The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-05-07
insult RETURN
AIDS LAWS TO
HELP INVESTOR
U. S. Records Tell Sordid
Story in Collapse of
Utility Empire.
BY RUTH FINNEY
Times stan Writer


WASHINGTON, May SAMUEL
insult comes back just in time to
help make investors safe from men
like himself.
The story Of what ne did with the
savings of half a million persons has
already figured in the government
investigation out Of which the stock
market bill grew. 1t will figure again
when the bill is debated this week
in the senate.
His arrival may help protect util-
ity rate payers as well as investors.
The house has on its program this
week the Johnson bill closing up one
of the principal routes by which
utility companies have escaped from
rate reduction orders.
The Johnson bill takes from fed
eral courts the right TO hear appeals
from the rate decisions Of state util-
ity commissions.
Smith Gift Recalled
Government records tell Of the
insult who contributed S237,O00 in
one Illinois primary campaign,
SIZE, 900 Of it to Frank L. Smith,
head Of the Illinois public service
commission, candidate for the Unit
ed States senate. insult tried so
hard to keep this contribution secret
that he was almost cited for con-
tempt of the senate.
Through Halsey Stuart & Co.,
insult hired a Chicago professor to
speak over the radio as The Old
Counsellor" and advise the public
to invest in utility stocks.
Hundreds of millions of dollars
were collected from the public. And
when Corporation Securities Com
pany of Chicago went into receiver
ship, its liabilities amounted to
Sis, Isl POI, its assets to SIP, 1853.
Federal trade commission records
give an idea as to what became of
the money.
Something for Nothing
BY means of a S3,50O,O00 bank
loan, a transaction of that amount
between two insult security COM
panies and a merger, Halsey Stuart
& Co. acquired a million shares of
Insults Corporation Securities Com
pany of Chicago for nothing, the
trade commission says. Someone
else paid.
Here's another story Of compli-
Gated finance.
insult, Son & Co. was organized in
1924 to do a brokerage and CONNER
cial business mostly in insult Sc
curities. Companion companies were
insult. Son & Co. Ltd, which oper-
ated in London, and insult, Son &
Co. of Canada. Ltd, which operated
in Canada.
The trade commission found that
it was the habit of insult, Son & Co.
to sell insult securities to its parent
company. insult Utility Investments,
Inc, at prices in excess of the mar
ket.
Cash Balances Disappear
With the profits it made it de-
clared dividends which the parent
company collected and, in turn, used
for dividends payable to another
company. A fourth insult company
prohted in such transactions by COL
lecting commissions on these sales
from one pocket to the other. In n
case commissions amounted to $780,
coo.
There was no cash balance to the
credit of any of these companies
when the crash finally came.
Other records say that annual
reports of Corporation Securities
Company of Chicago and insult
Utility Investments, Inc, showed
large net incomes in the years just
preceding their collapse. These
were for circulation among inves-
tors. Income tax returns for the
same years showed net losses.
Faces Bankruptcy Charges
The federal government accuses
him of violating federal bankruptcy
laws by transferring assets from
Corporation Securities Company of
Chicag Just before its collapse. It
also accuses him of mail fraud,
in information distributed to in
veStors asking them to buy insult
stocks.
Cook county, Illinois, charges that
insult took assets from Middle West
Utilities Company and Mississippi
Valley Utilities Company to Use in
protecting brokers accounts with
which he Speculated on margins.
If insult should be found guilty
on all these counts he faces max