INSULL TRIAL

Greymouth Evening Star, 17 November 1934, Page 10

INSULL TRIAL

SCENES AT OPENING. CHICAGO, October 2. ’the trial of Mi - Samuel Insull, the seventy-five-year-old financier, who was head of the great Utilities concern, the vast properties of which were swept away in the depression, was begun to-day in the United States District Court. He was charged with defrauding the public of £28,000,000. Clad in a grey suit and with his blue eyes shining as kindly as usual behind their thick glasses, Mr Insull was the last of the seventeen defendants in the case to arrive at Judge Wilkerson’s court. The .room in wliieh the proceedings were conducted was packed with spectators, reporters, photographers, lawyers and

witnesses. Blinding flashes from I.lie nows photographers’ apparatus flooded the scene with a Hollywood-like glare as the court proceeded with the task of selecting a jury from the special panel of one hundred summoned. Carpenters had constructed a 20ft shelf for the exhibits in the case and Government clerks arranged on it a. miniature niountan of files, ledgers and ether data concerning more than fifty companies with which the defendants were associated. A special force of marshals and court bailiffs kept order, refusing admission to all but the 250 spectators for whom space was available. At 10 a.m. the judge rapped sharply on his desk, summoning the court to order, and the Clerk of the Court called- the case of the United States against Samuel Insull. 'rhe defendants answered the roll-call and lined across the room in a row of chairs extending for about forty feet. Mr Insull himself sat beside his son, Mr Samuel Insull, junior, who was also charged. Mr Insull was near the end of the row that was furthest from the judge. He looked better than he has done for some time past, and, in answer to a question whispered to him, he stated that, despite the diabetic ailment from which he has been suffering, he would stand the trial as well as any of the defendants. His wife was not present, but one of his former proteges in the halcyon days of his sponsorship of the Chicago Opera Company, Miss Mary McCormick, was there—in the capacity of a. special reporter for the Hearts newspapers. Public interest in the outcome of tho trial is intense, as it is a matte? of personal concern to thousands of investors, who feel that Mr Insull and his associate defendants are respons-1 ible for the loss of their life savings

CHOOSING THE JURY. In spite of this fact, however, the opening of tho trial was quiet and orderly—possibly because most people consider that it will be a battle of statistics, in which tire sufferings of widows and orphans and the hopeless futures of thousands of impoverished investors will not be brought strongly into tho picture. The trial will be, it is believed, one of facts and figures, only thousands upon thousands of! cold,, dry records being produced in support of the Government's hopes of proving to the satisfaction of the jurors fraudulent intent on the part of the defendants. ; When the photographers had finished their work, a quiet air of dignity ;

prevailed in the court, which is six floors above the rumble of tram-cars. The morning was spent in the droning questioning of the prospective jurors, consisting chiefly of mechanics, farmers, tradesmen, clerks and artisan Sj By one o'clock, when the court adjourned lor lunch, twenty-four men had appeared in the jury box and twelve had been tentatively approved by counsel on both sides. Judge Wilkerson perhaps represents a, type which would appear strange on an English Bench. He is small of stature and appears still smaller when seated in his great highbacked chair behind a massive mahogany bench. His attitude is one of friendliness to all.

The informality of the lawyers engaged would also seem strange to an English court. The chief counsel for the United States is attired in a. dark blue suit and wears no wig over his iron-grey hair, while his opponent, Mr Floyd Thompson, who is leading for the defence and was formerly a judge, is most unconventional, his dress consisting of the lightest of grey suits with a pale lavender tie. Five lawyers appear for the Government and seven for the defence.

A long table is fitted up for the use of (he Press representatives, and behind them is a special despatch room, in which is a battery of telephones and telegraph instruments and other machinery, which has been specially installed so that full reports of the proceedings may reach newspapers in all parts of the world with the greatest possible despatch. At the afternoon sittting the examination of prospective jurors was continued without the taking of evidence being begun.

GOVERNMENT ALLEGATION. CHICAGO, October 3. Outlining the case against M. Instill and. his co-defcndants, the Government attorney referred to the questionable assets of the securities company, which included “a few dollars in cash.” He said that “the defendants falsely represented to the public that the corporation would commence business with assets of over £16,000,000.” Ho declared that the seventeen defendants sold through Halsey, Stuart and Co., a Chicago banking house, 700,000 allotment certificates in the corporation. These consisted of one ordinary share and one preference share, which were offered at £l5 a pair and recommended as “jewels of the Insull empire,” enabling the fortunate few to "get in on the ground floor.”

Tho Government alleged that Mr Insull spent eight weeks in revising the first annual report of the company. After it had been re-written eight times it showed a net profit of £126,000, instead of a loss of £34,800, as in the first draft. Halsey, Stuart and Co. received a bonus of £105,000 at the expense of the public for their services in stock-selling campaign. The attorney promised to produce proof that Mr Insull, foreseeing the crash of his companies, sold his own shares to two of them in 1931 and 193". and attempted to conceal the transactions.—Reuter.

HEAVY BRITISH LOSSES. CHICAGO, October 5. How much money did the British public lose in the Insull crash? An examination of the records shows that a total of over £29,000,-

000 for shares in Middle-West Utilities, one of Mr Insult's most active companies, was subscribed by British brokerage and banking firms. These shares were extensively dealt in in London, and often at highly fictitious prices. The greater number of them were undoubtedly purchased by small investors from the rank and file of the British public. But many famous names appear in the companies’ record books which form part of the exhibits at the present trial. 'That the Prince , of Wales invested money in this company' is stated by Mr 0. E. McCormick, treasurer of the' Middle-West Utilities. “One brokej' who bought a block of shares through the Instill company,” he said, “was subsequently found to be a distant relative of the Prince, and admitted that he hail made the purchases on the latter's behalf.” The list of names includes the following:— Sir John Simon, 119 shares; Lord Fairfax of Cameron, and another, <>3: Gen. 11. M. Foot, 118; Lord Dawson, ‘150; Sir William Stowell Haldane, 358: Sir Henry Holder, 741: Lady Hetty Menendez, 35; the Hon. Sir Patrick Ramsay, 131; Sir Philip Richardson and another, 437; Sir Alexander Walker, 240, and Sir Norman Watson and another, 4,839.