The free lance. (Fredericksburg, Va.) 1885-1926, 1907-01-01
{. v. PERKINS INDICTED
He and c. S. Fairchild Accused Of
Forgery in n. Y. Life Deal.
PROMPTLY GAVE $4,000 eAIL

Charges Grew Out Of "Prussian Loan"
Transaction, In Which Books Were
FaIsified to Show Alleged Sale Of
Railroad Stocks.
New York. Dec. 29.-The grand jury
which for the past month has been
investigating the affairs OF the New
York Life Insurance company return
ed indictments charging forgery In the
third degree against George w. Per
kins. former vice president Of the New
York Life Insurance company, and a
member OF the firm OF j. p. Morgan &
Co, and Charles s. Fairchild. a former
secretary and treasurer. president Of
the New York Security and Trust COM
pany (now ont OF existence). and
member OF the finance committee of
the insurance company. Mr.. Perkins
was in court when the indictments
were announced. He was formally
arraigned, entered a plea Of not guilty
and gave bond in the sum of 10000,
his sureties being j. Pierpont Nor
gan, Jr., who pledged a city residence
valued at 100000 and Cleveland II.
Dodge. who pledged unlmproved city
property valued at $4,000 Mr.. Fair
child Is at present in Europe.
Six indictments were returned
against each OF the two defendants
but all are based on the one transac
ton known as the "Prussian loan, the
specification under the charge of for
gerry being the Justification OF book
keeping entries. II is alleged that GER
tain railway stocks were transferred
by the insurance company to the Sc
curity and Trust company in order TO
comply with the Prussian law. but
that the transfer was not bona fde
The "Prussian loan" matter was de-
veloped during the Armstrong inves-
tigation. Some years ago the Prussan
government adopted a law which eX-
cluded all American insurance com
panies from doing business in that
country The American life insurance
companies were doing an extensive
business in Prussia at the time and
the law was a serious blow to them.
They at once made an effort to re-es-
tablish themselves by complying with |
the new law. As a result OF their eff
forts a prussian commission was APP
pointed and came to this country 10
investigate the various companies |
wishing TO resume business In Prus-
STA. Among these was the New York |
Life. The commission returned 10
Prussia with the recommendation that
the companies be again permitted TO !
write insurance upon compliance with |
the demand that they should sell any
and all stocks held by them as securi- |
ties. IL being a fundamental principle |
and theory OF Prussian law that no in
surance company should accept or hold
as collateral any stock. no matter how
well ii might be secured. Only bonds
were permissible.
To meet this demand the New York
Life agreed to sell 10000 shares OF
Chicago & Northwestern preferred
and $500 shares OF Chicago. Milwaukee
& st. Paul preferred. which 1t held. II
is now charged that instead of selling
this stock outright. the company
merely transferred il to the New York
Security and Trust company subsi'
diary concern, where it was held in
trust not being actually disposed OF
until about one year later. when 1t was
sold on the stock exchange at profit
to the company of sl55,OO0. The Chi
cago & Northwestern brought profit
OF s25O,0O0. while the Chicago. Mil
waukee & St Paul stock showed loss
OF s95 900.
The indictments against Messrs.
Perkins and Fairchild set forth that
"the defendants. with intent to de-
fraud. did feloniously make in a GER
tain book of accounts called the old
dates cash book. belonging to and ap-
pertaining to the business of said cor
poration, certain false entries"