The sun. [volume] (New York [N.Y.]) 1833-1916, 1896-11-12
MERRITTS VERDICT VOID.
NEW TRIAL IN mrs SURF AGAINST
MIR. ROCKEFELLER.

The Award OF Nearly ~ million Dollars
In the Gorebic Range Controversy
Set Aside rs Excessive and Improp-
cry round-Good Evidence Was barred.
The latest development In the big Merritt
Rockefeller mining suit has excited great In
terest among all those concerned In the iron
properties OF Wisconsin and Minnesota. On
Monday the United States Circuit Court Of APP
Jeals. sitting In st. Louis, reversed the decision
of the United States Circuit Court in Duluth,
which in June, 1895, awarded $4,000 dam
ages to tho Merritts. and ordered a now trial,
on the ground that evidence offered nv Mr..
Rockefeller and ruled out by the lower court
should have been admitted and that no such
damages rs were recovered could be sustained.
Tho history OF the suit and of the evclts
leading up to 1t includes the period Of wild
speculation that followed the discovery of ore
on tho Missabc or Mesaba range In Minnesota
and tho period of the marvcllously rapid de-
vslopmcnt OF that TART OF the country. In
1s91-02 fabulously rich deposits of high-grade
Bessemer ore were found along tho range, os-
pecinlly at Mountain Iron. a comparatively
short distance froia Duluth. Not only was
the ore rich, but It was easily worked, n side
track and n steam shovel being all that was
necessary to dig 1t out OF the sides Of the hills
that were solid with It. The early spring of
~ bhW u ~ II IA bDNIuluIiOll ia Nv
luth. unsurpassed even by similar occurrences
in the gold and silver country. The lobby of
the Spalding House was turned into n tenn
po-ary stock exchange, and fortunes were
made and lost every day. At that time the
properties were wholly undeveloped. They
lay In the depths Of almost an unknown wilder
ness. but sufficient was known of them to war
rant the belief that there were incstimable
riches there for some one.
Among the first to get on tho ssene we're
two brothers.. Alfred AID Leonidas Merritt.
They were experienced prospectors and shrewd
spectators. They set out to got hold by OPP
ton and purchase of all the promising land
they could. and the magnitude of their opera
tions was such rs to make bold spectators
blink with amazcment. by the middle Of 1893
they, with some others. had secured control OF
nearly all the valuable mineral lands on the
range. and they devised n great scheme to
consolidate their interests.
Then came the panic. and they found them
selves with. a great quantity. of valuable but
undevelopcd land on their hands. but with
secure capital, AMI approached John D.. Rccke,
Teller, who had valuable holdings on the Go
Eee'e range n They hey were successful n enlist
nitude Of which fairly startled AL those inter
ested in iron in that part ofthe county,.
kee-Gogebic Mining Company. the Aurora
Mining COMPANY. both on the GoGebic range.
and in the SpAnish-Americ Mining Company.
which owns mines in Cuba. These interests
he consolidated with the Merritt i~nt=rests in
the i Ihs which VII NI Included nc = %r no. N only the l Rnii'
road, Tho name OF the new corporation WAS
the Lake. Superior Consolidated Iron Mines.
Under this agreement the Merritts and those
with them were to take ail the stock Of the
new compeny. and Mr.. Rockefeller YVES to ac-
cept first mortgage bonds to the value OF his
interests that had been put into the concern.
As an alternative to this n~Ereement. Mr.;
stock al a D oieeea sl, 20 iSks above @i the the M market
value. This option lasted for Il year. and the
Merritts did not avail themselves OF it. In
the appraisal.of the properties for tho purposes
OF the consolidation a figure was put upon the
Merritt properties which it is now alleged was
far above their market value.
In January. 1894. six months after the agree
met lad been made e was rep1r:eI that
Company was inancially embarrassed. Be-
fore this was known 10 the public Mr.. Rookie
Teller offered to undo the wioIe transaction
offer was rejected by the Merritts. Then he Of
ferel to return the first mortgage bonds and
take stock of the new concern for them at par.
This second offer was accepted by the unanl-
nous vote of the Board OF Directors of the
a majority. 1t was a good deal for the com
pany. for at that time the bonds were worth
In February. 1894. Mr.. Rockefeller bought out
all the Merritt interests in the Consolidated
Company. at the same time giving them an
option TO buy 1t back again within a year at
the same price with six per cent. interest. Some
time after this transaction Alfred Merritt sued
Mr.. Rockefeller for Sl.25o 900. ALLEGING that
he had been defrauded TO that amount because
the properties turned in by Mr.. Rockefeller
had turned out not to be worth what had been
represented in the con solidation appraisal. and
that tle consolidated mines had been dam
aged and his own stock deprecated on that
account. In his first petition Merritt in
Guided the Aurora mine ms having rcen falsely
appraised. but after il was learned that this
property was paving dividends he confined his
attack to the Penokec.GoEebic Mining Com
pany and the Spanish-American Mining Com
pany. Mr.. Rocketcllers interests in these
two propcrties had been put in the agreement
at 81 900. 900.
At the trial Of the case Mr.. Rocke.eller's
defence wus an absolute denial of the a'leCa-
ton. His counsel pied 10 Introduce
evidence as to the rca. value of both proper
ties. in order to show that the Merritt inter
ests lad been largely overvalued. but This was
ruled out, and a verdict for S9I0 600 rendered
In favor OF Alfred Merritt.
The case was carried up by Mr.. Rockefeller
to the Circuit Court of Appeals. The Rrgu-
ments rested on the ruling out OF the testi-
mony and tho size OF the award TO Merritt. 1t
was shown that Merritt had owned but one
seventh of the stock of the company, and that
$3.50. 900 WIS far out OF proportion to his real
claim. when. IL The Rockefeller mines had
proved to be absolutely worthless. the maxi
mum damage that could have boen claimed
would have been 81 900, 900. 1t was on these
grounds that the decision was reversed.
DT11EQ EnR ERTrknq