The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1897-04-26
TELEPHONE CASE HEARD.
Newark Company Replys to
the Attacks Of It's Enemies
Another Adjourn
ment.

The application for receiver of the
Newark Telephone Company was heard
before Vice. Chancellor Pitney this morn
ing in this city. The bill was filed last
week by Frank H. Hall, a clerk in the
office of Messrs. Dickinson, Thompson
and McMaster. lawyers of this city, who
holds seyenty-seven shares of stock. When
the case was called this morning ex-At-
torney General John P. Stockton asked
for permission to join his clients, f. P.
Wyclzoff and w. M. Cross, also stock
holders, in the suit. With the Attorney
General was ex-senator Michael T. Bar
rett. The application was granted. Coun-
selor Chandler w. Riker represented the
Telephone Company.
The details of the case have been so
often published in 1.-THE News" that only
a brief resume of the facts is necessary.
In WORD the petitioners declare that the
company is bankrupt. that it has made
illegal contracts, and that it's affairs are
in hopeless tangle.
Counselor Charles D. Thompson was
the first to address the Court this morn
ing. He was about to read a very
bulky bill, when the Vice-Chancellor sai0
II was not necessary, and directed coun-
sci to begin his argument. Mr.. Thomp-
son lucidly set forth his case, and in the
course of his argument said that the la
bilities of the company amounted to $780,
000, and that its resources are of little
value, and are wholly inadequate to meet
its liabilities.
We contend" said Mr.. Thompson,
that the franchises under the ordnance
and the small amount of wire in the con-
ducts and the small number of telephones
are ali heavily mortgaged and the fran
chise is liable to be forfeited by the
Board of Street and Water Commission
ers." In closing Mr. Thompson asked
that the court permit examination of
the company's books
Counselor Chandler w. Riker then be-
gan his answer, which consisted of a
large number of afidavits At the outset
the Newark Telephone Company were
regular in every way and it's control was
in the hands of men of the highest repu-
tation in Newark.
why did your company pay fifteen
per cent for commission on stocks?''
asked Vice-Chancellor Pitney.
Il will explain that later on, sir. That
matter took place before the present
board assumed control and it has moth
ing whatever to do with the transaction. .
Continuing, Mr.. Riker said that the
mortgage complained of was drawn by
Hoadley Lauterbach and. johnson, the
eminent firm Of New York lawyers, and
on the other hand by Henry Young and
Judge. Fort of Newark. The contract was
not not. made de with the New York and New
made with the Automatic Telephone
company. of which Henry M. Whitney
and the President of the Schermerhorn
Bank in Brooklyn were officers Perry
Belmont OF New York and other men OF
equal financial responsibility were con-
nected l with this company. AS a mat
assigned its contract to the local com
pany. The local company, he continued.
has paid out in Newark alone for con.
'serate1lon 81 ot work, sl55O00. 1t was absurd
was not financially sound 1T had So
O0O00O; and had spent 900 in work It's
payroll per week exceeded $1,000, and the
petitioners, Mr.. Riker said couldn't pro-
quce a single man who hasn't been paid
every dollar due to him. The opposition
OF Of three men, counsel said, to the work
to say the least absurd.
The contract between the Construction
Company and the Telephone Company
was made and approved by Mr.. Klatz of
the Bell Telephone Company. ana tle he was as
an authority in contracts of that nature
counsel continued The complaint OF
Messrs. Hall, WylSoff and Cross that If
was bad was ridiculous
Coming to the allegation of the petition-
ers that the transfer of the stock was
illegal to Richard Douglass Kelley Mr.
Rlker said that Kelley was the manager
OF the Bel Telephone Company and it
But [ have here Kelleys own affi-
dayit," interrupted the Vice Chancel1or
picking up bundle of papers. Saving
that ne was simply clerk at $40 a week. .
rnra tod n ~
transferred to him as holder for the Best
Company, of which he was manager. and
he signed the certificate in blank. which
Is usual The Vice-Chancellor nodded
They attack our general system" con-
tinued Mr.. Riker, land to say we cannot
compete with the Bell Telephone Com
pang pa Whatever may be the merits of
coS,,d cne Bera Ia system, stem the Maxwell, which we
S. Goulo not stop, and our own, we only
Know that as the result of their svstar,
lie Ben telephones cost $780, while those
OF .nn .fhe Newark Company cost s162
lnlp.atiently mn. Interrupted the Vice Chan
ceilor, get down to why a RECEIVER
should not be appointed
M MI. Rlker, continuing, said that the
statsment that the Newark Telephone
Company had paid nothing to tfa rr1lst
company was absolutely false. The Trust
company was not a party to the suit
instead OF no bonds having been de-
Po'..oi Will tlie trust company. as the
petitioners complain, not only are they
deposlted, but with them the contract
Wltn the companies are to be seea in the
state trust Company in New York AS
10 the false statements alleged to have
been issued by the company, Mr.. RilSar
explained that some one had sent
pamphlets TO the Office having reference
20 the United States Telephone Company
put they were repudiated by the Nava RI
Telephone Company -. =
NOW who is who opposes 1lso Who
lmPugns the solvency of the Te,ephone
company? One is a lawyer with seventy
seven SHARES, and the other witnesses
Henry M Leyerech and Richard Douwlass
lseliey, VINO We're formerly with the com
pany: put are now employed by the Bel
Telephone Company We have nroof
your Honor, that the Bell Talephons, 3
Company would give large money to oain
any information by which they colll5 in
teriere With the operation of the Nevva,.lr
lIeleDhone Company. These cornnI.,ina,,tc
say we have no working plans. We were
working with great rapidity when thew
interfered with us ss
10 Illustrate what the Newark Company
had accomplished in the citv of Nnrtarl
counsel said that it was operating 502
telephones, while the Bell Tetanhano
Company, which had been in existenoe
nearly fifteen years, had 500 T'he re-
ceipts of the Newark company Vera 81 ma
per month and the yearly cost of run
nlng S8,9o0 per year. Its assets, as stated
by affldavits from competent Deonje wera
in excess of the liabilities by S24 ooo and
this did not include stock liabilities. IF
1t old it would be largely in a better
condition than the Bell Telephore Com
pany S status.
There is only one thing which these
petitioners can safely criticize said Mr..