The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-12-12
WHISKY TRUSTS TRICK.
Local Patrons Fighting Hard to
Get Their Rebates Col.
lected.
a BIG PILE OF DISPOSITIONS.
Attorney Lilienthal, With a Trunk.
load of Evidence, to Start for
the East.

Armed with the dispositions of almost
100 witnesses, Attorney Jesse w. Lilien-
thai will soon start for Chicago to prose
cute in the United States Circuit Court of
the Northern District of Illinois claims for
rebate against the whisky trust, amount
ing to about 600.
These depositions have just been taken
before Special Examiner Costigan here,
and the accumulated evidence amounts to
over 1900 pages.
The rebate phase of the controversy is
something peculiarly local, considering
that the three distributing agents for the
Pacific Coast were the first TO become
aware OF the fact that the Distilling and
Cattlef-eeding Company of Peoria, ILL.,, as
the whisky trust was technically known,
was indebted to its patrons to the extent
OF the promised rebate. These three dis
tributing agents were Lilienthal & Co.,
C. W. Craig & Co. and Jones, Mundy &
Co. OF this City, and they supplied all the
territory in this State, Nevada, Oregon
and Washington.
President j. B. Greenhut of Peoria, H.
Maddox, Hobart Il Co. and Frieberg &
WOTkum, of Cincinnati; Corning & Co. of
Peoria, and other big \ orthern distillers,
ago. 1t was attacked in the courts on the
ground that 1t was an unlawful combina-
ton IN restraint of trade, and all its prop
critics were transferred in consequence TO
the Peoria concern, and thenceforth it
was known as the "Distilling and Cattle
feeding Company" in the hope that the
charge that it was violating the law and
creating monopoly might be got around.
This scheme worked we'll enough to
combine the manufacturers of spirits, al
CohOlS and quick-aging whiskieS and gins
of Cincinnati, Peoria, Terre Haute, Omaha,
st. Paul, Chicago. Pittsburg, New York
and Baltimore, leaving out the Kentucky
distilleries entirely, and with capital
stock OF 3U,UOO.OOO 1t was soon doing about
30 per cent of the business of the country.
Its stock Just prior to the panic of 1898
sold al - per cent of its par value.
1t was very nice scheme that the trust
worked. Every consumer OF its products
was compelled 10 pay Z cents gallon
above the market price, which cents was
repaid 10 him at the expiration of six
months as rebate on the condition that
during that time he had purchased only
from the trusts distributing agents. So
called ''rebate vouchers were issued, and
thus the trust managed to get into its
hands considerable money from the cash
drawers OF its consumers to do business
upon.
On the face of these vouchers there was
promise signed by President Greenhut,
with its conditions, to pay the rebate, and
on the back the following, which the con-
sumner had TO sign:
1t is hereby certified that from the date OF
this voucher to the maturity thereof the within
named purchaser and the successors and
signs OF the same have purchased all of their
supply OF such kind OF goods and their COM
pounds as are produced by the Distilling and
Catte-feeding Company exclusively from one
or mon OF the dealers named herein.
On October last year the rebate system
was abandoned, leaving the distributors in
a tight squeeze, seeing that they were in
the habit of advancing the Z cents per gal
Ion for their patrons in the hope of reim-
bursement from the trust-a REIN burse-
ment that never came.
Eventually the trust went into liquida-
ton because of the three suits against it
IN Chicago of John f. Olmstead ct al,
Chester II. Graves ct al, and Stephen D.
Boyer ct al, and John McNulta, Edward
+. Lawrence and John J. Mitchell were
appointed receivers. There is only one re-
ceiver now-General McNulta. At the be-
ginning of the year the Olmstead, Graves
and Bower quits were consolidated.
All claims against the trust have been
resisted on the ground that they ''are void
as against public policy" that the corpora
ton having been formed for an illegal pur-
pose, all contracts made by it in further
ance Of that purpose were themselves in
valid and could not be enforced by either
party. The suits were for the winding up
of the trusts affairs.
The Pacific Coast claims involved over
10 per cent of the trusts entire output, and
through Attorney LiIienthal they were
filed with William NJ. Booth, master in
chancery at Chicago.
All the consumers, to facilitate matters, !
transferred their claims to a committee |
composed of E. r. Lilienthal, James H. |
Mundy and G. w. Craig to enforce collec- !
ton, ponderous batch of rebate vouchers !
being turned over with that end in view.
The distributing agents have separate
causes OF action, besides. Two suits are
by the Crown Distilleries Company, re-
spectively, for $4,000 for breach of con-
tract for exclusive distribution and for
SO 900 for distributors rebates and Jones, |
Mundy & Co. and G. w. Craig & Co. each |
brought a suit for $1,000 for distributors
rebates.
United States Circuit Judges Grosscup, !
Showalter ana Woods have each in turn |
sat on the case, Judge Grosscup having |
been almost worn ont by it. When Mr.. |
Lilienthal makes his appearance in the |
Chicago courtroom he will have to fight |
against the big law firm of Moran, Kraus & |
Mayer, retained by the trust and General |
McNulta. He will rely on his trunkload |
of dispositions contributed by the retailers
of the spirit trade, however, for effective
ammunition. Some of the evidence will