Lancaster daily intelligencer. [volume] (Lancaster, Pa.) 1864-1928, 1889-07-19
TRUSTS AND MONOPOLIES.
From the fourth paper Of WIN. l.. Wilson in
the Baltimore Sun.

wncse HebeTHi stTuctuTe i attetlIuu p
vellons tribute to its designers. II was
capitalized In 1889 at S70, 900, for which
amount certificates were issued. by 1855
its capital had grown to SgO,000,Oo0, of
which less than $6,OOO,0OO represented
shares issued for stock Of new corporations
absorbed into the trust" and all the resi-
due stock dividends. In addition to the
dividends IL had paid regular quarterly
dividends In money, averaging ~ per
cent. yearly, and reaching 10 per cent. In
recent years. The trust certificates, be-
ginning below par, had gone up to sl65.
Thus, In less than six years, capital of
seventy million dollars, at most seventy
six millions, with less market value, had
grown TO a capital of ninety millions, with
a market value of one hundred and fny
millions, having meantime paid regular
and liberal dividends. In a word the trust
scheme In itself, by what II had done, and
by what u seemed able To do, had doubled
the value of the property of the combina-
ton, although the increasing production of
the Russian oil fields was causing serious
competition I'm foreign markets. These facts
which sound like Eastern fables rather than
chapter from our recent commercial
history, will prepare us for tho spread of
the new invention as soon AS its nature
could be discovered and its possible effects
understood. The next great combination
was the cottonseed oil trust" formed
by the stockholders of more than seventy
corporations, operating in fourteen states.
Some of the Standard oil managers
appear in this trust also.
The average consumption OF sugar In tho
United States IL fifty pounds per capita,
requiring nearly one third Of the product
of the world. OF this vast amount we
produce, chiefly In Louisiana, a variable
fraction, averaging about one-tenth, and
import tho residue In the form of raw
sugars, which are refined In this country,
IA
refined grades. When therefore IL became
known that large majority of American
reiiners had formed sugar trust" and
Its operation was brought sharply home To
every household by an immediate and
consequent rise in tho price of an article of
at once excited to the point where legisla-
lures and courts were invoked To uncover,
and II possible to suppress this new form
of secret combination.
The Standard oil trust was simply new
and more perfect organization given To an
already existing combination.
HOW THE SUGAR TRUST WAS FORMED.
The sugar trust was the adoption of that
organization for the purpose of forming
combination out of hitherto independent
and competing companies. The deed
under which the sugar trust was organized
in October 1857, provided that all parties
to II, not already corporations. should first
become such, and that all the shares of
stock In all the corporations should he
transferred to the board of trustees, eleven
In number, designated as "the Sugar Re-
fineries company, In lieu of which stock
certificates declaring that the holder was
entitled to so many shares of the Sugar
Refineries company" were to DO dis
tributed.
The amount of these certificates was not
To exceed SJ0,0O0,0OO, and the quota al
lotted To each corporation was to be asccr-
s.....
To the actual value of its property. OF the
shares allotted fifteen per cent. were to be
leit with the board with which to acquire
other reineries becoming parties To the
deed to pay for additional capacities or to
appropriate To the several rafineries. Each
corporation preserves its identity and sepa-
rate management, but the board, elect their
directors and receive all the dividends, out
of which in turn they declare and pay
dividends on the trust certificates.
The parties executing the original agree
ment included nine in New York. headed
by the great lIavemyer & Elder concern,
whose reiineries have a capacity of 5000
barrels, or nearly two and a-half million
pounds daily.
These sixteen relineries first forming
the trust produce two-thirds of the refined
sugar of this country. Among the declared
objects OF the deed were To communicate to
all the processes orappiances possessed by
any; to maintain the standard of refined
sugars; to promote economics, so as to keep
the price of sugar as low rs consistent with
reasonable profit, and To protect against
unlawful combinations of labor.
The trustees denied with much emphasis,
any attempt or purpose To control produce
ton or enhance prices, but a few facts can
not be explained in any other way. Here
were sixteen of the largest rciinerics In the
country, engaged in eager competition in
the manufacture and sale of sugars, that by
single agreement entered into IA "trust. "
Almost Immediately five of these reilEeries
were closed, three in New York and two in
Boston. One of tho New York refineries,
the North river, was sold To the city for
park purposes, another and very large one.
the oxnard, was directed to be dismanlled
various excuses We're alleged for this
prompt dlminution of production, but II in
hard " explain why the only shutting
t2wn in the country was among sugar re-
tineries When tho trust was formed the
difference between the price of fair refining
raw sugar and refined granulated sugar was
9-lG cents per pound, difference, which
nm examination of corresponding prices in
London, allowing all that was claimed for
increased cost of production in America,
would afford fair profit to the refner. In
three months time the difference had be-
come lilo cents per pound, or one-half
cent more, for which there can be no ex pla-
nation except the power of the trust Ito in
samer, especially when the government
stands guard to keepaw all outside relief
that cannot leap over high protecting wall.
Let MS see what an additional half cent IA
pound meant. We consume annually
about three thousand million pounds of
sugar. OF this quantity the reiineries in
the trust produce, nearly, ifnot quite two
thirds, the other third being produced by
outside retineries, the sugar houses OF
Louisiana and a few unimportant molasses
houses. An increase of half cent a pound
on two-thirds Of our consumption, 10 wit,
on two thousand million pounds, would
give AN added profit of ten million dollars,
which is twenty per cent. on the certificate
capital of the sugar trust.
The quotations in New York for June 20
OF the present year show difference be-
tween the two grades of sugar | have
selected, which are standard grades for
comparison, of % cents per pound, which
is even greater than the amount above
stated, and shows the steady maintenance
of the power of the trust. As the quota
allotted 10 the North river refinery, which
subsequently sold in open market for
s325,0oo was 100000 in certificates, and its
owners were dissatisfied with their share
as compared with Others il is safe 10 say
that this capitalization was nearly il not
twice the actual value of the properties put
into the trust. The certificates began at
so, and reached at one time sl26, although
later reaction brought them some points
lower in anticipation of an adverse decision
in case affecting the trust.
After payment of dividends last year il
had, according to the circular of MeSsrs
Willett a Hamlin, quoted in Bradstrect of
June -, surplus of sl0,000,0 900 in its treas
ury. The same authority gives its earn
ings between January |, 1859, and June II
as 81, ,OOO, 200 more. Thus il. surplus from
last year, with its net cash profit for less
than six months of the present wear,
amount to S2S,ooo,ooo probably tho full