New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-05-30

Washington. May %.-Chief JUSTICE
vb,te's opinion IN the American Iooacco
company case may be divided INTO '"ie.
nar,s First he gave detailed sta'e'he"'
Of the history Of the case. and d"e'' On
what he called the 'undisputed iao'0
Next he took up the meaning OF the ohe'
man antitrust law and its application :,
the case al bar, and lastly he eohs'ue'eu
the remedies 10 be applied.
Al the outset of his statement OF lao1'
he classified the siXty-hve American cu'
norate defendants into three groups me
American Tobacco Company. because VI
us dominant relation TO the subject 'ha'-
Tor NJ the controversy was designate"
nc tho primary defendant. Inc Amer
can Snuff Company. the American Ois"'
comnenv. the American Stogie Con'pah!'
IN. MecAndrews q Forbes Company anu
the Conley Foil Company were named d
",ccsssorv defendants The nfty-nlne
other American corporations were cane"
the subsidiary defendants. The Two Eng
rsb oorrorations-the Imperial Tobacco
conansnv and the ritsh-American 10
bscro Company--as well as the twenty
nine Individual defendants. headed oE
lanes r Duke, remained unclassihed.
The "undisputed facts" in the case were
6iv,da6 hy the Chief Justice into two
nar,ods one being from the time OF the
organization OF the first. or the ola Ahie'i-
ran Tobacco Company. in 1870 10 the OF
ranjzation Of the Continental Tobacco COM
pan,. in 1895 and the other being from the
date Of that organization 10 me nesihili"s
Of the case under review
TIE chief Justice dwelt at length on the
,rrarization OF the old American Tobacco
COMPANY in January. 1890. just before the
sherman antitrust law was passed lie de-
scrjbed the organization or the American
Tobacco Company TO carry on the business
of five distinct concerns. which az the time
were manufacturing 81 per cent of all the
domestic cigarettes produced IN the United
States Before the organization Of this
conpanv. the chief Justice said. the FIVE
concerns had been engaged in fierce and
abnormal" competition.
Growth OF the Corporation.
lie told with much detail how the Ameri-
can Tobacco Company expanded. BY the
end of 1891 he said. the company had be-
come p factor in all branches Of the tobacco
business specific instances of contracts
being entered into TO prevent persons who
sold out 10 the American Tobacco Company
from re-en,ering the tobacco business for
len 10 twenty years were cited. The ex-
mansion proceeding. he said. the American
Tobacco Company acquired between 1891
and 1925 fifteen going tobacco concerns do
ing business in the states OF Kentucky Lou
isiana. Maryland Michigan Missouri, New
York. North Carolina and Virginia.
The organization Of the Continental To-
bacco Company was next described.
There is no dispute" the Chief Justice
saws, that as early as 1898 the president OF
the American Tobacco Company. by au-
thority Of the corporation. approached lead
ing manufacturers OF plug tobacco and
sought to bring about a combination Of the
plug tobacco interests, and upon the fall
ure 70 accomplish this, runous competition
l ny lowering the price OF plug below It's
III cost ensued As result Of this warfare,
which continued until 1898. the American
Tobacco Company sustained severe losses.
azgregatng more than 100000 The war
fare produced its natural result, not only
because the company acquired during the
last two years Of the campaign, as we
have stated control of important plug to-
hacco concerns. but others engaged in that
Industry came 10 terms. We say this be-
cause in 1895 I'm connection with several
leading plug manufacturers. the American
Tobacco Company organized a New Jersey
corporation. styled the continental To
bacco COMPANY, for trading and manu-
featuring with a capital of si5ooc,cD.
afterward increased 10 100000"
The new company issued its stock, the
Chief Justice said and took transfers to
the plants. assets and businesses Of five
large and successful plug manufacturers.
The American Tobacco Company trans
ferred to it its plug business. and Mr..
Duke. president of the American Tobacco
Company, also became president Of the
Continental company"
Closed Up Competitors.
The second period. or that following the
organization Of the Continental Tobacco
Conlpany. was described next. OF these
years Cniet Justice White said:
In tho year 1899 and thereafter either the
American or Continental companies for
cash or stock az an aggregate cost Of $50 =
cgop0. bought and closed uV some thirty
competing corporations and partnerships
heretofore engaged in interstate and for
ana distributors Of tobacco and related com
nloditios the interested parties covenant
ing not 10 engage in the business. Like
wise the two corporations acquired for
cash. by issuing stock and otherwise con
troll Of many competing corporations. now
going concerns. with plants in various
states. cuba and Porto Rico. which man
ufactured. bought sold and distributed to-
eacco products or related articles through
out the United States and foreign coun-
tries, and took from the parties in inter
cat covenants not 10 engage in the tobacco
business
Net only did the American and CONT
mental Tobacco companies continue 10 ac-
ouire other companies but the Chief JUS
tice referred to the other companies AZ ac-
quiing sill more companies
How Competition Was Stifled.
~ is Of The utmost Importance" he said.
ITO observe that the acquisition made by
The subsidiary corporations in Some cases
likewise snow the remarkable fact stated
above; that g. the disbursement Of enor-
NOUS amounts of money to acquire plants
which. on being purchased. were not
utilized. but were Immediately closed"
The chief Justice described the organiza-
ton Of the American Snuff Company at
the end Of an aggressive competition in
the snuff business between the American
Tobacco Company. with the force acquired
fron the vantage ground resulting from
the doninancy OF It's expanded organiza
tion" and independents As result. he
said. the American Tobacco Company came