The Redwood gazette. [volume] (Redwood Falls, Minn.) 1873-1940, 1929-11-27

November 18th.
The prosecutions and conspiracies of various fed
eral officials against the joint stock land banks reach
ed an outrageous elimination in the attempt to send
Guy Huston and William H. Gold to prison charges
of using the mails to defraud. Convicted by United
States district court two years ago, Mr. Huston and
Mr.. Gold have obtained remarkable vindcaton
in the decision of the United States circuit court Of
appeals at ST. Louis that the proceedings of the trial
court were positively honeycombed with which
afforded abundant cause for reversal
The trial court, naturally was not responsible for
the misdeeds of farm loan board and department Of
justice officials who used army of spies and other
rcgues prepare perjured testimony against the de-
PENDANTS. The court did not know, and had reason
to know, that government lawyer of long service
and unblemshed refused to touch the after
he had inquired into it. The federal farm loan board
has jurisdiction two systems, consisting Of
the federal land banks the other of the joint stock
land banks Because the latter privately fin
anced and tried to preserve the private management
they entitled to-, the board oppressed them in
thousand ways nl-feeing between the board and the
joint stock land bank existed for years. Finally the
msmanagement of the board, and the incompetence
of it's politically appointed land appraisers caused
financial losses to the banks. To escape the blame
of the board bureaucrats sought out scapegoat
among honest bankers of the system. This was the
motive for the conspiracy against Mr. Gold, president
Of the Southern Minnesota Joint Stock Lank Bank,
and Mr.. Huston, who officer of that bank and
the head of number of other joint stock land banks
They were charged with conspiracy to the
mails defraud Their sole offense that securi
ties they had sold had deprecated in value owing to
the agricultural collapse and the mistakes and malice
of the farm loan board The trial court had no way
of recognizing the conspiracy, all the since
erous documents that vital to the defense had been
stolen from the files of the Minnesota bank by
mental But he tria1
for its rulings in the case, and concerning these
the circuit court of appeals has spoken with great
clarity.
I" I'm considering of the character of the
at bar" says the in summarizing its conclusions,
several we'll established rules must be borne in mind
"Q) Where the alleged scheme involves the sale
OF stock of corporation, inquiry of considerable
Importance is whether the corporation for substan-
ta length of time has been organized and conducting
a legitimate business.
"(2) Business adversely, especially in time of
abnormal business conditions does not necessarily
spell fraud.
"(S) Good faith of defendant in a prosecution
for making of the United States mails in carrying
out alleged scheme to defraud is ordinarily
plete defense.
go Where all of the substantial evidence is
consistent with innocence with guilt, conviction
cannot be sustained
Applying these rules to the evidence in the case
at bar of the opinion that the alleged scheme
and the alleged false representations without sub
stantia support in the record and that the items of
evidence pointed out by the supporting
the Indictment consistent with the innocence Of
the defendants with guilt their part, and that
verdict of not guilty should have been directed by
the trial court.
I'VE deem it advisable, however, to advert to sew
eral occurring at the trial and which in the
opinion OF the court requires reversal Of Judgment
In the trial the government introduced evidence
to show that the price of the land bank stock in Min
neapolis in November, 1927 less than it was in
May and June, 1926 when the defendants had made
their allegedly false representations by mail. The
government argued that therefore the 1925 price
fictitious.
"The evidence was plainly inadmissible," says the
upper court Many factors might have interviewed to
affect the price unfavoraby; and uncontradcted evd-
ence in the showed the existence of number of
such unfavorable factors after the sales of May and
June, 1925"
The upper court points out, among many other
reversible that the trial allowed the jury
to pass the question whether dividends paid by the
bank had come from some unpermitted source, when
it disputed that they had come from earnings
The jury thus instructed "You are advised that