Evening star. [volume] (Washington, D.C.) 1854-1972, 1908-11-08
AMERICAN TOBACCO
COMPANY IS TRUST
Court Stays Injunctions Pend
ing Appeal of Suit.
DISSENT BY JUDGE WARD
Receiver to Wind Up Affair Denied
as Unnecessary.
DISSENT BY JUDGE WARD
UNITED CIGAR STORES ESCAPE
r. P. Richardson, Jr., Company
Also Exempted - Complaints
Against Imperial and British.

NEW YORK, November THE con-
tention of the government that the Ameri-
can Tobacco Company is a trust operat-
ing in restraint of trade and competi-
ton, in violation of the Sherman anti
trust law was sustained today in de-
cisons handed down by Judges Lacombe,
Coke and Noyes in the United States cir
cult court here.
Judge Ward handed down dissenting
opinion.
In the suit against the American To-
bacco Company, prosecuted by James C.
REYNOLDS and Edwin p. Grosvenor. special
assistants of the United States Attorney
General, the government asked for an
Injunction dissolving the combination OF
the American Tobacco Company and It's
sixty subsidiary companies. on the ground
that it was illegal in that 1t operated
in restraint of trade and commerce.
The government also asked the United
States circuit court to appoint receiver
to wind up the affairs of the allied cor
porationS.
Stay Pending Appeal.
While finding that there was an illegal
combination charged. Judges Lacombe'
Coke and Noyes in their opinion, say that
injunctions 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 appeal to the
United States Supreme Court.
The petition asking for the appointment
of a receiver to take charge of the COM
panies included in the combine was re-
fused as 'impracticable and wholly un-
necessary.
The Imperial Tobacco Company and the
British-American Tobacco Company, Eng
Iish corporations, were included In tne
government $ suit. The complaints against
these companies were dismissed
Judge Lacombe, in reading the decision,
said:
There can be little doubt that the fed
eral statute has been violated. Each one
OF the purchases OF companies COM
spiained of in the petition was contract
and combination in restraint of competi-
tion, very strong when it was entered
into and that is sufficient to bring 1t
within the ban of this drastic statute
Suit of Long Standing.
The suit had been in progress for many
months Great volumes of testimony
were taken both by the government and
on behalf of the defendant companies
In the course of these examinations 1t
developed that the American Tobacco
Company and it's subsidiaries practically
controlled the tobacco trade of the
markets is concerned. was shown to have
been of comparatively recent origin, how
ever.
1t came about through the formation of
a working agreement with great British
corporation which previously had con-
trolled the production and consumption,
not only in Europe. but in Asia as well.
In addition to the American Tobacco
Company the defendants named in the
suit included the Imperial Tobacco Com
pany the British-American Tobacco
Company. the United Cigar Stores Com
pany and fifty-nine smaller corporations.
The suit was filed July 10, 1907, and
asked specifically for the appointment of
receivers for the various defendant COM
panies.
The prosecution of the suit was con-
Quoted by j c. Reynolds. 1t was alleged
that the Imperial Tobacco Company.
which controls the tobacco trade of
Great Britain. fought the efforts of the
American Tobacco Company to sell it's
goods in that country and that as re-
suit the Imperial and American COM
panies organized the British-American
Tobacco Company to control the trade
outside of Great Britain and America.
History of Tobacco Trust.
The American Tobacco Company was
formed under the laws of New Jersey in
1901. when the old American Tobacco
Company. the Consolidated Company and
the Continental Company were merged
under a single head.
Under an agreement reached at that
time the parent company acquired the
plants. factories. property and trade
marks of all the component companies.
In addition to that ii now owns a ma
jority of the stock of the American Cigar
Company and of the common stock of
the American Snuff Company, the Ha-
vana Tobacco Company and the Ameri-
can Stogie Company.
Under an agreement made in 1902 the
vast export business of the American
Tobacco Company is conducted by the
British-American Tobacco Company Linz
tied. This latter corporation has a cap
ital stock OF S30.OO0.OOO. Iwo-thirds of
which is owned by the American To-
bacco Company.
The American Tobacco Company itself
is capitalized at s1SOOOO.OOO. Its presi-
dent Is James b. Duke. Thomas F. Ryan,
the banker and capitalist, has been re-
Garded as the dominant force in the
great corporation.
Since January. 1905. regular quarterly
dividends at the rate OF q per cent a
year have been paid on the preferred
stock. The first Dividend on common
stock was 21s per cent, paid on March l.
1gp5
Since that time dividends in the same
amount have been paid quarterly. In
addition a 10 per cent extra dividend was
paid in December, 1905: per cent extra
in 1906. III per cent extra in September.
1906: . per cent extra in June, 1907: ~
per cent extra in September. 1907, and 212
per cent extra in last December.
Extra dividends aggregating 10 per cent
on the common stock have been paid
thus far In the present year.