New-York tribune., 1911-12-28

Bonds. ................. , - I'190'0O0 ,S0 O00
Preferred stock. ............. 1o8,l50'00VoU IVY
Common stock. ............' olS'oVV'VVV
After the promoters had failed to finance
this proposition through Kuhn, Loeb Co.
of New York, the plan was changed to pro-
vide for a capitalization of S525.OOO'OOo'
but the condition of the money market
made it impossible TO finance the modihed
merger.
Mr.. Veeder testified that E. H. Hartman
James Stillman and other New York hnan-
ciers were to have furnished the capital and
the amount they were TO receive as COM
pensation was S10,00O,OOO.
The story Of the two proposed mergers
was told chiefly by the reading Of contracts
and agreements. entered into by interested
parties TO the jury by counsel for the gov
eminent. who then offered the documents
in evidence.
The late Gustavus j.. Swift was to have
been president Of the merger Edward Nor
ris and Michael Cudshy were TO have been
vice presidents and J. ogden Armour chair
man of the executive and finance commit
tees
The witness told Of the organization OF
the National Packing Company ON March
Is. 1908, but denied it had any connection
with the proposed merger
Mr.. Veeder was on the witness stand
when court adjourned. He will resume his
testimony tomorrow. and it IS expected
will conclude before noon. II Is believed
that his cross examination will be brief as
he has been an unwilling witness for the
government because Of his close relations
with the packers since 1855.
Henry Veeder son Of \. II. Veeder, who
is said to have acted as secretary for the !
old packers pool known TO the government
under the name Of "Postofice Box No. 2iI' |
will be the next witness.
Gary's Name Brought Into Case.
The name OF T. H. Gary. Of the United
States steel Corporation was brought into
the case when government counsel read
notation al the close Of the contract for
the financing Of the big merger.
The notation authorized Attorneys Wee
der and KrauthOn TO execute the contract
for Armour. Swift Morris and Cudahy I
with T. H. Gary as legal representative Of
Kuhn. Loeb & Co and the syndicate.
Contracts under which the combination |
OF packers purchased the six competitors |
mentioned by Veeder were then read TO
the jury
Pierce Butler, special counsel for the
government questioned Mr.. Needer at
length regarding the agreement entered
into in 1902 betwen the Armour, Swift and
Morris interests TO form S50O.O0O,000 |
merger of packing companies.
The witness said that an elaborate ex-
animation Of the packers books was made
by expert accountants and the properties
appraised by committee Of experts con-
sisting of Thomas Connors, Thomas Z
Wilson and Horace G. Gardner.
WAS the appraisal of these properties
ever made?"
Il think the work was completed, but
TO final report ever was made" was the
answer.
Mr.. Veeder said that under the merger
agreement each Of the contracting parties
was required TO turn over at least 80 per
cent Of the stock of the concerns it was
proposed to consolidate.
Six Companies in First Plan.
The witness produced the contracts
made by Armour, Swift and Morris in
June. 1902. for the purchase of six COM
petng companies prior TO the organization
Of the National Packing Company.
The concerns acquired by the combina-
ton al that time were the United Dressed
Beef Company of New York, the Fowler
Packing Company. the Anglo American
Provision Company the G. II. Hammond
Company, the omaha Packing Company
and the st. Louis Dressed Beef and Pro-
vision Company
The witness said the combination began
negotiations for the purchase Of Schwarz-
schld G. Sulzberser in July, 1902, the inten-
tion being to include it I'm the big merger,
but the purchase was never made.
"In July 1902. Michael Cudahy became
party TO the agreement for the merger. and
the Cudahy Packing Company was taken
into the combination said the witness.
The government brought out that all the
contracts for the purchase of competing
concerns contained a clause which prohib-
tied the persons making the sale from en-
gaging IN the packing business for a period
OF fifteen years after the date OF the sale.
Mr. Needer produced a copy Of the agree
ment, dated November IS. 1902, made by the
combination promoting the merger for a
loan OF 100000 from Kuhn. Loeb q Co.,
OF New York, by Jacob H. Schin
This agreement was made after negotia-
tions between the parties which lasted
through the summer Of 1907" said Mr.
Veeder Kuhn. Loeb & CO. said the pack
ers could have the money under certain
conditions, and finally the terms were de-
cded on. When il came time to close the
deal and get the t90OOoO0O Jacob II. Schin.
OF Kuhn. Loeb & CO.. scented the panic
which came year later. and the whole
deal was declared or
Organization of Packing Company.
The witness then described the organza-
ton Of the National Packing Company
March IS. 1893. with a capital stock OF SIS
10000. which the government contends has
been used by the packers combination 10
continue the old price-fxng pool which pre-
Viousy existed. The contract for the or
ganiEation Of the National Packing Com
pany ~as produced and examined by gov
ernment counsel.
Another agreement introduced was dated
July Y, 1902, and provided for a loan OF
$4,000 to Armour. Swift and Morris by
the First National Bank OF New York. An
agreement dated December 49, 1902 was
read. which provided for a loan of Sl6.OOoOOO
by Kuhn, Loeb q CO.. James Stillman and
j.. IT, Hartman to Armour. Swift and Nor
ris for use in financing the National Pack
ing Company.
When Michael Cudahy was taken into
The deal for tie reorganization Of the pro-
posed big company new agreement was
drawn and signed by Armour. Swift, Morris
and Cudahy, and each deposited 100000 in
a Chicago bank as evidence Of good faith.
said Mr. Vecder. These deposits were later
withdrawn when the organization OF the
IL, "a ahaud0upd -