The Stark County Democrat. [volume] (Canton, Ohio) 1833-1912, 1900-03-02
THIS SUIT
OYER COKE.
Another Action Was Brought
Against Andrew Carnegie.
CHARGES OF FRAUD ARE ALLEGED.
Cause of the Proceedings Was the Fam
GUS Low Price Contract Filed by Four
II. c. FriclS Company ystockholders-Mr.
Frick Is Made One of the Defendants.

PITTsBURa, Feb. 27.-The suit to break
the contract existing between the II. @.
Frick Coke company and the Carnegie
Steel company was filed by Attorneys
ID. 7. Watson, Willis +. McCook and
Johns McCleave, in common pleas court
No. 2.
The plaintiffs named in the bill are
John Walker, John Walker as guardian
of Andrew Carnegie Wilson, s. j..
SchoonmalSer and John Pontefract. The
defendants were the H. @. Frick Coke
company, the individual members of the
board of directors and the Carnegie
Steel company, limited.
1t is alleged that the Carnegie Steel
company requires about 2, SOC, 900 tons of
coke annually which is manufactured by
the Frick company. That the Carnegie
Steel company is the holder and owner of
80, l04 shares of the stock, of which An
drew Carnegie owns 81 ,213 shares.
Some time in the year 1899 the steel
company and Carnegie set up the pretense
that the coke company had contracted to sell it
coke as S1.35 ton, and after this came to the
knowledge of the president Of the coke com
pany he submitted it for the consideration of
the board of directors held in October 1899.
Thereupon the board passed resolution in
company that the existence Of any such con-
trBct was denied.
The bill then recites that previous to Jan. o,
1900, the board OF directors of the coke COM
pany was composed of five members, but upon
said date at q meeting Of the stockholders, the
membership was increased to seven, and Thos
Lynck, H. @. Frick, George Lauder, James
Gayley, A. NJ. Moreland, d. NJ. Clemson and
Thomas Morrison now compose the board.
That Gayley, Moreland, Clemson or Morrison
were not stockholders or owners of any shares
of stock Of the coke company, and were inter
ested only by virtue Of owning several inter
est in the Carnegie Steel company, but that
upon said date the steel company transferred
five shares of the coke company's stock to each
of these four defendants That notwithstand-
ing such transfers, the said shares still remain
in truth the property of the steel company and
were made only for qualifying the defendants
to hold the Office Of directors.
Yet the said four defendants were placed on
the board of the coke company by the Carnegie
company to subject the acts and management
Of the coke company to the will and interests Of
the Carnegie Steel company and Andrew Car
| negie.
The price Of coke increased until it went to
upwards Of SO ton. On JAN "a, 1900, a ma
jority of said board, pretending that more
than year previous thereto the coke com
pany had contracted to sell to the steel COM
pany all the coke that the steel company might
require for its furnaces for a period of five
years, beginning Jan. l, 1899, at the price of
$l.35 per ton, voted to the Carnegie Steel com
pany limited, o contract for all the coke said
steel company would use in its furnaces for
five years, commencing Jan. !, 1899, amount
ing, approximately, to 2,500,000 tons per year,
or about one-third Of the entire product of
said H. O. Frick Coke company, at the price Of
$1.35 per ton; the persons named produced at
said meeting and demanded and procured the
immediate signing of contract which had
been previously prepared and executed by the
Carnegie Steel company, Limited.
The plaintiffs allege that no agreement to
sell it's products to the steel company, as is
pretended as the excuse for making the said
contract, and no agreement for delivery
through period of years at the price named
was at any time made, and the pretense thereof
Is only the creation of the above named four
directors with Carnegie and Lawder, acting in
the interest of Carnegie and the steel company
for the purpose Of putting forth some excuse
to cheat and defraud all the stockholders other
than the members of the steel company, and
acted as a representative of Carnegie and the
steel company, and not honestly and in good
faith for the coke company. They were guilty,
| not only of constructive. but also Of actual
fraud.
1t is further alleged that the said contract if
carried out, will require H. O. Fricl Coke com
pany to refund to the steel company about
S596O0O on account Of coke sold to said steel
company during the year 1899 and paid for and
this Notwithstanding the fact known to the said
defendants, that the said sums of money so re-
quired to be refunded to the steel company
have already been paid out and distributed by
the coke company as dividends to the stock.
holders
That for the year 1900, il the pretended con.
tract is carried out, it will result in loss to
the coke company of not less than $4,OOO,OOO.
A preliminary injunction, to be made
permanent, is asked.