The Birmingham age-herald., 1905-09-20
EQUITABLE GOES
 AF TER THE MONEY
Continued from First Paee)


 ern National bank and held considerable amounts of It's stock. MT. Hyde was also president of this society as stated; MT. Fitzgerald was president of the Mer- cantile Trust company and a director of the society and chairman of its finance committee. MT. Hartley was also a direc- tor of this society and a member of it's finance committed"
 It developed soon after the Mercantile Trust company assumed the loans, MT. Morton reports that the collateral for S1e loan to John w. Young was worthless, and then it was that enormous sums were spent in an effort to develop the Kentucky and Colorado properties. On July 1, 1905, the cost of the Kentucky property stood at s619,067 and the cost of the Colorado property at $2,s09,63 The cost of the Colorado property was assumed by the Commercial Trust company to the extent of 5000 by the Western National bank (now the National Bank of Commerce) to the extent of $2000O0, and by the Amer ican Deposit and Loan company (now the Equitable Trust company to the extent of $100,000 on certificates of participation Issued to them respectively by the Mer- cantile Trust company on January 23, 1900, and agreements were executed to the issue of the certificates and agreeing that the collateral should apply to them equally with the notes held - the Mer- cantile Trust company. The Turner loans were made by the Mercantile Trust com pany In 1894, but Mir. Morton finds that the records of the Equitable Life Assur- ance' society contain no reference prior to 1900 to the Turner loans.
 For Benefit of Society.
 "The Mercantile Trust company, how ever" says MT. Morton, ''has produced an instrument signed by James w. Alex ander, president, dated May Il, 1890, about a week after the death of Henry B. Hyde, certifying that the Turner loan, and ad- ditional advances for the same account. were really made for the benefit of the society, as it was the principal share- holder of the Western National bank and was practically pledged for IA protection. On February G. 1900, over five years af- ter the guaranteers had incurred their ob- lisation to the trust company, President Alexander addressed letter to each of the aforementioned individual guaran- teers, or their representatives. stating that the Turner loans were made by the Mercantile Trust company at the request of the society," and that it was at the request of the society that the individual guarantees guaranteed the trust company against loss, and therefore the society would hold them, the guaranteers, harm less from loss. On February A. 1900, the executive committee of the society passed resolution authorizing the president to convey to the individual guaranteers the assurances of the society for their pro- lection. This resolution is the only minute on the records of any committee of the society or its board of directors In re- spect to any connection of the society with the Turner loans.
 ''February IA. 1900, the president of the society, Mir Alexander, also wrote to the officers of the three aforementioned cor hn1dtnO Nartf6oatps of rlartfaf- patton in the Turner loans. repeating that those loans were made in the inter ests of the society, and assuring them that the society would see that the amounts their companies loaned would be repaid.
 Seeks Advice of Counsel.
 'As soon as I became aware of the facts in regard to this transaction I re- ferred the matter to Wallace Macfarlane, special counsel, to ascertain what the societys legal responsibility was in the case, and he gives me as his opinion t.l the Mercantile Trust company should look to its guaranteers for the payment of the obligation, and that the secretary is in no sense responsible to the trust company, and it is his opinion that 1t is very doubtful whether the society Is lia- ble to the guaranteers. This, however, IS d matter l1dt Cdn OILY De SeIIltQ Dy litigation. I have notified the Mercan- tile Trust company to this effect and have urged that it proceed against it's guaranteers. I have also notified the trust company that we would expect to have repaid to the society $71S,264.. and interest. which I find the society has ap- piled on these loans, and I have in- structed counsel to take the necessary proceedings for the recovery of this money.
 Seen to Have Substantial Value.
 "I have been unable to form a definite opinion as to the value of the properties by which the Turner loans are secured. They certainly have substantial value. and the officers of the Mercantile Trus.t company are sanguine that they will ul- timately produce sufficient money for the liquidation of the loans. In any event the individual guaranteers of the loans, including the estate of Henry B. Hyde and Marcellus Hartley, are amply re- sponsible, and the trust company, by enforcing it's rights against them, should be able to escape ultimate loss upon the loans"
 Coming upon the mysterious s6S5 0o0 loan made by the Mercantile Trust company on the "J w. A. No. Account" MT Morton found that no such loan had been authorized by the society, and he repu- diated it. The "J w. A. No. Account" loan was repaid recently by individuals MT. Morton discovered. however, that from 1901 to 1904 the Equitable paid s2s5,- GOO on this loan. and he has instructed counsel ito take the necessary proceed ings to recover these amounts for the society"
 The Searls loan was originally $340. GOO, and was reduced to $S6.4Ss. The remain f-- --rr~ ,;e loo. -~f finds. is without avail.