The morning news. [volume] (Savannah, Ga.) 1887-1900, 1900-03-13
COST HIM THIRTY THOUSAND.
WHAT F,RICK PAID For $4,000, 900
IN CARNEGIE'S COMPANY.

answer oi the company says He Sold
> Per Cent. of His Holdings for
Book VaIuatiOn-H1s Resignation
Demanded to Preserve Harmony.
said He Had Insisted on Absolute
POwer-CIaimed Only $4,9OO,OO Is
Due Him.
Fttsburg, March 12.-Late this after
noon the answer of the Carnegie Steel
Company. Limited defendant in the equi-
ty suit of II. C. Frick, to determine the
value of his holdings in said company was
filed in Common Pleas Court No. l.
The answers filed are for the Carnegie
Steel Company, Limited, and the thirty
individual defendants named in the suit
The document meets every averment of
the plaintiff in the fullest detail.
1t is denied that the defendants during
April, May and June, 1892 executed artI-
cles of association for the Carnegie Steel
Company, Limited, but they did subscribe
to an amendment to the original certif-
Gates under which Carnegie Brothers &
Co, Limited had been organized as
limited partnership association. This was
solely for modifying the terms of the orig
Il
shareholders meeting at which Frick was
the chief actor in carrying out the plan.
The answer says Mr.. Frick is primarily
responsible for any defect, if any exists,
as averred by Mr.. Frick in these articles,
as the details OF the amendment were en-
trusted to him. 1t denies that the charac-
ter of the business has been changed,
though admitting that business was en-
arged, the capital increased by 800, ,O00 0OO
and more than double that amount addi-
tional paid in and invested in the asso-
cations business.
1t recites the requirement of Carnegie,
Phipps G. Company, limited, a separate
partnership association, for $4,000, 900,
which was paid for in the usual manner,
and says Frick devised and executed the
method of this payment.
II sets out that Mr.. Fricks own actions
in connection with the association estOp
him from questioning the validity of its
organization as partnership association.
What FricI<'s Interest Cost.
The history of Frcks membership in
the association is reviewed in detail and
shows that he was admitted as other
young partners, his payment for partner
ship being out of future profits. His in
terests were acquired under the iron
clad agreement" and consisted of 100000
OF cdp1tae STOCK. lnrOu8n various OpIOF-
tunihes he had, in February, 1885, become
owner of II per cent. of the capital stock
on which he owed Carnegie 81, I,S09,191, bal
anc of purchase price the interest being
Carnegie's only security. Afraid of the
then existing business depression he had
asked Mr.. Carnegie to buy at the book
value 8 of his II per cent, which was
done. This is all Mr.. Frick has paid for
his interests in the Carnegie Steel Com
pany.
With the credits from his stock earnings
the amount paid was only $4,000, al told,
for an interest worth $500Q000. He ac-
certed without question the book value for
) per cent. of his holdings at time when
he was scared and feared the stock would
depreciate, but now refuses to accept book
valuation for the balance of his holdings.
The answer also AYERS that since 1895
Mr.. Fricks functions have been merely
advisory, the president assuming general
executive power.
why Resignation Was Asked.
Mr. Frck, it is alleged, was dissatis-
fed, demanded absolute power, and with
violent outbursts of passions attempted
to make personal matter of business diff
ferences. 1t is alleged Mr.. Frick gave
most of his time to other enterprises and
various speculative schemes for placing
the property of the association in the
hands of promoters to be 1oated in mar
4NNNdbit SECURITIES OH llt publlr. Inc w
Tense admits his ability.
The answer says MIR. Carnegie, on pa
per signed by all acting members of the
board of managers, demanded Frick's res
ignation solely to preserve harmony, and
Carnegie denies controlling or seeking to
control his associate partners.
He admits that Fricks averments as to
profits for 1899 are substantially true, but
adds that on Dec. il last, the net value of
assets was only $75,6l01O4. II is denied
that anim0sity has been manifested to-
ward the Plaintiff.
In this connection Il is stated that the
price to be paid for the property of the
association and the coke company on this
cpton WAS $32O,O0O0OO. being on the basis
OF &oO 100000 for the property of the as
socat-on and the balance for The coke
property. Mir. Carnegie was 20 receive
for his interests $1C0O00.0 900 in bonds and
the balance, about $5795O0O0, in cash.
The "IroncIad Agreement"
Mr. Frick, 1t is claimed. has Upheld and
enforced the so-called 'ironclad agree
ment" at all tines opposing an attempt
on the part of MIR. Henry Phipps to make
a change in the original and Mr. Frick is
the first to attempt to evade It,
The answer AYERS that A9C0,000 is the
full amount due Frick. While in the as
soeiation in addition to an adequate sal
ary as manager Mr.. Friok, the answer
NfNi - IGttiNtI dNAudl hiNiutAflS III tuellt
which not only repaid him the sum of
$4,000 which he himself PAID for his in
terest but an additional sum or clear pro-
fit of 1898, Post
The defendants say that the plaintiff
has no reason 10 complain of the opera
ton of contract which gives to him
nearly S5000000 for an interest which in
voved no investment of capital by him,
and which has already paid him. in cash,
Profits Of almost $1,000 600.
The proposition made by Mr.. Frick TO
arbltrate his interests Is rejected in order
TO maintain the integrity Of the contract
governing since 1857.
Concluding, the answer says the So
called "roncad agreement is a good and
valid contract and binding upon the
plaintiff and asks that the bill be dis
missed, plaintiff to pay costs.
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