New-York tribune., 1905-07-21
LOAN NOT ON THE BOOKS.
Mercantile Trusts account Pad By
Trustees, 1t Is Thought.

II fuoLCCoS L. 10 4 ttO0SNN"
The mysterious loan account which has been
carried with the Mercantile Trust Company oy
James w. Alexander and Thomas d. Jordan.
trustee" supposedly for the Equitable Life AS
surance Society apparently has been wiped out
of existence. A. C. Judson. chief examiner OF
the State Banking Department, declares posi-
lively that no such account exists now on the
books of the Mercantile Trust Company.
Mr.. Judson will not say explicitly whether MS
Investigations show that such an account ever
did exist, as H. C. Deming. president OF the
trust company, testified, but so far. he says. he
has found no Indications OF 1t. Paul Morton
chairman OF the board of directors OF the
Equitable disowning the account for that So
ciety, says emphatically that the Equitable has
not paid the loan and closed the account.
Nobody would say yesterday that Mr.. Alex
ander and Mr.. Jordan, the trustees, had been
compelled TO pay the money-about S6So,OOo-to
close the account. The best information ootaln-
able was that Paul Morton, satisfied that II the
Equitable ever had any connection with that ac-
count 1t was of such nature that the society
own records did not show it and 1t was probably
nlegitimate, had expressed so forcioly his inten-
ton of not settling the loan with Equitable
funds that the trust company, alarmed, had
made a settlement at once with the trustees
The system OF bookkeeping employed by the
Mercantile Trust Company is such, 1t was
learned, that IL any loan account had been set
tied 1t was eliminated from the books. A dead
account the loan account would be II paid.
would leave nothing to show that 1t had ever
existed, 1t said, which would account for
no trace of the loans being found now by the
bank examiners. Their reports for previous
years. however, would show the account as an
asset OF the Mercantile, 1t was said.
Mr. hudson and his assistants have not com
pleted their examination of the books of the
Mercantile. They have audited all the assets Of
the company, and find them intact. They hope
to complete their auditing of the books by to-
night Then they will have determined whether
the account has been settled, and by whom; but
those facts may not be made public until the
report is made to Superintendent Kilburn.
Their work yesterday eliminated when Mr..
Judson announced that the account did not
exist on the Mercantile's books. He had
completed his audit of the assets. in which the
loan should appear but there was no such item.
NO RECORD OF LOAN ON BOOKS
Il have gone over all the assets of the Mer-
camille Trust Company said Mr. JudsOn, and
1 can find no trace of any loan TO James W.
Alexander and Thomas D. Jordan trustees.
In fact 1 find account for any loan to the
Equitable or any person connected with it
the possibility of the accounts being kept in
secret books or its record having been manipu-
lated or destroyed. He would not say whether it
had been closed recently by the payment OF
the money due. Later, in repeating his positive
statement that the account did not exist now.
he said that if any Juggling with it had been
attempted his investigation would have dis
closed 1t.
The bank examiner would not say positively
HI.
ist was meant only in the sense that it was not
Tive now. Whether his investigation of the
trust company's books should be prolonged to
show whether the account had existed and all
the details concerning it depended on what in
structions he would get from Superintendent
Kilburn. he said
Bainbridge Colby, counsel for Mr. Alexander,
when asked whether the trustees had taken up
the loan, refused to discuss the elusive account
in any way. Mr.. Jordan, dismissed by Chairman
Morton for not telling about the loan, 1t was
said also would not talk about it,
Mr. Morton not inclined to shed any light
on the situation. He knew nothing about the
Ioan he said. and in his work far had been
unable to find any obligation on the part of
the Equitable toward the Mercantile Trust Com
pany. Mr.. Deming might not have been testi-
flying about the Equitable Society when he spoke
about the loan he said.
Mr.. Alexander and Mr. Jordan may have
notes all over town. for all 1 know he said.
when asked about their standing as trustees for
the account. Mr. Jordan not dismissed by
me for refusing to tell about this loan"
Later Mr.. Morton said that the Equitable
never had had any connection with the loan
account
NO RESPONSIBILITY FOR LOAN.
Mr. Deming has said that Mr.. Alexander and
Mr.. Jordan were trustees for the loan." said he.
The Equitable never assumed any RESPONSE
bility for that loan, and never guaranteed its
payment. 1 know OF no connection whatever
between the society and that loan account. Ger
tainIy the Equitable has not taken up the loan.
/ don't know about Mr Alexander's and Mr..
Jordan's connections With the Mercantile Trust
Company. They did not maintain any loan
account In their official capacities"
II. C. Deming president OF the Mercantile
Trust Company. would not discuss the loan az
count or the examination OF the company's
books by the State Banking Department. In his
testimony before Superintendent Hendricks.
Continued second page
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