Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1921-02-17
BOTTLERSL LAUNCH
|. CHARGES Of FRAUD
/ To COCA COLA CO.
Settlement Of Pending Suit
on Contract Unlikely Now,
| classification of Books Is
Alleged

L.
O sensational petition filed late yes
terday afternoon with Judge Hugh
NJ. Morris. of the United States
court for the district of %Dela-
ware, the Coca-Cola bottling COM
panies charge the Coca-Cola Com
pany of Delaware, formerly of Geor-
gia, with duplicity and Justification
of their books as a means of sus-
taining an excessive price for the
syrup which the bottlers are obtain
ing from the manufacturers under a
court agreement. pending final ad-
Publication of the litigation in which
the two concerns are involved.
After reading the petition, Judge
Morris signed an order setting the
case for hearing at Wilmington next
Monday, February %.
The pending litigation relates to the
hlleged perpetuity of the original con-
kract between the Coca-Cola COM
pany and the so-called parent bot
HERS for the delivery of syrup for
the bottled drink. Judge Morris, sew
era1 months ago, sustained the con-
kention of the bottlers with refer
ence to the original contract, hold
ing in effect. that it is perpetual.
The petition, filed yesterday with
rudge Morris is an amendment to the
original suit and prays for further
relief as a means of protecting the
bottlers from the alleged purpose of
The Coca-Cola company from declin-
ng to ship or deliver any bottler's
syrup, upon compliments declining
% comply with any preliminary est1-
mate of cost of the syrup for any in
completed month; and from the pay
nent for the syrup until after the end
bf each 30-day period and after the
statement of cost. has been fur
hished~ the complainant and verified
by it; and that the complainant in
my respect by it's failure to comply
With such anticipated preliminary es-
imates of cost"
what Petitioners Ask
The petitioners also ask the court
Tor the construction Of several points
I issue between the bottlers and the
Eoca-Cola company, as follows:
1. What contracts the Coca-Cola
company had outstanding in June 10,
$40. for the purchase Of sugar. its
erns, and the extent to which the
contracts should be considered IN
onputing the cost of manufacturing
he syrup under the court order or
une 10.
Q. A true accounting of the actual
ost of manufacturing the syrup Tor
he months of November and Decem-
Ter. 1920, and such other months as
nay properly fall within the court
rider of June 10.
8. That the bottlers be allowed a
tated credit for all payments MADE
excess of the actual cost Of man
facturing the syrup since June lo.
The petition, which was filed by
he law firm of Ward, Gray & Neary,
e Wilmington, associate counsel Tor
he bottlers, serves to terminate the
feasibility of an anticipated settle
nent of the differences between the
-oca-Cola company and the parent
bott1ers. It is evident from the al
egations set forth in the petition
hat the litigation will be continued
lmost indefinitely.
When the original litigation was
Instituted an agreement was reached
.etween the litigants that the price
r. syrup for the bottled drink would
Ia s1.57 cents per gallon, based upon
he manufacturing cost OF the syrup.
7his a agreement, dated June 10, was
made a part of the court record IN
a
beriod of five months. At the eno
the five months period, it was pro
Fided that the price should be re-
diugted every thirty days on the
basis of the actual cost of manufac-
Turing the syrup.
Under the agreement, the Coca
rola company was required to tur-
bish the bottlers at the end of eV-
Ery thirty-day period statement
khowing the cost of manufacture
Xhe statement to be subject to verl-
nstion bv the bottlers. and to in
elIIde the items of sugar. cooperage,
freight, advertising and overhead ex-
benses. -
heir petition that they were un-
formed as to the actual cost -, Of
nufacturing the syrup. and that
hey accepted the manufacturing
lost estimates of the chairman OF
he board of directors of the Coca
cola company who gave the POSITIVE
issuance that the company mad
bnIy one contract for the purchase
bf sugar-a contract that would run
It's course and expire within few
weeks Subsequently, the Coca-Cola
company would obtain it's sugar ne
9 alleged to have declared, under a
JerbaI agreement with a large sugar
refinery to supply the needs of the
company for the balance of the
year at price to be determined by
the price prevailing in the sugar
market each Monday morning.
nent in June. at which time the
brice of sugar was around 20 cents
pound, the price of sugar began tc
HecIine, and by the last of October
veraged from IL to 9 cents pound
rhe price of other commodities also
Heclined, and the bottlers allege
That a large increase of profit in the
ylup accrued TO the manufacturers
n consequence 1t was their natural
ssumptioni they assert. that at the
termination of the five months
kgreement the price of syrup tc
Them would be very materially re-
duced.
But the bottler's anticipations
we're shattered, and they allege In
their petition that at the termina-
ion Of the five-months period the
Eoca-Cola company claimed that the
lost of manufacturing syrup for the
month of November was $1.81 pei
gallon, and "a statement was fur
nished on or about December 10 OF
what purported to be the actual cosi
bf manufacture for the month in
dicated."