Busted-Broke-Bankrupted, Yet Still Standing

Teddy Roosevelt and his Rough Riders charged up San Juan Hill during US's successful assault on the city of Santiago Cuba in the Spanish-American War. As we are at war, the Camp at Sea Girt attracts 10,000 visitors to see the drilling soldiers. Volunteers of the Third Regiment train before setting off for deployment.

The Rough Riders gave the future President hero status

After seven years on the run, Gideon Marsh returned from hiding to face jail time. The bankruptcy story of the Keystone Bank was nearly done. Marsh testified that after hiding in the Pacific Northwest he returned to clear the name of John Wanamaker. Wanamaker had made a public plea for Marsh to return, face justice and tell the truth. Marsh read it in the papers and decided to come back.

When put on the stand, he blamed himself and Henry Yard for gutting bank over the shore resorts, and hiding the evidence. After three years in the Eastern Penitentiary, President Teddy Roosevelt commuted Marsh’s sentence in 1902.

This impacted Sea Girt Land sales and the fortunes of the Land Improvement Company. Yard was out of sources of money. His personal notes were everywhere.

The Keystone Bank building ruined the reputation of Willis Hale the architect.

The Sea Girt hotels, the Beach House, and the Tremont were sold along with their management leases. The buyers were required to pay off the mortgages on each property ($9,500 for the Tremont and $20,000 for the Beach House). Yard leased the beach in Spring Lake for 10 years to the Borough for $4,000.

The Tremont beachfront in the early 1890s. The pavilion and the Parker House to the right. The Lighthouse is not built yet. (John Shibles Garage Collection)

Timing is everything. The bank failures and debt collection procedures in the 1890s proved chaotic. Growing monopolies in an expanding economy put smaller firms out of business at higher rates. There was a delicate balance between lenders and borrowers both wanting a more judicious way of settling these failures. The South and West wanted protections for farmers, while the North and Eastern states were most concerned with the organized rewind of bankrupt organizations for lenders across state lines. No one wanted the current free-for-all, with parties rushing to grab assets first.

The result was a rare legislative compromise called the Nelson Act, the first National Bankruptcy protection law. It provided for the creation of bankruptcy courts, giving companies breathing room for a fair and orderly liquidation.

Importantly, unlike the harsher British contemporary law, the US 1898 law gave individuals and businesses the ability to voluntarily seek protection.

The law had hardliners complain that defaulters would not be punished. Some argued that the law would be hard to navigate. Not for Henry H. Yard.

He read the law and used it to his advantage. His was is the second largest bankruptcy in NJ in the first year of the new court at over $950,000. He was out from under his obligations to the Sea Girt and Spring Lake Improvement Company. But Henry had prepared properly. In 1893 he had incorporated a separate company. American Timber was untainted by the problems with Sea Girt or Spring Lake, and it controlled most of the land he purchased after 1893 including the entire beachfront in Manasquan. He hooked up with millionaire George Jay Gould, and headed out West for a secret mission.

If cats had 9 lives, Yard had 10.