Los Angeles herald., 1908-01-09
HELNZE BANK
REVER rs TO
EDWIN GOULD
COPPER MAGNATE LOSES HIS
HOLD ON INSTITUTION
UNABLE TO MEET PAYMENTS
FOR STOCK
Loan of Over Million Dollars Falls
Due and Flnancier Fails to
Obtain the Necessary
Money

BY Associated Press
NEW YORK, Jan. S.-Unable to meet
payments due on his stock in the insti-
tuition today F. Augustus Heinze lost
control of tho Mercantile National
bank, the conduct of which as its presi-
dent had brought about his arraign-
ment in the United States circuit court
earlier in the day on charges of over
certitical-on.
One year ago Heinze bought a con-
trollinC interest from the Goulds, with
whom he pledged his holdings as Sc
curity for his promise to pay for them
in full within one year. This loan OF
S1,200,000 was due today to Edwin
Gould and William Nelson Cromwell,
who was a member of the Gould party
in the bank before the Mercantile was
added to tLs Heinze-M Morse Thomas
chain of -dancial houses.
Up to the last moment allowed him
Heinze struggled to meet his obliga-
tions so as - retain his banking house.
His failure as chronicled in the fol-
lowing statement, issued by Mr.. Crom-
well after an afternoons conference of
the parties concerned
Gould Gets Bank
THE Heinze stock in the Mercantile
National bank has been acquired by
Mr.. Gould in a satisfactory arrange
ment 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 January IA. This implies
of course, that the so-called Heinze
directors will then retire.
This morning Heinze, now under bail
consequent upon an indictment by the
federal grand jury on charge OF over
certifying checks of his brothers brok-
erage firm involving $3.50, 40, was ar
raignSi before Judge Chatfield. A plea
of not guilty was entered and permis-
sion was had to alter or withdraw it.,
or to make any other desired motions
later. An adjournment of the case was
ordered until January 20, when the
final plea will be made. The bail OF
$4,000 was continued.
1t was reported that other men
equally as prominent as Heinze in wall
street operations were to be called be-
fore 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.
1t is known the grand jury is not
vet throuf with it's inquiry into GER
tein banking conditions exposed by the
recent financial furry. United States
District Attorney Stimson, who was
seen after Heinze's arraignment, said;
TT would be improper for me to re-
veal the evidence I have lest 1 give
my case away, but 1 can. say that the
| investigation is not yet over.
! Upon leaving the federal building
Heinze had nothing to say further than
that he would not leave the city until
a disposition of his case had been
made
confers with Goulds
Soon afterward, accompanied by his
| counsel, Edward Lauterbach, Heinze
Joined I'd, in Gould and William Mel
son Crol gwell in the conference which
ended in his returning to them the
bank shares for which he was unable
to 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 Cop
per pool and the subsequent clearing
house investigation of the Mercantile
bank, when Heinze resigned the presi-
dency, and the directors likewise re-
signed, the copper magnate declared
that he ould still hold his stock The
bank however, had been adversely AT
fected by the trouble, and it was gen
orally believed that way would bt
| found again to bring it under the Goulc
control. This opportunity came today
A new directorate, practically install
ing the former management, is now
expected to restore the institution tc
its old time standing. For years this
bank had been under the control of TIL,
Gould interests and then Heinze, who
was branching out as banker. anc
with associates, was striving to secure
direction of a number of local banks
acquired considerable holdings in tho
institution.
He succeeded when he obtained abou
5000 shares of the stock from Edwin
Gould and 1000 from w. N. Cromwell
: 1t was reported at the time that th'
purchase price was 1926. Heinze pait
part cash and gave his notes for tbs
remainder. These notes, It Is said, raj
for six months when they were re
newed.
Charles w. Morse and e. r. and Or
lando Thomas had previously secured