The times. [volume] (Washington [D.C.]) 1897-1901, 1901-05-10
INDUCEMENTS TO JoBBERs.
The Tobacco Trust Charged with
DISCRIMINATING In Sections.

Hugh Campbell. President OF the United
States Tobacco Company. testified before
the Industrial Commission yesterday con-
corning the relations existing between the
American Tobacco Company and indie
pendent concerns in the tobacco Industry.
The United States company. he said was
engaged in the manufacture OF smoking
and chewing tobacco. New England was
the principal market for the products OF
the United States Company, though a por-
ton of their goods was sold throughout
the country. The export trade was small,
The condition which Mr.. Campbell pro.
tested against. amounting TO a practical
restraint of independent trade by the To-
bacco Trust. was the result Of agreements
made by representatives of the trust with
retailers and jobbers in the Northeastern
States Prior to the formation OF the
United States Company. the Continental
Company, trust concern. manufacturing
the same class of goods as the United
states Company, practically controlled
the entire Northeastern trade When the
! United States Company encroached on the
New England trade OF the Continental
Company the latter company offered Job
bers and retailers IN that territory per
cent and later 81 per cent to handle only
trust made goods. If the jobber refused
to enter into such an agreement he was
| not allowed to handle trust made goods.
As the Continental Company's brands
were better known and constituted a
great part of the jobbers trade he was
forced to accept the terms of the trust
or go out of business. Owing to this con-
dition OF affairs. Mr.. Campbell said, many
retailers had refused to handle tobacco
manufactured by the United States Com
1 M Ia
. their business.
The antitrust law Mr.. Campbell person.
ally considered imperative as far as the
prevention of such conditions as he had
described was concerned The contracts
mentioned between the trust and the re-
tailers were merely verbal agreements,
and there would be great difficulty in get
ting evidence of discrimination and result
ing restriction of trade. The simplest REM
edy lay in governmental legislation. II the
books of corporations whose stock was
listed on the stock exchange were sub
1ected to examination in the same manner
as those of national banks, and a general
supervision over the operations of such
corporations were exercised by the Gov
ernment. conditions detrimental to COM
petition could not exist and the jobber,
retailer, grower, and consumer would all
be benefited. 1t should also be made i'm
perative as part Of such legislation
that goods OF the same grade be sold at
the same price in different sections of the
country. thus doing away with prohibitive
rate-cutting TO kill competition.
j. NJ. Duke, of New York, President Of
the American Tobacco Company. in an
swer to questions by members of the Com
mission along the lines of the allegations
made by Mr.. Campbell, entered a general
denial of the charges of discrimination
in the New England States. Mr.. Duke
said he knew of no agreements, verbal or
otherwise, relating to the sale of trust
made goods only by retailers in that sec
ton. In fact, he said, no representatives I
of the company were empowered. or al 4
nature with jobbers. If such agreements /
were in force 1t was without the knowl-
edge or authority of the officers of the ,
company.
The jobbers and retailers. he thought,
had made up the story of the threats OF
the trust as an easy way of avoiding the
handling of goods they did not want and !
for which there was no demand. Under
normal conditions prices were generally
uniform throughout the country. He adj
mitted that in certain sections cigarettes
had sold, at times since the passage
the war revenue law, for Sl.50 thousan
the amount of the tax on LOCO cis
-e.tes under the law. This amounted !
giving the goods away, and WAS for the
a new brand or an old brand into new
territory.
MIR. Duke denied that competition could 4
be killed in this way The fact that ehe
American Tohacco Companv's goods 4
might be sold at a very low price to rsx
tailers would not kill competition If liz
pendent concerns could put on the mar
goods which caught the fancy of the p
lie. He reiterated his statements m
no agreements had been made with n,
England retailers 20 sell only trust made
goods.
John Landstreet Vice President of the (
United States Tobacco Company, who fol- !
lowed, quoted a number of affidavits of
jobbers in New England, setting forth /
in substance that they had been approach (
ed by representatives of the Continentai
Tobacco Company and offered induce
ments to sell trust made goods only. He
also read a copy of a letter from the Con- /
tinental Tobacco Company to a New Eng
land jobber. referring in general terms
TO a proposition that had been made to
him to reap an additional profit by hand
ling only the goods of the Continental
Company.
A number of retailers who had refused
the Inducements of the trust, and who
had continued to handle independent
goods. MIR. Landstreet said. had had their
orders to the Continental Company ig-
nored. One dealer who was thus refused
goods, and who wrote to the Continental
Company asking the reason why he was
cut off. was told in a letter. u copy of
which Mr. Landstreet read, that the Con-
DncnlaI company OlU not CONSIDER IL 10
its interests to have any business dealings
with him. The brands made by the trust
comprised the greater part of the New
England trade. 1t was absolutely neceS-
Sary that the retailer handle its goods in
order to do profitable business.
A large number of the retailers ap-
preached by the trust accepted its prop
osition. and those who did not were oblis-
ed to go into other States for trust
brands, the Continental Company reflls-
ing to MI their orders. Still other job
beers, Mr.. LandStreet said, who had ac-
cepted its offers. sold the goods of the
United States Company and other indie
pendent concerns surreptitiously. When
customer asked for an independent
brand. Mr.. Landstreet said. such dealers
would look around fearfully, as if they
We're about to commit a crime and then
sneak out the desired brand from under
the counter. or from such other out of
the way place. To those retailers the
United states Company was obliged to
snip ITS goods in plain cases without any
marks which would serve to identify the
contents as the product of an iudeDen-
dent concern. When things had come to
such pass that Il dealer sold Il non-trllst
brand of tobacco with precisely the same
guilty air with which he would pick a
lock- or commit a theft. and with lust
as much fear for the consequences il was
certainly time for remedial legislation.
H. d. Lee, Treasurer of the American
Tobacco Company, testified on the same
lines as did Mr.. Duke. He reiterated Mr.
Dukes statements that the officers of the
company knew of no agreements between
the Continental Company and the jObbers
and retailers looking to the exclusion of
the products of indepel dent concerns
from New England territory He admit
ted, however, that as Treasurer of the
American Tobacco Company he was not
in position to know officially of any
such agreements, which would originate,