Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1906-12-29
STATEMENT BY THE GRAND Jury
Manipulation Of Books Resulted in N
Loss to Polioyholders.
BOTH INDICTED MEN PROMINENT
FalrchiId was Formerly Secretary of
the Treasury and Perkins In
Member of Banking Firm
of Morgan & Co.

NEW YORK, Dec. 2s.-oeorge w. Per-
kins, formerly vice president of the New
York Life Insurance company, and now
member Of the firm of ]. z. Morgan & CO.,
and Charles S. Fairchild, formerly secre-
tary of the treasury and a trustee Of the
New York Life Insurance company, were
indicted today by the grand jury charged .
with forgery in the third degree. The in
dictements were based on what is known .
as the Prussian bond transaction. in wach .
II Is charged that a false statement was
made by the New York Life Insurance .
company in order to satisfy the government
of Prussia as to the securities held by that .
company.
Mr. Perkins appeared in court and gave /
bail IN the sum of $4,000. Mr.. Fairchild is
in Europe.
One of the transactions investigated by |
the grand jury in this connection and the |
one on which indictments we're found, is |
what Is alleged to be a dummy sale of 1000 /
shares OF Chicago & Northwestern pre-
ferred stock and $500 shares Of St Paul !
stock to the New YORK Security and Trust |
company. As far as appeared on the books /
Of the New York Life Insurance company
this transaction was a complete sale of the /
securities. The New York Security and
Trust company. however, recorded It as
loan. Later these shares were sold by the
New York Security and Trust company
with profit to the Life Insurance company
OF Si55,0O0. This alleged false statement Of
sale had for it's object compliance with the
rules OF tho Prussian government that a
life insurance company doing business in
that country shall not include corporation
stocks in its assests, but may include bonds
in such assests.
Statement by Grand Jury.
rbo n a.
corder Goff while another case was being
heard. The latter hearing was suspended
~,.hile the recorder listened to the report
oT@ the grand jury The jury reported six
indictments against each of the accused
men, Accompanying the indictments was
the following statement:
Tho grand jury respectfully presents that
in iIng a bill of indictment against two
persons for offerses committed in connec-
tion with the affairs of the New York Life
Insurance company. that, accepting the law
OF t'ese cases advised by the district
attorney, they felt constrained to find the
indictment this day filed The grand jur-
ors, however, desire to record their con-
victicr that I'm 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 that the evidence conclusively
showed that large pecuniary benefit was
derived by the policy holders as a conse-
quence OF these acts.
After presenting tho indictments the
grand jury was discharged with the thanks
OF the recorder.
Perkins Pleads Not Guilty.
Mr.. Perkins was arraigned in the court
OF general sessions and he entered plea of
not guilty TO the indictments, reserving
} the right to withdraw the plea at later
date. He was given until January 81 to
file demurrers.
Bail for Mr. Perkins was furnished by J.
p Morgan. jr., who pledged the house at
222 Madison avenue, valued at 100000, and
Cleveland II. Dodge who pledged six acres
of land In New York City, valued at $4,000.
Recorder Con- told Mr.. Perkins that it
would not be necessary TO furnish two
bondsmen Mr.. Perkins replied: 81 prefer
20 have two bondsmen. 1t is my wish to
furnish enough surety TO mako the bond
4 doubly sure"
The impression which had become general
that further investigation OF the insurance
cases by the grand jury would be impos-
sible on account of the statute of lmita-
tions was erroneous. 1t was stated today
that the investigation would be continued
by the grand jury. which will begin its
labors in January.
History of the Case.
fairs Of the New York Life Insurance COM
pany which resulted in the indictments
today, was an outgrowth of the investiga-
ton of the insurance companies by a legis-
lative committee a year ago.
So voluminous the testimony taken
by the legislative committee that District
Attorney Jerome was occupied for months
in examining 1t. George w. Perkins, a
former vice president of the company and
a..
financial firms In the world was arrested
on a technical charge OF larceny. but that
the proceedings were merely a test case
was shown when 1t was permitted to go
through 10 the highest court In the state
- without any opposition from the accused.
The pressure upon District Attorney
Jerome to proceed against high officials in
creased rather than diminished as time
went on. During the spring months the
public demand for sction was reinforced
by Justice O'Sullivan of the court OF gen
eral sessions, who, in a sensational charge
70 a grand jury. directed them to take ur
and investigate insurance matters with
the assistance OF the attorney general II
he chose to give them assistance or with
out t. II he did not. The question was
considered 20 some extent by that jury
but no definite conclusion was reached. and
the work they had begun was left unin-
ished When they were dismissed. On ths
request OF the district attorney a specla
grand jury was next drawn for the sole
purpose OF taking up the insurance cases.
Burnham Case Causes Activity.
The real activity. however began only
tav weeks ago, after the conviction OF
George W. Burnham jr., general counse
for the Mutual Reserve Life Insurance.
eompapy. on a charge OF forgery. The IN
I dictment OF Burnham and tive other higi
4 onsoials OF the Mutual Reserve had fol
lowed the insurance investigation. A yer
dist against Burnham convinced Mr.
Jerome. so he later announced, that ther,
might be grounds upon which he coul'
proceed against the officials OF the New
York Life. As a result the matter wa
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