The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1897-02-28
UD0[g UhyWIE5 T0aATuON OF
TITLE AM E[RlGA61 1TWBAG 10 CO.

ed Dy phe company, the nunlDer OF uduus
had been doubled.
The terms under which the American
Tobacco Company sells to its factors, or
agents, was next dwelt upon by the
committee.
You have established a system for
the sale of your goods through the agency
of factors, with whom you have agree
ments, have you not?" was asked.
we have a consignment agreement "
And you constitute those dealing in
tobacco in different parts OF the country
as consignees under this agreement
Nv e do not in the case Of everybody"
II understand that you reserve the right
to discriminate?'
Yes, we do" answered Mr. Duke, with
some emphasis.
How long has this form of agreement
ben in opcration?"
Since the latter part of 1895"
You said in answer to a former qucs-
ti0n. that che concerns that were incor-
porated in this company represented an
output eff about 80 per cent. Of the cigar
cites trader
''Well, that is more or less Of a guess.
/ could not say definitely at this moment"
But you have reason to think that that
estimate is approximately correctY
Il think it is
After the consolidation OF the firms
that you have named as being acquired,
how many competing concerns We're there
left?''
COMPETING CONCERNS LEFT.
THE revenue returns, / think, show
that there are about a HUNDRED"
d.
firms produce among them only about 10
per cent. Of the cigarette tradeE'
Yes
"Are any Of them in the State of New
Yorlx q
Yes, quite number"
do you sell or eonsign cigarettes on
any other terms than those mentioned in
this agreement
II think we do
Senator Lexow seemed surprised at
the answer, and almost pathetically ask
ed:
Now, Mr. Duke, is it not an establish
ed system of your business not to consign
your goods except under the conditions
mentioned in this rebate or percentage
agreement"
With some seeming reluctance, Mr..
was the correct one. He said, Also that
the trust did not sell directly to the re-
taller.
The witness then made an insignificant
admission He had already shown that
the only condition under which the trust
sold its cigarettes was under the con-
signment agreement. Now, in answer to
question by Senator Lexow, he said
Il
because Of a violation OF some Of its
terms. 1.-THE chief reason for this with
drawal, be frankly asserted, was because
| some of the consignees 'cut the prices Of
cigarettes"
The three most important sections in
| tine consignment agreement were read
| by Senator Lex0w,, as follows:
"Sec. Z. If you do not discriminate
| against our cigarettes in favor of those of
other manufacture, and if you do not sell
or dispose Of any other cigarette ut less
| than the list price: and if in all respects
| you comply with the terms OF this agree
/ ment, we will pay you a commission OF
| you from the sale Of the cigarettes which
we may consign to you
Sec. s. If, however, you handle Gig
| arertes Of our manufacture exclusively
and do not sell or distribute. or in any
way aid in tire sale or distribution Of Gig
arebtes of other manufacture, and if you
/ in all respects, fully comply with the
terms and conditions of this agreement
we will pay you an additional commission
/ Of ~ per cent. on the amount realized By
/ Won from he sale of cigarettes which we
may consign to you.
| "Sec IA The right is reserved by us
| to at any time to decline TO consign to you
| any more cigarettes, and to withdraw
| the cigarettes already consigned to you
1 upOn repaying to you all your legitimate
advances thereon, and the right is resery
al to you at any time to decline to act
/ further for US, after having delivered tC
rs all cigarettes in your hands, and pay.
ing over to us the proceeds Of all sales OF
our cigarettes at list prices"
PENALTY FOR VIOLATION.
Mr.. Duke asserted that he considered q
violation of any Of the foregoing sub-di
visions sufficient reason for withdrawing
the agreement from any factors, by refus-
ing to pay them any rebate and thus prac
| ticaily prevent their selling the products
Of the American Tobacco Company. He
admitted that the object of the trust was
| 10 get all the tobacco dealers to handle
| its goods exclusively, and that the object
Of the consignment agreement was to
maintain the prices fixed by the trust
| rs it not a fact Also" asked Senator
| Lexow, "that no man engaged in the to-
| bacco business can successfully compete
with others unless he handles your pro
ducts, so great have been the demands for
themT'
He can compete in the business, but he
rannOt make SO much money. People
Lave tried to throw our goods out Of the
market, but they have not succeeded"
lit amounts to this, that your brands
are so we'll known that a tobacco dealer
cannot exist except by selling your
hnndsy"
II don't know about that. All know
is that they do sell our brands"
I'm your opinion, Mr.. Duke, does not
such a state of things inevitably lead to a
monopoly"
mo. We simply sell certain brands
that belong to us. Other people, If they
wish, can make brands and take them
into the market, and if people want their
Goods they can get plenty Of jobbers to