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


the tobacco Industry, submitted BY
IN. commissioner to the President
Yesterday The rcpOr; deals wi;r
the history Ct the organizati3n OF th'
gIoa, cOmbinal len which prac 'icalil
controls the tobacco trade OF the
world: il tells story mat Will b.
:s' .nIShiny to those uniniolnrd on
the subject. and gives interesting
faces ard figures in compact. readable
I.rm concerning which the public al
lag has known only through rumor
While this is. tn" first OF three
llrtH OF the complete report. il gives
such Il complete history OF the foIina'
ton of the combina ion and such :.
clear insight into lis prcs' ut Organi.
cation an! operations. that it is vastly
more Interesting TO the public than
The sec ions that are to follow.
The summary follows:
I. History Of the Tobacco Combination.
"Ti" Tnh lc"o Combination has as
is c,nrr the American Tobacco
Company This company controls
ttr:.,' "i,at subsidiary combinations
til'' amer tHt Siull COMPANY. 'li'
Am. i, an Cigar Company. md tn"
F~iti-h- American Tobacco Company.
The American Tobacco Company and
ih,. other thrr" combinations each
control Il large number of subsidiary
companies. The number OF COM
panieS in the Combination doing bust
ness in the United States. Porto Rico.
and GINA is Sc, besides n consider
able number operating only in foreign
countries.
rh.. Tobacco Combination dOmi-
mates 'ho tobacco industry of the
United States. With tn" exception
rl cigars it, proportion of the coun-
1rv'S output of manufactured tobac-
go DrOducts is substantially four tifthS.
giving l. a large degree of monopoly
power
The magnitude of The Continuation
is further shown by its enormous
Capitalization. TIL" said Sc companies
hav" an aggregate capt. allzatlon. in
clu!iny bonds, of $3.50 800 ,S9". 4
considerable part of this. however. re-
presents duplication through int"rto ON
panv ownership OF securities. The
net amount Of the stock and bonds or
III" companies in the bands of tn"
public (including III" directors and
all holders except the companies
th-msnlves). however. is no less than
$3l6.34f.S2l.
The present report deals with tn"
position OF the Tobacco Combination
in the industry. AMI includes his
tory CT the Combination. a descrip-
ton Of its organization. plants. and
business. and an analysis of its con-
troll of the industry. Reports to be
vlt;ishcd later will deal with the
effect of the Combination upon the
prices of tobacco. with its profits and
the relation thereof TO its capitaliza-
ton. and with the competitive
methods pursued by the Combination
The history of the Combination be-
gins with the organization OF the
American Tobacco COMPANY in 1890
This was a combination of The five
principal manufacturers of cigarettes
tAll-n & Ginter. W. Duke. Sons
Co.. Kinney Tobacco Company. VIM.
8 Kimbail & CO. and Goodwin 4 Coz.
and it's business at first was confined
Substantially to cigarette man ltacturf.
The company started With capital OF
SIO Oi DlftttiFc W tAh'I SAc-
,,0,, 0OG OF common S:Ock-a9 amount
vastly. in excp:S Of its tangible assets
which We're $4,000. 900 tincludinS
s1,S2J.uO in the form OF notes OF tn"
individual stcckhOldersI. James r.
Duke was made president. and from
,hzt time to this he has been prtsi-
den, OF the leading companies in n"
Combination ami has largely directed
IT. policy.
The American Tobacco Company a;
il, inception secured control of OYER
~ per cenr Of The cigaret;' iCsl-
ness of the country. VI sought 10
maintain his dominant position partly
nv making agree NcD.s FORTH '>tn.
Siyc u.c Of what &c cOns!c ",'1 ih''
,sc>t cigarette ma hines: to :ih;| iH-
p,r:ani Ct these i:,r "ments. h'v'"''r
WAS terminated in 1895. During this
period 1890 70 1895. the average pro-
Ats OF the company were very large
exceeding four million dollars annual
~
PLUG Tobacco War. 1894 to 1897
The American Tobacco Company
caIly began to extend its DONNA
ton - cover other branches Of III"
tobacco industry. In 1891 the auth"
rizri cap!:al was increased 20 -
a.s, 00O s.. i,O0 noO Of this inCreaS"
va. common and $i.000.6O" vas i:r"
fcrred. In this year the company
houshr two impcr ant concerns mani
featuring smoking tobacco and snuh
another manufacturing plug chewing
tobacco. and a fourth which was in"
principal manufacturer of cher"o's IN
IN, United States During the ir'riol
from 1894 TO 1897 il developed j;
pIuc.,orac business with such 4
dexre. Of success that ultimately its
leading competitors in that branch
we're forced into combination WIN
itself
In pursuit OF its policy Of expansion
tho American Tobacco CDmpary. par