The San Francisco call., 1897-02-24
How the Price of Sugar Is
Regulated by the
Combine.
Explained by the President OF
the Wholesale Grocsrs'
Association.
American Tobacco Company'S PreSi.
dent Tells Of the Methods of
HIS Monopoly.

NEW YORK, n. Y, Feb. 2S.-The joint
legislative committee investigating trusts,
etc., in this State resumed its hearing this
morning.
Waldo Smith, president of the Whole
sale Grocers' Association, said his associa-
ton was not incorporated and extended
through New York, New Jersey, New
Hampshire and Vermont. To obtain ad-
mission each member of firm had to pay
$40 year. He denied that his associa-
ton controlled the price OF sugar in any
way. The only thing the association did,
ne said, was to send out list of the prices
in sugar prepared by the secretary. The
grocers all over the country adopted the
prices of the American Refining Company
as the standard. Mr.. Smith said mis- firm
bought goods from the American Sugar
Refining Company and from the Molten
hour Company.
"And you get the same discount from
both companies?"
"Yes, sir
'Then the product of the Mollenhour
Company is fixed by the quoted prices of
the American Sugar Refining Company 2"
Mr.. Smith said he had no knowledge of
any such thing. He said the Wholesale
Grocers' Association had asked the Amer
icsn Sugar Refining Company for a rebate
which would prevent the cutting of prices.
In other words, they asked for protection
and the sugar company gave it to them.
Witness said that sugar was sold wherever
the grocers' organization existed at the
same price.
James K. Duke, president of the Amer
lean Tobacco Company, was the next wit
ness. He said the company was organ
ICED in New Jersey because the laws there
were more favorable. There were five
companies organized into The American
Tobacco Company-W. Duke Sons & Co.,
Allen & Ginter, w. S. Kim ball g. Co.,
Kinney Tobacco Co. and Gordon & Co.
The companies were incorporated in 1890.
Nine concerns were taken in after the or
ganization. No manufacturing was done
in New Jersey. Several factories had been
closed, but the witness could not say how
many people were thrown out OF employ
ment, but said great many we're re-em-
ployed.
DO you operate under factors agree
ment?"
No, sir; We call ours a consignment
agreement"
A COPY of this was produced and placed
in evidence. In reply to another QUESTION
the witness said that the CONF panles con-
troled from so 10 80 per cent OF the to-
bacco trade.
How many competing companies were
left at tie tim. OF the organization?
About 1907
The witness said the agreement referred
to the sale OF cigarettes.
"Then you have this agreement with
wholesale grocers?"
Yes, sir.
as it fact that the greater number of
your consignees are wholesale grocers?"
No, SIR"
The witness said that if the consignees
violated any clause in agreement it
was Withdrawn. The consignees are al
lowed under the agreement 21z per cent
commission and an additional Il per cent
it they handle the cigaret es of the Ameri-
can Tobacco Company exclusively and if
they do not sell or in any way aid in The
sale or distribution of cigarettes of other
manufacturers.
Then you compel the consignees to fix
prIceT'
.Yss, sir"
"is it not fact that man cannot do
business unless he handles your cigar
ettes?"
He can do business, but he cannot
make as much money"
Does not that state of things tend to
make monopoly"
No. sir; for the simple reason that we
make and sell our own brands and anv
other person can make his own brands.H
''Is it fact that the small merchant
must take your brand in order to do busi-
ness, and do you not by the creation OF
the intermediate system of rebates and
discounts practically secure for your
products a monopoiy?"
"No, sir. Take another brand which
the public wants and another manufae-
turer can supply the whole business"
Senator Lexow announced an adjourn.
ment until 10 o'clock to- morrow morning.