The times. [volume] (Richmond, Va.) 1890-1903, 1891-03-29
RICHES ~ CIG4RErrEs.
Here is Close Guess at the Fat Profits of the
Combine.

The suit Of Theodore +. Allen against the
Kinney Tobacco Company 10 recover 100000
commis~l0 for his services IN organizing the
American Tobacco Company. Is one Of five
legal actions which viii shortly bring the
whole history Of the formation 81 the Cigarette
Trust before the courts, says the New York
sun.
Mr.. Aliens other four actions are: against
Allen d Ginter Of Richmond, Va. for 10000:
against W Duke Sons Il Co., for $4,000.
against " ). Kimball ~ Co.. of Rochester,
for 100000; against Goodwin d Co., for
$4,000.
The last mentioned action has not yet been
begun. The suit against Allen * Gnter was
brought in the United States Circuit Court,
District ot North Carolina, was transferred TO
the District of New York and Will come up
for trial next month.
suit against the Kinney Tobacco Company. Is
In the New York State supreme Court. The
action against W. Duke. Sons * co. Is IN the
United States Circuit Court. New York Dis
trlct
The amount claimed by Mr. Allen in each
case represents per cent OF what the COM
pany or hrm received IN stock certificates
from the trust IN which all were combined III
October. 1850.
Therefore this amount was. approximately.
For ". Duke, Sons q Co.. $1,000 600. for
Alan * Guutcr - 600 900 for w. :. kimball
a. Co., g3.OYD 600 for Goodwin a Co.. 5000
OOo for the Kinney Tobacco Company, So
600 600
The profits on this :95 900 900 Of capital
stock since the formation Of the trust are not
exactly known to outsiders but have been
carefully estimated
Two-fftis Of the whole amount Is preferred
stock and pays per cent The profits from
the common stock are estimated at between 10
and - per cent
Mr. Allen. who looked through all the state
meuts Of the original parties % the trust be-
fore the conclusion Of the final agreement. cs-
Inmates the total profit % bee =3.OO0,O0O. Other
estimates arr less conservative. With prott
OF s3O).O00 however. Mr.. Allen calculates
that the members of the American Tobacco
Company are making fully double what they
made before they consolidated their interests
This increase Of profit, Mr. Allen says, does
not cost either the wholesaler. the retailer,
or the consumer anything
The saving Is due % the abolition, with
competition, OF atotal expense OF some Fl ,sO1,-
600 annually.
IN consequence of this saving standard
brands OF cigarettes that were formerly sold
20 the wholesalers for So 40 and 500 q thous-
and are now sold by the manufacturers for
$3.50 and 30
The wholesaler can thus afford % sell for
less money than formerly 10 the retailer. who
anally gets his old price. and thereby larger
profit from the consumer.
The consumer moreover, gets now. Mr..
Alien says. only standard brands made from
good tobacco. since the old incentive 20 mau-
uacture poor stun for the purpose Of under
selling rivals has been eNtlngulshcd with the
consolidation OF the individual concerns.
big firm formerly injured is business, lac
says. by putting his name on cheap cigarettes
and then allowing them 20 be sold on the
reputation of one OF It's better brands.
curious feature Of tine trusts system IS
that by it the wholesale dealer IS compelled 10
make profit.
The goods are billed 20 him at "a certain
price by the manufacturers II he sells at the
schedule price he gets Il rebate OF approx
mately thirty cents thousand Oh the prdi-
nary standard GRADES.
BY cutting rates he loses his right 10 this
rebate.
Mr.. Allen is very emphatic in his denial that
the American Tobacco Company is q trust.
lie calls il Consolidation, and compares
II with the railway consolidation that resulted
IN the New York Central and Hudson River
Railway system.