The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1908-01-08
Copper Magnate Is Indicted For
OVHCsTtiiiRg Checks
RELEASED on $4,000 BAIL
Federal Grand Jury Returns Indct-
ment Based On Transactions In
Connection With His Old
Firm and a Bank.

New York, January 7--Indicted by the
tion of the fifteen checks representing in
the aggregate over 100000 and drawn by
the firm of Otto Heinze & Co., on the
Mercantile National bank, Augustus
Heinze, the copper magnate and former
president Of the Mercantile National bank,
surrendered himself to United States COM
missioner Shields today and later was
released on $4,000 bond. He Will be
formally arraigned to plead to the indict-
ment before Judge Chatheld in the Unit
ed States circuit court tomorrow.
Edward Lauterbach, counsel for Heinze,
stated tonight that his client did not will
fully overcertify the checks as no had
drawn a check for the credit of Otta
Heinze & Co. to the amount OF So00,0o0,
which the bookkeeper of the bank posi-
lively failed to enter on the books until
a day after the certification of the check
in question. The Indictment of Heinze
by the federal grand jury which has been
investigating the Mercantile and othec
banks identified with the Heinze and
Charles w. Morse interests, Is the after
math of the collapse of the Heinze pool
in United Copper and which brought
about the suspension of Gross and klee-
resulted in the resignation of f. Angus
tus Heinze from the presidency and board
of the directors of the Mercantile Ma
tional bank, after an examination of the
institution had been made by the clear
ing house committee. He declared at
the time he had been informed quietly
that indictments charging him with the
overcertification OF fifteen checks, all
drawn on October IA, just before the
smash in United Copper had been found
by the federal grand jury on December
2, and that his appearance would be re-
quired today.
Without awaiting the service of a bencn
warrant, Heinze In company with his
counsel appeared before Shields this af-
ternoon. The proceedings were short.
Heinze pleaded rot guilty and bail was
furnished Immediately by a bond COM
pany. When the proceedings were fin
ished Heinze told the newspaper men
that he did not care to make any state
ment and hurried away with his counsel.
Lauterbach's Statement.
After an examination Of the indictment
ward Lauterbach tonight made the fol-
lowing statement:
The Indictment is based upon certi-
cation of fifteen checks amounting to
something over $400,00 drawn by Otto
Heinze & Co. on the fourteenth day of
October, last. Before the certification
was made, F. Augustus Heinze obtained
the discount of a note of $4,000, secured
by abundant stock exchange collateral
worth at the market rates for that day
more than $S00,00O and drew his olecK
for 100000 to the credit of Otto Heinze
& Co., the amount which should have
passed to their credit, as L think it was.
There certainly was no wilful iptent with
ing the statute to overcertify any check,
not even to the extent that overcertfi-
cation is practiced every day in Wall
sreet by all the banks as a matter of
business necessity.
''On the contrary, as / 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
when they were certified l believe that
if the grand jury could have understood
the situation correctly that no indict-
ment would have been found"
Specific Charges.
The indictment specifically charges that
Heinze, while president Of the Mercan-
tile National bank oyercertify 15 checks.
That Is that he guaranteed by the bank
signature that the sums indicated in the
checks were held by the institution to
q pradjt M hQ To "
bank paper is, under the federad stat
utes, an offense punishable by mprison-
ment of not less than five years and not
more than ten years. One count is de-
voted to each of the checks involved
1t Is alleged that Heinze knew that
Otto Heinze & Co. did not have to its
credit the sums named in the various
checks The 10th count in the indct-
ment charges that TIeinze Intentionally
applied the funds of the bank and with
out the knowledge of the directorate to
the payments of the 15 checks drawn
by Otto Heinze & Co., and knowing that
the company did not have on deposit with
the bank sum equal to the amount
named in the certified checks.
For such an offense the federal stat
utes provided a penalty of not less than
five years Imprisonment or a fine of
not more than 5000 or both.
LIST OF the CheckS.
The checks certified by Heinze. accord
ing to the Indictment were as follows:
Gross & Kleeberg, s62,761 H. T. Cary
& Co., $21, 469; Cuyler, Morgan & Co.. s13,
1885, c. H. Smithers & Co., s11,006; K. S.
Bache & Co.. s124.6S0; Wasserman Bros,
s42, ,SsS; Marshall spader & Co., s49,67f;
Morse Moore & Moore. sS4652; ]. F. Col
gate & Co., s133s4; Sternberger, Simm &
Co., $15,000 Sternberger, Simm & Co.,
s14,603; Hayden, Stone & Co., $4,000; w.
r. Rosenberg, $1,000: Gross & Kleeberg,
$4,000 and E. E. Hutton & Co.. s25.675.
The troubles of F. Augustus Heinze be-
gan with the bull campaign started by
Otto Heinze & Co., and associates in
the stock of the United Copper company,
which Mr. Heinze had organized and
developed after his long fight with the
Amalgamated Copper interests in Mon
tana. The stock was selling about q
when mysterious selling was detected
Believing 1t to be an effort to raid the
stock by short selling, Otto Heinze &