The times., 1898-10-05
EXPOSING TOBACCO DEALS
Mr.. Keene Tells Secrets About
the Recent Break.
WHAT CAUSED THE SLUMP
Operations That Mystified the Street.
Some One Was Unloading, and
When the Great Operator Learned
of the Fact He Planned n Feat TO
Secure Himself Against Losses.

New York, Oct. 4-Mr. James r. Keene
gives some facts concerning the inside
history of the great tobacco deal that
has for some days agitated the market.
He has repaid what he regarded as a
breach of faith on the part of other large
holders by unloading in astonishing fash
ino and clearing nearly Sl,500,000 in two
days
THE detection Of any one large holder
would naturally produce serious conse-
quences in such a high-prieed stock
said Mr.. Keene in speaking of the matter
last evening ut did When the most
indubitable evidence was furnished 10 me
that one or two of the parties had sold
/ sold my stock, and / did ii promptly, on
Monday and Tuesday of last week, at be-
tween S145 and $780,
The slight break of the first day was
followed by intense excitement, when Mr..
Keene's brokers began their work. Wall
Street, aghast and mystified, saw Ameri-
can Tobacco, which at one time had
touched Sl54.75, go tumbling until, long af-
ter Mr.. Keene had held his hand, it
touched sl5.5O. That point was reached
on Saturday last.
Mr.. Keene knew positively a short time
after the market opened a week ago
yesterday that some one had begun TO
quietly unload. Well" he said, IF
they will have it that way. here goes"
And that day there was a net loss of is
in the stock. He sold perhaps 10000
shares and Tobacco, opening at H7 S-S,
broke to l39.
He sold steadily on Tuesday, and while
the street was still mystified American
Tobacco fell to l32 IA and Mr. Keene
rested from his labors, content.
so much has been said about my con-
nection with the speculation in the stock
Of the American Tobacco Company, and
much that is at variance with truth that
/ think ] should depart from the silence
/ usually observe in such matters. to give
a brief review of the facts and circum-
stances connecting me with ii.
Fight Agains PIuGmakers.
In the early part of January 1 was
supplied, by an absolutely responsible
authority, with the figures of the earn
ings of the American Tobacco Company
for the fiscal year ending December 81,
1897, and the financial statements of pre-
vious years These figures were given me
TO secure my cooperation in purchasing
the control of the capital stock Of the To-
bacco Company, which was then selling
at sS7 a share.
1T is well known in the Street (and l
presume to the gentlemen who had pre-
sented these figures to mel, that ! had
been a considerable buyer Of tobacco
stock some months before the date Of this
occurrence; and that l had thought it
wise under the stress of many threats
from the management, who were then
sellers Of the stock, TO sell a portion of
my holdings down to their cost price, for
fear of further attack.
This experience, together with the i'm
pressiVe statement made TO me that the
policy OF Mr.. Duke, the president of the
company was costing it 81, ,0e9,000 annual
~, in a hopeless fight against the plug
manufacturing interests of the country,
and believing that such a policy was in
direct conflict with the best judgment of
the responsible directors then in the
board, and in previous boards, decided
me to buy the stock
When. by appointment, my informant
called several days later ] had purchas-
ed 10000 shares of the stock, and so in
formed him, and then concluded the ar
rangement referred to above.
THE market at that time was in
state of great uncertainty. The war with
Spain was impending, and it was with
much difficulty that aid could be secured
TO purchase the amount Of stock required.
To add to the difficulties, the Maine was
blown up But, despite these depressing
circumstances and the conditions which
they produced, purchases were steadily
made by all the parties in interest
II confded the information and the
proposition TO one friend, who agreed TO
buy 30.0t0 shares, and, having secured the
purchase of %. 900 shares through another
gentleman, the practical control of the
company was secured.
My individual stock cost me 500
.ef, +Iaa
time reduced the price TO $50 l believe
that the average price of all the stock
bought to secure the control of the to-
bacco company at that time was not
more than 500 a share
The stock rapidly rose 10 $117 before
the books closed. When the facts regard
ing change Of control became known to
MIR. Duke and his associates, VINO were
then in the board, they sold a part of
their stock and il declined TO $97 share
With the control of the stock in hands
antagonistic to the existing management
every influence was brought to bear upon
the new owners of the property Messrs
Schley Payne and Terrell who repre-
sented on the books Of the company
small minority of the stock, were besieg-
ed by their friends, who were also friends
Of the management, to continue it in
power.
The stock in my control was at that
time in excess of 10000 shares. So much
pressure was brought to bear upon me
that / finally consented to give up the
original plan, which provided for an en-
tire change of officers, and consented to
a compromise, whereby Mr.. Duke retain
ed the presidency, Messrs. Payne and
Terrell became directors, and / was to
appoint the treasurer of the company.
who should be director representing me.
THE latter part Of this agreement has
never been carried out. ] am sorry to
say so, but Ii is the fact, nevertheless.
Feared n Forced Decline.
MY reason for permitting the minority
interest of $4,000 shares or more TO DOM
mate more than 10000 shares was this.
Messrs. Duke, Ahrents, Payne. Schley
and Terrell would, if a compromise had
not been agreed TO. have thrown their
stock upon the market. and some Of my
associates were not financially able to
stand the decline which would have fol-
lowed such selling.
''The election having been settled 11uon
this basis, the price of the stock natural
ly advanced upon purchases by Mr.. Duke
and his friends and upon the expectation
that the plug business of the company
would be consolidated into a new COM
pany- This required the sale of $3. 600 O00
treasury stock, which was done at this
time the cash therefrom being required
10 finance the operation If II was effected.
The stock so sold In the open market was
taken by the management of the COM
pany. and it brought about S1I0 a share.
1.-THE negotiations for the plug combi-
nation were discontinued for time be-
cause Of the efforts of the contributing