The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1893-08-19
MENAGE'S BIG DEALS.
Mortgages for Seven Times the
Amount Invested.
HIS METHODS or RAISING MONEY
Partial Expisn.tlon OF the Northwestern
Gssssnty Loan Co.'s Failure In
Minneapolis Comes 20 Light

ne appointment OF receiver EGy the
Northwestern Guaranty Loan Company.
Of Minneapolis. 10 causing good deal OF
light 20 be thrown on the extensive inter
ests Il has on the Sound. revealing stats
OF affairs which goes long way towards
explaining the failure and the departure
of its president. L. y. Nenage. for Chile.
Mr.. Menags began his investments on
the Sound some three OF four years ago,
and his ambition seems 20 have been To
found q town. He bought some 20
neres Of land between Ballard and Rich
mond Beach, extending west Of Green
lake and as far north as NcAieer lake. on
the Enohomish county line. On Septem-
Der s, lsgI. he and others connected
with his business incorporated the North
Seattle Company. With q capital stock Of
$50D,ooo, 70 which this property was trans
ferred. About the same time he bought
the iron mine, or rather prospect, in the
mountain overlooking the Skagit river op-
posite Hamilton. and incorporated the
Puget Sound Iron Company, with 4 capi-
cal stock Of 100000 70 work the mine.
This company was to build a blast furnace
on McAleer lake and smeit the ore, and
the erection OF steel works on the same
site was also talked Of AZ the time. These
Industries were TO be made the nucleus of
o manufacturing town 10 occupy the great
tract Of land be had bought. and
in order to develop IL he proposed to
build an electric railway with standard
gauge track and heavy rails from Seattle
through Ballard 90 the scene Of his in
tended operations, giving him connection
with both the Northern Pacific and Great
Northern systems. An application TO the
county commissi oners for a franchise was
made on his behalf. but when the time
came for selling {. no one put in an APP
pcaranee 10 bid. aud that part of the
scheme fell through. Then he began at
another point, for John +. Fay applied to
the Ballard city council for fran
place. The Ballard people were not
willing 10 let him in TO ground which they
had reserved for the big railroads, and
after Mr.. Fay had wrestled long and
vaiiantiy with the council his franchise
ordinance was rejected. He had brought
out Col ). i. Street from Pittsburg to
manage his iron works, bnt he did nothing
more than TO prospect the iron claims 10
some extent. He spent about 5000 last
summer 10 opening twelve-foot vein and
found four Others, varying from fifteen to
sixty feet in thickness.
About the same time he became In
terested in property on Mercer island
and bought large tracts there. These
were: Island park. io3 acres: Mer-
Ger PARK. "a acres: Groyeland park,
81 acres; East Seattle, PIT lots;
Maple Grove park, 80 lots Manages first
addition to Mercer park, "a lots: lot 1. Sec
tion 2. on Mercer island, 81 acres: Ken
wood park on Maydenbauer bay. 80 acres:
total Of 3S7 acres and 5il lots. He or
ganixed the Northwest Trust Company
with a capital stock OF 1000 coo on MAY
q. 1891, 10 hold these properties. but on
February Is. 1899, he incorporated the In
vestors' Trust Company With the same
amount oi capital stock to take its place
as regards part Of the property. The off,
GERS Of both these companies, like those of
the North Seattle Company and Puget
Sound Iron Company, resided in Mime
npolis and the offices were in that city. the
Northwestern Guaranty Loan Company
being behind all of them.
Apparently TO carry out the improve
ments he had designed for these
properties, they were all covered with
mortgages In peculiar manner The
Northwestern Guaranty Loan Company
would cause piece OF property 10 be
decided TO some individual. who was
always represented To be unmarried. and
be would execute mortgage on ID 20 one
OF the subsidiary corporations. then deed
the property TO such of the various COM
panies as the Northwestern Guaranty Loan
Company might direct. Payment of the
mortgages was guaranteed by the North
western Guaranty Loan Company, and
they were then taken East and sold among
the many persons who wished tn invest
In ''safe Western mortgages" An
other company through which much of
this business was done Was the PniIa-
delphia Associates Corporation. organized
by Mr. Menage under the laws of New
Jersey. None of the men through whom
these mortgages were made are known
here. although some of them purport 20 he
residents of Seattle, and they canno, h.
found by attorneys o. whom their notes
were sent for collection. The majority of
them are believed to have been resident.
Of Minneapolis. as the mortgages were all
made there and were simply sent here IN
b. recorded. Some Of these are tlrst NOR.
Cages. all Of which are made 10 the North.
are second mortgages. generally made to
the Philadelphia Associates Corporation,
and few are third mortgages to the
Northwest Trust Company.
An idea Of the value OF these securities
can be formed 10y comparing their amount
with the value Of the property on which
they are secured. The aggregate amount
ON all 81 the property North Seattle
Mercer island. Maydenhaaer hav and the
Hamilton iron mincs.--ls 81 tsiT 600 ~. az
these the first mortgages amount q x5a-.-
On. the second mortgages Co S-t7 IN IA
the third mortgages to s.. $40 and one flr.t
mortgage on the lake Washington pror.
erty 30 sala0o1 The relation which thes.
amounts bear 80 the cost OF the rrorsr,v
on which they are secured is shown hy the
example Of the North Seattle tract the
figures in regard % the Mercer island ana
Naydenhauer hay tracts being difficult, =,
arrive at without search OF the record.
Exclusive Of interest. attorneys fees al.
stractass' fees ana agents expenses tb,
North Seattle tract cost $l0a on Il ara
the mortgages en- il aggregate ST.. a. "a
ar seven times the cost Ia cost on an
average Of SD an acre and IL rnortrses>l AZ
the rate Of saaS al acre without imnrova-
msnts sufficient 60 make up more thaa A
fraction oi sae difference. Roscoe Hilton
the agent FOR the North western Guaranty
lean Company IN this city. SAYS that the
kerfa Seattle Company SAL owns oil the
property On which mortgages bad been
given. IS in case Of transfer to The mont.
EagSr be always transferred IL hack.
An account Of hss business relations
With Menage which throws a cod deal -