When James White died in 1881, he left an estate of $20,000.00 to his wife. James may have had many short-comings, but keeping insolvent or being in debt was not one of them.
That $20,000 is equivalent to one million dollars at the present time. If Ellen had been living in our day she would qualify as a millionaire with that much purchasing power. This money left to Ellen represented the difficult times and limited royalty earnings of her married life. The glory days of large royalty income was still in the future.
It was common knowledge among the Church officials that Ellen was in debt but it must have been a surprise to them just how much she was in debt, which they discovered at her demise. This in spite of the five million in royalties that she received in addition to the million that she had inherited at the death of her husband, at present day valuation.
"According to the records kept in the office, her financial interests in book rights, primary plates, and manuscripts, together with her home property, et cetera, exceeded comfortably her indebtedness, but on her death, or soon thereafter, her creditors would expect the return of their money." (Ellen White: The Late Elmshaven Years. Vol.6, p.446.)
In actuality, her assets amounted to far less than her indebtedness. Her accountant had figured her assets as what one might expect to obtain after years of collecting her royalties on her books and magazines.
Her home was valued at $20,000, and with the barn, farming equipment and associated buildings an additional $6,000.00; and fairly priced. That would represent $1,300,000,00 at the present time. It was estimated that a fair market value of all her literary properties and associated assets would be approximately $40,000.00. This would be if a forced sale was made to fulfill the clearing of her indebtedness.
The Church couldn't allow this as all her manuscripts and book rights etc. would become the property of the bankruptcy court to divide with her creditors. They were forced to break her will which had willed a good portion of her future royalties to her two sons and their families. No provision was made by Ellen White to pay her debts.
Even the Church didn't have the finances to clear her indebtedness and had to borrow money to pay off her creditors to save her estate from bankruptcy. It took them several years to save her royalties, and other means to pay back the loans they had accepted; to free them from this onerous financial load.
This is the time that a true count of all those who had loaned her money finally surfaced, some with interest and some without interest. The total came to a staggering $88,000.00. This figure represents the personal loans that she was able to obtain at their face value when she received them and not any interest that might have accrued on these loans.
[This is not counting any encumbrances on any of her personal property. This would be equivalent to $4,400,000.00 of current value, due and payable on demand, without figuring any possible interest. Some of these loans were made several years earlier and there may have been significant interest charges as well.]
"According to the records at the time of her death, Ellen White's properties, including home, farm, book plates, copyrights, and manuscripts were valued, in round figures, at $121,000; the liabilities were recorded at $88,000.00.
When her will was probated in the usual way in the Napa County Supreme Court, the Judge, though friendly, did not agree with the advice of Attorney Bell that provision could be made for the creditors to await payment pending the earnings of the estate in book royalties. Rather he held that, in compliance with law and normal procedures, all claims against Ellen White's estate must be met promptly and the estate closed up.
The Judge appointed three men to appraise the property...It was not difficult for these men to look over the real estate, farm implements and stock, office equipment and supplies, and put down their value. The bulk of the Estate, however, was in literary properties, book plates, and copyrights, and the E.G. White Manuscripts...
When W. C. White opened the vault door and explained that it held the E.G. White Manuscripts and the records of copyrights and book plates, the appraising committee was at a total loss to arrive at an evaluation, and so the men wrote down an arbitrary figure of $40,000.00 merely as a guess."
"This $40,000 for the literary properties, together with the $26,000 at which the home and the other properties was listed, left the Estate $21,000 short of its obligations. Ellen White was, for legal purposes, declared insolvent.
The White Estate Trustees and the leaders of the General Conference who were called in for counsel were confronted with an unexpected but very real problem. These were days when money was in short supply, $21,000 was a large sum, [$1,050,000 in present money] and the shortage was a baffling matter. From a financial standpoint there were no means with which to meet the requests of the will. It was considered a "dry trust." (Ibid pp. 454,455)
"It was finally agreed:
1, That the General Conference would advance to the White Estate Trustees, as an interest bearing loan, sufficient funds to meet all outstanding obligations. The loan to be repaid by sale of property and from royalty incomes." (Ibid p. 455)
[If they were able to sell her home, farm, and the associated buildings and equipment for $26,000, this would leave them with a debt of $62,000. This would be the equivalent of $3,100,000 dollars at the present time. This is the amount of debt that they had to pay in order to retain the books, papers and manuscripts and associated materials in the White Estate.]
2. "That each of the two sons to whom 10% of the Estate was bequeathed would, in exchange for a modest settlement relinquish their claims on the Estate.
To J. E. White, this meant a cancellation of his obligation to the Estate for the nearly $10,000 advanced by his mother to assist in his publishing ventures. To W. C. White, it meant a like amount." (Ibid. p.455)
[This would be the equivalent to $500,000 each at present rate of exchange. Modest settlement for their interest in a bankrupt Estate?
It took from 1915 to 1933 before this incurred debt, to clear her Estate from bankruptcy, was finally paid off.]
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