Evening star., 1932-09-30
insult RAILWAY
IN RECE|VERSH|P
Chicago North Shore Said
to Have Gotten S1,150,000
From R. +. c.
By the Associated Press.

BY the Associated Press.
CHICAGO, September 30-The Chi
cago, North Shore & Milwaukee Rail-
road, an insult company, was placed In
receivership today by Federal Judge
James A. Wilkerson.
The receivership petition said the
road borrowed S1,150 900 from the Re-
construction Finance Corporation. owes
$175,00 in taxes and was unable to
meet current obligations.
The petition was filed by the Amer
ican Brake Shoe g. Foundry Co. and
declared the railroad owed the company
$685..
Judge Wilkerson appointed Col A. A.
Sprague and Britton /. Budd of Chi
cago as receivers.
Return of insults Sought.
The return of Samuel insult from
Paris and his brother, Martin j. insult.
from Ontario will be sought. it was an
nounced today by one of the attorneys
for investors in the bankrupt insult
Utility Investments. Inc.
Attorney Lewis Jacobson, who made
the announcement, said he and his as
sociates would seek to have subpoenaes
issued for the brothers, who left the
country shortly after the collapse of
the insult utility empire.
Will Seek to Halt Pension.
Jacobson said however that the sub
poenaes would not be enforceable OUT
side of the jurisdiction Of the court in
which they were issued. but added that
| if the brothers failed to reply to them
other steps might be taken. At the
same time Jacobson said he would seek
to stop the annual pension of $4,000
which Samuel insult is receiving from
| three operating Chicago utilities.
Jacobson made his statement yester-
day during Federal Judge Walter C.
Lindleys inquiry into the affairs Of one
of the bankrupt insult investment COM
panies.
States Attorney John A. Swanson
also indicated he would like to question
the insult brothers as we'll as Samuel
insults son Samuel. ir.. still wee chair
man of the three Chicago operating
utilities. who left Saturday to visit
ii ~a-ents in Paris.
Swanson questioned former insult
| officials and learned. he said later that
Martin j. insult withdrew several shares
of stock from the portfolio of the Middle
West Utilities Co. huge holding concern
! his own and friends stock accounts and
! bank loans.
Prominent Stockholders Disclosed.
| Much interest was created by the in
! PRODUCTION into evidence at the bank
ruptcy hearing of roster of $50 names
many of them nationally known in
political. financial. and industrial circles
comprising a syndicate which under
wrote part of an issue of 100000 shares
of common stock Of the insult Utility
Investments. Inc. in 1880.
Lawyers said introduction OF the list
did not indicate that the formation OF
the syndicate was irregular or dishonest,
hut that they believed it still owed the
bankrupt concern more than $4,000
which should be figured among its
assets.
The syndicate was formed in August,
$780, to buy $4,000 shares of stock.
Subscribers were to pay 20 per cent
of their subscriptions as pledges. at
torneys said Some paid the full amount
at once, others paid per cent DOWN
and IS per cent when the syndicate
dissolved, while third group paid the
initial per cent, but have not paid
the remaining IS per cent.
Syndicate Disbands.
TIE syndicate was disbanded last
February with 20 per cent loss. about
s6.000.000. Attorneys said they have a
legal claim amounting to about s70O, 600
against those who failed to pay their
full margins. Among the $50 names
were those of sundry insult companies.
individuals and investment concerns
identified with them.
The names of individuals included
those Of Mayor Anton j. Cermak. JOS
eph Tumulty. private secretary Of the
late President Woodrow Wilson: Owen
D. Young and Gerard Swope. chairman
and president. respectively Of the Cen
eral Electric Co.; George M. Reynolds
and George Woodruff, Chicago bankers:
Frank L. Smith, former chairman OF
the Illinois State Commerce Commits
sion end now Republican State national
comitteeman; David E. Shanahan,
Speaker of the Illinois House Of Rep
resentatives; Melvin L. Traylor, promi-
nent Democrat and banker.
States attorney said Washington
Flexner, president of printing COM
pany had told him that Martin insult
traded secretly in Flexner's brokerage
account and that he borrowed secur-
! tiles belonging to Middle West to USE
as collateral Later, Flexner said. the
securities were sold to II subsidiaries
of Middle west at loss OF $4,000 to