The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1892-03-05
Fighting THE TRUST
Court of ChanCery Petit
toned to Enjoin the
National Cordage
Company.
HOW MONOPOLY GREW
The Stock of the Elizabethport
Company the Bone OF
Contention.
HOW MONOPOLY GREW

court OF Cnancery tnlS morning until
March 2S. This is most interesting
case. making public as it does the secret
history of the National Cordage Com
panv, which was organized to monopolize
and control the cordage product or the
country. In his bill Mr. Balch sets
forth the organization OF the
the National Cordage Company. which
was organized under the laws of New
Jersey for the purpose of obtaining con-
troll of the cordage trade of the United
States. That in pursuance OF that plan
most Of the principal cordage manufac-
tories in the United States were -pur-
chased by said company and paid for
either in cash or in the stock of the Ma
.ional Company.
The Elizabeth Company was one OF the
companies so purchased. A small amount
of the common stock of the National Com
pany has been placed on the market, but
the greater part of the stock has been
pooled by the said companies by placing 1t
in the hands of one or more persons to hold
for the benefit of all the companies in
the pool and sell it, a small amount at
time SO as not to flood the market and
lower the price of said stock. The shares
which came to the Elizabethport COM
pany have been disposed of in this man
ner.
On May 10, 1890. the Elizabethport COM
pany filed report with the Secretary of
State which showed that Edward M.
Fulton was president of the company and
In October. 1891, Mr.. Balch, the
complainant, bought Futon's stock.
He was to paw $4,000 down. and re-
ceived 200 share of the stock. The other
633 shares were to be placed In the hands
of Willard P. Whitlock. treasurer of the
H. - lNlI fhA
trustee pending the fultillment of the
terms Of the contract which were that
the balance of the purchase money $75, 900
was to bear interest at the rate OF six
per cent. until paid.
REFUSED TO FULFILL THE CONTRACT.
The bill alleges that Whi5lock has re-
fused to carry out the terms OF the con-
tract and in order that Balch may not OBJ
tain any of the shares of the National
Company he and Fulton and the
directors of the company have agreed
that the stock Of the National Company
which is owned by the EliZabethport
Company and pooled as hereinbefore set
forth shall continue for an indefinite
period in the hands of the people who now
control it and have attempted to cucumber
the stock and create liabilItities against
it, which liabilities and membranes
would if valid destroy the value of the
stock.
lQ6 Dill CHdTSeS Iutb Sdlo pOOkluS
agreement Is contrary TO law.
The bill is substanJiated by an affidavit
made by Mr.. Balch which is intere sting
reading. The affidavit sets forth that in
September last Fulton came to Balch ana
said that he wanted to sell him about
s4O0, 900 of the stock of the National
Cordage Campany, and that he owned
one sixth of the Elizabethport Cordage
Company, his brother, Elisha NJ. Fulton,
Jr,. owned another sixth and James M
Waterbury owned the rest He further
said that the Elizabethport Cordage Com
pany owned, as practically.it only assets,
81, $50. 900 of the common stock OF the Ma
tional Cordage Company. ard that all he
would sell Balch was the ElZabethport
stock, which would entitle him to about
1915, 600 par value of the National Cordage
Company stock.
TERMS OF THE SALE.
Fulton agreed to sell Balch his stock
for $25, 600 cash and $4,000 to be paid
when the National stock was worth s65 O
share in the open market, and the Ma
tional common stock of the Elizabeth
port Company should be free from the
pooling agreement under which it Was
| then held.
Fulton further said that when the
| National common stock was issued to the
Eizabethport company, in March or Feb
ruary, 1891, it was placed in pool to re-
main there one year, which pool con-
sisted of National common stock
placed in certain hands by the
cordage companies owning it, to be kept
| from sale in the open market and used
| for the benefits of the said companies.
| He also offered to let Balch have enough
of the Elizabethport stock to pledge as
collateral on which to borrow the S25, 900
| for the first payment to him.
| Fulton further said that the Elizabeth
port Company was not incumbered in any
1, txx 4
| that it had no other assets. having trans
| ferred all its property to the National
| C ordage Company, in exchange for its said
| shares of common stock, and that the
| National Company employed the Eliza
! bethport Company TO operate the Eliza
bethport factory until it was burned
| down in May.
MR.. BALCH is SUSPICIOUS.
! At first Balch refused the offer and
| wanted to know why Fulton wauted to
| sell at price below the market value.
| To this Fulton replied that he
was so involved in cordage companies
| in Canada that he wanted to get
| out of the Elizab bethport Company and be-
| sides he did not want to sell to an out
slider who would not act in harmony with
| those inside the pool, and because Baich
| was familiar with National Company IS
| matters. Balch, it appears, had been
! in the employ of the National Company
| Tor aDOub bWO years anu WIS ldhillldA
with the company's affairs. The National
| Company was organized five years ago,
and has bought out most of the principal
companies in the country. James A.
| Waterbury, is the president and
] holds very large interest in it.
| After Fulton had made these represen-
| tations Balch went TO Waterbury and
| asked him to loan him $50, 900 on his per-
sonal note, secured by 200 shares of the
Elizabeth Company as collateral. Water
| bury consented. and Balch closed the
| bargain with Fulton. When Balch went
| to Waterbury to get this money he found
Fultou's father there, who, when he heard
of the transaction objected, declaring
: that Edward had no right to sell the
! stock.
| Waterbury said he did not want to get
| involved in any trouble with Mr.. Fulton
! and told Balch to get the matter straight
| ened out Balch telegraphed to Edward
| Fulton in Montreal, Canada. and received
areply In which Fulton guaranteed that he
| was sole owner of the stock and had the
right to sell, and would come to New
| York and fix the matter up.
| THE DEAL COMPLETED.
He did so, and after an interview with
his father said that he was ready to pu
the deal through. but did not want tt
have row with his father Bach ther
went to see the elder Fulton, whC