Omaha daily bee., 1905-09-20
Report Says S2l8,264 Of the Society
Money Was Paid Without Authority.
DEMANDS RETURN OF THE CASH
Suit Will Be Instituted on Behalf o
Company to Recover
H.W A. NO. 3 ACCOUNT ALSO CROOKED
Nr. Morton Also Finds that S26S,OO0
IL Due from the Mercantile Trust
Company on Loan said TO
he Repaid.

NEW YORK, Sept l9-That the Equita-
ble Life Assurance society paid out SzlS, 90
to the Mercantile Trust company in connec-
tion with certain loans known as the "Tur-
ner -loans and that these payments were
without authority 50 far as the records OF
The society dscloses, became known today
when Paul Morton, president OF the society,
made public a report on the subject sub
mitted by him to the soclety's directors.
These transactions occurred I'm what Mr.
Morton refers tC as the Turner loans
with the Mercantile Trust company.
The Turner l)an," Mr.. Morton's report
sets forth, was carried in 1894 by the
Western National bank, which was con-
trolled by the Equitable Life Assurance
society. The collateral for the loans was
objected to by bank examiner, and Henry
3. Hyde then agreed to transfer the loan
and collateral to the Mercantile Trust com
oany. At that time apparently the loans
amounted to Ss61 ,49l
Turner Secretary to Fitzgerald.
George V. Turner, in whose name the
oan stood, was secretary to Louis Fitz-
gerald, then president of the Mercantile
Trust company and close business asso-
ciate OF Henry b. Hyde. The loan was
guaranteed by Marcellus Hartley, John T..
searles, Louis Fitzgerald, w. n. Coler, jr,.
and H. Hyde On March q, 1895, the
same guaTantors renewed their guaranty,
the loan having grown to S1,276,47S. the in
crease 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 sonslsted of
Salt Lake and Eastern railway stock anI
other Salt Lake stocks. This collateral
proved to be of little value. other col
lateral consisted of contracts of the Ken
lucky Mineral and Timber company and
the Amity Land and Irrigation company of
Colorado. Attempts were made to develop
The Kentucky property and the Colorado
property. and large sums were expended
FOR that purpose. and by July l. 1906 the
oost OF the Kentucky property stood at
ts19.067, and the Colorado property at $3.50.
$50. The Equitable Life Assurance society
paid the Mercantile Trust company S21s, ,264
on these loans on January g. 1900, and
H0obo0 on February 4. 1904
"The records OF the society" said Mr
Morton. disclose no authority whatever
for these payments. and the cash entries
In respect 10 them were very obscure"
VIII Demand Return of Cash.
Mr.. Morton also sets forth that on Feb
ruary g. 1900. the executive committee OF
the Equitable Assurance Life society
passed resolution authorizing the presi
dent TO convey to the individual guarantors
OF the Turner loans the assurance of the
society for their protection. on February
H. 1900. the president of the society, Mr.
Alexander, made statement that thes'
loans were made in the interest of tn,
society and assured the guarantors tha
the society would see that the amounts
their companies loaned would be repaiC
with interest.
b Mr.. Morton refers the matter to specia
counsel. who have assured him thai tn,
Equitable Life Assurance society is no
responsible for the loans Mr.. Morton hai
also notified the Mercantile Trust com
pany that he will expect it TO repay tn
S7ls,264 paid 10 II by the Equitable Lif
Assurance society
Mr.. Morton found that $265,OO0 was pai
by the Equitable Life Assurance societ.
TO the Mercantile Trust company on tn
$6S5, 900 loan, the nature of which loan ha
never been explained
Counsel have been instructed to begi
proceedings for the return of this sum
This loan was carried an accoun
known as the III. w. A. No. 3 account.
Mr. Morton also reported to the director
that It would be necessary to charge OF
$s6.4ss unpaid balance of a loan to Joh
F. searles. who has gone through bank
ruptcy. The collateral against this $s6,R ~
Mr.. Morton declares is without value
Al the conclusion of his report, Mr.. Nor
ton stated: I'm case any other transaC
tons Of this character are developed yo
will be duly advised"