The San Francisco call., 1897-02-16
Sugar Combines Secretary
Put on the LexoW
Gridiron.
Explains How the Stock Was
Increased From $7,ooo,o 900
to $5o,ooo,ooo
Finally Assumes the Aggressive AMI
Says There Is Too Much
Legislation.

1
tigate the existence of trusts and monopo-
| this morning.
| John E. Searies, secretary and treasurer
of the American Refining Company, was
on hand early. The first witness called
was James Post, a commission merchant
| of this city. He represented the two
Eastern concerns that were supposed 10
be in competition with the American
| Sugar Refining Company. These were
| the National Company and the Mollen-
hauer Company.
The witness admitted that while he
| represented the T. H. Howell, Son e. Co.
and the Mollenhauer Com pany in sugar
dealings, he sometimes had the one COM
pany competing against the other, because
it occasionally happened that the one
company wanted to buy and the other
wanted to sell.
"The product of both these concerns is
competed for at the same time in your
office, is that what you mean to say2"
Yes; that sometimes happens"
Senator Lexow then questioned the wit
ness about the factors agreement.
''Is it the same as that OF the American
Sugar Refining Company"
with the exception that we do not re-
quire an affidavit to get the rebate of
three-sixteenths OF cent per pound
The witness then stated again that he
did not think any of the refiners made q
quarter of cent profit last year.
And yet the factor gets three-six-
teenths of cent rebate when the refiner
does not make quarter of cent?' asked
Senator Lexow.
That's SC" replied the witness.
ado you want US to believe that?"
'Yes, SIR
The witness said that the price of sugar
was fixed by the daily state of the market
and not by the refining company. He ex-
planned that the quality rate book accepted
by the grocers and the com panies only
dealt with the freight. This contract. the
witness admitted, was TO stamp out COM
petition, but was equally for the benefit of
the grocer and the consumer, because
sugar was sold TO every body at the same
price.
John Z. Searles next took the stand.
After stating that he did not recollect
having testified at his previous examina-
tion that the price OF sugar was de pressed
last year he said that they were not run
ming TO the full extent last year. Twelve
refineries were not operated. He ad-
mitted that his company had in contem-
plation the purchase uf the United States
Sugar Refining Company of Camden
The only reason witness would give for
this contemplated purchase was that his
company might be able to utilize it.
The witness was then asked why the
American Sugar Refining Company had
purchased the Baltimore Refinery in 1896.
I'VE thought 1t was a good purchase
and that sugar could be conveniently dis
tri5uted from that point to the South and
West, he replied.
Now, is il not q fact that whenever q
plant has been acquired by you it has
been competing pian.?"
That is correct"
In reply 10 another question the witness
denied that the company could close all
the factories in any State and still be able
to supply the country also that there was
| a special sum set aside for supporting idle
refineries.
In reply to questions about the organi-
zation of the sugar trust, witness said
there were about 5000 shareholders when
the original American Sugar Refining
Company was formed. There were about
5000 now.
! 5000 shares of stock?''
''It was sold on the Stock Exchange"
"And you have recapitalized the stock
from 81, 0Oo,o 10 $50, ,0co, 900 and increased
the ownership by 3000?"
That's So"
Now, why did you not let the public
get chance at the stock when it was
owned by 100 people and not wait until it
was increased in nominal value ?''
LAS 1t Is explained in my previous testi-
mony the stock before the consolid alton
was in the hands of a few private PEOPLE
and the great public could not gain access
to it."
Senator Lexow at this iuncture an
| nounced a recess until 80 O'Clock.
Before Mr.. Searles left the stand the
chairman asked him to bring the books
of the com pany after recess.
After recess Mr.. Searles resumed the
stand. Witness said that the only retailers
his company ever sold sugar to were large
concerns.
as it not fact that you have an agree
ment with the Wholesale Grocers' Asso-
ciation?"
mo, SIT, it is not We have an agree
ment, however, with the wholesale gro
GERS in regard TO the freight from refining
points to the point of SALE"
senator Lexow wanted the witness to ad-
mi. that under the code of rules adopted
by the wholesale grocers the American
Sugar Refining Company controlled the
price OF sugar all over the country. but
Mr. Searles could not see it in that way.
But 1t is Your agents who have formu-
lated these rules?" queried Mr.. Lexow.
1T is the wholesale grocers who have
| formulated them" was Mr.. Searles' reply.
The witness gave the items of the orig
| inal capitalization of the original sugar
| trust. There were fifteen companies and
they amounted to S. $50, 900. He said he
had no record of the amount of certifi-
Gates issued for the stock.
"Then," said Mr.. Lexow, "the books
that show an increase of $43. .000, 900 from
capital of 100000 ere not in ex-
| istence?'
THAT is so, sir"
Mr.. Searles also declared that he did not
know the wherea bouts of the trust deeds
which showed the amount of certificates
distributed among the fifteen com panies.
de could not recollect the amount of GER
tifcates that went TO each company. Mr..
Searles explained that there was no neces-
sity Tor the certificates or books when the
new concern was formed and he did not
think 1t singular that they had disap-
peared.
The following is the capital stock of the
| hiteen original companies that composed
the sugar trust. according 10 the witness:
Havemever & Elder $500,000 Dick g.
Meyer $500. 600. De Costro $3.50. 900, Moller
d Sierck $4,000, Orynaud 500. COO +. o.
Mathieson d Wiechers $500 600, Brooklyn
$500. .oo0, Havemever 81. .0O0, 600, Forest City
$500, 900, Boston $3.50. 900. Standard 81, ,000,-
O0O. Bay State SOS, 600, st. Louis $3.50, 600,
Louisiana $450. 600, Planters $3.50 600.
AT this luncture Senator Lexow asked
the witness If ne had the minute book of