New-York tribune., 1896-04-25
NOT A TRUST, THEY SAY.
THE AMERICAN TOBACCO COMPANY
MAKES ITS DEFENCE
CLOSING TESTIMONY IN THE RIG slit IN NEW
ARk-JAMES b. DUKE. THE PRESIDENT
TELLS OF THE ORGANIZATION OF

TIE COMPANY
Inc closing testimony in the long dra wn -out suit
OF John r. Miller q Co.. OF Newark against the
American Tobacco Company was given in Vice
Chancellor Reeds court at Newark yesterday At
the opening for the defence Mr. Lndabury offered
the deposition Of Leopold Miller of l.. Miller &
Sons. No. SAB Broadway New-York CITY taksr
before commissioner In New-York Mr. McCarter
objected. and discussion followed Miller had
been called as witness by the compla,nants, and
as mis- testimony was not satisfactory. the COM
piainants counsel did not fit to Introduce IT,
Mr.. McCarter sad that the defence had no more
right to the deposition than 1t would have to the
testimony Of a witness subppnaed by the COM
plainants but not called 10 the stand. Mr.. Linda
bury held that deposition, once taken, was the
property OF the Court and was competent evidence
The vice-Chanceor allowed the document to be
read Miller testified that ne was a consignee Of
the American Tobacco Company because ne found
1t profitable He had contracts with pretty nearly
every big tobacco concern in the country and the
profits Of his business the rebates he received
from the various companies.
HOW THE COMPANY WAS FORMED
Part OF the minutes OF meeting OF the company
held January o. 1890 was offered as evidence
The minutes showed that James g. Duke had
offered the property. goodwill. patent rights and
market then present and prospective OF W. Duke.
Sons Co to the new corporation for 5000 shares
OF preferred stock and $3.50 shares Of the general
stock OF The latter company. similar offer
made by John w. Pope on behalf OF Allen Gner
W. s K.mball offered the rights and titles OF W.
d. Kimball e. Co.. of Rochester. y. Y, for 1000
shares of preferred and 2s9S0 shares OF common
stock The Kinney Tobacco Company offered to
sell 20 the corporation for 2000 shares
preferred and 5000 shares common stock and the
plant OF Goodwin & Co. offered for 10000 shares
Of common stock. The offers had been investigated
by the president OF the corporation and that officer
hal
offers were voted upon separately and accepted
This stock issued. according 10 the minutes.
FOR property purchased" Subsequent Inventories
the minutes read, showed that OF the real
estate not worth the value placed upon II. snd
the difference between the appraised value and the
amount OF stock paid made up by cash pay
men,s to reimburse the American Tobacco Com
pany Deeds OF real estate and assignments OF per-
sona property from the individual manufacturers
to the new corporation were offered In evidence.
James b. Duke president OF the corporation. took
the witness stand and told OF the organization OF
the American Tobacco Company. None OF the
firms composing the company had done business In
their own names since March. lS"
'Have any OF these companies done business since
1890 under the name OF the American TOBACCO Oo'h-
pany?' the witness was asked
"They have not"
"Wiu you state what was the par value OF the
American Tobacco Companys stock ;ha was pad
70 W. Duke Sons g. Co. for property sold TO the
American Tobacco Company" was the next ques-
ton
.'It was s74s7coo" said the witness.
ITO whom was this stock assignedv
..The Stockholders OF W. Duke. Sons CO.
"Hov; was the stock divided ard who receiver IL
"It was divided onc-ffth to d. y. Duke. one-i'th
- CHARLES X Watts. one-nfth to W. d. Duke. one
arm 10 F.. l. Duke and one-f'th to J. p. Duke
How was the price to be paid 10 w DuH' sens
g. Co. fxed?
we we're 20 receive 100000 IN stcct FOR real
os,s.e eool Will patent right IA machinery aHd
a 10000 in stock for I've assets, such as Isat !
bacco manufactured and in process OF mhnnisctur''
Those assets were guaranteed 10 be worth ''"''0V'
but on appra rnent they fell about 'o"V" snort.
.'wae the guarantee made good. and II So In "h't
way
1T was made good by the individual notes OF each
Of the stockholders for 10000 each. or s5oOo) n
all"
Were these notes pa!d'
They were within fonr OF five months
How was the price fixed in the case OF the Mn
ney Tobacco Company
in the same way was.
Was the stock paid that company the same IN
a,n5unt your company received. and II not. no"
much t?''
Il; was 5000 Oo)
DEFICIENCIES MADE GOOD.
Mr. Duke added that Of the purchase price OF the
Kinney Company plan: siO0loo) In stock was for the
real estate good will etc. and 100000 for I've
as,ets" that had been guaranteed TO be worth that
amount. The appraised value dh not reach the
estimated value. but the witness did not remember
how much the deficiency was. He was sure that
the guarantee made good Allen & Ginter gave
notes and cash to make up a deficiency in the est'-
mated value OF "l!ve assets" All the notes had
been pad within four or five months
Mr. Duke was asked about clause OF a contract
dated January 25 1880, which provided that l50o
shares of preferred be turned over TO the treas
He MEL Ia W
the clause had been lived up 10.
"A change made in this way" said the Wit
ness. I'VE gave our individual notss 1 for $4,000 f5r
the deficiency and transferred *OOccD worth oi pre-
ferrcd stock = the company ar security Tor TOE
MIR Duke said ha, a similar course had been pur-
paid in part. on cross-examnation Mr. Duke
could remember how II was that the stock OF
the American Tobacco Company was delivered to
the individual stockholders Of the W Duke Sons sas
probably suggSs1ed that he stock be sys11 to the
%en een %s k@S@sSf
OF w. Duke. Sons q Co. and the American Tobacco
the aoons ae Of TIVE Of W Dak
Sons 4 Co. made the value reached 3,si eD;
and the notes were given for the balance Explain
ing how he subscribed as an i1eorPorSstor o. the
spent cco 70, tO6scse and turned S Tysr to to tne M
CO ,R. srSe 'ST % 90 % a m
would be for PROPERTY bought" .-
and salesman for whe,sson 4 CO.; Of sprlngaed.
in 1890 testified that Whetston & Co. took the
agency for the Beauty Bright cigarettes. and
made an agreement to push that brand TO the , "s,
bonus He admitted that he had been asked TO
come to Newark to testify by the American To,
bacco Company representative In Boston. and
supposed his expenses would be paid. Previous TO
iSn Whetston g. Co. were handling none but
American Tobacco Company's cigarettes but the
"Beauty Brights' were the product Of the Nation
al Company
THE PLAINTIFF EXAMINED.
John r. Miller, the plaintiff. was called TO the
stand and asked by Mr. Lndabury VINO mad sus-
gested that he bring the sun. ne repheu ''a'
IN. ,boupht had suggested Itself to him after he
had been cut of by the American Tobacco Com
pany . -,o., roh.cco Cornanv"