The San Francisco call., 1895-11-19
Decision of the Attorney-General
Adverse to the American
Company.
RELIEF FOR THE DEALERS
Unlawful Methods and Contracts That
Will Not Be Tolerated in tho
State.

SYRACUSE, n. Y, Nov. 18.-Attorney-
General Hancock this evening gave out his
decision in the case of G. A. Whelan &
Co. of Syracuse against the American To-
bacco Company, proceeding preliminary
to the commencement of an action to pro-
hibit the American Company from doing
business in this State. The Attorney
General grants the petition of the plaintiffs.
1t is especially believed that this IS
first step in movement against the differ
enJ trusts, and that eventually the legality
of the business in sugar, leather, ETC., by
the combined companies will be subject to
like review in the courts. The efforts of
the Chicago gas combine to secure incor-
poration in this State is thus headed off
1t is understood in Syracuse that Attor-
ney-General Hancock is acting in sym
pathy with Governor Morton's wishes,
and this decision against the tobacco trust
is only a beginning. Attorney Gen eral
Hancock, in his decision, says:
"In brief, the evidence in papers sub
mitted to me are to the effect that 90 per
cent or over of the cigarettes manufac-
tured and sold in this and other States are
the product OF the American Tobacco Com
whose profits are the commissions allowed
on the sales made by them. In other
words, the wholesale dealer, or whoever
he may be that obtains this commodity
from the company for the purpose of COM
merce, is at once turned into an agent of
the company and subjected to its direction
and control as to the terms and manner in
which he shall dispose of this particular
line of goods. 1t is claimed upon the part
OF the petitioner that the real object and
purpose OF this arrangement and method
of doing business is to compel jobbers and
dealers to refrain from selling any cigar
cites except those manufactured by the
company and that If they handle other
brands the company refuses to consign
any further goods to them, and that, mas
much as the Larger part of the cigarettes
manufactured and sold are produced by
the factories of the company, such a with
drawal results in a great injury to, if not
destruction of, the business of said manu-
facturers.
Various affidavits have been presented
and dispositions of witnesses have been
read tending to establish this claim of the
petitioner. From the evidence submitted
to me the court would be authorized in
holding that far the larger portion of
cigarettes disposed of in New York are the
product of this company, consigned to sa-
called agents and sold by them under an
arrangement, express or implied, that they
shall handle the goods of no other manu-
facturer. The consolidation of the original
firms or corporations of their constituent
members into one corporation necessarily
terminates any competition between them,
and the sale OF goods by the aggregation
having already substantial influence on
the market, upon condition that the pur-
chaser shall not handle the goods of any
other firm or corporation, necessarily has
tendency to complete and continue
monopoly of the market as far as the par
ticuIar commodity is concerned.
evidence of this method of transaction
of business would, in my Judgment, be
competent to prove an original unlawful
combination or scheme upon the part of
the organizers of the corporation. II |
correctly understand the position taken by
the learned counsel for the company, while
disputing the charges that the officers of
the company have adopted any such
method of transactlng business as I have
indicated, they claim the right to impose
these conditions. l don't so understand
the law as applied to the facts of this case
In my judgment a corporation doing bust
ness in this State and having substantial
control of the market ought not to be per-
mitted to impose general prerequisite on
the purchasers of its commodities, whether
designated as agents or not, that they
shall obtain goods from no other source.
The enforcement of such condition must
necessarily operate as restraint on trade
and prevent competition. The purchaser
who deals in the merchandise of the cor
poration enforcing the restriction is pre-
vented from selling the wares of any other
manufacturer, and on the other hand his
customers must take the goods furnished
by: the party exacting the evidence to the
demand or go elsewhere to make their pur-
chas es.
''To carry out such rule to its logical
sequence would enable the wealthy cor
poration which has obtained monopoly
of the market to continue the monopoly
and to drive out of business poorer and less
fortunate competitors. Ample authority
has been conferred upon our courts to
supervise and keep within the lines OF law
corporations organized in pursuance OF the
statutes of the State of New York. They
may be restrained from transacting bnsi-
ness not authorized by their articles of IN
or from exercising any fran
chise, liberty or privilege not authorized by
law. The courts may annul the corporate
existence of a corporation which transacts
an illegal business or impose as condition
OF further existence discontinuance of
illegal methods. l have no doubt that
they have sufficient Jurisdiction over
foreign corporation to restrain it from
tlahsactlng an illegal business or from pur-
eulhg Illegal methods here, or in proper
case 10 cancel the certificate OF authority
granted such company. To hold other
wise would be to allow ;mmnn;t;es and
privileges to foreign corporations to disre-
nd 10