The weekly chieftain. [volume] (Vinita, Craig County, Okla.) 1905-1913, 1909-02-26
.TABACCO TRUST
LEADS THEM ALL
Commissioner Of Corporations Tells
Roosevelt of tie Magnitude Of
the "Tot acco Combination"

by Associated Press
Washington u. G., Feb l9.ln re.
port transmitted to President Roose.
welt today herbert Knox Smith. com.
missier of corporation. presents some
highly interesting history OF the or.
gnizatior of the Tobacco Combina-
ton. which IN the magnitude OF It's
business operations, is one OF the
greatest organizations Ia America
The report is result IN part Of an
extensive Investigation into the TO.
bacco industry made by the bureau
of corporations Subsequent reports
will deal with the control of the to-
baceo Industry with prices and pro.
fits, and with competitive methods.
Todays seport sets forth the rise
of one of the great combinations OF
the country In his letter of trans
initial. Commissioner Smith says that
Il deals with the history from the
standpoint Of its organization. of the
great tobacco combination. Starting
IL 1893 as the American Tobacco com.
pany manufacturer OF cigarettes,
with capital of $4,000 900. the
combination has no net capitallz.
alton (exeluding inteI-cumpany hold.
ings1 of S3i6,3i6,S2I Il has absorbed
about $50 sepernte concerns. and now
controls substantially four.tfths Of
the output of each important Kind OF
tobacco manufactured In the United
States with the exception OF cigars.
Its history also presents import.
ant features of stock manipulation
The financial transactions centerlng
around the organization of the Con.
sOlidated Tobacco company In 1901
are especially noteworthy Al that
time small body OF directors and
stockholders I'm the combination be.
loved that the profits OF the Combn.
alton could be greatly increased In the
immediate future. They organized
the Consolidated Tobacco company
and offered It's bonds hi exchange for
common stock of the American aud
the Contlnental. III order thus 10 Sc.
cure for themselves most of the In.
creased profits about 10 accrue. The
profits aecruimg 20 the common stock
Of the American and the Continental :
after its acquisition by the COns0li.
dated. increased greatly. and the
small body Of men controlling the last
named cOmpauy-so small In fact.
that six of them held majority of
It's stock and thus controlled the en-.
| tire combination became entitled to
millions of dollars which. had II not
been for the consolidated transaction.
would have gone TO the original com.
mon-stock holders.'
Commissioner Smith says that IN
| fairness II should be- added that this
offer OF exchange was made with no
coneealment OF the fact that that Of.
fer came from the principal officers
and directors OF the two companies
but, he adds
The conduct of this group Of men
/ Is q proper subject for criticism. how.
/ better than outside stockholders the
/ try. The report contains not onlv the
large profits about to accrue. They
ever, because they could fOrsee much
occupied a flduciary relation to the
outside stockholders. aud should have
shared with them equally the special
/ knowledge acquired by their position.
The report discusses at length tho
! methods by which the Tobacco Com.
binatlon hah been developed. inelud
ing the bogus independent concerns
OF the combination II points ont
clearly tha the leading purpose oi
/ the men VINO have controlled Il has
! been 70 dominate the Tobacco indus
! try The report contains not only
/ details Of The financial operations oi
/ the combination IN its rise. but also
many interesting sidelighta on the
schemes employed 70 brake the com
bination paramount n the tobacco
( industry