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Commodity Futures Trading Commission 

CEA CASES 

NAME: RAYMOND G. BROWN, SR., RAYMOND G. BROWN, JR., PRESTON BROWN, HARRY C. 

CLOWER, JR., AND R. BOND BAKER 

DOCKET NUMBER: 40 

DATE: JUNE 10, 1946 

DOCUMENT TYPE: COMPLAINT 

UNITED STATES OP AMERICA 

BEFORE THE SECRETARY OF AGRICULTURE 

In re Raymond G. Brown, Sr., Raymond G. Brown, Jr., Preston Brown, Harry C. 

Clower, Jr., and R. Bond Baker Respondents 

CE-A Docket No. 40 

Complaint and Notice of Hearing under Section 6(b) of the Commodity Exchange 

Act 

There being reason to believe that the respondents have violated the 

Commodity Exchange Act (7 U.S.C. Secs. 1-17a), and the rules and regulations 

promulgated pursuant thereto, this complaint is issued alleging the following: 

1. 

Raymond G. Brown, Sr., Raymond G. Brown, Jr., Preston Brown, Harry C. Clower, 

Jr., and R. Bond Baker are individuals, residents of the State of Maryland, the 

post office address of each being Mt. Airy, Maryland. 

2. 

The Chicago Mercantile Exchange, hereinafter referred to as the Exchange, is 

and, at all times covered by this complaint, has been a duly designated contract 

market for eggs under the provisions of the Commodity Exchange Act. 

3. 

J. S. Bache and Company, New York, New York, was until or on about June 1, 

1945, a partnership holding a membership on the Exchange and registered as a 

futures commission merchant under the Commodity Exchange Act. On or about June 

1, 1945, J. S. Bache and Company was succeeded by Bache and Company. Bache and 

Company was at the times hereinafter mentioned and is now a partnership holding 

a membership on the Exchange and registered as a futures commission merchant 

under the Commodity Exchange Act. Becker, Stone and Company, Chicago, Illinois, 

Fahnestock and Company, New York, New York, and Orvis Brothers and Company, New 

York, New York, were at the times hereinafter mentioned and are now 

partnerships. Each of these firms was at the times hereinafter mentioned and is 

now a member of the Exchange and registered as a futures commission merchant 

under the Commodity Exchange Act. 

4. 

The respondents, on the dates set forth herein, entered into contracts and 

held positions in egg futures equal to or in excess of 25 carlots and failed to 

report such positions on Form 503 as required under the provisions of Sec. 4i of 

the Commodity Exchange Act and Secs. 5.10, 5.11, 5.12, and 5.21 of the rules and 

regulations promulgated thereunder. 

5. 
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Respondent Raymond G. Brown, Sr., on the dates shown below had transactions 

in egg futures on the Exchange resulting in the positions indicated. 

(a) Held through J. S. Bache and Company and its successor, Bache and 

Company: 

October 

1945 

Date Future 

(Carlots) 

1945 Long 

Feb. 23 2

May 9 0

" 26 3

" 28 5

Aug. 13 5

(b) Held through Fahnestock and Company: 

October November 

1945 1945 

Date Future Future 

(Carlots) (Carlots) 

1945 Long Long 

April 2 26 

May 9 29 " 12 19 June 20 15 

July 9 15 3

Aug. 13 5 3

(c) Held through Orvis Brothers and Company: 

October 

1945 

Date Future 

(Carlots) 

1945 Long 

April 7 2

" 26 3

May 9 5

" 26 5

Aug. 13 5 

(d) The aggregate of the long or short positions carried for account of 

Raymond G. Brown, Sr., made up from subparagraphs (a), (b), and (c) above were 

as follows: 

October November 

1945 1945 

Date Future Future 

(Carlots) (Carlots) 

1945 Long Long 

April 2 28 

" 7 30 

" 26 31 May 9 34 

" 12 24 

June 20 25 July 9 25 3

Aug. 13 15 3

Reports were required to be filed by Raymond G. Brown, Sr., under the 

provisions of the Commodity Exchange Act and the rules and regulations 

pertaining thereto, covering the positions set forth on each of the above dates, 

but the only report received from Raymond G. Brown, Sr., was an incorrect report 

filed under date of May 15, 1945. 
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6. 

Respondent Raymond G. Brown, Jr., on the dates shown below had transactions 

in egg futures on the Exchange resulting in the positions indicated. 

(a) Held through Orvis Brothers and Company: 

October November October 

1945 1945 1946 

Date Future Future Future 

(Carlots) (Carlots) (Carlots)

1945 Long Short Long 

Mar. 13 2 " 19 4 

" 24 6 

Apr. 7 10 " 13 6 

" 19 8 

" 26 12 May 15 14 

" 24 24 Aug. 17 20 " 22 10 10 

 

1946 Jan. 28 3

" 30 4

Feb. 1 6

" 2 8

" 4 11

" 6 18

" 7 20

" 11 22

" 13 24

(b) Held through Fahnestock and Company: 

October November 

1945 1945 

Date Future Future 

(Carlots) (Carlots) 

1945 Long Long 

Mar. 17 26 " 19 30 " 22 35 Apr. 2 40 " 13 30 " 28 32 May 7 37 " 10 42 

" 12 37 

6(b) Held through Fahnestock and Company (continued): 

October November 

1945 1945 

Date Future Future 

(Carlots) (Carlots) 

1945 Long Long 

May 14 25 " 15 20 

" 26 25 July 5 25 5

Aug. 20 20 5

" 21 10 5
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 October November 

 1945 1945 

Date Future Future 

 (Carlots) (Carlots) 

1945 Long Long 

" 22 0 0

Oct. 24 5 10

" 31 0 10

Nov. 3 12

" 7 0

(c) Held through J. S. Bache and Company and its successor, Bache and 

Company: 

October November October 

1945 1945 1946 

Date Future Future Future 

(Carlots) (Carlots) (Carlots)

1945 Long Short Long 

Mar. 17 2 " 19 7 May 17 0 " 26 5 

Aug. 13 5 5 

" 20 5 10 " 21 5 5 " 22 5 10 Oct. 23 15 " 27 8 

" 29 10 " 31 0 

1946 Feb. 2 5

" 6 10

" 8 15

" 13 20

" 19 10

 

(d) Held through Becker, Stone and Company: 

October November October 

1945 1945 1946 

Date Future Future Future 

(Carlots) (Carlots) (Carlots)

1945 Long Long Long 

June 2 5 

Aug. 31 0 

Oct. 24 1 16 " 31 0 16 

Nov. 7 0 

 1946 

Jan. 25 22

" 26 25

" 28 27

" 29 29

Feb. 2 34

" 4 37

" 6 32

" 7 37

" 19 37
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(e) The aggregate of the long or short positions carried for account of 

Raymond G. Brown, Jr., made up from subparagraphs (a), (b), (c), and (d) above 

were as follows: 

An error occurred in the processing of a table at this point in the document. 

Please refer to the table in the online document. 

 

6(e) Aggregate long or short positions (continued): 

An error occurred in the processing of a table at this point in the document. 

Please refer to the table in the online document. 

 

Reports were required to be filed by Raymond G. Brown, Jr., under the 

provisions of the Commodity Exchange Act and the rules and regulations 

pertaining thereto, covering the positions set forth on each of the above dates, 

but only two reports filed under dates of April 15, 1945, and May 15, 1946, were 

received from Raymond G. Brown, Jr. 

7. 

Respondent Preston Brown on the dates shown below had transactions in egg 

futures on the Exchange resulting in the positions indicated. 

(a) Held through Fahnestock and Company: 

December 

1945 

Date Future 

(Carlots) 

1945 Long 

Nov. 13 3

Dec. 12 0

(b) Held through Becker, Stone and Company: 

December October 

1945 1946 

Date Future Future 

(Carlots) (Carlots) 

1945 Long Long 

Dec. 3 23 " 11 23 5

" 12 15 10 1946 

Feb. 4 25

" 6 27

" 15 27

 

(c) The aggregate of the long or short positions carried for account of 

Preston Brown made up from subparagraphs (a) and (b) above were as follows: 

December October 

1945 1946 

Date Future Future 

(Carlots) (Carlots) 

1945 Long Long 

Dec. 3 26 

" 11 26 5

" 12 16 10 

1946 Feb. 4 25

" 5 27

" 15 27
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Reports were required to be filed by Preston Brown under the provisions of 

the Commodity Exchange Act and the rules and regulations pertaining thereto, 

covering the positions set forth on each of the above dates, but no such reports 

were received. 

8. 

Respondent Harry C. Clower, Jr., on the dates shown below had transactions in 

egg futures on the Exchange resulting in the positions indicated. 

(a) Held through Orvis Brothers and Company: 

October 

1946 

Date Futures 

(Carlots) 

1946 Long 

Feb. 15 25

" 19 30

" 28 32

 

Reports were required to be filed by Harry C. Clower, Jr., under the 

provisions of the Commodity Exchange Act and the rules and regulations 

pertaining thereto, covering the positions set forth on each of the above dates, 

but no such reports were received. 

9. 

Respondent R. Bond Baker on the dates shown below had transactions in egg 

futures on the Exchange resulting in the positions indicated. 

(a) Held through Orvis Brothers and Company: 

October November 

1945 1945 

Date Future Future 

(Carlots) (Carlots) 

1945 Long Long 

Oct. 24 7 13

" 31 0 13

Nov. 7 0

(b) Held through Fahnestock and Company: 

October November 

1945 1945 

Date Future Future 

(Carlots) (Carlots) 

1945 Long Long 

Oct. 29 12 13

" 30 12 15

" 31 0 12

Nov. 7 0

(c) Held through Becker, Stone and Company: 

November 

1945 

Date Future 

(Carlots) 

1945 Long 

Oct. 31 2

Nov. 7 0 

(d) The aggregate of the long or short positions carried for account of R. 

Bond Baker made up from subparagraphs (a), (b), and (c) above were as follows: 
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October November 

1945 1945 

Date Future Future 

(Carlots) (Carlots) 

1945 Long Long 

Oct. 29 19 26

" 30 19 28

" 31 0 27

Nov. 7 0

Reports were required to be filed by R. Bond Baker under the provisions of 

the Commodity Exchange Act and the rules and regulations pertaining thereto, 

covering the positions set forth on each of the above dates, but no such reports 

were received. 

10. 

The respondents were aware of the reporting requirements relating to egg 

futures transactions and positions as evidenced by correspondence between 

certain of the respondents and officials engaged in the enforcement of the 

Commodity Exchange Act. 

11. 

The respondents are all members of the same family, related either by blood 

or marriage. Certain of the respondents gave powers of attorney to other 

respondents giving authority to trade and withdraw funds in connection with 

their transactions in egg futures and certain respondents also guaranteed the 

accounts of other respondents 

 

and there were frequent transfers of funds between the accounts of the various 

respondents on the books of the brokerage firms. Checks made payable to certain 

of the respondents bore the endorsement of other respondents. In the entering 

of orders covering transactions in egg futures certain of the respondents gave 

orders for purchases or sales of certain quantities which after execution were 

distributed among the accounts of various respondents. 

Therefore, each of the said respondents is hereby notified to be and appear 

at a hearing to be held at 10:00 o'clock a.m., Eastern Standard Time, on the 

23rd day of July 1946 in Room 2709, South Building, Department of Agriculture, 

Washington, D. C., before a referee to be designated by the Secretary of 

Agriculture, to conduct such hearing and then and there show cause, if any there 

be, why an order should not be made directing that, until further notice of the 

Secretary of Agriculture, all contract markets refuse all trading privileges to 

each of such respondents. 

The respondents will have 20 days after the receipt of this notice of hearing 

in which to file with the Secretary of Agriculture an answer in triplicate, 

fully and completely stating the nature of the defense and admitting or denying 

specifically in detail such material and relevant allegation of this complaint. 

Any allegations that are not answered will be deemed admitted for the purpose of 

this proceeding. 

It is ordered that this complaint and notice of hearing be served on each of 

the named respondents by delivery of a true copy hereof to each of them by an 

employee of the Department of Agriculture or by registered mail at least 20 days 

prior to the date herein set for hearing. 

Done at Washington, D. C., this 10th day of June 1946. 

/s/ Clinton P. Anderson 

Secretary of Agriculture 
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