The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1903-08-18
THE TOBACCO TRUST IN KEN
lucky

ot"NN -
that the price is low because the tobacco
offered on the Eastern markets Is OF very
inferior quality. Others tell US that 1t Is
because the trust is overstocked on the
kind of tobacco grown in North Carolina.
Others sing a different tune. The real
reason. as the merchants of Kinston and
other big tobacco towns point out, Is be-
cause the trust wants to take the crop Tor
less than the cost of production.
North Carolina is not the only state
that is up in arms against the action OF
the trust. The people of Kentucky, who
produce tobacco wholly unlike that grown
in North Carolina, are feeling the iron
heel of the trust on their necks, and the
industry of that State is thereby render
ed unproductive. Kentucky and North
C|aorlina raise more tobacco than any other
States. Kentucky leads M the weight and
North Carolina in the money value. All
the tobacco growers of these States ask
Is fair prices. When the trust offers star
walton prices, what ought the farmers to
do? According to the trust organs they
ought to thank the trust that better prices
prevailed under competition and resolve
to diversity their crops. Not SO thinks
the Louisville Courier journal. In an
editorial discussing the tobacco situation,
the Louisville Courier Journal says:
TOBACCO TRUST CONSIDERATIONS.
The negotiations now going on as to
whether the Tobacco Trust is to give the
tobacco growers of Kentucky a chance
to live or whether it viii persist III the
attempt to depress prices and break down
the auction markets are suggestive OF
many considerations For one thing the
trust managers ought to consider how
likely it is to suffer provided they go too
far, both III the matter of liquidation and
in the u~nwillingness of planters to con-
tinue growing their great staple. The
trust problem, in fact, Is brought home
to the whole State and particularly to
Louisville. whose leaf tobacco trade IN its
various qualifications forms her largest
commercial interest.
The ease with which the cotton market
was made to respond to speculative ma
nipulation this year is a hint that the To
bacCO Trust might take to heart. Tobacco
of the Burley variety is a natural mo-
nopoly of Kentucky, just as cotton IS a
monopoly of the South, for while tobacco
. is grown elsewhere it lacks the flavor and
the other qualities that make the Ken
lucky product an article of universal con
sumption. Tobacco grown in this State
is shipped to every corner of the world,
civilized or uncivilized. The naked negro
basking in the woods of Africa is willing
to exchange gold dust, ivory or slaves for
the ''black fat that comes from Western
and Southern Kentucky, while the Oldest
civilization of Europe ranks tobacco in
some form among the essential require
mentS of life.
An article whose. production is limited
by natural causes and whose use is so con
stantfy growing that the working up OF
the raw material constitutes one of the
most profitable of all manufacturing en-
terprlses, ought to bring a good price, as
cotton is doing now, and must continue
doing whether the corner is a failure or
not. Instead of that, tobacco has been
selling lower and lower since the Cont
mental and American have obtained such
a grip upon the markets The demand
has been increased, but by the destruction
of competition values have sought a lower
level every year since the trade IN it has
been practically monopolized.
Present conditions in the leaf trade
would have resulted in a roaring market
for the great staple were not the planters
compelled to sell their crops on so re
stricted a market. The original American
Tobacco Company, which began with q
comparatively small capitalization on Jan
uary u, 1890. has now become expanded
into a set Of monster corporations which
are seeking the monopoly of every branch
of the trade, and which has power to de
press the leaf market at will. These cor
poratIons are worth enumerating.
First, is the American Tobacco Com
pany, with a capitalization of $14, 900, 00(
of 8 per cent. preferred stock. and s54,
SOC, 600 of common stock, on which Il PEI
cent. is now. paid.
The Continental Tobacco Company i
second. It was organized December 10
1898, with $50, 900 900 of common stock, OF
which 10 per cent. is paid, and $50, 0O0, 00t
OF preferred stock, on which { per cent. il
distributed. This company issued also 81,
900, 900 of debentures for the purchase O
the P. Lorillard Tobacco Company, in ex.
change for the Lorillard preferred shares
~ dIoo pooSh liz 9o,ouo,OOu IL C1IUIO
stock of the LOrillard Company.
The common stocks of these two paren
companies are controlled by a holding cor
p~oration known as the Consolidated To
bacco Company, which has an authorized
issue of $40, 000, 900 of common stock, OF
which a dividend of 20 per cent. has beer
paid. To buy the common stock of tn
two controlled companies it issued $156,
593, 400 of 4 per cent. debentures, and ex
changed 500 of these for each share o
common stock for the Continental Com
pany and 5000 for each common share O
the American Company. 1t depends upor
the dividends these two stocks receive fOl
the payment of the bond interest, but /
had a surplus of s950,216 on December 81
1902, after paying the interest on the de
b~entures and the dividends of 20 per cent
on the consolidated stock.
The American Cigar Company, with $40,
1000 of stock and SO, OOo, 600 of gold
per cent. notes, is another subsidiary cor