The sun. [volume] (New York [N.Y.]) 1833-1916, 1911-05-30

january, 1871. TINS frm was converted
into a corporation known as the Nationa
Tobacco Works. having a capital stock
Of StO0. 100. all Of which was issued 10 the
partners Almost Immediately there
after. in the month Of February. the
American Tobacco Company became the
purchaser OF all the capital stock OF the
new corporation. paying f6OO no cash and
81 200, 600 in stock Of the American Tobacco
Company. Tho members OF the pre-
viously existing firm bound themselves
10y contract with the American Tobacc
Company TO enter its service and man
age the business and property sold. and
each further agreed that for ten years he
would not engage in carrying On. directly
| or indirectly. or permit or suffer the use
Of his name in connection with the carry
ing on OF the tobacco business in any
form.
In April following tho American
Tobacco Company bought odt the b,si =
ness OF Philip Whitlock of Richmond. Va.
who WAS engaged in manufacturing
chcroots and cigars. and with the excli-
sive right to Use the name Of Whislock
The consideration for this purchase was
33OO. go and Whitlock agreed to become
Company for q number Of years and not
TO engage for twenty years in the tobacco
business.
in the month OF April the American
Tobacco Company also acquired the
business OF Marburg Bros. 2 we'll known
gagged in the Manufacture and distribution
Of tobacco. principally smoking and snuff
The consideration was a cash payment
Of Sie+8 8s7 IS and stock to the amount
| OF 0.075.UOO. The members Of the firm
also conveyed the right to the use Of the
frrvV a~A
in the tobacco business for u lengthy
period.
Again. in the same month. the Ameri-
can Tobacco Company bought out a
tobacco firm OF old standing. also located
in Baltimore. as q. W. Gail 4 Ak. engaged
| principally in manufacturing and selling
OF smoking tobacco. buying with the
business the exclusive right TO use ,h,
name Of the firm or the partners. and
the members Of the firm agreed not to
engage in the tobacco business for a
specified period The consideration for
| this purchase was 477 $50 6S in cash and
stock TO the amount OF 81. 10000. The
plant WAS abandoned soon after.
The result of these purchases was
manifested at once in the product OF the
company for the year 1901 1t will b..
seen that as To cheroots. smoking tobacco,
fine cut tobacco. snun and plug tobacco
the company had become a factor in all
branches OF the tobacco industry.
Acquired Fifteen Going Concerns.
Referring to the occurrences Of the
year 1891. as in all respects typical Of the
occurrences which took place in all the
other years OF the firs. period. that il,
during the year 1892. 1898. 1894 1895
1893. 1897 and 1893. We content ourselv 90
with saying that it is undisputed that he
tween February. 1891. and October. Is0s
including the purchases which We hav g
specifically referred to. the American
Tobacco Company acquired fifteen going
tobacco concerns doing business IN the
States OF kentucky. Louisiana. Maryla
Michigan, Missouri. New York, North
plants an all cash consideration Of s.
+i0. .235 % was paid. while the payments
for tho remaining five aggregated in cash
Si.ll5, 100 95 and in stock -. .i23.0OO II is
worth noting that the last purchas.
in October. 1903, was Of the Drummond
Tobacco Company. a Missouri corpora
ton. dealing principally in plug tobacco
for which a cash consideration was paid
of s. 45T 500
The corporations which were com
bined for the purpose OF forming the
American Tobacco Company produced
very small proportion of plug tobacco
That an increase in this direction was
contemplated is manifested by the almost
immediate increase Of the stock and its
use for the purpose OF acquiring a. we
have indicated. in 1891 and so2 the owner
ship and control Of concerns manufactur-
ing plug tobacco and the consequent in
crease in that branch Of production.
There is no dispute that as early as 1893
the president Of the American Tobacco
Company by authority OF the corporation
approached leading manufacturers OF
plug tobacco and sought TO bring about
combination Of plug tobacco interests,
and upon the failure to accomplish this
the ru,nous competition by lowering the
price OF plug below it's cost ensued As
result OF this warfare. which continued
until 1898. the American Tobacco Com
pany sustained severe losses aggregating
more than four millions Of dollars The
warfare produced it's natural result. not
only because the company acquired dur
ing the last two years OF the campaign,
AS we have stated. control OF important
plug tobacco concerns. but others en-
gagged in that industry came to terms.
We say THE because in 1893 in connection
with several leading plug manufacturers
the American Tobacco Company organ
ICED New Jersey corporation styl led tho
Continental Tobacco Company for trad
ing and manufacturing with q capital OF
S76, ,ooo, ,oOo. afterward Increased to $780,
900. 900. The new company issued its
stock and took transfers to the plants
assets and business Of five large and suc-
cessful competing plug manufacturers.
The American Tobacco Company also
conveyed 10 thls corporation AZ large
valuations the assets. brands, real estate
and good will pertaining TO its plug to-
barco business. including the National
Tobacco Works, the James q. Butler
Tobacco Company. Drummond Tobacco
Company and Brown Tobacco Company,
receiving al consideration $40. 27& 200 of
stock tone-half common aud one-half
preferredl $500 600 cash and an additional
sum for losses sustained In the plug bust
ness during 1898, Ss4O. .O35. Mr. Duke, the
president Of the American Tobacco Com
pany. also became president OF the Con-
tinental Tobacco Company
I.oriiiar6 Cc.rnanS Absorbed.
Under the preliminary agreement
which was made looking to the formation
OF the Continental Tobacco Company
that company acquired from the holders
all the 33,0O0.00O Of the common stock
Of the =. LOrillard Company in exchange
for 81. .O00 900 of its stock and 81 .5sl 800
Of the 81 0O.0OO preferred in exchange
for notes aggregating q sum considerably
larger The Lorillard company, how
ever. although it thus passed practically
under the control OF the American
Tobacco Company. hy virtue OF its owner
ship ot the stock in the Continental com
pany was not liquidated. but its business
continued to he conducted as a distinct |
corporation. is goods being marked and |
pu' upon III" market Just a. il they were |
IN" manufacture Of an independent con-
cern
Following tho organization of the Cor.
tinenfa' Tobacco Company the American
Iobatro COMPANY increased It's caDital /