Wausau pilot. [volume] (Wausau, Wis.) 1896-1940, 1911-12-12

manufacture anu SAFE 0i cptwtLss aud
smoking tobacco and cigars. The
former one tin-foil company is di
vided into two, one of 1926. 900 cap
ital and the other of 100000. The
one SNUFF company is divided into
three companies. one with capital
of s15,000.0 900; another with cap
ital Of sS.000,000; and third with a
capital of $4,000, 000 The licorice
companies are two. one with cap
itai of s5.75S.09 and another with a
capital OF s2,000,00O. There is, also.
the British-American Tobacco com
pany. a British corporation. doing
business abroad with capital of
$26,OOO.000. the Porto Rican Tobac-
co company with capital OF
Sl,S0O,O00, and the corporation of
United Cigar Stores. with a capital
of 100000. Under this arrange
n1ent each of the different kinds of
business will Re distributed between
two or more companies. with a d.
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 21-39 per cent, while the
American Tobacco company will have
33-OS per cent. the Liggett and
Meyers 20.05 per cent, the Lorillard
company 22.82 per cent. and the
Reynolds company 2.66 per cent. The
stock OF the other thirteen COMPANIES.
both preferred and common has been
taken from the defendant American
IoDacco company and has been dis
trlDuted among its stockholders. All
covenants restricting competition have
been declared null and further per-
romance of them has been enjoined
re preferred stock of the different
companies has now been given vot-
ing power which was denied t under
the old organization. The ratio of
the preferred stock to the common
was as IS to 40. This constitutes a
very decided change in the character
OF the ownership and control of
each company.
In the original suit Ehere were TWEEN
ty-nine defendants who were charged
with being 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 Distribute companies ranging
from Al per cent. as a maximum to
2S1a per cent. as minimum, except
In the case of one small company. the
Porto Rican Tobacco company, in
which they will hold As per cent. The
twenty-nine individual defendants are
enjoined for three years from buying
any stock except from each other
and the group IS thus prevented from
extending its control during that pc
riod. All parties to the suit. and the
new companies who are made parties,
are enjoined perpetually from In any
way effecting any combination be-
tween any of the companies In viola
ton of the statute by way Of resump-
ton of the old trust Each of the
fourteen companies Is enjoined from
acquiring stock in any of the others.
All these companies are enjoined from
having common directors or officers.
or common buying or selling agents,
or common offices. or lending money
to each other.
Size of New Companies.
Objection was made by certain In
dependent tobacco companies that this
settlement was unjust because 1T left
companies with very large capital in
active business. and that the settle
ment that would be 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 to that of each of the independ-
ent companies. This contention re-
suits from a misunderstanding of the
antitrust law and it's purpose. 1t is
not intended thereby to prevent the
accumulation of large capital in bust
ness enterprises in which such com
bination can secure reduced cost of
production sale and distribution. 1t
is directed against such an aggrega-
ton of capital only when its purpose
is that of sitting competition, enhanc-
ing or controlling prices and estab-
fishing monopoly If 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.
confiscation Not the Purpose Of the
Statute.
II is not the purpose of the statute
to confscate the property and capital
Of the offending trusts. Methods of
punishment by fine or Imprisonment
of the individual offenders. by fine of
the corporation. orsby 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.
I venture to say that not in the his
tory of American law has a decree
more effective for such a purpose
heen entered by a court than that
against The Tobacco trust As Circuit
Judge Moves said in HIS judgment ap-
nroving the decree:
"The extent to which T. has been
necessary to tear apart this combina-
ton and force II into new forms with
the attendant burdens ought to dem
onstrate that the federal antitrust
statute is a drastic statute which sc-
composites effective results: which so
long as It stands on the statute books
must be obeyed. and which cannot
he disobeyed without mourning far
reaching penalties. And, on the 9TH
err hand. the successful reconstruction
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