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The Administrative and Policy Problems of the J. B. Watkins Land Mortgage Company, 1873–1894

Published online by Cambridge University Press:  24 July 2012

Allan G. Bogue
Allan G. Bogue
Affiliation:
State University of Iowa
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Extract

During the last quarter of the nineteenth century the financial milieu of the United States was enlivened by the appearance of farm mortgage companies whose agents scoured the northeastern states, proclaiming the discovery of an investors' mother Iode, the western farm mortgage. To the experienced investor the farm mortgage was no innovation of course, but the mortgage companies were to bring the mortgage market to a new peak of organization and their investors ultimately to a state of frustration compounded. This paper deals with the history of one western mortgage company.

Type
Research Article
Information
Business History Review , Volume 27 , Issue 1 , March 1953 , pp. 26 - 59
Copyright
Copyright © The President and Fellows of Harvard College 1953

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References

Editor's Note: This paper (in a somewhat shorter form) was read at a joint meeting of the Business Historical Society, Inc., and the American Historical Association, held in Washington, D. C., on December 28, 1952.

1 The Annual Reporls of the Connecticut Bank Commissioners, 1888–1895, of the Massachusetts Commissioner of Foreign Mortgage Companies, 1890–1895, of the New York Superintendent of Banking relative to foreign mortgage, loan, investment, and trust companies, 1891–1896, and of the Vermont Inspector of Finance, 1889–1893, provide many data on the numbers of the companies and their more reprehensible business practices. See also, Bogue, A. G., “The Land Mortgage Company in the early Plains States,” Agricultural History (January, 1951), vol. 25, pp. 20–33.Google Scholar

2 Connelley, William E., A Standard History of Kansas and Kansans (Chicago, 1918), vol. 5, p. 2407Google Scholar; Standard Publishing Company, Kansas (Chicago, 1912), vol. 3, pp. 1200–1202Google Scholar; National Cyclopedia of American Biography (New York, 1926), vol. 19, p. 105; “Lawrence Daily Journal World, Feb. 5, 1921.

3 The J. B. Watkins Collection at the Library of the University of Kansas contains some 435 letter press books, ledgers, and account books along with 480 standard manuscript boxes of incoming material. Chronologically the collection covers the years 1871–1921 with the bulk of the material relating to the period 1880–1900. A smaller collection of ledger and letter press books is still in the possession of Mr. Dick Williams, the executor of Mrs. Watkins' estate. Pertinent files of the Farmers' Loan and Trust Company of New York were opened to me through the courtesy of the City Bank Farmers' Trust Company and the Collection of Regional History, Cornell University. Unless otherwise noted manuscripts referred to are from the J. B. Watkins Collection.

4 J. B. Watkins to Chas. Demand, Boston, Mass., July 29, 1874.

5 The State Census Rolls, 1875, at the Kansas State Historical Society in Topeka, give the population of Lawrence as slightly over 7,000.

6 J. B. Watkins to D. W. Clapp, Iowa City, Ia., Feb. 8, 1879.

7 Henry Dickinson to A. N. Bentley, Greenville, N. Y., Dec. 27, 1877; to Charles Thompson, Manchester, England, Nov. 28, 1877; to J. B. Watkins and Co., Jan. 18, Feb. 9, 1878. Margaret Beattie Bogue working with the Goodell Papers, Loda, Illinois, found that Addison Goodell also ascribed the rapid growth of his Ioan agency during the late 1870's to the unsatisfactory experience of investore with other forms of securities during the depression of the 1870's. Addison Goodell to William Boardman, Hartford, Conn., Feb. 13, 1874; to John G. Baucus, Hoosick, N. Y., Mar. 28, 1874; to S. M. S., Apr. 28, 1874.

8 When the New York Times marked the bankruptcy of Corydon Weed, important loan agent of Bloomington, III., and Watkins' one-time superior, with an editorial, the “Collapse of Western Mortgages,” on Nov. 11, 1877, Watkins took up the defense of the mortgage business in general in J. B. Watkins to Editor, New York Times, Dec. 19, 1877.

9 J. B. Watkins to Nathaniel Gordon, Exeter, N. H., June 2, 1877; Henry Dickinson to Charles Thompson, Manchester, England, Nov. 28, 1877.

10 Henry Dickinson to Prof. Debolson Wood, Hoboken, N. J., Oct. 26, 1882. By 1876 the rate returned to American investora was uniformly 10%, in 1878—9%, 1880—8%, 1881—7%, and in 1886—6%. Rates given to British investora usually were 1% lower than the American rate.

11 J. B. Watkins and Co. to G. M. Parks, Washington, Kans., Aug. 12, 1876, to Q. A. Annin, Las Vegas, N. M., June 9, 1877, to B. S. Stone, Mexico, N. Y., June 12, 1877, to Henry G. Bronson, Hartford, Conn., Aug. 14, 1877; J. B. Watkins to H. C. Dodge, Amherst, N. H., June 23, 1877, to R. L. Cochran, Franklin, Pa., Mar. 12, 1879.

12 J. B. Watkins to Sidney W. Jackson, Jericho, Long Island, N. Y., Jan. 6, 1874, to H. L. Ward, Norwich, N. Y., June 12, 1877.

13 J. B. Watkins to Lyman Kimball, North Ferrisburg, Vt., Aug. 13, 1875.

14 J. B. Watkins to Edward Lewis, Philadelphia, Pa., Jan. 3, 1878.

15 J. B. Watkins to W. E. C. Lyons, Nashville, III., July 15, 1874.

16 J. B. Watkins and Co. to Donald McIntyre, Johnstown, N. Y., June 25 1877, to Henry G. Bronson, Hartford, Conn., Aug. 14, 1877.

17 Henry Dickinson to J. B. Watkins and Co., Jan. 18, Feb. 16, 1878, to Edward Pim, Mountmellity, Ire., Jan. 11, 1878, to I. A. Moorehouse, Leeds, Eng., Feb. 4, 1878. The previous experiences of British investors in the American field are treated in the following studies: Jenks, Leland H., The Migration of British Capital to 1875 (New York, 1927)Google Scholar; McGrane, Reginald C., Foreign Bondholders and American State Debts (New York, 1935)Google Scholar; Hidy, Ralph W., The House of Baring in American Trade and Finance; English Merchant Bankers at Work, 1768–1861 (Cambridge, 1949)CrossRefGoogle Scholar; Brayer, Herbert O., William Blackmore: The Spanish-Mexican Land Grants of New Mexico and Colorado, 1863–1878, I–II (Denver, 1949).Google Scholar

18 Henry Dickinson to J. B. Watkins and Co., Dec. 24, 1877.

19 Henry Dickinson to J. B. Watkins, Feb. 16, 1878, to Charles Thompson, Manchester, Eng., Feb. 26, 1878.

20 Henry Dickinson to Charles Thompson, Manchester, Eng., May 6, 1878.

21 J. B. Watkins to Charles Thompson, Manchester, Eng., Dec. 21, 1878.

22 J. B. Watkins to Edward Lewis, Philadelphia, Pa., Feb. 19, 1878, to Henry Dickinson, Dec. 30, 1880.

23 J. B. Watkins to Henry Dickinson, Nov. 23, 1878, to Reverend C. H. Richmond, Saranac, N. Y., Sept. 19, 1879; J. B. Watkins and Co. to Henry Dickinson, July 7, 1880; M. J. Dart to J. B. Watkins, May 28, July 26, 1880.

24 Examples of such business practice are to be found in the Davenport Collection, and the Henry W. Sage Papers, Collection of Regional History, Cornell University, Ithaca, N. Y., as well as in the Charles M. Hawkes Papers, Kansas State Historical Society, Topeka, Kans.

25 J. B. Watkins and Co. to A. W. Gilbert, Ross, Ohio, July 9, 1879.

26 J. B. Watkins and Co. to Hopkins and Taber, Holton, Kans., Mar. 13, 1879, to William H. Dodge, Great Bend, Kans., Mar. 24, 1879.

27 J. B. Watkins to Edward Lewis, Philadelphia, Pa., Dec. 28, 1878.

28 H. Dickinson to J. B. Watkins and Co., Apr. 18, 1878.

29 J. B. Watkins and Co. to D. M. Wright (address not given), Aug. 28, 1875.

30 J. B. Watkins and Co. to D. M. Sprankle, Wichita, Kans., Mar. 16, 1876.

31 J. B. Watkins and Co. to M. Noyes, Parsons, Kans., July 16, 1875, to Ellsworth Reporter, June 7, 1876, to D. M. Sprankle, Wichita, Kans., Apr. 6, June 9, 1876, to M. Reasoner, Concordia, Kans., July 17, 1876, to Adams and Altdoerffer, Larned, Kans., Nov. 21, 1879, to Henry P. Churchill, Cawker City, Kans., Mar. 15, 1882.

32 J. B. Watkins and Co. to W. H. Fletcher, Republican City, Kans., Aug. 7, 1874; also to M. Noyes, Parsons, Kans., July 16, 1875.

33 M. J. Dart to J. H. Crossman, Humboldt, Kans., July 24, 1876.

34 Ibid., July 31, 1876.

35 Ibid., Aug. 21, 1876.

36 J. B. Watkins and Co. to James H. Crossman, Humboldt, Kans., Apr. 1 and June 9, 1876, to E. S. Bertram, Council Grove, Kans., July 17, 1876, to Scott and Ross, Erie, Kans., Feb. 18, 1876, to Theodore Hurtz, Belleville, Kans., Apr. 22, 1880.

37 J. B. Watkins and Co. to Samuel H. Early, Clay Centre, Kans., Aug. 4, 1874, to W. H. Knight (address not given), Feb. 11, 1876, to S. H. Hustoedt, Caledonia, D. T., Mar. 13, 1880, to W. R. Hoole, Zion Valley, Kans., May 10, 1880, to T. G. Fladeland, Grand Forks, D. T., Dec. 9, 1880; M. J. Dart to A. Hubbard, Spencer, Ia., Aug. 7, 1876, to L. J. Best (no address given), Aug. 30, 1876.

38 The sixth principal meridian lies some 20 miles to the west of the ninety-seventh meridian of longitude.

39 J. B. Watkins to Edward Lewis, Philadelphia, Pa., Dec. 18, 1877.

40 J. B. Watkins and Co. to Register of Deeds, Seneca, Kans., Mar. 4, 1876, to Welch and Drew, Feb. 13, 1879; M. J. Dart to D. M. Sprankle, Wichita, Kans., Sept. 23, 1876; J. B. Watkins to Edward Lewis, Philadelphia, Pa., Dec. 18, 1877, to D. W. C. Clapp, Iowa City, Ia., Feb. 8, 1879.

41 M. J. Dart to H. C. Reynolds, Blue Rapids, Kans., May 5, 1881, to J. B. Watkins, June 4 and June 15, 1881; Henry Dickinson to Jerone H. Wheeler, Worcester, Mass., Nov. 1, 1882.

42 M. J. Dart to W. D. Russell, Yankton, D. T., Apr. 30, 1881. One of the local agents was John D. Cameron of Sioux Falls who was indieted by the U. S. for preparing fraudulent affidavits of pre-emption. See United States vs. Cameron, filed in the Supreme Court of Dakota, Oct. 2, 1882, Northwestern Reporter, vol. xiii, p. 561; also “Report of Special Agent, Wm. W. Burke, to Hon. J. A. Williamson, Commissioner of the General Land Office, Oct. 9, 1880,” Senate Executive Document No. 61, vol. 3 (1882–83), 47th Congress, Second Session.

43 W. J. Patterson to J. B. Watkins, Aug. 14, 1882, to Coughran and McMartin, Sioux Falls, D. T., May 9, 1882; T. H. Rudiger to J. B. Watkins, July 29, 1882.

44 J. B. Watkins to Henry Dickinson, Dec. 5, 1881.

45 M J. Dart to Henry Dickinson, Apr. 15, 1882.

46 M. J. Dart to T. L. Nixon, Wichita, Kans., May 8, 1880, to J. B. Watkins, London, Eng., May 17, May 28, 1880, to J. M. Dean, North Ferrisburg, Vt., May 19, 1880; J. B. Watkins and Co. to Kohn Bros. and Co., Wichita, Kans., May 15, 1880, to F. E. Gillett, Kingman, Kans., July 12, 1882, to Governor John P. St. John, Topeka, Kans., July 12, 1882, to Merchan's Detective Association, Kansas City, Mo., Aug. 19, 1882; Kingman County Citizen, May 7, June 19, June 25, July 2, 1880; A. L. Selig to M. J. Dart, Feb. 23, 1882; T. H. Rudiger to Sheriff H. R. Watts, Wichita, Kans., July 6, 1882.

47 M. J. Dart to U. B. Mumford, Beloit, Kans., Apr. 15, 1881.

48 J. B. Watkins to T. B. Sweet. Topeka, Kans., Oct. 12, 1881, to H. G. Reynolds Blue Rapids, Kans., Aug. 27, 1881, to M. J. Dart, Dallas, Tex., April 28, 1882; Beloit Gazette, Aug. 21, Sept. 3, Oct. 29, 1881.

49 M. J. Dart to Earl Joslin, Lyons, Kans., Sept. 5, 1881.

50 M. J. Dart to Aaron Ford, Greenvale, Kans., Sept. 8, 1881.

51 J. B. Watkins and Co. to L. W. Higgins, Kinsley, Kans., Nov. 7, 1882; T. H. Rudiger to M. J. Dart, June 27, 1882, to J. B. Watkins, July 18, 1882. The figure of 40,000 acres was arrived at by subtracting the acreage of real estate owned on Jan. 1, 1881, from the holdings at the date of the organization of the J. B. Watkins Land Mortgage Company in October, 1883.

52 In general this account is based cn the stenographic record of Watkins vs. Perkins given in the Lawrence Daily Tribune, Dec. 21, 1880, to Jan. 3, 1881, inclusive, and Perkins vs. Watkins in Magistrates Court; The President of the Western Farm Mortgage Co. F. M. Perkins vs. J. B. Watkins, Libel Suit for $10,000 Damages (published by J. B. Watkins Land Mortgage Co., 1887).

53 M. J. Dart to J. B. Watkins, June 12, 1880.

54 “Fraud and Embezzlement,” Lawrence Daily Tribune, Dec. 3, 1880.

55 Civil Actions, No. 5003 and 5045 and Criminal Action, No. 709 were filed in Douglas County District Court.

56 Paul Brooks to J. B. Watkins, July 14, 1892.

57 Statement of Frank Perkins in Perkins vs. Watkins (Lawrence, 1887), p. 117.

58 J. B. Watkins to R. L. Cochrane, Franklin, Pa., Mar. 12, 1879.

59 J. B. Watkins to Rev. C. H. Richmond, Saranac, N. Y., Sept. 19, 1879.

60 J. B. Watkins and Co. to B. S. Stone, Mexico, N. Y., June 12, 1877; J. B. Watkins to Henry Dickinson, Mar. 12, 1880.

61 J. B. Watkins to H. G. Chalkley, Oct. 14, 1881.

62 Assets and Liabilities, Jan. 1, 1881, letter press book 20 (Lawrence series), p. 388.

63 J. B. Watkins to Henry Dickinson, Nov. 12, 1883.

64 J. B. Watkins to O'Connel and Springer, Fort Dodge, Ia., Feb. 18, 1879, to E. S. Bertram, Council Grove, Kans., Mar. 23, 1882.

65 The effort to set a combination rate is discussed in “The Land Mortgage Company in the Early Plains States,” Agricultural History, vol. 25 (January, 1951), pp. 20–33.

66 J. B. Watkins to Henry Dickinson, Nov. 25, 1878, Feb. 22, 1879, to Farmers' Loan and Trust Company, New York, N. Y., Dec. 23, 1878.

67 Henry Dickinson to J. B. Watkins, Feb. 21, 1883, to J. B. Watkins and Co., July 25, 1883.

68 J. B. Watkins to W. S. Platt, Waterbury, Conn., Oct. 10, 1883.

69 J. B. Watkins to Rev. Dr. J. W. B. Clark, Haverhill, Mass., Oct 11, 1883.

70 Henry Dickinson to J. B. Watkins, July 23, 1883.

71 J. B. Watkins to Rev. Dr. J. L. Withrow, Boston, Mass., Oct. 11, 1883.

72 T. C. Green to J. B. Watkins, Oct. 23, 1891.

73 J. B. Watkins to Henry Dickinson, Oct. 11, 1883.

74 J. B. Watkins to Rev. Dr. J. W. B. Clark, Haverhill, Mass., Oct. 11, 1883.

75 T. H. Rudiger to Henry Dickinson, Oct. 16, 1883.

76 J. B. Watkins to Henry Dickinson, July 18, 1884, to Rev. Dr. J. W. B. Clark, Haverhill, Mass., July 21, 1884.

77 Stock book of the J. B. Watkins Land Mortgage Company in possession of Dick Williams, Lawrence, Kans.; J. B. Watkins to H. G. Chalkley, Feb. 11, 1889.

78 T. H. Rudiger to Henry Dickinson, Dec. 10, 1883.

79 J. B. Watkins to S. N. Rowell, Malta, N. Y., Sept. 27, 1883.

80 Frederickson, D. M., “Mortgage Banking in America,” Journal of Political Economy, vol. 2 (Mar., 1894), pp. 203–234, p. 210.CrossRefGoogle Scholar

81 Henry Dickinson to J. B. Watkins, Jan. 5, 1878.

82 A copy of this agreement is to be found in Farmers' Loan and Trust Co. File 1497, in City Bank Farmers' Trust Company.

83 J. B. Watkins to H. G. Chalkley, Aug. 22, 1887.

84 J. B. Watkins to Henry Dickinson, June 26, 1888.

85 J. B. Watkins to H. G. Chalkley, Dec. 24, 1887.

86 J. B. Watkins to Henry Dickinson, Oct. 13, 1888.

87 J. B. Watkins to D. M. Sprankle, Oct. 10, 1888, to M. J. Dart, Feb. 17, 1890.

88 D. M. Sprankle to J. B. Watkins, Mar. 28, Apr. 18, May 16, 1884, to Henry Diegel, Sept. 22, 1884; J. B. Watkins to Henry Diegel, Pueblo, Col, Feb. 16, 1884; W. J. Patterson to D. M. Sprankle, Apr. 14, 1884.

89 T. H. Rudiger to D. M. Sprankle, Apr. 12, 1884.

90 D. M. Sprankle to O. C. Stanton, Aug. 6, 1886.

91 D. M. Sprankle to O. C. Stanton, June 13, 1887, to J. D. Miller, Lincoln Kans., Aug. 5, 1887.

92 D. M. Sprankle to O. C. Stanton, Apr. 2, 1888.

93 D. M. Sprankle to J. B. Watkins, Feb. 15, 1888.

94 J. B. Watkins to M. J. Dart, May 19, 1888.

95 M. J. Dart to Henry Dickinson, Nov. 26, 1884.

96 M. J. Dart to G. R. Scott, Corpus Christi, Tex., Nov. 20, 1887.

97 The figure is deduced from the real estate list submitted in Girard Life Insurance, Annuity and Trust Company vs. the J. B. Watkins Land Mortgage Company, et al. Case No. 7083, filed in United States Circuit Court, District of Kansas, First Division, Apr. 5, 1894.

98 M. J. Dart to J. B. Watkins, Mar. 10, 1886.

99 Ibid., Apr. 9, 1887, Dec. 4, 1889.

100 M. J. Dart to F. H. Banker, Mar. 2, 1886.

101 M. J. Dart to J. B. Watkins, Nov. 19, 1888.

102 M. J. Dart to Lawrence Office, Nov. 23, 1888.

103 For example, among the companies licensed to seli western mortgage securities in New York on Jan. 1, 1891, ten reported operations in Texas while 19 included Kansas in their lending field. New York, Assembly Doeuments, 1891, No. 64.

104 M. J. Dart to J. B. Watkins, Mar. 23, 1887.

105 T. C. Green to J. B. Watkins, July 22, 1891; however, United States: Eleventh Census, 1890: Report on Real Estate Mortgages, Table 69, p. 248, shows a smaller average spread.

1880 1889 10 yr. average

Kansas 9.47% 8.48% 8.83%

Texas 10.18% 9.27% 9.74%

106 M. J. Dart to J. B. Watkins, Nov. 13, 1884.

107 J. B. Watkins to M. J. Dart, May 11, 1888.

108 M. J. Dart to J. B. Watkins, Oct. 26, 1888.

109 Agreement of Jan. 28, 1887, Article 4.

110 Watkins did not collect all of the dividends on his own stock in the 1890's.

111 T. H. Rudiger to J. B. Watkins, July 9, 1885; J. B. Watkins to Henry Dickinson, Mar. 30, 1889.

112 D. M. Sprankle to M. J. Dart, Aug. 8, 1891.

113 D. M. Sprankle to J. B. Watkins, Sept. 17, 1891.

114 J. B. Watkins to D. M. Sprankle, Mar. 18, 1891.

115 Sent to all investore with principals due, dated Aug. 1, 1893.

116 T. C. Green to J. B. Watkins, Aug. 1, 1893.

117 W. P. Presby to J. B. Watkins, Oct. 19, 1893.

118 See Balance Sheet, Appendix.