Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1897-02-24
THE TRUST INQUIRY.
PRESIDENT WHOLESALE GRoCERS
ASSOCIATION TEsrIFIEs.
THE AMERICAN TOBACCO COMPANY.
President Duke on the Witness
Stand--Be Tells OF the Agreement
OF His Organization with Con-
sfgnces.

otNC AfhANhf IAtFts'taN Va N''N Ff'NfN
sale Grocers' Association. was the first
witness. lie said HIS association was not
Incorporated, and extended through New
York. New Jersey, Connecticut, New
Hampshire, and Vermont. He denied
that his association controlled the price
Of sugar in any way. The only thing
that it did, he said, was to send out a
list OF the changes OF price ia sugar, pre-
pared by the secretary.
Mr.. Smith said that previous to the
formation Of the Wholesale Grocers' As
ISOLATION the grocers lost money by
selling sugar He declared that the
Wholesale Grocers' Association had had
nothing TO do with the making OF a code
of rules fixing the price of sugar on an
equality everywhere. or fixing the price
OF sugar in any way since six years ago
last June. Witness said that grocers all
over. the country adopted the prices Of
the American Sugar Refining Company as
the standard.
Mr.. Smith said his firm bought goods
from the American Sugar Refining Com
pany and the Mollenhauer Company.
'And you get the same discount from
both companies?"
Yes, sir
Then the price Of the Mollenhauer
Company is fixed by the quoted prices OF
the American Sugar Refining Company"
Il have no knowledge Of any such
thing"
But don't you fix the price asked?"
Eyes, daily, as telegraphed by our
brokers'"
Now" said Senator Lexow, rising in
his seat and handing Mr. Smith a copy
of the factors agreement. II am sorry
we should know more about your busi-
ness than you do"
Mr.. Smith examined the document care
fully. and said: ''All that is in that
agreement is that we make an af1davit
TO maintain the price of sugar"
Now, let me show you the affidavits
you make. Do these affidavits not state
the conditions on which you receive the
sugar.
mo, sir. We found we were handling
sugar at net cost, which means ruin. We
went TO the sugar refineries. They said:
Now We Will give you a list of our
customers, and If you can get 80 per
cent. of them TO ask for what you want
we Will grant it,
Then it was the American Sugar Re-
fning Company which proposed the or
ganization of the Wholesale Grocers' AS
sociation@
mo association was formed at that
time. II was simply an agreement. We
asked for a rebate which would prevent
the cutting of prices"
Then you were granted what you
askedg"
Yes. sir, We asked the American
Sugar Refining Company to fix a price
and limit the price. In other words, we
asked for protection, and they gave il to
US"
The witness said that sugar was sold
wherever their organization existed at
the same price.
COMBINES A BENEFIT.
Witness declared that combinations
were a benefit 10 the consumer and to
the trade.
He denied that the Crocers' Association
was a tail TO the kite of the American
Sugar Refining Company
us not the sale OF sugar absolutely es-
sential to the success Of the jobbing
businessg asked Mr. Lexow. eyes, sir;
it is"
Hence a factors making or unmaking
depends on his securing a factors agree
ment from the American Sugar Refinery
and its allies?"
Eyes, sir"
Therefore, the making or unmaking
OF a wholesale grocer depends upon the
granting of a factors agreement by the
sugar refiners2"
Witness admitted that such was the
case. and said if the factors agreement
was withdrawn, there would be wholesale
competition and universal ruin.
at is not fact that you are building
up an instrument for the perpetuation Of
a monopoly by the American Sugar-Re-
filming Company by means Of this factors
agreement
"No, sir; for the reason that capital
can come in at any time and break up
the combination"
Witness was then shown q copy Of the
factors agreement. but. Notwithstanding
it's provisions, insisted that competition
did exist. He declared that the rebate
system was % years older than the
Wholesale Grocers' Association.
TOBACCO COMPANY.
James =. Duke, president of the Ameri-
can Tobacco Company, was the next wit
ness He said the company was or
ganized in New Jersey.
How many companies were organized
into the American Tobacco Company"
There were five-W. Duke Sons & Co.,
of Durham, n. c.; Allen & Gnter, of
Co, OF Rochester; the Kinney Tobacco
Company New York; Gordon & Co, Of
New York. The companies were incor-
porated in 1890"
"Why did you organize in New Jersey?"
Because the Jersey laws for that thing
are more favorable"
"Did you take in new companies after
you were organized?"
Witness replied that they had done so,
and gave the names Of nine concerns.
"Are all the factories Incorporated run
ning?"
"No. sir"
s'How many are closed?"
Goodwin & Co.. the HALL Factory, the
Consolidated Cigarette Company, and, j |
think. another"
did the American Tobacco Company |
receive the books of the old companies?" |
mo. sir; they remained with the old |
companies"
"Do you operate under factors agree
ment?"
mo, sir; we call ours consignment
agreement"
A copy of this was produced and placed |
in evidence.
In reply to another question, the wit |
ness said that the firms organized con- |
trolled from 80 TO 80 per cent Of the /
cigarette trade.
''How many competing companies were |
left at the time of the organization
About 100"
The witness said that the agreement re-
ferred to the sale Of cigarettes.
'You have this agreement with whole
sale grocers?
Eyes, sir"
sis IL a fact that the greatest number
OF your consignees are wholesale gro
cers?"
'No, sir"
The witness said that II the consignees
any clause In the agreement 1t
was withdrawn. The conslgnees are al
lowed under the agreement a 1-2 per
cent commission. and an additional 7 1-2
per cent IL they handle the cigarettes Of
the American Tobacco Company ex- |
Il L..