The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1897-03-31
FOR SWEET CHARITY
American Tobacco Co.'S Factor
Agreement Discontinued
OILY CANNON CIRCULAR
AGREEMENTS WERE EXPOSED
IN LEXOW INVESTIGATION.
CIRCULAR LUSH WITH PROMISE
This Modern Ogre Having Been
Brought to Its Knees by State Leg
isIatures Voices Its Surrender
With Churlish Grace.

New York, March 30.-The American
Tobacco Company, which embraces a
large majority of the cigarette and to-
bacco firms in the United States to-day
issued circular wherein formal notice
is given of the abandonment of its fac
tor agreement, which formerly existed
between the company and its customers.
The reasons for the change are set forth
in IL circular which was mailed tonight
to tho tobacco jobbers in all parts of the
country. The circular reads as follows:
In many States the Legislatures have
recently passed laws intended to make
illegal all contracts and arrangements
by which manufacturers seek to comply
with the natural demands of dealers
in their products to secure to them le-
gitimate compensat ton; such laws are
calculated to keep the trade in a constant
state of uncertainty, and to involve those
therein in expensive litigation.
While it is probab BILE that all such laws
are unconstitutional and i'm a test, would
so be declared by the courts of final re-
sort, yet, during the progress Of the liti-
CATION the manufacturer and dealer
would suffer great loss and expense, for
these laws bear equally on all parties
to the contract or arrangement.
Though the laws in your State may
not be so sweeping as in some others,
yet trade Is not bound by any ina ginary
lines, and for that reason any arrange
ment that is not general in its application
defeats the result the dealer desired.
I'm view Of these considerations. and
that, in the interests of the trade gener-
ally we are engaged now in testing such
laws in several States, and, because of
tie delays, annoyance and expense of
lawsuits, we do not feel that we shoald
be expected to undertake to have adjudi-
Gated the laws of all the States which
have passed them, we have determined
that. in the face Of all these laws. which
so seriously affect the permanency of any
arrangement by which the manufactu-
rer undertakes to benefit the dealer, and
which involve You as well as ourselves
IN their ineonrenience and penalties, it is
proper, IN your interest and our own TO
terminate all arrangements relating to
rhe sale Of our products. We therefore
respectfully notify you OF the termina-
ton. on this date. OF our contract with
you relating to the consignment of cigar
cites, and of the abrogation and with
draw;il of all conditions pertaining TO the
sale by you of any of our products
A second circular giving the revised list
OF cigarettes says: - at,
ut is our hope that the success Of
our business will warrant our making
donations OF money or merchandise to
our customers from time to time, in
recognition Of their interest in distribut-
ing our goods Should we be able to
carry out this intention. the donation at
frst will be based. primarily upon the
amount of our products purchased by
you Direct from US. and secondarily,
upon the expense to us of maintaining
the output brands in your State.
We wish>you to understand that moth
ing herein shall be construed as imposing
any obligation upon the company to make
slch donations, though it is our expecta-
tion that the condition of our business,
through the efforts Of the trade. will war
rant our doing so; and it is also to be un-
dersfood that such donations NAV be al
Tered in form or amounts. or entirely
discontinued. at any time without notice. y