New-York tribune., 1902-06-14
ASSAnS TRUST IN COURT.
". BOURKE COCHRAN HURLS SUCH EPI-
THETS AS FRAUD" PIRACY
AND HIGHWAY ROBBERY"
AT TOBACCO MEN
AT TOBACCO MEN.

Consolidated Tobacco Company and other de-
fendsnts among them James B. Duke. president
Of the corporation. and Thomas F. Ryan. one
Of the directors. and obtained order for the
examination of Messrs. Duke and Ryan. with
the object of proving by their testimony that a
conspiracy existed among the directors of the
American Tobacco Company and the Cont
mental Tobacco Company to defraud stock
holders of both concerns in the formation Of
rbe Consolidated Tobacco Company, which has
acquired most of the common stock of both the
American and Continental companies by ex-
changing its own bonds for such stock In the
Supreme Court yesterday Justice Clarke heard
arguments on an application made by De Lam
cev NicoII, attorney for the tobacco interests,
for vacation of the order. W. Bourke Cochran
appeared for the plaintiffs in the actions
Mr. Butler held two thousand shares of Amer
lean Tobacco Company common stock. of which
he transferred one thousand to the Consoli-
dated Tobacco Company in exchange for bonds.
He now sues TO have his thousand shares
returned TO him. the ground of fraud. Mrs
Elns did not transfer any Of her holdings, but
she sues to compel the Consolidated company
and lis associate defendants render ac-
counting Of all profits and TO turn into the
treasury all such profits for distribution among
the plaintiff and her associate stockholders.
Mr.. NicoT in opening his argument declared
that % per cent of the holders Of common stock
of the Continental and American Tobacco COM
Tanies saw the philosophy of going into the
consolidated This left only twelve thousand
shares which did not accept the offer of the
Consolidated company, and it was the holders
Of these twelve thousand shares who were now
raising the question of the validity of the trans
action.
ASKED TO HAVE ORDER VACATED.
Now I ask your honor" he continued. Ito
vacate this order for the examination OF Duke
and Ryan on several grounds. The first. be-
cause the directors of the American Tobacco
COMPANY and the organizers Of the Consolidated
Tobacco Company were not trustees for Butler,
and that they were privileged TO deal with the
stockholders and were not under any oblga-
ton 10 Butler 10 give him full and complete
account of the affairs Of the company Mr..
Nicoll declared that the Consolidated Tobacco
Company and its co-defendants had acted hon
orably in the transaction had held out no allure
rnents 10 the plaintiff, Butler, TO part with his
stock and had not misrepresented the matter In
any way 10 him.
As 10 the suit of Mrs Elms against the Con-
solidated Tobacco Company, Mr.. Nicoll said her
position was a remarkable one. She has not
parted with her 80 shares" he went on. She
has retained them, and last year drew q per
cent on her shares and this year she has drawn
10 per cent dividends on her investment You
would think she would throw bouquets at the
defendants for their dividend earning prowess
which. since last year. has resulted in her divi-
derds being increased almost 100 per cent. In
stead, she comes to court charging them with
high crimes, misdemeanors and all kinds OF
fraud
Mr.. COCKRANS ARGUMENT
After the recess Mr. Cochran began his argu-
r2~nr in opposition. He declared that the Con-
soldated Tobacco Company had obtained over
5 100000 of stock of the American Tobacco
Co-rany without paying a penny for it. stock
which, he said, was selling to-day in the market
at :I20 The stockholders of the American To-
hacco Company, Mr.. Cochran continued re-
ce:ved an express promise of protection from
III. Ryan, which induced them to exchange
their stock for bonds of the Consolidated To-
bacco Company basis Of 81 for the Amerf-
can stock and 81 for the Continental stock.
Butler. an experienced tobacconist, had will
lfngly gone into the merger, but when he went
into it he did not foresee any prospect of fraud
OF deceit Turning toward Mr.. Nicon Mr.. Cock
ran said:
The fruits Of that fraud S100OOOooo.
and they are now in your hands If this be
financiering, then there is difference between
finance and piracy"
Mr.. Cochran declared that his client parted
with MS stock at a greatly reduced price, and
without being told that the earning powers Of
the American Tobacco Company would be large
y increased on July l, 1901 when Congress re-
rnitted the taxation cigarettes In blissful
ignorance Of this" he said, the stockholders in
trusted their stock TO men who intended to
despoil them of its earning power; but, like the
directors of the Third Avenue Railroad, l sup
pose they should feel grateful be allowed
10 enjoy even fraction Of the dividends.
=
his client had not been robbed in a bargain,
hut had been despoiled by highway robbery.
and these men who had done it could not. be
c. use they rich come into this temple of
Justice and ask to be protected Mr.. Nfcoll,'
he added, practically asks US What are you
going TO do about il? A certain gentleman some
years ago who robbed the city of millions made
the same remark and he got his answer in a
criminal court Of justice
BENEFIT FROM THE REMISSION
Mr.. Cochran declared that the directors of the
Consolidated company intended using the
mission by Congress last July of the taxation on
cigarettes, which 40 cents on the thousand
Tor their own benefit and not for the benefit of
holders Of the common stock or for the welfare
q The community, and that the directors prac-
ucauy seized in advance the profits which
crued result of the remission of the tax.
When the merger took place. he asserted, the
Consolidated Tobacco Company was
ing mere than S1.eD0001 whereas it could
earn S5.eDo.cn. This is the company" he said
that they considered 4 very small one, but ii
did not escape the attention destroy the ap
petite Of these freebooters; they boast in this
court that they have made S1o0o00oO0, and
an we ask is for them to account for our share
Of il
The trust question" continued Mr.. Cochran
Is here before US, in this effort 10 learn how
the spo!iatiOn of corporations can be stopped
through the courts
In closing MIR. Cochran said that unfortu-
niiy naleIy no no charge Of crime was made by his
client If there We're only grounds for an in
ulctment,' he said, this would not have been