Omaha daily bee., 1905-08-26
Equitable Life Assurance socisty Files
Answer to Charges Made by State.
RlSMANAeEMENT OF FUNDS ADMITTED
Directors Bay Affairs Were Manipulated
Without Their Knowledge
REPLY PLACES BLAME ON OFFICIALS
Tribunal is Asked to Fix Responsibility
for Illegal Actions.
REPLY PLACES BLAME ON OFFICIALS
DEPEw LOAN IMPROPERLY MADE
suit gViII BE Brought by Omcers of
the society TO Compel Return
of the Money to the
TredsuFy.

Life Assurance society today Joined with
the state Of New York in asking for a
full investigation in court of its directors
and officers and their alleged wrong doings
in managing the moneys OF the society.
The document which announced this de-
termination was the answer OF forty-nine
Equitable directors to charges made
against them and the Equitable by the
state.
Some officials of the Equitable have been
guilty of improper and illegal acts, 1t
charges. In all thirteen charges are
answered by the directors Among these
answers they admit the S95O,OOO loan to
the Depew Improvement company. They
admit the S6S5,OOO loan to the Mercantile
Trust company. but waive responsibility
in this loan so far as the Board of Di-
rectors is concerned and indicate that
Messrs. Alexander, Jordan and Deming are
the persons having the most intimate
knowledge of these transactions.
The charge that excessive salaries were
paid to officers of the Equitable is not
directly answered. but admission is made
that under the guise Of service, excessive
fees were given to certain Equitable OFF,
cials who were also directors in other
companies. In defense the answer states
that these practices were not known to
the whole board of directors.
Outlining their belief to the best
policy to pursue I'm fixing the blame for
the Equitable scandals, the directors say,
. first that the blame for alleged cases of
misconduct will be found to rest on in
divldual officers and not upon the di-
rectors as a body. Having made this ex-
planaton the answer then admits in
general way the wrongdoing charged
broadway Rental Deal Admitted.
The first charge specifically answered is
that premises on Broadway were let at
Inadequate rentals to the Mercantile Safe
Deposit company. This is admitted, but
II is denied that at the time this lease
was made James II. Hyde, James w. Alex
ander, William Alexander, Gage f. Tar
bell. Valentine p. Snyder, Thomas d.
Jordan, Charles B. Alexander Henry X
Wintbfup. Alvin w ISreeh and William
TT Mcintyre were stockholders and di-
rectors in the Mercantile Safe Deposit
company.
With certain reservations. admission is
then made that the capital stock of the
Missouri Safe Deposit company was secured
by the Equitable society which paid $50
per share for shares of par value Of 500.
The reservations In favor OF the Equitable,
in connection with this charge, include
claim that these allegations are true in
every respect 20 certain OF the Equitable
officers, but that the alleged purchases were
never known TO the whole board OF d.
rectors.
Unwarranted Loans TO Agents.
As TO excessive and unwarranted loans
TO agents the reply admits that they were
made
}. The directors further admit that the
= officers who permitted wasteful. improvident
and improper advances of money tc agents
have been guilty OF grave errors Of Judg-
ment, but assert that they have no informa-
ton suficient to form a belief that these
officers were knowingly guilty of such i'm
proper acts. Instances are mentioned In
which the system OF making advances to
lgents is necessary and proper within rea-
sonable limits
The consolidation OF the Western National
bank of New York City with the National
bank of the United States, by which a
money loss resulted to the Equitable society
and a profit to some directors. is also ad-
mitted. But the directors say the response
bility for these losses must be divided
among 'those individual defendants who
directly participated or had, or by reason
OF their oficial duties and position should
have, knowledge OF the transactions"
The table OF alleged improper salaries of
Equitable officers which was embodied in
the states charges is declared TO be a
true statement OF the figures A direct ad-
mission is then made that these sums were
paid without sufiicient vouchers or audit.
but the directors say their opinion is re-
served as to whether such we're large and
in all cases unwarranted."
Pensions wrOngfuIIy Paid.
Admissions of greater latitude however
are made on the subject of pensions and to
the charges that money in the guise OF
fees was received by directors and stock
holders who were simultaneously stock
holders OF other corporations. After ad
mittinE that these moneys were received
as charged, the reply states:
Many OF these defendants were ignorant
character necessarily known to the whole
board OF directors
some Of said pensions were found to bt
justihAble others excessive and some i'm
proper,
Denial is next made OF any knowledg,
or information Sufficient 20 form a belief
concerning the payment Of an attorney
fees which were disproportionate to the ser
vices rendered.
Taking up the S6S6.OOO loan Of the Mer
camille Trust company, admission OF ~
existence Is made, but the directors deny
that they improperly permitted this trans
action.
Finally. admission OF the payment OF thii
t6S5,OOo TO the Mercantile Trust company oil
July Il last is made, but II is stated tha
this Was only after the trust company mac
asserted a claim against the Equitable anS
after this claim had been resisted and dis
allowed by the present managing ofhoer
OF the Equitable society.
LoAn 10 Depsw Company.
The $4,000 loan to the Depew Improve
ment company is next admitted with
proviso which states that this admission
is restricted to those OF the individua
defendants who were or ought 70 hav
been cognizant Of theAe transactions"
J. The directors then announce that an ex
animation OF all facts In connection will
the Dtpew Improvement company is nov
being prosecuted with e view 10 recover
ing Sithef BY LEGAL action or by adjustmen
cut % court any sums that may be foun
hcOAtinusd on second Pase)