The Hawaiian gazette., 1889-05-14
THE AMERICAN REFINERY.
Particulars Of the Suit Brought to Can
eel It's Observation-Disclosures Who Knew
Nothing.

The trial of the suit brought il
the name of the people to secure the
forfeiture of the corporate franchise
of the American Sugar Refining
Company of San Francisco, on the
ground that it had entered into an
illegal combine, or trust" began
before Superior Judge Wallace on
April 10th.
The following summary of the
evidence is from the Examiner:
Mr.. P. c. Jones, whose deposition
was taken before his departure for
Honolulu, stated that he originally
owned fifty shares of stock in the
American Sugar Refinery Company,
representing a par value of $4,000.
In February, 1888, he met John E.
Searles Jr. of New York, to whom
he delivered his fifty. shares, Searles
promising that he should receive in
lieu thereof seventy-tive shares OF
what were mentioned as trust certi-
fcates,; issued by the Sugar Re
fners' Company. the value OF these
certificates to be $500. The prom
Use was carried out. the certificates
being deposited with the Hawaiian
Consul in New York to Jones' credit.
and finally sold for him for the sum
named, $500 In the meantime
he had received three dividends, the
first of II per cent. upon the par
value of the certificates. the second
p and the third per cent. The
witness said that he had handed his
stock to Mr. Searles because he
found that all the other stockholders
in the American Company had done
so. He thought the only person now
holding the stock of this corporation
was Searles, who had it ali.
Ex-President Welch of the Amer
lean Sugar Refining Company gave
testimony rather more complete in
detail. He had become acquainted
with Searles about the same time
Jones had, and, like the latter, had
handed over his stock in the San
Francisco corporation, 900 shares in
all, representing money to the
amount of 100000. All the other
stockholders did likewise, and after
SearIes had obtained it all two cert
fcates, representing $4,000 shares of
the Sugar Refneries Company, of
par value of S1Q0 each, were deliy-
cred to Fred w. Zeile, Secretary of
the California Company, having been
issued in the name of two trustees
for the benefit Of the original own
ers of the transferred stock. The
exchange was at the rate of one and
one-half shares Of trust stock for
one share of the original company
The two certificates were afterward |
returned to Searles, and he gave
Zeile certificate of trust represent |
ing the amount due to each stock |
holder. These were distributed by |
Zeile. and Welch fell heir to one,
which he produced This certificate
was found. upon examination, to
call for LOO and odd shares-of
value considerably, about $4,000 or
$4,000, in excess of what he was
strictly entitled to under the agree
nent already mentioned
Ex-President Welch denied that
he American company had been
embarrassed at the time
he stock was transferred, stating
hat there was S2,500,000 in the
at the time, which, he con-
placed the value of the
stock considerably above par He
stated also that from February, 1888,
he date of the transfer, to January
81, 1889, when he resigned the Presi-
lency, the American Company had
business on its own
account, buying, refining and selling
ugar, realizing thereby large sums.
lie was asked what had become of
his money, but stated that he did
lot consider it anybody's business
,ut the company's. He admitted
hat no dividends had been de
Jared.
Mr.. Zeile said he sold his stock in
he American Refinery to John E.
'earles Jr., receiving for each share
ne certificate and a half Of the Su
,ar Refneries Company. Mr. Scar
es' office is at 112 Wall street, New
Zork The value of Mr.. Zeile's stock
vas about $4,000. He was careful
lot to refer to the Sugar Refineries
as trust.
When the transfer of the Ameri-
an refinery was made to the Sugar
iefneries Company, Mr. Zeile, as
and Treasurer of the Anne
lean Sugar Refining Company, de
vered $3.50 shares of its stock to
II. Searles. Fifty shares We're held
ut-ten for each Of the five Direc-
ors-at Searles' request. Daily re-
orts Of receipts and disbursements
the American refinery are sent to
II. Searles. At the last election he
as chosen a director of the Ameri
an company, and resigned several !
-eeks ago. R. H. Sprague was put
] his place, and also resigned after
ne meeting. The other directors
re W. w Montague, W. II. !
diamond, Robert Oxnard and F. W. +
ellie.
Searles, who held a power of at =
1rney from the Havemeyers and