The Washington times., 1909-02-25
Second Installment of Re-
port on Combine" Is
Made Public.
FUTURE CHAPTERS
WILL DELVE DEEPER
"Trust-Buster" Tells Of "Unscrup-
ulous" Means Adopted TO
Blot Out Competition.

Ten men absolutely control the en-
tire tobacco and snuff business Of
this continent. with the exception
Of the manUfactura Of cigars. and the
colossal trust which they manage has
within the last few years throttled
almost every vestige Of real compe-
tition. They have gained their hold
on the trade by the unscrupulous use
Of vast sums of money, by deceiving
the public, by resorting 70 all man
neT of schemes. aud by the iercest
price-cuSting that the commercial
world has ever known.
This, in brieI. is the conclusion
reached by Herbert Knox Smith, chief
of the Bureau Of Corporations, the
trUst-probing end of the department
OF Commerce and Labor. Mr.. Smiths
second installment Of his report on
the Tobacco trust was made public
today and in it he deals with the
orEanizat ton of the combination. its
degree of control, it's growth. and its
present OvertOwerilg position in the
trade. Future chapters af MS story,
he writes the President VIII handle
the subjects Of prices, profits, and
competitive methods
Controlling Interest.
its three great subsidiary combinations
the American Snuff Company, the
American Cigar Company, and the
BriIish-AmeTicau COupany-cOmpTise
some eighty-two subsidiary concerns in
the United States, Cuba, and Porto
Rico, according 10 the Smith report.
Ten stockholders control 60 per cent OF
the stock Of the mammoth concern, and
these are: J. 3. Duke. president OF the
company; a y. Brady, o. H Payne,
p A B. Widener, Thomas 4. Ryan, B
y. Duke, @. =. Sch'ey, and the estates
Of w. c. Whitney and W. l. EIkins.
Twenty-eight directors own nearly Y
per cent Of the stock. but for all praC-
tical purposes the ten names mentioned
dictate the policy OF the combination.
which represents a total net capitalize
tion Of 100000.
The concern controls % per cent OF
the cigarette business of the country,
Il per cent of the manufactured tobacco
icHeWlng, smoking, me cut, and Snuf),
and Il per cent Of the cigars In 1906
the American Tobacco Company used
In its manufacturing plants 100000
pounds Of leaf tobacco
Plants Absorbed.
An idea Of the absorption Of COM
peting plants and Of the changes
through combination within the last
decade may be mad" says Mr.. Smith,
from the fact that IN 1897 the combIna-
tiOn had ten plants, each producing over
5000 pounds OF tobacco or SNUFF per
year, while there were Zi3 independent
plants OF the same type.
In 1900, on the other hand. the cOmbIn-
alton had fOrty-hye plants Of this class
and independent manufacturers I4O
Especially conspicuous has been the alb
SOTptIOn OF large plants In 1897 the
combination had eight plants. each pro-
duclng over 100000 pounds Of these
products per year, while its competitors
had fCrty-siX such plants. In 1906 the
combination had thirtv-four plants Of
this size and the Independent concerns
only sr'.nteen.'
one 81 the favorite plans OF the trust
Mr. Smith says, was 90 buy up an in
dependent plant that had made its rep
uIauOH on ltS antitrust record, its fair
dealing with union labor. OF its time
hOnOred SquITeneSs 10 its customers
and to operate il still as an "Inderend-
ent' OF antitrust" concern Dozens
ot the plants X purchased outright OF
controlled were operated in this mar
ner.
Cigar Branch Independent.
The only branch Of the tobacco trade
that it has not been able 10 dominate
is the cigar business and it failed In
that ambition only because the great
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