The Indianapolis journal., 1899-12-10
BIG DEAL in TOBACCO
AMERICAN TOBACCO COMPANY TO
ABSORB CIGAR MANUFACTORIEs.
The Biggest Firms in the United
States Are to he Taken In
Some Other Facts.

Information was received in this city
yesterday that the American Tobacco
Company, which is the tobacco trust,
would hereafter supply a large part of
the cigar trade OF this city by reason of
the fact that negotiations which have been
going on for some time between the Amer
lean Tobacco Company and several Of the
largest cigar manufacturing companies of
the country have been practically con-
clude6. and an official announcement of
their absorption by the trust is expected
within a few weeks. The cigar firms
spoken of as being absorbed are Kerbs.
Wertheim & Schiller, Straiton & Storm,
Powell Smith & Co, NJ. StacheIberg, of
New York. Hamburger, Homan & Co. and
Juan F. Portuando. OF Philadelphia The
goods made by these firms form a large
part of the cigar trade of this city. where
it is well known among cigar retailers
that Outside cigars are preferred by
most Of the smokers to the homemade
article.
In effecting the consolidation with the
cigar trade 1t is announced that the tobac-
CO trust is about to enter the business of
cigar manufacturing on a large scale, ap-
have proved so successful in the manage
ment of it's other business. especially in
the line of cheroots From the same source
1t was learned yesterday that although
maintained as two separate corporations,
the Continental Tobacco Company and the
American Tobacco Company were prac-
tically one and the same concern. inasmuch
as j. 3. Duke, of Durham, n. c., is presi-
dent of both and the stockholders of the
American Tobacco Company own all the
stock in the Continental Company.
Regarding the recently reported intention
OF the Continental Company 10 raise the
price on all grades of goods 10 per cent 1t
was stated yesterday that this was apt TO
be misleading, inasmuch as there was no
disposition to raise the price of tobacco.
at least while conditions enabled the com
panies to keep them where they were. On
the contrary, all the present efforts OF the
t ust are directed to preventing any cut
ting OF prices by jobbers. To this end the
company has arranged with a. +. Lee, the
president of the National Wholesale Gro
GERS Association, to act as purchasing
agent for all the jobbers in the country.
Mr.. Lee, whose headquarters is in New
York, has arranged with the trust that in
the event that he is able TO place 100000, 900
pounds of tobacco each month with the
jobbers represented in the National Whole
sale Grocers' Association the tobacco will
be sold to him ar such a price that the job
bers will practically receive 10 per cent. off
from the regular wholesale price besides
the usual per cent discount 70 cash. 1t Is
made conditional with Mr.. Lee, however,
that In case any jobber offers to cut prices
TO the trade Mr.. Lee shall at once refuse
to act further as the purchasing agent for
that jobber. This will in effect cut the
jobber off from all advantages and he will
be compelled to buy his tobacco direct at
the regular price, with no discounts other
than per cent. for cash.
While nominally acting as an individual
In hx1 trurr l.,
resents the trust while serving as the pres
ident of the Grocers' Association, and to
make IL worth his while the trust allows
him 1-20 OF 1 per cent. on all his sales,
which, in the aggregate, are something
fabulous, when ii is considered that the
two hundred million pounds a month re-
ferred to have to do only with the conti-
mental company, which IL is intended shall
appear 10 be competing with the American
company. The latter concern has another
method of keeping prices up by restricting
its goods to few jobbers. a dealer to be
on the books of the American company
must have a good geographical location
and an extensive trade and the fact OF his
financial responsibility has nothing to do
with his ability or inability TO secure goods
from the trust While many dealers who
handle tobacco exclusively are members of
the Grocers' National Association, the ar
rangement with the association is primari-
ly intended to cut off these dealers at dis
cretion and leave the tobacco trade almost
altogether in the hands of the wholesale
grocers. While this is not likely to be done
In this city at present, the tobacconists are
absolutely at the mercy of the grocers. and
may be cut off at any time the grocers may
elect. The whole scheme, IL is said. is one
to evade the antitrust laws passed in sew
eral States, as by doing business with only
one man, and that by private arrange
ment, the trust is beyond the reach OF any
State law, il is intended to cut off all
direct intercourse with jobbers in whatever
localities the antitrust laws are sought to
be enforced against the company.
Local representatives of the trust are
evasive when asked to discuss the taking
over OF the cigar plants. but intimate that
by Jan. a formal announcement will be
made.