The Providence news. (Providence [R.I.]) 1891-1906, 1893-09-18
Startling Developments Regarding
Affairs Of q Loan Company.
How CONCERN WAS WRECKED.
Its Manager Was Born IN Providence
His Victims Can He Found In Many
states-so me OF His Schemes and How
They Were Brought to Light.


surface regarding the affairs Of tbs North
western Guaranty Loan c,mpany of Min
neapolis. which passed into the hands ofa
receiver on May 20. Among the victims
of the concern are Rhode Is
land and other New England
people. It. Is said that
people In twenty states invested In the So
curiti' which the company offered. The
Industrial trust company Of Rhode Is
land was q trustee OF the company's
bonds aud held $50 600 of the company's
guaranteed fuad Tor the protection of the
holders OF securities. The Indus rial
trust company had done all 1t could to
protect the interests of security holders.
The Northwestern Guarinty Loan COM
pany on Jan. last declared q semi
annual dividend OF per cent.
mailing checks to the stockholders 90
that they reached them on that date.
Four months and twenty days later IL
closed its doors owing more than % .000.-
600. OF this amount s., SOC, ,0u0 IL frsudu-
lent notes absolutely worthless. The
assets can best be suggested by an inter :
rog alton point.
The man who wrecked the company is
Louis +. Mena9e. now fugitive from
justice. He was born in Providence.
DE-
moved to New Bedford. Iu October,
1871, he went to Minneapolis. In 1871 he
opened q real estate Office with II. q.
Brackett.
Il 1889 and 1890 MenaRe began to specu-
late in real estate in Montana and WASH
ingson. He bought one piece of land In
Great Falls for e25. 600 in cash. plated It.
and then put on q blanket mortgage
placed with the Helena Trust company
which he bad orxanixed, and then bonds
amounting to $3.50. 600 were issued againss
this property.
He bought an island near Seattle for
$4,000 cash, and In the same way bonded
it for $700, ,00O.
The Northwestern guaranty loan COM
pauy was Incorporated under the laws of
Minnesota on May /. 1884. with an
authorized capital of 100000. The
paid up capital at that time was $4,000, 600
For the first few years Mr.. Menags
held practically all the stock.
In the light Of recent dey lopme at Il IL
probable that Manage used the company
AS clearing house for his own enterprises
from the start.
After the opening Of this year of panic
and hard times thousands upon thou
sands Of dollars worth of commercial
paper fell due at the New York bank of
the house. and it was paid the instant 1t
was presented. No man was ever more
careful In paying interest AMI dividends
aud In meeting payments the moment
they became due than was Louis +. Mem
age.
On the 10th day of May 1t was known
that the company could not make COOL
its guaranl 90 OF com nercial paper. It
.fh. oiu1
that it had ready. There was nothing
ceiver.
The Minneapolis trust company, OF
which Samuel Hill is the pr,si lent and
j. M. Hill, the president Of the Great
Northern railway. IL the principal stock
holder. was made the receiver. Then
began the unraveling OF the gigantic
fraud.
The receivers were confident that the
losses to the creditors wonld be slixht, but
when they came to Look into the matter
they were dumbsou ded.
They found that property had been mort
gagged for two. three, five and In some in
stances ten times its value and tie mort
cages sold.
But the most astounding discovery
was made in connection with the c)m-
mercial paper which the company had
guaranteed and sold.
Out Of sixty makers OF notes whose sig
natures were affixed to notes which came
to ole Minneapolis firm OF lawyers alone
they were able to find but four men. Not
one of these nien has in o commercial
sense business existence.
These notes continued to pour In until
at the present time it is known that the
| Northwestern Guaranty Loan company
sold 81, 800, 900 worth Of commercial paper
signed by these irresponsible psope and
| which is absolutely worthless.