The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1905-09-20
En- or nous Payments
Without Authority.
MORTON HITS GLOOM
Records Of Equitable Show No Author
iiy for Paying Out This $218,264
and the Cash Entries in Re.
spect to Them are Very
Obscure.
Obscure.
CBy the Associated Press.)

New York, Sept. 19.-That the
Equitable Life Assurance Society paid
out S21S.264 to the Mercantile Trust
Company in connection with certain
loans known as 1.-The Turner loans,
and that these paymets 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
Mr.. Morton refers to as 'the Turner
loans These, Mr.. Morton'S report
sets forth We're carried in 1894 by the
Western National Bank, which was
controlled by the Equitable Life AS
surance Society. The collateral for
loans was objected to by a bank exam
iner. and Henry b. Hyde then agreed
to transfer the loan and collateral to
the Mercantile Trust Company. AT
that time, apparently, the loans
amounted to $6G1 ,491. George V.
Turner, in whose name the loan stood,
was secretary to Louis Fitzgerald, then
president of the Mercantile Trust
Company, and a 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 III. B. Hyde. On
March 81, 1895, the same guarantors
Ienewer their guaranty, the loan hav-
ing grown to $1,216,47S, the increase
being due to attempts to develop the
property on which the collateral for
,he loan was made. Part of this col
lateral was given by John w. Young
and consisted of Salt Lake and eastern
railway stock and other Salt Lake
stocks. This collateral proved to be
OF little value. Other collateral con-
sisted of contracts of the Kentucky
Mineral & Timber Company and the
Amity Land & Irrigation Company, OF
Colorado Attempts We're made TO de-
velop the Kentucky property and the
Colorado property and large sums
were expended for that purpose, and
by July l, 1905, the cost of Kentucky
property stood at $619,067, and the
Colorado property at $2,9O9,G33. The
Equitable Life Assurance Society paid
the Mercantile Trust Company $21S,-
264 on these loans on January %.
1900, and 100000 on February 4
1904. 1.-The records of the society,
said Mr.. Morton, "discloses no authori-
ty whatever for these payments, and
the cash entries in respect to them
were very obscure"
Mr. Morton also sets forth that on
mittee of the Equitable Life Assurance
Society passed q resolution authorizing
the president to convey to. the lnd1-
vidual guarantors of the Turner loans
the assurances of the society for their
protection. On February IA. 1900, the
president of the society Mr.. AleXan-
der. made a statement that these loans
were made in the interest of the Socie-
ty. and assured the guarantors that
the society would see that the amounts
their companies loaned would be re-
paid with interest.
Mr.. Morton referred to the matter
TO special counsel who have assured
him that the Equitable Life Assurance
Society is not responsible for the loans
MIR. Morton has also notified the Mer-
camille Trust Company that he Will ex
pect it to repay the $71S,264 paid tt
il by the Equitable Life Assurance so
ciety. -
Mr.. Morton found that 1865. 1000 wa!
paid by the Equitable Life Assurance
Society to the Mercantile Trust Com
pany on the $6S5,000 loan, the nature
of which loan has never been explain
ed. Counsel have been instructed t'
begin proceedings for the return o
this sum. This loan was carried OF
an account known as the j. w. A
No. 8 Account Mr.. Morton also re
ported to the directors that it would
be necessary to charge off $S6,4SS un
paid balance of a loan to John E
Searles, who has gone through bank
ruptcy. The collateral against thi!
$S6.4SS. Mr.. Morton declared, is with
I,1n