New-York tribune., 1911-10-26
Majority of Holders of Preferred
Stock Ask Hearing in Court.
RICHARDSON'S OUT OF FIGHT
Leaf Men, However, File Their
Objections to the Proposed
Reorganization.

The first move for the support Of the re-
organization plan of the American TOBACCO
Company by those interested In the corpo-
ration was made yesterday when the COM
Inittee Of preferred stockholders OF the
American Tobacco Company filed petit
ton in the United States Circuit Court re-
ouesung permission TO be heard in sup
port OF the plan
The committee. headed by James n. Wal
lace. stated that they were acting on behalf
Of 50 per cent Of the preferred stockholders
who have deposited their securities with
the Central Trust Company. They said
that they represented stock OF a par value
of S47.O244O0 out Of the entire preferred
stock Of the American Tobacco Company,
amounting at par to S7S.6S91o0
The provisions Of the reorganization
rlan. the committee declared, offered fair
safeE-lards TO the interests Of the preferred
stockholders and also provided an honest
dissolution OF the illegal combination in
conformity with the decree of the Supreme
Court For these reasons the committee
requested permission to be represented by
counsel at the hearings on the plan.
Charles r Carruth, counsel for r. p.
Richardson. jr. & Co. the Tobacco Trusts
most persistent enemies among the indie
denpents. announced yesterday that his
clients were practically out OF the fight
over tho reorganization plan Of the trust
unless something unforeseen should happen
that would again endanger their freedom.
The American Tobacco Company, said Mr..
Carruth. suddenly showed a willingness TO
eetlle its long drawn out struggle with the
~
their company at a par value Of $4,000,
while the Richardson's agreed TO buy back
their own bonds for $4,000. the amount
the trust had paid for them.
''This will give us all that we had been
fghtIng for" Mr. Carruth said. "and Mr..
Richardson felt confident that If he had
been able 10 resist the trust for so many
years when it was at the height of it's
power he would be able to protect his in
terests in the future under any condition
that the courts might create in the tobacco
industry. For this reason we do not ex-
pect to take any further part in the case" 4"
Louis D. Brandeis. of Boston. and Felix
H Levy. of this city, as attorneys for the
National Cigar Leaf Tobacco Association
and other organizations of independent to-
bacco men. fled their objections yesterday
10 the reorganization plan They said that
the proposed plan. II approved by the court,
would result in legalizng the monopoly in
stead Of restoring competition. Its effect
upon tobacco planters. independent tobac-
CO manufacturers jobbers, retailers and
upon labor engaged in the manufacture of
tobacco would he more injurious than a
continuance Of the present illegal monop-
oily. they added.
3 The shortcomings Of the plan. as seen by
these two attorneys. were grouped into five
fundamental defects Of which they said
that each was so serious that It formed
alone a sufficient ground for the rejection
OF the plan. Their first objection was that
s. was proposed 10 divide the trust into
various corporations, but TO distribute the
stock Of these pro rata among the common
stockholders Of the American Tobacco
Company. This common ownership of
stock, they said. would make it certain
taht no real competition could exist be-
tween the new corporations.
Among the further objections was one
10 the division with three huge corpora
tons Of nearly all the properties held by
the trust No plan could be effective TO
restore competition, N1essrs. Brandeis and
Levy said. which did not include as an es-
sential condition that no department of
the tobacco business now conducted by the
large as 10 prevent the Independents en-
gagged in that branch of the business from
competing with them under fair conditions.