Forest City press. (Forest City, Potter County, D.T. [S.D.]) 1883-19??, 1908-01-16


l. checks: that is. he guarantee
indicated IN the checks We're held by
the institution to the credit of the
drawer. To overcertify bank paper is
under the federal statute an offense
punishable by Imprisonment of not less
than five years and not more than ten
years. One count is devoted to each of
the checks involved. II is alleged that
Heinzc knew that Otto Heinze & Co.
dId not have tn their credit the sums
named III the various checks. The 10Th
count III the indictment charges
that IIoirze Intentionally applied the
knowledge of the directorate to the
payment of the Is checks drawn by
otto Heinza * Co, and knowing tha
the company did not have a de-
post with the bank u sum equal to
the nou named in the certified
checks.
For such an offense the federal
statutes provide IL penalty of not less
tina i've years Imprisonment OF "a
fine of NOT more than $1,000 or both.
Heinze's Position.
Edwar Lauterback. Heinze's coun-
Sci. made the following statements:
The Indictment il based on GER
LITIGATION of 10 checks, amounting to
something over $500, 900. drawn by
Otto Heinze ~ Co. on the 18th day of
October last. Before the ccrtifcation
was made =. Augustus Heinze OBJ
tanned h discount of "a note of $780,
900. secured by bundant stock ex-
chlnge collateral. worth at the mar
ket rates Of that day more than $780,
900. and drew his check for 100000
to the credit of Otto HcinZe 4 Co. the
amount of which should have been
passed to their credit. as / think it
was. There certainly was no wilful
intent within the StDtitn tn nxa,..,tif,,
any check. not even to the extent that
oVercertitication is practiced every day
in Wall street by all the banks as a
matter of business necessity. on the
contrary, as l have stated, there was
far more than the amount of the
checks standing to the credit of the
account of the drawers of the checks
hen they We're certified. | believe
thai if the grand jury could have un-
ders'ood the situation correctly no in
dictment would have been found
Aftermath of Collapse.
The Indictment of Heinze by the fed
erai rand jury which has been inves-
tigating the Mercantile and other
banks Identified with the Heinze and
Charles w. Morse Institutions is the
aftermath OF the collapse of the Heinz
pool in United Copper and which
nrougnt ABOUT the suspension of Gross
& kleberg. stock brokers. and subse-
auently resulted in the resignation of
f. Augustus IieinZe from the presi-
dency AID the retirement of the direc-
tors of the Mercantile National banl,
after an examination into the institu-
ton a been made by the clearing
house committee. Heinze declared at
the time that he had been BETRAYED
by his friends in the United Conner
pool,
Betrayed by Friends.
The troubles of Augustus Heinze be-
gan with the bull campaign started
by Otto Heinze & Co.. and nssocintes
in the stock of the United Copper com,
pany which Mr.. Heinze had
n developed after his long fight with
the Amalgamated Copper interests in
Montana. The stock was selling about
$50 when a mysterious selling was de-
tected. Believing it to be an effort ia
raid the stock by short selling. otto
Heinze d Co, gave unlimited buying
orders to various brokers', believing that
when he time came the bear operators
would be unable TO cover their con-
tracts except ut such prices as the
feinzes dictated. Heavy selling of
stock offered Otto Heinze & Co. we're
forced to Graw checks for large
amounts to various brokers. When he
source of the selling was ascertained
the Heinzes declared that they had
been betrayed by friends. The United
NOPpCi StoSN siNiiiICO dIlu STOSS t kIe-
berg. stock brokers, suspended, claim
ing thai Otto Heinze & &c. failed TO
TAX up the stock of the United Copper
company which had been bought for
them. A crisis was provoked in the
affairs of the Mercantile National bank
and the clearing house association made
an examination following which Heinze
withdrew from the institution as an Of
fcer. but with his friends still maintain
ing a stock control. which he had pur-
chased several months before from Ed
win Gould. There have been reports
the Gould interests would again re-
sumo control Of the Mercantile.
OMAHA FIRM GETS