The morning call., 1893-01-03
CIGARETTE TRUST
Despotic Scheme to Crush
Out Opposition.
METHODS OF A MONOPOLY
The Retail Dealers Held in .TilraiI by
Powerful Comb;na-
ton.
New York Times.

new iOEk llHc5
OF the 1900, 0C0 cigarettesof domestic
make consumed in this county in the year
ending June 80 about 90 percent were of
the brands controlled by the trust known
as the American Tobacco Company. There
is great tribulaion. among all thesecigaf-
cite manufacturers who are net in:tle trust
and the jobbers on account of the way. in
which the market has been moIopoiizeti ard
because of the means by whiehthe nbnop-
oily is maintained: There are fortunes OF
millions to be made in the manufactures of
cigarettes. That. is why the trust was
formed.
Half a dozen manufacturers had the
market to themselves until few.years ago.
They had made and were continuing to
make fortunes. They saw that otherse0v
eted their field and contemplated putting
capital and labor into it.
So they conferred together and tue con-.
ference resulted in combinations, and tha
American Tobacco Company: eame:fmt6 ex-
istenee. The capital stock was fxeG at
S25. 100000. OF this SIS COO zoo was eonlmon
and SIC. 000 preferred. Almost all those
manufacturers who did not 90 into:the trust
were eventually either driyea from tire field
or forced to sell their plants TO. the trust.
Then, by prodlgal advertising OF the brands
manufactured in The trust factories and
'freeZe-out" metbods not uncGfnI14nn to To- $:
dustral combinations, though in tlfisease
more stringent than usual and so IN ore Utfec-
tive, was brought about tine Result 9 the
last fiscal year when 90 per cent OF the cog
sumption was controlled.
The trusts plan for putting cut its. prof.:
uct was at first under system If reba ties. ?
This c0nfiicted with the laws against trusts
in many States. and in TeXas; President :
j. b. Duke OF the American Tobacco Conf.
pany was indicted. Nothing came. Of that @
proceeding, however. Now tlie ;ruSs hasa
method by which it believes it briggs. :.
itself within the law, and If NOT, does. utely @
evade it under the new scheme, though the :
Iron heel of monopoly" brushes Insfe :
ruthlesS4y than ever the rights of nfaIfli-'
iacturers outside of the trust aAd: Of the
jobbers.
1t Is an ingenious scheme The trust sells. :.
no goods. 1t just .'consigns" its goods to
dealers to be sold on commission. JHstthe ;.
same, the dealer has to pay the fun value. Gf :.
the goods CONSIGNED" to him ten days after =
they are received. Three months after de-
livery the trust balances its books with tae
dealer and pays him bis comm ssion." 1t
Is, In other words. necessary for the dealer
to wait three months for his profit on the ;.
goods he sells; but the trust gets the fuiE3
amount of the purchase money-the:"lfst:
price, as it Is called, which means its price
plus the profit of tie dealer WHO sells the
rest of the three months before thedeaIef
gets his profit that profit can be usett:hy the
trust without The payment OF Interest or
any other consideration.
But why should the dealers buy the trust
goods under such burGensOme ondttion ?:
Simply because if they buyany other goods =
they cannot buy trust goods except al the !.
so-called list price," which Is the price fUf.
which they have themselves to sell. them.
The edict Of the trust, not in words bat in
to
cigarettes than tile cigarettes made by the
trust cannot get any more trust goods ex-:
eept at price which will make it prefitess
for him to handle them. =
The trust has regular detective Service.
to see that its demand in this regard IS car-.
ried out. case in point is that Of 4. very
large Third-avenue jobber. Last July lie
received notice that no more. goods W6tFd
be Consigned" to him TO sell on c0nIi{is.:
sion. but he might buy them at 'iSt prief,"
the price for which lie would have 10 seal.
Inquiry as to the cause OF the cutting off of
this firm revealed that it WAS becallse 1t had
been sellng trust goods at prices Tower
than the trust had fixed to govern ihe job
bing trade. The dealer saw the dow ssfall
of his business, so Tar as cigarettes was
concerned. unless he could get Teins stated
Finally The trust officers condescehdedtG.
reInstaie him on their lists; but as. a. pen-
atty for his having seen fit to SELF goods for
any price he pleased the sentence was plO::
Dounced upon him that Tor three mOnth5:Ee
would receive no-cOmmissions for handling:
trust goods. In a word. he simply bad to.
handle trust goods for three month his with
out making cent of profit. -.
Now this same dealer has been black
listed again. This time it is. because one;of
the trust detectives went into his place aTi..
purchased 500 of brand of cigarettes
manufactured by company that kaa
started in opposition to the American :
Tobacco Company. He has been FORMALLY
notified that no more goods will be-: 1'edii-:
signed" TO him by the trust, but that he can
buy them at list priee"-thatis," tfe:very .
price at which be would have TO setlsh hem.
As the trust brands OF cigarettes; through
advertising. are those which. sGmsunrers
mostly call for, a jobber WHO has notget
them to supply to his trade is in bad way.
There is much chaflng under The yoke
and there is much'ta as to s,bat1s geins
to De-done. Many Jobbers have been put
under the ban by the trust for doing Just.
what the Thrd-avenue jobber did. In-sev.
eral cases. one being that of large dealer. :
the biacksisting has been the prdverbiaf last
straw, and the dealers have told the Trust
that they would get along without any more
''c0nsjgnments" of its cigarettes. =