Courting Disaster


| September 2005



It appears that as long as Northwestern Mfg. and Car Co. of Stillwater, Minn., operated, they lost money. Finally, in 1886, the company was forced to reorganize, becoming Minnesota Thresher Mfg. Co.

But even though the company lost money, a pair of stockholders, Thomas Lowry and R.B. Langdon, who each held $25,000 worth of Northwestern stock, declared six dividends of two percent to themselves and a couple of other choice stockholders.

The new company wanted that money back, so they brought suit against Lowry and Langdon to recover $3,000 from each, the amount it was claimed had been wrongfully paid out as dividends.

Officials within the new company were irked that Langdon and Lowry had combined their claims with other parties. Those combined claims against Northwestern totaled $1,700,000, which meant that when Northwestern ceased business, the amount it could pay out was much lower - 10 cents on a dollar - than if the claims hadn't been made.

Minnesota Thresher was still indebted to pay $3,500,000 in losses from Northwestern's debacle, so it made no sense that some of the principal stockholders of the old company should be getting dividends when everything else was losing money.

In 1889, Minnesota Thresher Co. filed another, similar suit, against H.H. Porter and R.R. Cable, who had received $12,000 and $2,000, respectively, for dividends. "It is claimed that the old Northwestern Mfg. and Car Co. paid the amounts to the defendants in dividends while it was in an insolvent condition," says Farm Implements and Hardware (FIAH) in their October 1889 issue.