The daily morning journal and courier., 1905-09-20

this amount was turned over to the bank in payment for the collateral which it. had assigned to Turner. Upon Turner's note there was endorsed a guaranty of payment by Marcellus Hartley, John E. Searles, Louis Fitz- gerald, w. N. Coler, ir., and H. B., Hyde, and upon all renewals of the note the same guaranty was endorsed. These gentlemen were all directors of the Western National Bank, and held con siderable amounts of its stock. Mr. Hyde was also president of this soci- ety as. stated; Mir. Fitzgerald was chair man of the Mercantile Trust company, a director of this society and chair man of it's filance committee; MT. Hart ley was also a director of this society and a member of its finance commit tee,"
 It developed soon after the Mercantile Trust company assumed the loans, MT. Morton reports, that tn ecoIlateral for the loan to John W. Young was worth less, and then it was that enormous sums were spent in an effort to develop the Kentucky and Colorado properties. On July 1, 1905, the cost of the Ken lucky property stood at $619,067 and the cost of the Colorado property at i$2,S ,S09,6 ,633. The cost of the Colorado property was assumed by the Commer- cial Trust company to the extent of $50,000 by the Western National bank (now the National Bank of Commerce. to the extent of $2O0,000, and by the American Deposit and Loan company '(noW the Equitable Trust company to the extent of $100,000. The Turner loans were made by the Mercantile Trust company in 1894, but Mir. Morton finds that the records of the Equitable Life Assurance society contain no reference to them prior ito 1900. '"rhe Mercantile Trust company, however, says MT. Morton, ''has, produced an instrument signed by James W. Alexander, presi- dent, dated May il, 1890. about a week after the death of Henry B. Hyde, cer- tifying that the Turner loan and addi- tional advances for the same amount were really made for the benefit of the society, as it was the particular share holder of the Western National bank, and was particularly pledged for it's protection
 President Alexander wrote to the va rious guarantors and the, corporations handling the loans that the Equitable society would fully protect them. This was done by authority of the executive committee, and a minute to this effect is the only mention of the Turner loans.
 "As soon as I became aware of the says MT. Morton, T referred the mat ter to Wallace MacFarlane, special counsel, to ascertain what the societys legal responsibility was in the case, and he gives me as his opinion that the Mercantile Trust company should look to its guarantors for the payment of it's obligation, and that the society is in no sense responsible to the trust company; and it Is his opinion that it is very doubtful whether the society is liable to the gtlarantors. This, however, is a matter that can only be settled by liti- gation. I have notified the Mercantile Trust company to this effect and have urged that 1t proceed against it's guar antors. have also notified the trust company that we would expect to have repaid to the society $71S,264 and inter- est, which find the society has applied on these loans, and I nave instructed counsel to take the necessary proceed ings for the recovery of this money.
 T have been unable to form defi- nite opinion as to the value of the prop critics by which the Turner loans are secured. They certainly have substan- tial value, and the officers of the Mer- cantile Trust company are sanguine