The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1910-04-28
Prosecution Outlines What 1t
Expects to Prove Against
Former Copper Magnate.
DENIES THAT OIL TRUST
IS PLAYING ANY PART
Defense Scores Vital Point i'm
Relation to Order of the
Testimony.

NEW YORK, April 27.-After a scath-
ing opening address by United States Dis
trlct Attorney Wise, the government be-
gan in earnest today the prosecution OF
its case against +. Augustus Heinze, the
Montana copper man who Is charged with
misapplicatior OF funds OF the Mercan-
tile National bank OF which he was the
former head, and with overcertiication Of
the checks of Otto Heinze & Co, which
he and his associates dominated,
10 Heinze's operations the prosecutor
referred 10 as Him fam and 'bunko
games" while he charged that the Mer-
camille National bank had been reduced
TO the level of a gambling institution
When counsel had concluded their ad-
dresses, the government began the in
PRODUCTION OF evidence, important among
which a letter OF August /. 1907. 20 kd"
by the defendant and addressed to the
Mercantile National bank. as follows:
please deliver to bearer from collat-
eral you are holding as securities
100 shares of Louisville & Nash
vile, 100 shares OF Southern Pacific COM
mon, 100 shares of Amalgamated Copper
and receive in exchange 1000 United Cop
per common"
Shares Held for Loan.
The securities which the 1000 shares OF
United Copper replaced had been Left by
Otto HeinZe Co. as part security for
loan of sl50,00o on May "a, 1907.
May q. 1907, "A loan for S15O.O00 by the
Mercantile National was secured by 100
shares OF United Copper preferred, 300
United Copper common. 300 American Ice,
500 Southern PacIac and 500 Union Pa
Ciic and various loan book entries were
read TO show how Otto Heinze &: Co. arc
alleged to have obtained loans from the
bank on standard securities, later substi
tuting therefor less valuable copper
stocks
An entry of August 5. 1907. was admit.
tk
the defense. 1t purported 10 show that
5000 900 had been loaned TO a clerk in
the United Copper company's office. and
in turn made payable TO the Montana Ore
Purchasing company, one OF the Heinze
concerns. Mr.. Wise sought 10 show that
this loan had crippled the banks legal
reserve,
Heinze's Brother Borrowed.
Other entries were read showing that
on August 10, 1907. Arthur p. Heinze. a
$4,000 on 100 shares of United Copper.
Arthur Henze was a director OF the
bank at the time. and the loan of Sll0,-
900 was placed to his own account, swell
ing 1t from $1,000 to SIP, 900.
The trial opened with the denial by
Judge Houeh OF motions for the dismissal
Of all the indictments and Mr., Wise then
began outlining the governments case
against Heinze, charging misapplicatlon
OF the funds of the Mercantile National
bank while it was its president. and with
& Co. at the time, IL Is charged, the firm
was carrying on extensive specuiations
In the stock OF the United Copper COM
pany.
This man is not being prosecuted by
the Standard OIL Mr. Wise said in his
opening address. al am net here as the
prosecutor of Charles w. Morse, nor am
| here employee of the Standard
oil company. but a sworn officer OF the
government and VIII discharge my duty
as such. The Standard OIL has nothing
to do with this case, and so help me
God II will have nothing to do with It."
Formation Of Pool.
Mr.. Wise said he would show the stock
OF the United Copper company on which
the money was loaned 10 the firm Of Otto
Heinze Co, was worth at no time be-
tween January 1909, and October. 1909,
more than $40 n share
81 will show you" continued Mr.. Wise,
that Otto Heinze. Arthur Heinze and
Max c, Schultze held the controlling
stock In the United Copper company and
formed a pool to Initiate the stock
"Thcy proceeded with the usual Aim
fam OF wash sales,' continued Mr., Wise
In his illusions to the United Copper
management.
The prosecutor told the jury that F.
Augustus ileinze was at that time presi
dent Of the United Copper company and
president OF the Mercantile National
nanlS.
He declared that in financing this haz-
ardous, reckless speculation" the bank.
luCpuSh iitlIlIf; lSlA OlNp y, tttIHHs O.
Co from June 10 October II. 1907. $9al.-
900 without adequate security.
con the night OF October H." said Mr
Wise. after such men az Barney and
Morse refused Ia enter Into any such
wildcat scheme. tho firm or Otto e. Hinze
& Co. owed nearly 81 900. 900 TO the Mer-
camille National bank which IL had pat
In a position Of gambler In Wall street,
Career Of the Firm.
otto c. Tcinze g. Co. al one time
I.ng p,cd lc n
| the textile district of this city, and
closed up shop in night and became
a brokerage firm. They entered Wall
| street with about much knowledge of
affairs as a 2-year-oid.
II will ask At the close of the trial
that this man be found guilty. / shall
prove that this man. as trustee had
violated his truGt. and as n result the
Mercantile National bank has been
| looted. And I snail ask that lie be pun
ished as 4 lesson TO all men that they
may do likewise
Albert +. Clcmmon a bank examiner,
was called as a witness
| The session came 10 an unexpected
end when Mr.. Clemens was excused,
Defense Scores Point.
Mr.. Wise said he had in court fifty
! brokers from Butte 10 Boston. and the
| books Of their concerns. showing facts
that would tend TO establish the deal
! ings of the United Copper company and
| The existence of pool
Mr.. StanChficld objected. saying that
the alleged r-certltlcation and misap-
Continued on Page Seven