New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-02-25
HOW THE STOCK WAS DIVIDED
NUMBER OF CIGARETTES MANUFACTURED
"DETAILS OF THE HEARING

coro,or Iexow before beginning the ,xamina-
lion OF witnesses yesterday morning, announcer
so-called Coal Trust. "It is the intention, ne
sod "of the committee 10 investigate the So called
coal Trust tomorrow. Charges have been made
that the coal cor1blraton is In the nature OF the
most vicious trust tina; exists. Newspapers In New
Work. have made specific charges that the trust
exists for the purpose OF keeping ZIP the price OF
coal The committee IN this formal manner puts
itself at the disposal of the newspapers making
those charges all the authority and powe" OF It's
subpoena and publicly requests that where they
have information has been charged that they
will place that within the knowledgc of the com
mittce We make this declaration In the broadest
sense so that no claim may be made hereafter that
the committee has failed to probe tina; question TO
the bottom and the offer of the use of the com
mittces subpoena IL made in the broadcast sense
and placed at the disposal OF those who make
these charges absolutely and without reservation.
The committee will subpoena all those who 1t be
lieves may throw light upon the question. II then
the charges not maintained and those who
have made them do not produce the proof or aid
the committee In obtaining information, II Will be
their fault and not the committees"
James b. Duke president of the American To-
bacco Company. then resumed his place on the
witness stand lie first examined as to the
financial affairs OF the company. and unlike some
witnesses who have preceded him seemed willing
to let the committee know in what proportions the
capital Of the trust divided among the sub
sdiary companies amalgamated under the title Of
the American Tobacco Company The original
capital of the company. at the time of It's organ-
cation was 100000 which was later increased to
s25 cUOJ0 and a further increase TO s3j.0O.00O
afterward authorized. or this capital s2sS3o,oO
had been issued.
How much OF the stock did your company receive
as purchase consideration" asked Senator Lexow
TIE AMOUNT RECEIVED.
I'VE received s7.4g7 Co.," replied the witness.
How did you receive it?'
I'VE got 100000 of pre- ferred stock and $4,000
IN common stock. We guaranteed that there would
be 800 90 In live assets"
so that in round figures. you got 100000 for
goodwill. such as patents. trademarks?"
Yes, sir
How much did Allen & Gnter receiver"
"The same as the Duke Company-N $4,000"
The witness added that the Kinney Tobacco Com
pany received H999,G0 and guaranteed 100000 live
assets while " S. Kimball Co received g. 1900
and guaranteed 10000 live assets Goodwin & CO.
had received and guaranteed the same amounts as
kimball & 60.
HOY much stock was issued for the live assets
Ct the various companesY'
About 100000 worth"
And how much for the goodwill. such trade
marks. patents, etc"
About Sl9%0.GO0"
That's about 500 10000 in round numbers?'
Eyes. sir"
The witness said that in distributing the stock
consideration given the earning capacity of the
five original companies which formed the trust.
"Who made the appraisemertY
Mr. Ginter. Mr. Kinney. Mr.. Emory Mr. Hart
and myself"
Did the number Of the original stockholders ex-
coed fifteen"
Il think the number from fifteen TO twenty
five"
How many stockholders have you now"
About 1900 or 5000 | don't know the exact num-
How the stock issued"
I'VE issued two-ffths preferred stock and three
nfhs in common stock"
so that where "A company was valued az 5000,
OOo. you issued to 1t 100000 in common stock and
100000 in preferred stockY"
"Yes. sir"
How much Of the stock originally issued for
goodwill represented machinery"
About 100000 or sHo.c1."
Then that arount he deducted from ss.-
600 90 I'm order TO reach the given for good
Will etc.
YES sir"
Did YOU not practically control OF me
cigarette machines by consultations"
NO Two competing companies had the same
machines We had"
Did you not subsequently secure control of a
machine that practically removed fear of compe
titon2'
Some people considered the Allison machine bet
ter than the one we used
Didn't you acquire the rights OF this machine?'
II doa't remember exactly.
''Was not the Allison company organized In con-
junction with the tobacco combination"
NO sir; not exactly. although II was friendly"
.Have you obtained the figures showing the num-
her Of hands employed before and after consollda-
ton
NUMBER OF HANDS EMPLOYED.
..Yes; prior to consolidation the five original COM
panies employed 1886 hands and in February. 1896
the American Tobacco Company had 1874 hands
employed
In reply to further questions the witness admitted
that the product had also increased.
How much OF the stock is yet owned by the
original stockholders"
II can't tell exactly know what own myself"
"Do the original stockholders hold 80 per cent OF
II cir original holdings?
II am unable TO say.
After Informing the committee that the preferred
stock paid per cent Mr.. Duke said that the |
common stock IN 1890 the first year, paid 10 per |
cont. I'm each OF the four following years l. per |
Continued ON Fourth Page.