Orleans County monitor. [volume] (Barton, Vt.) 1872-1953, 1911-12-06


holders. and the corporations and indl-
.vidual defendants were enjoined from
conspiring or combining to restore
such monopoly, and all agreements be-
tween the subsidiary corporations tend
ing to produce or bring about further
violations of the act were enjoined-
In the tobacco case the court found
that the individual defendants, TWEEN
ty-nlne in number. had been engaged
in a successful effort to acquire COM
plete dominion over the manufacture,
sale and distribution of tobacco in this
country and abroad and that this had
been done by combinations made with
a purpose and effect to stitie competi-
ton. control prices and esta blish 9
monopoly. not only in the manufacture
of tobacco, but also of tin foil and lie
orice used in it's manufacture and of
its products of cigars cigarettes and
snuffs The tobacco suit presented
far more complicated and difficult case
than the Standard Oil suit for decree
which would effectuate the will OF the
court and end the violation of the stat
ute. There was here no single hold
ing company, as in the case of the
Standard Oil trust. The main company
was the American Tobacco company,
a manufacturing. selling and holding
company The plan adopted to de-
stroy the combination and restore com
petition involved the redivision of the
capital and plants of the whole trust
between some of the companies con-
shutting the trust and new companies
organized for the purposes Of the de
cree and made parties to it and mum
boring. new and old. fourteen.
Situation After Readjustment.
The American Tobacco company
(old,. readjuSted capital $92.OO0.OOO:
the Liggett 4 Meyers Tobacco company
new. capital $67 100000 the p Loril
lard company tnew,. capital SAT .O0O.
600. and the r. J. Reynolds Tobacco
company (old,. capital $1.525.O0O. are
chiefly engaged in the manufacture
and sale of chewing and smoking te
bacco and cigars The former one tin
| foil company is divided into two. one
| of 1926. 900 capital and the other Of
! S40O.O00 The one snuff company is
| divided into three companies. one with
capital of $13.00O.0OO. another with a
| capital of SS.OOO.OO0 and third with
! capital of $2.OOO.OOO The licorice
f, of $3.7lS.3OO and another with a CAPT
| tai of S2OOO.O0O. There is also the
| British A n,erican Tobacco company. a
| British corporation. doing business
| abroad with Il capital of $26OOO.OOO
| the Porto Rican Tobacco company.
with a capital of $1.S0O. 900 and the
corporation of United Cigar Stores
with Il capital of $4,000 600
Under this arrangement each of the
| different kinds of business will be dis
! tributed between two or more comps
| MES with a division of the prominent
| brands in the same tobacco products.
50 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 21.39 per
cent. while the American Tobacco COM
pany will have 33.OS per cent. the Lig-
gett & Meyers 2O.O5 per cent. the Loril-
lard company 22.S2 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 stock holders. All
covenants restricting competition have
been declared null and further per
;'ormance of them has been enjoined
The preferred stock of the different
companies has now been given voting
power which was denied it under the
old organization. The ratio of the pre-
ferred stock to the common was as Is
to 40 This constitutes very decided
change in the character Of the owner
ship and control of each company.
In the original suit there were TWEEN
ty-nine defendants. who were charged
with being the conspirators through
whom the illegal combination acquired
and exercised its unla wful dominion
. Under the decree these defendants will
| hold amounts of stock in the various
distributes companies ranging from t
per cent as maximum to 2S1a pc
cent as minimum. except in the cas-
Of one small company. the Porto Rical
Tobacco company. in which they vii
hold As per cent. The twenty nine in
dividual defendants are enjoined 70
, three years from buying any stock eS
cept from each other. and the group
thus prevented from extending it's cor
troll during that period. All parties t
the suit and the new companies VIII
:, are made parties are enjoined perpe
ually. from in any way effecting an
combination between any Of the con
r panies in violation of the statute b
, way of resumption of the old trus
Each Of the fourteen companies is Ell
, joined from acquiring stock in any {
p the others. All these companies ar
q enjoined from having common dire'
tors or officers. or common buying {
selling agents. or common Offices. {
t