The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1894-05-14
BY A HUGE SWINDLE
indianapolis People Were Caught
in the John Brown Colony.
Mr.. Haughey Was a Mere TyrO to
Banker Mcdonald, of California,
Who Is Now Jailed.

Quite a number or HooSlers, among tnem
several Indianapolis business men, were
caught in the recent failure of the John
Brown colony, in Fresno county, Califor-
MIA. The exposure of this scheme brought
to light another instance in which the rank
est fraud was concealed under the cloak
of righteousness. The names and losses of
Indianapolis people in this scheme, as de-
veloped from information obtained yester-
day, are as follows: Isabella McElhennan,
ss75; John F. Wallick, S75; Martin H. Wal
lick, $3.50; Mary a. Wallick. $40; Alice b.
wicks, 1915: Cornelia Burnett. s275: Camp
bell H. Cobb. 500; Miss Lois L. Hoyt. s275;
Martin McGillard, $275; Charles Mcclure.
$3.50; C. H. Martin. 500: Anna NJ. Shoemaker.
$50. The Indianians outside of Indianapolis
are as follows: Samuel Clugston. 1915; Thos.
Gregory, $96425 James Johnson, SLIPS; Geo.
w. Casey, $50, and Thomas Parr. 1915.
Fontanet, Ind; Miss Mary E. Bennett,
Griffith, Ind, s375; r. E. Bryant, $3.50. and
William Robertson, Charlottesville. Ind. ST.
025; Rev. o. +. McHargue, Charleston, Ind.
$275; Rev. G.. G. Bartholomew, Upton, Ind,
$1,102, and Rev. j. o. Cults, Irvington, Ind,
$3.50. Most OF these gave up hope of recov-
ering the money some time ago.
The story of this swindle reads almost
like a fairy tale. 1t is the old story of the
wolf in the sleeps clothing. In 1889 John
Brown and w. F. Baird bought three thou
sand acres of land in Fresno county. Cali
fornia, for the purpose Of establishing a
colony of fruit growers. The land was d.
vided into five, ten and twenty-acre tracts.
with wide roadways crossing at right an
giles. eighty rods apart. On paper the tract
was a thing of beauty. The land was then
put on the market. not for direct sale, but
to be sold on conditions, in which lies the
whole tale of the swindle. No deeds were
given for the lots, but a contract was en-
tered into with each purchaser, by. which
they agreed to pay $40 an acre for the care
of the land for a period of three years, at
the end of which time the purchaser owned
no part of the land, but simply had the priv
ilege of buying as much as he had con-
tracted for at the rate of $50 to 500 an
the first payment allowed their claims to
lapse through fear of the final result or in
a shis n,o TO mage hsea rhe eo 1ohep Rin ay Tine nrom mnss
of the scheme hired a few men at $l.25 a
day and went to work grading roadways
and setting out fruit trees. On the books
of the company a large number of men
were carried as laborers at wages ranging
from 81 to 50 per day, when in fact not
more than half the number were actually
employed, and were receiving, only $L25 a
day. The difference was the first profit to
the promoters. Brown and Baird united
with the church at MADEIRA, and soon be-
came leaders in IL, with Brown as super
intendent of the Sunday school. With $500
in cash a bank was organized, with a cap
ital stock of 800, 900, of which Brown and
Baird owned the largest part. Their stock
was paid for with a forged draft on the
Chase National Bank of New York This
draft was ostensibly sent forward for col
lection, and was supposed TO be credited
by the New York bank TO the account of
the MADEIRA bank, when, in fact, it never
left the pocket of John Brown. For several
years the banks books showed the inter-
est on the deposit in New York paid reg
lIlarlv On the StrQnUfh of the two swim
dlers' piety several good men of MADEIRA
were induced to take small amounts OF
stock in the bank and act as directors.
Richard II. Mcdonald, jr., of the now de-
funct Pacific Bank, of San Francisco, was
then drawn into the meshes OF the pro,
personal magnetism induced Mcdonald to
allow the MADEIRA Bank to overdraw its
account, giving collateral security for the
overdrafts. In this way the MADEIRA Bank
soon owed the Pacific Bank the enormous
sum of s95, 200, all of which was secured by
by the skillful hand of Baird. Thus the
Pacific Bank was manipulated until, when
the crash came, in September, 1891, the
MADEIRA Bank owed the Pacific Bank over
800. 600, for which Mcdonald had a large
bundle of forged notes. At the time of
the failure of the MADEIRA Bank Brown
over 100000, besides what they had Sc
cured from the other bank.
Mcdonald saw that he had been swim
died, and, being as big a rascal as those
who had swindled him., he Immediately
set about to recover the The money SsfSrc, To n do SO
Bank, and his first act was to charge all
of his losses to the colonists. When he
took charge of the defunet bank 1t owed
depositors. $50, 00, which he also charged
to the colonists, and had the books of the
Pacific Bank falsifed accordingly, thus at
a single stroke of bookkeeping clearing
his own bank of the entire loss. In the
meantime the land of the colony had all
been decided to Mcdonald, and to secure
this account of Sl65, GOO against the colony
he had to continue it's existence on the
same Swindling lines that were followed
by Brown and Baird.
1t is said that when a tiger once tastes
human blood 1t wants more. So with Nc
Donald. His first crime of stealing $165, 900
from the colonists seemed TO arouse in
him a desire TO enter all kinds of ssilId-
ling speculations. The colonists had been
robbed by Brown and Baird of over $780,
900. but now they had a man TO deal with
embarked in all kinds of ventures that
seemed to promise big returns, and when
they failed, as such schemes usually do,
he charged all the losses 10 the colonists.
He decided 1000 acres of the land 10 the
California Raisin and Fruit Growers AS
sociation, of which he was a trustee at
eral others of his friends were
made directors at the same munifi-
cent salary. The land was then bonded for
$500, 600, backed by the guarantee of the
Pacific Bank. He tried to sell the land,
but failed, and then came the crash. The
Pacific Bank books show that the John
sos. 0D, when 1t actually received less than
$4,000. The other $4,000 was sunk by Nc
Donald IN various bright prospects, and
to cover up the loss it was charged to the
colonistst-
For all these crimes Mcdonald is now in
l Jail and the grand jury is investigating his
crookedness. All the time he had charge
of the John Brown colony he was robbing
it, and at the same time robbing the de-
positorS of the Pacific Bank, but the col
onists were the losers in both transac-
lions.