The Telegraph-courier. [volume] (Kenosha, Wis.) 1888-1946, 1908-11-12
Suit is Brought in Milwaukee to
Dust Trustee in Charge of
Big Bond Issue on Lines
BEGeS MAY BE BACK OF SUIT
Foxy Milwaukee Railway Man Alleged
to be Seeking to Hurt Frost
Interests But He Denies
the Allegation

Suit was Friday instituted in Mil
waukee courts to GUST as trustee of the
$10,000,000 bond issue Of the Chicago,
Milwaukee Electric railway company,
the Western Trust and Savings bank
of Chicago. Charges are made by
Alexander Beaubicn, bondholder, that
the company conspired with the rail
way company to water the issue. Tt
is further charged that the $10,000,000
issue is worth only about $5,000,000.
Tn plaintiff has petitioned that the
defendant company be restrained from
longer acting as trustee in the matter.
A temporary injunction was yesterday
granted by Court Commissioner Hugh
Ryan which restraints the Western
Trust and Savings bank from so act
ing pending a hearing before Judge
Turner, Nov. 81.
The means of watering, according to
the plaintiff, consisted in the issuing
of bonds for which the railway com
pany never acquired a. return. AS CO.
defendant with the Chicago bank are
named the Chicago, Milwaukee Electric
railway company and Willoughby G,
Walling, the bank s secretary.
1t is charged that on Jan. 1, 1905,
an issue of 10000 $1,000, twenty year
first mortgage bonds was authorized,
they being secured by trust mortgage,
executed to the bank and Mr.. Walling
as trustees. The company, according to
the plaintiff who is owner of ten bonds,
is now insolvent. The application for
injunction states that interest due on
the bonds on Jan. /, 1908 and July l,
1908, has not been paid.
Of the $1O,OOO,OOO bond issue, accord
ing to the plaintiff, $9,7OO,00O were
to be held in escrow, to be issued only
as required. Their issuance was de-
pendent upon certificate, signed by
the president and secretary Of the rail
road company in which these officials
testified that improvements and prop
erty additions, covering in cost the
bond issue, had been made. It is then
charged that, in violation of this con-
dition, the bank made several issues
of bonds without such certificates.
Alleged specific instances are quoted.
The plaintiff alleges that such issues
were later hidden under false certif-
Gates. That is, according to the
charges, in spite of the fact that no
improvements or additions were made
by the railroad company and despite
the fact that that company acquired
no additional property, the bank issued
the bonds. Later certificates, alleging
that improvements had been made, were
signed by president and secretary of
the railroad company. The plaintiff
further alleges that the bank was con
versant with these facts and that the
issue was made despite them The
petition closes with the statement that
the bank and it's secretary are inter
ested in other properties in business
alliance with the railroad company and
are therefore unfit and improper per-
sons to act as trustees.
Secretary w G. Walling said last
night in Chicago that he was unable
to explain the meaning of the Milwau-
kee suit, lie denied that there had
been any watering of bonds [. ].
Osborn, one of the receivers for the
Chicago and Milwaukee Electric rail
way company, also expressed ignorance
of the matter. j. E. Otis, the bank s
president, said
GAS trustees we could net water
the bonds of the Chicago, Milwaukee
road, if we wished | am not acquaint-
ed with Beaubien, but believe that the
suit was fled to facilitate some new
move contemplated by the people back
of the action begun in Milwaukee to
day."
This statement was, in Chicago, tax
en- to indicate that President John l.
Beggs and the Milwaukee Electric
Railway and Light company was be-
hind the suit That report was circul-
ated in Chicago yesterday. 1t is abso-
lutely denied by Mr.. Beggs.
''We know nothing about this suit
in any of it's phases, said Mr.. Beggs.
''We are in nowise interested nor con
cerned in i"