The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-09-20
EQUITABLE CASH
IS IN BAD LOANS
President Morton Exposes Queer
Deals Involving Three
Millions.
DEMANDS RETURN OF
THOUSANDS LOANED
Says Life Insurance Heads Under
Hyde Regime Made Secret
Investments.

New York, Sept. 2O.-That the Equit-
able Life Assurance society paid out
$218,264 to the Mercantile Trust com
pany in connection with certain loans
known as "the Turner loans,' and that
these payments were without authority
50 far as the records of the society
disclose, became known today when
Paul Morton, president, of the society,
made public g report on the. sub
directors.
These transactions occurred in what
Mr.. Morton refers to as " the Turner
loan This loan, Mr.. Morton s report
sets forth, was carried in 1894 by the
Western National bank, which was
controlled by the Equitable Life.
Collateral Objected to.
The collateral for the loans was OBJ
iected to by a bank examiner and
Henry B. Hyde then agreed to transfer
the loan and collateral to the Mercan-
tile Trust company. At that time ap-
parently the loans amounted to $685.
491.
loan stood, was secretary to Louis Fitz-
gerald, then president Of the Mercantile
Trust company, and close business as
sociate Of Henry B. Hyde. The loan
was guaranteed by Marcellus Hartley,
John E. Searles, Louis Fitzgerald, W.
IN. COl6r, JT., anu II. d. L. ue.
Loan Grew to Million.
On March 81, 1895, the same guar.
antors renewed their guaranty, the loan
having grown to $1,276.47S, the in
crease being due to attempts to de-
velop the property on which the col.
lateral for the loan was made. Part Of
this collateralewas given By. John W.
Eastern railway stock and other Salt
Lake stocks. This collateral proved to
be Of little value. -
Other collateral consisted Of con-
tracts of the Kentucky Mineral & Tim
Der company and the Amity, Land &
Irrigation company, Of Colorado.
Attempts were made to develop the
Kentucky property and the. Colorado
property and large sums were expend-
ed for that purpose and by July J.
1905, the cost of the Kentucky proper
ty stood at $619,O67 and the Colorado
property at $2,809,633.
Paid Without Authority.
The Equitable Life paid the Mercan
tile Trust company go $2as2044z 6 On od these
Feb 4, 1904.
The 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 or
Feb. IA, 1900, the executive committee
of the Equitable Life passed a resolu
ton authorizing the president to con
vey to the individual guarantors of the
Turner loans the assurances OF the so
ciety for their protection.
On Feb. IA, 1900, the president o,
the society, Mr.. Alexander, made thu
statement that these loans were mad
in the interest of the society and as
sured the guarantors that the societ.
would see that the amounts their com
Interest.
Equitable Not Responsible.
Mr.. Morton referred the matter t
special counsel, who have assured hill
that the Equitable Life is not respo1
sibe for the loans. Mr.. Morton ha
also notified the Mercantile Trust CON
pany that he will expect it to repay tn
$718,284 paid to it by the Equitabl
Life.
Mr.. Morton found that $265, 900 WE
paid by the Equitable Life to the Me
camille Trust company on the $685,OC
loan, the nature of which loan hs
never been explained. Counsel HAY
for the return of this sum. This loa
was carried on an account known ,
the tx. W. A. No. account.'
Mr.. Morton also reported to the d
rectors that it would be necessary
charge off $86,4SS unpaid balance of
loan to John E. Searles, who has go1
thru bankruptcy. The collateral again
this $S6,4SS, Mr.. Morton declares,
without value.