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Chicago has been Insull's lightly-held kingdom. Middle West is the utility empire sprawled somewhat shapelessly through 5,321 small cities and towns serving 6,000,000 people. It was acquired financially in the financially halcyon days. Mr. Insull could lose this village-empire and still be a great man if he controlled Chicago. But, again, it seemed that no one was prepared to take over the reins of power. That section of Middle West which lay, illogically, in New England and along the Atlantic, heavily involved with New York banks, might be taken away and attached to some large Eastern, possibly Morgan-sponsored, system. This was, however, stoutly denied last week. As for the midwest part of Middle West, stretching from Texas to Canada, the problem was to effect financial reorganization of the parent company without disturbing the profitable operation of all its 119 subsidiary parts.
For this task Federal Judge Walter C. Lindley in Chicago appointed as receivers: 1) Edward Nash Hurley, politico-businessman who once headed the U. S. Shipping Board and last month procured both Republican and Democratic conventions for Chicago; 2) Charles Alexander McCulloch, who recently bolstered the business of the late John R. Thompson one-arm-chair cafeterias; 3) Samuel Insull. When an. objection against Mr. Insull's appointment was made, Judge Lindley exclaimed: "This company is Samuel Insull's own child. His appointment is not improper because if he were excluded the company would miss the benefit of his intimate knowledge of its affairs." He made each receiver post a $100,000 bond and warned, "I expect an impartial administration of the assets of this company."
The only surprise in appointing Samuel Insull was that Samuel's brother Martin was not appointed. Brother Martin has been president of Middle West, and a great speechmaker up and down the Mississippi-Missouri Valley. Recently Samuel Insull Jr., smart son of a smart father, had been supplanting Uncle Martin in control of Middle West. Uncle Martin was out. Although Father Samuel would act officially as receiver, it was possible that Son Samuel would continue to be the practical cost-cutting manager of the sprawling empire.
What directly threw Middle West into receivership was $4,000,000 unsecured notes in the hands of the public, the first $10,000,000 of which would fall due June 1. Besides this obligation, Middle West owed the banks $30,000,000. If bankers forced the receivership, it was New York bankers, not Chicagoans. Although the Chicago banks may have Mr. Insull's personal fate in their hands because of the receivership of the Insull trusts investment, it is strong New York banks which are owed most money by Middle West.
Reorganization is a long process. That Middle West could be reorganized without affecting a kilowatt in its 5,321 towns seemed altogether probable last week. Assuming moderate patience on the part of bankers, the various regional subsidiaries of Middle West seemed to be financially solid. The aforementioned Eastern division caused the most immediate concern.