The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1911-12-05

chiefly engaged in the manufacture
and sale of chewing and smoking to-
bacco and cigars. The former one tin
foil company is divided into two. one
Of $S25,OOO capital and the other Of
100000. The one snuff company is
divided into three companies, one with
capital Of $4,000, 900. another with a
capital Of 100000 and a third with
capital of $S.OOO.OOO. The licorice
companies are two. one with capital
Of $5.75S.3OO and another with CAPT.
tai of 100000. There is also the
Tobacco company.
British corporation. doing business
abroad with a capital Of $4,000. 900.
the Porto Rican Tobacco company,
with a capital Of $1.SOO.OOO. and the
corporation Of United Cigar Stores,
with a capital Of 100000.
Under this arrangement each Of the
different kinds Of business will be dis
tributed between two or more compa-
MES 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 coun-
try is divided so that the present in
dependent companies have 21.89 per
cent. while the American Tobacco COM
pany will have 33.OS per cent. the Lig-
gett & Meyers zoos per cent, the Loril-
lard company 22.82 per cent and the
Reynolds company 2.66 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
been declared null and further per-
Torrance of them has been enjoined.
The preferred stock of the different
companies 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 78
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 twen-
ty-nine defendants, who were 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 various
distributee accompanies ranging frOu Al
per cent as a maximum to 1874 per
cent as minimum. except in the case
Of one small company. the Porto Rican
Tobacco company, In which they will
hold As per cent. The twenty-nin in
dividual defendants are enjoined for
three years from buying any stock ex-
cep: from each other, and the group Is
thus prevented from extending its con-
troll during that period. Al parties to
the suit and the new companies who
are made parties are enjoined perpet-
ually from in any way enecting any
combination between any Of the COM
panies in violation of the rtatute by
way Of resumption Of the old trust.
Each of the fourteen companies Is en-
joined from acquiring stock in any of
the others. All these companies are
enjoined from having common direc-
tors 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 it 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 division Of
the capital and plant Of the trust into
small fractions in amount more near
~ equal to that Of each of the indie
pendent companies. This contention
results from a misunderstanding Of
the antitrust law and its purpose. 1t
is not intended thereby to prevent the
accumulation Of large capital in bust
ness enterprises in which such a COM
binction can secure reduced cost Of
production. sale and distribution. 1t
is directed against such an aggrega-