The Portland daily press., 1879-07-10
The Dennison Failure.
DENNISON PAPER MANUFACTURING
COMPANY
Important Meeting of Creditors at the
Falmouth Hotel

One of the largest meetings of creditors held
IN this city for many years met yesterday af-
ternoon att o'clock at the Falmouth Hotel,
for the purpose of hearing the statement of
this company in relation to its liabilities, re-
sources, and the causes which led to it's sus-
pension.
The meeting was called to order at 2 p. M.
and Hon. VIM. P. Frye of Lewiston was Sc
lected as chairman.
A. A. Strout Esq, of the firm of Strout &
Holmes, counsel for the Messrs. Dennison and
the paper company, made very full and ex-
plicit statement of the affairs of the company.
From this statement it appeared that Mr.. A. c.
Dennison went to Mechanic Falls in 1851, and
built the Eagle" paper mill, and in 1857
erected what is known as the "Star"
mill. In 1861, his son, A. 7. DENIM
son, purchased an in terest in the
business which was afterwards carried on
under the firm name of A. G. Dennison & Co.
Until the organization of the Dennison Paper
Manufacturing Company-in 1873-business
was profitable, and in 1866 the firm erected the
Diamond" mill and at the same time made
extensive improvements upon the dams and
Falls.
In 1867 they built the "Union' mill, and an
expensive stone dam across the Little andre
scoggin river above their mills. In 1870 they
put up the brick building, used for supercalen-
daring the finer grades of paper, and in 1878
they built the "Poland" mill, which is now
used for the manufacture of pulp for their
other mills. They also extended the "Dia-
mond' mill and made additions to
the buildings connected with their
property which were afterwards used
by the Evans Rifle Co. The building and
furnishing of these mills, and extensive i'm
provements upon their real estate involved the
expenditure of large amount of money, which
not only absorbed the profits of manufactures
but occasioned the contracting of a floating
debt, of which, owing to the general depression
OF business and decline in prices, they have
been unable to rid themselves
In 1873 DR.. w. r. Evans perfected and pa
tented the arm known as the evans Magazine
Rifle" which was so novel in its features and
direct in its action that it was believed by COM
petent experts to be destined to revolutionize
the military system of the world in the depart
ll0lU VI oilldil he nldUUor came TO The
attention of the Messrs. Dennison. Sam
pie guns were manufactured and sent
to different countries receiving the
most f1attering commentator, and their
agents in New York received large orders
which they were unable to fill owing to want
of capacity for manufacturing. The Messrs.
Denison were induced by these favorable in
dications and by advice of friends competent
to judge to erect works sufficiently extensive
to manufacture so guns per day. The
machinery and tools required for this purpose
owing to the novel structure of the gun, were
necessarily of peculiar pattern, and the cost
OF the works for the manufacture of the rifle
was largely over 100000. In the mean
time demand for the arm continued, and in
the fall of 1877 the Evans Rifle Manufacturing
Company, which had been previously organ
lied, commenced manufacturing on large
scale and continued until it had on hand about
5000 rifles, the largest part of which remain
unsold owing to a variety of causes affecting
more OF less the sale of all firearms. 1t also
appeared that in 1875 the Bowdoin Paper
Company situated in Topsham was organized
and the Messrs. Dennison united with Messrs
York for the sale of paper, in taking the stock
OF the company, Parsons & Co. advancing the
whole capital, holding the moiety of stock
belonging to the Denisons as collateral security
for the purchase money due from them.
Stock was issued from time time as cash
dividends were earned, which was pledged by
the Dennison Paper Manufacturing Company
for loans obtained by it. During this time
that company found itself embarrassed on ac-
count of the very large amount absorbed in its
real estate and in the manufacture of the rife
and the paper business in common with all
other business being considerably depressed
from what it was during the exaggerated
prices and excitement OIL war times, it was
obliged to raise an additional sum of money
for the general purposes of its business. 1t al
ready had q contract with Messrs. w. I'll.
Parsons & Co., by which the latter agreed to
advance, upon satisfactory security being given.
the sum of $4,000 in addition to their ac-
ceptances to the amount of manufactured
paper on their hands for sale. Accordingly
in January, 1878, this sum was advanced by
them in cash and in May following and upon
application they agreed to make further ad-
vance provided the Dennison Paper Company
would execute mortgage of its real estate as
security which it agreed to do, and in ac-
cordance with this agreement in August fol-
lowing mortgage was executed to secure
the sum of 100000, covering loans made and
to be made to that amount After this
Parsons & Co. continued to advance until they
had loaned the company the full sum of $780,
900 in cash, covered by the mortgage. With
this assistance the company continued its bust
ness until the 2Sth day of last month. The
advances made by w. H. Parsons & Co, had
then come to be in excess of the security held
by them and they declined to make further
acceptances and put on record the mortgage
which they held This action upon their part
left no alternative for the Depnison Paper
Company except to call a meeting of the cred
itors. The unsecured liabilities of the COM
pany amount to $3.50, 927.29, and the secured
liabilities to $1626SSS4. Among the unsecur-
ed liabilities are banks. $63.394.7S; loans,
$30,939S2; supplies I. Dennison for merchan-
disc, $4,000; employees at mill, S4 ,52S So; 9TH
er merchandise accounts, 1924, 421.65; A. C.
Dennison & Co., 1927 ,642.21. The secured liza
bilities include about $4,000 to the Atlantic
Bank and $142, 900 to w. H. Parsons & Co.
The mortgage held by W. III. Parsons & Co.
also covers $35, 900 of the notes of A. c. Dem
nison & Co., given for loan to the Dennison
Paper Manufacturing Company. In addition
to this the Dennison Paper Company is liable
as endorser for $20S, 017.S2, of which S42 $50 is
the paper of the Evans Rifle Company Its
assets consists of the mills at Mechanic Falls
subject to the mortgage of w. FL. Parsons &
Co. for 100000, and personal property and
other real estate unincumbered, of the value
of $61 600 in round numbers. The value of
the mill property could not be accurately stat
ed inasmuch as it depends in large measure
upon whether the business continues or not,
and the same is true of the property of the
rifle company. The cause Of the disaster is to
be found in the large amounts expended in
building up the real estate, the unfortunate re-
suits of the rifle company and the general de-
preston Of business which has prevented the
company from meeting and paying its interest.