The Montgomery advertiser., 1905-09-20
MYSTERIOUS
 LOANS FOUND Equitable Money Paid Out Without Authority. MORTON IS INVESTIGATING Society's President Makes
 Report Public. Tells Directors of Fands Seemingly Lost to orxanizstion, over which
 Litigation wnl Be
 Necessary.
MORTON IS INVESTIGATING

New York, Sept. 19.--That the Eouit- able Life Assurance Society paid out xzis.2e4 to the Mercantile Trust Com
 pany In connection with certain loans
 Anown as the Turner Ioan," and these payments were without authority so far as nne records of the Society disclose became known today when Paul Morton President of the Society, made public 2 report on the subject submitted by him 10 the Society directors
 These transactions occurred in what Mr. Morton refers to as the Turner loan" The Turner loan,. Mir. Morton,s report sets forth. was carried in 1884 by the Western National Bank, which was controlled by. the Equitable Life Assurance Society. The collateral for the loans was objected to by a bank examiner, and Henry B. Hyde then agreed to transfer the loan and collat- eral to the Mercantile Trust Company. At that time, apparently, the loans amounted to $661.4sf. George V. Tur- ner, in whose name the loan stood, was Secretary to Louis Fitzgerald, then President of the Mercantile Trust Com pany and close business associate of Henry B. Hyde
 The loan was guaranteed by Marcel Jus Hartly, John p. searles, Louis Fftz- gerald, W. N. Conner, Jr.. and H. B. Hyde. On March 21, 1895, the same guaranteers renewed their guaranty, the. loan having grown to s1, ,276,l7s, the increase being due to attempts to de- velop the property on which the col- lateral 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 Salt Lake stocks. This collateral proved to be of little value Other collateraIs consisted of contracts of the Kentucky Mineral and Timber Company and the Amity Land and Irrigation Company of Colorado.
 Attempts were made to develop the Kentucky property and the Colorado property and large sums were expended for that purpose. and by July |. 1905, the cost of the Kentucky property stood at Sl9se6T and the Colorado property at sa.es0,63S The Equitable Life Ass snrance Society paid the Mercantile Trust Company sais26I on these loans on January 2s, 1900, and $500,O00 on February f. 1904. "The records Of the Society" said Mir. Morton, "discloses no authority whatever for these payments and the cash entries in respect to them were very obscure"
 Assured of Protection.
 Mir. Morton also sets forth that Feb ruary l, 1900, the Executive Committee of the Equitable Life Assurance Society had request authorizing the President to convey to the individual guaranteers of the Turner loans the assurances of the Society for their protection. On February 14, 1900, the President of the Society, Mr. Alexander, made a state- ment that those loans were made in the interest of the Society and assured the guaranteers that the Society would see that the amounts their company loaned would be repaid with interest
 Mir. Morton referred the matter to special counsel. who have assured him that the Equitable Life Assurance Com pany is not responsible for the loans. Mir. Morton has also notified the Mer- cantile Trust Company that he will ex- pect 1t to pay the $71S,2s4 paid to 1t by the Equitable Life Assurance Society.
 Mfr. Morton found that that $265.000 was paid by the Equitable Life Assu- rance Society to the Mercantile Trust Co. on the $635,000 loan, the nature of which loan has never been explained. Counsel have been instructed to begin proceedings for the return of this sum. This loan was carried on an account known as the TX " A No. 8 account" Mir. Morton also reported to the direc- tors that 1t would be necessary to charge off $s6.4sS unpaid balance of a loan to John E. Searles. who has gone through bankruptcy. The collateral against this Sse.4ss. MT. Morton de- clared, iB without value
 At the conclusion of his report Mir. MortoH stated "in case any other trans actions of this character are developed you will be duly advised
 MT. Morton found that the Turner loans were made by the Western Ma tiona1 Bank before the Equitable Life Assurance Society became interested in the bank. The loans originally were ns follows:
 To John W. Young $l1s,o55, on col lateral consisting of Salt Lake and Fort Douglass Railroad Company bonds and stock. Salt Lake and Eastern Rail way Company stock. Salt Lake Dock Company stock and Deming, Sierra. Marie and Pacific Railway stock.
 To the Kentucky Mineral and Tim her Company 325s,s94. the collateral being contracts for the purchase of certain lands in Southeastern Ken- lucky.
 To the Amity Land and Irrigation Company S264,5s9. the collateral rep resenting a controlling interest in cer- tain irrigation ditches in Prowers County, Colorado.
 TO the total of Ssss.04s was added interest of S25,444, making the total sesi 4s2. The manner of transferring
  Rank to the Mercantile Trust Com pany, when the bank examiner ob- iected to the collateral, Is described by MT. Morton as follows:
 Transferring the Loan.
 "Henry B. Hyde, who was President or inc Society at the time and also Sirsctor in the bank, arranged to trans Ter inc collateral to the Mercantile | Trust Company in the following man. ner. -rhe collateral was first assign ed bv the bank to George V. Turner. | Secretary to Louis Fitzgerald, then | prssIdent of the Mercantile Trust Com | nany Contemporaneousiy with the | sssierment. Turner, on the security of | ths collateral. obtained from the Trust | Tn1oDsnv SnS loan of sss1,4s2 (the exact | srao,,nt that the collateral stood at on ehn books Of the bank) evidenced by | SIs @ ro,s dated November Is, 1894. and | tsI. srrount was turned over to the | hsnL fin payment for the collateral s-hieb if had assigned to Turner. Up- VI srnrnsrs note there was endorsed a ..sntv on of payment by Mareellus STs-tisv John E. searles, Louis Fitz- s-sraI6 ". N Coler, Jr.. and H. B. T,,sa ana upon all renewals of the | -a,s Inc same guaranty was endorsed. | saoee M tter,en were all directors of |