Los Angeles herald., 1909-07-02
HEAD OF SUGAR
TRUST INDICTED
PRESIDENT AND SEVEN OTHER
MEN ACCUSED
SIX DIRECTORS INVOLVED IN
CONSPIRACY CHARGES
Officers Of American Refining COM
pany Are Declared Guilty of
Plot to Restrain Trade
of Product
(By Associated Press.)


NEW YORK, July 1.-The American
Sugar Refining company, six of its dt-
rectors and two other individuals were
indicted by the federal grand jury to-
day on a charge Of conspiracy in re-
straint of trade.
The individuals indicted are Wash
ington 2. Thomas, president of the
American Sugar Refining company; Ar
thur Dojer, Charles II. Sneff and John
E. Parsons of New York; John Mayer
of Morristown, N. j., and George H.
Frazier of Pennsylvania, all of whom
are directors of the company. Indict-
ments also were found against GustaVe
Kissel and Thomas b. Harnett, counsel
for Adolph Segal. There are fourteen
counts in the indictment.
The indictments charge the corpora
ton, the American Sugar Refining com
pany, and the persons accused of con-
spiracy in restraint of trade in viola
tion of the Sherman antitrust law. The
defendants will answer to the indict-
ments in court next Tuesday.
When Case Started
The events leading up to today's in
dictments may be traced back to 1896,
when Adolph Segal of Philadelphia
sold to the American Sugar Refining
company a refinery which he had built
and for a time operated at Camden,
N. J.
Years later Segal took over the old
Pennsylvania Sugar Refining company
of Philadelphia, which had suspended
business In 1898.
BY 1903 Segal had q new plant nearly
completed. Meantime, however he had
engaged extensively in real estate pro-
motions and became pressed for funds.
Just at this time Gustave Kissel,
broker turned up with an offer to OBJ
tain for Segal a loan of SLIPS, 900, which
was accepted. The loan came from the
treasury of the American Sugar Refin-
ing company, but Segal claims that he
Gid not know this.
To secure the loan Segal entered into
a bond with Kissel by which the bor-
rover turned over, along with other
securities, $4,000 of the $4,000 shares of
the Pennsylvania refining company
and agreed that the sugar securities
should be put in a voting trust, which
gave Kissel or whoever he represented
control of SegaPs company.
Elect New Directors
The new controlling interest In the
Pennsylvania Sugar Refining company
forthwith elected new board of di-
rectors, and this board soon afterward
ruled that the Segal refinery should not
then be operated.
Segal also borrowed heavily from the
delphio, with which he deposited the
secur. ties of the so-called sugar trust
loan. President Nipple of the Real
Estate Trust company had been made
custodian of these securities.
The trust company became hope
lessly involved and suspended Presi-
dent Nipple committed suicide.
After George H. Earle had been made
receiver for the Real Estate Trust
a
the difficulties were due to the pres
sure brought by the American Sugar
Refining company upon Segal for the
discharge of his obligations, while
Segal, not being permitted to operate
his refinery, was helpless to pay.
Mr.. Earle appealed to the depart
ment of justice, alleging among other
things that the minority interests as
sociated with Segal were being de-
frauded and that the trust" was act
ing in violation of the Sherman anti
trust law This appeal brought no re-
suit.
Suit Then Resulted
Suit was then brought in the United
States district court at New York, the
Pennsylvania Sugar company seeking
damages of $50 900, 900 from the Amer
ican Sugar Refining company. After
a trial of two weeks compromise was
effected.
The exact terms of the settlement
have not been made public, but 1t is
understood that the sugar trust can
celled the Kissel note of S1.125.OOO,. paid
Segal $2,000,000 in cash in lieu of losses
which he claimed he had sustained
through the idleness of his refinery
and returned to him the $4,000 shares
of the Pennsylvania company which
had been deposited as. security for the
loan of 1908.
The section of the law under which
the indictments were found provides
as penalties a fine of not more than
$4,000 or Imprisonment for not more
than one year or both, in the case OF
individuals, and a fine of not more
than $4,000 in the cases of a corpora
tion.
The indictments charged that "for
six years prior to the finding of this
Indictment and continuously since" the
defendants have been engaged in the
restraint of trade.
The indicted men are all prominent
in financial circles.