The Black Hills union and western stock review. [volume] (Rapid City, S.D.) 1904-19??, 1904-05-13
ED. C. BROWN AND
SONS ARE INDICTED
Sheldon Banker and Railroad
Commissioner Charged
on Four Counts.
PULLS OUT OF THE RACE
Mr.. Brown Announced That He Would
No Longer Attempt to Press His
Candidacy for denomination
This Year.

Sheldon. Ia. May 5.-The O'Brien
county grand jury Tuesday afternoon
voted five indictments against Ed C.
Brown, chairman OF the Iowa board of
railroad commissioners and president Of
the failed Sheldon State bank Of this
place, for Irregularities In connection
with the banks affairs. leading to It's
failure. They are understood to in
clude one and possibly two for en-
bezzlement. one for declaring a divi-
dend when the bank was insolvent, and
at least one for receiving deposits after
the bank was known to be insolvent.
Earl w. Brown, cashier Of the bank,
and Ed c. Brown, IT.. a director. both
sons Of President Brown. are also In
dicted Oh five counts each, the same
accusations being made against all
three. The Indictments were returned
by the jury sitting at Primghar the
county seat
The indictments have not yet been
reported to the court, but Mr.. Brown
was waiting to be called before the jury
but it is understood was not called,
the indictments being based on records.
The largest cmbeZzlement charged Is
based on a loan of $4,000 to ]. w. Fix
& Co., firm of which Earl Brown,
cashier and son OF President Brown,
was a member Earl Brown signed the
firm name OF Fix & Co. to the notes.
the loan being made without authorize
ton Of the directors, which is contrary
to statute In case of an officer Of the
bank.
Paid Dividend When lnsoIvent.
1t IS charged in another indictment
that on April 49, 1903, the band declared
a dividend Of nearly $4,000, being then
insolvent.
In another, Brown is charged with
having borrowed $4,000 from a Chicago
bank on his personal note and later
writing the bank to charge 1t against
the bank, which is alleged to constitute
embezzlelpent. There are several spe-
ciflc charges of receiving deposits after
the bank was insolvent.
The bank originally had 100000 cap
ital, but In 1892 was reorgani2ed. the
capital being cut to $4,000 1t is
charged with, carrying over $4,000 Of
practically worthless paper to the new
organization. and therefore being In
solvent from the beginning of the new
organization. -
Ed c. Brown left Sheldon. fter it was
given out that the indictments had been
voted to attend the congressional con-
venton at Cherokee. On the train he
told friends that in view of his indict-
ment he would not further attempt TO
stand as a candidate for denomination
rs railroad commissioners, his term ex-
piring this year.
Will Pay 40 to so Cents.
The bank is now expected to pay 40
to 80 cents on the dollar. An effort will
be made to hold the original $1,000 Of
stock for a hundred per cent assess
ment on the ground that the bank was
lnsolvent when they reorganized and
retired, and therefore they could not
escape liability by merely reorganiz-
Ing. The stock at that time was held
largely In Dubuque. Under the reor-
ganization the $4,000 of stock was
chiefly held IN Dubuque but was later
bought by the Browns. Under the
terms of purchase 1t continued to be
held by the Dubuque people as colat-
eral security, the Browns to pay for It
In instruments. The Dubuque men re-
tanned the right to vote it. Creditors
Insist that this was equivalent to con-
linued ownership by the Dubuque In
terests, therefore that an assessment
against them will hold good. If these
Two assessment contentious are made
good at law large share of the liabili-
ties will be paid, as the eastern Iowa
people are wealthy.
The bank had about 1894, 600 deposits
when 1T failed, on November last r.
W. Ady Is receiver, w. D. Boies attor-
ney for the receiver and Joe Moreton
Of this city county attorney.
Sympathy for the Browns
1t has been expected for a long time
that Mr.. Brown, who is serving his
first. term as railroad commissioners
would retire from the race for O re-
nomination II he should be indicted
His statement last evening following
his Indictment, that he should no long,
er attempt to be a candidate, OCCASION
ed no surprise, but 1t has resulted In
revival OF expressions Of sympathy.
Without regard to plitics, people here
feel q deep sympathy for Mr.. Brown,
who was always public spirited citI-
zen and a leader in the community,
and for his family.
The bank matters were not taken up
by the grand jury till yesterday, and
there was little delay in voting the in
dlctments. For time after the failure
there was much bitterness Of feeling
| against the Browns, but the tide has
turned recently, and expressions of re-
greet are heard in all quarters
The firm of Fix and company was
handling a big ranch in North Dakota.
In which the Browns invested too much
money in a speculative transaction.
| This Is not considered the only serious
/ error Of judgment, but 1t contributed
| largely to bringing about the crash