Omaha daily bee., 1909-07-02
cRUSHEs COMPETITOR BY LOAN
Charged with Existing as Unlawful
Business Combination.
JOHN E, PARSONS INCLUDED
Prominent Lawyer and Phi nthropist
Among Those
LAW
Is UNDER THE SHE
Famous Antitrust Statute \,
Trouble Grows out of IA :. =
ship of Penna SUE
Refining Company. =


NEW YORK, July 1-Through e
men, empaneled as a federal grand jury,
the United states government today laid
the groundwork for another gigantic anti
trust suit In the indictment OF the Amer
lean Sugar Refining company, as a cor
poration, six OF its directors and two prom
inent lawyers. The defendant company
and the individuals were charged with con-
splracy in restraint Of trade under a crim-
inal clause Of the Sherman antitrust law,
which provides az q penalty, upon convlc-
tion, fine of not more than ZOO, or i'm
prisonment for not more than one year,
or both, in the case Of the individuals, and
fine Of not more than 5000 in the case
OF corporation.
The individuals indicted are Washington
p. Thomas, president of the American
Sugar Refining company; Arthur Donner
and Charles II. Senff and John E. Parsons,
all OF New York. John Mayer Of Norris
town, N. j., and George II. Frazier of Phil
adelphia. All are directors Of the COM
pany
The others indicted are Gustav d. Kissel
and Thomas b. Hainett, counsel for Adoph
Segal, whose plant the Pennsylvania
Sugar Refining company, was shut down
by the trust, and whose fight In retala-
tlon. with the testimony brought out in
this suit for $50 100000 damages recently
settled out Of court. largely furnished .he
basis for the government prosecution. The
defendants will answer to the indictments
In the United States district court on
Tuesday next.
What Indictment Charges.
Bulky and in blanket FORM the lndct-
ment contains fourteen counts, alleging
conspiracy and restraint of trade. The
closing of the Segal plant, the details OF
the sl.260000 loan by which this was ac-
complIshed and various details of the trans
action. are recited fully. The defendant
company. It is asserted. controls 90 per
cent of the sugar trade in the United
States.
A gist Of the charges most OF which has
been brought out herefofofe, III the Segal
investigation, is that the American Sugar
Refining company. and the individuals
Jointly indicted with IT, accomplished the
control OF the Pennsylvania Sugar Refin-
Ing company, by Inducing segal to borrow
from Kissel acting broker and the
agent for lender unknown at the time the
loan was made, whereas, the lender really
was the defendant corporation, to borrow
kl 2SOO 600 and to transfer to Kissel, with
a majority stock a voting power, as the
holder of 26OO0 shares Of stock Of the
Pennsylvania company. II is further stated
that segal was not aware that the Ameri'
can Sugar Refining company was the rea
'ender. and that he did not suspect th'
designs Of the rival corporation
How Rival Was Crushed.
segal as the defendants then well knew
the Indictment continues, would be dc
pendent upon the dividends from the bust
ness of the Pennsylvania company to pay
such interest. and to repay the borrowed
principal, and in case the business of tha
company was shut down segars fnsncia
affairs would be put in a 'ruinous cond
ton" and the hold upon both Segal ant
the company by the defendant would b'
continued and greatly strengthened.
Kissell, Il is charged. in pursuance OF thi
power. called a stockholders meeting Of tn
Pennsylvania company on December
1907, at Philadelphia, and voted as a di
rector in favor of the adoption of a reso
mtion closing up that company's business
The indictments today further compli
Gates the affair OF the American Suga
Refining company, which was recently
forced to settle the suit brought by segsl
and only a short time before was heavil,
weighing cases The action also dispel
all doubt as to the governments attitude
which was considered uncertain wher
United States District Attorney Henry A
Wise sailed for Europe recently.
Indictment Follows Civil Victory.
n After George II, Earle had been made re
oeiver for the Real Estate Trust compan,
y on August 2S. 1905. he claimed the trus
company's difficulties were due to tn,
pressure brought by the American Suga
Refining company upon segal for the dis
charge OF his obligations. while at III,
same time ssgal not being permitted L
operate his refinery. was helpless to pay
Mr. Earle appealed TO the Department O
Justice. II is understood the attitude o
the Department OF Justice was that so ia
as representations had been made. the fact
did not differ in theory from the Knigh
case, in which the federal courts had hell
that the acquisition of four competing re
fineries BY the American Sugar Refinin
company did not constitute a violation o
the sherman antitrust law suit was the
brought in the United States district cour
AT New York. the Pennsylvania Sugar com
pany seeking damages OF $50 10000 fror
the American Sugar Refining company
After a trial OF two Weeks a compromis
was effected on June s. The exact term
OF the settlement have not been made pub
lie. but Il is understood the Sugar trust
Cancelled the Kissell note OF 81 l25 COO pai
SeGal 100000 in cash In lieu OF losse
which ne claimed ne had sustained throug
the ldleness OF his refinery, and returne
10 him the $1,000 shares Of the Pennsyl
vania company, which had been deposite
! as security for the loan Of 1904
IL was this victory over the America
Sugar Refining company which seemed I
open the way for federal suit.
The accused men are all prominent
financial circles
John n Parsons, counsel for the Amel