Omaha daily bee., 1911-12-06

companies are two, one with a capital
OF S5,i5S,3o0 and another with a capital OF
S200,ooo. There Is. also, the British
American Tobacco company, a British
corporation, doing business abroad with
a capital Of S26OO,OOO. tho Porto Rican
Tobacco company, with capital OF
N.SO0,OoO, and the corporation Of United
Cigar stores, with a capital OF S9OO0OOO.
Under this arrangement each of the
different kinds OF business will be dis
tributed betweea two or more companies
with a division OF the prominent brands
in the same tobacco products, so as to
make competition not only possible but
necessary. Thus the smoking tobacco
business Of the country is divided so
that the present independent companies
have 2.S9 per cent, while the American
Tobacco company will have SS.OS per
cent, the Lggett q Meyers zoos per cent.
the Lorillard company 22.S3 per cent,
and the Reynolds company 2.65 per cent.
The stock of the other thirteen com
panies, both preferred and common, has
been taken from the defendant American
Tobacco company and has been dis
tributcd among its stockholders. All
covenants restricting competition have
been declared null and further perform
hllNt Va Alltll mas bttH tUlOiueu. i he
preferred stock Of the different companies
has now been given voting power which
was denied it under the old organiza-
ton. The ratio Of the preferred stock
to the common was as rs to 30. This
constitutes very decided change in the
character OF the ownership and control
OF each company.
In the original suit there we're twenty
mimi IafanIaV ,tg MI,
being the consplrators through whom the
Illegal combination acquired and exercised
its unlawful dominion. Under the decree
these defendants will hold amounts OF
stock in the various Distribute COM
panies ranging from Il per cent as a
maximum to 2Sla per cent as a minimum,
except in the case OF one small company,
the Porto Ricen Tobacco company. In
which they will hold 45 per cent The
twenty-nine individual defendants aye en-
Joined for three years from buying any
stock except from each other, and the
group is thus prevented from extending
its control during that period. All parties
to the suit, and the new companies who
are made parties, are enjoined perpetu-
ally from in any way effecting any com
bination between any of the companies
in violation of the statute by way OF
resumption 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 hay
ing common directors or officers. or com
mon buying or selling agents, or common
officers, or lending money to each other.
Size of New Companies.
objection was made by certain indie
pendent tobacco companies that this set
uement was unjust because it left com
panies with very large capital in active
business, and that the settlement that
would be effective to put all on an
equality would be division of the capt.
tai and plant of the trust into small
fractions in amount more nearly equal
TO that of each of the independent COM
panies, This contention results from a
misunderstanding of the antitrust law
and its purpose. 1t Is not intended thereby
20 prevent the accumulation Of large can't
tai in business enterprises in which such
a combination can secure reduced cost
of production, sale and distribution. II
is directed against such an aggregation
Of capital only when its purpose Is that
of sitting competition, enhancing or con-
trolling prices and establishing a mon
opoly. 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
1T is not the purpose Of the statute ia
confiscate the property and capital of the
offending trusts. Methods of punishment
by fine or imprisonment OF the Individual
offenders. by fine of the corporation or
by forfeiture of its goods in transporta-
ton, are provided, but the proceeding in
equity is a specific 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.
Il venture to say that not in the history
Of American law has a decree more effcc-
tive for such a purpose been entered by A
court than that against the tobacco trust.
As Circuit Judge Moves said in his judg-
ment approving the decree.
The extent to which it has been
necessary to tear apart this combination
and force 1t into new forms with the at
tendant burdens ought TO demonstrate
that the federal antitrust statute is a
drastic statute which accomplishes effec-
tive results; which so long as Il stands
on the statute books must be obeyed, and
which can not be destroyed without in
curing far-reaching penalties. And, on
the other hand, the successful reconstruc-
ton OF this organization should teach that
the effect OF enforcing this statute is not
to destroy, but to reconstruct; not TO de-
molish, but TO re-create in accordance
with the conditions which the congress
has declared shall exist among the peo-
pie Of the United States.
Common Stock Ownership.
1T has been assumed that the present
pro rata and common ownership in all
these companies by former stockholders
of the trust would insure a continuance
of the same old single control OF all the
companies into which the trust has by
decree been disintegrated. This is erron-
eous and is based upon the assumed in
efficacy and lnnocuousness OF judicial In
junction. The companies are enjolned
from cooperation or combination; they
have different managers. directors, pur-
chasing and sales agents. II all or many
OF the numerous stockholders. reaching
into the thousands attempt to secure con-
certed action OF the companies with
view to the control OF the market. their
number is so large that such an attempt
could not we'll be concealed and its prime