New-York tribune., 1909-02-26
RULERS OF SMOKELAND
MORE TOBACCO REPORT
Methods Whereby Ten Men Formed
Huge Trust Revealed.


hold than 80 per cent of the stock Of the
American Tobacco Company, and therefore control
the entire tobacco combination with its eighty-sx
companies operating In the United States Cuba
and Porto Rico This information is made puohc
by Herbert Knox Smith, Commissioner OF Corpora
tions. in subdivisions II and III Of Part OF ms
report the tobacco industry. These divisions OF
the report reveal the methods by which the manu-
facture OF tobacco, except cigars has come under
the control of these men, Commissioner Smith says
In the tobacco combination are the American To-
baeeQ ComPsny and its b
lean Cigar Company and the Brltish-American
Germs. The combination represents q total net
capitalization of over s316.oo00o0 49,.
end of 1905 total Capitalization of a little ever
NaSion Only ABOUT ne-sixth@nameiy the com
mon stock, amounting to little over sac, 600 00C-
has voting power for the election of directors or
for the ordinary management of the business
The great bulk of the common stock Is held sin oy
members of the directorate OF the american
Tobacco Company and theis Intimate f sr associate
holders together own II per cent of this stock.
Indeed the ten largest stockholders. seven Of
cent, and these ten alone can, therefore. readily
dominate the entire combination.
Figures show that the combination in 1891 con-
So per cent of the business Of cigarette man
ufacture. and this proportion practically is main
tanned to-day In cigars its output increased from
per cent Of the business in 1897 to 14.7 per cent
in 1906, while IN manufactured tobacco Chewing
smoking fine cut and snuff the combinations
1881 u per in 1906 Finally in 1906 the COM
bination controlled of these separate products, re
spectlvely, plug, 81 cent; smoking Il per cent
fine cut 81 per cent and snu, S6 per cent In the
year 1906 the combination used in the manufacture
of its various products nearly three hundred mill
ion pounds of leaf tobacco. Continuing the report
says:
ABSORPTION OF RIVAL PLANTS
duong over 5000 pounds Of manuTactured tobacco
or snur year, while there were 2iS independent s
MI nT a oil
hand the combination had 10 plants OF this class
ana Inaepenoeht @ M 1 ~ re largo
plants. In 1897 the combination had plants, each
year, while it's competitors had IS guch plants In
1895 the eombnaton had & 81 plants Of this SHe' and
Despite the combnation's enormous expenditures
frequent price cutting by means Of its so-called
,,'hghting brands" there has been in several
Competitors TO gain business more Rapidly than
e "a S 5i be ao uS 10 ba been ~ oVepcoTne
only by continued buying up OF competitive con-
driven OF business forced sell out to the
combination, either by reason of the direct com
the vigorous competition between the combination
the larger and more powerful concerns which 1t
acquired, however. the combination has usually
obtained control only by paying a high price
The American Tobacco Company itself, states
the report. controls directly indirectly forty
Of these subsidiary companies. aside from
controlling the three principal subsidiary COM
bnations The American Snuff Company con-
trOis six other companies the American Cigar
Company twenty-six and the British-American
Tobacco Company three (these three companies
buy leaf and manufacture tobacco in the United
States for export) the British-American also con-
trols many subsidiary companies operating IN
other countries
Regarding the combinatfons policy of control
by stock ownership the report says:
This policy OF stock ownership has been partieu-
stock acquisition was first inaugurated II was the
Quire only controlling interest in the securities
OF otner corporations leaving majority IN inc
various apparent advantages. Through it the COM
bination able TO acquire control over business
capital In some instances 1t secured stock inter
prises without investment of capital but merely
IN return for contracts for the supply OF materials
The most important motive. however. for the
nuanee OF separate corporate existence in che case
bnation TO keep its control There is strong
trusts" in general and the Tobacco Trust in Par
ueular. In order to overcome the effects OF the
antitrust sentiment and the union label sentiment,
Combination particuIaFiy during 1903 and 1904 seo
cretly acquired a controlling interest in numerous
concerns which had been catering TO customers
ued to operate under their former management and
to the combination. Those which employed union
labor continued to do 50 and advertised the union
until the facts were disclosed by the government,
n9spendents and we're looked spon bT ths iaitee
as their worst enemy.
CONTRADICTORY INDUSTRIES CONTROLLED
OF control Of contributory enterprises and dis
tributInE firms by the combination the report says:
The American Tobacco Company is also engaged
in numerous contributory enterprises connected
contributing concerns is the MacAndrews & Forbes
of the manufacture of Iicorice paste In the United
States Lcorice. next to leaf tobacco, Is the most
ure and more than nne-tenths of the licorice made
in the country is used in tobacco. The MacAn-
other formerly Independent concerns. and now not
Company and it's afhIated concerns but also to
most independent tobacco manufacturers. The
prices which It charged TO the latter the sub
feet OF much complaint and the company, along
with the J. $ Young Company, which # afterward
violation of the Sherman antitrust act.
other important contributory concerns controlled
Foil Company and the Johnston Tinfoil % and Metal
featuring Company, maker of cotton bags for
packing tobacco; the Mengel Box Company and it's
TWO subsidiary concerns makers or wooden boxes;
the American Machine and Foundry Company, the
New Mschner comSany ao ali ihe Of Whe
make machinery hold and develop patents there
Which makes nicotine extracts of various kinds out
of tobacco stems. the principal by-produet Of to-
bacco manufacture. and the Manhattan Briar Pipe
Company.
ested in a number Of distributing companies, most
of which, however. sell not only It's own products,
Of the combination, as well as OF Independent
Germs. The most important OF these concerns is the
has several subsidiaries. This company and most
fe b 'ts eesresate nuSer being about four hundred
Other distributing concerns in which the Amer
iesn oPaeG9 esT and Tobae Company Of New Or
leans and Acker Merr2l condit whGtesae re aha ana
stock OF the latter company is held by the Amer
lean
BILL TO PUNISH WATERSHED POLLUTION
Dr. Eugene Porter, State Commissioner OF Health,
will try to have bin passed at Albany giving this
w IN