The citizen., 1911-12-08

[ SCuI2clUTe aGC s4AS O8 CHEWING anu
smoking tobacco and cigars. The
former one tin-foil company is di
vided into two. one Of ss25.O00 cap
itai and the other Of 100000. The
one snuf company is divided into
three companies. one with capital
OF s15.000.000. another with a cap
ital OF $4,000. 900; and a third with a
capital OF $1,000 900. The licorice
companies are two. one with a cap
ital OF s5.75s.O0 and another with a
capital of s2.OOO.O0c There is. also.
the British-American Tobacco com
pany. a British corporation. doing
business abroad with a capital Of
S25.O00000. the Porto Rican Tobac-
co company with capital Of
sl,S00.00O. and the corporation of
United Cigar Stores, with a capital
OF $4,000 900. Under this arrange
ment each OF the different kinds of
business will be distributed between
two or more companies. with a di-
vision Of the prominent brands in the
same tobacco products, so as to make
competition not only possible but
necessary. Thus the smoking tobac-
co business of the country is divided
so that the present independent COM
panies have 2I.39 per cent. while the
American Tobacco company will have
33.08 per cent, the Liggett and
Meyers zoos per cent. the Lorillard
company 22.S2 per cent. and the
Reynolds company 2.s5 per cent The
stock Of the other thirteen companies
both preferred and common, has been
taken from the defendant American
Tobacco company and has been dis
tributed among its stockholders. All
covenants restricting competition have
been declared null and further per-
foTmance Of them has been enjoined.
The preferred stock Of the different
companies has now been given vot-
ing power which was denied It under
the Old organization. The ratio of
the preferred stock TO the common
was as IS to 20. This constitutes
very decided change in the character
OF the ownership and control Of
each company.
In the original suit here were twen-
ty-nine defendants who were charged
with teing the conspirators through
whom the Illegal combination acquired
and exercised its unlawful dominion.
Under the decree these defendants
will hold amounts OF stock In the va
rious distributee companies ranging
from IL per cent. as maximum to
2sL per cent as a minimum, except
IN the case Of one small company. the
Porto Rican Tobacco company. in
which they will hold IS per cent The
tweaty-nine individual defendants are
enjofned for three years from buying
any stock except from each other
and the group is thus prevented from
its control during that Pc
riod. All parties 10 the suit. and the
new conp npanies who are made parties.
are enioined perpetually from in any
way efecting any combination be
tween any Of the companies in viola
ton Of the statute by way OF resump-
iion OF the old trust Each OF the
fourteen companies Is enioined from
acquiring stock in any Of the others
Ali these companies are enjoined from
having common directors or officers
or common buying or selling agents.
or common Offices. or lending money
10 each ether.
Size of New Companies.
Objection was made by certain in
dependent tobacco companies that this
settlement vas unjust because 1t left
companies with very large capital in
active business. and that the settle
ment that would he effective TO put all
on an equality would be a division of
the capital and plant Of the trust into
small factions in amount more nearly
equal 70 that OF each of the independ-
ent companies. This contention re-
suits from misunderstanding OF the
antitrust law and its purpose II is
not intended thereby 10 prevent the
accumulation Of large capital In busi
ness enterprises in which sIch com
bination can secure reduced cost of
production. sale and distribution. II
is directed against such an aggrega
tion Of capital only when its purpose
is that OF sitting competition enhanc-
ing or controlling prices and estab
fishing a monopoly. II we shall have
by the decree defeated these purposes
and restored competition between the
large units into which the capital and
plant have been divided, we shall have
accomplished the useful purpose Of
the statute
confiscatlor Not the Purpose OF the
Statute.
II is not the purpose OF the statute
10 confiscate the property and capital
Of the offending trusts. Methods of
punishment by fine or Imprisonment
of the individual offenders, by fine of
the corporation. or by forfeiture of its
goods in transportation. are provided.
but the proceeding in equity is spe-
cific remedy to stop the operation of
the trust by Injunction and prevent
the future use OF the plant and capital
in violation of the statute.
effectiveness of Decree.
| venture to say that not in the his
tory of American law has decree
more effective for such a purpose
been entered by a court than that
against the Tobacco trust. AS Circuit
Indna Moves said In his Judgment ap.