People's Pilot, Volume 2, Number 44, Rensselaer, Jasper County, 21 April 1893 — LANSING FIRMS FAIL. [ARTICLE]

LANSING FIRMS FAIL.

A Lumber Company and an Iron and Engine Plant In the Michigan Capital Forced to Give Heavy Mortgages A Savings Bank Suspends in Consequence— Fears of Runs on Other Banks. Lansing, Mich., April 19. —The Lansing Lumber company and the Lansing Iron & Engine works, the former with a capital of $200,000 and the latter capitalized at $100,000, and both under practically the same management, of which Orlando F. Barnes is president, executed mortgages covering all their real estate and chattels Tuesday to O. M. Barnes. The mortgagee is the father of the head of the companies and has indorsed their paper to the extent of $565,000. In addition to this he is theirereditor in the sum of $136,000, and it is to secure this aggregate of $701,000 that the mortgages are given. • About two-thirds of. the paper is held by the local banks, the Central Michigan savings bank, of which O. F. Barnes is president, carrying the largest amount. About half is secured by gilt-edged collateral in addition to the senior Barnes’ indorsement. Having thus assumed the practical control of both institutions, the mortgagee will continue the business of both concerns, which he will personally manage. The assets of the company, although not definitely ascertained, are estimated at $800,000. To this Mr. Barnes will add his private fortune of $1,000,000, and expresses entire copfidence in his ability to meet the liabilities, which foot up $900,000. The news of the execution of the mortgages caused a run to be made on the Central Michigan savings bank. This was met until 3 o’clock, an. hour before the regular time for suspending business, when, although a large amount of cash remained on hand, the doors were closed on the advice of State Bank Commissioner Sherwood, who took im : mediate possession of the institution and commenced an examination of its affairs. This examination cannot be completed for several days, but the commissioners thinks the bank officials justified in asserting the solvency of the bank, and its ability to pay all depositors in full. He anticipates a resumption of business when the examination is completed. The other banks are fortifying themselves to meet the drafts which will doubless be made upon them to-day. All are confident of their ability to meet the emergency, and this opinion is shared by the business men generally. The mortgages executed by the lumber company secure $366,000, and those by the iron and engine works $335,000. No paper has. been secured by the mortgagee, who says that every dollar of it Will be taken care of.