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


tain loans known as the Turner loans,
and that these payments were without
authority. so far as the records Of the
society disclose. became known today
when Paul Morton, president of the
society, made public a report on the
subject submitted by him to the So
ciety's directors.
These transactions occurred in what
MIR Morton refers To as the Turner
loans" with the Mercantile Trust COM
pany The Turner loan" Mr.. Morton 5
report sets forth, was carried in 1894
by the Western National bank, which
was controlled by the Equitable Life
Assurance Society
Bank Examiner Was Wise.
The collateral for the loans was OBJ
Jected TO by a bank examiner, and
L Henry Is. Hyde then agreed to transfer
loan and collateral to the Mercan-
tie Trust company. Al that time ap-
parently the loans amounted to 1851 ,49l.
George Y. Turner. in whose name the
loan stood, was secretary To Louis FitZ-
gerald, then president of the Mercan-
tile Trust company. and a close bust
ness associate of Henry B. Hyde The
loan was guaranteed by MaTCelus Hart
ley, John n. Searles, Louis Fitzgerald.
W. y. Coler, jr.. and II. B. Hyde. On
March p, 1895. the same guarantOrs re-
neWed their guaranty, the loan having
grown To Sl,275,47S, the increase being
due to attempts TO develop the proper
" on which the collateral for the loan
was made.
John w. Youns's Collateral.
Part of this collateral was given by
John W. Young and consisted of Salt
Lake x Eastern railroad stock and
other Salt Lake stocks. This collateral
proved 10 be of little value. other col
lateral consisted of contracts of the
Kentucky Mineral & Timber company
and the Amity Land * Irrigation com
pany OF Colorado.
Attempts were made TO develop the
kentucky property and the Colorado
property. and large sums were eXpend-
cd for that purpose, and by July /, 1900,
The cost of the Kentucky property stood
at S6l9,06I and the Colorado property
at s. SOC, e53. The Equitable Life As
surance Society paid the Mercantile
Trust company S2lS264 on these loans
on Jan. 81, 1900, and 100000 ON Feb. T.
1904
No Authority fer Payments.
''Fhe records of the society," said
Mr.. Morton. disclose no authority
whatever for these payments and the
cash entries in respect TO them were
Very obscure"
Mr.. Morton also sets forth that on
Feb. a. 1900, the legislative committee
of the Equitable Life Assurance Socie-
~ passed a resolution authorizing the
president to convey To the individual
suarantors of the Turner loans the
assurance of the society for their pro-
lection. On Feb. 1t, 1900, the president
OF the society, Mr.. Alexander. made a
statement that these loans were made
in the interest of the society and as
sured the guarantors that the society
would see that the amounts their COM
pahies loaned would be repaid with in
terest.
Equitable Not Responsible.
Mr.. Morton referred the matter TO
special counsel who have assured him
that the Equitable Life Assurance So
ciety is not responsible for the loans.
Mr.. Morton has also notified the Mer-
camille Trust company that he viii eX-
pect II TO repay the S7lS.264 paid 10 it
by the Equitable Life Assurance So
ciety.
Mr.. Morton found that $265, 600 was
paid by the Equitable Life Assurance
Society to the Mercantile Trust COM
pany on the $685., 600 loan, the nature Of
which loan has never been explained.
Proceedings to Recover.
Counsel have been instructed to begin
proceedings for the return of this sum.
This lvdn was carried on an account
known as the ]. w. \. No. 3 account
Mr. Morton also reported 10 the direc-
tors that it would be necessary to
charge of $50 ASS unpaid balance of a
loan 10 John f.. SeaTles. who has gone
through bankruptcy. The collateral
against this $S6.4SS. Mr.. Morton de-
clares. is without value.
Al the conclusion Of his report Nj
Morton stated,
In ease any other transactions of this
character are developed you will be duly
advised
made by the Western National bank be
fore the Equitable Life Assurance com
pany became interested in the bank. The
loans originally were as follows:
Some Salt Lake Stocks.
To John ". Young. Sl3O57 on collateral
consisting of Salt Lake & Fort Douglas
Railroad company bonds and stock: Salt
Lake a. Eastern railroad stock; Salt Lake
Dock company stock and Deming, Sierra
MadFe d Pacific railway stock.
To the kentucky Mineral q Timber
S-os.394, the collateral being contracts for
the purchase Of certain lands in south
eastern Kentucky.
To the Amity Land & Irrigation com
pany S26f $50 the collateral representing ii
controlling interest in certain irrigation
bitches in Prowers county, Colorado. To
the total S6560i9. was added interest OF
SIS. AS, making the total S66l, i9l.
The manner OF transferring the loan
from the Western National bank 10 the
Mercantile Trust company, when the
hank examiner objected 10 the collateral,
Is thus described by Mr.. Morton;
Henry c. Hyde. who was president OF
the society at the time and also a di-
rector in the bank arranged 10 transfer
the collateral 10 the Mercantile Trust
company in the following manner;
Turner Was Useful.
sThe collateral was first assigned by
the bank TO George Y. Turner. secretary
90 Louis c. Fitzgerald, then president OF
The Mercantile Trust company. Con-
temporaneously with the assignment
Turner on the security of the collateral.
obtained from the trust company a loan
of s6gl ,491 (the exact amount that the
collateral stood at on the books of the
November Is, 1881; and this amount was
turned over to the bank ia payment of
the collateral which Il had assigned 10
turner. Upon Turner'S note there was
endorsed a guaranty of payment by Mar
eeIIus Hartley, John r. Searies Louis
fitzgerald ". y. Coler, jr., and H. b
HYDE and upon all renewals Of the note
the same guaranty was endorsed. These
Gentlemen were all directors or the West-
syn National bank and held considerable
amounts of its stock. Mr.. Hyde was also
president of this society, as stated. Mr.
fTifz1eraId was president of the Mer-
rantile Trust company and a director OF
This society and chairman of its finance
sommittee Mr.. Hartley was also di-