The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1897-02-28
NEwEYoRK CITY. F. bruarv %

s,oarld next take UP the American Tobac-
70 COMPANY James b. Duke the presi-
lent OF The company, which is popularity
SHOWN as the Tobacco Trust, was the
first witness called to testify to the oper-
atoms of this company. He informed
he committee that the American Tobac-
20 COMPANY was formed in 1890, and was
Incorporated under the laws of New Jer-
sey. Mr.. Duke at the outset was unable
to supply the committee with amy salts
factory reason why the company should
have been organized in New Jersey, but
eventually Senator Lexow forced him to
admit that the reason was to be found
in the fact hat the laws of New Jersey
were more considerate and favorable to
trusts than the laws of any other State
i'm the country. That fact has been be-
fore demonstrated in the case of the
Sugar and Rubber trusts.
When the tobacco company was first
organized, it was brought out, the fol-
lowing companies were amalgamated:
Allen & Ginter, of Virginia; w. Duke
Sons &Co., of North Carolina; w. 5.
Kimball & Co, of Rochester; Goodwin
& CO., New York, and the Kinney 10
oacco Company Of New York. Suisse
quently the trust acquired these addI-
tional concerns: The National Tobacco
Works, of louisiana Il. Whitlock "
Co., Richmond, Va. q. W. Gail ~ AK
and Marburg Brothers, of Richmond;
Hernsheim Brothers & Co., of New Or
leans; Thomas II. Hail. Consolidated
Cigarette Company, H. Ellis x Co, of
Baltimore, and a. II. Martin & CO., Of
North Carolina.
Having obtained the names of these
subsidiary companies now controlled by
the American Tobacco Company, Mr.
Lexow reverted to the motive that urged
the New Jersey Incorporation.
II will repeat" he said, 1.-THE question
that / asked you before, and that is,
What was the nature of the situation
that justified the orga nization Of COM
pany in the State of New Jersey, no de-
partment of which was situated in that
State, and where it has consequently no
interest as distinguished from the four
States in which it owned factories?"
We'll" replied Mr. Duke, with con-
siderable hesitation. for one thing the
taxes were lower and then. again, coun-
sci advised us to organize in New Jersey"
do you mean" continued Mr. Lexow,
THAT the preliminary taxes We're made
lower"
Eyes, and the yearly taxes Also" an
swered Mr.. Duke
us it not fact that the primary rea-
son for the organizing of the American
Tobacco Company in New Jersey was
that the laws of that State permit one
company to acquire the stocks and Sc
cTsties Of other companies tranacting
substantially the same business?"
THAT did not move us, because we did
NOT mean to own any stocks I'm other COM
panics."
Were you principally concerned in
the making up Of the corporation OF which
you are now president"
II was"
'.Then, so far as YOU are personally
concerned. the primary object for organ
izing in New Jersey was the question OF
taxaton?'
Eyes, sir
A MONOPOLY OF 90 PER CENT
Then Mr.. Lexow branched off in the
direction of inquiring as TO the amount
of business controlled BY the American
Tobacco Company. Mr.. Duke, in reply
to questions, admitted that his company
had monopoly of actually about 30 per
cent of the cigarette trade Of the coun-
try. In what are known as the "all-to-
.bacco" brands Of cigarettes, he testified
that the trust made about 80 or 20 per
cent of the entire output.
"The committee would Ike to know, /"
suggested Mr.. Lexow, whether all the
factories that you have named as being
bought up are now running?'
I "No, sir; we closed down the factories
of Goodwin & Co., the Hall factory and
the Consolidated cigarette factory. We
closed down these factories; but / would
like to explain that the brands that were
manufactured there were removed to
other factories which we owned, ard are
now being made in these places. You see
the American Tobacco Company, In
! these instances, did not buy the buildings
or factories, but simply bought up the
brands. Those brands, as | have said,
/ We are now making in some of our other
] factories"
How many men were discharged by
the closing of the Goodwin factoryY
at was only small concern. / cannot
exactly say how many people were en-
ployed there; but is was probably not
more than $50. When we moved the
brand 10 our Rochester factory for man
! Ifacture, we employed more people
here"
How many employees were discharged
rom Halls factory?"
II cannot say"
Have You no figures which will show
even approximately how many hands
we're discharged?"
We'll, as a guess, / should say from
about $50 to 200"
Now, was the number not something
ike 1902"
i don't think it was as many as that. :"
However, when pressed more closely
On inns posnt, Mr. Duke felt himself con-
strained to acknowledge that in the busy
season Halls factory might have EN-.
ployed as many as $50 men and girls. He
thought, also, after considerable oues-
tioning, that the Consolidated cigarette
factory might have employed 300 hands
lie admitted, also, that the Ellis factory
IN ia ltmore' was shut down, but he
. said that its trade had been removed
10 another factory which the tr,et owned