The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1908-01-09
HEINzE LOSES
HIS BANK STOCK
Unable to Complete Payment,
Control of Bank RevertS to
Gould interests.
TROUBLE ON EVERY HAND
PLEA OF NOT GUILTY WHEN AR
aA'GNED IN COURT.

New York. Jan. S.-Unable to meet
payments due on his stock in the in
stitution today, F. Augustus Heinze
lost control of the Mercantile National
bank, the conduct OF which, as It's
president, had brought about his ar
raignment in the United States circuit
court earlier in the day on charges OF
Decentralization.
One year ago HeinZe bought con-
trolling interest from the Goulds, with
whom he pledged his holdings as Sc
curity for his promise 10 pay them In
full within one year. This loan of
who was a member of the Gould party
Gould and William Nelson Cromwell,
in the bank before the Mercantile was
added to the nze-Morse-Thomas
chain Of financial houses.
Could Not Raise the Money.
Up to the last moment allowed him
Heinze struggled to meet his obiga-
lions and so to retain his banking In
terests. His failure was chronicled in
the following statement issued by Mr..
Cromwell after an afternoons confer
enee of the parties concerned:
The Heinze stock in the Mercantile
National bank has been acquired by
Mr.. Gould in a satisfactory arrange
nent. Mr. Heinze was given every
possible chance to pay for the stock,
but because of his inability TO do so in
the time agreed upon, we have been
forced to take it over"
Later Mr. Cromwell added that the
Gould interests would assume their
proper place in the bank board at the
meeting on Jan. IA. This implies, of
course. that the so-ealled HeinZe di-
rectors will then retire.
Heinze Arraigned.
This morning Heinze, now under bail
consequent upon an indictment by the
federal grand jury on a charge of
oVer-certifying checks of his brothers
brokerage firm involving $4,000, was
arraigned before Judge Chatfeld.
A plea of not guilty was entered and
permission was had to alter or with
draw it. or to make any other desired
motions later. An adjournment of the
case was ordered until Jan. 20, when
the final plea will be made. The bail
of $4,000 was continued.
1t was reported today that other
men equally as prominent as HeinZe
in Wall street operations were to be
called before the federal authorities to
plead to similar indictments. Who
they are or when their arrests are to
be expected could not be learned at
the United States district attorneys
office
Grand Jury Not Through.
Ii is known that the grand jury is
not yet through with it's inquiry into
certain banking conditions exposed by
the recent financial furry. United
States District Attorney Stimson, who
was seen after Heinze's arrangement,
said.
1T would be improper for me to re-
veal the evidence l have lest L give my
case away. but l can say that the in
vestigation is not yet over"
Upon leaving the federal building
Heinze had nothing to say further
than that he would not leave the city
until disposition of his case had been
made.
Struggled Against Fate.
Soon afterward, accompanied by his
counsel, Edward Lauterbach, Heinze
Joined Edwin Gould and William Mel
son Cromwell in the conference which
ended in his returning TO them the
bank shares for which he was unable
10 pay. 1t is said that the transaction
was not concluded until every means
by which Heinze might have held his
interest had been exhausted. After
the collapse of the United Copper pool
and the subsequent clearing house in
when HeinZe resigned the presidency
and the directors likewise resigned.
the copper magnate declared that he
would still hold his stock. The bank
however. had been adversely affected
by the trouble, and II was generally
believed that a way would be found
again to bring it under the Gould in
fiuences. This opportunity came to-
day, A new directorate practically
installing the former management is
now expected to restore the institution
to its Old-time standing. For years the
bank had been under the control of the
Gould interests. and then Heinze, who
was branching out as a banker and
with associates was striving to secure
direction of a number of local banks.
acquired considerable holdings in the
institution. He succeeded when he OBJ
tanned about 5000 shares of the stock
from Edwin Gould and 1000 from w
n. Cromwell It was reported at the
time that the purchase price was 1925