Evening star., 1934-10-04
|NSULL COMPANY
DECLARED DUMP
U. S. Opens Mail Fraud
Case by Claims of
Stock BoIstering.
BY the Associated Press.

BY the Associated Press.
CHICAGO, October A. Samuel
insults stock sales in his ill-fated
Corporation Securities Co. were termed
a simple conspiracy to swindle, cheat
and defraud the public" by the Gov
ernment as 1t outlined the mail fraud
case against the utilities executive to-
day.
United States District Attorney
Dwight H. Green, in a calm statement
detailing what Government investi-
gators uncovered in Insults financing
charged that the company was set up
simply as dumping ground for
large quantities Of stock acquired in
market deals to boost the price Of
insult stock.
Charge False Value Given.
insult and the others put into the
new company the common stock OF
another insult company. insult Utility
Investments. and "a few dollars in
cash" 1t owed s3.500,000 for the
stock. Then, on this property, Green
charged:
The defendants falsely represented
to the public that the new corporation
would commence business with assets
OF over $50 900 600"
Green declared that four of the 16
defendants on trial with insult floated
a huge issue of allotment certificates
under the pretense that they were
letting their friends and customers in
on an opportunity to make plenty OF
money"
Finance Firm Was Agent.
1t was through Halsey Stuart &
Co., nationally known La Sale street
investment banking house, that the
IT defendants sold their TOO 900 allot-
ment certificates, which were pack
ages" OF one share of common stock
and our share Of preferred stock
offered at s75 pair. Green continued.
Employees of the investment house
were told to contact customers, Green
declared. and recommended an in
vestment in this paper as the jewels
Of the insult empire" with the tip
that only a fortunate few would be
allowed to get in on the ground
fooI"
other high lights of Green's open
inE statement were:
The insult family, in the organi-
zation Of Corporation Securities Co.,
received stock at cost of little
over $3.50 900, which would have cost
the public over $28,000,000.
The shares that Halsey Stuart &
Co. received for nothing would have
cost the public over $25,000,000.
Reports Held Colored.
THE defendants spent weeks re-
vising their first annual report. After
rewriting it eight times they showed
a net profit Of approximately $500. 900
instead Of loss Of over S174,000, as
showed in the first draft.
For its services in the stock-Sell-
ing campaign Halsey Stuart & Co.
received a bonus of $525 900 at the
expense of the public"
A jury Of IL men-farmer, banker
grocer, statesmen and jobless-was
sworn yesterday to sit in Judgment
upon Samuel insult and the 16 CO.
defendants.
The jurors presented a varied ap.
pearance. Next to an unemployed
salesman, jobless for months, sat &
former banker. Another was a re.
tired factory manager who said HI
and his wife owned plenty of Insul
bonds. but it wouldn't prejudice them
Two alternate jurors were decided
upon because Of the expectation tha
the trial might extend far into tn,
Winter.
Armed Guards on Job.
Armed guards patrol the United
States court house At the trial o
AL Capone. last big spectacle of th'
same court room, United State
marshals carried concealed weapons
For the insult trial their firearms
AS caiber revolvers, are on display.
The aged defendant. now "A
steeled himself today. He appeared
to be in better physical condition thai
at the opening of the hearing.
Things" he said, ARE going al
right, I think. I'm feeling fine ane
I'm satisfied, thus far"
He exchanged notes with his son
Samuel insult, jr., one of the de-
PENDANTS, and gave every indication
he would make many of the decision.
on the conduct of the trial in the
manner in which he conducted hi,
business when he was the ruler ol
one of the worlds largest utility en-
pires.
rl,s-