Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-12-05
METHODS OF THE COMBINE
Small Manufacturers Could Not Get
Necessary Supplies.
TOBACCO TRUST MAY COME NEXT
History Of the case Briefly but Vivid
ly Set Forth by the Courtroom
trolled Whole Supply.

NEW YORK, December 5.-Sweeping
aside all demurrers Judge Hough. in the
United States circuit court, yesterday
tanned the indictment against the so-called
licorice trust and ordered the defendants
to trial for alleged violations OF the Sher-
man antitrust law.
The defendants are the MacAndrews &
Forbes Company and the ]. S. Young Com
pany, corporations, and Kari Jungbluth
and Howard E. Young presidents. respect
lively, of the two companies The extreme
penalty In the case OF a conviction is one
years Imprisonment and 5000 fine either
or both.
Judge Hough's decision is regarded as
one of the most important victories gained
by the federal government since President
Roosevelt began his campaign against the
Illegal practices of business combinations.
1t gives hope to the government that at
last 1t may obtain a verdict under the
Sherman antitrust law. and Il Will act as
precedent in the drawing of indictments
against other corporations.
II was intimHted that the American To
bacco Company. its officers and directors,
may be next in the list as common stock
of the licorice trust is owned by that COM
bination.
Controlled the Trade.
Prior to December s, 1902 says Judge
Hough, the MacAndrews Company was
engaged in the manufacture of licoriee
paste: the Young Company WAS similarly
engaged: Jungbluth and Young were pres
idents of the companies. Licorice paste is
a substance made from a root not grown
in the United States and is a prime neces-
sity in the manufacture Of plug and smoi-
ing tobacco"
Judge Hough said the MacAndrews COM
pany was the largest producer in the com
q FUn .ftsl sargr- .4..,-
troled 50 per cent of the output; There
was also a manufacturer in Providence
named Lewis and another in Now York
city, Weaver Il StCrry The four actually
supplied the entire trade demand.
the common stock Of the Iouu- COM
pany passed into the control of the Mac
Andrews company in December, 1906. and
while the former company maintained a
in name. The Young company then in
turn entered into an agreement with
Lewis of Providence whereby the latter
agreed for five years to limit his produc-
ton to a certain amount, on which the
Young company guaranteed to hin GER
tain profit, one-fourth of which he had
to give to the Young company. The Young
company received the right to set Lewis
prices for him and to take ali the .ro:its
if the sales exceeded the amount named.
Lewis, however. was allowed 10 make his
price one-quarter of cent pound less
than his competitors, 4
Weaver G. Sterry were the outsiders
then and a fight began Immediately with
the three companies on one side and one
on the other. Prices went down and re-
manned until in March, when, according
to letter written by Young. Weaver d
Sterry were ready Ito come to some agree
ment.
Put on the Screws.
That agreement was made i'm June. and
in a letter Mr.. Sterry is quoted as saying
the time was ripe for sharp advance
1t seems that in the meantime the indie
pendents, taking advantage of the low
prices, were stocking up as fast they
could with licorice. Their dream ended
when the MacAndrews company notified
a customer of the Young company that
licorce had jumued from about Z cents
to cents a pound. The Aoun- com
pany allowed a half cent under that
price, and Lewis was still lower.
In his opinion then, from the letters,
Judge Hough sets forth the acts of the
companies. They had the trade at their
mercy. They ordered that no more stock
ing up be done. If a dealer or mauufac-
turer was not satisfactory to them. he had
to pay a cent more than the regular Gus
toners. MacAndrews would sell only TO
the American and Continental companies.
the patrons of the others were limited, and
there was absolutely nothing to prevent
them from driving any man out of bust
ness.
Instance after instance is set forth OF
orders issued by the heads the COM
panies. The moment independent was
known to be trying to get his paste from
outside concerns he received a letter say
ing that lin view of present and 2rosDec-
tive conditions, mainly as to supplies OF
root il is Thought best to sell only to those
manufacturers who are willing to JON US
in contracts as presented These con-
tracts were for two years and obligated
the manufacturer to take the paste at any
price ard in such quantities as was seen
fit to give him. Otherwise he received
nothing and had to go out of business.