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# EFFECT OF THE POTTER, LOVELL & CO. FAILURE
t sources enables the Manufacturers' Record to set at rest whatever uncertainty there may have been as to the effect of the failure of Potter, Lovell & Co., of Boston, on the Southern enterprises in which they were interested, and for which their concern was a sort of Eastern clearing house. The announcement of the failure caused considerable comment in Southern financial circles on account of the good enterprises in Texas with which the firm was known to have some connection. Our advices are that the embarrassment to these corporations will be only temporary and will not interfere seriously with the projects they have under way. They will be brought out of their difficulties through friendly receiverships.
Potter, Lovell & Co. in their January statement showed a fully paid up capital of $400,000 and a surplus of $300,000, all of which will be wiped out. They did business last year of about $64,000,000, mostly in paper which they had discounted in New England banks for New England and Southern customers, and it is thought thas several millions of this paper will unexpectedly have to be liquidated, owing to the failure.
The trouble seems to have had its origin in Gogebic mining ventures and transactions with the concern of Shaw & Co., the magnitude of which is indicated by the fact that the assignee has attached the latter firm for an account exceeding $1,000,000.
Potter, Lovell & Co. had managed large transactions for Texas, but the Boston papers agree that these investments were in the main successful ventures and that they were cornered in lugging the tanneries and other enterprises in the East. They responded to calls for $1,700,000 in three days, but the pace was so rapid they had to quit. It is thought a new concern will be organized to buy the assets of the suspended firm and attempt to carry on the business. As to the Texas business of the firm, they were carrying W. M. D. Lee and Abner Taylor, member of congress from Chicago, for $700,000, the proceeds of which went into the Brazos River Channel and Dock company, a corporation that is successfully building the deep water channel on the Texas coast. The company itself never had any paper out except some bonds as collateral to protect the Lee and Taylor advances. A receivership for this company and Lee and Ferguson, which firm is also interested, is probable, with Major Evans of Austin, and Geo. W. Angle of San Antonio, both directors in the Brazos company, as the receivers. This course is considered best, in order that work may not be stopped. The other directors in this company, who are Thos. J. Hurley, United States Senator C. B. Farwell, Major Evansand Hon. Chas W. Ogden and George W. Angle, of San Antonio, are not in any way involved in the financial difficulties growing out of the failure.
Potter, Lovell & Co. were owners of the control of the Fort Worth Land and Street Railway Co., of Fort Worth and as the latter is indebted to the Fort Worth Loan and Construction Co., the Pullman Car Co. and the Detroit Electrical Works for about $100,000, it will pass into the hands of a receiver to protect those accounts, which may lead to the consolidation of all Fort Worth's street railroad interests.
The suspended firm had large interests in the Austin and Gainesville street railways, but those corporations have no floating debts and are in good financial condition, and the control is owned by the Hurleys of Fort Worth, so that the failure applies to the stock held by Potter, Lovell & Co. alone, and does not affect the corporate property.
The rumors connecting the firm of J. V. Farwell & Co. of Chicago with the failure grow out of the fact that all their paper was handled by Potter, Lovell & Co., who a'so raised the $3,000,000 with which the Farwells and Abner Taylor built the state capitol of Texas. J. V. Farwell was given as one of the directors in the defunct company, and the claim is made that under the laws of Massachusetts he is responsible for the firm's depts, but he asserts that he is not legally a director, never having been informed of his election. He does a $20,000,000 business in Chicago, and was connected with Lee & Ferguson in their Texas enterprises. It is stated that the Worcester Steel Works is crippled by the failure and is likely to go under.
The total losses by the failure are $5,000,000 according to outside estimates, but, as we have shown, none of the Southern enterprises involved are likely to suffer disastrously, and in
