New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-09-20

pany. regarding which made full statement at m nit, to
the BOARD at their meeth neI al assent ar that
meeting may he fully informed regarding these I'M
In November. 1894, this society held S,281 shares,
OF little less than twoffths OF the captaI STOCK
became interested in the stock of this bank the
follows:
To John ". Young-Salt Lake and Fort Douglass
Railroad Company bonds and stock salt Lake
Do6k Company stScF penine sierra Madre and
To KenfubIv Mineral ana yTimber company-Con
tracts for the purchase Of certain lands in south ~
To Amity Land ana Irrigation company-RePre
ditches in Powers County Colorado 1850
Total .s0ss, Is $
Total Se61 491
These loans were not paid and the bank had
examiner had objected TO asset of the bank
Whereupon. Mr.. Henry b. Hyde, who was presi-
dent of the society at the time and also director
10 the Mercantile T99st Company in the following
manner: The collateral was first assigned by the
bank TO George Y. Turner, secretary to Louis tItz-
Company. Contemporaneously with the assign
ment. Turner. on the security of the collateral OBJ
uhe exact amount that the collateral stood at on
dated November Is, 1891; and this amount was
turned to the bank in payment for the c0IIat-
Turne T note there 5r was ndorsed guarantee Of
payment by MarG@llqs HARTLEY John f. SG HTde
and Upon ali renewals of the note the same guar
antee was indorsed
ALL DIRECTORS IN BANK.
These gentlemen were all directors Of the M @nt
of its stock Mr. Hyde was also presldent 3I tl5s s
the Mercantile Trust Company and a director of
this society and chairman of its hnance 3
a member Of its finance committee. In addition
to these Endorsements the same of
guarantee covering the original a4nnt Of se COM T9
pany 1ip to that date in attempts to develop the
collateral on November 9. 1895, further sealed led
45saI ad h cWn 81 2S as a. and all future
advances that should he made in accordance with
Soon after the Mercantile, Trust, Gompanyy as
sumed these loans in November, 1894. it was found
that the collateral for the loan to John w young
wholly worthless: but 1t was decided TO a.,
tempt to develop the other security known as the
Kentucky property and the "C9lorado PToPeroy;
pose with the result that on July l. 1900 the cost
ne trust COMPANY al S % 600 s8S gnu The COST Of the
Western National Bank now the National Bank
American Deposit and Loan Company (noW the
on certificates Of participation issued to them re
gpecyely by the Mercantile Trust C0PanE ON 6
Turner and the guarantors or their representatives
agreeing that the collateral should apply to them
equally with the notes held by the MercantAe
on January %. 1900, the burden Of the Mercan-
tile Trust Company appears 70 haze been further her
trust COMPANY BY the then controller of the society
on the books of the trust company to the Turner
loans. and on February 4. 1904 similar payrnent
s5oo0c0 thereof credited by the company upon
disclose no authority Whatever for these payments.
and the cash entries in respect to them were very
obscure
THE SOCIETY PLEDGED.
The records of the society. Furthermore. contain
no reference. prior the year 1900. to the Turner
has produced an instrument signed by James w
S Pre- es6eP daf SnI MAY Hv aRGgf
that the Turner loan and additional advances for
Of the societv, as it was the principal shareholder
of the Western National Bank, and was practically
on February G. 1900 over five years after the guar
antors had incurred their Qbhgation 10 the trust
TO each of the aforementioned individual guarantors
or their representatives stating that the Turner
at the request of the society and that it was at the
request Of the society that the individual! guaran-
tors guarantee the trust company against loss
the guaran1ors, harmless from loss on account OF
their guaranty. On February a. 1900 the executive
tRoriRing the president to convey to the indvidual
guarantOrs the assurances Of the society for their
This resolution is the only minute on the records
Of any committee Of the society or it's board Of d-
rectors I'm respect any connection of the society
With the Tuner loans On February a. 1900 the
70 the Officers OF the three aforementioned corpora
ions noidlng certhcateS or participation in the
Turner loans. repeating that those loans made
in the interest OF the society, and assuring them
that the society would that the amounts their
companies loaned would be repaid with interest
SOCIETY NOT RESPONSIBLE"
As soon as l became aware Of the facts in re-
gard to this transaction / referred the matter to
Wallace Macfarlane, special counsel, to ascertain
what the Eociety's legal responsibility in the
and he gives his opinion that
camille Trust Company should look its guaran-
tors for the payment Of the obligation. and that
the society Is III responsible to the trust
company. and 1t IS his opinion that it is very
doubtful whether the society is liable the guar
antOTS. This. however, IS d can only
he settled by litigation ] have notified the
camille Trust Company to this effect, and have
have also notified the tluct company that would
expect have repaid to ths society the Sis 90
and interest which ! find the society has applied
on these loans. and ! have instructed counsel 10
this money
/ have been unable TO form a definite opinion as
the value of the properties by which the ''Tur-
ner loans secured They certainly have SUBJ
stanIial value, and officers of the Mercantile
Trust Company sansUine that they Will ulti-
lnaUey produce sufficient money for the liquidation
Of the loans In any event the Individual guar
antors the loans. including the estates of Henry
r. Hyde and Marcellus Hartley, are amply reSpon-
sibe and the trust company, by enforcing It's
rights against them. should be able to escape ulu
loss upon the loans.
In addition to the above loans which I brought
to your attention at the last meeting Of the board
find that liz 1897 the society made a loan TO John
f Searles which June ?, 1885, amounted to $40
900 The total loan been reduced TO $S6,4SS. The
collateral held is without value and Mr.. SearleS
has been through bankruptcy. which makes It nee
essarv 10 charge off the amount do not see why
this has not done before. unless II is with the
idea that ultimately Mr.. Searles will be in position
make the amount good.
Tna- TTg ri of