Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-05-19
n. Y. DAILY NEWS
SUES PAPER FIRM
Overcharge of S780,708 by
International Is Alleged in
Suit Telling of Loan Offer.
speei,l Disp,teh to The star.

Special Dispatch to The Star.
NEW YORK, May 1s.-The News
Syndicate, Inc, owner Of the Daily
News, filed suit today in the Supreme
Court to recover s7so,70s from the In
ternational Paper Co. The sum is al
legged to be the amount Of overcharges
paid by the newspaper for paper In
1928 in consideration of a prospective
loan of 100000 from the paper
company and the fact that the paper
company was to become tenant in the
newspapers new building. The loan
was to be secured by 20-year mort
gage on the building.
The plaintiff alleges that 1t was re-
uuired to pay more for its newsprint in
1929 than other newspaper publishers.
Answer for the paper company has
been filed.
Graustein Signed Agreement.
The agreement was signed by A. r..
Graustein, as president OF the inter
national PAPER Co, who has been mem
toned in connection with the purchase
of stock in newspapers throughout the
country. and by Roy G. Hollis. secre-
tary of the News Syndicate Co. The
agreement was not carried out, accord
ing to the defendant, because the News
Syndicate Co. failed to enter into a
new contract OF which the loan and
lease provisions were TO be part.
The complaint relates that the two
parties entered into a contract in 1924
for purchase by the Daily News Of
print paper from the International.
In 1925 this contract was extended to
1928. Under the contract the News
Syndicate Co. was to pay the current
price Of paper in the United States and
was to enjoy any reduction which In
ternational extended to any OF its GUS
toners, with further extension.
In 1927, for the period from 1929 to
1881, the terms being the same. The
International charged a uniform price
throughout the United States, except
in 1927 and 1928, when the uniform
price was only on delivery east of the
Rocky Mountains.
The plaintiff charges that on January
|. 1928, the International, in violation
of the contract, reduced the cost OF
news print paper to other customers to
a point below that paid by the plaintiff.
In view of these facts, says the News
Syndicate Co, it is entitled to receive
back at least $3.50, 7os as payment made
in 1928.
"Compromise" Is Signed.
International, it is charged, refused to
change the agreement. There followed
nrotracted negotiations and the parties
sought to effect q settlement or compro-
mise of the plaintiffs claim. on Oc-
tober /. 1928, an agreement was mace
in writing which provided condltlons
which in effect would be payment
bv the international to the News syndi-
cate Co, of 81 SOC, 900, of which 100000
was to be paid in cash on January i,
1929 and the balance in equal yearly
installments.
The new agreement also provided
that International was to lend TO the
News syndicate Co. 81, 200, 900 at per
cent on q 2O-year mortgage on the
plaintiffs new building, to be paio OH
at the rate Of at least $3.50. 900 o year.
A FIRST payment Of 81 100000 was 70
be advanced on the mortgage loan ana
the balance was to be turned over WEI rsn
the new building had q roof on. Inc
International also obligated itself 10
lease 10 floors in the new building Tor
q term of five years.
Prom time to time, says the plaintiff,
it offered to perform the terms OF thls
agreement and demanded performance
nv the defendant. The latter, 1t Is al
legged. refused to go ahead with the
agreement unless the plaintin mace
new contract for paper, which contract
was drafted by the International and
was contrary TO the spirit and letter OF
the agreement.
In answer, the International admits
the plaintiff sought to have the de-
PENDANT take q lease on 10 floors in its
new building and adds that upon
declination OF the defendant to do so
the plaintiff submitted its claim as set
forth in the complaint, suggesting at
the same time that the claim be set
tied by the defendant making the
IS 900 900 mortgage loan.
Dismissal Of Complaint Asked.
It Is stated in the answer that fol-
lowing long negotiations on october ~,
1928, in consideration OF the plaintiff
agreeing TO the new contract for paper
supply in 1884 and upon terms which
permitted the defendant to extend TO
other customers equivalent concessions.
the defendant entered into an agree
ment following the PLAINTIFFS refusal to
accept q contract in which the Inter-
national reserved such right to extend
equivalent concessions to other custom
erS.
This agreement was Cancelled by
mutual consent on February ~. 1879.
The International asks that the COM
plant be dismissed.