St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1895-02-23
Ike $25O,COO, which did not pay inter-

like $250,GOO, which did not pay inter
est.
Third-The contract with J. r. VOL
colt for the loan of $780, 900 or more, by
means of which the company acquired
the properties known as those OF the
North Seattle company and the Puget
Sound Iron company, which were rep
resented by mortgages against which
debentures were issued. These mort
cages represented, l believe, the
amount of original investment addi-
tions thereto, amounts to come to the
company according to the agreement,
expenses, improvements and some adj
vance interest. The large profit to
come to the company was the object
In making the arrangement. The fail
ure of the project until the present
time may be laid to various causes,
principal of which is the falling off of
real estate activity on Puget sound.
The original price of the property
was not extravagant, and large part
of the increased amount for which it
is now held went to the stockholders
of the Guaranty Loan company as div
idends. This is also true of the North
after.
Fourth-The loaning of c. c. Calkins,
Of Seattle, the sum of $1O0 600 at a large
rate of interest. The loan was made
by the then superintendent of the loans
on written appraisals of prominent cit
izens, representing the value. of the
property to be three times the amount
Of the loan. Unfortunately, Mr.. Calk-
ms did not protect the property, and
in attempts to better itself the company
advanced perhaps $50, 600 more on other
security. This with the Wolcott mat
ter above), first carried as short paper,
was put into the shape of mortgages.
These cover East Seattle and other
property on Mercer Island.
Fffth-The purchase of some 500
acres of land in Texes, on which the
town of North Galveston is laid out.
While the title was given by me, at
first, the investment was solely for the
company, and made because there was
thought to be great profit on the enter
prise, which would go far towards pay
ing its dividends and expenses for
years. The purchase price of $11 an
acre was extremely cheap, the site a
natural one for a city, the land fertile
and particularly adapted to the culti-
VatiOn of fruit. The financial crisis
alone prevented the project realizing
all that was expected of it. 1t is true
that some considerable money was
spent in developing the property, but,
at the rate of sales for a few months
prior to the failure, another seasons
work would have repaid it all, and
demonstrated the complete success of
the enterprise. The 10000 pear trees
set out on this property would have
produced in a few years an income of
S1O0,000 at a liberal discount from the
yield and price obtained at neighbor-
ing orchard a few years since.
Sixth-The loaning of some $4,000 on
the stock of the Gallatin Light and
a high rate of interest The light plant
seemed to be paying well, and it was
thought that a short electric railway in
connection Herewith would also be
profitable.
Owing to the financial disturbance,
bonds were not placed as expected, and
the Guaranty company was carrying
the loan at the time of the failure.
Mortgages placed by me with the
company are of the same general char
acter as were placed through mort
gage agents in the city and elsewhere,
and many times when loans matured
they were given to the company in
stead of being renewed with the mort
gagee, because the demand for loans
from the company was greater than
the supply. In this way l lost a per-
sonal clientage, and later the company
was obliged to renew the loans to
protect my credit, which was identical,
in a degree, with its own. Later,
many of these loans were replaced by
short paper, as the demand for that
became better than for mortga ges.
The character of the mortgage and
the good faith of mortgagor should
be considered as having been based
on values when the mortgage was
given, and not on values at such
times as we have fallen upon now,
when there seems to be little value to
any real estate if forced to a sale.
There were times when my paper,
or that of the companies of which I
owned the stock, was largely dis
counted solely for the benefit of the
Guaranty company, either to supply
a demand for paper, or as accommo-
dation; and at the time of the failure
the Guaranty company was still owing
the Minnesota Agricultural company,
which was entirely auxiliary to my
business a balance of over $4,000 on
account of accommodation paper.
The Minneapolis Realty company,
formed at first for the purpose of car
rying some of my real estate, pend
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