THE FIRST IMPORTANT STEP TO BLOCK THE ORIENT ROAD
November 30, 1900, nine months and a half after the Orient Road was started, the St. Louis judge who had at two A. M. granted the receivership for the northern roads appointed Judge Black, of Kansas City, receiver for the Guardian Trust Company. For weeks we had been fighting this case, and also interesting people in the Orient Road; fighting to save my first child, the Guardian; fighting to give strength to my last creation, the Orient. Can you imagine such a fight as this?
In Mexico the Guardian Trust Company had been made a legal company; that is, a concession had been granted for it to act legally as a trust company in the Republic of Mexico. It was the first trust company from the United States to be given this power, and this meant much to the stockholders. But the Gates-Harriman-Thalmann crowd were positive this receivership would destroy my standing in that republic.
Before the application for a receiver for the Guardian Trust Company, the Orient Railroad was moving along well, considering the few months since its birth. From all parts of the United States people were subscribing, and we shortly had a million dollars in subscriptions. I had heard that Mr. Gates had told a friend of his that he would "break the Guardian, and as Stilwell was the largest holder in the Guardian Trust Company, this would break him." I had read in the papers, as I have before mentioned, that Mr. Harriman was to "handle me," and that the great "rate-cutter" was never to be allowed to be at the head of a transcontinental railroad, so the fight must be now to wreck the Guardian. As long as I had that company back of me, I had great power. The best way to accomplish their purpose was to apply for a receivership of the Guardian, and also to have the Reorganization Committee of the Kansas City Southern refuse to pay the four hundred and seventy-five thousand dollars, and in this way cripple the Guardian Trust Company and myself.
It did not seem possible that any such conspiracy could be carried out. All bonds and shares in the reorganization of the Kansas City Southern had been deposited with the understanding that this debt should be paid. This agreement to pay had the names of Thalmann, Gates, Stillman, Harriman, and others, and I could not understand that men with such responsible positions in the business world would be repudiate a debt that had been openly acknowledged. Our company was solvent, it had paid every demand for thirteen years, it had few obligations, it had not accepted deposits, and it had a wonderful earning power. I little knew then the power of money in courts, but I now understand how thousands of poor men will give up and accept any settlement that the rich man may impose upon them, as they know they cannot stand the constant drain of court costs.
These unprincipled men of the Reorganization Committee could not bear to see me again at the head of my trust company, with two million, one hundred thousand dollars paid-in capital and a good surplus. I now had valuable Mexican concessions; I had the friendship of the leading men in Mexico; I had the backing of the leading bankers of my home town; I had designed a railroad which would open up a new empire of wealth, and give my beloved Kansas City a new short line railroad to the Pacific. But all of the rumors I had heard did come true. The application was filed by Gates and others for a receiver for the Guardian Trust Company. The Kansas City Southern also started a fake suit to recover the amount of bonus stocks they had been given of the bond sales of the Belt Line and of the Port Arthur Channel and Dock Company and claimed that the four hundred and seventy-five thousand dollar debt was not a just and valid claim. The case was brought before the same judge who had granted the receivership for the Northern Railroad at two o'clock in the morning.
We were ably represented by Mr. T. L. Chadbourne, now of New York, Judge G, M'D. Trimble, of Kansas City, and J. E. McKieghan, of St. Louis. It was a strong, clean presentation of a clean case by able, painstaking men, but all during the trial I could see that the judge expected to grant a receivership no matter what the testimony was. We showed that the company was perfectly solvent, that we had two million, one hundred thousand dollars paid in, and ample surplus. We had a list of subscribers who were will to take all the balance of our two million, five hundred thousand dollar stock at par.
On November 30, 1900, the receivership was granted. The decree of the court was that the company was solvent when the stock was sold, was now solvent, and therefore, Gates and others had no right to recover, but that the great holdings of real estate in the Exchange Building, which we now owned, the Lyceum Building, the Trust Company Building, and the Syndicate Building in Kansas City in connection with the Port Arthur Rice Farm, were acts which our charter did not permit, as it said we could hold real estate as administrators, executors or assigns, but not otherwise.
Were the holding of real estate illegal, how easy to have given the company two years to have disposed of it, or we could have at once transferred it to a separate company and divided this stock as a dividend among the stockholders. But had the judge adopted this plan, Stilwell would not have been hurt. I am sure, in after years, Judge Thayer recognized the fact that he had been swayed in his
judgment and used as an innocent tool to injure me. I understand he often expressed regret for this act.