Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1908-01-09
Loses Control /! !! J! Of Ml n! I
tile Bank, New York.
Unable 10 Pay For Stock, Which
Reverts to Former Owner.
Enters Plea Of Not Guilty to Grim
inaI charge...on Ball.

| New York, Jan. S.-Unable 10 nee'
payments due on his stock in the in
stitution +. Augustus Heinze today lost
control of the Mercantile Nationa
Bank. the conduct of which had
brought about his arraignment in the
United States circuit court. on charges
OF Decentralization. Just one year ago
| Heinze bought a controlling interest
from the Goulds, with whom he pledged
his holdings as security for his promise
to ray for the same in fun within one
year. This loan of $1.2U0,0O0 was due
today to Edwin Gould and William Mel.
son Cromwell. Up 10 the last moment
Heinze fought to meet his obligations
| His failure was chronicled in the fol-
lowing statement issued by Mr.. Cron,-
well. after IN afternoon conft rence OF
| the parties concerned.
"HeirZe stock in the Mercantile Ma
| tional Bank has been acquired by Mr.
| Gould in a satisfactory arrangement
Mr. HeinZe was given every possible
chance to pay for the stock. but be-
cause of his inability to do SO, in the
time agreed upon, we have been forced
TO take II over
Later Mr.. Cromwell added that the
Could interests would assume their
proper place in the bank board at the
meeting on Jan. "a. This implies. of
course. that the 20 called HeirZe di-
rectors VIII then retire.
This morning Heinze, now under bail.
following an indictment by the federal
grand jury on 4 charge of over-cer-
Trying checks Of his brothers broker
age firm. involving S4600O0. was ar
raigned before Judge Chatfleld.
a plea of not guilty was entered with
permission TO alter or withdraw it, or
to make any desired motions later.
Then an adjournment was ordered until
Jan. 2h, when the final plea will be
made. The bail Of $4,000 was con-
tinued.
It was reported today that other men
equally as prominent as Heinze in
Wall street operations We're to he call
ed before the federal authorities To
plead to similar indictments. Who they
are. or when their arrests may be ex-
pectad. could not be learned.
II is known that the grand jury is
not yet through with it's inquiry into
certain banking conditions exposed by
the recent financial trouble. United
States District Attorney StintSon. who
was seen after the arraignment said:
1T would be improper for me to re-
veal the evidence I have lest ! give
away my case. but I can say tina. the
investigation is not vet over"
Heinze upon leaving the federal
building had nothing to say further
than that he would not leave the city
until Il disposition of his case had been
made.
When. following the collapse OF the
United Copper pool and the subsequent
Clearing House investigation of the Mer.
camille, Eeinze as president of the board
of directors resigned. the copper mag
nate declared he still would hold his
stock. The hank, however, had been ad.
versely affected by the trouble ana it was
generally believed a way would be found
again to bring it under the Gould influ.
lerce.
| This opportunity came today. A new
directorate, practically installing The for
mer management. is now expected &c
bring back to the institution its old time
standing. For years the bank had beer
under the control of the Gould interests
when Heinze. who was branching out as
banker and with associates. was striv.
7
local banks, acquired considerable hold.
ings in the Mercantile
His controlling interest was secured
when he obtained about 5000 shares OF the
stock from Edwin Gould and 1900 from w
n. Cromwell. It was reported at this
time that the purchase price was $685. He
| paid part cash. giving his notes for tht
balance. These notes, it is said. ran 70,
six months. when they were renewed.
Charles W. Morse and T.. r. and Or
lando Thomas had previously secured
considerable Of the banks stock and Will
| Heinze's holdings were easily able t
make him president ard elect the direc
torate. Both Morse and the Thomase.
are supposed to have already disposed o.
their interests. Concerning a report thai
| HeinZe and Morse had had n misunder
standing over the Inflated bull campaign
| in United Copper which was about Il
eliminate in a lawsuit. John G. Tomlin
\ son. personal counsel to Heinze. tonight
fsaid:
mo papers have been drawn. It is tru,
| that there had been general discussion
| of Mr.. HeinZes affairs. but no definite
action in any direction has been decided
upon. The relations Of Mr.. Heinze ant
Mr.. Morse have been most pleasant"