The Vinita daily chieftain. [volume] (Vinita, Indian Territory [Okla.]) 1902-1913, 1909-02-25
TEN MEN CONTROL
HUGE COMBINE
Small Group Practically Controls The
Manufactured Output Of Worlds
Tobacco Supply.
BY Associated Press.


Washington, d. c., Feb. 25-Her-
bert Knox Smith, commissioner of
corporations, today made public sub
divisions II and III of part | of his
report on the tobacco industry They
deal with the present organization of
the tobacco combination, so-called, 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
tobacco combination contain an ella
borate discussion of the methods by
which the manufacture of tobacco, ex-
cept cigars, has come under the con-
trol of comparatively few capital
lists. 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 50 other subsidiary concerns
doing business in the United States
W lAi1O anu AuDds 1 n1 AOiAlbAhel7
tiOn represents a total net capital
ization of over $3l6,000,000 A very
small group of ten stock holders con
trolls 60 per cent OF the outstanding
voting stock of The American Tobac-
co company through which company
the entire combination is controlled"
A list of the subsidiary companies
controlled, including over twenty
hitherto secretly controlled, so-called
bogus independent concerns" is Civ
EN- in the report. 1t is shown also
that the combination is practically
the only important exporter of to-
bacco manufacturers from this coun-
try Astonishing figures are given in
respect to the development of the
In 1891 it controlled SO
per cent of the business of cigarette
and this proportion prac-
tically is maintained today. In cigars
its output increased from 4 per cent
of the business in 1897 to IA 7-l0 per
cent in 1906; while in manufactured
tobacco (chewing, smoking, fine cut
and snuff the combinations output
increased from per cent of the total
in 1891 to - per cent in 1906. Finally
III IOJDt bnG AOillDildliOli NOilbibAACQ Vi
these separate products, respectively
plug 81 per cent, smoking II per cent,
fine cut 81 per cent, and snuff SO per
cent" In the year 1908 the combina-
tion used in the manufacture of its
various products nearly 100000 600
pounds of leaf tobacco.
"An idea of the absorption of com
peting plants says Commissioner
Smith, and of the changes through
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 man
lfactured tobacco or snuff per year,
while there were 243 independent
plants of the same class. In 1906, on
The other hand. the combination had
IS plants of this class and independ-
snt manufacturers 140 Especially con-
spicious has been the absorption of
he large plants. In 1897 the combin-
alton had eight plants, each produc
ng over 100000 pounds of these
products per year, while its competi-
.ors had 46 such plants. In 1906 the
had "a plants of this
size, and Independent concerns only
II.
Despite the combinations enor-
nous expenditures for advertising
md in schemes and despite fre-
luent price cutting by means of its
io-called fighting brands, there has
Deen, in several branches of the in
lustry a constant tendency for com
Detitors to gain business more rapid /
y than the combination and thus to |
educe its proportion of the out |
,ut This tendency has been over
ome only by continued buying up of
concerns Many weaker
have been virtually driven |
nut of business or forced to sell out
0 the combination. either by reason
# the direct competition of the lat
er. or as an indirect result of the
igorous competition between the
and larger Independent
oncerns. In the case of the larger
nd more powerful concerns which it
cquired, however the combination
as usually secured control only by
aging a high price The immense
rofits of the combination have en-
bled it to keep up this policy