Evening journal., 1909-02-25
HARD RAPS FOR
TOBACCO TRUST
Commerce and Labor Report
Says Ten Men Control
the Trade

BY United Press Leased Special Wire.
WASHINGTON. d. c.. Feb s5.-Ten
men absolutely control the tobacco and
snufr business OF this continent, with the
exception OF the manufacture OF cigars.
and the closssl trust which they manage
has within the last few years throttied al
most every vestige OF real competition.
These are, IN brief, the conclusions
reached by Herbert Knox Smith, Chief OF
the Bureau OF Corporations. the trust-pro-
bing end OF the Department OF Commerce
and Labor. Mr.. Smiths second installment
OF his report on the Tobacco Industry wRs
made public to-day, and in It he de&s
with the organization OF the combination.
its degree OF control, its growth, and its
present overtowerinE position IN the trade.
In future chapters OF his story, he writes
the President, he will handle the subjects
Of prices, profits, and competitive meth
DDS
The American Tobacco Company and lis
three great subsidiary oomblnations-the
American snun Company, the American
Cigar Company, and the British-American
Company-comprise some Sc subsidiary
concerns IN the United States, Cuba and
Porto Rico, according 10 the Smith re-
port. Ten stockholders are alleged to con-
troll sixty per cent. OF the stock Of the
mammoth concern, and these are. j, i.
Duke, president Of the company; A. n.
Brady o. H. Payne. p. A. b. Widener
Thomas +. Ryan, B. y. Duke, G. r.
Schley, the brokerage firm OF Moore and
schley, and the estates or w. c. Whitney
and W. L. Elkins. Twenty-elght directors
own nearly n per cent. Of the stock. but
for all practical purposes, says the re-
port the ten names mentioned dictate the
policy OF tho combination. which repre-
sentH total not capitalization OF Ssi6 OOo.-
oOo According to the report the concern
controls 50 per cent OF the cigarette busl-
ness Of the country. q por cent OF the
manufactured tobacco (chewlng, smoking,
hne-eut and snunD, and "A per cent. Of the
cigars In 1905 the American Tobacco used
IN its manufacturing plants 100000 COO
pounds OF leaf tobacco
An idea Of the absorption OF competing
plants and OF the changes through com
pmauon within the last decade may be
han' says Mr.. Smith from the fact
tnat In 1897 the combination had ten
plants each producing over $1,000
pounds OF tobacco or snuff per year, while
there were 2la Independent plants OF the
same type. In 1906 on the other hand. the
combination had 45 plants OF this class
and independent manufacturers 1io Es-
peeially conspicuous has been the absorp-
lion OF large plants. In 1897 the combina-
ton had plants each producing over
100000 pounds Of these products per wear
While its competitors had as sucb nlsrts
In 1905 the combination had "a plants =,
this size and the independent concerns
only L."
one OF the favorite plans OF the Trust
Mr.. Smith says was to buy IN an inde- /
pendent plant that had made its renuta- /
tion on its antitrust record. its fair aeaI- /
Ing with union labor. or its time-bonored
to its customers. and 10 oner- [
ate II still as an Independent" or amt
trust concern. Dozens OF tho nlants ~
purchased outright or controlled were on
Grated IN tiis manner, IL is charged. The |
only branch Of the tobacco trade that Il
has not been able to dominate, saws the /
report Is the cigar business and IL failed |
In that ambition only because the great
bulk OF cigars are made by hand. and /
therefore the small factory is practicable
upon an equality so far as manufacturing |
are concerned. with the plant
operating thousands of hands whose year
ly output is high in the millions. The
Trust Is now spending large sums OF
money experimenting with cigar making
machines and if they are successful I'm
developed them to the required state Of
efficiency and can control the patents
they may be able to command the cigar
business in the same manner that they
dominate e<ery other branch Of the tobac-
co trade. Mr.. Smith says.
''The Combination" continues the re-
port. ''has superior advantage over COM
petitors, from tho great size Of its plants
and from the control Of more efficient ma
but nevertheless great many