The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1907-08-22

TRUST
PROCEEDING BEGUN IN PHILA-
FAR REACHING CONSEQUENCES.

FAX REACHING CONSEQU ENCES.
PHILADELPHIA, Aug. 27-Gover-
nor H. Earle, Jr., as auxiliary receiver
of the Pennsylvania Sugar Refining
Company, brought suit yesterday in
the Chancellors Court at Trenton
against the Sugar Trust, otherwise
known as the American Refining Com
pany, for an accounting and division
of profits earned by the latter since
December 80, 1903.
The action is brought under the
common law, and is entirely indepen-
dent of the one pending in New York
against the Sugar Trust under the
Sherman antitrust law for triple dam
ages amounting to $3O,OOO,OOO for con-
spiracy in restraint of trade.
But the new suit, from a legal stand
point, is much more important than
the other, involving a principle which,
if vindicated, will, in the opinion Of
leading lawyers, have an effect more
or less decisive upon all Federal pro-
ceedings against combinations or mer-
bers made for the purpose of Suppress
ing competition.
The profits of the Sugar Trust are
enormous, and since it's formation it
has never paid dividends of less than
Z per cent upon all its stock and some
times as high as 10 per cent besides
occasional extraordinary dividends. 1t
has always refused to reveal the totals
of it's yearly profits even to its stock
holders not Immediately concerned in
it's management 1t is the oldest Of
the great industrial combinations in
the country, the one which has the
most intimate relationship to the eco
nomy of every household, rich or poor,
yet the Federal Government never, I'M
til prompted to do so by Mr. Earle as
receiver of the Real Estate Trust Com
pany, of this city, took any steps to-
ward it's prosecution.
If the equity proceedings in Trenton
is successful it will mean the opening
up of all the inside accounts of the Su-
gar Trust, and for the first time secrets
of very great significance will thus be-
come known. Further than this it will
establish the principle that those hav-
ing controlling power in corporations
who use that power to lessen or stop
! the money-making activities of the cor
poration are accountable to the minor
ity stockholders for all the additional
profits which would have been earned
if they had not done so.
How much the Sugar Trust will be
found to owe the Pennsylvania Sugar
Refining Company if the decision is af-
firmative can at this time be Hardly
surmised; but it will undoubtedly be a
very large sum. Mr.. Earle and others
who have looked into the business
merits of the remarkable sugar refin-
ing enterprise planned and equipped in
this city by Adolph Segal, have repeat
eddy declared that if the works could
have been operated the profits would
have been enormous.
The Sugar Trust obtained control OF
Il
Refining Company in 1903 through
!. loan procured for Adolph Segal by Gus
tavus r. Kissel, a money broker, o
New York. Mr.. Kissel represented tt
Mr.. Segal that he was acting in behal
of a capitalist who desired to rema:l
unknown in the transaction. TIL
n amount Of the loan was 81 ,250,0 900. Mr.
n Segal asked Mr.. Kissel if his principa
o was the Sugar Trust or any one of tn,
Havemeyers and he assured him to tn
contrary. AS collateral for the LOAF
Segal gave bonds of the Hotel Majesti
corporation, yet in embryo, of the fac
; value of S1,000,O00, bonds of the Penn
b sylvania Sugar Refining Company O
- the face value of 100000 and $500
!. shares of the stock of the latter, con
shutting a majority. Kissel expresses
l. the fear that if the refinery were rul
Is the company might incur debts whic
a would lessen whatever value the stoc
had and Segal thereupon signed al
agreement that the refinery should b
4 kept closed until the loan was repaid
= The Sugar Trust was Kissel's rea
client 1t put its own men in tn
Board of Directors of the Pennsylvani
" Sugar Refining Company, of which on
: ly one meeting was afterward helt
and that was for the purpose of pass
u ing a resolution to the effect that tn
refinery should not be operated. An
it never has been operated.
After Mr. Segal learned that the re
finery was in the hands of the Have
myers he twice rendered payment G
the loan. The refinery was very fine
ly equipped and he was eager to hav
It begin operations. The tenders wer
both refused. On one occasion he Of
4. fered as an alternative a bonus {
a 100000 II he were released from IN
z agreement not to operate the rehner!
| aching tha nVf.rIIao. % "A