New-York tribune., 1910-04-26
SEVEN HE|NzE COUNTS GO.
Judge Hough Partially SuStalnS
DemurrerS 10 Indictment.
TRIAL WILL BEGIN TO-DAY
Government Case Unharmed,
It Is Said, by Action of Court
on Preliminary Motions.

Judge Hough performed q further opera
tion Yesterday or the indictment found
against Fritz Augustus Heinze. upon which
trial was to have been begun IN the Grim
maj Branch Of the United States Circuit
Court. Counsel for Heinze demurred 10 the
grand jury's true bill" and Of the Four
teen counts seven were taken out but
without injury 10 the case Of the govern
ment according 10 the lat;er's oounsel.
The real trial viii begin this morning
Heinze was in court early with John b
stanchheld. John c. Tomlinson. jr, and ex-
Judge William J. Wallace. his counsel
Talesmen enough for several juries were
there ready 10 be called and examined. but
Yrst as the deputy marshal was about to
begin. Mr stanchheld demurred TO the lat
est indictment. The talesnen were then
dismissed until this morning. and the many
witnesses in court went away also.
Charges Against Heinze.
The charge against Mr.. Heinze-or. rather
The charges. because they are all for the
same violation OF the national banking
lsW--are misapplication OF the funds OF
the Mercantile National Bank while its
president in the alleged interest OF cop
rer pool Nr Tomlinson attacked every
line and count in the indictment. II was
ful OF mere oonclusions.' he said, and. OF
she allegation in connection with the mis-
aunlication that there was conversion, SAID:
The allegations OF facts show no con-
version. The indictment does not show that
Otto F4einze & CO. was insolvent 80 there
can be no conversion, as there was no in
so,vency."
All Of the transac ctions mentioned in the
Indictment as misapplications were with
Otto Heiuze & Co. alleged manipuiators Of
the pool They were put IN the bankruptcy
court but were not adjudged bankrupts.
The petition Of creditors was thrown out
Felix Frankfurter. Assistant United
States Attorney. who prepared the sugar
fraud cases and this case. answered Mr.
Tcmlinson. but before he had gone FAR
Judge HouCh wanted TO know what he
meant by viIful misa7plication.
1t means misuse OF the funds 10 the dis
honest detriment of the banks interests"
Mr. Frankfurter said. II this indictment
vas 10 contain all the facts in the case
IL would have 10 be as compen1ious as
great encyClopRdia. We didn't want 70
Iut in any more than the necessities OF the
case warranted
Wise Challenges Staaohfeld.
nIr stanohheld followed AIr. Frankfurter.
declaring that there was no allegation in
the Indictment that the loans were made
without the knowledge Of the hoard Of di-
rectors. Henry A Wise. the Jn.ted States
Attorney. who was sitting near Nr Frank
furter. jumped up and declared they would
prove that every loan was made without
the know ledge and consent OF the board.
Judge Hough then dropped seven counts
of the fourteen. the seven LETT in being
leitered. He said that the iettered counts
set forth the same transactions as the
others. but showed in addition at great
length and. in his judgment, with perfect
ciearness. the existence and pre-eXistence
10 The knowledge OF the defendant Of .
speculative venture of the most hazardous
nature. because the lettered counts as
serted defnitely that the loans were made
10 persons who were interested with the
defendant in that venture lie said. in fin
ishng:
ANY party handling trust funds who
voluntarily parts with those trust moneys
% a hazardous and an immoral enterprise
for the benefit only OF others than the
hank and to the loss Of the rank is also. in
my judgment prima facie guilty Of con
version, and II that also be done with the
intent to Gefraud and as denounced in the
statutes, the jury may ind il 10 be
crime"
When the decision had been handed down.
M Stanchheld tried to have subpgnas for
the books of the United Copper Company
inNalidared. but Judge Hough denied the
motion. without prejudice.