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The revelations which cast a new angle on the Insull situation last week, which made Samuel Insull seem worse than an old man crushed by circumstances beyond his control, came as the result of a five-month inquest into the books of Insull Utility Investments, Middle West Utilities and Mississippi Valley Utilities by Arthur Andersen & Co.. accountants. In addition to juggled income statements and the loan to Martin Insull, the backwash included the following facts:
¶ Insull Utility Investments has assets of only $27,473,000 against liabilities of $105,000,000 after writing off capital liability (preferred and common stock) of $148,000,000. An $8,000,000 investment in subsidiaries, including Insull, Son & Co., was valued by the auditors at $00000.
¶ Marshall Emmett Sampsell, president of Middle West controlled Central Illinois Public Service, resigned at the request of the receivers. They found he had "borrowed" 4,000 shares of its $100 par preferred from the treasury, used it as collateral on a joint bank loan with Martin Insull. The company has filed claims with bonding companies for its loss. Two months ago Mr. Sampsell's wife hanged herself.
¶The audit of Middle West did not list its assets at market value, obscuring the company's actual condition. The receivers last week seemed to feel that better conditions and good management might enable it to pull through, with the possible lopping off of the eastern properties. Grover C. Neff, chief operating executive of Wisconsin Power & Light Co., was made president of the company last week. The report showed that Middle West indulged in huge security operations, chiefly attempts to support its own stock. It made large gifts to subsidiaries to enable them to "write down" losses, also loaned them funds for stock deals. Unusual for a utility, it had bank investments in Peoples Trust & Savings (being liquidated), A. B. Leach & Co. (being liquidated) and Hill, Joiner & Co. It also had an investment in Chicago Opera Shops Building, storehouse for the Opera's stage sets and costumes. Among its receivables are $300,000 in notes secured by South Bend real estate and signed by George M. Studebaker and Clement Studebaker Jr. Another receivable is 50¢ borrowed by Martin Insull.
¶ Attentively awaited by Chicagoans was the Insull "syndicate list" showing what prominent persons were enabled to buy Insull securities at less than market prices. This was not published although Chicago papers seemed sure of its existence.
Secure in Chicago business and society despite the flight of his father and uncle, last week Samuel Insull Jr. bowed to his losses, rented the bottom floor of his 25th and 26th-floor duplex. By doing so he lost a kitchen, living room, dining room and several bedrooms. He still has room enough for a comfortable home for himself, his wife, and Samuel Insull III, age 1.