Middlebury register. (Middlebury, Vt.) 1886-1937, 1893-05-26
Two HEAVY FAILURES AT ORWELL.
THE VERMONT INVESTMENT AND GUAR
ANTEE CO., AND HAMMOND, BUSH
AND co. GO UNDER.

W. FIGANI TAlLOhEO ~ OHWGLLs
THE VERMONT INVESTMENT AND GUAR
ANTEE CO., AND HAMMOND, BUSH
AND co. GO UNDER.
The Addison county world and the
State at large were startled on Friday
morning last by the announcement in the
daily papers of the failure on the previous
day of the Vermont Investment and
Guarantee Co. and Hammond, Bush &
Co. of Orwell.
Both were generally supposed to be
solid concerns, but the stringency in the
money market and the distrust of west
ern securities, in which both dealt,
rendered it impossible for them to raise
funds for meeting paper coming due, so
there was nothing for them to do but
to suspend. EX-GoY. E. j. Ormsbee of
Brandon has been appointed by the court
of chancery receiver of the investment
company, and has entered upon the dis
charge of his duties. The members of
the firm of Hammond, Bush & Co. will
settle their affairs through the insolvency
court of the Addison district.
THE ORWELL BANK ALL RIGHT.
The failed firms were so intimately
connected with the Orwell bauk that
some uneasiness was felt on its account.
But there was no run upon it. National
Bank Examiner Harlan w. Kemp of
Montpelier was early on the ground and
made thorough examination of it. His
findings are embodied in the following
circular, copies of which have been sent
to all interested in the institution:
To ,ohom il may concern:-I hereby certify
that, as national bank examiner, nave made
full and careful examination into all the
affairs and details OF the business OF the First
National bank OF orwell, VT, to ascertain its
true con iition and to discover If it is affected
or its stockholders and depositors imperilled
| by the recent failures OF the Vermont Invest
ment and Guarantee company, and of Ham
mond. Bush and company land that after going
over all the assets and liabilities OF the bank,
| am prepared to say that it is sound, in good
condition, and entitled to the full confidence
of the community have no doubt that the
stock will continue to be worth very hand
some premium.
IL. W. KEMP,
National Bank Examiner.
THE INVESTMENT COMPANY'S CAREER.
The Vermont investments and Guaran-
tee Co. was incorporated by the legis-
lature of 1884, the corporators named in
the act being Charles K. Bush, Virtulon
Rich, Thomas A. Hammond, William B.
Wright and Cyrus Jennings. Its limit
of capital stock was 100000. 1t was
authorized to loan and borrow money,
to purchase and sell real and personal
property, to buy and sell bonds and
securities, and, generally. to do such
business as its name implies. A clause
of the act of incorporation provided that
''the stockholders shall be personally
liable for the Indebtedness of the corpor-
alton beyond their stock to an amount
equal to the par value of their stock"
The company at once began business
and has since carried it on actively. Its
principal business was the taking of
mortgages on western real estate, al
though it did considerable in the way
of handling short-time commercial pa
per. The mortgages it took were de-
posted with trustees and on the basis
of these securities the company issued
what are called debentures, which were
practically its notes. The interest on
the debentures was paid by funds de-
rived from interest paid the company by
the mOrtgagOrs. That, at least, was the
theory. and it was for the most part the
fact, although, as will be seen below,
the company had to advance quite an
amount of interest to meet the interest
on the debentures. The company made
its profits upon the difference between
the rates of interest it charged and paid.
A large number of the debentures came
due this year-$l9S, 900 worth, as appears
by the report made to the State inspector
of finance on the Both of June last. and
of course these had 10 be paid. But. as
had been said, the tightness of money
prevented the company from realizing on
its securities, and 50 it had to suspend.
1t will be seen that the holders are Sc
cured by mortgages in the hands of the
trustees. There is, therefore, good rea-
son for believing that ultimately they
will get their money. But it will neces.
carilu tn tr
that termination, as such mortgages are
not and from the nature of the case can
not be what banking people call "quicB
assets. The receiver is an entirely com
petent and careful man, and all may resi-
assured that he will do the best he car
ana as well as any one could for them.
The situation of the stockholders is diff
ferent from that of holders of debentures
They are partners in the company, anC
by the terms of the act of Incorporation
quoted above, are liable, if the loss ha!
been large enough, to lose not only wha
they have put into the partnership by
buying stock, but as much more on toI
Y of that.
The latest information from Orwell il
to the effect that the situation looks bet
Y ter, so far rs the affairs of the company
are concerned, the further they are in
NcSllSdltus
The chief sufferers will be people o
q small means, many of whom, living il
: the vicinity of Orwell, had most of thei
e savings in the company. The deben
lures were held by all classes there
: abouts and to some extent by people al
l over this part of the State. 1t does no
t appear that any large blocks Of stock o
e debentures were held by Middlsbur,
men. Col. II. NJ. Chapman was the larg
r est holder of the company's stock in thi
section.
Z The officers of the company are
President, George Briggs; vice-presi
? dent, w. B. Wright; treasurer, c. +
i Bush; secretary, ID. L. Wells; directors
e George Briggs, j. w. Wyman, II. NJ
4 Chapman, b. B. Smalley, w. B. Wright
w. S. Dewey, G. e. Bush; trustees, 4
S j. Ormsbee, G. r. Bottum, j. S. VIII
n cox; attorney, M. j. Harrington; coun
: sci, John w. Stewart.
!. The following is the latest statemen
put out by the company. 1t is date
Il nan Q1 1900