The San Francisco call., 1906-12-29
NET ENvEL0PS
PERKINS. AND
FA|RCH|LD
Men Prominent in the New
York Life Are Indicted
for rd-Degree Forgery
TRUE BILLS RESULT
OF "PRUSSIAN LOAN,
Transfer of Stock Foreign
Law Demanded Should Be
Sold Is Specific Charge

NEW YORK. Dec 2S-The Grand
Jury, which has been investigating the
New York Life Insurance Company. re-
turned indictments today charging
forgery in the third degree against
George w. Perkins, formerly vice presi-
dent of the company and member of
]. P. Morgan & Co., and George S.
Fairchild, formerly Secretary of the
Treasury, president of the New York
Security and Trust Company and a
member of the finance committee of
the insurance company. Perkins was
in court when the indictments were an
nounced. He entered a plea of not
guilty and gave bonds in the sum of
$4,000. his sureties being j. p Nor
gan Jr. and Cleveland H. Dodge. Fair
child is in Europe.
Six indictments were returned
against each of the two defendants, but
all were based on the transaction
known as the "Prussian loan," the spe-
cification as to forgery being alleged
Justification of bookkeeping entries. 1t
is asserted that certain railway stocks
were transferred by the insurance COM
pany to the Security and Trust Com
pany in order to comply with the Prus-
sian law. but that the transfer was
not bona fide.
INTER- IA
The Grand Jury coupled with the in
dictments a presentment in which it
places itself on record as convinced
that Perkins and Fairchild were "in-
huenced by desire to benefit the poll
y-holders- The Grand Jury further
says the Indictments were returned
only under strict Interpretation of
the law as laid down by District At
torney Jerome
1t has been an open secret for six
days that Perkins would probably be
indicted. The indictment of Fairchild
came as surprise, for he had nc
been publicly connected with the in
vestigation.
The New York Security and Trust
Company, of which Fairchild was presi-
dent, was at the time of the "Prussian
loan controlled by the New York Life
Insurance Company. The railway
shares were transferred by the New
York Life to the Security and Trust
Company, and it is contended that If
crime was committed Fairchi1d must
have been cognizant of it and party
to the transaction.
1t is said that the discharge of the
December Grand Jury, which followed
the presentment of the insurance in
dictments, does not end the inquiry
into the New York Life.
THE PRUssIAN LOAN
The "Prussian loan matter was de-
veloped during the Armstrong investi-
Government adopted a law which ex-
cluded all American insurance com
panies from doing business in that
country. American life insurance com
panies were active there and the law
was a serious blow. They at once made
dii u Tc-cStdDllSH themselves by
complying with the new law. AS a
result, Prussian commission came to
this country to Investigate various
companies, Among these was the New
York Life The Commission returned
to Prussia with the recommendation
that the companies be permitted to
write insurance again, provided they
sell all stocks held as securities, it
being fundamental principal of Prus-
sian law that no insurance company
should hold as collateral any stock.
Only bonds were permissible.
To meet this demand the New York
Life agreed to sell 10000 shares of
Chicago and Northwestern preferred
and $500 shares of Chicago, Milwaukee
and St Paul preferred. 1t is charged
that instead of selling these stocks out
right, the company merely transferred
them to the New York Security and
Trust Company. subsidiary concern,
where they were held in trust, not be-
ing actually disposed of until about
one year later, when sold on the Stock
Exchange at profit to the company of
s155. 900.