New-York tribune., 1910-05-10
HE|NzE COUNTS QUASHED
Tria! of Ex-Copper King Now
Rests on 1903 indictment.
DAYS BATTLE ABOUT EVEN
Prosecution Delves Into Hitherto
Closed Book, but Its Expert
Makes Poor Showing.

MAKES OUI SaOW1l
Judge l5ough threw out yesterday the re-
manning seven lettered counts in the iE-
oictment of 1910 against Z. Augustus HeiEze
3,lst before the adjournment Of the trial un-
iii TO-DAY. On the request OF Henry A
Wise. United States Attorney, the renlaih-
ing count in the 1903 indictment was
ouashed. That left the lSS Indictment,
found EheE Henry l.. Stimson was United
States Attorney, as the basis for the pres
en- trial OF the eX-copper king. The coun-
eel VIII sum up before the jury this morn
ing unless there should be some unexpected
move made by the defence.
The 1908 indictment contains thirty counts.
fifteen charging 1nisapplication of $4,000 Of
The funds Of the Mercantile National Bank
on October IL 1907, and fifteen charging
overcertifcation Of each of the checks ap-
piled 10 the S5on0O loan. Last year an IN
dictment was found containing sixteen
counts OF these, fifteen we're thrown out
OF a demurrer and the sixteenth was
ouashed yesterday. The next Indictment
was found on March 3 of this year. II
consisted of fourteen counts. seven of which
were lettered. This whole indictment. with
Judge Hough's action of yesterday, has
been Quaslled.
The trial yesterday swayed from a de-
cross-examination Of the government ex-
pert, j. p. Eernsier, by John B. Stanch-
field. OF counsel for Mr.. Heinze. back to
fine showing for the prosecution, when Mr.
Stanchfsld gave Mr. Wise an opportunity
20 delre into United Copper assets prior 10
1e7. which had been a closed book thereto
fore. and the day closed with victory for
the defence in the ruling OF the court on
tie iettered counts.
Court Iashes Witnesses.
Judge Hcugh in his remarks did not give
the defence much comfort regarding the
nlisapplication charges, however, but in rul-
ing on the Iettered counts said he adhered
10 his opinion expressed several times IN
the course Of the trial that the defendant
had not been connected with the transac-
lions. Referring 10 the witnesses called by
the prosecution. who. he said, had proved
witnesses for thesdefence in that their MEM
CRY failed them or that they were ignorant
Of things the prosecution claimed they had
knowledge of, Judge Hough said:
Language has been exhausted to fit the
ignorance and loss of memory of some of
the witnesses. whom it is unnecessary to
name: ignorance the prosecution claims was
pretended, and loss Of memory feigned-"
When one of the counsel for Heinze-John
e Tomlinson-was arguing for the dis
ulissaI of the misapplication charges, say
Ing that il the bank was properly secured
Il did not concern the institution If the
money was cast into the sea, Judge Housh
wanted to know whether the act would be
legal if intent TO misuse the funds We're
shown Mr.. Tomlinson held that the law
was prohibitive rather than punitive He
reiterated this when the question OF lend
Ing the banks money down to below the 10
per cent legal reserve was discussed. There
was 10 evidence. ne said, of wilfu intent
Judge Hough in all his comments implied
taat in his opinion there had been estab-
iished enough ground for the misapplication
charge te have the 5ury pass upon it
Further argument on the 1908 Indictment
may lie made this morning before the sum
ming I'D takes place.
When the counsel for the defence Mr..
Stanchffeld, began his cross-exsminaton of
the expert accountant, Fernsler. he delved
into his experience, WHICH began for the
government in the Walsh case at Chicago
lie said he had begun the present case
81 the conclusion Of the Morse trial. in De
cember 1905 which shocked Mr. Stanchffeld
because Of the reference TO Morse. seeing
IN this an attempt to influence the-Gury,
which the witness disclaimed-
Fernsler was led TO say that he had eE-
pIained testimony given before the jury to
newspaper men. at the request OF the lat
ter and then Mr.. Stanchfield asked:
Did You tell that the United Copper had
q .S32 600 in deposits in various banks in
January, 1907 when the first dividend was
paid?'
The witness said that he had not, and
then said that the company did have that
sum on deposit, admitting that he did not
testify TO that fact. He said he had not
given this testimony, because he had not
been asked about it. Mr.. Stanchfield. TO
show that the charts IN evidence prepared
by the witness might not be correct. point
Cd 10 an error in addition Of $4,000. 1t was
further brought out that other subsidiary
companies had balance of s, ,2s5c00 at the
time OF the first dividend payment III 1907.
StanchfeId Opens Up the Past.
Eut IN this labor to get at the seeming
balances Of the companies Mr.. Stanchfield
led the witness back Of 1907. period hith
erto closed by a ruling Of the court at the
request Of the defence. That gave MI
Wise his opportunity, and when Mr.. Stanch-
field objected as the prosecutor began to
uncover events in 1906 Mr.. Wise said:
7 want 10 show by this witness that this
statement regarding the balances. as shown
in these books. the purest bit Of paper
profit ever conceived
Objections were Of no avail and a series
OF stock transfers was revealed as the
basis Of the assets The witness said that
The dividends were not paid out OF the
earnings. in detail he showed that the 1895
dividends were paid by journal entries. no
money passing in the transactions. Albert
Z. Radert, who helped Fernsler in the
work on the Heinze books, was cross-ex-
anined, several blueprints figuring in the
questioning, but their relevance not being
brought out.
The motion for the dismissal of the let
tered counts remaining in the 1910 indict-
ment followed and was granted, which
gave the Heinze forces renewed hope, but
the subsequent remarks Of Judge Hough re-
sarding the misappiication counts left the
result OF the days battle about even with
the honors leaning toward the prosecution.