The Middleburgh post. [volume] (Middleburgh, Snyder Co., Pa.) 1883-1916, 1900-03-15
CARNEGIE and RRICK.
The Iron Kings Answer to His
Former Partner and Friend.
FRIOK's INTEREST A GIFT TO HIM.
Complain Of the Operation of u
Contract which Gives Him Nearly
SG.OOO,OOO without Investment"


Contract which Gives Him Nearly
$4,000, 900 without Investment.'
| Pittsburg, March 13.-Late yesterday
afternoon the answer of the Carnegie
Steel company, limited, defendant in
the equity suit Of II. c. Frick. to de-
termine the value of his holdings in
said company, was filed in common
pleas court No. |. The answers filed
are for the Carnegie Steel company,
| limited, and 80 individual defendants.
The answer meets every one OF Mr..
Frick's allegations, declaring that Mr..
Frick himself led in the reorganization
of the company The averments of
plaintiff with reference to change of
business are denied, as In the amend
ed certificate the same language was
employed as in the original, and in
fact there has not been any change in
the character of business. The name
of the association was changed. and
| for the convenience of the business the
principal offices were removed from
Bessemer to Pittsburg. The business
was enlarged subsequent to the change
of name, but this in no wise changed
the legal status Of the association.
The answer then sets forth the his
tory of Mr.. Frick's membership in the
association To begin with his in
terests were acouired in the same man
ner as other young partners. He was
not required to pay for same, provis-
ion being made, as in all cases of newly
admitted members. for payment out Of
the future profits. Mr.. Frick's interest
was acquired about Jan. IA. 1887, under
the terms of what is known as the
"ironclad agreement" and amounted to
500 600 of the capital stock. In May,
1899 an option was given to Mr.. Frick
, To acquire on Jan. |. 1894. an additional
interest of 3 per cent This option was
abrogated in November, 1890, with Mr..
Frick's consent. but as accommodation he
was credited in his account with the as
sociation with the sum of sl3S,l46.GS.
representing the increment in the book
value of the interest covered by his
option from the time 1t was given until
abrogated. Subsequently he acquired
an additional | per cent and then s
per cent In February. 1895. Mr.. Frick
was the owner of II per cent of the
capital upon which he owed Andrew
Carnegie 81 500 1911 balance of purchase
price. He was not. however. under his
agreement with MFR. Carnegie person.
ally liable. the interest acquired be-
ing the onlv security which Mr.. Car
pepie held.
The answer then tells of Mr.. Frick
going to Mr.. Carnegie, at the time of
|
relieved Of a norton of his holdings.
Mr.. Carnegie paid him the book value,
which was greatly in excess of the
price paid by Mr., Frick. After this
transfer Mr.. Frick held only 6 per
cent of the whole. and the balance due
on that percentage due from Mr.. Frick,
the purchase price was finally adjusted
and paid to Carnegie. the payment
consisting of s129. 900 in bonds of tho
n. C. Frick Coke company at mar and
s191 SO in cash. This is all Mr.. Frick
has maid for his interest in the Car
negie Steel company With the credits
from his stock earnings the amount
paid was only $500. 900 all told for an
interest worth $4,000, 900. He accept
ed 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 re-
fuses to accent book valuation for the
balance OF his holdings.
1t is denied that Mr.. Carnegie con-
trolled or sought to control the action
of his associate partners. although
owning at all times over so pcr cent
of the capital. but by reason OF Nj.
Carnegie's age and business eyreri-
ence MANY or all of the mariners we're
willing to hear with Difference his
views on matters pertaining to the
business at all times. Mr.. Carrerto.
II is asserted. has held an intprp,' iu
excess of so per cent rather frcm tie
necessity of taking the shares Of ,jm!d
deceased or retiring members than
from any desire or intention on his
mart to hold a controlling interest.
Touching upon the profits of the
company II IL said that Mr.. Carnegie's
estimate of the probable profits in 1900
was made in Jest 1t is admitted that
as ayerred nv Frick. III is denied that
tho associatjon has assets which il