Jasper County Democrat, Volume 8, Number 25, Rensselaer, Jasper County, 23 September 1905 — MORE EQUITABLE LIFE REVELATIONS [ARTICLE]

MORE EQUITABLE LIFE REVELATIONS

President Morton Digs Up a Transaction Involving $3,500,000. HYDE AND ALEXANDER HIT Guaranteed Loans That Were Based on Poor Collateral—Suit Or* dered fbr Recovery of Cash.

New York, Sept. 20. That the Equitable Life Assurance society paid out $218,264 to the Mercantile Trust company in connection with certain loans known as “the Turner loan,” and that these payments were without authority so far as the recards of the society disclose, has become known. Paul Morton, president of the society, lias made public a report on the subject submitted by him to the society’s directors. These transactions occurred in what Morton refers to as "the Turner loan.” The "Turner loan,” Morton’s report set forth. was carried in 1894 by the Western National bank, which was controlled by the Equitable Life Assurance society. Hyde a Guarantor of the Ix>an. The collateral for the loans was objected to by a bank examiner, and Henry B. Hyde then agreed to transfer the loan and collateral to tlie Mercantile Trust company. At that time, apparently, the loans amounted to $661,491. George V. Turner, in whoes name the loan stood, was secretary to Louis Fitzgerald, then president of the Mercantile Trust company, and a close business associate of Henry B. Hyde. The loan was guaranteed by Marcellus Hartley, John E. Searles, Louis Fitzgerald, W. N. Coier, Jr., and H. B. Hyde. Collateral of Little Value. On March 21, 1895, the same guarantors renewed their guaranty, the loan having grown to $1,276,478, the increase being due to attempts to develop the property on which the collateral for the loan was made. Part of this collateral was given by John W. Young, and consisted of Salt Lake and Eastern railway stock, and other Salt Lake stocks. This collateral proved to be of little value. Other collateral consisted of contracts of the Kentucky Mineral and Timber company and the Amity Land and Irrigation company, cf Colorado. COST GROWS TO A BIG SUM Two Properties Come to Nearly $3.500.000 by July. 1005. Attempts were made to develop the Kentucky property and the Colorado property, and large sums were expended for that purpose, and by July 1, 1905, the cost of the Kentucky property stood at $619,067 and the Colorado property at $2,809,633. The Equitable Life Assurance society paid the Mercantile Trust company $218,264 on these loans on Jan. 23, 1900, and $500,000 on Feb. 4, 1904. “The records of the society.” said Morton, “disclose no authority whatever for these payments. and the cash entries in respect to them were very obscure.” Morton also sets forth that on Feb. 14, 1900, the executive committee of the Equitable Life Assurance society passed a resolution authorizing the president to convey to the individual guarantors of the Turner loan the assurances of the society for their protecion. On Feb. 14, 1900, the president of the society, Alexander, made a statement that these loans were made in the interest of the society, and assured the guarantors that the society would see that the amounts their companies loaned would be repaid with interest. Morton referred the matter to special counsel, who have assured him that the Equitable Life Assurance society is not responsible for the loans. Morton has also notified the Mercantile Trust company that he will expect it to repay the $718,264 paid to it by the Equitable Life Assurance society. Morton found that $265,000 was paid by the Equitable Life Assurance society to the Mercantile Trust company on the $685,000 loan, the nature of which loan has never been explained. Counsel have been instructed to begin proceedings for the return of this sum. The loan was carried on an account, known as the "J. W. A. No. 3 account.” Morton also, reported to the directors that it would be necessary to charge off $86,488 uupaid balance of a loan to John E. Searles, who has gone through bankruptcy The collateral against this $86,488 Morton declares is without value.