The morning news. [volume] (Savannah, Ga.) 1887-1900, 1897-02-25
TALE OF THE TOBACCO TRUST.
| PRESIDENT DUKE BEFORE THE
LEXOW COMMITTEE.

| Up Between 1000 and 3,OOO-The
| Five Original Companies in the
Trust Employed 5,s95 Hands
Whereas the Trust Now Employs
9,I94.
! New York, Feb. 24.-There was large
attendance of spectators this morning
when the joint legislative committee re-
sumed its investigation Of trusts, monopo-
lies etc On calling the committee to or
der, Chairman Lexow said the coal trust
would be taken up tomorrow.
President Duke of the American Tobacco
Company again took the stand He said
that the American Tobacco Company was
capitalized originally at $20OO0,0OO, which
was afterwards increased to $29, ,S35OO0.
How much of the stock did your COM
pany receiver" asked Chairman Lexow.
''We received $7,4 ,O0O," said Mr.. Duke.
80 you received Sc. 100000 for good will,
such as patents and trade marks?"
Yes, sir"
How much did Allen and Ginter re-
ceive?"
The same as the Duke company. $780,
The witness said that Kinney & Co re-
| ceived &,999.0OO in stock; S. Kimball & Co.,
S,4990OO and the Goodwin Company, $2-
499 600.
How much stock was issued for the
| live assets of the various companies?"
about $5,OOO,OO0 worth of stock"
And how much for the good will, such
| as trade marks, patents, etc.?'
"About $19,990 OC0."
The witness said that in distributing the
stock the earning capacity of the five ori-
| ginal companies was considered.
"WhO made the aODraiSpment? ?'
''Mr Ginter, Mr. Kinney, Mr.. Emory,
! Mr.. Hart and myself"
Did the number of the original-stock-
| holders exceed fifteen?'
Il think the number ranged from fifteen
to twenty-five"
The witness said that when the stock
was increased to $29 $4,000 there were
about forty stockholders.
How many stockholders have you
now?"
about 2,OOO or 5000, don't know the ex-
| act number
"How was the stock issued?"
I'VE issued two-ffths preferred stock
| and three-ffths in common stock"
Witness denied that his company had Sc
| cured control of all the cigarette making
machines by combining with the other
| companies.
did you not subsequently secure control
of a machine that practically removed fear
of competition ?"
Some considered the Allison machine
better than ours"
HAS not the Allison company organized
| in conjunction with the tobacco combina-
tion?"
mo sir. not exactly, although it was
friendly"
Witness said that prior to the consolida-
! ton the five original companies employed
| 5,S95 hands and in February, 1896, the
American Tobacco Company had 9,19i en-
ployes
In reply to another question, the witness
| said that the common stock in 1894 paid
12 per cent; in 1895 it paid nothing, and in
1896 it paid 8 per cent. in cash, and there
was also a surplus or $1,4O0,00O
Witness attributed the decline in the
price of the stock from III to GO to un-
loading. He said that he held more of
the stock now than ever before He de-
| cared that the output in cigarettes had
almost doubled since the consolidation.
Josiah Brown of Springfield N. j., Sec
! retary of the American Tobacco Com
! pany, was then called In reply to a
| question, the witness said that most of
| the business was done in New York, but
the books were kept in New Jersey. Wit
| ness looked after the cigarette end of
the business. Witness could not tell how
! many held common and preferred stock.
| The common stock, he said, was more
| largely dealt in He could not explain the
fall in the price of the stock from III to
| g. but said II might have been due to the
| taxes that had been imposed on the COM
pany and other disturbing elements.
Francis b. Thurber then took the stand.
| He said he was president Of the American
! Grocer Publishing Company. He declar-
ed that the American Grocer was devoted
| to groceries in general, but especially to
the retail trade. He then read a long
statement containing history of the
| trusts. He said the average price of sugar
for nine years prior 20 the consolidation
| of the Sugar Refining Company was 7.19
cents per pound, and for the nine years
| succeeding the consolidation was 937
! cents per pound The decrease in the
price was owing to the cheaper purchase
| of the raw material and the cheapened
| cost of production.
Mr. Thurber said that the total results
of the combinations intelligently admin
| istered were beneficial to the public at
| large and to the laboring classes. The
| profits Of capital have been steadily de-
| creasing, and those of organized labor
| steadily increasing
at no time" said he. would a dollar
purchase so much as at the present time.
There are good trusts and bad trusts, but
| the good trusts so far predomnate that
such aggregations Of capital should be en-
couraged. accompanied by safeguards
against abuses"
When Mr.. Thurber had concluded his
II they expressed his theories as TO combi-
! nations as a whole, or those commonly
called trusts, and he replied that he refer
red to them generally, as we'll as speclh-
! cally. He contended that the centraiiza-
| ton of capital was the natural condition
| OF the time. Witness would not admit
| that concentration OF capital prevented
| competition. He declared that competi-
ton was active at present, and that IL
was bound to increase against the Ameri-
can Sugar Refining Company. Witness be-
| ueved however, that the limited price
| system is a necessity In modern trade. He
did not believe that the stock of every COM
| bInatfon was put on the market and spec
| Mated In The Standard oil Company.
he said, could not be called speculative in
any way
In reply to a question, the witness said
| ne ala not believe chat the American
| sugar Refining Company could buy up, IL
| a desired, all the rival concerns.
| could not the American Sugar Refn-
| ing Company, with It's control of from 20
10 80 per cent Of the output and It's capi-