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RECEIVER FOR GUARDIAN TRUST. EX-JUDGE BLACK OF MISSOURI. APPOINTED IN SUIT OF JOHN W. GATES AND OTHERS. St. Louis, Nov. 30.-Judge Amos Thayer, in the United States District Court, has appointed F. M. Black, of Kansas City, receiver of the Guardian Trust Company, of which A. E. Stilwell is president. The appointment was made on Judge Thayer's decision in the suit recently brought by J. W. Gates, of Chicago, and other stockholders. The receiver was formerly a Justice of the Missouri Supreme Court. In his opinion Judge Thayer says: The proof shows with reasonable certainty that the officers and directors of the defendant company have made a practice of organizing other corporations to engage in various enterprises of a highly speculative character: that funds of the company to a large amount have been invested in the stocks and bonds of such concerns, which had at the time no market value: that money in considerable sums hac been loaned to such companies, sometimes upon their stock as collateral and on other occasions without any security: that some of these enterprises have proved absolute failures, and that the money invested therein had been wholly lost. while other of such enterprises are in a precarious condition and the outcome thereof is doubtful and uncertain. Moreover, in some cases, if not'in all. there appears to have been such identity in personnel of the governing bodies of these corporations and the governing body of the trust company that it is impossible to believe that the interests of either were fairly considered as properly guarded in any of the transactions and dealings which occurred between them. In addition to the acts aforesaid, the proof shows that the defendant company has made large investments in real property apparently without a shadow of authority under its charter. such unauthorized investments having resulted in the locking up of the company's available means and impairing its usefulness. Furthermore, the Court entertains no doubt that the defendant company has paid one and probably several dividends out of its general fund that were not earned, such payments being made for the purpose of allaying suspicion as to the condition of the company and creating a false impression that it was in a prosperous condition. The Court expressed the opinion that the act creating trust companies does not authorize the acquisition of securities by such companies either as an investment or as collateral for loans unless they have an ascertainable market value and may be properly termed "investment securities," and finds that it is unsafe for the company to continue the further transaction of its customary business until it has realized upon some of its assets and liquidated its indebtedness The receiver's bond was placed at $100,000. Kansas City, Mo., Nov. -The petition for a recelvership was filed in Kansas City on October 23 last-the day before the stockholders were to have held a meeting to elect a new board of directors. The Gatés petition also asked for an injunction to prevent the holding of the meeting Judge John F. Philips granted the injunction and set a later date for a hearing on the receivership question. The petitioners contended that Stilwell took advantage of them in the character of securities placed in a reorganization of the company. The bonds of the old Kansas City, Pittsburg and Gulf Railroad (now the Kansas City Southern, in which Gates is interested) figured in the bill. and the contention was made that the stockholders were in danger of losing $1,000,000 if Stilwell were allowed to carry out his plans. When apprised of the appointing of a receiver to-day Mr. Stilwell declared that he had expected the action and was preparing to form a new company. which will. he declared, finance the Kansas City, Mexico and Orient Railway, which he is promoting.
