The sun. [volume] (New York [N.Y.]) 1833-1916, 1907-07-10
BRITISH TOBACCO TRUST, TOO
NIOLvED IN. TIE MUSTER SUIT
UNCLE SAM BRINGS TO-DAY.

Nv. IhE BUSTER SUIT
UNCLE SAM BRINGS TO-DAY.
Court likely to BE Asked 70 nestrsin Brit
Ish Buying Of American rsnAcco Cor
p~oration Lawyers Get Busy Looking Up
the Law Powder Trusts TurnC emins.
The suit which tho Federal Government
vii uring In the United States Circuit Court
here to-day asking for an injunction to
restrain the American Tobacco Company
and its subsidiaries. as a monopoly. from
doing interstate business or. as an alter
native. in some cases for the dissolution
of the companies and the appointment
Of receivers will involve the English to-
bacro trust az well me Government
Investigators have uncovered an agreement
in writing between the American company
and the Imperial Tobacco Company. the
English combination. by which tho Ameri-
can trust binds itself to keep out of the
English field and the Imperial company
reciprocates by Withdrawing from the
United States.
The remainder Of tho worlds trade in
American tobacco. under the tsrms Of the
agreement, Is turned over to . company
known 40 the British-American Tobacco
Company. which was organised In 1901.
the date Of the agreement. Tho American
Tobacco Company own two-thirds Of the
capital stock of this British american
company and the Imperial company the
remaining one-third. Tbs American To-
bscco Company alone requires SOC. oo0. 900
Of the 100000 pounds Of tobacco that
is produced on the average In America
each year, and it supplies the British
American company with It's raw material
on commission. Operating under the
agreement with the British trust IL thus,
according to the Governments contention,
has a virtual monopoly on the worlds
trade in American tobacco.
The two English companies age Of course
outside the jurisdictions Of the Federal law.
but the Federal Government. It IL said,
will ask the court, IL IL holds that It can do
40. TO restrain the agents Of these companies
from buying tobacco in this country until
the combination 10 broken up. Tho agree
perial was entered into after . years var
between the companies.
The American Tobacco Company's on
GERS refused yesterday to on tho
Federal Administrators new ~receivsrship
plan Of trust busting. They viii have some
thing to ay after the bill OF equity has been
uIai to-day
The Government in it, bill will ask for the
appointment Of . RECOVER or receivers to
take charge Of the physical properties and
assets Of tho oompany only " q alternative
proposition. Its CHIEF request will be for
the injunction. The Ida 10 that in the
event Of the court deciding that . restrain
ing order would work q hardahip on the
public the propsrtiesmAy be turned over to
a receiver, who viii continue 10 manage
them until they oan be separated into their
original organizations In the CASE of q
good many OF the companies which the
American ooutrols relief can be obtained,
in the opinion Of the Federal authorities,
by a mere order Of the court compelling the
company to divest itscf Of its stock owner
ship in the subsidiary concerns. But In the
case Of some Of tho Subsidiary concsrns
themselves thereare II h oontended. nnonoIk
olistic conditions. Even n the control
u the American company was broken
there would still DO . monopoly. This 10
said to be true. for Instance Of the spuh
production in this country. which u con.
trolled by the American. According 70 the
theory Of the new plan the appointmnt
Of . receiver would At such . oAss and snd
in the breaking Of the monopoU. TIE
authority under which the may
appoint a receiver IL said TO be the section
Of the Sherman antitrust act which says
the court may prevent and prohibit .
monopoly. The appointment - reocivsr
would be one way of preventing II, II decided
to be a lawful way.
Milton ID. Purdy. assistant to the Atturuey-
General. came on to this city from Wash-
inston last night and will b present In
court this morning, when the petition and
the exhibits are presented. Mr.. Purdy
i credited with being the suthor Of the
receivership plan.
The Government authorities bellows they
have q strong case against the American
Tobacco Company. That 10 the reason
Why they have decided to mako It . tsst
case AZ regards the recstvership plan.
Plans have also been made by the Depart
tnent n Justice to bring q similar action
against the powder trust, but that will
not Re begun for some time.
IL was said yesterday that the Govern
rnent will be able 10 show conclusivcly that
the American Tobacco Company 10 q mono
poly; that 1t controls 80 per cent. Of the
smoking tobacco. plug and cigarette output;
% per cent. OF the snuif In this country;
shout Is per cent. of the Ioortce products.
and 80 per cent. OF the tinfoii. Tho Govern
rnent will undoubtedly charge the company
with sitting composition In the retail trade
through its control Of the United Cigar
stores Company. and also with controlling
The jobbers' trade through its ability TO
orer commissions that 20 Independent con-
csrn can compete with.
One thing that the Oovernmsns will
seek especially 10 accomplish In the petit
non which it will file 10 the full disclosure
on the companies which the American
controls. The Government Investigators,
90 It was reported yesterday, have run
against cases where subsidiary concerns
o. the American Tobacco Company have
oeen posing as free and independent or
ganizations and soliciting business on
That basis.