Albuquerque citizen. [volume] (Albuquerque, N.M.) 1907-1909, 1909-02-25
TEN STOCKHOLDERS
CONTROL TOBACCO
INDUSTRY
More Than Eighty-Two Con-
Germs with 800 Million
Dollars Capital
Are In.
SMITH EXPOSES
THE COMBINATION
Many Weaker Concerns Forced
Out of Business by the
Combination Which
Now Has a
monopoly.

Washington, d. c., Feb. 25.-Her-
bert Knox Smith, commissioner of
corporations. today made public sub
divisions IL and III of part 1 of his
report on the tobacco industry. They
deal with the present organization of
the tobacco combination. so-cAiied.
its degree of control in that industry.
and the development of that control
These divisions of the report, re-
sulting from a thorough investigation
into the business operations of the to-
bacco combination. contain an eiabo-
rate discussion of the methods oy
which the manufacture OF tobacco,
except cigars, has come under the
control of a comparatively few cap
italists. Commissioner Smith says:
"In the tobacco combination are
The American Tobacco company and
its three great subsidiary combina-
tions, The American Snuff company.
The American Cigar company and
The British American company. be-
sides s other subsidiary concerns do
ing business in the United States.
Porto Rico and Cuba. The combina-
I ton represents a total net capitalixa-
| ton of over $S16,000.0 900. A very
small group of ten stockholders con-
ttols so per cent os the outstanding
voting stock of The American To-
| bacco company. through which COM
pany the entire combination is con-
| trolled."
"A list of the subsidiary companies
controlled Including over twenty
hitherto secretly controlled, so-callel
| bogus Independent concerns'" Is Civ
en- in the report. IT Is shown also
that the combination Is practically
the only important exporter of to
oacco manufactures from this coun-
try. Astonishing figures are given in
respect to the development OF the
com bination. In 1891 1t controlled
I89 per cent of the business of Gig
arctic manufacture, and this proper
tion practically is maintained today.
In cigars its output increased from
per cent of the business in 1897 to
LA 40 per cent IN 1906; while in
| manufactured tobacco (chewing,
smoking fine cut and SNUFF the
| IcoHlblIidlloHS = output lhNitdotN liObt
IL per cent of the total in 1891 to II
per cent in 1906. Finally, in 1906,
1.-THE combination controlled of these
| separate products respectively plug
s per cent smoking II per cent. fine
cut ST per cent and SNUFF 90 per cent"
I'm the year 1906 the /. combination
used in the manufacture of its vari-
Gus products nearly 300.000.000
pounds of leaf tobacco.
IAN idea of the absorption of COM
peting plants" says Commissioner
Smith, 'and of the changes through
combination within the last decade
may be had from the fact that In
| 1897 the combination had ten plants,
each producing over $4,000 pounds
| of manufactured tobacco or SNUFF per
year, while there were 243 independ-
ent plants of the same class. In 1906
| on the other hand the combination
had 40 plants of this class and in
dependent manufacturers l40. Espe-
| cially conspicuous has been the alb
sorption of the large plants. In 1897
the combination had eight plants,
each producing over 100000 pounds
OF these products per year, while its
competitors had 40 such plants, In
Is 906 the combination had "a plants
of this size and independent concerns
| only II.
Despite the combinations enor-
nous expenditures for advertising
land in schemes and despite frequent
price cutting by means of its so-call-
] ed lighting brands, there has been
I'm several branches of the industry
a constant tendency for competitors
to gain business more rapidly than
/ the combination and thus TO reduce
It's proportion OF the output. THE
tendency has been overcome only by
continued buying up of competitive
concerns Many weaker concerns
have been virtually driven out of
business or forced TO sell out to the
combination, either By reason Of the
direct competition of the latter or as
am indirect result of the vigorous
competition between the combination
ana larger Independent concerns. In
tine case of the larger and more pow
cr rul concerns which IL acquired,
% tyever, the combination has usually
s., ured control only by paying high
zee. The immense profits of the
ubination have enabled il 10 keep
this policy