The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1896-12-10
ITS CHARTER FORFEITED
ALLEGED IN A SUIT AGAINST The
AMERICAN TOBACCO CO.
Action Based on Allegation That Com
panY is Monopoly in Manufac.
ture Of Cigarettes.

WI = VI StE1IGttSSs
New York, Dec. 9.-The suit to annul
the articles in the corporation of the
American Tobacco Company, brought in
the name of the Attorney General OF the
State of New Jersey on behalf of John
X. Miller and Franklin Miller, Of Newark,
was begun before Vice Chancellor Reed
in the Chancery Court of Jersey City
to-day. The suit is based on the allega-
tion that as the American Tobacco Com
pany is monopoly in the manufacture
Of cigarettes its charter has been vio-
lated and forfeited. 1t is expected that
the case viii occupy a week for trial.
New York, Dec. 9.-The final argument
in the action to annul the charter of the
American Tobacco Company was begun
to-day in Jersey City, before Vice Chan
cellor Reed. The suit was begun in 1894,
in the name of Attorney General John Z.
Stockton. The real compliments are
John II. Miller and Franklin Miller, Gig
arctic manufacturers and tobacconists. of
Newark, represented in to-day's argument
by Thomas M. McCarter, his son, Thomas
M. McCarter, Jr., of Newark, and NJ S.
Gurterman and Edward Einstein, and
others, of New York. The defendants
counsel present were Joseph III. Choate,
Richard Lindabury and Col w. w. Full
Ter, the general counsel of the American
Tobacco Company The complainants'
brief set forth
"That the firms, corporations and indi-
viduals who organized themselves under
the law of New Jersey into the corpora
tion known as the American Tobacco
Company are conspiring with each other
TO control and monopolize the entire busi-
ness of manufacturing and selling paper
cigarettes in the United States; to crush
all rivals and competitors; to destroy and
prevent competition among themselves
and to fix and maintain the prices of
said commodity.
THAT the corporation never intended
to establish any factories or depofs in
New Jersey and have not done so.
"That the ineorporators have not CON
dueted any part of the business in the
State of New Jersey. All that has been
done was TO make sales in an illegal man.
ner to dealers who are citizens of New
Jersey.
That the corporation is not bona
tide corporation for the purposes conten-
plated By the laws of New Jersey.
That the division Of S25, ,000, 900 Of cap
itai stock was illegal, for the reasons
stated, and because eighty per cent. Of
the stock was issued ostensibly FOR the
purchase OF property Mt price fixed by
the parties to the agreement which price
arbitrary and not limited to the real and
actual value of the property for which
the capital stock was issued"
Mr.. McCarter read and argued until
hx,ss,s sss,.@ 4 I -
The hearing will probably occupy three
days more.
The answer of the defendants admits
the incorporation. 1t denies that the
incorporators entered into an agree
ment to mpnopolize the manufacture
and sale Of paper cigarettes or TO crush
out It's rival. The original agreement
Of October II, 1889, the answer saws.
was abandoned and new company was
formed January %, 1890. The lewiston
of the capital stock was according 10 the
the agreement of the latter date. On that
date resolution was passed that an as
sessment be levied upon each share Of
general stock to the amount subscribed.
That the incorporators went into the
market and each invested the whole
amount Of his stock subscription in actual
cash IN leaf tobacco at market rates and
delivered the tobacco to the company,
wEeFeuncn the certificate of stock was
issued The incorporators abandoned
the idea Of establishing factory at
Newark because they were unable to find
satisfactory site, the answer says,
and il further declares that the company
ls combination Of previously existing
fr41s. After the transfers of stock the
prey ions companies ceased to exist and no |
aAnnL 11.na ian1nol - -.