Civil War flag returns to war memorial

INDIANAPOLIS -- A blue silk flag carried by soldiers of Evansville's 25th Indiana Volunteer Regiment during the Civil War was welcomed back to the Indiana War Memorial on Monday.\nThe flag, 6 feet by 6 1/2 feet, was hidden in public sight for the last few years in a frame on the ceiling of a bank in a small northeastern Indiana town. It is unclear where it was for the last decade or more since it vanished from the war memorial's collection.\nMuseum officials had known the flag was missing since a mid-1990s inventory. A 1980s inventory accounted for it, but records do not indicate whether someone might have borrowed it, said Stewart Goodwin, the memorial's executive director.\nKeith Lourdeau, special agent in charge of the FBI's Indianapolis office, officially turned it over to the war memorial Monday, but its route back from the ceiling of the Waterloo branch of the First National Bank of Fremont began in 2000. That is when bank records show its former top executive, Earl Ford McNaughton, bought the flag for $43,250.\nMcNaughton was ousted from that job in late 2004, and a company last year began trying to sell off the extensive collection of antiques, Civil War items and Indian artifacts he had bought.\nCivil War collectibles expert Wes Cowan, the president of Cowan's Auctions of Cincinnati, identified the regiment's flag as authentic last summer and contacted the war memorial since such banners remained the property of the federal government even while in state possession.\nSelling a regimental flag from a Confederate unit is legal since those did not belong to the U.S. government, said Cowan, who appears on the PBS show "History Detectives."\nHe said the Indiana regiment flag, with an estimated value of $60,000, was out in the open amid the collection of Civil War uniforms, weapons and photos throughout the bank building in the town, 25 miles north of Fort Wayne.\n"It wasn't hidden in any way or tucked away where no one could see it," Cowan said. "It's great to get this flag back where it belongs."\nMcNaughton had spent about $8 million in bank money on antiques and memorabilia over the years, said David Morrison, president of American Heritage Collectors in Angola, which is liquidating the collection.\nNot all of the Civil War items at the bank were authentic, such as a coat supposedly belonging to Gen. George Custer that was made after the war, Cowan said.\n"McNaughton was not a very sophisticated Civil War collector," Cowan said. "While he had a great eye for a lot of antiques, he was taken advantage of on some of his Civil War material."\nFederal officials said they were still investigating how the flag made its way to the Waterloo bank. FBI spokeswoman Wendy Osborne said she could not comment on whether investigators had found or interviewed McNaughton.\nGoodwin, who traveled to the bank last week to retrieve the flag, said the war memorial now has battle flags from about 85 of the 99 Indiana regiments that were formed during the Civil War, though some were short-lived and might have never had flags.\nHe said tracking of the museum's collection has improved in recent years and that the flags are an important part of the war memorial, which has about 200,000 visitors a year.\n"We guard these like they are our own children," he said of the flags. "That is the way we think about them"