New-York tribune., 1907-10-18
OTTO HEINZE & co.
FORCED TO SUSPEND.
+. AUGUSTUS GIVES UP
BANK PRESIDENCY.
Consequences of the United Copper
COrRer-Uercaatie National
Found SOLuent.
Found SOIuent.

IN the suspension of the Stock Exchange firm
Oh Otto HSlnze & Co. and the resignation of r.
Augustus Heinze from the presidency of the
Mercantile National Bank. to which he was
elected last January, after the Heinze- Morse
Thomas combination had obtained control from
the Gould interests. The directors at once Of
fered the vacant office to William B. RidSeIy
the Controller of the Currency. who announced
that he would take the offer under advisement
William A. Nash, president of the Corn Ex-
change Bank and acting chairman Of the Clear
ing House committee. said last night that the
committee. with the full cooperation of the Of
hcers of the Mercantile National Bank. made an
examination of Its condition after the close OF
business last night The examination was thor
oush and was not completed until late hour
Mr. Nash and his associates were convinced
IIom the results of the examination that the
pank was perfectly solvent and able to meet
all its Indebtedness. The capital OF $3,OOOOOO
IS intact and with large surplus.
Mr. Heinze gave a5 his reason for resigning
that the difficulties CT his brothers firm de-
manded ali his attention but it was the opinior
In banking circles that the identification OF his
brothers with tbs United Copper corner and the
circumstances connected with the collapse or
| the manipulation had made it appear advisable
that he should retire from his hank presidency
Mr- Heinze gave out the following statement:
In view of the difficulties in which my broth
/ IL
| proper 1 should give literally of nv time in
/ assisting them TO straighten out their affairs
/ In aid OF this have, after consulting with nv
| Ieilow directors OF the bank and my personal
i friends and consulting as well nv own personal
interests as a large stOckhOlder of the bank this
udy resigned as It's president. remaining. how
ever as director, and have joined with nv
| IelIow directors in a request that Mr. Ridgely
/ ton
The directors Of the Mercantile National Ra.k
/ who attended the special meeting to act on Pres
| ident Heinze's resignation were William F Carl
| ton' Stanley Clifford. Chester Glass. Edward T
| Jeffery John F. Kehoe. Seth NJ Milliken.
| Chares w Morse, Benjamin NicoIl. Miles NJ
| OBrien. Dick s. Ramsay William Skinner. Ed
! ward r. Thomas, o. F. Thomas and Robert N.
| Thompson. The only absentees were Warner
Van Norden. Max H Schultze. who is III: Harry
| F. Morse and Arthur P. Heinze. who Is in
| Europe 1t is understood that President
| Heinzes withdrawal from the presidency was
decided upon at a meeting Wednesday night
| at the home of Charles ". Morse. Those who
are said to have attended this meeting in ad-
| dltion to Messrs- Heinze and Morse. are E r
| Tho mas. David A. Sullivan. president OF tho
| Union Bank. OF Brooklyn, and o. B. Bergen
F. A HEINZE IN THE DARK
F. Augustus Heinze. after the suspension o.
| his brothers firm had been announced. said that
/ he was more or less in the dark as to the firms
| recent transactions, and had retained co1nseI
and auditors TO go over the firms books. San
| ford Robinson and Davies StoPe & Auerbach
| are Mr.. Heinze's counsel
| 1t is understood that in trying to engineer
the corner in United Copper stock Otto Heiuzs
/ & CO. sent numerous orders TO buy the stock 10
| out-of-town firms. and that these orders were
executed here by Stock Exchange houses Gross
| & Kleeberg. who failed Wednesday. is not
the only Stock Exchange firm which was badly
hurt in the Henze manipulation According 10
| counsel for Gross & K1eeberg. no less than five
| other prominent houses purchased stock on di-
/ rect orders from the Heinze firm These houses.
however. We're able 10 Weather the gale.
There was talk among Stock Exchange mem
bers last night OF a movement 70 have Otto
/ Heinze & Co. expelled from the Exchange on
! account of its dealings this week in United
/ Copper. One prominent member characterized
/ the transactions as the most fragrant sver at
/ tempted in the history Of the Stock Exchange"
/ None of the members of the firm. in the judg-
ment of the Street. had had the experience neces-
/ sary TO conduct successfully the business of q
/ large Stock Exchange house.
/ Otto Heinze. one OF the brothers Of f. Angus
| tus Heinze was formerly a merchant in ths
/ drygoods district Arthur P. Hei-se had prior
/ to the formation of the firm of Otto Heinze &
/ Co. been an officer OF the United Copper Com
/ pany and Max H Schultze had been the con-
/ fdentiaI man of the business firm of which tho
/ father of the HeinzeS who died few years
/ ago. was the head. The firm OF Otto Heinze
! & Co. was formed on March s. 1906. and on
/ the same day Mr.. Schultze was admitted To
membership in the New York Stock Exchange.
| paying for his seat 100000. At the same time
a seat on the Boston Stock Exchange was pur-
chased for $4,000.
HEINZE BANK SUSPENDs
| Following closely on the Heinzs suspension
and the resignation OF F. Augustus Heinze cama
the news that the State Savings Bank OF Butte.
Mont of which Mr.. Heinze is a director and
stockholder. had closed it's doors This bank
was established in 1901 and had a paid up
capital of $3OOOOO with deposits of more than
| $4OOOOOO. Its local correspondents are the
Mercantile National Bank and the Van NOrden
Trust Company. Prior to Mr.. Heinze's entry
into the affairs of the Mercantile National the
Butte banks correspondent here was the Van
Norden Trust Company.
Otto Heinze & Co did not announce its in
ability to meet it's contracts. as did the Stock
Exchange house of Gross & KIeeberg on
Wednesday. Instead. the firm waited for the
Stock Exchange authorities to act, thereby re-
tanning full control Of it's assets. At the hour OF
the opening of the Stock Exchange the firm is
sued The following statement:
Arthur p. Heinze is no longer a member of tha
firm of otto Heinze x Co. The firm feels itself
perfectly solvent and will meet and pay all its
just and legal obligations in full The firIn,
however, refuses 10 pay obligations which il
does not consider legal or just until a proper
adjudication of the matter has been made.
Rather than submit to such unjust demand II
prefers 10 permit itself to be temporarily sIls-
pended from the privileges of the Stock Ex-
change
MI.