The Daily bulletin. [volume] (Honolulu [Hawaii]) 1882-1895, 1890-11-20
THE SUGAR TRUST FLOORED.
Two Receivers Appointed by
Judge Pratt.
It Cannot Legally Hold the
tt ust Assets.
Plan Of Re-Organ iznt ion.
Bad Financial Showing Dividends Paid Out
Of Borrowed Money.
Great Fail In Certificates I
SAN Francisco, Nov. 6, 1890.

DAN rhANCloCO, lNON. ", iooO.
The explanatory statement put
out by the trustees with their plan
of reorganization shows that the
Trust started with $40, 200, 900 loan
as working capital. $1,000, $50
was disbursed in dividends and 3d.
10000 for Improvement of plant.
Analysing the financial statement,
which consists of figures punched
together to make good showing, it
is found that the Trust owed nearly
81, 100000 of loan on the 3lst Au-
gust last-$6, 774 ,065. SO is the APP
parent amount-which proves that
SO, 225, 1886 of the original loan has
been repaid. 1t is clear, therefore,
from the small cash balance on hand
and the close figuring upon sugar
stock and book debts and the alb
sence of details of expenditure and
earnings that at least five per cent
of the dividends paid came from
loan and not from profits. And it
is noteworthy that no disclosure of
the condition of the Trust financially
has been made at the end of Octo-
Der. The New York Herald which
has been the financial prophet of the
Sugar Trust heretofore, quotes "a
member of the biggest brokerage
house of the city" as saying, after
reading the financial statement:
~ should not be surprised to see
the bottom drop out of sugar to-
morrow morning. The statement is
very bad. For instance, the first
surprise is that the trust has only
the insignificant sum of S679, 1897 in
the treasury. 1t has been widely
rumored and never contradicted by
the trust that they had about ST.
900, 900 in cash. Another unplea-
SAINT feature is the proposal to issue
$40, 900, 900 in bonds on a mortgage
which the plan declares to be neces-
sary to perfect the reorganization.
These bonds, of course, will take
precedence over the $50, 100000 of
stock, which is not calculated to put
the holders of the stock in good hui
NOR. Furthermore, the statement
shows that the trust has never earn
ed dividend, and that the divi-
dends have been paid from borrow
ed money. They borrowed $1O,-
100000 when the trust was started,
you remember. They have paid
out just about that much in divl-
dends and they have only beg
carly $60e,000 in cash on hand"
This seemed to be about the drift
of all the intelligent criticism upon
the long awaited plan. Brokers and
spectators fingered around the tick
ers in Wall street offices long after
the closing hour discussing the plan
and the probable effect on the mar
ket this morning. The bears in SUI
gar seemed to be jubilant.
The New York Herald in it's f.
nance article October 31st, declares
that the Trusts exhibit shows that
it had not the money to pay the Oc-
tober dividend of % per cent, which
required $3.50, 900, whereas the
trust had only $679, 1897 in cash on
Sept. 1st. "The per cent cash
now proposed to be paid-and which
is equal to the October and January
dividends at the usual rates-is, it
seems, to be obtained from the pro-
ceeds of mortgage of $40, 200, 900,
to be clapped on to the reflneries. :"
In other words, the reorganized
trust is to continue paying dividends
from borrowed money, while the
managers divide any accruing pro-
fits in salaries. The article goes on
to remark that the investments and
sugar stock represent the actual sur
plus, being $12,208, 300, or about
two years dividends at 10 per cent.
A more rotten or unsatisfactory ex-
hibit has never been presented by a
financial combine.
The sugar certificates represent
such of the refineries as remain in
the control of the trust 1t is noto-
rious however, that the American
Refinery and one or two other mod
ern refineries have been withdrawn
from the trust and are claimed by
individual members of that famous
or Infamous combine. The plan of
reorganization withholds informa-
ton on that point, although the pub
lie which deal in certificates and the
holders thereof should certainly be
informed as to what properties this
negotiable paper represents. The
men who have made public confess
sion under oath to fraud in their Pc
tition for winding up, invite certifl-
cate holders to put themselves
blindly in their hands again aud
trust them in new deal in the GER
tiicate of the same lawyers as certi-
fled 10 the legality OF the original
trugt deed which the courts pro-
nounced illegal and fraud against
the Commonwealth. The present
litigation proves that all certificate
holders are not fools, and that being
IN u position 10 force q distribution
OF tho assets they will do 80 and not
place tho oonsplral0rs In u position
whore they can make away with all
Visible property and use tho perlilr
Gates % gamble with on Wall street,
Inc plan 81 reorganization Is as fol-
loss