Los Angeles herald., 1906-12-29
MAGNATES
INDICTED
Insurance Men Face
Forgery Charge
Perkins and Fairchild
Are Defendants
Grand Jury Says Officers Committed
Acts in Belief They Were serv-
ing the Best Interests Of
Policy Holders
BY Associated Press.

BY Associated Press.
NEW YORK, Dec. 2S.-The grand
jury which has been investigating the
New York Life Insurance company to-
day returned indictments charging
forgery in the third degree against
George w. Perkins, formerly vice pres
ident of the company and member of
j. 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.
Mr.. Perkins was in court when the in
dictments were announced. Mr.. Per-
kins entered a plea of not guilty and
gave bond in the sum of $4,000, his
sureties being ]. P. Morgan jr. and
Cleveland Fl. Dodge. MI Farchild is
in Europe. The court assured Mr.. Per-
kins that double surety was not neces-
sary, but he replied that he preferred
1t.
Six indictments were returned against
each of the two defendants, but all are
based on the transaction known as the
"Prussian loan," the specification as
to forgery being alleged classification Of
bookkeeping entries
1t is asserted that certain railway
stocks were transferred by the insur-
ance company to the Security and Trust
company in order to comply with the
Russian law but that the transfer was
not bona fide.
Grand Jury Makes Statement
The grand jury coupled with the in
dictments a presentment in which 1t
places itself on record as convinced that
Messrs. Perkins and Fairchild were
influenced by desire to benefit the
stockholders"
The grand jury further sasys the in
dictments were returned only under a
strict Interpretation of the law as laid
down by District Attorney Jerome. The
statement follows:
"The grand jury respectfully reports
that in filing a bill of indictment
against two persons for offenses COM
mitted in connection with the affairs
of the New York Life Insurance COM
pany, that accepting the law of these
cases as advised by the district attor-
ney they felt constrained to find the
Indictment today filed.
"The grand jurors, however, desire
to record the conviction that in doing
the acts charged the defendants were
Influenced by a desire to benefit the
policy holders of the New York Life
Insurance company; that the defend
ants themselves neither did nor could
in any way personally profit from the
acts done, and very concluslvely
showed that a large pecuniary benefit
was derived by the policy holders as
consequence of these acts"
After presenting these indictments
the grand jury was discharged with the
thanks of the recorder.
This statement was an official con-
firmation of the reports which had
grand jury was in session that the ju-
rors were not at all convinced that
crime had been committed in the "PruS-
sian loan" transaction.
The matter was pressed by Mr.. Je-
rome, however, who appeared before
the jury on a number of occasions and
made arguments. Mr.. Jerome was with
the jury until late yesterday evening
and again early today.
Interrupted Mann's Trial
The trial of w. D. Mann. the editor of
Town Topics, on a charge of perjury
before Recorder Goff was interrupted
in order that the grand jury might re-
port
1t had been an open secret for six
days that Mr.. Perkins would probably
be indicted. The indictment of Mr..
Fairchild came as a surprise, for he
had not been publicly connected with
the investigation.
The New York Security and Trust
company, of which Mr.. Fairchild was
president, was at the time of the "Prus-
sian 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 Mr.. Fair
child must have been cogniZant of it
and a 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 statement that the statute of linn
itations becomes effective January 1
with regard to any Irregularities deVel-
oped in the company during the Arm
strong investigation is erroneous. The
inquiry will be continued by the Janu-
ary grand jury.
The "Prussian loan" matter was de-
veloped during the Armstrong investi-
cation. Some years ago the Prussian
government adopted a law which eX-
cluded all American insurance compa-
nies from doing business in that coun-
try.
American life insurance companies
were active there and the law was a
serious blow. They at once made an
effort to re-establish themselves by
with the new law, AS a re-
suit a Prussian commission came to
this country to investigate various COM
panies. Among these was the New
York Life.
The commission returned to Prussia,
with the recommendation that the COM
panies be again permitted to write in
surance provided they sell stocks held
as securities. ii being a fundamental
of Prussian law that no in
company should hold as collat-
eral any stock.
Sold Stocks to Dummy
To meet this demand the New York
Life agreed to sell 10000 shares of Chi
s... Isx.s