The Montgomery advertiser., 1909-06-06
REPORT ON TOBACCO
REsPoNsE TO BEyERIDGE REssLU-
 ZION HEARD IN SENATE
The Tobacco ccmbinatisn Centreis Substantially Three-Fourths ef the HusiRess ef Manufnct- urinx Tobacco other
 than Cfgars.

Washington, June 5.--Respondsng to a resoiution introduced ip tne senate by Mir. Beveridge an exnaus- tive report made by the bureau ot affecting the prices of tobacco was sent to the senate today by President
 Much of the information covers mat ters heretofore lmade public by com-i missioner Herbert Knox smith.,t IS stated that the bureau has n pre- paration complsts report covering and the operation of the corporations, the information for which was ob- creating the bureau. The more im- portant material showing in substance the results of the investigation ts included in preliminary report Com missioner smith says that any con- siderStion of the subject of the tobacco indr(.r during recent years Is nec- ess sily largely q consideration of the relation of the tobacco combination to the industry. It Is stated that the tobacco combination controls substan- : tiaiiy three-fourths of the business of manufacturing tobacco. other than cigars. in the United States to show the extent of this business 1t Is stated that the output of the independent concerns, excluding cigars, now a- mounts to sss,0oo,o0o per year.
 According to the report the Ameri- can Tobacco Company and other com panies in the combination have given the bureau full and ready access to their books and records. From com ing books, 1t appears that the bureau has had less valuable tnformation con- cerning the conduct of business by inc dividual concerns.
 Tables are included in the report showing the remarkable increase or profits to the concerns in the tobacco combination from 1890 to 1907 inclusive The bureau says 1t is not prepared at the present time to report in detail on the subject of over-capitalization or on the cash value of the good will acquired from time to time by the combination. It Is asserted, however, that the value of good will which means value of brands of goods man. ufactured by concerns which were swallowed up by the combination. could not have exceeded a eompara- lively small fraction of the value as- signed to 1t on the books of the com bination. The only reason why the American Tobacco Company. in it's early years, was able to earn liberal the report says, law in its monopoly power. After reviewing capitalization and earnings of the combination. the report says:
 Tt is evident. therefore, from these facts that no comparison of any sign 1ficance can be made between the net earnings of the tobacco combination and it's capitalization or its reported assets"
 Among the most interesting subjects taken up by Commissioner Smith Is the amount of tax paid by the com panies in the tobacco combination to the Federal government in com parison with the profits made py the combination. The report says the maximum amount of taxes paid as might be expected was during tho years 1899 to 1901. when the war re- venue taxes were in force. The A. mount of tax collected fell off greatly in 1902 and 1903.
 The cost of the output of the con cerns in the tobacco combination shows broadly speaking, steady increase since 1888. corresponding to the in- creased volume of output" said the commissioner. "Very striking. how ever,s are the changes in the pYofts and particularly when the profits are compared with the taxes paid. As the amount of tax paid fell of, the amount of profits increased. From 1893 to 1908, the taxes fell on about ss,0o0- poo while the profits increased about $13.6o0,o00 rising from 3s,l22,sTi to 3ls.T35.a99 in 1903. The profits fell off somewhat in 1904 but again ina creased, reaching the maximum in 1908 R20.gAf TAQ