The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-03-09
PROSECUTIONS FOR REBATING
SET on roof AGAINST THE TRUNK
LINES HERE.

The United States Government has be-
gun an inquiry before the Federal Grand
Jury In this district into charges which
have been brought by w. r. Hearst against
practically all the trunk lines running into
New York and against the subsidiary con-
Germs OF the sugar trust. The charge is
that the railroads nave not only vio-
lated the law against fret ing by CIV
ing rebates to the American Sugar Re-
fning Company in different forms,
but have also violated the Interstate
Commerce act by entering into a pooling
agreement whereby the freight shipped
from New York by the trust over these roads
was divided on a fixed percentage basis,
The evidence which has been placed in the
possession Of the Government, it is as
serted, will show that this agreement af-
feoted the American Sugar Refining Com
pany only, and that that concern was the
only one that got rebates, this being, there
fore, a discrimination against all other
Sugar concerns.
The only concerns Of any importance
competing with the trust are Arbuokle
Brothers and the Federal Sugar Company,
the Spreckels concern. The complaint
was not brought by them. The evidence was
IhIi 10 NOiA0i HASSNJ 80
Washington some weeks ago and for
warded to the District Attorney here, with
instructions to prosecute the matter at once
before the Grand Jury.
~Subpenas were served by the Govern
ment two days ago, and yesterday five or
six witnesses were before the Grand Jury.
1t was said that they were clerks in ship
ping offices. None Of the high officials,
it is understood. has been ~eubppnaed. The
Government expects to finish the prelimi-
nary investigation very soon.
There are a dozen complaints. The rail-
roads mentioned are the New York Central,
the West Shore, the Pennsylvania, the Phil
adelphia and Reading, the Erie, the Della
ware, L~ackawanna and Western, and the
New York, New Haven and Hartford.
The subsidiary concerns Of the sugar trust
involved are said to be the Brooklyn Coop
erage Company, Palmer Dock Company
and Havemeyers & Elder. There is a
separate complaint in each individual case,
alleging the giving Of rebates In violation Of
the Elkins law, and a complaint against
all railroads collectively for pooling. Vio-
lations of the act are made misdemeanors,
and the punishment can be heavy fines.
In the different complaints it is charged
that rebates have been given TO the sugar
trust in one form or another by all Of the
railroads involved. In some cases, one
being that Of the Lacka wanna, it is alleged
that this rebate was in the form OF a charge
for extra lighterage.' In the case Of the
Lackawanna this amounted, it is alleged,
to two cents for every 100 pounds lightered
from the American Sugar Refining Com
pany and the National Sugar Refining
Company in Brooklyn to the freight receive
ing station at Hoboken. This, 1t is alleged.
was paid back to the sugar companies by
tho rn abroad wharaaa tho liUhtara pa
really done by the railroad itself, and not
by the companies, and was at the railroads.
expense. In the case of some OF the other
railroads 1t is alleged that the freight billed
was less than the amount shipped, and in
at least one case the allie cation is that the
railroad made fiat back payments to the
shipper.
ii the complaint alleging that the anti,
pooling law has been violated it is charged
that the railroads have had an agreement
dividing the freight shipped by the trust
which was draw up four years ago and
has been modified from time to time. All
Of the railroads, it is allie ged, We're parties
to this agreement, and have been dividing
the freight Of the sugar trust in conform
ancs with the percentages fixed in the agree
ment. The New York. New Haven and
Hartford, being a New England road, does
not come under this agreement, it is said,
but the case against this road is based on
Its transportation arrangement with the
Brooklyn Cooperage Company, which fur
nishe the barrels used by the sugar com
panies.
All of the complaints we're drawn up
by Clarence j. Shearn. Mr.. Shearn said
yesterday that the strongest case was
that against the New York Central, al
though he would not say that that was the
road alleged to have made fiat payments
of rebates.
The evidence put in possession OF the
Government" said Mr.. SheaTn, shows a
hard and fast agreement to divide the
T.a;nIN a-I ,oa e,,H Otapflyy afr1nn fn foHn
directly before the Grand Jury without
an investigation by the Interstate Com
merce Commission. 1t does not involve
calling many witnesses. either"
traffic agent Of the companies in the sugar
trust. The rebates, it is charged, were
paid to that concern. and then turned over
to Havemeyers q Elder,
John Arbuckle OF ,ArbuGkle Brothe rs,
the largest Of the independent producers
who. il is alleged, have been Disseminated
against, would not discuss the matter last
night.
First Assistant District Attorney Clarence
$. Houghton is in charge OF the Grand
Jury. There was an impression about
the Federal Building that the proceedings
would result in several indictments.
STATEMENT ny THE ATToRNEY-oENFRAL.
WASHINGTON, March s.-Upon complaint
fled by Representative William r.. Hearst
of New York, the Attorney-General of tic
' " SNoNNp ilpn - ~
the American Sugar Refining Company
and certain trunk lines running out of New
York that are accused Of having given
rebates to the company on shipments OF
sugar to the West. Henry l.. Stimson, the
lnited States Attorney for the Southern
District of New York, is in charge OF the
case.
Acknowledgement Moody made the fol-
lowing statement about the case:
Upon being shown the publication in the
New York American and journal of to-day
Acknowledgement Moody said that some
weeks ago a representative of that paper,
called upon him and said that information
was in possession Of that paper tending to
show that large rebates on the transporter
ton Of sugar had been given to the American
Sugar Refining Company by the trunk lines
Of railroads running out Of New York city.
and asked him II the Department of Justice
desired to use the in legal pro-
ceeding Is. An examination Of the matter
submitted showed clearly that 1t was highly
important and tended to show the giving