Tazewell Republican. [volume] (Tazewell, Va.) 1892-1919, 1908-11-12
KNOCK OUT BLOW
FOR THE OCTOPUS
Court Decides That American Tobacco
Company Is 4 Trust Operating In
Restraint of Trade.

~'N'' @OAhB ANON- C.-ln6 CO0IC1Llf n
OF the government that the American
Tobacco Company is a trust operatir z
In restraint of trade and competition in
violation Of the Sherman antitrust Law.
was sustained today in decisions handed
down by Judges Lacombe, Coke ard
Noyes, in the United States Circuit
Court here. Judge Ward handed down
a dissenting opinion.
In the suit against the American To-
oRcco Company, which was prosecuted
by James c. McReynolds and Edwin P.
Grosvenor, special assistants of the
United States Attorney General. the
government asked fer an injunction dis
solving the combination of the Ameri
can Tobacco Company and its sixty sub
sloiary companies on the ground that it
was illegal in that it operated in re-
stralnt of trade and commerce. The
government also asked the United
States Circuit Court to appoint q re-
ceiver to wind up the affairs of the al
lied corporations.
While finding that there was an IL
legal combination as charged. and that
lnJunctions should issue against all the
defendants except the United Cigar
stores Company and the R. P. Richard
son, Jr., Company, the injunctions
are, however, stayed, pending an ap-
peal to the United States Supreme
Court. The petition asking for the ap-
polntment of receiver to take charge
OF the companies included in the COM
pine was refused as being ''impracti-
cable and wholly unnecessary"
The suit has been in progress for
many months and great volumes of tas-
tlmony were taken by both the govern
ment and on behalf Of the defendant
companies. 1t developed from this tes-
timony that the American Tobacuo Com
pany and its subsidiaries practically
controlled the tobacco trade of the
world. This control, SO far as foreign
markets is concerned, was shown to
nave been Of comparatively recent ORR
gin, however, and came about tbrouqb
the formation of a working agreement
with great British corporation which
previously had controlled the production
and consumption not only in Europe.
but in Asia as well.
Ihe American Tobacco Company was
formed under the laws of New Jersev
In 1904, when the old American Tobacco
Company, the Consolidated COMPANY
ana the Continental Company were
merged under a single head. Under
such an agreement reached at that
tlme the parent company acquired the
plants, factories, property and trade
marks OF all the component companies,
ana In addition to that it now owns a
majority of the stock of the American
Clgar Company and of the common
soock OF the American Snuff Company.
tne havana Tobacco Company and the
American Stogie Company. Under an
agreement made in 1902 the vast export
business of the American Tobacco Com
pany Is conducted by the British-Amer-
lean Tobacco Company, Limited. This
iatIer corporation had a capital stock Of
SSO' 100000, two-thirds of which is
owned by the American Tobacco Com
pany. The American Tobacco Conn
pany itself is capitalized at $50, 900, 900.
It's president is James B. Duke, but
Inomas +. Ryan, the banker and capi-
talist, has been regarded as the domi-
nant force in the great corporation.
Since January, 1906, regular quarterly
dividends at the rate of per cent, a
: year have been paid on the preferred
STOCK. The first dividend on the com
, mon stock was q per cent, paid on
. march l, 1906. Since that time divi-
dends In the same amount have been
PAID quarterly, and in addition a ten per
cent. extra dividend wss paid in Decem-
DER, 1905, five per cent. extra in De-
: cember, 1906; five per cent. extra in
June, 1907; u per cent. extra in Sep
: tember, 1907, and q per cent. extra in
last December. Extra dividends aggre-
eating fifteen per cent. on the common
stock have been paid thus far in the
present year.
7 Judge Lacombe in his decision said
. There can be little doubt that the
Federal statute has been violated. Each
one of the purchases of companies COM
planned of in the petition was contract
p and combination in restraint and COM
e petition was very strong when it was
: entered into, and that is sufficient to
d bring it within the ban of this drastic
statute"
!. The suit was filed July IS, 1907, and
f asked specifically for the appointment
T of receivers for the various defendant
: companies. 1t was alleged that the I'm
8 perial Tobacco Company, which con-
a trols the tobacco trade of Great Britain,
fought the efforts of the American To-
4 bacco Company to sell its goods in that
a country, and that as a result the Impe-
q rial and the American Companies organ
v lied the British-American Tobacco Com
pany to control the trade outside Great
| britain and Anarica