The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1905-09-20

AAt4elAltN NbliiAiitbtNI-
Found to Be Worthless.
It developed soon after the Mercantile
Trust company assumed the loans, MI.
Morton reports that the collateral Tor lh9
loan to John ". Young was worthless ana
then it was that an enormous sum was
spent in an effort to develop the ken-
lucky and Colorado properties On July
], 1893 the cost Of the Kentucky prop
erty stood at S6I9.0jI and the cost or the
Colorado property was assumed by the
Commercial Trust company 10 the extent
, Of 100000, by the Western National Ddnh
(now the National Bank OF Commerce. 10
the extent OF 100000, and by the Amerl-
can Deposit K Loan company now the
Equitable Trust company TO the extent
or 100000 on certncateS OF pafuclpd tIoI
issued TO them respectively by the MeI-
camille Trust company on January 20
1900, and again were executed by turner
and the guarantors or their representa-
lives cOnsenting 10 the issue OF the GER
Jificates and agreeing that the collateral
should apply 20 them equally with the
notes held by the Mercantile Trust COM
panY The Turner loans were made by
the Mercantile Trust company in 1884. but
Mr.. Morton finds that the records of the
Equitable Life Assurance society con-
tain no reference prior to 1900, TO the
Turner loans.
Alexander's Letter.
The Mercantile Trust company. how
an instrument signed by James W. Alex
ander president, dated May II, 1890, about
a week after the death of Henry B.
HYDE, certifying that the Turner loan
and additional advances for the same ac-
count were really made for the benefit
Of the society, as ii was the principal
shareholder of the Western National
bank and was practically pledged for its
protection. On Feb, o 1900 over five
years after the guarantOrs had incurred
their obligation 10 the trust company
eHs-Hn a lot raV
TO each of the aforementioned individual
guaranJOrs or their representatives, stat
ing that the Turner loans were made by
the Mercantile Trust company at the re-
quest OF the society and that il was at
the request of the society that the IN
diVidual guarantOrs guaranteed the trust
company against loss. and that therefore
the society would hold them, the guar
of their guaranty. On Feb il, 1882 the
executive committee of the society passed
a resolution authorizing the president to
convey TO the individual guarantors the
assurances of the society for their pro-
lection, This resolution IS the only min
ute on the records of any committee OF
the society or its board of directors in
respect 10 any connection Of the socl-
ETY. with tie Turner loans.
"On Feb. a. 1900, the president of the
society. Mr.. Alexander. also wrote 10 the
officers of the three aforementioned cor
pOratiOns holding certificates of parrici-
patton In the Turner loans, repeating
that those loans were made in the in
teTest of the society and assuring them
that the society would see that the
amounts their companies loaned would
be repaired.
Courts Will Have to Decide.
As soon as became aware of the facts
IN regard to this transaction, referred
the matter to Wallace MacFariane, spe-
Cial counsel, To ascertain what the So
ciety's legal responsibility Was in the
f...sa Hr. oils
that the Mercantile Trust company should
look 10 its guaFantOTS for the payment
of the obligations and that the society
is in no sense responsible TO the trust
is very doubtful whether the society IS
liable 10 the guarant0Fs. This, however
is matter that can only be settled by
litigation. / have notified the Mercan-
tile Trust company to this effect. and
have urged that it proceed against its
guarantOTs. / have also notified the
have repaired 10 the society Sl&2A and
interest. which I find the society ap-
piled on these loans, and have in
structed counsel to take the necessary
proceedings for the recovery of this
Il have been unable to form defi-
mite opinion as to the value of the prop
critics by which the Turner loans were
secured. They certainly have substantial
values, and the officers of the Mercan-
tile Trust company are sangulne that
they Will ultimately produce sufficient
money for the liquidation of the loans.
In any event, the individual guarantors
of the loans. including the estates Of
Henry b. Hyde and Marcellus Hartley,
are amply responsible, and the trust
company by enforcing its rights against
them, should be able to escape ultimate
loss upon the loans.
No Authority for Loan.
Coming TO the mysterious S6S5.O0O loan
made by the Mercantile Trust company
on the y. W. \. No. 3 account" Mr.
Morton said that no such loan had been
authorized by the society and he repudi-
ated il. The j. W. \. No. account"
loan was repaid recently by individuals.
Mr Morton discovered, however. that
from 1871 10 1901 the Equitable paid $780,,
OJ0 on this loan and he has instructed
counsel to take the necessary proceed
ings to recover these amounts for the
society,"
The SeaTles loan was originally for
$40 600. and was reduced To SS6.4SS The
remaining collateral on this loan, Mr..
Morton finds, Is without avail.