New-York tribune., 1911-10-16
INDEPENDENT INTERESTS
TO FIGHT TOBACCO PLAN
Saw Control Would Remain in
Hands Of "InsiderS," Naming
Ten Who "Dominate" Trust.
"NAKES SITUATION WORSE
Following All Day Conference, at
Which Court Attack Is Planned,
Statements Are Issued
Through Counsel.

llLOVgN N)tHSNA'
The independent tobacco interests
spent busy day yesterday planning
their fight against the proposed plaA for
reorganization or disintegration pro-
posed by the American Tobacco Com
pary IN is plan made public on satur-
day. There was a conference at the Bar
Association beginning early in the after
noon and lasting until late in the even-
Ing. after which statements were given
out by committee Of tho National cigar
Leaf Tobacco Association and Ira Nor
ris. president Of the Independent Tobacco
SaIesmen's Association OF America.
The plan was condemned in both state
ments and was generally condemned by
all those taking part in the conference.
Felix II. Levy. who as a special Assist
ant United States Attorney assisted IN
the prosecution Of the American Tobacco
Company took part in the conference
and will be the chief counsel of the in
dependent interests in their fight TO pre-
vent the acceptance OF the plan by tho
government.
II was pointed out by the independent
interests that the chief feature Of tho
plan provided for the sale 10 various new
companies 10 be organized Of separate
portions Of the interests. manufacturing.
copyright and sales interests Of the
American Tobacco Company, and that
the new companies were 70 pay for their
purchases with their securities and not
WITH cash. These securities are 70 be
divided among The common stockholders
Of the American Tobacco Company. and
| thus control Of the new companies VII
still be in the hands Of the men who now
control the American Tobacco Company
and who were made defendants by tho
government in it's suit 10 dissolve no
| trust
| II is true. said the Independents, that
the preferred stockholders Of the Ameri-
can Tobacco Company will have the
power 70 vote for directors in the re-
| organized company, a power which they
| have not had in the existing company.
/ but the largest single interest in the
company will still remain in the hands
| Of the men whom the government has
sued, and 1t is the history Of corpora
| tions that a large minority interest i5
| fully equal TO holding the control Of a
company against divided majority.
In the case OF the new companies none
| Of the stock, according 70 the plan made
! public, goes 10 the preferred stock hold
ers of the American Tobacco Company,
| but It is 20 be dividcI among the conf
mon stock holders. The twenty-nine in
dividua defendants in the governments
suit will thus remain in the same abso-
lutte control OF the new companies as
they are at present, through the owner
ship Of a majority Of the stock in these
new companies.
Ten Men Who Dominate Trust
! Fifty-six per cent Of the common stock
of the American Tobacco Company Is
now held by twenty y-nine men. and these
men. according 70 tie independents are
dousnated by the following interests:
/ ]. b. Duke, A y. Brady O. II. Payne,
P. A. b. Widener. Thomas F Ryan. 3.
y. Duke, G.. b. Schley and the estates
OF W. c. Whitney and w. L. Elkns.
The same men. through their domina-
ton. would control % per cent Of the
stock Of the new companies 10 be organ
| ized and put forth as Independents Tho
situation would thus p ONE that these
men would own and control three
fourths Of the business now owned and
controlled by the American Tobacco
Company. and they would derive the
benefits from the monopoly that now %
20 all the stockholder; Of the American
! Tobacco Company. The monopoly
would be continued. while the division
of the profits would be restricted.
This. however, is not the only advan-
! taga 10 the individual defendants pointed
out by the Independents. The plan pro-
vides for the purchase Of the interests
! in large part Of the American Tobacco
Company by the companies 10 De organ
lied But the money 20 make the pur-
| chase is 20 be supplied by the common
stock holders Of the American Tobacco
| COMPANY. who are 10 pay for all practi-
cal purposes an assessment on their
stock of S36. 1000 900. Forty-four per cent
n this sum will be supplied by thu
minority interest I'm the common stock
The money will be used 10 buy NE
stock OF the new companies. and will
then be Immediately turned again into
the treasury Of the American Tobacco
Corpanv 70 pay for manufacturing. sales
ord other interests 10 be turned over 10
/ the new companies.
Having got back again into the treas
ury of the American Tobacco Company.
the money will be used 10 retire tho
b, dis Of the company. The income that
has heretofore been used 20 pay interest
on bonds will in the future be available
TOR dividends on common stock. The
nrsferred stock holders will receive no
/ banedt from this part OF the plan. as
! their stock has a stipulated income, so
| that the only benefit 10 the preferred
stock holders comes IN voting power.
while an the increased earnings Of the
oomnonv will go 20 the common stock
holders. who will also continue 20 re-
c.ive the earnings from the plants osten-
sibly disposed of by the American To-
baoco Company.
! II IS asserted that the individual de-
fendants in the governments suit. whils
on the face Of the plan complying with
the requirement that they dissolve and
disintegrate the trust. have I'm reality
/ ,--4.t.. ,,,tr{,ad gcbarna hv ub{ch