Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-06-22
STORES USED AS MENACE
AMERICAN TOBACCO COMPANY
CONDEMNED IN REPORT.
Judge James C. McReynolds Con-
cludes His Investigation, But Coun-
sci for Company Protests.

NEW YORK, June 22.-Judge James c.
McReynolds of al Broadway, who was APP
pointed after the retirement of Henry w.
Taft special counsel for the federal gov
eminent in cases against the tobacco trust.
has made an investigation of the United
Cigar Stores Company and finds that not
only Is this great retail smoking goods en-
terprise controlled by the American Tobacco
Company, but also is used by that corpora
ton for the purpose of sitting independent
competition.
The United Cigar Stores Company, which
now has more than five hundred retail
stores in operation, 1873 of which are in New
York city, was organized a New Jersey
corporation in May. 1901, by J. Whelan OF
Syracuse. N. Y. who. under the name of c.
A. Whelan & Co, had operated a similar
combinat ton of retail cigar stores on a small
scale in Syracuse. The American Tobacco
Company, seeing that this corporation prom
ised success. acquired control of 1t, and now
owns $61U,VoO of the s9DJ.0O0 common. all of
the preferred stock and most of the bonds.
The business has been extended. to include
all the important cities of the United States,
although in certain cities advantage has
been taken of local conditions by the Amer
lean Tobacco Company acquiring control of
local combinations of retail cigar stores
which operate in the same way as the
United Cigar Stores Company.
Officers of the Department of Justice in
this city say the obvious purpose of
the control Of the United Cigar Stores
Company is to put an end to retail COM
petition. 1t is plain to be seen. they add.
that if the United Cigar Stores Company
can eliminate competition the Independent
manufacturers will have market for
their goods. The usual practice in the
adjustment of a branch of the United
Cigar Stores Company is to buy out some
local cigar store and put the proprietor
under a contract not to again engage in
the tobacco business The United Cigar
Stores Company enjoys great advantage
over other competitors in that it is able to
undersell them. The government will
the United Cigar Stores Company is a part
of the American Tobacco Company's gen.
eral monopolies plan.
Many Concerns Controlled
The American Tobacco Company also
owns the control of the Metropolitan To-
bacco Company of New York, which ap-
proaches a complete monopoly in its sup
ply of tobacco products to dealers in New
York city. 1t dominates the Royal Com
pany. one of the largest retail cigar estab-
lishments in New York. with a show en-
porium in the st. James building. Fur
Their than this, 1t controls large tobacco
jObbing houses in Chicago, Richmond and
Atlanta. In the last-named city the job
bling house of the American Tobacco Com
stores.
1t has been estimated that the American
Tobacco Company controls 80 per cent of
the cigarette trade, from So to 10 per cent
of the trade in smoking, and chewing to-
bacco. from 10 to 30 per cent of the cigar
trade and % per cent of the lcorice trade.
Trade in Cuban Cigars.
Though New Jersey corporation the
Havana Tobacco Company controls prac-
tically ALL the trade in Cuban
Under the Sherman antitrust law bill
In equity will be filed against the American
Tobacco Company in New York in a short
time. Judge McReynolds is at present in
Washington for consultation with the au-
thorities in the Department of Justice as to
the form of procedure. For long time the
American Tobacco Company denied that it
controlled the United Cigar Stores Com
pany, but the admission was finally forced
by the government.
General offices of the United Cigar Stores
Company have been established recently in
the large new twelve-story building at No.
"A West 18th street. seven floors of which
are occupied by the various subsidiary de-
partments of the concern. These include
the general offices, the real estate depart
ment. which is corporation in itself.
known as the United Merchants Realty and
Improvement Company; the premium de-
partment. the employment, construction,
purchasing, auditing. advertising, sign-writ
ing and legal departments.
Officers of the Company.
Officers of the United Cigar Stores Com
pany are: President Geo. ]. Whelan. the or
ganizer of the corporation; secretary, Ell
lott Ave-ett; treasurer, Edward WISE di-
rectors. George ]. and Charles A. Whelan.
Elliott Averett. Edward Wise, Herbert S.
Collins and John F.. Whelan. In the at
fairs of the corporation Mr.. Averett is COM
monty regarded as the direct and active
representa- tive of the American Tobacco
Company.
S. NJ Stroock of No. 800 Broadway is the
general counsel for the United Cigar Stores
Compan.'. and also has an office In the legal
department of the company's general Of
fee building in West 18th street. When
yesterday afternoon and was shown Wash
ington dispatches announcing the govern
ment's purpose he read the report carefully
and said: Part of this seems to be true
and part of it untrue. and part of 1t do
not know about.
Mr. Stroock said he would like to make
a written statement for publication in reply
to these allegations. and after making
notes of the statement printed herewith he
Issued the following statement:
II have had no opportunity to consult
with any of the officers of the United Cigar
Stores Company. there is nothing that
/ care to say at this time. From my eX-
perience attorney for the United Cigar
Stores Company l can state that the COM
pany has always endeavored to comply with
the law and to conduct its business along
honorable business lines.
SERIOUSLY INJURED.