New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1910-11-18
CONFIRMS WATER FRAUDS
M. ]. O'Brien, as Referee, Re-
ports Against Sugar Refineries.
COMPANY HAD INJUNCTION
IT'S Dissolution Advised-Citv
Claims s525, 600 for Loss
Through 'Bypasses.

F,x-Justice Morgan J. O'Brien. as referee
found Yesterday against the American
SUGAR Refining Company in its aotior -
restrain the city from shutting off the
water supply of its Williamsburg plan+s
Back in March, 1908, the city gave the
sugar company fifteen days in wbict, 10
nav it $4,000 for water which IL had
frsudulently obtained between July 20
1897. and July Sc. 1903, OF have its water
supply cut off
The company Immediately brought an in
junction suit. and in May, 1908, Mr.. O'Rrien
vas appointed referee by nutua! consent
Of the parties involved. He recommended
Yesterday that the motion for a permanent
Injunction he denied. as the conpanv.
through its fraudulent use of the citv's
water had no standing in 4 court of equity
The evidence adduced showed that the
American Sugar Refining Company had
..l.yrasses' on the water pipes entering
I,th the Favemeyers & Elder plant and
fbc "Brooklyn House" sugar refining
plant just across Kent avenue from the
other These "bypasses'' made It possible
Tor the plants 10 take water from the city's
mains without its passing through the
water meters installed in each refinery He
did not. however. consider that the mere
existence of these ''pypasses" incUlpated the
conDany. since they We're q part of the
equipment which the American company
took over when it acquired the II and Z.
House and the Brooklyn House"
The referee had two Questions to decide :
FIRST. whether the refiuertes had received
water from the city through their unue-
tered connections and second, whether they
had done SO fraudulenty. Parsons, Clas-
son * McIlvaine represented the sugar COM
pany. and Edward 1axson Assistant Cor
puration Counsel the ciUy-
The city amended its answer in the suit.
alleging fraudulent use of water between
December ]. 1887, and December !. 1903. It
relied on The testimony Of discharged en-
pIoyes that the company had kept the
''bypasses" open continuously, which was
fatty contradicted by two Of the COM
pany's present employees But the latter
made contradictory statements which
greatly weakened their case in the esti-
nation Of the referee. The city further
strengthened its side with the evidence Of
its investigators, who testified that after
they had begun watching the two refineries
n 1903. the amount Of water registered h.
the meters suddenly increased almost half
The company contended that it was en-
titled 10 an unlimited supply of unmetered
water. because it paid frontage charges.
But the referee found thar this contention
was uniusttfed, since the city ordinance
specified that water should be paid for
either in taxes or by meter measurement
and that where meters were installed they
were intended to register the total supply
Of water used. He decided, therefore, that
not only had the sugar company heen TAX
ing water from the city mains by means
Of the 'bypasses' without paying for H.
but that this constituted fraud
M O'Brie1 said he was not called upon
u decide whether the city's charge Of
$50. 500 for unmetered water used ny the
plaintiff company in the six years speci-
fed was just Personally he considered
the city-s estimate that 100000 gallons Of
water a day had been SO obtained during
this period by the plaintiff three times
TOO big on The other hand, lie pointed
ont that ,ha very nature Of the
fraud made even approximate measure
ment impossible and that all the city eX-
per1s had To 20 OF was the Increased reg
i~trariou I'm the meters after the by
passes had been closed and removed fol-
loving the investigation in 1908.