in the early 1890s, menage had begun to purchase land near puget sound in washington, accumulating several thousand acres which he planned to develop into an iron mine, smelter and steel mill, along with housing for the workers. to finance the development he sold an early form of mortgage-backed security to investors in new england and europe. when the panic of 1893 occurred, investors found that menage's properties were fraudulent. many of the deeds were held by random names taken from the minneapolis and saint paul telephone books, the properties themselves were unimproved, and the payments to investors were being made out of the bank's funds.