Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1910-04-28
Prosecution Of Aeinze Opens With
SCathing Address by Dist. Atty. Wise
I, Who Says Mercantile Bank Was
- Made Gambling Institution.

New York, April 27.-After a scathng
opening address by United States Dis
trict Attorney Wise, the government
began in earnest today the prosecution
of it's case against F. Augustus Hein1e
the Montana copper man. who is
charged with misapplication of funds
of the Mercantile National Bank Of
which he was the former head and
with over -certification of the checks
of Otto HeinZe L. Co, which he and his
associates dominated. His operations
the prosecutor referred to as film fam
and "bunco games" and he charged
that the Mercantile Bank was reduced
to the level of a gambling institution.
When counsel had concluded their adj
dresses, the government began the in
PRODUCTION of evidence. Important in
this was a letter of Aug. |, 1907, 80.
I'D" by the defendant. and addressed
to the Mercantile National Bank as
follows:
"Please deliver to bearer from col
lateral you are holding as securities,
100 shares Louisville e. Nashville. 100
shares Southern Pacific common, 100
Amalgamatod Copper and receive in
exchange 1000 United Copper common"
The securities which the 1000 shares
of United States Copper replaced by
had been left by Otto HeinZe as part
| security for loan of $l50,000 on May
| 24.1907.
Testimony was given to show that
on MAY q. 1907, a loan for $4,000 by
| the Mercantile National Bank was Sc
| cured by 100 shares United Copper pre-
American Ice, 500 Southern Pacific and
| 500 Union Pacific and various loan
book entries were read to show how
Otto Heinac 4 Co. are alleged to have
obtained loans from the bank on
standard securities, later substitute
ing therefor less valuable copper
stocks
An entry of Aug. s. 1907 was admit
ted after much objection by the de-
fierce. 1t showed that 100000 was loan
ed to a clerk in the United Copper Co.
offices and in turn made payable To
Montana ore Purchasing Co. one OF
the Hcinze concerns. This loan, Mr..
Wise sought to show. crippled in"
bank s legal reserve.
Other entries were read showing that
on Aug. 10. 1907 Arthur p. Heinze,
brother of the defendant borrowed
$4,000 on $1,000 shares of United Cop
per. Arthur HeinZe was a director of
the bank at the time and the loan OF
S11O.O 900 was placed to his own account.
swelling it from $4,000 to S112.O0o.
New York, April 27.-The II men
comprising the jury which is to try +,
Augustus Henze. the Montana copper
man and former banker filed into court
today under guard. having spent the
night at a downtown hotel to which
court orders will confine them while
the trial lasts They will be kept in
charge of special United States mar
shals.
Before the trial was resumed today
before Judge Hough in the United
States circuit court. L. S. District At
torney Wise apprised the court of the
fact that during the progress of yes
terday's session Heinze left the court
room several times to smoke and tele-
phone. Judge Hough said that if there
was a recurrence of this. the facts
should be brought to his attention and
he would pass upon them.
while I don't want the defendant
kept under actual custody, | do want
him to remain in court while the trial
is on" said Mr. Wise,
The trial opened today with the de-
NAL by Judge Hough of motions for
the dismissal of all the indictments.
Mr.. Wise then began outlining the
governments case against Heinze,
charging misapplication of the funds
of the Mercantile National Bank while
he was it's president and with over
certifcation of checks of Otto HeinZe
& Company at the time. it is charged.
the firm was carrying on extensive
speculations in the stock of the United
Conner Company HeinZe's counsel
yesterday asked jurors if they would
be prejudiced by the fact that banking
relations existed between Heinze and
Charles w. Morse and called attention
to Heinzes long litigation with Stand
ard Oil interests.
This man is not being prosecuted
by the Standard Oil Co." Mr.. Wise ex
claimed with much feeling in his
Opening address today. II am not here
as The prosecutor of Charles w
Morse. nor am | here as an employe
of the Standard Oil Co. but a sworn
officer of the government and I'll dis
charge my duty as such. The stand
ara Oil has nothing to do with TINS
case; an6, so help me God, will nave
nothing to do with it,
Mr. Wise said he would show that
the stock OF the United Copper Co, on
which the money was loaned to the
firm of Otto Heinze & Co.. was worth
at no time between January. 1903. and
October. 1909, more than $50 share.
Il will show you" said Mr.. Wise.
that Otto Heinze. Arthur HeinZe and
Max c.. Shultz held the controlling
stock in the United Copper Co. and
formed pool to initiate the price of