The Telegraph-courier. [volume] (Kenosha, Wis.) 1888-1946, 1908-02-06
Declines To Act as Receiver OF
the C. & NJ. Electric on
Account Of Protests
RECEIVERS NOW IN CHARGE
Men Named by the Court Began the
Work of Operating the Road This
Morning and Long Fight
is Promised

The task of unearthing frauds alleged
to have been, perpetrated by A. G.
Frost in the financing Of the Chicago
and Milwaukee electric railroad and
ten allied corporations was begun yes
terday by Receivers Osborne and Han
ma. Under the fire Of protests, public
and private, Frost earlier in the day
withdrew as receiver Of the properties
he is charged with manipulating.
The receivers went to work with the
determination to ferret out all the funds
alleged to have been diverted by Frost
from the railroad to his personal side
ventures and to recover the money for
| the benefit Of the stockholders, bond
| holders, and creditors. The books of
the involved concerns were segregated
and arrangements made to put a force
of auditors to work on the accounts at
once.
AS soon as the assets and liabilities
can be determined litigation will be
instituted to recover the diverted funds
The inside workings Of Frost s system
of finance will men come out in hear
ing before a master in chancery. The
recovery Of the property is likely to
embarrass some Of the subsidiary ven
lures in which Frost it is alleged, was
sinking his money.
The enforced withdrawal Of Frost
from the receivership precipitated at
once scramble among the conflicting
interests for the naming Of his success
sor. H. A. Haugan, president of the
State Bank of Chicago, was put for
ward by the committee Of bankers that
succeeded in calling off James III. Gill
bert, president of the Metropolitan
Trust and Savings bank, from his at
tack on Frost a month ago. The West
ern Trust and Savings bank, which has
a large claim for money loaned to
Frost, urged the appointment Of r.
Floyd Clinch, director of the bank.
1t was stated last night on good authori-
ty that Mr.. Hangar would be appointed
by Judge Grosscup today. Mr. Hangar
is favored by the Canadian interests.
The withdrawal of Frost was an
nounced about noon. Judge Grosscup
issued this statement:
"Mr Frost has asked me to relieve
him from his appointment as receiver,
and | have done so. [ think that in
taking this step he is doing the right
thing in view of all the controversies
that seem to exist within the proper
ties Of which / was not aware at the
time of the appointment. I still be-
lieve, however that his personal help
is essential to the working out Of the
interests involved"
It soon afterward transpired that
Howard M. Carter had been appointed
attorney for the receivers. Mr.. Carter
was the lawyer whom Frost secured to
file the compliments petitions for a
friendly" receivership. He is on the
staff of Attorney w w. Gurley, gen
eral counsel for Judge Grosscup IS
Union Traction receivers, and formerly
he was the partner of Isaac M. Jordon,
Judge Grosscup's son-in-law.
d. B. Hanna of Toronto, Ont, vice
president Of the Canadian railway, ar
rived in Chicago Thursday and within
an hour later he had qualified and given
$4,000 bonds as one of the receivers.
Tomorrow both Mr.. Osborne and Mr..
Hanna will qualify before Judge Sea
man of Milwaukee as receivers of the
| Wisconsin corporation
Expresses Confidence ia Frost.
Receiver Hanna, last evening gave
out an interview in which he deplored
the ousting Of Frost from the receiver
ship and secuted the charges Of irreg-
ularity preferred against the promoter
by Mr.. Dawes
81 don't believe word of those
charges, he said. ct don t think any
weight should be attached to appear
ances that developed on a superficial
three days examination of the books
Of the company. A further examina-
ton, am sure, will establish the fact
that all moneys are properly accounted
for.
II am sorry Mr.. Frost has withdrawn
as a receiver. He has been identified
with the road from the beginning, and
1T seems essential that he should con-
tinue close to it's management either
as an operating receiver or in some
other position to be designated by the
court. The contraction Of the remain
ling eight miles of the road into Mil
Waukee can be completed by May /,
and [ am satisfied from thorough ex-
animation of the property made recent
| " that it will be paying investment.
The line is a substantial, permanent
piece of work-almost a dead level from
| Evanston to Milwaukee and the con
struction necessarily has been expen-
sive. But the outlook for traffic has
Justified the expense