New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1889-01-10
THE SUGAR TRUST BEATEN.
PROTECTING THE PEOPLE.
FORFEITURE OF CHARTER AND. DIssOLU.
TON THE LEGAL RESULT.


TON THE LEGAL RESULT.
JUSTICE BARRETT DELIVERS AN ELABORATE
DECISION AGAINST THE NORTH RIVER
SUGAR REFINING COMPANY = PLAIN
LAW AND PLAIN SENSE, ENOUGH
FOR THE INSTRUMENTATION
CHARGES NOT DISCUSSED,
On the grounds mainly that the shareho OF
the North River Sugar Refining Company have
surrendered their shares. thereby destroying the
corporate existence Of the company. ana that the
combination known as The Sugar Trust Is IN
restraint of trade and unlawful Justice Barrett IN
the Supreme Court has decided that the application
made by the Acknowledgement OIL the state Oh
N.w-york for the forfeiture of the charter OF the
.o,nanv and it's dissolution must be granted The
Secision. which was handed down yesterday, is, ex
eept certain portions Of it relating to preceden's
and practice. as follows:
The questions to be decided in this case a,e
whether the acts complained Of are corpora rounds
and Il So whether such corporate acts arc gIVS SiI
Of forfeiture within Section 1I95 OF the Coee "a @
procedure The people rest their case primarily ugun
inc mSSsr sh second sub dvison that the defendant
has .become liable be dissolved py the somsJ
pvileges or franchises conferred upon II eS law.
The act complained of in this he ~ tho
owners of certain sugar refDeries. - ..er.r.ss
The combination comprises all me sugar reI mni,ed
IN this State and with few exceptions tn the ohIeu
states This vast combination is denounced oS sfe
people public menace as preventive OF reats
monopoly It is defended by the corporation as .ne
individual act Of its stochholders IN no Tss
association constituting nothing more serious man
lawful SsnSns arS e interests Joint
arrangement for mutual protection and beneht
THE FIRST QUESTION TO BE CONSIDERED.
The first question then to be considered is whether
the corporation such has entered into this comons
ton TOR II It has not. clearly 1t cannot be deprived
OF its franchises because OF independent and several
acts however Illegal. of its stockholders. To
proper appreciation and solution of this question:
the precise must be CLEANED and the foundation
Of the transaction minuely anaiyzed. Such ANALYSIS
the purposes of tho project and thus aid In the solution
Of the second question. namely. whether the comoina-
ton is the innocent association claimed by thc ae-
Let us then consider the foundation Of the comb
bssn STYLED f sSs aPSS desd At deed
sugar renees in this state wsr rna simple
partnerships, Others corporations laen,gS tne s
s 'sP In ths fundamental business each
finery. The combination never could have peen SUI
oartnsrsbip ARRANGEMENT between partnerships and
corporations. 1t was necessary therefore snsr ~
turn the corporations into partnerships or inc pare
nerships into corporations s ..,.
II did not require the ssto mind that prepared TINS
most original instrument to perceive that an aggre
CATION partnerships with the dangers resulting a Sm
death and the exercise of Individual power wou s
never effect safe and permanent cohesion Acooppi
ingy we find, as one Of tho first provisions IN tbs
deed and the basis Of the socalled trust srctsr s
condition in substance that the partnerships snan
all be turned into corporations. This IN iact was
DONE and thus several Of these mere very
shares Of capital stock through which me eomDhsuJn
became No 81 Shareholders and as such fitted themselves to
enter the combination within the terms OF tac oesa
existence the deed specifies what be done by each
of the corporations, formed or TO be formed. ,h.u
selves and the partnerships for those CORPORA
tons which they are to FORM that al me shares OF
ferred board consisting of eleven persons nameo
in the decd trustees 70 be held BY them ana 'he hs
purposes set forth In the deed.
PURPOSES OF THE TRUST
These purposes arc declared TO be:
~ To promote economy Of administration and TO
reduce the cost Of refining, thus enabling Inc price
of sugar to be kept low consistent with rea-
sonable profit.
srces and processes known used By the others,
and useful to improve the quality aud diminish inc
ss5 TO furnish protection against unlawful COM
az 70 protect against Inducements to lower tho
standard OF refined sugars. - A..
parties hereto, IN ali lawful and suitable ways
no nfo t SSnr1 ) members president president
treasurer and committees s1d 70 p sn,hsa ,1s tb
sue ana WITH he peced objects Of
the Agreement as applied to the business Of each
isa pox sua p may rSatSa Or
inc thus formed the trust named the Trustees and
se o %Scn The the dSsa created and
duties Of the trustees with regard to such persons
The cestuis-que-trustenf are, OF course the enure
body q q The ;s az nS
v S oe sare Of their stock Yet they transfer
tho entire block 10 eleven gentlemen who are there
@ to stand In nT ssGa 19S from wGd r s
OF tho receipt Of their shares and Of tho obligations
nlsh this In the shape Of what are termed trust cerd
Gates These certificates are not 70 exceed $50
800 They are to be divided by the eleven trustees
among the several refnees in due proportion to the
arc then to subdvidc the blocks Of certificates so
assigned to sso sSoS g The Ts
eesthiquet trust held prior to the transfer to the
The form of the trust certificate is precisely Ike tho
eradicate Of stock IN corporation The eleven p
fncrtes Company and each certificate specifies that
II is issued under and subject TO the provisions Of the
trust deed The usual paors lpm nno on s sps
with an asdesdum, to the effect that the assignee Iy
accepting the transser assenss to the terms of the
TO DISTINGUISH TRUsTEEs FROM DIRECTORS
To avoid confusion Of thought. and to distinguish
clearly between tho eleven trustees constituted by the
deed and the trustees OF tho vaous corporations, we
VIII hereafter speak Of the former the trust board
or tho trustees and Of the latter the directors"
Upon the acceptance Of tho trust certificates the
original corporate shareholder ceases to hold any
further relations with his particular corporation and
thenceforward he is treated shareholder In the trust
board. He can no longer receive dividend from
bis particular corporation. indeed can the latter
ever again declare dividend. Each corporation is
thereafter bound by special provision in the deed to
pay the profits arising fom IT'S business to the
trust board No discretion that head Is left In the
directors Of the various corporations They cannot
use any part Of such profits for betterments or I'm
proved machinery increased capaeitycertanly not
without the consent Of the trust boad-but must pay
ever all the profits directly the trustees. Nor can
even the latter declare dividend upon the trust cen
tihcates allotted to the shareholders OF any one cor
poration payable OF the profits received from such
corporation On the contrary their duty IS 30 blend
AL the profits received from all tho corporations into
one grand mass and from that aggregation Of profits.
declare such dividends as they, in their Judgment,
deem appropriate TO be proportion tely distributed to
the holder of each trust certificate.
To emphasize these positions It may be well to