The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-08-26
EQUITABLE BACKS UP MAYER.
Continued from First Po1e.

Continued from FlrSt foVe'
to take over the debts Of said agents to the
defendant society may have been guilty
OF grave errors Of judgment. resulting u
great loss to this defendant by reason OF
unbelievable advances, as we'll as BY reason
OF excessive payments Of interest.
The answer goes on 70 say that u 1ne
IN the business Of lie insurance, the system
OF making advances to agents is necessary
and proper within reasonable limits. Inc
whole subject Is now under examinatlon
by the present mana cement OF me e. E 1a.
as will substa ntially prevent further losses
from uncollectable advances, and from the
differences between the rates OF interest
charged by the trust companies for their
loans to the society and the rate aloHeo
by such companies to the society upon It's
deposits.
The twelfth paragraph OF the complaint.
thus answered, also alleges that in order
to avoid the law various trust companies
charged the Equitable with the amounts
Of agents debts as loans. 1t further alleges
that among the trust companies which
carried such accounts Of agents, the Equit.
able Trust Company, which was supposed
to have on deposit 81. $50. o35.l2, In reality
carried a sum largely in excess OF that and
paid interest on the larger sum-
It also says that certain directors Of The
Equitable Society were directors OF the
Equitable Trust Company, and were there
fore injuring the society and profiting
themselves. Similar allegations are made
with regard to the Commercial Trust Com
The sixth paragraph Of the answer takes
up the consolidation Of the Western Ma
tional Bank with the National Bank OF
the United States. Paragraph ls Of
Of the banks was owned BY certain Equitable
directors. who sold their holdings to the
society at an exorbitant figure.
The allegations in this thirteenth section
of the complaint are admitted IN the answer
with all sorts Of technical qualifications.
individual defendants who directly par
ticipated in the transaction. Further, the
answer denies any knowledge or informa-
tion sufficient to form judgment as to
the Western National Bank could have
obtained 500 share for It's holdings therein
il the accused directors. had accepted the
second Of the alternative offers contained
In the circular dated Dec. IL, 1902, instead
OF the first OF these alternative at o me
the society admits that the table Of salaries
set forth In paragraph II Of the complaint
was correct prior TO the recent change In
the control and management. Since then,
have been made. The paragraph further
sdmits that the society was permitted to
pay to many Of it's officers and directors
and others certain sums as expenses al.
legged to have been incurred in its service.
which were paid without sufficient vouchers
or audit.
Such payments are now under investiga-
ton, and the society has not at present
precise information as to-. whether
such sums were large and in all cases un-
directors were particularly responsible for
the paymente.
Paragraph Of the answer admits
that some illegal and excessive pensions
may have been paid to various persons by
individual defendants were ignorant Of the
facts. which were Of a character not neces-
sarily known to all the members of the
directorate.
1t points out that the present president
vestigation Of the pensions paid and that
some which were excessive have been re-
duced and others which were improper
have been discontinued.
In paragraph o the answer denies any
knowledge in respect to the allegations
in paragraph is Of the complaint that
various officers of the Equitable were paid
salaries for duties which they either did
not perform or that when the duties were
performed the salaries were excessive. .
eating s27 600 received BY James h. hyde
from the Equitable, Mercantile and Com
mercial Trust companies Paragraph 10
also charges that excessive salaries were
paid to attorneys andecounsellors at law. n
Paragraph ten Of the answer is all abou
the $685.. 900 loan to the Equitable by the
Mercantile Trust Company. It traversee
the matter in Section IL OF the complaint
which charges Jaes w. Alexander and
Thomas D. Jordan. as trustees, with having
the trust company and by means of the loan
benefting certain individuals unknown
as yet to the plaintiff.
The complaint further charges that no
records Of these leans or advances appear
upon the books Of the Equitable Society.
Paragraph ten. in dealing with these alIegs-
tons, says that they are true. except that
the society itself did not procure OF permit
the transactions referred to. The answer
further expresses the belief that Alexander
a few others Of the Individual defendants
whom this defendant is at present unable
to identity, knew anything about them.
The answer further alleges that there are
certain entries in some OF the socety's
books which. relate to the transactions,
but that such entries ere obscure and un,
ineligible except TO those who are cog
INFANT OF. or Participated in, the trans
actions. The answer denies that by reason
o. the TRANSACTION It BEGAN in any way
pany the sum Of sss5 900, or any part thereof.
The answer further admits on informa-
ton and belief that 1t is true as al
legged In said Paragraph II Of the COM
plant. that on or about July II. 1905. the
amount OF said account, then aggregatine
about sess 1000. was paid to said trust com,
pany by some person or persons unknown
to this defendant. but this defendant al
leges that said payment was made oniv
after the said Mercantile Trust Company
had asserted claim against this defendant
therefor a-d right to charge. said amount
against the f,rds Of this defe ada then on
deposit with, the said Mercantile Trust
COMPANY ard after this claim had been
resisted and disallowed by the present
managing officers Of this defendant ~
Paragraph 10 Of the complaint further
states that an examination OF ali the facts
connected with the loan to the Depew I'm.
provement Company is now being prose-
cuted with q view Of recovering, either by
action or by adjustment out OF court.
any sums that may be found due to the
society 6y any persons interested in or
connected with the Depew Improvement
Company who NAV be found liable, '.
Paragraph II Of the answer admits tina,