New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-12-06


between some of the companies consti-
tutinG the trust and new companies or
ganizcd for the purposes OF the decree
and made parties 10 1t, and number
inC, new and old. fourteen.
Situation After REIMBURSEMENT.
Tho American Tobacco Company odd
rcadjustcd capital. S92.0O0,000; the Liz
Cctt & Meyers Tobacco Company new
capital, $61.0OOO0O: the i. Lorillard
Company new. capital. S4I 100000. and
the II. !. Reynolds Tobacco Company
told). capital ST.52jooo. arc chiefly en-
gagged in the manufacture and sale OF
chewing and smoking tobacco ana CT
CARS. The former one tinfoil company
is divided into two. one Of SS2J,0O0 cap
ital and the other of SfN0.00o. The one
snuff company is divided into three com
panies, one with capital If Sl3NN,oOo,
another with a capital of SS.01ONO and
9 third with capital of SS0N,ooo. me
licoriCe companies are two. one with 4
capital Of SJ.75S3 300 and another with
a capital Of So.00O.000. There are also
the British American Tobacco COMPANY
British corporation. doing business
abroad. with q apital Of S26.o00OW; the
Porto Rican Tobacco Company, with a
capital Of 81 SOO0G0. and the corpora
tiun Of United Cigar Stores. with cap
ital of 100000.
Under this arrangement eacn OF the
different kinds Of business will be dis
trihuted between two or moro companies
with q division Of the prominent brands
in the same tobacco products, 50 as 10
make competition not only possible but
necessary. Thus the smoking tobacco
business Of the country is divided so
that the present independent companies
have 2139 per cent while the American
Tobacco Company will have 33OS per
cent the Lieeett 4 Meyers 2oOJ per
cent. the Lorillard Company 22.S2 per
cent. and the REYNOLDS Company $50
per cent. The stock Of the other thirteen
companies. both preferred and common,
has been taken from tho defendant
American Tobacco Company and mas
been distributed among its stockhold-
crs. All covenants restricting competi-
ton have been declared null and further
performance Of them has been enioined.
The preferred stool, Of tho different com
panies has now been given voting power,
which was denied n under tho old or
saniya tion. The ratio of the preferred
stock TO the common was as ~ 10 40
This constitutes very decided change
in the character NJ the ownership and
control Of each company.
In the original snit there were twenty
nine defendants who were charged with
Icing the conspirators through whom the
illegal combination acquired and eyer
cised its unlawful dominion. Under the
decree these defendants viii hold
amounts If stock IN the various dis
tributee companies ranging from Al per
cent as maximum TO 2Sis per cent "a
q minimum. except i'm the case Of one
small company the Porto RiCan To-
hacco Company. IN which they will hold
A. per cent The twentv-nlne individual
are enioined for three years
from huving any stock except from each
other, and the group Is thu" prevented
from extending its control during that
period All parties 10 the suit. and the
new companies who are made parties
are entoined perpetually from In any
wav effecting any combination between
anv Of the companies in violation OF
The statute nv way ri resumption OF the
old trust. Each of the fourteen COM
panies Is enioined from acquiring stock
in any Of the others. All these com
panies ere enioined from having com
mon directors or officers. or common
buying or selling agents, or common OF
Aces. or lending money to each other.
Size Of New Companies.
objection was made by certain inde-
pcndent tobacco companies that this
settlement was unjust because IT left
with very largo capital IN
active business, and that the settlement
that would be effective 10 put all on an
equality would be division Of tie cap
ital 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
anding Of the antitrust law
and its purpose. II is not intended there
hv TO pravent the accumulation of large
~apitaI in business enterprises In which
such a combination can secure reduced
cost Of production. sale and distribution.
II Is directed against such an aggrega-
ton of capital only when Its purpose
is that of sitting competition. enhancing
or controlling prices. and establishing
a monopoly II We shall have by the
decree defeated these purposes and re-
stored competition betvnen the large
units into which the capital and plant
have been divided. we shall have &C
the useful purpose Of the
statute.
confscation Not the Purpose.
II is not the purpose OF the statute to
the property and capital or
the offending trusts. Methods or pun
ishment by fine or Imprisonment Of the
individual offenders. by fine OF the cor
nora ton or by forfeiture Of its goods
in transportation, are. provided, but the
In equity is specific remedy
TO stop the operation OF the trust by In
junction and prevent the future use OF
the plant and capital in violation Of tho
statute.
Effectiveness Of Decree.
venture TO say that not in the his
tory Of American law has n decree more
effective for such purpose been en-
tered by court than that against the
Tobacco Trust. AS Circuit Judge Moves
said in his judgment approving the de-
cree:
The extent 10 which IT has been neces-
sarv 10 tear apart this combination and
force it into new forms, with the aitendsnt
burdens. ought to demonstrate that the
federal antitrust statute In drastic stat
ute which accomplishes effective results:
which so long as II stands on the statute
books must be obeyed, ana Whlch cannot
he disobeyod without mourning farreach-
ing penalties And. on the other hand, the
successful reconstruction of this organiZa-
tion should teach that the effect OF enforce
ing this statute Is not 10 destroy, hut 10
raconstruct. not 10 demoliSh, but 10 re-
create IN acCoIudU'r WIN VIC ~ "
which the Congress has declared shall OK
,et among the people Of the United states.
Common Stock Ownership.
1t has been assumed that the present
nrn rata and common ownership In all
tbese companies by former stockholders
OF the trust would insure continuance
of the same old single control Of all the
companies into which the trust has by
decree been dsintegratcd. This is er-
rcneous and is based upon the assumed
InefFcacy and innocuousness Of judicial
The companies arc en-
Joined from cooperation or comblna-
ton, they have different managers al.
rcctors. purchasing and sales agents. If
All or many of the numerous stOckhold-
ors reaching into the thousands. at
tempt 10 secure concerted action Of the
80 ~ ,,lns with Wow 10 the control u