The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1900-03-13

pnaeS kA0 AHFttls OF NtlA9s - AHuhA q ~
the 'iron-clad agreement and
amounted to 100000 OF the capital
stock In May, 1859. an opuon WAS
given to Mr.. FrIclS to acquire on jan
i,ary /, 1894, nn additional interest OF
3 per cent. This option was abrogated
in November, 1890, With Mr. Fricka
consent, but ns Compensation he was
credited IN his account with the asso-
citation with the sum Of 2iSs, 1858, rep-
resenting the increment IN the book
value Of the interest covered by his op-
tion from the time It wns. given until
abrogated. subsequently be acquired
an additional per cent, and then
per cent, for whichshe made no cash
payment except as hereafter stated IN
February, 1895. Mr.. Flick was the own-
er of II per cent Of the capital. upon
which ne owed Andrew Carnegie
81. 500 ,ls1 IS, balance Of purchase price.
He was not, however, under his agree
ment with Mr. Carnegie, personally lla-
BILE, the Interest acquired being the only
security which Mr.. Carnegie held. 1t
being at that lime period OF business
| depression, Mr., Frick went TO Mt, Car
negie and expressed o desire to reduce
his holdings IN the association, requesi-
ing Air. Carnegie to purchase at the
book value s per cent, Of the IL per
cent, held by him. Mr.. Carnegie had no
fears such as Mr. Frick expressed, and
agreed to relieve Mr. FTick Of the
i charge. which Mr., Frick declared TO be
a burden upon him. Mr.. Carnegie paid
him the then book value, which wns
greatly In excess Of the price paid for
! Ii by Mr.. FrtcN After this transfer Mr..
Frlcl held only per cent. Of the whole,
| and the balance due on that percent
ace from Mr.. FTick for tie purchase
price was finally adjusted and paid to
| Carnegie. the payment consisting OF
St29. 900 In bonds OF the II. C. Frick Coke
Company at par and $1s1 So in cash.
This 10 all MI. Friclc has paid for his
| interests In the Carnegie Steel Conn
pany. with the credits from his stock
earnings the amount paid was only
| $500 900, and all told, for an interest
worth S5,OOO0O0. He accepted without
question the book value for 5 per cent.
| oe his holdInga al q time when he was
| scared and feared the stock would de-
| preciate, but now refuses to accept the
| book valuation for the balance OF his
| holdinEs. One third OF the interest held
al q dime by Henry Phipps was also
taken by Mr. Carnegie at book value.
Carnegie was, II appears, always ready
to buy, and showed uhbeunded eonIl-
| dence In the merit Of the association en-
| terpriRes.
vices. which he ciaims largely added TO
the success OF the association, Mr. Car
negie says that since January, 1895, MT.
FriciS's functions have been merely ad-
| visory, the business Of the association
being conducted under the direction,
| silpervision and management Of the
president, who held general executive
power.
tuated by malevolent motives In de-
mandinE the resignation Of Mr.. Flick
M chairman. and It Is stated the reslg-
nation was demanded in order to pre-
serve harmony in the interest OF the
association. The piaintih was informed
| iv Carnegie that he had better resign
| for his own sake, and to avoid the
necessity Of a refusal to re-elect him at
tbe approaching annual meeting. This.
however, It Is claimed, was done In the
klndliest spirit and after all the act
ing members Of the board Of managers
had signed a paper requesting Mr.
Frlcls to resign.
Big Profits Admitted.
It Is admitted that the profits Of the
company for 1899 were substantially as
averred by the plaintiff. the amount 80
stated, however, refers only to the diff
ference between the amount OF tne
! sales and the actual expense or manu-
| factlire, and does not by any means In
| dIcate the amount available for dlstrl-
button as dividends. II is denied that
the association has assets which It
could transfer worth $250,000, and It Is
| asserted that on December 81, 1893, the
books showed that the net value Of the
| assets Of the association was $ib,6lO,-
1O4 O6. From time to time the plalntin
has been n member uf committees ap-
| pointed to re-vnlue the assets and the
values now entered may be taken as the
plaintiffs own statement OF their value
/ TO his fellow members. on which, dur
ing plaintiffs membership, more than
fifteen settlements have been made
| with retiring members or the estates
| OF deceased members.
II Is dnIed that animosity has been
.manlfested towards the plaintlm from
his failure with others to 9Vail on an
option given by Carnegie. IN this con-
nection II Is stated that the price to be
paid for the property Of the association
and the coke property on this option
was $320,000.0OO being on the basis OF
/ t4NVtVNgtVNg AAA hAAE RA0FNANS
association and the balance for the
coke property Mr.. Carnegie was to
receive for his interests S1O0,000O00 In
bonds and the balance about S57, $4,000
in cash.
Upheld the IrUnciad Agreement.
Mr.. Frlck. It is claimed. has upheld
and enforced the so-called "lronclad
agreement" at oil times opposing an at
tempt on the part Of Mr., Henry Phipps
to make a change In the original. Dur
/ ing oil the years Mr.. FrIek, as the ae-
/ tive agent OF the association, acquired
| the interests Of all retiring partners
under its provisions; when partner
was deemed unsatisfactory by his as
sOclates he was informed Of that fact
generally by Mr.. Frick, with q state
nent that the company would pay for
/ such interests under the terms OF the
agreement, and II not accepted volun-
tarlly. he would enforce said terms.
This course continued up to the time of
his resignation az chairman and mama
ger OF the association, and he was the
first 10 attempt to eyade the agree
ment.
1ron-olad Agreement.
Appended to the answer proper is ex-
hlblt "a" which relates how and when
Mr.. Frick became a member OF the hrm
Of Carnegie Bros. & Co., limited. under
the terms OF the famous 'iron-ciad"
agreement, which is now for tho 1rSt
time authoritatlvely made public,
The first clauso OF the agreement
binds the incoming partner, when called
upon by three-fourths Of the partners
in nITnbar hOidtnr fhran. foffrlhr In