New-York tribune., 1907-10-08
TOBACCO TRUST DENIAL
ANSWER TO GOVERNMENT.
Says Allegations Made against 1t
as Monopoly Are Untrue.

as U1OnOPOly are CntFue.
The American Tobacco Company through Junius
Parker ex-Judge William ]. Wallace, Delaney
~NiceH and Williamson W Fuller. counsel. filed
Yesterday in the United States Circuit Court for
the Southern District of New York it's answer to
the petition of Attorney General Bonaparte, filed
on July O. charging the company with violation
Of the Sherman antitrust act on the ground that
it was combination in restraint of trade. The
company denies all the allegations of the Attorney
General and asks that the case he dismissed.
Appearance was entered for all of the than
one hundred defendants except the Imperial To-
bacco Company. which had already appeared and
answeredfthroush Hornhlower, Miller & Potter, of
New York and Coke & PickreT of Richmond, and
the United Cigar Stores Company which had done
the same Many of the defendants were abroad
and out of the reach of the federal officers, but
answer was made for them that there might be
no delay. The Brtish-American company filed the
same answer through the counsel.
1t is asserted in the that the American
Tobacco Company has not and never had a monop-
oily of the tobacco business and that it never can
have any such absolute control.
Practically all the facts regarding ,the formation
of the American Tobacco Company and the per-
sons composing it admitted. 1t is repeatedly
asserted, however, that the American Tobacco
Company never bought an independent corporation
with intent to suppress competition suppress
trade. but that the business acquired from every
such company stimulated and usually increased
its product and earnings 1t is asserted that none of
the independent companies IN which interest
was bought by the American Tobacco Company
paid for at an exorbtant price.
1T has not been part OF the policy Of the
American Tobacco Company" says the answer.
"tO disguise the ownership. controlled COM
panies TO break down opposition and secure for it
the benefit of public sentiment against combina
tIon
The competition between the American Tobacco
Company and various other tobacco manufacturing
companies is the same whether the American To-
hoo oil Tho $50
stock mono Of the stock ALL
The tobacco company acknowledges that it op-
posed the organization Of the United Cigar Stores
Company. but says that the latter company be-
came Of such great strength that the tobacco COM
pany induced to enter into partnership with IT.
The American Tobacco Company holds $500
coo Of the 1000 of common stock Of the United
Cigar Stores Company, aII OF the preferred stock,
$500 and all of the bonds S2sJn0O0 The $4,000
OF common stock of the United Cigar Stores Com
pany not owned by the American Tobacco Com
pany is owned by George J. Whelan and his
cates, who are in charge of the affairs of the
United Cigar Stores Company
The answer denies that there is any agreement
with the American Tobacco Company by the terms
OF which the United Cigar Stores Company pro-
notes and furthers the sale OF tobacco products
manufactured 10y the defendants, and hnders and
obstructs the sale Of products manufactured by
others.
In regard to the charges that many small plants
have been bought in and closed and eliminated by
the American Tobacco Company, for the purpose
OF destroying competition, the answer declares
that long brands remain in existence COM
petition cannot be destroyed, competition in the
tobacco trade is matter of struggle between
brands, not factories.
It says that many concerns which the company
has acquired are kept in active existence and re-
main under the control and management OF the
minority stockholders Specific cited
among them tho r. A. Patterson Tobacco Company
and the r. J. Reynolds Tobacco Company, eX-
ampes Of specially active and severe competi-
ton"
It is asserted that the governments allegation
regarding the various supply manufacturing cor
porations owned a whole in part by the
American Tobacco Company. and making boxes,
bags untpil and licor!ce paste and buying supplies.
are untrue, that such companies sell To independent
manufacturers Al the same rate and sometimes at
less rate. than that AZ which they sell to the
American Tobacco Company
Dealing with those parts of the governments
complaint relating to the organization OF the Con-
sohdated Tobacco Company. the answer says. in
part
os2HsaGq o Of the the a cansodatea At Tq6%fSS
competition, njurins or restraining Interstate or
foreign commerce, or to exclude others therefrom
or to acquire hereunder a monopoly. As a matter
OF fact there was ia the nature OF things ONLY 10
a limited extent competition between the American
Company as the American Tobacco Company's
I!S UISSaS "as li' 1te ~ @dtSt1S
mental Tobacco Company'3 business was principally
the manufacture OF chewing tobacco II is true
that the organization Of the Consolidated Tobacco
Company was prontable to the organizers thereof
and justified their judgment in making the large
investment OF $S0oQ0.OOD bur there assurance
the time Of such investment that IL would be
profitable, and the profit that has come has been IN
no wise illegitimate,
Many pages are given TO recounting the history of
the battle with English tobacco manufacturers
which eventually led the formation Of the Brit
ish-American company. The government alleges
that this company Illegal The defendants deny
the charge. The control of the American SnuH
Company is also denied Relative to the ownership
Of the American Cigar Company by the American
Tobacco Company the answer declares.
That so far the investment by the American
Tobacco Company ana the Continental Tobacco
Company in the American Cigar Company is con
Cerned, such investment was in a related but
competitive business; that said organization and
acquisitions OF and by the American Cigar Com
pany did not restrain interstate commerce. and
far II affected said Interstate commerce. such
effect was incidental. and not direct.