The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1905-10-11
THE EQUITABLE FLEEOED
Paul Morton Makes Astonishing Rev.
elations Of Fund Juggling.
ORDERS SUI'r< FOR RECOVERY

Secret Deal in High Finance Made With
{ Policy Holders Money by Henry B.
Hyde to Save Western National Bank
From wreck-Insurance Society Out
3.1S,264 and Hold For Sc 1873, 400.
New York City.-Revelations so as
founding that they staggered even the
| most INSCRIPTIONS experts in the art
of high finance in Wall Street were
made by Paul Morton, president Of the
Equitable Life Assurance Society. in
a statement issued to the directors, in
which he showed that the policy hold
crs of the society had been heeced out
of S71S,264.3O by a deal III 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 ShipDuild-
! ing Trust nOt0riety; the Kentucky Mill
eral and Timber Company and the
Amity Land and Irrigation Company,
Of Colorado.
Mr.. Morton in announcing the loss of
this S71S,264.90 adds that 100000
more in cash was paid out for some
thing that he has not discovered in
connection with the same deal; that
originally this was 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 S661, ,401: that about one-ffth
Of these were absolutely valueless in
the beginning. and that for the four
hfths the Equitable Society has.wrong-
fully paid out in meeting notes and the
interest thereon, $71S,26490, but finds
now that the original loan, plus inter-
est, stands for $1,276. .47S.49. There
fore, despite the payment of more than
three-quarters of a million on the orig
inal note for S661 ,491. the note still
lives with value Of 81 $1.276,47S.49.
Mr.. Morton, after explaining that
the Equitable never had any c0nnec.
ton with this except to pay out the
money and save certain directors, fur
nishes the further information that he
has discovered in respect Of the mys-
terious S6S5,0OO tranactions, some
time called the "yelloW dog" lnd,
that the Equitable Society actually
paid on this in the last, few years $780,
600 in cash and that therefore, the
mysterious persons who took up this
loan in the Mercantile :Truste Company
six weeks ago really only paid the diff
ference between $685.. 1000 and $265,0OO
Mr.. Morton further finds that the COL
lateral held on a loan Of $S6,4SS to
I'll, Z c., 81 &c
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 it's millionaire directors; John
E. Searles, former Sugar King" Gen.
eral Louis Fitzgerald, Hyde's presi
dent of the Mercantile Trust Com
pany. and w. N. Coler, 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 Cen
eral Fitzgerald, guaranteed by the men
mentioned above and accepted by the
Mercantile Trust Company.
Since November Is, 1894, this So
called Turner loan" has been in ex-
.istence, 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
a release from their guarantees, and
saddled upon the Equitable Society
the sole responsibility for the bad in
yestment This included S11S,O55 OF
absolutely worthless bonds and stocks
taken from Young by the Western Ma
tional Bank, in which the Equitable
Society owned less than a two-ffths
interest.
Mr.. Morton, while disclosing only
part of the facts and concealing the
remainder, announced he had instruct
ed Wallace MacFarlane. special coun-
sci for the society, to insist that the
S719,264.90 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 II
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.