The times., 1898-10-28
A PLUG TOBACCO COMBINE.
1he continental Company VIII Con-
troll the Product


troll the Product.
New York, Oct N.-When the Drur-
mond Tobacco Works, of St. Louis was
opened Few days ago. as the property
Oh the American Tobacco Company. the
hrst positive step In forming the largest
industrial interest in the United States
was TAKEN 1t was the first act in COM
pietion of an organization having wider
ramiications than even the Standard Oil
company. 1t insured the successful
formation of the Continental Tobacco
Company, which is to be run under a
working arrangement I'm connection with
the American Tobacco Company, although
the two corporations will have a distinct
and separate capital and offices.
1t was nearly two years ago that Col
Joseph b. Hughes, of Hamilton, Ohio,
and hiS-ussociates, Fletcher S. Heath, a
banker of the same city, and Perry S.
Heath, First Assistant Postmaster Gem
eral, began to syndicate the great plug
tobacco manufacturing establishments OF
this country, and form an organization
which, although at that time without the
design, Is now to control more than
four-ffths of the plug tobacco output of
the country and take from the Ameri-
can Company It's entire plug trade.
For more than eleven of the last
twelve months, eight or ten of the largest
capitalists in the country, including
three or four of the leading tobacco
manufacturers, have devoted almost their
entire time to the work of perfecting this
organization and bringing the manufac-
turers together. Six or eight times after
the contracts were secured and the capi-
tai made ready, obstacles arose which,
for the moment. seemed to destroy all
chances of success. month before the
declaration of war against Spain, s2s, 500 900
in capital, the amount necessary to begin
transfer of properties, was made ready,
but the prospect of war frustrated all
plans. Two of the largest life insurance
companies In New York City at one time
contracted to take upwards Of $50, 600, 900
in the first bonds, while Russell Sage
and his associates had arranged to take
half as much more.
Col Hughes is at present the most
adroit and successful syndicator in the
country, having formed the first English
syndicate to purchase American brewer
les. Even war did not deter him In his
determination Fletcher s.. Heath pro-
cured all the contracts for the purchase
of the plants and the deal has now been
made complete. The company will have
a capital of $500 600, one-half TO be Z
stock.
The following are the concerns pur-
chased by the Continental Company, and
will form the line of plants which will
produce 10000, go pounds of plug tobacco
annually, the same being, as stated, more
than four-fifths of the plug tobacco out
put OF the country: The Messrs- Drum
mond & Co. and Brown Tobacco Compa-
ny. St Louis: Daniel Scotten & Co, De-
troit; P J. Sorg Company and the Will
son-McCauley Company. of Middletown.
Ohio; John FINER & Brothers Tobacco
Company and the Harry Weisinger To-
bacco Company. Louisville. Ky; P. H
Mayo & Brother, Richmond, Va, and p.
Lorillard & Co, New York.
Besides the product of the above com
panies, all of the plug tobacco business OF
the American Company is to be absorbed
by the Continental Company, and the ci-
garette business OF the above concern tthe
Continental Tobacco Company is to be
turned over to the American Tobacco
Company. making the latter producer
of cigarettes and smoking tobacco and
the product of the Continental Company
almost exclusively that of plug tobacco.
The actual aggregate cost of the above
concerns exclusive of the plug business
of the American Tobacco Company. was
a little less than sso.OoOOo0 cash All of
the sellers are substantial subscribers to
the Continental Company, and most OF
the general managers of the above COM
panies will continue TO act in the capacity
of general managers for their respective
concerns under the direction of the Conti-
mental Company.
The Messrs. Paul ]. Sorg, Niddletown,
o.; Capt. p. II. Mayo. Richmond, Va,
and Daniel Scotten. Detroit, Mich. will
personally retire from business but their
present active managers will continue 10
direct the manufacture of their individual
concerns. These are among the oldest
and most successful and best known plug
tobacco manufacturers in the entire coun-
try The directory OF the Continental
Company will be composed almost entire
ly of representatives of the absorbed to-
bacco factories. although it is expected
that President Duke. of the American To-
bacco Company. will be an officer in the
new organization.
Col. Hughes does not anticipate any in
crease of price in the product, but rather
a lower price to the dealers and consum-
ers II will put an end to the disastrous
war which has been waging between the
American Tobacco Company and the
large independent plug manufacturers.
There will be provision made for joint ad-
vertising. storage. selling and purchase of
raw material. This will insure better
market for the raw material: VIII de
crease by several millions of dollars per
annum unnecessary expenses, which have
arisen out of the fight during the past
three years: will effect large economies in
production; will result in more reliable
markej for leaf tobacco and fix relia-
BILE price for the product so that dealers
and consumers will know upon what to
depend.
All plug manufactures desired by the
Continental Company were secured. ex-
cept one. a large concern in st. Louis,
which was offered a price in excess of
that paid most of the other concerns
based upon earning capacity, but it has
been so successful as an independent con-
cern that it did not desire to amalga-
mate.