The Washington times., 1901-11-24
The Tobacco War" Started by
the American Company.
A Triangular Duel between the
American Trust and Two Recently
Formed English Companie.-Man-
ufncturers and Retailers at Odds.

lean combination is reported to have The
intention OF capturing the British trade OF
losing a million sterling in the attempt
To meet this competition the Imperial To
bacco Company Of Great Britain and Ire.
land, Limited. has been registered, ant
upward of dozen of the leading Bristol
Liverpool, Glasgow. Nottingham. and Lon
don houses have agreed upon an amaIga-
nation OF their business. They promise
that, in the arrangements which are now
being made the interests OF the retail
trade Will be carefully borne in mind. But,
meanwhile, the United Kingdom Tobacco
nists' Alliance has arranged plan of CO.
operation with Messrs. Salmon and Gluck-
stein, the most powerful of the "multiple
houses" At the present moment the Brit
ish manufacturer and the retailer appear
to be pulling different ways, while the
American invader has secured foothold
upon English soil by the purchase OF
Messrs. Ogden's, In Liverpool. No certain
light is shed upon the policy of any of
these three combinations. and, to 4 great
extent, the leaders are waiting for others
to make the first move. 1t Is quite possi-
bic that an end has not yet been reached
in amalgamations, but it is certain that
the trade of this country in cigars, TO-
baccos. and cigarettes Will not be handed
over to newcomers without a severe and
prolonged battle royal
| The Americans are bringing to this side
OF the Atlantic the American Tobacco
! Company, some of whose productions are
not unknown here. 1t represents a NOM
inal capital of many millions, but an act
ual capital OF, say, ten millions. 1t is
open to this combine 10 proceed on two
lines-by the purchase of rival concerns
or by cornering the raw supply. A very
high price was given for ogden's, and
other businesses might also be simil-
arly absorbed, Factories in the British
Islands are essential for several reasons,
but the main and principal argument is
! that sort of protective duty exists al
ready. IS. per pound being charged by
the customs on tobacco 3s. 10d. on cigar
cites, and As. I'D. on what are termed
American .'sweetened''-that Is. adulter-
ated cigarettes. The extra duty is quite
sufficient to give the homemade article
the advantage. There is no question at
all Of superiority of American methods of
manufacture or of distribution. We have
nothing at all to borrow from the United
States In respect Of machinery or of or
ganization.
Tobacco Manufacture In England.
On the contrary. nowhere else in the
world is tobacco manufactured more skill
fully than it is in these Islands. and the
Americans have nearly everything to
learn from us. With them. moreover the
cigarette habit is declining rather than
increasing. The establishment OF Ameri-
can manufactures TO supply the British
market is therefore out of the question,
except upon this side OF the Atlantic
1t is, of course. impossible to shut ont
American capital from employment here.
With the ultimate object of controlling
the distribution of their manufactures.
the Americans have commenced hostiIi-
ties by offering inducements to retailers
to Sell their cigarettes cheaper. Prices
have not been altered, but bonuses have
been given in kind, plan which permits
the wholesale houses to say, I'VE can
afford to give the bonus no longer" And
in that case the retailer who has lowered
the price to the public will be caught
because it is always most difficult TO
raise price when once it has been put
down.
An attempt to corner American tobacco
is not regarded as feasible. Granted that
Virginia and other States largely supply
the world, and admitting that the possi-
oiiIties OF Australia and of South Africa
as tobacco-growing countries cannot vet
be taken into account, the task of buyins
up the tobacco crop Of America would be
beyond the finances Of any trust. In the
first place. the visible supply of manu-
.actured tobacco in this country, in bond
ea warehouse or in the factories, is taken
at the equivalent of two years consump-
tion. 10 this must be added the stocks
controlled by Intermediates in America
financed by English firms. estimated at A
further six months supply. 1t Is assumed
that the American yearly output is of the
value OF E4o.000,000; but, though this
vast sum were found In order to prevent
an ounce of tobacco reaching us. it Is |
certain that in the following year twice |
the amount would be required, and in the |
third season it would again need be dou |
saw that profitable market awaited hir, |
ne would throw cotton out of cultivation |
10 substitute tobacco. and so the Ameri- |
can supply would be increased fourfold.
Strong British Combine.
Turning now to the position of the
British manufacturers. the terms upon
which they stand together are not yet |
disclosed, but pretty shrewd guess has
been made. In actual capital they are
as nearly as possible the match of their
American opponents and their financial
resources are quite as powerful. 1t |
seems, however, to be a weak point that |
the Imperial Tobacco Company is relying
upon the loyalty of their customers to |
British commerce, for there is no patriot
ism across the counter. Moreover. II is
alleged that they have failed to conciliate
the retailers in the past. At all events.
the Tobacconists' Alliance came into ex-
istence about q year ago to secure for the
living profit. The alliance
has about 5000 members out of the 10000
tobacconists throughout the country.
threat has been made that there may soon
be more retailers; but, with $50, 600 hold
ers of tobacco licenses throughout the
country. extending even - chambers
shops and sweetstuff stalls, it is difficult
70 imagine development in this direc-
ton. Moreover, the totacconists proper
Usually supply the petty retailers. 1t is
Upon the action Of the traders who join
he alliance that much depends.
NOW this body OF their own volition
opened up negotiations with the firm OF
salmon and Gfuckstein. from whom they
have hitherto held aloofs. This house has