New-York tribune., 1922-10-11
Doherty Calls for
Support of New
Pierce Oil Board
Says He Became Connected
With Company as a Pure
ly Business Proposition;
Untern1yer Com m ents

Henry L. Doherty, president of the
Cities Service Company, who was re-
Gently elected a director of the Pierce
Oils Corporation and agreed to provide
funds needed by the company, yester-
day issued a letter to preferred stock
holders asking their support of Judge
Alton B. Parker in his appeal for prox-
les to indorse the new board.
Mr.. Doherty denies that he had en-
tered the Pierce Oil situation through
friendship for H. Clay Pierce. He de-
clared that he became connected with
the company because he thought it
was a good business deal and expected
to make money out of it.
Under my contract with Mr.. Pierce
he explained, 81 was required to ad-
vance funds Immediately to the COM
pany and assist tAe company in other
ways, and yet l could receive no bene-
fits or profits until second preferred
stock had been created and until the
notes given me for money advanced to
the company had been converted into
this preferred stock par for par. All
dividends and profits to accrue to me
We're only after dividends had been
paid on the preferred stock, and then
only when and as dividends were paid
on the common stock"
Mr.. Doherty said that he had pro-
vlded the company with funds on Sep
tember 80 to pay the quarterly dlvl-
dend due on October 2, but, much to
his surprise, "the members of the board
claiming to represent the preferred
stock refused to pay this dividend. al
though the company had ample surplus
to Justify this dividend and the cash
was available"
MIR. Doherty said that after efforts
to bring about cooperation between
the opposing proxy committees,
Samuel Unte1'myer, counsel for the
Lehman committee, declined to post
pone litigation concerning the method
of election of the new board. He
charged that the Chase Bank declined
to renew s1,000,oOO loan to the Pierce
Oil Corporation on ga mere technical
ity" and that efforts by his representa-
tives to pay off the loan were unsuc-
cessful.
"The litigation by Mr.. Untermyer."
Mr.. Doherty continued, will probably
require a complete audit of the COM
Iany's affairs and possibly valuation
OF the company's physical property,
end therefore final decision may not
be reached for many months, and de-
moralization of credit both for the
company and it's securities will pre-
vail until final decision can be
ieached, unless some other means can
be found to settle this controversy.
Therefore. upon careful thought, it
VIII be obvious to you that there is
now but one solution to our problem
ana that is for the preferred stock
Ioiuers TO lodge their proxies with
Judge Parkers committee
sahuel Untefmyer. counsel for the
1ehnan ns commlttee, commenting on Mr..
Dohertys statement, said, in part.
When the preferred stockholders
have been put into control OF This
property, as they are entitled 20 he
ana viii be-. they will be glad t., deal
With Nh. Doherty or anybody else who
can prove to them that it is to the hast
interests Of the preferred stockheld-
efs. y the personnel of the proxv
committee, consisting, as it does ~
the two great banking houses that IS
sued these securities and of the larg-
est holders of preferred stock. does not
convince the stockholders where heir
convince them.''
elected board of directors M IJnter.
myer stated that he and members Sof
NJ ms family have cash investment Of
5000, 900 in the preferred Pierce Oil
stock He said the company's profit
ana loss account for the seven months
OF the present year showed that ON
september | there was an impa rla .nt
OF capital to the extent of S1,014yT7
and that there had been loss in
ttading from the first Of the wear rp
to that date of $779,0e4.
AS the largest individual preferred
stoekholder, Mr.. Untcrmyer said, he
protested the payment Of the Ocrober
quarterly dividend, as it involved bor-
rowing money