The Jersey City news., 1901-12-17
BELDEN'S PLEA
Text Of the Bill Asking for
Receivership for Jersey
City Water Supply
Company.
APPLICATION MAKES NO STR
Men Ce nversant With Com
pany's Status Say Belden
Has Bitten More Than
He Can Chew.

The application 70 a rule to show cause
wnv receiver should not be appointed
for the Jersey City Water Supply Com
pany, the announcement of which ap-
peared in yesterdays News, caused
very little interest among men in the city
who are thoroughly conversant with. the
standing of the company. In fact they
smile and simply say that William Be.den
is biting off more than he can chew when
he assails the status of that corporation.
! When the argument on the return of the
rule takes place next Tuesday some in
teresting things viii be unfolded.
The bill presented by Meesrs. Grouse &
Perkins, counsel for William Belden, the
complainant, sets out that for the pur-
/, pose of carrying out the water contract
a corporation was formed with a capital
| of 81 100000, and the incorporators were:-
| Fred C. Cochen. M. j. Kennedy. N. K.
Connolly, John McCorly, Louis H. H.
Meht, Henry Belden and William D. Ed
wards, of whom the first Ave were repre-
eentatives or employees of P. H. Flynn,
the owner of the contract to supply Jer-
sey City with water.
For the assignment of his contract to
the company Mr.. Flynn was to receive
stock to the amount of $993,000 This was
done and Mr.. Flynn agreed to vest in the
company all the lands and water rights
required for the performance of the con-
tract for the sum Of s6,500,000 on first
mortgage bonds of the company bearing
interest at per cent. and secured by a
trust mortgage ON the contract with the
| city. The bonds were turned over to
| Flynn.
Belden then proceeds to say that since
| the execution of the contract between
Flynn and the company the former by his
control of the board of directors of the
company had caused the company to in
cur obligations which under the agree
ment should have been incurred solely
ny Mr.. Flynn. Among these obligations
/. Belden mentions a contract with the I. A
| Gillespie Co. for laying pipe or conduit;
a contract with the Hudson Tunnel Com
pany for building tunnel at a cost of
SPAS 900. Mr.. Flynn, the complainant also
swears. by his agreement should have
done all this work himself.
The bill proceeds by charging that Mr..
Flynn has failed to carry out his contract
and that no work has been done towards
the completion of the work but on the
tunnel and that so little work has been
done that it is impossible to finish the
contract until within two years from the
present time, and that 1t the contract is
not finished by March, 1902, there is a
penalty Of $500 day to run against the
contractor until it is finished.
'sAnd your orator, says the complain
ant, further shows that the Jersey City
Water Supply Company through the
Board of Directors. managed as afore-
said by the said p. H. Flynn, have wasted
the assets of the said company, and that
the affairs of the said company have been
mismanaged to the detriment and loss
of your orator as stockholder of said
company.
And your orator further shows that
the company is insolvent and has no
funds to carry on the business of the said
organization.
The bill winds up with prayer to en-
Join the directors of the company. from ex-
ercising any of the privileges or franchises
and collecting any debts due 10 the COM
pany, transferring any of its bonds, tene-
ments, lands or securities or cancelling or
abrogating its contract. 1t also asks 10
prohibit P. H. Flynn from receiving any
of it's bonds IN excess of 80 per cent of
the value of the work done and materials
furnished in the contract and from selling
or disposing of its assets.
Appended to the bill is an affidavit
made by Belden in which, after going over
the facts before mentioned, he says that
Flynn is now in negotiation with New
York banking houses to raise loan and
that he intends to cause the company,
through his control of the Board of
Directors, without consideration, to cancel
the said contract and to wrongfully re-
lease him from his obligations.
| "If the company" says Mr.. Belden, 'is
/ allowed and does release Flynn from his
obligations, the value of his, the depon-
eht's stock, will be greatly deprecated
7 and probably be extjnguished.'
/ Lawyer w. d. Edwards. representing
Mr. Flynn, has prepared an answer to
/ the bill which confines itself to the alle-
cations affecting the sovency of the COM
! pany. He will show that work has peen
done on the contract and is being done
and that there are no grounds for appre-
| hension that the contract will not be fin
! ished in time
| Mr.. Edlow w. Harrison, engineer for
| the company, said today that The conten-
tion of Mr. Belden that the work couldn't
and wouldn't be done on time was absurd,
| and made by one who doesn't know what
| he is talking about The city, re added
| needn't worry about the contrae- nor the
condition of the company about It's ability
| to meet its obligations.