The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1897-02-08
THE LEXOW HUMBUG
Unjustifiable Questions and
UnWarranted differences
LeVeled at the
Sugar Trust.
sEARLES REBUKEs INQUIsIToRs
Should Be the Policy Of the State
to Promote Great Enter
prises, Not Drive
Them Out.
sEARLEs REBUKEs INQUISIToRs

the State of New York, resumed its in
vestigation this morning. Secretary
Searles, of the American Sugar Refineries
Company, was on hand early. Immedi-
ately on the assembling of the commit.
tee his name was called by the Sergeant
alarms, and Mr.. Searles answered
"Herer'
Before you take the stand, Mr.
Searles. we would like you to explain
why you did not appear before the com
mittee on Friday and Saturday last
Wien you were subpoenaed?'' said Sena-
tor Lexow.
Il was on my way to catch train te
keep an out-of-town engagement when
was served with the committees sub
poenae. 1 asked Mr.. Parsons to come
before the committee and explain the
reasons for my Absence" said Mr.. Searles
Senator Lexow looked angry at this
statement.
Mr. Searles, the poor man and the
millionaire stands on the same level be-
fore this committee of the Legislature OF
the State of New York and must equally
obey it's processes. The committee will
not pass upon the question of your dis
given your testimony. If the testimony
you give is helpful to this committee
and if you answer the questions put to
you, the committee will then cons der
whether or not you have purged yourself
of contempt"
Mr.. Searles then took the stand, saiA
ne was o6 years old, treasurer of thu
AMERICAN Sugar Refneries Company OF
New Jersey and banker
iou are man of considerable affairs
IN TINS city, are you not, Mr.. Searles ?''
asked Senator LexoW
i am supposed to be-" replied Mr.
SearieS, smiling
Mr. Searles was asked about the So
s5ed eaied +h trust deed or agreement under
s9adated, and said that he did not know
When did you last see it?"
About the time of the North River
Refinery litigation
p'"You We're large owner of the North
River Refinery?'
Did you not testify that you received
100000 stock in the Sugar Trust in return
Ior your sS5o,oo0 stock in the North River
YES
was not this typical of all the trans
acuons involving the consolidation of the
refinery ccmpanies?"
The circumstances under which the
North River Refinery was purcha sad were
peculiar and did not fix the real value of
the property to the company. In other
cases the prices We're fixed in accordance
with tne real value of the refineries to the
Whole, regardless of the capitalization of
the individual companies"
Senator Lexow went at length into the
qetails OF Mr. Searles' purchase of North
Riyer Refinery stock and his subsequent
transfer of it to the American Sugar Re
nnlng Company. Mr.. Searles thought that
his purchase of the stock was prior to
November p, 1887, the date of the agree
We C afa 49,
mation of the so-called trust
was there not an agreement looking
TO the formation of the trust in existence
as early as April 2. 1sS7?'' asked Senator
NO, there was not replied Mr..
Searles. There had been some talk
about the consolidation, but no definite
agreement of any kind had been reached
before the autumn of 1857. Efforts to
bring about consolidation were under
discussion some time before but no def
mite agreement or definite proposal re-
gardlng consolidation had been made,
here are the books of the compa-
nies that afterward formed the trust?''
They were retained by the various
companies have no idea where they
are now
Where are the books of the American
Sugar Refining Company as it existed be-
fore the consultations"
Mr.. Hector c. Havemeyer had. them
He Is dead"
-
lslature for an increase of time" said
Senator Lexow, st is going to find OUT
just what was paid for the stock of the
original companies forming the trust in
that information, if it is in the world
and you might as well give it to u.s.
is that a question: asked Mr. Searles
Senator Lexow looked annoyed
Did the same ratio prevail with the
other companies as with the North Rive,
Company
Il have already said, replied Mr.
Searles, that the capitalization of those
companies did not represent their value
to the whole"
AS trustee of the sugar trust issuing
certificates, you issued to yourself $500, ,00l
in certificates in return for $S50,000 OF
@ stofk' thgs lll making "a profit Of sS5o,ooo over
THAT is not correct said Mr.. SearIes
Some OF the members of the North
Rivers Sugar Refining Company were not
Gates they We're to receive. / agreed te
pay them a certain amount of money for
the stock. valued the certificates high
er than they did, that is the difference
capitalization of the American Sugar Re
f1ning Company was not their real value
SO that you cannot say that / made $3.50,
900 over night
DO you mean that the stock was
watered SO per cent?
mo; I mean that the convertible val,1e
6 Of the certificates at that time was moi
par"
You speculated, then, on the future
success of the scheme?'
.'If you want to put it that way. ]
bought the stock of the North River
Sugar Refining Company at less than the
real value because the directors wanted
to SELL
WAS the same offer made to the other
constituent firms as was made to the
North River Company ~
mo, sir; that case, as said, was a
peculiar one.''
The witness said that all the stockhold.
ers in the Sugar Trust knew of the pur-
chase
z cries that were shut up receive in GER
ficates?"
Il don't remember the amount
Have you the figures ?"
= have not them with me at present .
Where are they?
Il presume the American Sugar Refin.
ing Company has them.
Chairman Lexew then questioned the
witness as to how the value of the vari
GUS consolidated firms was estimated.
Was Mr. Havemeyer mistaken wher
he said that the Sugar Trustees accepted
the figures and estimates Of the various
officers and stockholders of the compo-
nent companies without investigation
and issued certificates upon that basis 2,
II think the statement Of the reports
Of the various companies were generally
accepted as q basis for estimating thu
galue OF the property
What was the total capital stock q