The Wilmington daily Republican. (Wilmington, Del.) 1890-1902, 1900-02-14
HENRY C.RRAK'S SUIT
Against Andrew Carnegie and the
Carnegie Steel Company.
CARNEGIE CHARGED WITH FRAUD

King, and Asks That Justice b
Done Him OF the Company Dissolved
Pittsburg, Feb. 14.-Henry Clay
Frick filed a bill in equity yesterday
in the court OF common pleas No.
OF Allegheny county against Andrew
Carnegie and the Carnegie Steel COM
pany, limited. praying first for decree
that the pretended transfer of his in
terests in the company was and 10 null
and void, and that he is still the owner
Of all such interest and is entitled in
every lawful way to represent and act
for the same.
Second, for an injunction restraining
the defendants from any interference
with his interest in the said company
and from excluding him from particle
patton in the care and management Of
the assets and business.
Third, decree ordering the defend
ants to cancel upon the books of the
firm any assignment or transfer here
tofore made or pretended to be made
to said association of the plaintiffs
interest in the firm.
Fourth, decree ordering the de-
PENDANTS to cancel and erase all entries
upon the books of the firm of INSULT
cient, unfair and improper valuations
of its assets and of the plaintiffs in
terest therein, and to cause the said
books so to be kept as to fairly and
fully show the real value of the COM
pany.
Fifth, In case the defendants shall
refuse the offers made by the plaintiff,
and shall refuse to continue the bust
ness and allow him to participate in
the management and control, in con-
junction with themselves, and shall
insist upon the exclusive management
by themselves, and shall continue to
exclude the plaintiff from his interest
in the business, that the court will
thereupon allow the plaintiff to declare
the firm dissolved, and appoint re-
ceiver to take charge Of all the bust
ness and assets of the firm, permitting
said receiver to fulfill unperformed
contracts and to do whatever shall be
necessary in and about the proper
liquidation of its affairs, and that, af-
ter the conversion of the entire assets
of the company into money and the
payment of the debts Of the company,
the court will then distribute the bal
ance thereof among the partners in
proportion to their interests
Sixth, that an account be taken be-
tween Carnegie and the plaintiff where
by Carnegie shall be charged with all
the losses, expenses and damage he has
caused by his illegal and fraudulent
conduct. and that if Carnegie persists
In his fraudulent scheme and refuses
the offers hereinbefore made, and thus
causes the actual dissolution Of the
firm, all losses incurred by the plain
till by reason of the forced winding I'D
Of the firm shall be charged against
him, and that he shall be decreed to
make good and pay to the plaintiff the
difference between what his interest
was fairly worth on or about Feb. /,
1900, and the amount he shall receive
through the decree of this court in
final liquidation and settlement of the
firm.
In 1892 there were two limited part
nerships: % Called Carnegie Bros.
& Co., limited. with a capital Of S.
100000, which made steel rails, and
owned the Edgar Thomson steel rail
mill in Braddock township. (2) Call
ed Carnegie, Phipps & Co.. limited,
with capital Of S. ,O00, 900, which made
all kinds of steel plates, structural
material, iron forgings, made the ma
terial for and built bridges, made ar
NOR plates, and made material for the
same.
Carnegie owned over so per cent of
each of the old firms, and he, with
Prick, Phipps and others, owning in
terests in each, formed in 1892, what
constituted a new partnership. called
the Carnegie Steel company, limited.
In this Carnegie retained over so per
cent, and now has 5Sk per cent, while
Frick has b per cent. Both old firms
we're merged into the new, which had
capital Of $4,000 900, and operated
all the old works. This new firm was
under the immediate care and super
vision of Frick, as chairman, from
1892 to Dec. 5, 1899. 1t finally enlarged
the capital of its different works, en-
larged their output, and purchased
other plants, ore mines etc.
Carnegie lived In New York, passed
much of his time abroad, remaining at
one time for 18 consecutive months.
He did not pretend to manage the cur
rent business, although he was con-
suited as to important matters.
The business from 1892 to 1900 was
enormously profitable. In 1899 the
firm actually made in net profits s2l,-
900 900. In November, 1899 Carnegie
estimated the net profits for 1900 at
SAC, 900 900. and Frick then estimated
them at s42,50O,000.
Carnegie valued the entire property
at over $780, 900 900 and avowed his
ability, in ordinarily prosperous times,
to sell the property on the London
market for $500 $1,000.
In May, 1899, Carnegie actually re-
ceived in cash, and still keeps, $1,170,-
900, given him as a mere bonus for his
80 days option to sell his 5Sh per cent
interest in this steel company for $751;
100000. tricks per cent, on that
basis, would be worth $16,23S,00O.
Prick now alleges. right at the
height Of this enormously successful
business. that Carnegie suddenly, and
with malevolent intend towards him,
arbitrarily demanded of him his resig-
nation as chairman, and this without
any reason except to crafty Carnegie's
malice.
Prick, in the interest of harmony.
gave his sesignation, and subsequently
Carnegie demanded of Frick that he
tFrick) should sell to the firm his in
terest In 1t at figure which would
amount to less than one-half of what
this interest is fairly worth. Prick
refused to sell at that price. but Of
fered to sci and allow three men to
value the interest sold. Carengie re-
fused this, nd left Frick, threatening
him for not yielding to his demand.
Frick no. alleges that after his
resignation Carnegie fraudulently and
secretly, without Tricks knowledge
or consent aftemnfin1 To carry nnt a