Los Angeles herald. [microfilm reel] (Los Angeles [Calif.]) 1900-1911, 1907-07-11
TOBACCO TRUST
UNDER LAWS BAN
GOVERNMENT FILES PETITION
WITH COURT
American Tobacco Company, with
Allied Corporations and United
Cigar Stores, Is Made
Defendant
Ry Associated Press.


By Associated Press.
NEW YORK, July 10.-The government
filed today in the United States court in
this city petition against the American
Tobacco company, the Imperial Tobacco
company and the British American To-
bacco company with the American Snuff
company, the American Cigar company,
the United Cigar Stores company and the
American Stogie company, the MacAn-
drews & Forbes company, the Conley Foil
company and other corporations and
twenty-nine individuals connected with
the named companies.
These corporations and individuals con-
stitute what is generally known as the
Tabacco trust, and the petition directed
against them sets the purpose of the gov
ernment to abolish this trust by breaking
up the agreements under which the con-
solidated concerns are working. In show
ing the growth of the trust since its or
ganization in 1890 the conclusion is reached
that at an early day, unless prevented, it
would completely monopolize the entire
tobacco industry
The origin of the tobacco trust, accord
ing to the petition, dates from the forma-
tion of the American Tobacco company in
1890 to acquire five competing cigarette
manufacturers with joint assets much less
than $25, 600 and an annual consumption
of leaf under 100000 pounds
The petition shows the subsequent his
tory, development and growth of that
company until it's total assets now ex-
ceed s275O0O,0oO, and likewise the origin
and manipulation of scores OF created,
acquired and controlled corporations util-
lied as agencies to accomplish the general
design; the progressive absorption and
elimination of competition and destruction
Of formidable opposition and the entry by
the defendants into. various departments of
manufacture and trade, domestic and for.
eign, In tobacco products with intent to
monopoize
Divided Worlds Business
The allegation is made that the men,
bers of the combination have divided up
the tobacco business of the world, as
signing to each some special territory for
that the consolidated corporations annu-
ally purchase over 75,O00,0OO pounls of do
mestic leaf and Of the total produced In
the United States manufacture, sell and
distribute more than 280, ,0000 900 pounds ESQ
per cent? of the smoking and plug to-
bacco; 95 per cent of the snuff, 80 per cent
of the cigarettes, rs per cent of the small
cigars, 95 per cent of the licorice products,
so per cent of the tinfoil products and 10
n TX nf Ia nd or
that they are rapidly acquiring control of
the ordinary agencies-jobbers, whole
salerS and retailers-tArough which to-
bacco products are distributed.
OF the total annual production of do
nestle tobacco, estimated at 800, ,OO0 900
pounds, 75 per cent Is purchased by the
American Tobacco company and it's asso-
ciates and allies at prices which the gov
ernment alleges to be unlawfully in
fiuenced by the combination. 1t is said
that this Is in defiance of the usual laws
of trade where open competition by many
separate and independent concerns con-
troll the prices.
The petition continues:
Controls Cigarettes
''The American Tobacco company of
New Jersey. organized in 1890 with $25,OOO,-
900 capital, took over the business of Allen
& Ginter of Richmond, w. Duke Sons &
Co. of North Carolina, Kinney Tobacco
company, w. S. Kimball G. Co. and Good
win & Co. of New York, and thereby
acquired control of the manufacture,
trade and commerce in cigarettes. 1t was
Immediately successful and shortly after
its operations and with others united from
time to time have steadily sought through
1t to acquire dominion power and to mon
opolize the different branches of the to-
bacco industry This company has the
principal agency through which the de-
signs of the combination have been accom-
plished. the control of many others has
been secured and In various ways these
have been manipulated and utilized"
The operations of the monopoly, accord
ing to the petition, have been along these
general plans
To acquire three other confederated
companies the business of successful op-
ponents, taking from owners and man
ayers pledge not thereafter to engage In
the tobacco business; to drive out old
companies by destructive competition; to
deter any who might wish to engage in
the tobacco trade; and finally to gain con-
troll Of the agencies through which the
tobacco products were distributed. 1t is
said these things have been accomplished
by means of the increasing power and
forces of the combination and by acquir-
ing controlling interests in the stocks of
corporations thereafter operating without
competition.
Unfair Methods
Many kinds of unfair trade methods
have been resorted to- it is said. favorite
one being to cause corporation secretly
controlled to advertise itself as wholly In
dependent and free from association with
their associates and combinations, to OFFER
its goods below cost, to initiate competing
brands and In these ways to use the same
for the destruction Of real independents
After reciting the bitter trade war be-
tween American and English concerns. the
GcOntinued ON Page Two.)