Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1909-06-07
Impossible to Make Comparison of
Earnings and Capital
MONOPOLY POWER PROFITABLE
Book Values Do Not Appeal to the
Bureau as Reliable.
TAX FELL OFF. PROFITS GREW
From 1890 TO 1908 Taxes Paid Fell
Off Eight millions, wbue Profits
Increased to over Thirteen
Millions.

WASHINGTON, June Corresponding to
q resolution introduced in the senate by
Mr. Beveridge an exhaustive report made
by the bureau OF corporations on informa-
ton collected affecting the prices of to-
bacco has been sent to the senate by Presi-
dent Taft. Much Of the information covers
matters heretofore made public by Com
missioner Herbert Knox Smith.
1t Is stated that the bureau has in prep
aratlon a complete report covering the sub
iect OF the prices Of tobacco and operations
of corporations, information for which was
obtained in accordance with the law Gre
atng the bureau The more important
material showing in substance the results
of the investigation, is included In pre-
liminary report. Commissioner Smith says
that any consideration of the subject of
the tobacco industry in recent years has
| necessarily involved consideration of the
relation of the tobacco combination TO the
| industry 1t is stated that the tobacco conf
| bnation controls substantially three
| fourths of the business Of manufacturing
! tobacco other than cigars. In the United
States. To show the extent Of this busi-
ness II is stated that the output of the In
! dependent concerns. excluding cigars, now
amounts 70 $4,000 600 per year.
Had Access to BOOkss
Accordny TO the report the American
| Tobacco company and other companies in
| the combination have given the bureau fun
and ready access to their books and rec
! ords. From comments made on the manner
Of keeping the books 1t appears that the
bureau has had less valuable information
concerning the conduct Of business by in
dividual concerns.
| Tables are included in the report showing
the remarkable increase of profit to con-
Germs in the tobacco combination from 1890
to 1907, inclusive. The bureau says 1t Is
not prepared at the present time to report
In detail on apitallzation, or = the
cash value OF the good will acquire rom
1 time to time by the combiuation.N is
asserted, however that the value u the
good will, which means value of brands OF
goods manufactured by concerns which
were swallowed up by the combination,
would not have exceeded a comparatively
small fraction of the value assigned to II
on the books of the combination The only
; reason why the American Tobacco com
: pany in Its early years was able to earn
liberal dividends on it's entire capitaliza-
ton, the report says, is In its monopoly
power. After reviewing capitalization and
earnings of the combination, the report
, says:
Unable TO MIKE Comparisons.
ut is apparent, therefore. from thess
facts that no comparison Of any signifi-
cance can be made between the earnings
of the tobacco combination and its capitsli-
cation or it's reported assets"
: Among the most interesting subjects
taken up by Commissioner Smith is the
amount of tax paid by companies In the
tobacco combination to the federal govern
ment in comparison with the profits made
by the combination. The report says that
the maximum amount of taxes paid, as
might be expected, was In 1899 to 1901, when
the war revenue taxes were In force. The
amount of tax collected fell off greatly In
1892 and 1903
THE cost OF the output of the concerns
in the tobacco combination shows broadly
speaking a steady increase since 1889
corresponding TO the increased volume OF
output" said the commissioner. VERY
striking, however, are the changes in tht
profits, and particularly when It's profits
are compared with its taxes paid. As the
amount of tax paid fell Off the amount OF
profits increased From 1893 to 1903 taxes
lfen off about Ss,0OOOOO, while profits In
; creased about s2S 600. 900, rising from S5,l22,
81 In 1898 to 1s,735,sss in 1908 Profits fel
4 off somewhat in 1904 but again increased
] reaching in 1906 the maximum, $2O,61, TOs. y
SENATE UP TO wOOLEN SCHEDULE
Progressive Republicans and Demo
Gratis Expected to Combine,
WASHINGTON, June 6.-Having acteC
upon most of the vexed problems in tn,