New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-02-09

for i,?"
IT bought it as a private deal" said the witness,
Put YOU were at that time an officer Oh 'he
,rust?"
The trust had not then been formed
or was being formed. however. was II not'
at was" ,..
And YOU were one OF Its prospective ofncers'
Mr. Sear.es shifted uneasly In his char ana
,d ,.s,u> for the first time We'll. I was not
me Of IT'S officers at the time. for 1t had not yet
come into existence.
MIR searles" said the chairman. impressiveiy'
was not the stock actually watered Tor your o""
advantage. either as a private individoa' OF DIS
prospective officer of the trust?
THE SAME ANSWER AGAIN
CT, ma, so,6 IN the trust at its value TO that
orgsnizat,on replied the witness after pause.
senator Lexow then dropped that line OF eNa'n'-
nation appearing well satisfied with 'he iac's "o
had extracted but he at once entered upon a"o'"oi
line Of attack which he pursued with equal asper-
ity OF manner. 49,.
"Mr Searles" said he. "is It rot a fact that
carly IN the year 1887 there in existence an
agreement that had for It's object the formation Vi
the Sugar Trust?'
mo sir" said the witness.
was the trust not being contemplated at that
time?"
mo. sir: not Mt that time
Tho chairman again consulted his deadly notes
and read from the minutes OF the Norm river
Refinery Company an extract showing tha' III
for the consolidation into the trust
When the witness had thought 1T over ne sald
that what he had meant was that athoush 'he
matter had been spoken of, no dehnte arrange
,nents had been made looking toward It's consum-
nation. 49,, nil.
"Jybat became of the books of the North River
refinery"
They remained with the company
what became Of the books belonging to the
uaveno4ver company with which you were ami
iated?"
Il really couldn't tell you
.>,oc the hooks of the companies that became a
mart Of the trust part OF the assets Oh 'ose
comnanies were they not?
Certainly" $500.
.vveu Mr.. Havemeyer has testified that the trust
bought the assets of these various companies Is
that true?
Certainly"
TUT CUSTODIAN. But DOESN'T KNOW.
49,. ,.o,, M, &c the secretary and treasurer of
tho American Sugar Refining Company the success
'ie 49, ,rust the legal custodian of these
books"
Il suppose ! am
well where they?
II really don't know. ! have mao nc o0O"''''4 -
consult them for long time .,,
.,yvbat we want TO know is the original captain
,,o, ~ tho companies that became members OF
49, ,rust and how much stock they received ior
,he,r stock We want TO know this. ana we lh'enu
N nnd out somehow. II the Information Is Ia "''S
- -. .,a
eve have got at tho truth in the case OF 'he
North River refinery ii seems to me- went on ''e
,a,,man LAS trustee of the Sugar trust you
oia IN Yourself $4,000 in stock OF the trust LOT
GO, no NJ North River Refinery Stock ala you hot'
tn, &c NOT the fact" said Mr.. Searles lhe
trustees Of the North River Refinery "o"iu ho' "1-
cent shares in the Sugar Trust III return III -
800, so 7 purchased their stock from 'hern anu
aorS,,c "a one standard. the standard OF cash
wben Il was bought, and under another s'ahu",u'
,be standard Of the trust shares wheh II was 9ou
,rbo,.s Main enough. is II not? To put II III oti''
words I purchased the stock OF the NoI'n NV
company at low price because i'S u''e''o''
anxious 10 dispose of II for cash
AZ EXPLANATION AT LENGTH
e.a.or 1exow looked disappointed, and asked
roa more questions on the same point 10 "'ic',
~ -oariee r.,lied: The directors or trustees OF
che North River refinery at first agreel 10 AM
500 coo OF stock in the Sugar Trust lot 'ne,' 80
,,, INST as the transfer was TO be accoHiplsH' a."
,hnr trustee came back from abroad ana Nlo't'''!
ohtected TO the plan. Another meeting was ""o
"a os q result the directors resolved to accept
,ov cash offer In lieu of stock In the trust men
, hourht the stock at the price nave me"''o'i'u
with the consent of all concerned ana 'he trustees
of the trust paid me the same amount IN shares OF
the trust as they were TO have paid the o"ec'os u
The North River refinery.
..Then the directors of all the companies IN the
trust knew all about this transaction?
..Thev did There were comparatively Few men
who controlled the business of refining sugar IN
those days. not many more Una" "'
should say. - 8,
Now, did not the trust issue S50000,o00 OF stock
IN return for only s150oooD worth of the stock OF
the consolidated companies?
Il do not recall any such figures
rs il not fact that the capital stock of all the
Gel 10 -
o00?'
Il do not think II nearly as much as that.
The real value Of the properties o. the companies
Is not nearly represented by their capitalization
The witness added that as nearly as he could re-
member the capitalization OF all the companies ap
proxinated only 81. 900
THE WITNESS'S PROFITS.
Senator Lexow again required TO Mr.. searles $
private investment in the shares Of the North River
refinery You are now receiving profit Of II per
cent on 100000 worth of shares that you received
for the North River refinery shares
The witness admitted the truth of this statement.
or "a per cent upon your original investment Of
ss25 oo0?" Being natural deduction. this. too.
admitted by the witness. though with some evil
dent distaste
WAS not the actual value of the properties be-
longing TO the trust in 1891 something Ike $4,000
900. and for this amour: there not issued
some $40, go 900 of certihcates?"
THE actual value OF the properties much
greater thar the sum you mentioned"
Senator Lexow here asked few general Ques-
tons about the practice of undercapitalizaon, in
quring If Mr. Searles did no. think the plan an
injurious 10 the interests Of the STATE. Mr..
SeareS was much more ready 20 regard the evils
It's opposite extreme lie thought ov4pca
ton extremely harmful indeed.
"Wn not the State lose a part or the taxes due
it on account OF undercapi,azatitnY asked the
Chairman
"Oh, no.. said Mr. Searles. confidently; the State
IL protected abundantly because the officers of the
corpora lions obliged 10 tell under oath what Is
the actual value OF their properties Right here
strangely enough. an audible smile went the rounds
OF the Council Chamber.
Have you ever made an official and public re-
port OF the affairs of the company"
No; not In New-Jersey."
why notr'
'"rhe laws OF New-Jersey do require a re