The original scan for this article is located at: http://chroniclingamerica.loc.gov/lccn/sn83030272/1904-12-14/ed-1/seq-14/.
New York Sun, December 14, 1904, page 14:
WIRELESS TELEGRAPH MIX-UP
DR. GEHRING OBJECTS TO G.N.Y. SECURITY CO.
Which, He Says, Proposes to Take Over the American De Forest Without Paying Enough--Also Wants an Accounting of "Special Treasury Slock" Sales.
Dr. Gustave P. Gehring of 46 Manhattan avenue says he is the inventor of several wireless telegraphy patents, and organized and practically controlled the International Wireless Telegraph Company, to which he sold his patents and the privilege of using them. Now he owns, he says, several thousand shares of the American De Forest Wireless Telegraph Company, which absorbed the International, and he alleges that his rights and those of the other stockholders, along with the properties of the company, are being imperilled by the tactics of its president, Abraham White, and its treasurer Francis X. Butler. Mr. Butler is a member of the law firm of Knabe & Butler, who are counsel for the American company.
Supreme Court Justice Truax has at present under consideration a motion made by Mr. Butler to vacate, on technical grounds, an order recently obtained by Dr. Gehring's counsel, John J. Vause, for the examination before trial of both White and Butler. If they do not succeed in having the order for their examination set aside they must produce the books of the American De Forest company for inspection.
Abraham White is the man who, about eight year ago, got into the newspapers by bidding for several hundred thousand dollars worth of United States bonds, then issuing. White's available capital when he made the bid was approximately the 44 cents that he spent in postage to forward and register his bids. His price was high enough to enable him to get the bonds and he went to Russell Sage, who lent him money enough to pay for them. White was said to have cleared about $100,000 in that transaction.
When wireless telegraph companies first came into the promoting field White got into the game. At present he lives at the St. Regis. At other times he may be found among the Gates crowd at the Waldorf or in Wall Street. His speculations are said to have been considerable during the recent boom.
The original De Forest Wireless Telegraph Company and the International Company, controlled by Dr. Gehring, were contemporary, but the International soon absorbed the De Forest with all its properties. Then White came along with his American De Forest Company and after some dickering it absorbed the International. The American company was capitalized at $15,000,000, of which $11,500,000 was preferred and the rest common. The par is $10. The company now owns practically all the De Forest, Gehring and other patents, and has stations at Poughkeepsie, Newburgh, Buffalo and other places. It also has a contract with the United States Government.
Just about a month before the American company was incorporated a $50,000 corporation, known as the Greater New York Security Company, appeared. White was, and is, the president and Francis X. Butler its treasurer. It is this company that is worrying Dr. Gehring. Last Sunday the company advertised that it was prepared to sell stock in the Amalgamated Wireless Securities Company, a new corporation, capitalized at $10,000,000. The Amalgamated, said the Security company, had acquired a controlling interest in all the wireless company.
Before this advertisement appeared, Dr. Gehring had taken legal steps to protect his interests, which he values at over $150,000. Through Mr. Vause he got an order for the examination of White and Butler, and on the application he made an affidavit setting forth his grievances.
Dr. Gehring alleges that, according to his information, part of which he says was derived from White himself, there is a deal now pending by which the patents, privileges and properties of the American company are to be turned over to the Greater New York Security Company by its officers, without adequate consideration.
The officers of both companies, he says, are the same, and to all intents and purposes the Greater New York company is a part of the American and is being operated for the interests of Abraham White. He has learned, he says, that White, through the Security company, is selling what is called a "special treasury" stock of the American at $15 share, on which a monthly dividend of 2½ per cent. is promised. This stock is supposed, says Dr. Gehring, to be sold to raise more working capital for the American, but he would like to find out where the proceeds actually go. Dr. Gehring says that there is no such thing as "special treasury" stock of the American, so far as he knows, and he believes that what is really being sold is the ordinary everyday preferred that still lies in the company treasury. Large sales of stock have been made lately, Dr. Gehring says, and he wants to know where the money goes.
In order to prevent the consummation of this alleged plan, Dr. Gehring has served White and Butler, as officers of the American, with a summons in his suit. The object of the suit, he states, is to have a receiver appointed, to have the American's officers enjoined from making a deal with the Security company for the transfer of the assets and to demand an accounting from the officers concerning the proceeds of the sales of stock that have lately taken place.
White and Butler have not replied to Dr. Gehring's changes and probably will not until they get a complaint. They are understood, however, to deny that anything has been done or is contemplated which will affect injuriously the interests of the American stockholder. Mr. White was not seen yesterday and Mr. Butler declined to talk. If Justice Truax sustains the order it is almost certain that an appeal will be taken, so that matters will be at a standstill for some time.
The Greater New York Security Company was recently, on it own motion, joined as co-plaintiff in the suit of Henry Gardner, a yet unidentified person, against the Marconi Wireless Telegraph Company.