The St. Louis Republic., 1900-12-01
Judge Thayer Poiniedly Criticiscs
Management of Kansas
City Concern.
SPECULATICNS ARE DENOUNCED
President Stilwell and Directors
Alleged To Have Used Funds
to Promote Their Own
Enterprises.

| Judge Amos A. Thayer of the United
States Circuit Court. granted the applca-
tion for receiver for the Guardian Trust
| Company OF Kansas Ciyy. recently made
| by John W. Gates and other minority
| stockholders yesterday. The order names
Francis NJ. Black, former Judge OF the
Supreme Court OF Missouri receiver OF
the trust company, and stipuIat-a that he
take immediate possession OF all its prop
er,y and assets. His bond was placed at
| 100000
In his opinion. the Judge spoke pointeoly
IN criticism of the manner in which tne
trust company's affairs had been con-
ducted
The motion for the appointment Of re-
ceiver was argued before judge Thayer. in
chambers, on November ". Ivy Counsel
Frank Hagerman. l.. -. hrauthon and
Max Pam for the complaintInts and Judge
J. +. Mckeighan. Judge J. Med. Trimbis
ana Thomas l. Claiborne, Ir., for the de-
fendant. 1t WAS alleged by the com
plainants that A. G. stiiwell. president or
the trust company. with the Board or
Directors. mismanaged the funds of the
company, ard diverted them TO iurtherinS
enterprises In which they were Interested
In part the opinion is as follows:
1ne present motion WAS litu DS fiii-
norily stockholders to correct abuses OF
administration and to obtain the appoint
ment of receiver because of TlisInansge-
ment OF the ccmpaEy's aifGns and various
ultra wires acts committed by directors and
managers. who Were in active control or
the corporation. These acts. it IS claimed
in substance have led 10 dissipation Of
the company's assets ana brought 1t To the
verge of insolvency.
How Company Sustained Loss.
Counsel will understand that the order
made herein Is not based upon tha theory
that the bill is one filed by she com
plainants to cancel and resrind their
stock subscriptions on the ground Of fraud
or upon the theory that thu complananis
are In q position at this time to maintain
such a BILL although no decisive opinion
need be expressed upon that point. Be
tween November !, 1879. and January 4,
1860. the company's finances were in J. bad
condition. The Court concludes that opera
tions should have suspended at least for the
time being. The real grievance is that the
Defendant company committed acts in ex-
cess OF Its corporate powers and by ~
doing sustained grievous loss
Proof shows with reasonable certainty
that the officers and directors have mads
practice Of orsanzir other corpora tioAi
TO engage In various enterprises OF a
highly speculative character. which the
money Of the trust company was used 10
forward The fact that officers. directors
and employees Of the trust company gen
orally served as directors and officers Of
such subsidiary companies and have held
stock therein leads the Court to conclude
that the money of the trust company
should not have been used to purchase the
stock and bonds OF such concerns and to |
supply them with capital
IN addition to this the defendant COM
pany mas made large investments In realty |
apparently without a shadow Of authority
under Its charter. Furthermore the Court |
enteriains no doubt that the defendant
COMPANY , has paid out one. and probably |
several dividends out of its general funds |
that were never earned, such payments be- |
ing made Tor the purpose OF aliaying sus-
picion as to the condition of the colnpeny
and creating a false impressi that IL was
In a prosperous condition
"A truSt company performs many I'M
poTtant ohlceS and duties in a community \
ana Goes so better than could any indi- |
Iiduai or copdrtnership. but II was never /
ihteNaed tEat trust company should 20 !
INTO the market as a borrower of money in 1
large sums on its notes, to b. cmploycI i'm /
speculative ventures. as the defendant COM
pGny appears 70 have done"