The Mount Holly news. [volume] (Mount Holly, Burlington Co., N.J.) 1891-1942, 1919-04-01
Who Gers the Money ?

vi vain OAb1ACLlo vi Wills COuAlHs IL VIC
the suit of DR.. r. n. Kelly, of Brown
Mills, against Henry NJ. Black. Tn
action was based on the contention {
DR.. Keely that Black, as president {
the Farmers Telephone Company
had made a contract with the NeV
York Telephone Company which wa
entirely to his own profit, and whereof,
the stockholders of the former corpora
ton did not receive the consideration
they were entitled to.
The Farmers Telephone was organ
lied in 1902-the original incorporation
being Henry M. Black, NJ Warne
Hargrove and William II. Reeves
The purpose was to give telephone ser
vice between Mr.. Blacks home an(
his cranberry bog at New Lisbon, tax
ing in such subscribers as might bt
along the line. 1t was thought The
business might be profitable if the
lines were extended, so stock was solo
and the service was given to four coun
ties-Burlington, Ocean, Monmouth
and Burlington.
In 1917, about the time Camp Dix
was started, the New York Telephone
Company, one Of the adjuncts of the
Bell Company, wanted to get connec-
ton in the territory that was covered
by theFarmers' Company. The bill
in chancery claimed that Mr.. Black,
as president of the company, made a
contract with the New York Company,
and then purchased the stock of the
Farmers Company wherever he could
pick it up, paying $50, the par value, aud
selling it for price that netted him a
good profit. The suit was brought to
compel Mr.. Black to account to the
stockholders for the extra sum he had
received over the par value.
Martin V. Bergen and Thomas P.
Curley represented DIR. Kelly, and
Senator Wells appeared for Mr.. Black.
Judge Collins, of Jersey City, and a
lawyer of the New York Company,
also appeared in the case The pre-
sentation of the matter to the vice
chancellor was that Mr.. Black had sold
stock of the Farmers Telephone Com
pany at large profit and that the ex-
cess over the par value should be
turned back to the stockholders. 1t
was asked that the contract by which
the property of the Farmers Telephone
Company had been disposed of be an
nulled and that the purchase money
be returned to the stockholders of that
corporation, if not by the New York
Company, then by Mr.. Black.
Robert n. Kelly, who was the
principal mover in the matter, was
the first witness. He told of owning
rs shares of the Farmers Telephone
Company. He had received dividends
of six per cent. since the formation of
the company until 1918 when the divi-
dend was passed. Some time in the
summer of 1917 DR.. Kelly had talk
with Mr.. Black in the formers bunga-
low at Browns Mills, when Mr.. Black
asked the doctor what he would take
for his stock. The latter named $3.50
q share as the price, but Mr.. Black
said: Impossible you are simply
holding me up" He offered $65
share, and the doctor remarked that
such a price would allow Mr.. Black to
make profit of about 100000, and the
latter said it was not anybody's bust
ness what he made. Another CONVEX
sation was had with Black at the Office
Of Senator Wells with the idea that a
settlement might be effected and that
this suit could be stopped but Kelly
still held out for $3.50 and nothing was
doing.
George Pfeiffer, Jr., owner of five
shares, was at the conversation in Sen
ator Wells Office. Black wanted to
BUY at par, stating that the corpora
ion could not possibly finance itself
lnder the conditions at Camp Dix,
and If it was not closed out it would go
into the hands of receiver. In
statement that was given him Pfeiffer
gained the idea that the standing of
The Farmers Company was $166, 900,
which, with deduction of $780, 900 for
wear and tear, brought the value down
TO 1885, 900. Witness was at a meet
ng at which Black, Kelly and Reeves
we're present. Black said he could not
zee any reason for lawsuit. He was
old that he certainly could not want
% take the stock at par when it was
worth $136, 200, to which Black replied
hat it was his business and added
hat he had financed the affair, and at
hat time, Black admitted he was to
eceive IS per Share for the stock he
Gould hand over to the New York
Company.
On cross-examination Mr.. Pfeiffer
,aid that S136, 900 was the book value
If the stock. Mr.. Black had SAID he
had right to get whatever price he
could for stock he could deliver.
said he had been given five
shares of stock of the Farmers Tele-
phone Company by DR.. Kelly, for
which he rendered check which the
ioctor would not receive. The check
is still in shape to be handed over.
M. Warner Hargrove, secretary and
general manager of the Farmers Tele-
phone Company, was the next wit
ness. He gave list of the directors
and said that in June, 1917, Henry NJ.
Black owned one-third of the stock.
This holding was later increased. Wit
ness and William H. Reeves purchased
for Mr.. Black 593 shares. They were
paid for by J. NJ. Lamb, treasurer of
the company, the arrangement being
that the stock was to be turned into
him. In June, 1917, in company with
Reeves, witness had a conversation
with Black at the latter's home at
Jobstown. They were asked what
they thought about selling the COM
pany, their reply being that they did
not approve of the idea as the affairs
were going along all right and with
the prospect Of Camp Dix being large
concern, it looked brighter. Black
said he had already sold the company
He was asked what he got and he said
that was not anybody's business. He
said there were 1900 shares still out
which ewould like to get and he
would give S. bonus per share on all of
that stock. This would make $4,000.
He would keep $4,000 and divide the
remaining $4,000 between Hargrove
and Reeves for their work. He also