The Courier News from Blytheville, Arkansas on October 7, 1932 · Page 5
Get access to this page with a Free Trial
Click to view larger version

The Courier News from Blytheville, Arkansas · Page 5

Blytheville, Arkansas
Issue Date:
Friday, October 7, 1932
Page 5
Start Free Trial

Page 5 article text (OCR)

FRIDAY. jjCTQBER 7, 1932 BLYTHEVILLE, (ARK.) COURIER NEWS PAGE FIT1 How Instill Stock Values Evaporated SILL'S SIH1 Product of Fifty Years of Struggle \Vas Destroyed in Fifty Days. EDITOR'S NOTE: This U th« third of bis: stories on tbe ilse ami fall of Samuel.Imull, public ulilltj magnate, ;who has bten called "the world's e« atest fal lure -" By UOBERT TALLEY NEA Service Writer j (Copyright, 1932, NEA Service, Inc.) CtllCAQO—Samuel Insull's climb to control of a public utilities empire that was worth $4,000,000,000 at its high tide required 50 years. His fall look just about that many days. On April 15, 1932, Insult's vast Middle West Utilities Company, operating In 32 states, went- into receivership. On June 6, ihe 13- year-old Napoleon ol po w ' c r abdicated. He resigned as chairman of the Commonwelath Edison Company, the People's Gas Light & Coke Company of Northern Illinois, three of the largest utility operating • companies in the world. He resigned as one of the receivers of Middle West Utilities. He resigned from 05 chairmanships, 85 ciicctorates and 11 presidencies. For three hours Insull sat at his desk signing resignations. When Samuel Insull finally laid asidi his pen he had nothing left but three yearly pensions of $GOOO cacti, granted him by his three major operating companies. The last days of empire saw a vastly different Samuel Insull from the hard-headed, autocratic financial tyrant to whom nobody in Chicago had dared say "No." Back to the Bottom When reporters called at his luxurious office . for a farewell interview they were greeted by a careworn old man whose hollow smile and trembling fingers indicated the straiii under which lie had labored in his vain effort, to save his companies. Asked about his future plans, he was affable but reticent. As a closing question, someone inquired about his health. "Well," replied Insull, "I got a good sleep last night; I feel pretty Sjood today." Something in his tone seemed to imply there had been other nights —probably many—not so restful. Later,'an associate to'.d_ reporters he had heard Insull say the day before: "I have gone from the bottom to the top, and now I am at the bottom again. I only hope 1 \vill b3 able to keep a roof over my head and care for my wife." There is no mystery about Insull's downfall. The real mystery is how he managed to keep his fantastic pyramid of holding companies standing as long as he did in the face of the worst stock, market decline in history. Insull had fought desperately. He had thrown in his own $100,000,000 fortune. In perhaps the most hectic chapter of frenzied finance in history, he manipulated, borrowed, loaned, exchanged millions of dollars between his various companies in a manner that now has given auditors one ol the most intricate and complicated financial" tangles on record. lie saddled stock on his employes and ordered them to go out and sell it. He borrowed heavily from banks — millions 01 millions of dollars. A Sudden Crash III the years when lie was building his giant chair., Insull had been called "the greatest money raiser in history." In the end, this ability proved his undoing. For he contracted such burdens of debt for his investment companies that tfccj eventually collapsed under their Oivn weight-. When the end came, Insull weni down with his ship. Chicagoans tel jou they are certain he lost every dime he had. The crash came with deadl. swiftness., In brief, here is th story: . L! »st spring. Middle West Utili t'cs Co. found itself unable lo mec 510,000,000 in short term notes. In sull frantically appealed to Nc' York bankers . . . txu, at last, hi credit had dried lip. He could ge no more money. So a Chicago printing firm, t which the $3,000,000,000 Midd: Wett Utilities owed an S8000 bil threw this industrial giant into re csivership and the far-flung Insu empire toppled. Middle West was the cornerston on which the Insult pyramid restec One by one, the other tightly-h tcrlaced holding companies dragge each other down. Among the fust to fall were U great superholdlng companies. U iull Utility Investments and Co Deration Securities, Inc., whii capped the ]>cak of the pyrami ' ri 'ey represented control of tli Great Insull domain. Losses Jn Millions When, the other day, auditors f itie receivers of Insull Utility I >«;rnents completed a five-month "animation of the books, they re- J? rt «d this condition had existed r .°f .April 16: Utility Investments was Lima — ly insolvc nt. It owed nine s2747i a , 5 much K il owncd - u liad v*ii»M,364 of assets with which to 1 '° y .* 2 = 3 ' 9 «,341 liabilities, a defici. °f 5^26,000,000. lllc rc as,on for all ibis was clcji'. •The auditors balance tlieet slu.^ warn you, Mell.j.Mir'js txlnj; ovor- •orked. •nils Sales Tax id«» Is n live, rowing one. We are Being to huve u olid more of U, no wu muy just as well begin grcomlng ourselves or It. N» legislative act will ever ncel nil conditions ' without crltl- Lsm beinff directed, nnd Justly, at t from semewlieio. We hnvo had Sales Tuxes before nud we hnvo ;hem now. (incidentally we HVO Whig more Tax Sales now than ever in ti'.e history of the country which should make us sU, ii» luul take note). And the very fuel of their being so distributed us llioy i<r« is what makes them paliilcES. The matter of lipping or reducing should be simple tmd can be ml- Juslcd. And roduclns will i» nil the moie simplified when we have a combined Interest. In the reduction. At present we don't have that combined interest because Just so long as Mr. Landowner cnn dig U out of the soil he will be ki>pl digging. Bui I'm nfmld he's sunk nnd we must do something about it. so I conclude with tlic sam? remnrk as before:—To get started wa nitist vote for the Sides Tax Amendment. Then we must, concentrate on reducing expenses. That, loo, must come. —F, P. JACOBS Gilder. Ark. Smith, Roosevelt Shake, "Make Oltlcw Outnumber. Voltrg SOMERSET,-VI. (UPS-Elections lire peaceful In tills.political pnr- isc whore public offices outmim- 1 the voters. Thero arc but eight lers In Somerset 'nn^ so tome clt- zens haive to ho(d more llnui on own Job;, ; . •' , Above is a certificate for 100 shares of stock in Insull Utility Investments, Inc., ons of Simuel Insull's two great super-holding companies. At peak prices of 1029, this ICO-share certificate was worth $16^000. It was last offered at about 25 cents a share, with no bidders. A 1 ., right- is Samuel Insull as hu ^appeared at the peak of his power, on his 70th birthday in 1929. this investment trust held securities for which it had paid $237,892,050 and which, at current prices, had a market value of $30,404,267, a shrinkage of more than $207,000,000. As yet, there Is no auditor's report on Corporation Securities, Inc. The latest available data Is the company's balance sheet of Dec. 31, 1931. This slrawed investments with a book value of $145,455,706 and a current market value of $33,070,252, a shrinkage of more than $111,000,- II is interesting, in this connection, to note what happened to the I prices of tlie most important In- II security issues. Middle west Utilities common ared to a high of $570 a share In 29, was then split 10-for 1 and me to rest at $50. The 1932 low i this stock was 12',; cents a share; cent quotations, largely spscula- •e, have boosted H to about 37',-i nts. $160 to K 1-2 Cents Insull Utility Investments Co. hit 60 a share in 1929, dropped to n w of 12',; cents In 1932. Recently lere has teen a little speculative uying at 25 cents a share. Corporation Securities, Inc., was 'Id in 1930 in 5101 stock units, at hich time the price of one share common was $28.25. Its 1932 low as 12& cents a share; latest data hows this stock offered "at the .arket"—and no takers. It is important to bear in mind iat these are security holding ompanies. The operating compan- s that Insull's genius builded be- 3re he turned to high finance are n the whole, doing as well as oth- r utilities. Commonwealth Ediscn, whicl oared to $450 a share in 1020, hit low of $35 in 1032 and has since imbed back to about $75. People's las, v:hich went to S50-S in 1929 ropped to S39 this y^ar but has ince recovered to $75. Public Scr ice of Northern lUiucis. which wa» 435 in 1929, has recovered from a Maj. F. P. Jacobs Reviews Arguments for Sales Tax "Al, this Is from Hie heart. flint ROCS for me,, too, Frank." And thus was Democratic political ' history of 1!H2 mndc when former Governor Alfred E. Smith nnd Governor Franklin D. Roosevelt "made up" nnd shook hands. Thij end of Smith's silence toward 'the nominee for president •• was Ihe high six>t of the Now York stale Democratic convention. Smllli Is shown hero at trie right as ho hnnds vvllh Roosevelt. They had Joined IOICCH to nominate Lleul,-Gov. Herbert H. Lehman for iho Kovcriiuralitp, thus wrecking Tammany's hopes In the convsnllop. '•;•.". ow of $35 to about $75. A Broken Emperor Many Chicagoans tell you the believe Insull would have riddei. >ut the storm had the deprcssio been shorter or less severe. One hears In Chicago now that Insull has lost his grip on himself, .hat Hie strain of his ordeal was too much for him. Chicagoans tell you of a bent and »wed old man, showing all of his 73 years, whose step no longer was alert. They Icll you that an associate, entering Insull's private office, would find the slipping master of billions slumped in his chair, as though in a coma, staring at the wall. Then Insull would come to himself with a slart . . . and begin issuing orders in his crisp manner of old. This is the picture they draw of Samuel Insull as the shadows of ruin and bankruptcy closed in on him. TOMORKOW: Samuel Insnll' romance with a preKy actress in the gay 90' s and his unsuccessfu attempt lo effect his wife's comeback In the theater after 26 years ot absence from the state. (To the Editor:) I was so pleased with t,he interest expressed in my former effort o get others interested in this sub- ect of taxation that I am trying .gain. . . So far as I know, this proposed Amendment to. be voted on in No- emter is the first organized effort o reduce the taxes on land in this tale. I believe iL is generally agreed hat the taxes on land are too high. n fact the taxes on land have lx>- •ome conftscatory. But confiscation, or dispossessing the present, owners of land will not rectify the situa- ton, since those who become the owners of land in the future will be handicapped, identically as the possessors of land at present arc. And by handicap I mean that they too will be burdened with the un- ust and inequitable taxes on land. So the' present obsolete system must continue unless the people bestir themselves and change it. Landowner rays It's useless to state, since we all !ai(Kv it's true, that expenditures for carrying on our national, state nnd county governments have increased while revenues and incomes have decreased almost universally. And this applies probably more to our agricultural clement than to any other stratum ol industry in the country today. In fact the plight of tlie landowner seems to have iurnishcd considerable material for the outstanding candidates in the present political campaign to make promises of aiding in various ways yet, to materialize. These gentlemen recognize that such aid will in effect be an aid to general conditions Once that idea becomes predominant and generally felt we may get somewhere, but just so long as the organized industries try to keep the bulk of the burden where it now is on the disorganized agricultura class, we may expect present condi tions to remain with us. Simply be ause the general welfare of all ou: oinbincd industries rests on Ihi >rcducts of the sail. That found a ion should be protected or th tructurc falls. For advocating this Sales Ta previously I was accused of bcin T Read Courier News Want Ads. demagogic by a Committee of the Blythcvll!c Lions club. If advocating a distribution .of the present unjust, obsolete and inequitable taxes now levied on the' overburdened landowners means being a demagog, then, that's what I nm. But, even that doesn't make It unanimous. In connection Iherewilh I'd like to say this: Mr. Landtaxpayer is now paying a tax of $8.70 per thousand dollars valuation for the privilege of owning that-land. Let him continue paying it. I, who do not own any land, may do more busliie&s than he. I may buy and sell many times more than he, and, I do, but he owns land, therefore he must, pay a privilege ta.x to make I possible lor m« to buy and sell ree of, nny tax. No sophistry nor pccious argument can ever' change lie facts. Here we have one group, •anting to do business, buying or •elling or what not, making profits hope, yet paying no tax on the usiness done. However, just as soon s the business includes oftTtlng a •(-1 ot land, a tax must be paid n it regardless of whether'IL produces a penny of profit. There's nly one conclusion, gentlemen: It's lot equitable, therefore unjust. It's, 'Id and obsolete, and long past due or a change, and when you'give It little more thought, I'm sure •our fense of fairness will convince t'ou of the necessity for a change. Sales Tax or Tax Sales And now, my good friend Mel! Brooks in giving a most scholarly review of the Amendment proposed winds 'up with this: "The total amount of tax money sent out of the county is the thing that affects the commercial life of the county." Perhaps so, Mell. but not necessarily. And then he follows It up with, "Whether it's paid by a few or many." which leaves us with the one conclusion that he prefers il to be paid by the "lew' 1 not Including himself. So there you are. After all is said and done it's human na ture asserting itself. We come righ back to the fundamental law of se preservation merging into self in tcrcst . . . But we must remembe the Goose has her limit in th number of eggs she'll lay. And Roller Skating At the ARMORY Every afternoon and night except Wednesday night and Sundays. Afternoon price, 15 cents — 2:30 to 5 Night prices, 15 and 25 cents—7 to 11 THAT'S FROM R PLANE NERRLY FiyE MILES UP,;,,-, RENE MICHENAUD STEPPED OUT INTO SPACE ON JUNE 29, 1932.'THIS FAMOUS FRENCH PARACHUTE JUMPER WAS. WEARING A HEAVY OXYGEN APPARATUS, YET IT WRS 23 MINUTES BEFORE V.E REACHED THE EARTH. HIS FIVE MILE OUMP IS R WORLD'S RECORD. SO IS THE MILEAGE WHICH MILLIONS. OF MOTORISTS GET OUT OF EVERY GALLON OF PHILLIPS 66 GASOLINE. AND THIS IS ONLY ONE OF THE MANY. BENEFITS OF ITS HIGH TEST-WHICH RIGHT NOW RANGES FROM 63.^° TO 70.6°. PHILMJP WITH PHHLUPS • THE GASOLINE OF CONTROLLED VOUTIUTY "HIGHEST TEST" at the price of ordinary How can you be sure that you are not passing up far finer performance- thai you are not missing worthwhile savings in money—unless you try : a tankful of Phillips 66 -. -. i the greater gasoline f Those definite gravity figures above, which prove that Phillips 66 I* higher test.;. the sensational sales record of this new and finer motoC fuel ... the many technical facts which prove that it gives, you more value for the money—all these things are not half as convincing as the difference which'you will actually fetl in your engine; That is the test which clinches the argument for high test gasoline* You will get results which will surprise and delight you* More power and pep. More speed and-less noise. And greater mileage froro, every; gallon. Stop for that trial tankful tomorrow, at the Orange and Black 66 shield, where extra high test costs nothing extra; because Phillips Is the \V ' ~ ~ largest producer of natural high gravity gasoline* PIQUE A GASOLINE CF U. S. MOTOR GRADE AT, A COMPETITIVE PRICE ALSO PHILUPS 66 ETHYL AT THE REGULAR PRICE Of iTHYL 6ASOUNE For WORRY-LESS Stabilized LUBRICATION Sure, you can fill the crank-. C»K willi a cbt«p oil m*ac to sell gt a tow price. But wilUhe few pennies Mvcd evef .compensate you for w«k* of worry about potiibk. djim«se to your motor? jPl«yj**f«l: ' When you c5?'tin, r^W ^ Phillipi « Mot6r OU.! Jt fift b4«. -Every ...dreiijtoet niorewd quart il abtdlute tc tod .t pttt v*luc.Wei' worhfi

Get full access with a Free Trial

Start Free Trial

What members have found on this page