Audubon Republican. [volume] (Audubon, Iowa) 1894-1925, 1911-12-21

smoking tODdccO anu cigars. Inc
former one tin-foil company IL d.
vided into two. one of $s25.000 cap
ital and the other of 100000 The
one snuff company is divided into
three companies, one with capital
Of $15.000.000; another with cap
ital Of $S.000.000; and third with a
capital Of $S,000.000. The licorice
companies are two, one with cap
ital of $5.75s,00 and another with a
capital Of 100000. There is. also.
the British-American Tobacco com
pany. a British corporation. doing
business abroad with capital Of
$26.000,000 the Porto Rican Tobac-
CO company with capital Of
$1,S00.000. and the corporation OF
United Cigar Stores, with a capital
OF 100000 Under this arrange
ment each of the different kinds Of
business will be distributed between
two or more companies. with a d.
vision. Of the prominent brands In the
same tobacco products. 30 as to make
competition not only possible but
necessary. Thus the smoking tobac-
CO business Of the country is divided
80 that the present independent COM
panies have 21.3s per cent. while the
American Tobacco company will have
SS.0S per cent. the Liggett and
Meyers zoos per cent. the Lorillard
company 22.s2 per cent. and the
Reynolds company 266 per cent The
stock OF the other thirteen companies.
both preferred and common, has been
taken from the defendant American
Tobacco company and has been dis
tributed among its stockholders. All
| covenants restricting competition have
oeen declared null and further per-
romance OF them has been enjoined.
Inc preferred stock of the different
companies has now been given vot-
ing power which was denied II under
the old organization. The ratio Of
the preferred stock to the common
was as 70 to 49, This constitutes a
very decided change in the character
OF the ownership and control Of
each company.
Infthe original suit there were TWEEN
ty-nine defendants who we're 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
2sh per cent as a minimum. except
In the case of one small company. the
Porto Rican Tobacco company. In
which they will hold as per cent. The
Twenty-Five 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
tfon 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 II 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 its purpose 1t is
not intended thereby to prevent the
accumulation of large capital In bust
bination can secure reduced cost of
production. sale and distribution II
Is directed against such an aggregar
ton OF capital only when its purpose
Is that OF sitting competition. enhanc-
ing or controlling prices and estab-
fishing monopoly. II 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
consiscatIor Not the Purpose Of the
Statute.
II IL not the purpose OF the statute
to confiscate the property and capital
of the offending trusts Methods OF
punishment by fine or Imprisonment
Of the individual; offenders. by fne OF
the corporation. or by forfeiture OF its
goods In transportation. are provided.
hut the proceeding In equity is a 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.
venture to say that not in the his
torv of American law has decree
more effective for such purpose
been entered by court than that
against the Tobacco trust AS Circuit
Judge Noyes said in his judgment ap-
proving the decree:
"The extent to which I. has been
necessary to tear apart this combine
| ton and force It into new forms with
the attendant burdens ought to dem.
onstrate that the federal antitrust
statute Is drastic statute which &C.
composites effective results: which SO
long as It stands on the statute books
must be obeyed and which cannot
be disobeyed without mourning far.
reaching penalties. And. on the 9th.