The evening world., 1909-02-25
TEN MEN CONTROL.
The $316,0O0,0O0
TOBACCO TRUST
Commissioner Smith Tells
How Giant Concern SqueezeS
Small Dealers.

WASHINGTON. Feb. c5.-Herbert
Knox Smith. Commissioner of Corpora
tions, to-day made public Subdivisions
and 3 Of Part / OF his report on the
tobacco Industry. They deal with the
present organization Of the Tobacco
Trust, its degree OF control in that In
dustry and the development CT that
control
These divisions Of the report result
Ing from a thorough investigation INTO
the business operations Of the tobacco
combination. contain an elaborate dis
cussion Of the methods by which the
manufacture Of tobacco, except cigars
has come under the control or COM
paratively few capitalists, Commis'
sioner Smith says:
Fake independents.
I'm the tobacco combination are the
American Tobacco Company and It's
three great subsidiary combinations, the
American Snuft Company, the American
Cigar Company and the British -Ameri-
can Company, besides eighty-two other
subsidiary concerns doing business in
the United States Porto Rico and Cuba
The combination represents total net
capitalization OF over i2lfCoo,oM.
"A very small group of ten sock
holders controls 60 per cent. Of the out
standing voting stock Of the American
Tobacco Company, through which COM
pany the entire combination Is con-
troled.'
These ten controlling stockholders are
j. B. Duke (president Of the company
A. N. Brady, o. q. Payne, P. A. B
Widener, Thomas F, Rypn, 3. N. Duke
G.. b. schiey, the banking and bro
keraze fir,n Of Moore & Schley (chiefy
as agents for clients), and the estates
Of w. G. Whitney and W. L. Elkins.
A list OF the subsidiary companies
controlled Including over twcrty h!th
| erto secretly controlled so-callcG 'huEu.
independent concerns, " Is s!'er in th'
report. 1t Is shown, also, that lie Trus
g practically the only Important cA
porter OF tobacco manufactures from
! tins country,
AN idea OF the absorption Of com
peting plants" says Commissioner
/ Smith, and Of the changes througi
combination within the last decade may
be had from the fact that in 1897 th'
combination chad ten plants, each pro
ducing over 5000 pounds OF manufac
tured tobacco or snuff per year, Will,
there were 343 independent plants OF th'
same class.
"In 1906, on the other hand, the com
bIna,lon had ij plants Of this class anC
Independent manufacturers no
Absorption Of Large Plants.
Especially conspicuous has been tn
absorption OF the large plants. In lSs
the combination had S plants, each pro
ducing over 100000 pounds OF thes
products per year, while It's competitor
had i6 such plants. In 1896 the combina
pendent concerns only Il.
Despite the combinations enormou
expenditures for advert ising and 4
schemes, and despite frequent prIc
cutting by means Of its so-called fight
ing brands. there has been In severa
branches OF the industry constan
tendency for competitors to gatn bus
ness more rapidly than the combination
and thus TO reduce It's proportion OF tn
output. This tendency has been ovei
come only by continued buying up c
competitive concerns.
MANY weaker concerns have been VII
tually driven out OF business or force
10 sell out tn the combination, either b
reason Of the direct competition Of N
letter. or as an indirect result OF tn
vigorous competition between the con
binatiOn and larger Independent cor
Germs In the case of the larger an
more powerful concerns which il az
Ouired. however the combination ha
! usually secured control only by payin
: high price. The immense profits
: the combination have enabled II to kee
up this policy"