The Topeka state journal., 1897-09-10
TWELVE MORTGAGE LIENS
Are Discovered Among the Assets of
the Milwaukee Mechanics
Insurance Co.

D. o. McCray and E. w. Tatman have
filed with Superintendent McNall report
containing the result of their investiga-
ton of the affairs of the Milwaukee Me-
chanics Insurance company, which was
made last week. The financial affairs of
the company, particularly their securities,
were made the subjects of a critical ex-
animation, but Superintendent McNan
has not determined what action he will
take with reference to the company. The
report says:
''Of the s, ,2SO, .76 shown in the state
ment as first mortgage liens, we found on
examination that loans to the amount of
$27s, 339 a. being in twelve different loans
were secured by the same property, about
three blocks of land in South Milwaukee.
The interest on all of these loans was
prior to the 30th day of June, 1897, (the
day previous to the semi-annual state
ment) in default since about the first of
March, 1896. On the 30th day of June
1897, the defaulted interest was all marked
paid on the books of the company and an
additional note for S16215.00, the amount
of the defaulted interest taken by the
company in settlement. This additional
note is secured by the same property. At
the time of this compromise of this de-
faulted interest the insurance company
entered into a contract with Bigelow,
Milwaukee, and Henry c. Payne, member
of the Republican national committee,
who has control of the street car interests
of Milwaukee, and other Milwaukee peo-
pie who held judgment liens and second
mortgages on parts of the property COW
cred by the twelve mortgages owned by
the company, whereby the parties guar
anteed the payment of the principal by
the year 1902. The company as it's con-
cipal on these loans which they evidently
did not consider well secured agreed to
reduce the interest from to per cent
per annum. After an inspection of the
property, which is used by manufacturing
concerns, we called on Mr.. Bigelow at
his bank and were informed by him that
Mr.. Payne and himself did not think it
would be good showing for the business
interests of Milwaukee if the insurance
company were allowed to foreclose on this
property and also to secure a second
mortgage to the amount of $4,000, which
his bank held on the property, they had
concluded to enter into the agreement
mentioned, and hoped that in the course
of time they could turn the property
prior to 1902 and get the money out of it.
He frankly admitted that at the present
time he did not think it would bring the
amount of the insurance company $
I'VE also found in our examination of
the mortgages that $32, 600 of the amount
shown in the statement mortgage
loans, were loans which have either been
foreclosed, or are now in process of fore
closure. In many of them the title to the
real estate is now in the company, and
they are not loans at all and should be
carried in some other account. An ex-
ample of this class is loan No. 23S for So
OOO which is secured by a mortgage given
by a turner society of Denver. Colo. The
loan is for $4,000 and the company took
$1,000 of it as an accommodation to their
Denver agent, and because they were
eager for Denver business. January I,
1897, they reported $3.50 interest in default.
1t was then in foreclosure. The conn
pany said when we were in Milwaukee,
that it would be sold in few days, but
that they did not suppose that they would
get much of anything for it, as the peo-
pie who held the $4,000 in notes were in a
position to freeze them out.
Turning our attention to the charges
against this company of evading the nom
resident agency law by means of dunn
my agencies we found from careful in
spection of the flies of the daily reports
that the practice was more widespread