The Detroit times., 1911-06-19
sl0,000,000 WORTH
OF STOCK MADE
OUT OF THIN AIR
Late Henry 0. Havemeyer's Conf.
Dental Man Tells How Sugar King
Cleaned up on Organization
of Company.
Dividends Amounting To $4,000, ,00C
Were Drawn on Atmospheric
Capital He Says.

i
OF thin air and dividends Of $4,000. .00t
in real money were drawn on the "at
mospherie capital" for Henry q. Have
meyer, the late sugar magnate. was
related before the Hardwick sugar
trust investigating committee or the
house today. James III. Post, who
conducted the deal for Havemeyer
| was on the stand.
In executive session the committee
ordered Post to tell all he knew OF
the organization of the National Sugar
Refining Co., of New Jersey, the nu
cleus for the present sugar trust.
II had secured as agent OF Henry
o. Hayemeyer options for the pur
chase OF the three concerns that Went
into the National company said
Post. They were the National, OF
New York; the Mollenhauer plant
and the New York Sugar Refining Co
These companies were to be bought
for preferred stock. pro rata In the
new concern. To make this purchase
the National of New Jersey issued
$10,000.000 of preferred stock"
There was also an issue OF $10,-
100000 of common stock, was there
not?" asked Hardwtck
Yes"
THAT issue OF $1O,O00,00o of stock
was simply promoters profit, was II
not?' asked Hardwick, and Post ad-
mited that the $10,000,000 was issued
without the slightest real value IN
property or business assets.
Who got that common stock?''
asked Hardwick.
THE entire $10.000.000 was issued
to me. / turned II all over to Henry
o. Havemeyer."
Post declared that while the stock
had been practically transferred to
Havemeyer. ha Post always voted 1t.
Were any dividends ever paid on
this stock?' /.
"A dividend of 10 per cent was de-
clared in 1908. and one OF Is per cent
in 1904"
ITO whom were these paid?"
The entire amount $2.500,000 was
paid to me, and / sent the entire
amount TO Henry o. HavemeYer."
did you ever get any 6f this
stockf
Yes, some FIVE years later Henry
o. Havemeyer gave me 5000 shares
/
pany. | never drew the dividends,
though"
Post related that he had paid S.
250,000 to the three companies that
went into the National In the pre-
ferred stock issued. or the remainder
81, 100000 was used to buy a fourth
interest In the McCahan. Sugar Co.
All the real money used In promot-
ing the National concern, he said, was
81, 100000 which was advanced by his
firm, B. II. Howell Son & Co., to
finance the shifting of the stock OF
the completed National concern to
the American Sugar Refining Co.
Under cross-examination by Rep.
Madison (Rep, Kas) Post admitted
that he had named the board OF direct.
ors who voted the two stock issues OF
the National and that he instructed
them what 10 do and then left the
room while they voted him the $10,-
100000. He declared that he has al
ways controlled the voting Of the
stock.
I'm order to prevent the ousting OF
the original directors whom named"
he said, II have always refrained from
voting that stock. So long as II did
not appear In the annual meetings
there was not a quorum present and
there could be no election. The same
directors are still In control"
Post declared on cross-examination
that the directors knew that he was
to receive the 10000, 900 without COM
pensation.
What you did," asked Madison.
was to go to those directors, whom
you had named after consulting Have
meyer and get that s8,250,000 OF pre-
ferred to turn over for control Of the
subsidiary companies and then over
and above that to secure an issue of q
Promoters profit to yourself OF $10,-
000.00?"
"Yes, that's It." said post.
Post then launched into a defense OF
II. o. Havemeyer, who, he said. was
too big" a man to have permitted
customs frauds. He insisted that the
refinery superintendents were alone
responsible for the under-weighing.
Wearied OF sending kilograms to
Joseph f. Smith, head of the Mormon
church. summoning him to Washing
ton, to testify about the beet sugar
industry In Utah, Chairman Hard
wick, OF the investigating committee,
today arranged to have the United
States marshal at Salt Lake City
serve subpoena on the reluctant
Mormon official.