New-York tribune., 1891-05-01
REPORTING on THE SUGAR TRUST.

iesrous Of raising the standard OF !ntchsence'
REPORTING on THE SUGAR TRUST.
rur SENATE COMMITTEE SAYS SPECULATION
WAS IT'S CHIEF PURPOSE AND MAKES
VARIOUS RECOMMENDATIONS
.norv anr,l ao-Tnc senate Committee on GenefNi
laws .,,hmi,ed 10 the Senate this morning repV'
NJ 5000 wcids on the Sugar Trust investsa'o', o.
,evewing the testimony taken the report says III
rt .npoars uncoayadicted that the Trust ueciareu AZ
"a, cont 6nnual dividends all times during It's eNs'cO
an, only upon the original capital OF All tle % 49,,
.o-co,atons amounting less than sI,o0ocOV ou' az"
npon the fatnocs valuation placed upon the s.oA & VI @
constituent corporations. amounting 10 aooo' ~
A very inportant part OF the Investigation re'Ve " s,
@ :, ,nese dividends by the Trust, and the prohts
.so nv the constituent corporations out OF "eh suO'
nv,dends could be leetmately paid. NO sa'slaO'S ~
torma.iou could be obtained or ellctea from INC ~ ~,
a, emp,oves of the constituent corporations
. " :, ,so ,,os,s which such corporations had mode'
49,, ,h nrpose OF informing committee whether such
uronts had been iegitimately earned In Vne ou' 90
renninr sugar by the constituent corporations " 80
seemed OF importance that the committee shOuu nav
,cness 70 and possesson Of the books OF suoh
INA question OF tho legitimate and honestly eaIh'u
s,oa.s became very important feature ol ue "a =. 49,
ion II the constituent corporations haa e'e ,. ~ ~
sness of refining sugar profits sufficient 70 permit 'no
T,ust 10 declare annual dividends amorhVhe W IV p
..n, unon tho enormous valuation placed upon the pop
lies and represented by the eerthoates issoeu " 49,
ava most strongly to establish that eomohauoh Vi
nanv renners Substantially under one mshageme"e "'
pner things being equal, a most oesifaoie euu " " "
saned for the Trust certificate holders.
There has been and widespread Speculation ~
certificates OF the Trust and certificates OF deposit ls
nv the Central Trust Company In exchange Tor the IruS.
,tec.,. II was plainly one the chief purposes OF
the Trust to provide for the issue oi uese cernoS'
arording thereby opportunity for great specua''ou ~
tAem obviously the advantage OF the persons
he Trust with whom lodged full and accurate lh0f
,, ~ 60. Mans and condition the disadvantage OF
he general public, who were ignorant OF He se're@ "
e Trust It's methods and plans, and OF the ac'uai Na
II the certificates in which they uoait t". . i s,
sftv millions of certificates amply suniclehU ior
ton IN tho amount OF many hundreds OF millions OF collars
rst the chief object the Trust was for the purpose
incubation Is cutie plainly shown by the ha'u 'u"o'
placed upon the properties OF the cohsotuenS ~,
uuoa which the certificates were issued. hsd ehe ann
heen solely the more economical and profitable rehhhs
sugar this result would have been obo1ined whou. any
increase OF the capitalization OF the properties OF e
constituent corporations.
ssu,ng sNo cation your committee found that
amoe the articles of personal property transferred by
the constituent corporations OF the trust 10 ue
co,p,raton were the BOOKS OF such coporaOns 4hese
looks vera removed Jersey City previous TO the De-
tnr,,g of tho Investigation and quite likely IN antclI-
on Of It, Without the books the Information fespec.s
the Trust and s inside workings was whouy 'nsuno' ~
10 enable your committee 10 determine the ie @ iI
of the Trust and also whether their SllOOoo'V l"u "
two and ope.han years in dividends upon an ihha.ea
ca,al OF nearly ESQ oOo coo lermatsly and honestly
earnei or not a, ,u...o, aom,rds
why were not the books producedi Repeated uemanus
wore made for them Did they contain transactoS anu
on that would show the people that they "ec
using their combination Illegal and una"iu purposes
these are questions that the people must oe'erie Oi
tcmsslves 1t appeared tina, the Sugar Rehnerles Oon
nnnv or the so.caled Trust never had any COOKS VI
except books showing the receipts OF rrohts from
tie constituent companies and dividends pad OUT ~
also anDaared that outside OF the aruSI au eo
se the books o. :he constituent companies ana tat 'he
oyprt
sugar Refining Compny of the most meaere chaf-
aeter; and 1t appeared from careful eNahih"'oI
Of the same to have been in the same hahoWr"he "''
to have been written at one ana he Sanio eiV.nis'
- oausa N believe that the persons who organized
the new sugar Trust Incorporated the same under
te laws Of State Of NewJersey dd so 70 eSe"p' ~
,igors Of our laws in several particulars. 49,
FrsLTo escape taxation under the laws OF ts eOaVe
secnnd-Upder the laws Of New-Jersey the company
could issue common and preferred stock which couu not
be done IN NewYork
Tbird-Under the laws of NewJersey the new company
could hold and own stock OF other companies u'ie0 "
foreign, without restriction.
And your committee finds, from the testimony OF MI
uavemeyer, that the American Sugar refining company
Maid tax Of about sl1 900; while. II organized unuer
the laws OF New.York the tax would have been about
sno 500 The Cottonseed OIL Company was incorporated
unde. ths laws Of NewJersey and paid tax oil ABOUT
so 900 while In NewYorx State it would have been about
$4,000: and according to the testimony Of Tax Com.
missioner Coleman Of NewYoIk many millions OF capital
ar, cong out {. NewYors into New-Jersey each year
20 FORM corporations which, the natural order of things
should capital of similar corporations here
As result Of your committees investigation, it would
recommend:
First-That legislation had restraining the formation
trusts as hostile the interests Of the people, as they arc
no formed or providing for their formation under the
sun eryison Of some existing department. of the State Gov
ernent board to be created by law and to that end
your committee viii prepare bill
sccond-That legislation be had providing that foreign
corporations doing business IN this State should into
the treasury Of State, when they begin business
therein the same paid by such corporation upon
incorporating in any oer State or that such corporations
be required to pay upon their business done in this
State.
Third-That all ocalled nrsts corporations doing
business in this State and which organized out Of the
State and hold stock o. other incorporated COM
panc shall be required keep their books Of account in
this state or true core Thereof which shall be subject to
examination by drly quaihtd accountants TO be appointed
by the Attorney the State whichever he shall de-
sire 20 do So and at the expcgse OF such trust
The report is signed by the following members Of
tho committee George H. Erwin, &. p. Nedder, H. j..
Coggeshsl c. S. Van Gorder, w. l.. Brown Norton
Chase and Jacob A. Cantor.