The Mitchell capital. (Mitchell, Dakota [S.D.]) 1879-1918, 1904-05-06
sn. c. BROWN AND
SONS ARE INDICTED
Sheldon Banker and Railroad
Commissioners Charged
on Four Counts.
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'Erien
county grand jury Tuesday afternoon
voted five Indictments against ED C.
Brown, chairman Of the Iowa board Of
railroad commissioners ana president of
the failed Sheldon State bank of this
place, for Irregularities In connection
with the banks affairs. leading to its
failure. They are understood to in
clude n 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 h bank.
and Ed c. Brown, jr., a director. both
sons OF President Brown. are also in
dtcted on 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 embez2lement charged is
based on a loan of $4,000 to j. w. Fix
G. Co, a firm Of which Earl Brown,
cashier n son of President Brown,
was a member. Earl Brown signed the
~ vi vi TIN q W.. w lLS lOleS,
the loan being made without authoriza-
ton of the directors. which is contrary
to statute in case of an officer of the
bank.
Paid Dividend When in~solvent.
1t is charged in another Indictment
that on April 10, 1903, the band declared
a dividend of nearly 81, 900, being then
insolvent.
In another, Brown is charged With
having borrowed $4,000 from q Chicago
bank on his personal note and later
writing the bank to charge it against
the bank. which is alleged to constitute
ENFORCEMENT. There are several spe-
cific charges of receiving deposits after
the bank was insolvent.
The bank originally had 800, 900 cap
ital, but in 1892 was r~eorganized. the
capital being cut to $50, 900. 1t is
charged with carrying over $4,000 of
practically worthless paper to the new
organization, INC therefore being in
solvent from the beginning of the new
organization.
Ed c. Brown left Sheldon after 1t was
.iven out that the indictments had been
voted to attend the congressional con-
vention 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
as railroad commissioner, his term en-
ptl'ing this year.
Will Pay 40 to SO Cents.
The bank is now expected to pay 40
to so cents on the dollar. An effort will
be made to hold the original $780, 900 of
stock for a hundred per cent ASSESS
ment on the ground that the bank was
insolverlt when they reorganized and
retired, and therefore they could not
escape liability by merely r%eorganiz-
ing. The stock at that time was held
largely in Dubuque. Under the reor-
ganization the $4,000 of stock was
bought by the Browns. Under the
terms of purchase 1T continued to be
held by the Dubuque people as ollat
aral security, the Browns to pay for it
In instalments. h Dubuque men re-
tanned II right to vote it. Creditors
Insist that this was equivalent to con-
tinued 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 a large share of the liabiIi-
ties will be paid, as the eastern Iowa
people are wealthy.
The bank had about s194, 900 deposits
when 1T failed. on November 3 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 a re-
nomination if 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 it has resulted in a
revival Of expressions of sympathy.
Without regard to plttics, people here
feel a deep sympathy for Mr.. Brown,
who was always a public spirited citi-
zen and a leader in the community,
and for his family.
The bank matters were not taken I'D
by the grand jury till yesterday, and
there was little delay in voting the in
dictments. For a 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 was
handling q 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 it contributed
largely to bringing about the crash.