Evening star., 1909-07-01
FEDERAL GRAND JURY
|ND|CTS SUGAR men
American Refining Company
and Six Directors Charged
With Conspiracy. )
ACCUSED OF VIOLATING
THE ANTITRUST LAW
Fourteen Counts in the Indictment
Alleging Restraint of Trade.
sEGAL ATTORNEYS ACCUSED
Corporation and Eight Individual
Defendants Cited to Answer in
Court Next Tuesday-Brief
History of the Case.

History of the Case.
NEW YORK. July 1.-The American
Sugar Refining Company. six of its
directors and two other individuals were
indicted by a federal grand jury today
on charge of conspiracy in restraint of
trade.
The individuals indicted are Washing
ton B. Thomas. president of the Amcri-
can Sugar Refining Company: Arthur
Donner and Charles H. Senff and John Z.
Parsons of New York: John Mayer OF
Morristown. n. j.. and George II. Frazier
of Philadelphia. all of whom are directors
of the company.
Indictpents also were found against
Gustav E. kissel and Thomas B. Harnett,
counsel for Adolph Segal.
There were fourteen counts In the IN
dictment. The indictments charge the
corporation, the American Sugar Refining
| Company and the persons accused of
conspiracy in restraint of trade in viola
| tion OF the Sherman antitrust law. The
defendants will answer to the indictments
| in court next Tuesday.
Dates Back to 1896.
The thread of events leading up to to-
days indictments may be traced back 10
| 1886 when Adolph Segal of Philadelphia
sold to the American Sugar Refining Com
pany a sugar refinery which he had built
and for time operated. at Camden. n.
| j. Some years later Segal took over the
old Pennsylvania Sugar Refining Com
pany OF Philadelphia, which had suspend
ed business in 1898.
| BY 19G; Segal had a new plant nearly
completed and was ready to compete i'm
| sugar refining. Meantime, however, he
had engaged extensively in other real
estate promotions and became pressed
for funds. Just at this time Gustave
Kissel a Wall street broker turned up
with an offer to secure for Segal loan OF
81. 900. which was accepted. 1t after
ward developed that the loan came from
the treasury of the American Refining
Company. but Segei claims that at the
time he did not know this.
Shares Turned Over.
To secure the loan for his real estate
operations Segal entered into bond with
kissel by which the borrower turned
over along with other security. 5000 OF
the $1,000 shares of the Pennsylvania
Refining Company, and agreed that the
sugar. securities should be put in voting
trust, which gave kissel or whoever he
represented control of Segal's sugar com
pany. The new controlling interests In
the Pennsylvania Sugar Refining Com
pany forthwith elected a new board OF
directors, and this board soon afterward
passed a resolution that the Segal re-
finery should not be operated at that
time. Segal also borrowed heavily from
the Real Estate Trust Company of Phil
adelphia, with which was deposited the
securities for the so-caled sugar trust
loan. President Nipple of the Real Es-
tate Trust Company had been made Gus
todian of these securities. The trust
company became involved hopelessly and
suspended. President Nipple committed
suicide.
After George H. Earle had been made
receiver for the Real Estate Trust Com
pany, August 2S. 1906. he claimeo that the
difficulties of the trust company were due
to the pressure brought by the American
Sugar Refining Company upon Segal for
the discharge of his obligations. while at
the same time Segal. not being permitted
to operate his refinery. was helpless TO
pay.
Appeal to Department.
Mr. Earle appealed to the Department
of Justice alleging, among other things
that the minority interests associated with
Segal i'm his sugar refinery were being de-
frauded and that the trust" in keeping
the refinery closed. was acting in re-
straint of trade. and in violation of the
Sherman antitrust law.
REPRESENTATIONS made by Earle to JUS
tice Moody. then Attorney General, and
subsequently to Attorney General Bona
parte continued. but without the relief
sought 1t is understood that the att,
tude of the Department of Justice was
that so far as representations had been
made the facts did not differ in theory
from the Knight case. I'm which the
federal courts had held that the acquf-
stion of four competing ref1neries by
the American Sugar Refining Company
did not constitute violation or the
Sherman antitrust law. Suit was then
brought in the United States dis
trict court at New York. the Pennsyl-
vania Sugar Refining Company seeking
damages of $50. 600. 600 from the Ameri-
can Sugar Refining Company After A
trial of two weeks a compromise was
effected on June 8. The exact terms or
the settlement have not been made
public. but it is understood that the
sugar trust" Cancelled the kissel note
of $1.125,000. paid up Segal se,OO0,ooo
in cash in lieu of losses which ne
claimed he had sustained through the
idleness of his refinery and returned to
him the $4,000 shares of the Pennsyi-
vania company which had been DE-
posted as security for the loan OF l9o3
Sugar Refining Company which seemed
to open the way for federal sun
against that corporation along the lines
drawn by Mr.. Earle three years ago
Attorney Generals Comments.
With respect to the indictment found
by the grand jury in the New York Su-
gar Refining Company cases, Attorney
General Wickersham said today that the
Indictment spoke for itself, and he had
nothing to add.
In his opinion the administration OF
Justice should be quiet. thorough effective
and impersonal. and II was his inten-
ton that this should be so in the sugar
company proceedings as in all other
ca ses under his control.
Hill Converses With the Kaiser.
KEEL. July Ambassador Hill return