The sun., 1910-04-29
HEINzE POINTS At O'BRIEN
is RESPONSIBLE FOR HERCAN-
TILE BANk LOANS or 1901.
MEANING Particularly the Hrlnye Loans
Made tS Hold Ip the nIteSi topper
CORNER Nr. O'BrIsn CSmrs iS Court
and Mnl Have a chance To TESTIFY

Circuit Court for misapplyng the funds
of the Mercantile National Rank. 20 put
the responsibility up to Miles NJ O'Brien.
who was first vice-p president of the bank
when the He,nze leans were made IN
iSO7. became incre0 singly evident as the
trial proceeded yesterday. In his cru~s-
examination Of the first important wit
ness, Emil Klein. the cashier. John y.
s,tanchhald. 10 counsel for Heinze. got
Mr.. Klein o. say that Mr.. O'Brisa virtu-
ally managed the hcnk and that MIR.
O'Brien's salary Was raised from Sl2. Goa
toScS .OsO when Heinzs came in and refused
10 take any salary a. president
- Mr.. O'Brien wasn't present when Mr.
Stanchfeld was putting his questions
N the witness but he came In lmmedi-
Ately AftsTward and remained throughout
the day. sitting On the opposite side
Of the room from Heinze. II was said
that he was prepu red to dispute the con
trntion of the defence and would get the
opportunity later.
Sill another point of the defence was
brought out yesterday when Mr.. Stanch-
fleld showed that ON October 10. two days
after p. A. Heinzs had got from the hank
on an unsecured note SSOO.OO. which
he turned over to his brothers firm,
over 81 .OOO. .OO0 in collateral. mainly copper
stocks, was turned over Co the hank.
In these two days the Heinze pool IN
United Copper had collapsed. the common
dropping from ~ Ia ~. and ON the 18th
20 iiis hid. I'm the nth came the elimi-
nation uf IN. H"inz..- from the hank
following IN ,NspIn1 tiou bY the Clearing
House committee Apparently - viii
bs the c1nt'ltI n e the defence that
Fritz Heinz had amply protected the
hank. thour. .u~t what Influences nper-
ated To brinr forth the collateral didn't
come out yesterday.
Continuln.. h.. examination of Cashier
Klein concerning the manner IN which
the bank : tuut- y ere Ted to tho mauipU-
lators OF th" corner. United states At
torney Wise brought out that 4 loan to
the firm uf otto Heiu2c a 60. on August
rs brought the bank reserve sa1i. La
below the legal limit. this heir, raid the
next far Comptrul'"r Y iEaly wrote
to Heinle A. yr"sI tent un August 10
calling attention "a IN" fact that the firms
soans were seeo WH in excess oi the amount
allowed and demanding more collateral.
% which Hcinze replied en- August -.
stating that he had had The loan reduced
&C. s25o.Uo Apparently 'ri~ Was brought
about by huyirg two drafts on Bremen
and Paris from the firm for s2!5.W0 on
August II. hut On August 20 the hank
made tw q loans To the firm. one of S2ls .Uo0
and one of So p,0 on denaBd notes. neither
Of which has nr-n pad. vhIch loans
more than covered the c"-t - the drafts
The reserve was brought Si79 a5s under
the legal linit that day T. vas s2Sa. i:7
under the limit ON OCtpba- No. aftc' another
SO coo loan had been made On October
!. Mr.. Klein aid. the associates of Hein1e
collectively owed the hank SfGl. nsi and
had up a. collateral Iod United Copper
preferred. 6.g1 United copper common
and 1900 american lC'' On OCtober ~.
when !. Heinze drew = chesk for siD
0O and Indor~ed q over to otto Heinys
A Go. the reserve was s5Sj ~ hel"w the
requirement The Heinz" firm Withdrew
eeQg on of the amount - the rha~'S I'M
mediately N wa the tay that United
Copper touched the tot. IImpInC up -
points H. ~. and the H"iuy'-- thought
that they hal a." bears Skinned The
stock dropped the same number 81 point
the next d1y
There a. something doing in the hank
that day - appeaTs from asher klein-
testimony IT, had q ak with the paw
ing teller about the way ihInE- wer" going
and at O'Clock he -IoA" o. ieinze
Il asked HIM sad the witness. of
Va couldn't get rofr. money 'or that
ssOO.OJ0 loan Ne -aId that h" 4 get ht {
the next day. | urged nifn 70 -"' sH i..'
loan that day. hut . - a that D." rogIia't
] told HIM that ! WIS auNlo'- about our
clearinEs IN the morning. but he said
that he had no anxiety.
Mr.. Klein = diFr,' e-aWGna ton ended
here and MIR SttnChh".d took him IN
hand Almost MS iIr-f question Wa q
Miles VI. O'Bricn was first -prpzidert
from January to D,t0l@r of 1877 Nj.
kloin said that h" WIS
what was the salary of m" president
None
1T wa paid to NJ. O.B,.n IN fact.
Wasn't IL"
Il don't know
Mr. StanchneId brought ou' that Mr..
O'Brien received salary that year of
$500 and thai tic Saiary " the prT,sl-
cent before shat had le'n SlJG0. Mr.
O'Briecs salary ~ vla~-prp sident having
been raised from sit.p1 10 S?5.OD.
Don't yOu know that Nr. Heinz
directed that the salary - ~" president
bs paid to ilr O'RrIeus" asked Mr. StanCh-
field hat tho witness could not swear
as IN this. lie said that q was fact tnat
Heinge had lcon abasut three or four
times for rather extended periods.
Isn't II a IA : that tho a6tive managing
head Of the ua0k during 1871 was NJ
O'BTiens- MIR. StanC hfield inquired Mr.
Klein said yes The witness testified
IN answer 10 another question Of Helm res
counsel tha, H"inZe- holdings in the
the market price In January meant an
Investment og about g. poOO He ad-
mstted that the ss-erve Of hank fuctu-
ated m accordance with the money mar
ket, hut when Mr.. S'tnchneld wanted
to know II ~ wasn't a fact that the re-
serves Of mot banks IN tho city were
below the % per cent. requirement IN
Ieo7. the Court promptly sustained an
objectiOn. IL was admitted that no
criminahty was involved in allowing the
reserve tO 10 10 reduced Henzs'E ac-
count in the hank he witness test fed.
was as high ~ SAL 40 in August. but
had dropuHd 10 Sll .Oy on October -
u was at this point that Mr. Sianch-
field produced a loan card dated October
~. l06. showing this collateral tor the
gS0O.OOO loan. W.'sg Ohio COPPER. - OOD
Davis Daily. 20 ISL United Copper common
and SE States Savings Bank Of Butte
This collateral at the market value. tbs
witness said. was worth over ~ OSO.OOJ
Mr.. StRnchfieid wanted 20 know II tns
witness had had this collateral that Glv
or an agreement tp get " later
i didn't have n and I didn't have any
agreement. was the reply Th. nr-r
hs had seen Or this collateral he said wr-
on October iC. Onths 18th 10 appeared
8eOO.OOO mors collateral wls brought 10
a