Friday, March 01, 2013

The Mallory settlement

  Still reading back issues of Chariton newspapers, I came across The Patriot's account this week of the 1909 Mallory settlement --- a transaction that for practical purposes ended two years of financial drama and changed the face of Lucas County in ways we still talk about now and then.

As background, railroad contractor and entrepreneur Smith H. Mallory had been the county's most influential (and richest) resident from the time of his arrival in 1867 until his death during March of 1903 at his grand home, the Ilion.

Little changed after his death, apparently, since the Mallory assets passed into the hands of his widow, Annie (upper left) , and daughter, Jessie (Mallory) Thayer (lower left), largely unaffected by taxes and other complications that would develop today. Jessie Thayer, astute and accomplished, was committed to her community in a noblesse oblige kind of way. So everyone was feeling relatively secure until the fall of 1907 when all hell broke loose.

Frank R. Crocker was the trusted associate of the Mallory family, then in charge of the the cornerstone of Mallory enterprises --- First National Bank, one of southern Iowa's largest and apparently most stable finiancial institutions.  Crocker's suicide by morphine overdoes in the family home --- now Fielding Funeral Home --- overnight on Oct. 31-Nov. 1, 1909, led to the discovery that he had broken the bank by frittering away its assets in a series of disastrous investments stretching back to 1903.

The bank was closed immediately and its remaining assets placed in the hands of a receiver, charged with recovering as much money as possible. His number one targets were Annie Mallory, president of the bank, and her daughter, Jessie, a director. There was never any suspicion that the two women had been involved in Crocker schemes, but neither was there doubt that their trustful inattention had allowed the disastrous situation to develop.

Confronted with the threat of massive lawsuits which they most likely would have lost, the women settled during 1909, packed the contents of the Ilion and moved permanently to Orlando, Florida. Because the settlement for the most part shielded the assets of Jessie (Mallory) Thayer, they were able to live comfortably there until their deaths during the 1920s. Although the sums involved seem relatively modest in 2013, they were huge during 1909. Here's how The Patriot reported the settlement in its issue of May 20, 1909:


Another settlement of magnitude in the affairs of the defunct First National bank of Chariton has been arranged for by Receiver J.H. Jamison. It is that between the bank and Mrs. Anna L. Mallory, president, and her daughter, Mrs. Jessie M. Thayer, a director in the institution, and involves approximately $100,000 in real estate and money. In this settlement Mrs. Mallory and Thayer turn over to the receiver all their real estate in Lucas county, including the beautiful home, Ilion, all town property and $27,500 in cash or securities. This settlement was agreed upon by Receiver Jamison and Judge Vincent of the treasury department. It remains with the department to ratify the agreement.

If this settlement goes through it means that Mrs. Mallory and Mrs. Thayer are released from all liability in the matter of the failure of the bank. This settlement is in full of all claims against them --- against Mrs. Mallory and Mrs. Thayer as stockholders, Mrs. Mallory owning 33 percent of the bank's stock and Mrs. Thayer owning 17 percent, and against each of them for dividends received since 1903, since which time the bank was insolvent, Mrs. Mallory having drawn $36,000 and Mrs. Thayer $18,000. It is said that this settlement will leave Mrs. Mallory without money or property. Her share of Mr. Mallory's reputed wealth was her interest in the bank which proved to be worth much less than nothing, and the home property, Ilion. The other property of Mr. Mallory's went to the daughter, Mrs. Thayer, who still is possessor of considerable property in Creston and elsewhere.

This settlement is generally believed to be a good one and it will expedite the declaring of another dividend, which Receiver Jamison thinks will be ready for the creditors some time this summer, and which will probably be 10 per cent. He thinks he can soon dispose of the property, including Ilion, at good prices. He says many people are desirious of owning the Mallory home. He thinks it ought to bring not less than $60,000.

As it turned out, no one really wanted the Mallory home, which was largely neglected although occupied some of the time by farm workers and tenants until demolition during 1955. The nearly 1,000-acre Brook Farm, associated with the home, did sell for $55,000 to Luther H. Busselle and William A. Eikenberry, who held it until their own deaths during 1948.

No comments: