The Birmingham age-herald., 1916-11-28
LADELPH|A SUIT ID HAVE NO EFFECT Will Not Change Local Tide
 water Litigation MIR. JOHNSTON TALKS Latest Suits Are Believed to Be Based on Allegation of Excess
 sive Profits by Morris
 Brothers
MIR. JOHNSTON TALKS

The status of the Birmingham, Ems ley and Bessemer railroad (Tidewater llines) will not be affected by the suit filed yesterday in Philadelphia by five stockholders of the company against Morris Brothers, investment brokers and bankers, who are said to have promoted the line, according to For ney Johnston, local attorney for Nor ris Brothers.
 Neither will the suit have any eff feet on the proposed consolidation of the Tidewater lines with the Bir- mingham Railway. Light and Power company, and the litigation now pend ing by which the city of Birmingham seeks to prevent the consolidation.
 "So far as the local properties are concerned and the status of the pro- posed consolidation of the Tidewater lines with the Birmingham Railway, Light and Power company, the suit will make no difference at all" said Mir Johnston yesterday. While I have not yet seen copy of the legal pa pers in the case and am not advised as to the exact details of the action.
 
 STOCKHOLDERS LOST ALL
 From the meagre information have received in regard to the case, it seems that the action was instituted by five stockholders in the Birming- ham. Ensley and Bessemer railroad When the lines were forced into the hands of receiver and the sale of the properties was ordered by the courts, the price for which the lines sold was not sufficient to pay the bondholders. who, of course, held a prior lien or mortgage. Under the terms of the sale the bondholders themselves will lose heavily and, of course the stockholders lost what they had invested.
 "rhe causes for the failure of the Tidewater lines to make good in a tail on several occasions In the past. The financial crisis which developed prevented the extension of the lines and the construction of feeders and other things entered into the propo- sition to bring about heavy losses"
 According to information received in Birmingham yesterday from Philade1- phia the compliments in the action are Charles F. Hitchins, Worcester, Mass: Sturgeon H. Cunningham, Bos- ton; Patrick F. Clark, Worcester, Mass; L. L. Berber, Warick, R. l., and William H. Walton, Providence, R I. The action is declared to be in behalf of the stockholders named as in the same concern and it alleges that Morris Brothers were the pro- motors of the enterprise.
 It is alleged that Morris Brothers sold stocks and bonds of the com pany to the extent of $2,102,500 and that they realized from these sales the sum of about s1.s00.O0o. It is de- clared in the allegations that the Underwater Construction company was the instrument through which Morris Brothers acquired their holdings, the latter company, 1t being charged, was organized at the instance of Morris Brothers.
 EXCESSIVE PROFITS CHARGED
 While the reports received in Bir- mingham were not specific on this point it Is believed by those familiar with the promotion of the Tidewater properties that the sole basis for the suit is the fact that Morris Broth : CTS are alleged to have made excessive profits through the cOnSLTuctlO1l or the line by the Tidewater Construction company It is pointed out that the mere fact that the stock lost its value through the failure of the company to make dividends would not offer a ground for recovery from the brokers through whom the stock was bought
 On a recent visit to Birmingham Fred S. Morris, who Is the head of Morris Brothers. declared that his firm which held a large part of the bonds of the defunct company, had lost heav- fly in the enterprise and that the amount would reach several hundred thousand dollars. even if the consolf- dation with the Birmingham Railway, Light and Power company was af- fected.
 Morris Brothers are the owners or the Tuscaloosa Railway and Utilities company which operates the street railway, light, power and gas plants and ice plant at Tuscaloosa.