The evening star and Newark advertiser., 1907-08-03
6. Il. Earle, Jr., Would Force
Secrets Of Its Profits
From American Co.
FIRST ATTACK OF KIND
Believed That 1t May Open New
Field for Investigating Giant
Monepolies-.BiIl of Equity
Filed at Trenton.

TRENTON, Aug "a bill In equity
which calls upon the American Sugar
Refining Company to give an account
ing Of its business for the past four
years was filed before Chancellor Magic
yesterday on behalf of George IT. Earle,
jr., receiver of the Pennsylvania Sugar
Refining Company, of Philadelphia.
The suit, it is said. is the only one Of
the kind ever filed in this country, and
the step taken by the receiver Of the
Pennsylvania Company may be the
means of opening an entire new field
for investigating the trusts. The suit
is brought under the common law, and
is separate from that for $50, ,000, 900
damages which Mr. Earle instituted
against the American Sugar Refining
Company in New York.
Mr.. Earle, who was appointed ancil-
larry receiver for the Pennsylvania
Sugar Refining Company in New Jer-
sey, seeks by his suit to compel the
American Refining Company to make
an accounting of its profits since De-
cember 49, 1905, when it secured con-
troll of the Pennsylvania Company. He
holds that in securing the controlling
lIlleTtSl III Inc EGIlnSylNdlld
the American company became trus-
tee for the concern, and is responsible
to it for an accounting. The American
Sugar Refining Company never oper-
ated the Pennsylvania Sugar Refining
Company plant, but the receiver for the
latter company holds that the old law,
which makes it necessary for a trustee
to make profits and render an account
ing of funds placed in it's custody, ap-
plies to the American Sugar Refining
Company.
The sugar trust obtained control of
the stock of the Pennsylvania Sugar
Refining Company in 1903 through
loan procured for Adolph Segal by
Gustavus E. Kissel, a money broker,
of New York. Mr.. Kissel represented
to Mr.. Segal that he was acting in be-
half of a capitalist who desired to re-
main unknown in the transaction The
amount of the loan was $1,250,000 Mr..
Segal asked Mr.. Kissel IL his principal
was the sugar trust or any one of the
Havemeyers and he assured him to the
contrary. AS collateral for the loan
Segal gave bonds of the Hotel Majestic
Corporation, yet in embryo, of the face
value of $1,000 900; bonds of the Penn
sylvania Sugar Refining Company of
the face value of 100000 and $4,000
shares of the stock of the latter, con-
stituting a majority. Kissel expressed
the fear that If the refinery were run
the company might incur debts which
would lessen whatever value the stock
had and Segal thereupon signed an
agreement that the refinery should be
kept closed until the loan was paid.
The sugar trust was Kissels real cli-
ent. It put its own men In the board
of directors of the Pennsylvania Sugar
Refining Company, of which only one
meeting was afterward held, and that
was for the purpose of passing reso-
luton to the effect that the refinery
should not be operated. And 1t never
has been operated.
After Mr.. Segal learned that the refinery
yvas IN the hands of the Havemeyers he
twice rendered payment of the loan. The
refinery was very finely equipped and he
was eager to have ii begin opera tons
These tenders were both refused. On one
occasion he offered as an alternative bo-
nus If $100,00 If he were released from
tho agreement NOT 70 operate the refinery,
asking the privilege of manufacturing
only / 900 barrels of sugar day. This
was likewise refused When his affairs
were approaching their crisis and ne saw
that unless the refinery were TO oeg1n
earning a profit at once he would be
ruined Mr. Segal succeeded in obtaining
assurances of a working capital OF s2,ooo'-
OO0 1t was then that the last refusal on
the part of the trust to remove its clutches
from the Pennsylvania Sugar Refining
Company was given. The memorable
crash Of the Real Estate Trust Company,
of which the first warning was the suicide
of President Ripple. came soon afterward.
For three and half years the Sugar
Trust has kept the securities put up oy
Segal as collateral. and has held the Phil
adelphia refinery as If the ownership OF
IT had been forfeited; but 1t has never
attempted to dispose of any of these Sc
curities, not even the bonds of the Ma9es-
tic Company Were 1t to do So said Mr..
Junkin yesterday. the members of the
trust would at once be arrested and prose-
cuted under a criminal statute.