The sun. [volume] (New York [N.Y.]) 1833-1916, 1899-08-29
GAS WAR LAWSUIT FAILS.
BTOCKHoLDER CAN'T INSPECT NEW
AMSTERDAM cog hooks

Gen. Pieraon Had Based His Motion the
Fact That Gas was Being sold for 90
Cents-He Thought This Ruinous and
Wanted n Receiver-The Court Says No.
Gen. ]. Frederick Persons motion for per-
| mission to inspect the books and papers OF the
New Amsterdam Gas Company so as to ascer-
| tain II 1t Is losing money by selling fifty cent
| gas. and If so to have receiver appointed. has
| been denied by Justice McAdam OF the Su-
| preme Court While 1t was denied that Gen.
| Pierson was acting In concert with other per-
sons who wish to end the gas war. the decision
| will quiet the reports that peace can be brought
about by litigation Of this kind.
! Cen Plerson. who moved as a stakeholder.
has $4,000 OF consolidated gold bonds Of the
company and sevonty-Hve shares OF the pre-
| ferred stock. The company was organized
| early in 1898 by the consolidation OF the Equ-
| table. New York and East River and the New
! Amsterdam gas companies with S1O.OO00OU in
| preferred and $l3.0O0OOO In common stock.
| Person had exchanged securities which he
| held in the Equitable for those in the mbined
| company The Justice says that as bond
| holder he would have right to all inspec-
| ton. but as stakeholder he could inspect in a
| proper case. The Justice says further:
| THE writ Of mandamus does not issue here
| in as matter OF course. 1t is an extraordi-
| nary remedy TO be invoked only upon special
| occasions. The Courts do not grant the man
damus until they have taken into considera-
| ton all the facts and circumstances OF the
| case. The condition and character of the
books. the reasons for refusal by the corpora
| ton. the specific purposes OF the stock holders
! in demanding inspection. the general reason
| ableness Of the request. and the effect on the
| orderly transaction Of the corporate
| business in case 1t is granted. are all
| considered in granting or refusing the writ. 1t
| IL only granted in furtherance of essential
| justice To hold that every person who
| shows himself to be holder OF stock Is at lib
| erty to demand an examination OF the entire
corporate books and records by accountants
| selected by him. when and as often as he
| pleases. and II refused to apply for a writ of
mandamus to enforce such right. would be to
| establish rule highly prejudical to the inter-
ests OF all corporations and their stock holders
The gravamen OF the petition Is that be-
cause the company has reduced the price Of
gas from Sl.1O to fifty cents per thousand
cubic feet NJ dividend has been declared on
the stock since April, 1893. and that the
petitioner has been paid merely five per cent
on the consolidated bonds since that time;
that this condition OF affairs is caused by the
drectore involving the company in gas war:
that the petitioner believes that the company
is selling gas below its cost. and that without
an examination OF the books he cannot
tell from what source the company de-
rives its money to pay its fixed charges.
whether from it's capital or income
The answering afIldavits show. what is a
notorious fact. that since May J. 1899.
| there has been a war among the companies
supplying gas In the borough OF Man
haitian that tho reduction made by the re-
spondent was necessary to enable 1t to COM
pete with its rivals and they deny the allega-
tion of the petitioner that long term contracts
for supplying gas at the reduced rate
have been made by the company. These
affidavits also show that at tho time OF
consolidation and even since there have
been in the borough OF Manhattan
four companies supplying illuminating
gas to the inhabitants thereof. to wit: the
Consolidated Company. the Standard Com
| pany. the Mutual Company and the respond
emit: that the pipes OF the companies have and
do parallel each other in many places through
out the borough. and that said companies are
in active competition. condition that has
proved highly beneficial to the general public
| and demonstrated that for tho public. rivalry
is better than monopoly.
1T clearly appearsthat the Consolidated Com
pany was the first to cut the rate after which
its agents carried on canvass for the patron
age Of the respondent. many Of whose GUS
| toners were induced to go with the cut rate
| company. so that the respondent. to retain its
business for the benefit OF its stockholders.
was obliged In self defence to cut rates also,
and this act constitutes the main grievance
OF the petitioner. and the head and front
OF the respondents offending. According to
ordinary business methods. the respondent
mot the attack by adopting the only course wise
management could suggest The petitioner
fears that the respondent cannot sell gas at
fifty cents per 1000 cubic feet. and may In con-
sequence have TO go into insolvency and. per-
haps into the hands OF receiver.
There seems to be nothing to justify these
fears. The petitioner has not furnished any
proof by experts that gas cannot be profitably
sold at a reduced price. and the fact that a
competing company is able to furnish it
almost as low and pay dividends would seem
to prove that there is still q margin Of
profit left. At all events. the petit
toner's fears standing alone do not enttle him
to go with accountants into the business place
OF the respondent, there to rum mage over the
respondents books and records since its In
corporation. to ascertain the cost OF gas. fact
that can easily be asccrtainsd in q much moro
simple and practical way upon application to
any gas expert. No information contained In
the books would aid in settling tho gas war.
which must like many OF the cut rate wars OF
tho past adjust itself.
THE Consolidated Company was in this
instance the aggressor. and. II it erred. the
responsibility rests with it. and cannot be
shifted upon the respondent. for 1t is in no
manner accountable for the condition by
which it was confronted. The con soli-
dalton occurred only fifteen months ago. and
since then the petitioners holdings have not
deprecated: on the contrary it is undsputed
that they are worth 1915 more than at tho
time tho consolidation was effected. a result
which ought to be accepted as the best test OF
good management. Interest has been regu-
lary paid on the bonded debt and the question
when dividend is to be paid on the stock Is |
one resting largely in the discretion OF the
board OF managers.
The petitioner the owner OF seventy-Hve