Arizona republican., 1905-09-20
TURNER LOANS
Paul Morton Finds Another
 Weak Spot
EQUITABLE MANAGEMENT
Again Under the SearchIight-P Prssf- dents Report to Directors Of the Society Made Public Yesterday. SO.ne Very Crooked Financiering.

New York, Sept 19.-That the Equitable Life Assurance society paid out S21S.26 to the Mercantile Trust company in connection with certain loans known as Turner loans," and that these payments were without au- thority so far as the records of the so- ciety disclose, became known today when Paul Morton. president of the society, made public a report on the subject submitted by him to the soci- ety's directors.
 These transactions occurred in what MT. Morton refers to as the Turner Ioans" This loan, MT. Morton's re- port sets forth. was carried in 1894 by the Western National bank, which was controlled by the Equitable Life As surance society. The collateral for i the loans was objected to by a bank ! examiner and Henry B. Hyde then 1 agreed to transfer the loan and col l laterial to the Mercantile Trust com pany At that time, apparently, the l loans amounted to $6G1,491. George V Turner in whose name the loan stood. was secretary to Louis FitZSer- l aid. then president of the Mercantile l Trust company and close business ! associate of Henry E. Hyde. The l loan was guaranteed by Marcelus | HaLtley. John Searles. Louis titZger- J aId, w. N Coler, Jr., and Ii. B. Hyde. 1 On March 21, 1895, the same guaran- tors renewed their guaranty the loan l having grown to $1,216.f7S. the in ! crease being due to attempts to de- velop the property on which the col laterial for the loan was made. Part of this collateral was given by John w. Young and consisted of Salt Lake and Eastern railway stock and other l Salt Lake stocks. This collateral
 proved to be of little value. Other ! collateral consisted of contracts of the Kentucky Mineral and Timber com pany and the Amity Land and Irriga-
 tfon 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 l. 1 1905. the cost O the Kentucky property
 stood at S619,O67 and the Colorado property at S2,SO9,653. The Equitable Life Assurance society paid the Mer-
 camille Trust company S21S,264 on
 these loans on January 23, 1900, and ! S5OO.OO on February 15, 1905.
 The records of the society," said 1 MT. Morton. disclose no authority
 whatever for these payments, and the
 cash entries in respect to them were
 very obscure"
 At the conclusion of his report MT. l Morton stated:
 "In case any other transactions of | this character are developed you will
 be duly advised"
 Mir. Morton found that the Turner loans were made by the Western Ma 1 tionaI bank before the Equitable Life
 Assurance society became interested l in the bank The loans originally
 were as follows:
 To John w. Young. $113.O55, on col
 lateral consisting Of Salt Lake and Fort Douglas Railroad company bonds and stock; Salt Lake and Eastern | Railway company stock; Salt Lake Dock company stock, and Deming.
 Sierra Madre and Pacific railway i stocks.
 To the Kentucky Mineral and Tim i Der company. S25S.394, the collateral
 being contracts for the purchase of
 certain lands in southeastern Ken
 lucky.
 To the Amity Land and Irrigating company. $264 599, the collateral repre- senting a controlling interest in certain l irrigation ditches in Powers county Colorado To the total. s636,O49, was added interest of $25.443, making the
 total, S661, ,491.
 The manner of the transferring the loan from the Western National Bank to the Mercantile Trust company, when the bank examiner objected to the col l lateral was described by MT. Morton.
 Henry B. Hyde, who was president of the society at the time and also a director in the bank arranged to trans fer the collateral to the Mercantile Trust company in the following man ner:
 The collateral was first assigned by the bank to Geo. v. Turner, secretary to Louis C. Fitzgerald, then president of the Mercantile Trust company. Con l temporaneously with the assignment ! Turner on the security of the colla-
 teraI. obtained from the trust company a loan of $661, ,491 (the exact amount that the collateral stood at on the books of the bank) evidenced by his note dated Nov. 15, 1904; and this amount was turned over to the bank 1 in payment for the collateral which it mad assigned to Turner. Upon Tur- ner's note there was endorsed a guar anty of payment by Marcellus Hartley, John E. Searles, Louis Fitzgerald, W.. N. Coler, Jr.. and H. B. Hyde, and on l all renewals of the note the same guar anty was endorsed. Those gentlemen were all directors of the Western Ma | tional bank and held considerable amounts of it's stock. MT. Hyde was also president of this society and as stated MT. Fitzgerald was president of | the Mercantile Trust company and a director of this society and chairman of its finance committee; MT. Hartley