Santa Fe daily New Mexican. [volume] (Santa Fe, N.M.) 1885-1897, 1894-02-28
CROOKED BUSINESS.
Trial of President Dane, of the De-
fnnct Banks Of Silver City
and Misunderstanding
Revelations.

of the defunct banks of Silver City and
Deming, has been progressing in the
United States district court before Hon.
A. B. Fall at Las Cruces for the past week.
It is expected the trial will terminate
either to-day or tomorrow. The defense
is represented by Mr.. 7. B. Catron, OF
this city, and the prosecution by United
States Attorney j. B. H. Hemingway, as
sisted by Mr.. II. B. Ferguson. of Albu-
querque. There are twenty-five counts,
or specific charges against the defendant
and the indictment covers forty-five
pages of closely written matter. Bank
Examiner Lazier has been hard at work
on the cases ever since the indictments
we're found by the grand jury.
As soon as the cases were called Attor-
ney Catron made motion that two of
them be consolidated and tried as one.
The court overruled the motion.
The first witness called for the prose-
cution was Col. Paschal R. Smith, of Dem
ing. He testified that two notes were
given the First National bank of Deming
of which the defendant was president,
one sigued by himself and one signed by
his wife, Matte G. Smith. He asserted
that the money mentioned in the note
signed by his wife was never received by
her, but that it was placed to his credit,
and that the proceeds Of the note signed
by himself was also placed to his credit,
or 80 much of it as was not interest, the
understanding being that the notes were
to be paid when certain bonds were sold.
1t was also agreed that portion of the
proceeds were to be used in the transac-
ton of selling the bonds, and that he was
| to be reimbursed in bonds. Sixty
thousand dollars in bonds were to
be put up as collateral security
for the two notes. The surplus obtained
from the sale of the bonds was to be
equally divided between himself and
Dane, after paying off the two notes. The
bonds were never, to his knowledge, sold
He further testified that he had recently
had conversation with Frank II
Siebold, the cashier of the bank, in com
pany with Dane, and that Dane and Sic
bold held quite an animated converse.
ton. The substance of the conversation
was that Siebold was just as guilty az
Dane, that they were in the same boat
and that Siebold had better get out of it
Siebold remarked that he did not know
what to do, that he had lost confidence in
everybody.
| Mrs. Smiths note was for $5,321.21 and
his own for $1O,6OO. The reason he did
not give his note for the entire amount
was because the bank capital was only
100000 and the law prohibited the Civ
ing of note for more than 10 per cent
of the capital. None of the securities
which were placed in the bank on account
of the notes have been Withdrawn, sd fal
as he knows
The collateral put up as security fol-
the notes was in the shape of bonds and
stock receipts of the Rio Grande Irriga
tion & Colonization company. He after
wards delivered $4,000 in bonds ant
took up the receipts, 100000 in receipts
still remain in the bank. The company
whose bonds were put up, was organized
to purchase and reclaim lands and tn,
construction of canals and reservoir
in the Rio Grande valley near Albuquer
que.
No part of canal was ever constructed
The bonds were issued in payment o
lands and charter rights held by the OLE
company. About $4,000 of the entir'
Indebtedness of $3000,OOO were issued fo
the payment of 100000 acres of land tina
the company now owns and for the con
cession of 100000 acres that the com
pany was sometime to build canal on
The grants of the company were never
confirmed, but were once favorably re-
ported upon by the surveyor general
The timber land, when the litigation now
pending is settled, will be worth about 81
an acre and consists of 114,O00 acres.
Mr.. Frank Fl. Siebold, the ex-cashier
next took the stand. The bank was
organized in 1884 with Mr.. Dane as presi-
dent and the witness as cashier. The
bank was examined by Bank Examiner
Lazler in 1892 and closed February 3,
1892. The bank did not have any regu-
lar discount committee in the conduct of
it's affairs. The directors took no part
in the conduct Of the bank. Mr.. Dane
performed all duties connected with the
making of loans and discounts which
should have been performed by the dis
count committee and for which the by