The Washington times., 1911-12-05

ent antitrust law, except b
marketing petroleum and its products.
erected and maintained through thir.
seven different corporations; T. .,,
company 1t in effect commanded the
dissolution, Of this combination, directed
the transfer and pro rata distribution
by the New Jersey company OF the
porations to and among its stockhoid-
erS and the corporations and individ-
ual defendants were enJoined from con-
spring or combining to restore such mo-
subsidiary corporations tending 20 20
duce or bring about further violations
of the act were enjoined.
In the Tobacco case, the court found
that the Individual DEFENDANTS. twenty
nine in number. had been engaged In a
successful effort to acquire complete
dominion over the manufacture. sale,
and distribution of tobacco In this coun-
and made With
pose and effect to stifie competition,
control prices. and establish monopoly,
not only in the manufacture OF tobacco,
but also q tinfoii and heor1Se nredct usea IN N
cigars. cigarettes. and snuffs. The
tobacco suit presented far more COM
plicated and difficult case than the
Standard on suit for decree which
and end the violation OF the statute.
There was here no single holding com.
pany as In the case OF the STANDARD on
trust: The ,bnadn main ompsnyy company was m.t the
featuring, selling, and holding company.
The plan adopted to destroy the combi-
nation and restore competition involved
the redivision of the capital and plants
la oil fr,,o hat Of "a
companies constituting the trust and
new companies organized for the pur-
poses of the decree and made parties to
1t, and numbering, new and old, four
teen.
Situation After Readjustment.
The American Tobacco Company (old),
capital. $92. .Ooo 900; the Liggett
& Meyers Tobacco Company new.
capital, $67. 900. 900; the p. Lorillard Com
pany new. capital. $47,oOO,OOo, and the
r.. J. Reynolds Tobacco Company (old).
capital. T.525, 900, are chiefly engaged in
and smoking tobacco, and cigars. The
former one tin-foil company Is divided
into two, one OF $S25, ,0OO capital and the
other Of $4Oo, 900. The one snuff company
With W S Capital % Of SIS, ,eco. .oeS amother; with @
espita ssp Of s aas Tne coniee e@es S1n
panies are two, one with a capital Of
$2,ooo,oOO There is, also. the British
American Tobacco Company, a British
corporation doing business abroad with
q capital Of $4,000. 900, ,the Porto Rican
9. 800. 900, and the corporation Of United
Cigar Stores. with a capital Of IS. .000, 900.
Under this arrangement, each Of the
different kinds of business will be dis
tributed between two or more companies
with a divisipn nf tho nrop,inanf Qndl
In the same tobacco products, 80 as to
make competition not only possible but
necessary. Thus the smoking tobacco
business Of the country Is divided so
have H.39 per cent, while the American
Tobacco Company will have 33.& per
cent. the Liggett & Myers zoos per cent,
the I,orillard Company 22.82 per cent,
and the Reynolds Company 2.66 per cent
The stock Of the other thirteen COM
panies. both preferred and common. has
been taken from the defendant Ameri-
can Tobacco Company and has been dis
tributed among its stockholders. All
covenants restricting competition have
ance of them has been enjoined. The
preferred stock of the different COM
panies has now been given voting
power which was denied 1t under the
old organization. The ratio Of the pre-
ferred stock to the common was as 70
TO 40. This constitutes a very decided
change In the character Of the owner
ship and control of each company.
In the original suit there were twenty
nine defendants who were charged with
being the conspirators through whom
the illegal combination acquired and ex-
ercised it's unlawful dominion. Under
the decree these defendants will hold
amounts of stock in the various distrib-
as maximum to 2SA per cent as a
minimum, except in the cose of one
small company, the Porto Rican To-
bacco Company, in which they will hold
45 per cent. The twenty-nine individ-
ual defendants are enjoined for three
from each other, and the group is thus
prevented from extending it's control
during that period. All parties to the
suit. and the new companies who are
from in any way effecting any combina-
ton between any of the companies in
violation of the statute by way Of re-
sumption of the old trust Each of the
fourteen companies Is enjoined from &C.
quiring stock In any of the others. All
these companies are enjoined from hav-
ing 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 inde-
pendent tobacco companies that this
settlement was unjust because 1t left
companies with very large capital in
active business, and that the settlement
that would be effective to put all on an
equality would be a division Of the
capital and plant of the trust into small
fractions In amount more nearly equal
70 that of each OF the Independent
companies. This contention results from
misunderstanding of the antitrust
law and its purposes. 1t is not intend
ed thereby to prevent the accumulation
of large capital in business enterprises
in which such a combination can secure
reduced cost of production. sale. and
distribution. 1t Is directed against such
an aggregation of capital only when
its purpose is that of sitting compe-
tition, enhancing or controlling prices,
and establishing a monopoly. II we
shall have by the decree defeated these
purposes and restored competition be-
tween the large units into which the
capital and plant have been divided,
we shall have accomplished the use
full purpose OF the statute.
Confscation Not the Purpose.
II is not the purpose of the statute to