The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-12-10
TOBACCO WAR NOW ON
FIGHT BETWEEN THE TRUST AND
ANTITRUST FACTORIES.
History OF the Organization and
Workings OF the Tfust-Fight Made
by Other manufacturers.

Company would be passed this month, the
stock dropped to about SIS cents from 70.
and yesterday it scored still greater fall,
reaching IS cents. but recovered and closed
at ~ cents. The fact that this company
has now several determined rivals with
fully as much money has brought about this
great change. Last spring the American
stock was worth 116 for preferred and III
for common.
The history OF this immense trust dates
lack to the invention by young man in
Roanoke. Va. of a machine for the manu-
facture Of cigarettes, which reduced the
cost to minimum. Soon after this ma
chine was invented W. Duke, of W. Duke,
Sons & Co., of Durham, n. c.. secured con-
troll of the patents. There had been no ma
chimes sold at that time, although num-
Der of them had been leased at a yearly
rental to different manufacturers. Duke
then conceived the idea of organizing a
great trust to control the output of cigar
cites, and until within the last few months
manufacturers have been unable to break
the trusts power. The frs. overtures were
made to manufacturers in 1883 and 1882
They were asked to sell their plants to the
new concern and take stock in the trust for
them. The idea did not at first meet with
favor but in a short time. as the leases on
their machines expired, and they We're noti-
fled that they could no longer use them,
they were glad to accept terms at the die
tation of Mr.. Duke. This was the first in
timation some of them had that the patents
were controlled by Duke. 1t was simply a
case of freeze-out. The Duke combination
was willing to take in all the manufacturers
and issue trust stock in payment for the
plant, and 1t was but a short time until the
American Tobacco Company controlled the
cigarette business and manufactured about
80 per cent. of the cigarettes made in this
country.
Then began a war OF determination. There
were several other cigarette machines on
tho market at the time. among them the
Briggs, Barring and Elliott machines. These
were taken UP by the manufacturers who
did not want to be forced into the new
trust. and for time the makers of these
machines did fairly good business. The
trust was relentless. and began suits in the
federal courts against all these manufacture
ers and against the makers Of the machine
for infringing the patents OF the machine
used by the trust. The trust was organized
in 1890, and as soon as possible after that
these suits were filed. They hung fire in
the courts for several years. the trust pur-
suing a diliatory policy and endeavoring to
hold their temporary injunction. whenever
such was obtained. as long as possible. The
effect of the suits, even though temporary
injunction was not obtained, was TO make
the outside manufacturers afraid to buy
the other machines, which was as beneficial
TO the trust as il the injunction had been
granted. In this way the trust gradually
drove out all competition, until IL manu-
featured about 80 per cent. of the cigarettes
dA {vaf III IL rfyxy
Then the first bomb fell In the camp on
the trust. Last summer the first decision
was rendered In the patent cases. and az
was against the trust. The stock took a
slump, and this was soon followed by an
other decision in the same line. The third
case was then decided, and thus the trust
the machines was concerned All this time
the trust stock was gradually declining UNI
til 1t reached 70. at which point 1T stood
when the announcement was made last Sat
urday that the dividend on common stock
would be passed.
TIME FOR ACTION.
When the patent suits went against the
trust it was seen by Mr.. Duke who is
very shrewd business man, that some
thing must be done. Several large concerns
were known to be simply awaiting the de-
cision Of the courts to enter the field In
the manufacture of cigarettes. The trust
had never attempted to control any of the
tobacco trade outside Of cigarettes, but this
branch had been controlled with a high
hand. There were still very wealthy con-
Germs in the business. but as their line was
plug tobacco the trust had never been
directly affected by them, although over
lures had been madegat numerous times to
induce them to join the trust and thus
of the country. These overtures had failed,
but the trust was not daunted by failure
and new proposals were made with a regu-
outside concerns. From later developments
1t seems that these proposals were made
II % n to the trust that
1t. and 1t was DESTROYS that the larger con-
Germs that might enter the cigarette bust
ness be part of the trust.
When these overtures failed and 1t was
found that nothing could induce the outside
companies to enter the trust. radical meas
ures were decided upon. The trust decided
to branch out and be competitor of the
plug factories To this end a factory was
established and a new plug tobacco was
below cost in the vain hope that this
would bring in the obstinate manufac-
turers This tobacco was sold to the job
to the retailers at 16 cents It was of a
similar grade to other tobacco that was
then being sold to jobbers at IS to q cents
q pound 1t was expected that this would
Immediately bring the obstinate ones to
time, but the trust reckoned without it's
most In tndt. All Dut one or the outside
concerns kept on doing business as be-
fore without SO much as noticing the new
departure Of the trust This one concern,
located in St Louis. began making a cut
and put out new brand of tobacco that
was precisely the same as its standard OF
the 26-cent grade and reduced the price to
Is cents, which was loss of about 6ia cents
a pound. In one month this company lost
$1,000 according TO the statement of
member Of the company and then stopped
it's attempt to compete, believing that
sooner or later the trust would come to
grief. as it was losing money at the rate
of nearly 100000 a year on it's new
a careful examination OF the new tobacco,
declared that Ii cost at least 20 cents a
pound to manufacture 1t, TO which must
be added the cost of selling, which made
the actual cost when placed In the hands
of the jobber about 22is cents. 1t was sold
trust of gig cents on each pound that was
sold. 1t was being sold at the rate of about
100000 pounds month, which would
make net loss In a year of about 81 10000
"a drain that even the American Tobacco
Company could not long stand.
EXTENDING THE FIGHT
This effort of the trust made the outside
manufacturers. or some OF the leading ones,
more determined than to make cigar
cites. Among those outside concerns that
were thus directly affected by the action
of the trust and which had not previously
been interested to any extent in the trust
or it's doings the Lisgett & Myer To-
bacco Company and the Drummond
Tobacco Company, of st. Louis; the Loril-
lards and FINER, OF Louisville, and =. j.
SOrg of Ohio These concerns renreeanf