Daily press. [volume] (Newport News, Va.) 1896-current, 1909-02-19


or fortified the dominant position o
the men already in control of The
Tthucco Combination. II also served
to simplify the organization and tho
securities Of the Combination
The merger was accomplished BY
giving he securities OF the recrganiZ
ed American Tobacco Company II
exchange for all the securities or the
Consolidated. Continental. and old
American companies which were IN
the hands OF the public Uhis term
fcing used % designate all holders
except the three big companies them
selvcs). such previous securities
being lhereupon cancelled. and
by the direct cancellation OF
in,orcompany holdings. The small
amount Of American and Continental
common stock which was in III"
hlnds of the public. $4,000, ana the
stock o: the Consolidated Tobacco
G. mpany. $40.O00000. were exchans-
ed for an equal amount OF common
stock of the reorganization An"ri-
can.
The preferred stock CT the new
American Tobacco Company WIS civ
on no voting power for the election
OF directors or on ordinary matters.
The power OF the men who had con
,rolled the C,lsclidated stock was
th,.s male even more secure under
the reorganization than it had been
during the existence CT the Console
da ed Tobacco COMPANY. fen al
Ihlt time the preferred stocks of the
American and Continental ccmpan-
les which were largely in the hands
CT the outsiders. had a voting power.
although those stocks were a minori-
" as compared wiah the common
stock held by The Consolidated.
Absorption and Domination.
The history. OF the Tobacco Com
h!.ation thus presented shows plain
" that the leading purpose Of tn"
men who have contrclled it has
been to dominate the tobacco in
dustry They started out by prac-
tically monopolizing the cigarette
business With the great profits de-
rived from that source They carried
on strenuous competitive fight in
the plug industry. which 1Atimats-
" forced the leading competing
manufacturers into combination
with themselves. This secured for
he Combination dominant posi-
tel in the manufacture, not only or
plug but of smoking tobacco. Soon
after the combination in the snuf
industry was brought about, and
subsequently combination in the
cigar industry. The latter, however.
controls only limited proportion
OF the business.
The successive combinations
which these men have established eX
ccpt that in the cigar business. at
the outset tLok in the leading
manufacturers and secured a very
large degree Of control over the
business. That degree OF controi.
however. has been further extended
by The acquisition, either by direct
purchase or by securing controll-
ing stock interest, Ct a very large
nutnDeI vi oeiiOi SAh>>-e
Germs. The total number OF former
Is separate concerns and combina-
7i2ns which have passed under the
control of the Tobacco Combination
IS in the neighbohoOl Of $50. This
number includes the concerns which
originally entered the several com
binations. but such original acquisi-
li.1s. though in general they were
the largest c5ncerns. were much less
numerous than the concerns acIuE-
cd slIbseQuen. to the formation OF
Of the combinations. 1t appears TO
have been the policy in fact to buy
Al, from time to time. most con-
neritors whose business had bec1 me
successful.
The effect OF these later acquisi-
lions is best seen in the increase in
che proportion Of the business con-
,roiled. In 1900. shortly after the
formation Of the Continental Tobac-
co Company. the Tobacco Combina-
ton controlled about so per cent of
he production of chewing and smok-
ing tobacco in the United States.
In 1906 it controlled SIS per cent OF
III. chewing tobacco and 76.S per
cen, OF the smoking tobacco. Its
oroportion Of the manufacture OF
snuff increased from 500 per cent in
1901 she first full year Of tho
operation OF the American Snuh
Company. So per cent In 1906.
A significant feature Of many Of
the acquisitions Ct the Combination.
par,icnlarly during the period from
1909 10 1904. is the fact that they
were made secretly and that the
American Tobacco Company interests.
as long as possible. concealed their
control. continuing 10 operate the
concerns as though independent and
often using them as a special instTu-
mon, for attacking the business q