The Redwood gazette. [volume] (Redwood Falls, Minn.) 1873-1940, 1927-04-13
Pantoriun1.
OFFICIALS FIND
ONE TECHNICALLY
AGAINST HUSTON

ONE 1CSI1A>1SAL&1
AGAINST HUSTON
Continued from page one)
he did or whether it looks like he
did not then there is probable
cause"
The contract which figures in the
indictments is one made between Mr..
Huston and the Bank in 1924. By
the terms of this contract Mr.. Huston
became the fiscal agent of the Bank
for the purpose of negotiating the
sale of the stocks and bonds of the
institution. Under the terms of the
contract he had right to sell on a
commission basis or make out
right purchase at an agreed price.
The particular stock to which the
indictment refers was sold out
right to Mr.. Huston. Between the
time he purchased this stock and sold
it, all bank stocks increased in value.
AS result Mr.. Huston made $3.50
more per share than if the stock had
been sold to others at the time he
purchased it from the Bank.
The Government claims the pur-
chase clause in the contract is null
and void-that Mr.. Huston, as fis-
cal agent, could sell only on the COM
mission basis and should have return
ed to the bank the difference between
the two amounts.
Again referring to Commissioner
Glass decision this statement is
found;
81 am frank to say that regard
less of what my action is COM
PEELED to be, if under the contract
Mr.. Huston had not found him
self as fiscal agent, / doubt very
much if | could have come to the
conclusion that there was prob
able cause here, most of the con-
duct being consistent with legiti-
mate business, as the evidence
shows. There were some de-
viations, that is true, but not
harmful or detrimental to the
extent that somebody suffered or
was deprived of anything to which
they were rightfully entitled, be-
cause it was under a contract,
it was under an arrangement
which was agreed to by the par
ties concerned
In making the indictments the Gov
eminent also laid much stress on a
100000 mortgage, by which Mr..
Huston is alleged to have benefited to
the full amount of the mortgage. This
involved transaction between the
Bank and the Farmers Fund and on
this point Commissioner Glass found
from the evidence as follows;
"As to the five hundred thous-
and dollar mortgage entry
while the accountants have found
a discrepancy there is the actual
amount of the security, it was
nothing different than the Bank
had before, where they had COM
plete title, which they did not de-
sire to continue to hold, and
through the organization of this
Farmers Fund and get a mort
gage back on it which the Bank
evidently felt was sufficient Sc
curity because they had owned
it once and ought to have known
the value of it, and sold it at
profit, which evidently from their
own actions warranted them in
taking back a mortgage on it.
The evidence shows that the
greater part of that, though not
all of it, has been cleaned up.
That was, in my opinion, trans
action of which the Board in
Washington was just as cogniz-
ant as was Huston and as was
the Minnesota Bank. That is
what the evidence shows. All
the other counts of the indictment
have been gone over and proof
submitted, and they, as general
thing, in my opinion, have been
explained with degree of frank
ness and honesty that would I
hardly warrant the conclusion
that there has been any intent to
defraud."
The case which will try Mr.. Huston
and the other men indicted with him
was originally set for trial during the
June term of the Federal court at
Mankato and the trial date was fixed
as June Is. But because the United
States Senate failed to pass the de-
ficiency appropriation bill number
of terms of Federal court have been
discontinued. 1t is probable that the
Mankato June term will be omitted
with the others. In that event the |.
case will come up for trial during the
January term of court at Mankato,
this term setting the third Tuesday in
January Of 1928. |