The Morris County chronicle. [volume] (Morristown, N.J.) 1877-1915, 1906-10-23
|GUILTY OF SUGAR REBATING.
New York Central and ManagCf
May Be Fined s240,090.
Counsel For Defendants Aseribes
Verdict to Public Hostility
to Corporations.

New York City. The New York
Central Railroad Company and its
general traffic manager, Frederick g.
Pomeroy, were each found guilty on
six counts Of giving unlawful rebates
in 1904 to the American Sugar Re
filming Company, by a jury in the
United States Circuit Court, Criminal
Branch.
The conviction makes each Of the
defendants liable to fine Of $4,000
for each separate offense, or d fine OF
$4,000 for the railroad and the
same amount for it's empicye, or a
total of $4,000. The indictment,
while indicating that about $4,000
was secured by the Sugar Trust in
unlawful drawbacks on the transac-
tions set up, specifically alleges the
payment of not more than $40, 600
in the offenses for which the fines can
be imposed.
Judge Holt did not tx the penalty
at once. Immediately after the jury
brought in its verdict Austen G. Fox
! on behalf OF the defendants asked the
Court to fix date on which he could
hear argument on motion for arrest
of judgment. After it is disposed of
Judge Holt will fix the penalties,
which, it is expected by United States
District Attorney Henry L. Stimson
and his assistants, will be near the
maximum These operate only as
civil judgments, and the defendants
If they refuse to pay them cannot be
imprisoned for their action.
The conviction, which came after a
trial lasting only three days, but two
of which were consumed in putting
the evidence before the jury, marks
the successful completion of the first
prosecution of either a corporation
or an individual for infraction of the
Elkins law ever initiated in the Fed
eral courts of this district.
The indictments on which the rail-
road company and it's servant were
convicted charged the giving of re-
bates to the wholesale sugar jobbing
firm of Edgar & Earle, of Detroit, on
demand of the Sugar trust. The re-
bates were five cents off the tariff
rate Of twenty-three cents a hundred
pounds paid by the railroad company
by voucher
United States District Attorney
Stimson summed up for the Govern
ment. No member of the jury could
fail to see, he said, that the system of
giving the rebates must have been
known to the president of the road.
and the Elkins law plainly made the
Illegal act of an agent of the corpora
ton the act of the corporation itself.
1t is no excuse at all for the rail-
road to say that it had to give secret
rebates to the American Sugar Rein
ing Company, although not to Ar
buckle Bros, on the plea that other
wise the freight would go by water"
said Mr.. Stimson. The real reason
why the railroad has not put in a de-
Tense is that it has none. It's clerk
who paid the rebates did not send
them II the form of checks, but
bought ATS. When the railroad S
audit accounts were destroyed every
three months no trace of the transac-
tions was left. They forgot, however,
that we could subpoena the banks to
produce the. telltale drafts
The jury was out about three-quar-
tiers of an hour, coming back. once for
supplementary instructions taken
from list handed up by Mr.. Fox,
and copy of the Elkins law.
At the conclusion of the trial Aus
ten G.. Fox. who appeared on behalf
of the railroad, made the following
remark:
ut is impossible to successfully de-
fend rebate cases in the present state
of public opinion.