The Washington herald., 1911-06-17
PRISON,
SUGAR COMPANY
BROKE CONTRACT
But sTrulst' Combination
Ran on Three Years.
ADMISSIONS TO PROBERs

Henry /. Oxnard, vice president
Iof the American Beet Sugar Com
lpany, told the Hardwick investigat
ling committee of the House yester
day how John E. Parsons, as couh.
sel for the American Sugar Rein
ling Company, had %. KID" al
agreement between the sugar trus
and the American Beet Sugar Com.
pany. which later was abrogated b,
1.-THE beet sugar folks, because they
were advised that it might lane
some of them in jail for violating
the Sherman antitrust law.
The questionable agreement wa:
entered into by the two sugar in
terests in 1903, after the sugar
trust had tried in vain to drive the
beet sugar people out of business
by cutting prices. Under the agree
ment the American Sugar Refining
Company became the selling agent
of the American Beet Sugar Com
pany.
'CUTTHROAT COMPETTTToN,n
What was the reason for this agree
ment7- asked Chairman Hard&ick.
There had been a ruinous, cut
throat competition" admitted Mr.. or
nard, ''and in addition, 1t was cheaper
TO have our product handled by the brok-
ers- Of ths American Sugar Refining
Company"
IF this agreement was SO beneficial
why was IT not continued?'' asked Mr..
Hardwick.
When Col. Duval succeeded me az
president of the company he said he
thought the contract was against the
law. told him that we had expert legal
advice from officers OF the American
Sugar Refining Company and from a
counsel that II was not In violation Of
law. But Mr.. Duval said he would have
Mr.. Wayne Macveagh pass upon the le-
gality Of the contract. Mr. MacVeagh
told Col. Duval that II we did not abro-
gate If we would run the risk OF going
to the penitentiary.
We conferred with the officers Of the
American Sugar Refining Company as TO
Mr.. Manveagn's opinion and Of our de-
sire to abrogate It. They reiterated
their belief that IT was not in their opin-
ion IN violation of law, but they would
agree to abrogate II we wished to do so.
The contract was terminated in October,
1905. after being in operation for about
three years. 1t was to have run until
1872"
Sold Small Refinery.
Mr.. oxnard told how at the time Of the
formation Of the Sugar Refineries Conn
pany In 1887, he and his brothers were
running small refinery In New York
valued at about $4,000. The composition
was keen, and he and HIS brothers were
glad to sell out to the trust
What did you get for your plantT'
asked Chairman Hardwick.
About $4,000 in trust certificates ofl
the consolidated company" replied Mr..
Oxnard.
That is making money very fast.
commented Chairman Hardwick. ana Mr.
Oxnard agreed.
After this transaction, said Mr.. oxnard
ne went abroad to study the beet sugar
industry, and upon his return in 1850 he
and his brothers and several associates
started beet sugar factory at Grand
Island. Nebr., the first east Of the Rocky
Mountains. The American Beet Sugar
company, he said, now owns six plants
which at trst were operated as separate
corporations, but In 1899 were consolIdate6
into the American Beet Sugar Companv
The capitalization Is 10000 900 s15. mn an
In common and s5;0ooo0o in preferred
stock
What is the cost Of these pIantsp.,
asked Chairman Hardwick.
About s8Oooooo." replied Mr.. oxnard.
In addition we have land valued at
about AO00,00oy
Why was your capitalization more
man the cost Of your property?" asked
"Very Little watered stock.v
There is very little watered stock in
bur company" replied Mr.. oxnard. .'The
reason our capitalization vas slightly |
higher than the cost Of our property |
was so that We could keep our prou- |
srty In modern and up-to-date condi- |
ton"
IN describing the sugar trusts EFFORTS /
% drive the beet sugor interests out of /
business, Mr. oxnard said that IN Octo- |
Der. l9o1. the American Sugar Refining /
company dropped its price from S to 80
tents z pound in the Missouri River
Vaiiey Tor the purpose of damaging the /
oeet sugar interests That was the only /
snort made by the American Sugar Re-
anlng Company to drive the beet people
'ut OF business. the witness said
Mr. Oxnard said that the purposa ~ /
.ne American Sugar Renning Company
vas apparently to compel the beet sugar
factories to nh their existing contracts
t "a cents pound. which was less
han the cost Of production.
This was an unfair and ilIeral casn-
,ettive act for the purpose Of driving
he beet sugar people out Of businessfss
Esked Representative Madison.
Fieffffous Price.
we 50 regarded IT." replied Nj. OK
lard.
How did you meet the reduction7"
sked Representative Madison.
"our contract" explained Mr. oxnard
was based on the open market price.
he 81 cents rate pound, quoted b II
he American Sugar Refining Company.
Vas not the open price,.
How did vou Gemonstrnfe 5fI1r7f ~ xrrr