The Morris County chronicle. [volume] (Morristown, N.J.) 1877-1915, 1905-09-26
TIVE EQUITABLE FLEECED'
Paul Morton Makes Astonishing Rev.
Citations Of Fund Juggling.
ORDERS SUIT FOR RECOVERY

secret Deal in High Finance Made wien
Policy Holders Money by Henry 4.
Hyde to Save Western National Bank
Prom wrecl---Insurance society Qua
sz1s,26z and Held For s2.sss.x9o.
New York Revelations SO as
founding that they staggered even the
most interruptions experts In the art
Of high finance in Wall Street were
made by Paul Morton, president Of the
Equitable Life Assurance Society, in
4 Statements issued to the directors, in
which he showed that the policy hold
ers Of the society had been He.sced out
Of S71S.264.90 by deal in worthless
and partly worthless securities origin-
ally taken by the Western National
Bank on collateral loans made BY the
bank to John w. Young Of Shlpbuild-
ing Trust notoriety; the Kentucky Min
eral and Timber Company and the
Amity Land and Irrigation Company,
of Colorado
Mr.. Morton in announcing the loss Of
this $718.26490 adds that 100000
more in cash was paid out for some
thing that he has not discovered i'll
connection with the same deal; that
originally this was a private transac-
ton among certain directors Of the
Equitable and the Mercantile Trust
Company, involving in the beginning
the purchase of doubtful stocks at q
cost of $6G1. 491; that about one-fifth
of these were absolutely vaIueIess in
the beginning, and that for the four
ffths the Equitable Society has wrong
fully paid out in meeting notes and the
interest thereon, $718. 26490, but finds
now that the original loan, plus inter-
est, stands for $1,276, 47849. There
fore, despite the payment of more than
three-quarters Of a million on the orig
inal note for $061 .491, the note still
lives with a value Of 81 PIG 47S.49.
Mr.. Morton, after explaining that
the Equitable never had any connee-
ton with this except to pay out the
money and save certain directors, fur
nisAe the further information that he
has discovered in respect of the mys-
terious $665,000 transactions, some
time called the "yeIlow dog fund.-
that the Equitable Society actually
paid on this in the last few years $685.
600 in cash and that therefore, the
mysterious persons who took up this
loan in the Mercantile Trust Company
ssixsweehs ago really only paid the diff
ference between $685., 600 and $685. 900.
Mr.. Morton further finds that the col
lateral held on a loan OF $86,488 to
John 70. Sarles is worthless. He init
mates that worse is to come.
The new deal exposed by Morton is
years old, and was engineered and
guaranteed by Henry B. Hyde. found
er Of the society; Marcellus Hartley.
one OF its millionaire directors; John
e. Searles, former "Sugar King" Gen
eral Louis Fitzgerald, Hyde's presi-
dent of the Mercantile Trust Com
pany, and w. NJ Golfer. Jr. The deal
was due to the refusal of a national
bank examiner to permit the securities
to remain on the books Of the Western
National Bank as assets, and was
based ON a note for 1861 .491, made by
George v. Turner. secretary to Gen
eral Fitzgerald. guaranteed by the men
mentioned above and accepted by the
Mercantile Trust Company.
Since November 10, 1894. this So
called "Turner loan" has been in ex-
sistence. but seemingly it never has
been discovered by State Superintend-
ent of Banks Kilburn or State Super
intendent of Insurance Hendricks or
their predecessors.
But what is regarded as one Of the
most astounding features of the reve-
lations made by Mr.. Morton Is the fact
that after the Equitable Society. which
really had nothing to do with the deal
primarily. had been protected from loss
by the guarantees OF Hyde, Hartley
and their associates. James w Alex
ander, who succeeded Hyde as presi-
dent of the Equitable, gave to these
guarantors in the name OF the society
release from their guarantees. and
saddled upon the Equitable Society
the sole responsibility for the bad in
vestment. This included S113.O55 OF
absolutely worthless bonds and stocks
taken from Young by the Western Ma
tionaI Bank, in which the Equitable
Society owned less than two-flfths
interest.
Mr.. Morton. while disclosing only
part of the facts and concealing the
remainder. announced he had instruct
ed Wallace MacEarlane, special coun-
sci for the society, to Insist that the
$71S. 1854 go paid by the society into the
scheme without seeming authority
should be refunded by the Mercantile
Trust Company. with interest.
Mr.. MacFarlane was instructed also
to bring suit to recover the money IL
the trust company should refuse to
make restitution voluntarily. and to
take steps to protect the society against
further loss because Of the Alexander
releases.
URGES COMPULSORY INSURANCE