The panic of 1907 engulfs the Collins Company

Posted by | April 22, 2013

“One of the most important business enterprises of modern Pennsboro was the founding of the Collins Company, [the holding company for Pennsboro Lumber Company] which was opened as a retail planing-mill in 1905,” declares Minnie Lowther’s 1910 ‘History of Ritchie County (WV).’

The company was headed up by Creed Collins, then considered the wealthiest man in Ritchie County, who partnered with Charles W. Sprinkle and Elbert M. Bonner in this venture.

In April 1907 the trade magazine ‘Hardwood Record’ reported:

“The Collins Company, wholesaler of lumber at Pennsboro, W. Va., has just purchased from the Deckers Valley Lumber Company a large tract of West Virginia lumber near Sturgisson, between Morgantown and Kingwood. The tract comprises from 2,500 to 3,000 acres of virgin timber and is one of the finest in the state.

“The transaction includes several miles of railroad, two sawmills, a hotel, store, and other property. Although the exact amount of money involved has not been announced, a report places it at at least $100,000. The company has taken possession of operations, with E. M. Bonner as general manager and Frank Smith as superintendent.

“The sales department will be conducted through the general offices of the Collins Company at Pennsboro, W. Va. Creed Collins, C. W. Sprinkle and E. M. Bonner are the principals of this well-known hardwood house.”

Business seemed promising enough that the following month Collins, Sprinkle & Bonner opened a second lumber concern (along with the Frank Smith mentioned above, and also one J.B. Yates).  The Lick Run Lumber Company also based in Pennsboro.

Creed Collins and his partners couldn’t have predicted the Panic of 1907 that was about to engulf their businesses that summer.

In early 1907 consumer goods prices were high and continuing to increase, a situation set in motion by too easy credit. The money center banks of New York City owed their depositors more money than the whole country possessed, real money and ‘credit money’ combined. The system couldn’t sustain itself that way any longer. A stock market panic hit that threatened to topple the New York investment banks and reverberate through the economy, triggering a depression.

The Panic of 1907 caused nationwide bank failures, timber prices collapsed, mine operations ceased, railroads stopped running, a rash of bankruptcies occurred, and a dramatic loss of confidence and a nasty economic downturn sank in for the next year.

“Collins Lumber Company Bankrupt,” reported the NY Times on October 9, 1908.  “Following the filing of a petition in bankruptcy in Clarksburg, WV today Judge Dayton in the Federal court adjudged Creed Collins of Pennsborough, a prominent business man of Ritchie County, and the Collins Company, a large lumber concern, bankrupts.  The Collins Company’s liabilities are listed at $254,879 and its assets at $46,644.  Mr. Collins assets are estimated at $92,427.”

“….thus one of the largest enterprises in the history of the county took its place among the annals of the past, and untold sorrow followed in its wake,”  historian Minnie Lowther tells us.

Charles Sprinkle and Elbert Bonner were also bankrupted in 1908, but had nowhere near the remaining assets Collins had.  And so Decker’s Valley Lumber sued Collins individually for restitution, knowing he had more assets than both his partners and the partnership itself.

The same Judge Dayton mentioned in the NY Times article ruled the suit valid, despite the fact that the original transaction papers were signed not solely by Collins, but by Collins and his partners Sprinkle and Bonner.  The court cited a technicality that the signatures at the bottom of the document did not reference the partnership, but were simply individual signatures, and therefore that Decker’s Valley could sue any or all three partners as individuals.

But the lawsuit stalled.

Meantime, the turbulent business environment and his own personal misfortunes were too much for the 64-year old Collins to bear. “Death quickly follows in the wake of the financial misfortunes of Creed Collins,” announced the Wheeling Intelligencer in April of 1909. “Health fails when fortune of lumber magnate and Democrat politician dwindles,” the obituary continues. “The well known Democratic politician and financier died this afternoon [April 23 ] shortly after 1 o’clock at his home at Pennsboro. The end was not unexpected and it came with all members of his immediate family at his bedside.

“The death of Creed Collins was caused by his recent financial troubles. Formerly known as the richest man in Ritchie County, he was hard hit by the financial depression. A few months ago he went into bankruptcy. The loss of his fortune was a deathblow to Mr. Collins and it is said that he died of a broken heart.”

Three years after Creed Collins’ death, his estate trustee, Homer Adams, filed an appeal in West Virginia’s Federal Circuit Court Of Appeals, Fourth Circuit.  Circuit Judge Pritchard reversed the lower court decision, only allowing Decker’s Valley to claim against the partnership assets. “If there shall be any surplus of the individual estate of Creed Collins remaining after the payment of his individual debts,” wrote Pritchard, “this claim, like all others allowed against the partnership of which he is a member, will participate in its distribution.”

And what happened to Sprinkle & Bonner after the Collins Company implosion?

Timber crusing (estimating) prior to purchase of the 7,600 Acre tract, known as the Ranwood Lumber Company Tract, on Sugar Creek and Back Fork of Elk, Webster County. CH Holden, Ranwood Lumber Company; C.W. Sprinkle, Atlas Lumber Company; EM Bonner, Atlas Lumber Company; and Dave Cogar, woods boss. Photo from 1913.

Charles Sprinkle moved to Cincinnati, where he founded the Atlas Lumber Company, which provided butts for guns in World War I (the “Encyclopedia of American Biography, “Vol. 19, edited by Winfred Scott Downs, 1947 states “all the butts” for guns in WWI, but that sounds exaggerated). He also sold wood to the auto industry in Detroit. Sprinkle was a member of the Lumberman’s Club, the Cincinnati Club, the Hyde Park Country Club, the Detroit Athletic Club, and Calvary Episcopal Church. He died 1944 in Cincinnati.

Bonner regrouped to form EM Bonner Associates, based in Pickens, WV.  Photos in the collection of the West Virginia Regional & History Collection confirm that the company was still active as of 1920, and had lumbering operations in the towns of Log Bottom & Camp Run.

Sources: —West Virginia Corporation Report Of Secretary of State.  March 1, 1907, To March 1, 1909. — Online at www.archive.org/stream/corporationrepor19071909west/corporationrepor19071909west_djvu.txt

“Encyclopedia of American Biography” (Vol. 19, edited by Winfred Scott Downs, 1947)

http://www.archive.org/stream/hardwoodrecord24chic/hardwoodrecord24chic_djvu.txt

http://www.rootsweb.ancestry.com/~wvritchi/MKL_HRC14.htm

http://query.nytimes.com/mem/archive-free/pdf?res=9E04E2DF103EE233A25753C1A9669D946997D6CF

http://www.geo-met.com/tommysmith/creedob2.htm

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