The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1896-05-23
GAS Combine AT War.
A Philadelphia Capitalist Begins
a Suit Against Secretary
Of State Kelsey.
Special to the Jerseu Gin Nesrs.

TRENTON, May %, 1S96.-Suit has been
entered in the United States Citcuir
Court by Charles A. Furbush, of Phila-
delphia, against Secretary of State Henry
c. Kelsey, the Newark Gas Light Conn
pany, the Citizens Gas Light Company
and the Newark Gas Company, defend
ants, all of which are Newark com
panies.
The bill of complaint sets forth that
in 1898 John P. Persch, of Philadelphia,
entered into an agreement with Henry
G. Kelsey, providing that the latter
should sell to Persch, or his assigns,
the entire capital stock of the Newark
Gas Light Company and the Citizens
Gas Light Company, for the purpose OF
consolidation. Persch was to pay Kelsey
of his assigns, $7,O0O,000, as follows: $4,-
000,000 in first mortgage gold bonds $1,000,-
600 in cash and 81, 100000 par value at 6
per cent. cumulative preferred stock of
the new company to be formed by the
consolidation, out of a total issue of
81. 100000, and $1,OOO,000 of the common
stock of the new company out of a
total issue of $1,5000oO.
1t is further set forth that Persch, by
the performance of this contract, would
have secured as his profit after paying
s1,0o0000 i'm cash, $1,0o0,0o0 in the bonds
of the new company $l,500.ooo in its pre-
ferrea stock, and 100000 in its common
stock
1t is stated in the bill of complaint
that the bonds would have been worth
more than their market value and that
he Hareferred stock would IlHave been
worth more than it's par value, and that
the common stock would have had 8
market value, if the defendant had not
failed ITO carry out his agreement.
The bill then goes on to point out that
the manufacture of gas in Newark is PEE
cularly profitable, owing to the low
price of coal and .totthe favorble Situa
ton of the plants of the companies. 1t
states that the cost of manufacturing is.
no only relatively cheap as compared
with the cost of ether companies en-
gagged in the same business in other
places, but the prices charged to the
consumer are nSHch higher than the
prices charged by other companies. 1t
is claimed that by the terms of the con-
tract M. Kelsey bound himself to Sc
cure for the companies the exclusive
privilege of supplying gas to the city of
Newark for ten years for not less than
$l.40 per thousand cubic feet to private
consumers, and SIPS for public use.
It is further set forth that the value
of the contract between Persch and Kel-
Sey depended entirely upon the former
scuTing exclusive control of the stock OF
the new company, and that although the
contract was made with the full knowl-
edge and consent of the majority of the
stockholders and directors of the Newark
Gas Light Company and the Citizens
Gas Light Company, they had failed
to deliver the stock, Notwithstanding the
fact that they had been notified by
Persch of his willingness to carry out his
part of the contract. And it is further
charged in the bill that having full
knowledge of the existing contract the
directors Of the Newark Gas Light Com
pany and the Citizens Gas Light Com
ark Gas Light Company, still refusing
to deliver the stock to Persch
It is said that Mr.. Kelsey has endeav-
ored to settle the claim of the plaintiff
by offering $4,000 worth of the cofilrnon
stock of the Newark Gas Light Gmpany;
Which offer was refused. Persch after
wards transferred all his rights existing
BY reason of@the contract. to Charles A.
Furbpsh, the plaintiff in the suit
Owing to the nature of the subject
of its purpose being the consolidation of
the two companies and the issuing of
capital stock, and by reason ofsthe rapid
increase in the use of gas in thereby of
Newark and vicinity, the plaintiff sets
forth that it is impossible to estimate in
money the damages sustained by Persch,
and he therefore requests that the de-
PENDANTS. be required to answer certain
interrogatories propounded Concerning
the financial condition. earnings, etc, of
the Newark Gas Company.
j. Edward Ackley, of New York is So
licitor for the plaintiff