New-York tribune., 1911-10-16

Payments on STOCK WnlCn NueE VIII IL
ceivc as holders of the common stock of
the American Tobacco Company.
The independent interests are confident
that the courts will reject the proposed
plan as giving in reality more COM
plete monopoly of the tobacco trade into
a few hands than does even the present
organization.
National Cigar Leaf Statement.
The committee of the National Cigar
Leaf Tobacco Association said:
1t is a matter of public record that the
Supreme Court in its decree said; Ill
The combination in and OF ltselt, as wen
as each and all of the elements composhs
st. whether corporate or individual. whether
considered collectively. or separateE' DC
decreed 10 be in restraint OF trace.
And President Taft said in his recent au-
dress at Detroit. with reference 10 the
Tobacco case: 49,, .o,,
critics owned by single companies ana 10
distribute these plants into diherenl anu
differing ownershps in order to create COM COM
petition between them. ana MAINTAIN s uiov
competition by the power OF cohtIlu'lls
Injunction against any future union OF
any agreement TO avoid future coihPeu-
II is evident therefore. that both the
Supreme Court and President Ialt nav
given the country tle ilSuN ~ hei.'NN -
no plan should be adopted WnlCn MouN NJ
leave the effective working controi IN % the
hands OF the same group OF lh1l @ Nluu udis
who were named by the supreme Court III
tts decree as constituting in themselves
restraint OF trade .., ..,.,, q ,rac-
tjcal standpoint whether such c0nuOl II
s6Solnte 10 the extent OF involving an
actual majority OF stock ownership, or
equally effective through the exercise .a oa
tie power which is always aNhEole %! Sle
LARGEST s,roun Of stock ownership, even IL a
minority. ,,s,,oss
naturally rests with the largest Jolht m m
terest I'm n corporation II II contains thS
elements that by their experience anu
knowledge of the business are dl ir"tS ~ or9 %
well suited as any one else 10 ehapS IntIl Il
10 conduct that business in an eHecuNe
and profitable way. - ..,a,,o 3. Main
that il will be necessary TO dlssoiNe lt0
combination in q genuine ana real scHSJJ
70 that actual freedom OF compeuuCh Slldii
be restored and dnaintalneo oE 'le 'le,iS,s;rc iSCs;
ton "out OF the elements now cotnpost,Ii2 ip.'1s,i5
81 n new condition which shall be honestN
in harmony with and not repushaht ~ '"'
INV rlap of dissolution which leaves the
eNcciive control Of the separate parts OF
the combination i'm the hands OF @ @tle sdIno ,
small croup of individuals who now con
tr0i inc present solidihcG combination can
not bring about restoration OF coihpeu-
tion. 49,. ,to 1oet con6i-
,ion would be worse than the first ,auSt
after such dissolution the same So.su"o'
would continue to be exercised az pT,tS,,Id
with the added advantage that II WCuLu
have Gf indeed any such plan VIII oe "l'
proved the sanction Of the courts as
asainst it's present situation. Whlch HAS
been condemned by the courts.
Insiders Control. Morris Says
Ira Morris. president Of the Independent
Tobacco Salesmen's Association OF Amer
ica said:
The principle which pervades the plan
throughout is the retention OF toHuOl W
the small group OF lnsldtrs NhO HO" O0'
lrol the combination 49,. S-,i,,,
OF these insiders. Herbert hhoN Sii"rn, III
Commissioner OF Corporations, iia,ittod iil "a
port on the Tobacco Industry, Su"@liilSleT Unity u. "
The President OF the United states a. l@'e
as september p, 1911, said: .a,,st-
Through adroit and ,iequcnnu,, ~ GUy ton
u,entS Of the securities Of the commune tloii @
"a very large part of its great edIillu5' Io
gone TO . small group OF hslutttS, w W.
have throughout retained suI5S1'';; 5,o ;rd,,cHd
ing control. The insiders IN ls'l liuuce;u liu;
The common stock holders OF the oIu m ..a, AineIi
can and Continental con.l ames 70 sut ~ ti
der their stocks for per oent oonus ol @ @I.,e
~, Coosolidated Tobacco Company, thus
seruriuc FOR the common stock OF the Con-
soUdated most of which the lnSl0SIS .Glu!
the great increase IN earnngs' mitTn IN W. War
foresaw from the reduction IN the ""'
"Tbis Increase the rank and hle Of
sfockboldere of the older concerns dld hoO
rcrcere I'm the reorganization in 1909 tne
advantage of the Insiders was perpetuated
Of the book profits OF the new NIi!eIlC"'' .e.,,
Tobacco Company in 1910 mot the earn
t,oe'" as revised bv the bureau), nameIN,
S35.J0oOo0. onlv about &5p,gH Went 70
The holders of the SlO4VoOogn DVIiuIS' 80 80,
-n0 ONh 10 tnc holders Of the StH,OVV.VV III
ferred stock leaving 10 less than >-2VouV,
fOr thc comparatively small NUMBER Ol
holders of the $40 000 600 common stocA'
which alone has voting power
Sixty Per Cent in One Year.
"T5is was over 60 per cent on the com
mon stock in one year. NOT lilc,uuiiS In
short. the b,'lt Of the earnings or thls
great combination. increased by mohopOc
lStic power, has 10y clever arrangement VI
capitalization. been more and more cen cen
tered in a very small group OF lndiN!duals
The language Of this government lepOI |
needs no comment. IL docs. however Ie-
0uire careful reflection, so as 10 MAKE
credible the astonishing example OF cIalu-
such rich prize I'm their hands can any
one doubt that just as lu the ldnSudAe -, ~
the report in the reorganization IN I''t
the advantage OF the INSIDERS wa pc. pj1a- pfj,'-
atcd,' SO iu this momenlous lt4IsallIo, me-,
lion Of 1911 ROW IN progress, tne sdlht
VERY small group OF lndlyldua.s W sIrt no
constitute the insiders VIII leave no eUoIl
untried to Bcrpetuate again. and perhaps
Tor good and an. the advantage which theN
now possess and which they have so selfsh-
The cupidity and self-agsrandizement
which were shown by this very small
group OF lNNIAlludls dlIitdl 4AbLI Atl' A''
lowing extract from the report OF the COM
missioner Of Corporations:
There must also be considered here the
Irohts arising from the imitation OF the
Combinations securities. For example. one
% the constituent businesses CIV. Duke,
Sons & Co was valued In lN0, under com
petition. AZ $3.50 90 Five years later, al
the organization of the old American
Tobacco Company. il formed the basis for
Tho issue of s7500000 Of stock. BY 1908, due
10 various readiustmcnts, the securities
based on tins business had increased 10 -,
c01Go Meantime cash dividends and in
forest thereon had amounted 10 Slo.|CCO.
Thus the total par value OF these securities
Gle cOm5iHcd market value being SUD
Ftantaly the samel. plus the dividends and
interest paid up TO 1905. amounted 70 neal "
SEQ O11. or lJ5 times the value Of TINS
particular business i'm lSS.'
7 may be permitted 90 say that John
Laws famous South Sea bubble held out
scarcely better promise Of good returns
upon an investment Can il be wondered
at then if every effort rs made by the
small group OF insiders 10 retain control OF
such a good thing
Here is another quotation from the bu-
reau's report.
"Thc combinations history, therefore