The Union Mortgage Loan Company of Eau Claire engaged in several lines of business related to real estate mortgages, real estate sales, stock and bonds sales, and property and estate management. Its principal businesses were farm loans and farm mortgage sales. Most of the loans were made to clients in northwestern Wisconsin (especially Chippewa, Eau Claire, Price, Rusk, and Washburn counties), North Dakota, and eastern Montana. A few were also made for property in Minnesota. Loan applicants were frequently referred to the company by local banks or agents who received commissions for referrals. Typically, the company made short-term (about 5 years) loans to farmers, and took a first mortgage on the farm as collateral. It then sold the mortgage to an individual investor at face value, but at an interest rate of 1 or 2 percent below what the farmer was paying. For this 1 to 2 percent charge the company provided a number of services. It investigated the value and checked the title of the land held as collateral, saw that the mortgage was filed and recorded, monitored the payment of taxes and insurance premiums, and collected interest and principal payments for remittance to the investors. When necessary it also assisted investors in foreclosing on mortgages and oversaw the sale or rental of the foreclosed property. Until 1923 it guaranteed all loans. Thus if an investor foreclosed, but was unable to sell the property for the principal and interest owed, the company made up the difference. For investors who could not afford to purchase a mortgage outright, the company also issued and sold its own debenture bonds secured by mortgages deposited in trust.
Mainly through foreclosures, the Union Mortgage Loan Company acquired substantial property holdings. In 1934, for example, it owned 21 farms in Wisconsin totaling 2,805 acres, and 68 farms totaling 22,290 acres in Montana and North Dakota. The sale and rental of these properties, and the rental, on a commission basis, of properties owned by third parties represented another major component of the company's business. Farm rentals, and occasionally sales as well, were generally made on a share-cropping rather than a cash basis.
A smaller, but also significant area of business was that of bond trans-actions. The Union Mortgage Loan Company bought and sold municipal and corporate bonds and also acted as trustee for bond issues of governmental units and private corporations in the Eau Claire area.
The company was founded in January 1905 as the Mortgage Loan and Trust Company. In January 1906 it was renamed the Mortgage Loan and Security Company, and in June of that same year it became the Union Mortgage Loan Company. The moving forces behind the formation were brothers Kim and Julius Rosholt. Kim Rosholt had for some time been active in the colonization of Wisconsin's cutover lands and was also associated with a number of banks in northern Wisconsin. During the period of Rosholt's involvement with the Union Mortgage Loan Company it had very close financial relationships with Rosholt-controlled banks. Other prominent Eau Claire area residents involved with the company included Byron A. Buffington, Dr. E. S. Hayes, Orrin H. Ingram, S. G. Moon, and John S. Owen. Until 1910 the Union Mortgage Loan Company was very closely associated with the Union National Bank and the Union Savings Bank of Eau Claire. The same individuals owned stock in the same proportions in all three financial institutions. This arrangement terminated in May 1910, and after that the Union Mortgage Loan Company was essentially independent.
In 1909 Herman F. Schlegelmilch became associated with the firm. The Schlegelmilchs were long-time Eau Claire residents and Herman F. Schlegelmilch and his father (also Herman Schlegelmilch) had maintained a large hardware business. Herman F. Schlegelmilch first served as secretary and about 1914 succeeded Julius Rosholt as president of the firm. Under Schlegelmilch the firm prospered. It did over one million dollars of business in both 1919 and 1920 and, until the Depression, averaged about 400,000 dollars annually. At Schlegelmilch's death in 1924, T. Gordon Barland succeeded to the presidency. Barland, a nephew of Schlegelmilch, had joined the company in 1919 and served in various capacities including secretary. With Schlegelmilch's death the company took on the management of a large amount of property he left to his wife Kate.
The tremendous drop in agricultural land values and succession of bad crop years which marked the Depression of the 1930's took their toll on the Union Mortgage Loan Company. In 1933 it did a cash business of only 23,000 dollars, and in 1934 of about 15,000 dollars. The company found itself unable to pay taxes on its extensive land holdings or to meet interest and principal obligations from 75,000 dollars of first mortgage and collateral trust bonds it issued in 1930. Consequently in November 1934 it filed a petition for reorganization under the National Bankruptcy Act. The plan of reorganization was mainly for the benefit of holders of the 1930 bond issue and made no provision for the holders of guaranteed mortgages or other creditors. After the reorganization the business was drastically curtailed. It made a few loans, but concentrated on trying to sell or rent farms it owned, and on trying to meet tax obligations on lands which secured the 1930 bond issue. Business was restricted to such an extent that about 1938 Barland opened the T.G. Barland Agency, an independent real estate and insurance business. He operated the agency, while continuing to serve as president of the Union Mortgage Loan Company, until his death in July 1942.
The office of president was not filled after Barland's death, but the company continued in business to liquidate its assets for at least another decade. A covering letter to the company's 1953 annual report to the Wisconsin Secretary of State stated that there had been no directors' meetings for years, that the company had no assets in Wisconsin, but that it still had interests in a few North Dakota and Montana farms (E. B. Bundy to Secretary of State, Corporation Division, June 30, 1953 [Archives Series 356, box 1513]). The Union Mortgage Loan Company filed no reports after 1953 and for that reason went into bad standing January 1, 1955 and was involuntarily dissolved on September 2, 1980.
