Albuquerque evening herald. [volume] (Albuquerque, New Mexico) 1911-1914, 1911-09-29
AMERICAN TOBACCO
PROFITS FOR YEAR
s35,0O0,O00
Small Group, Through Manip-
ulating the Stock, Cut Down
Small Investors Dividends.
Doubled Average Earnings
of Independents.

washington. sept 60 Tho ntri-
|cntc financial side OF thc American
Tobacco COMPANY. known as tho to-
bacCo trust aud which now Be- Ia
process of dissolution %, order of the
supreme court ot the United states.
because it was a combination iu re-
straiut of trade iu violation ~ the
sherman antitrust law. was set forth
in report ut th, commissioner OF
corporations Herbert Knox smith,
which was sent Co IN, president aud
made public today. II was the SECOND
part of a report uu th, tobacco n-
dustry and deals with the earnings.
capitalization and Investment uf the
combination.
The commissioner says that the vast
earning power which arose from tho
substantial control uf the tobacco IN
dustry was a monopoly resulting from
concentration Thc capitalization of
this mououulstic pow cr was much
greater than the actual Investment.
aud Dog clever arrangement the hulk
Of tho earnings was ccntcrcd in IN,
hands of small group. The cuur-
nous profits resulting from Tho nfla-
ton of the securities and The divi-
bends paid thereon. the report con-
cludes, rested in their ultimate anaIy-
Sis upon the monopulistic advantages
obtained through concentration ot
control.
started Win Cigarettes.
The great tobacco combination.
which rcntcrs around the American
I"haeco COMPANY ss,rtrd ia 1890
with 20 million dollars worth capt.
Hliz1tiou operating unlA In cigarettes
hN l'"N it controlled about four-fifths
ot the whole domestic tobaccu indus.
trA, except cigars. and Us net caui.
tatizatiun exceeded $40 million doll
lars
Ia 1880 tho combination earnings
Wcr, moro than lN per cent ON the
actual Investment They ros, iu 1891
Q" more than - per cent lu 1875
came expansion into other branches.
90 keen competitive struggle. aud q
sharp drop iu earnings But by 1900
the combinations broad domination
OF the whole Industry took effective
shape From 1904 To- 1905 the aver
age Of tho earnings was 20 per cent.
or y3l 200 uoN N,arly
What Competition Did
In ih" snuu business tho combina.
ton has lu almost complete monopoly
90 per cent 81 the whole business
From rate ot lcss than . per cent
Ia tho first wear Ga0lb an, earnings
rose in 1905 tto 22 por cent The
common stock of the SNUFF company.
originally ull water" paid 90 per
per cent dividends In 1909 and 90 per
cent IN 1870
In The highly controlled smoking
tobacco" business the average earn
ings of its Important subsidiaries I'M
creased from ~ per cent Ia 1900 TO
~ per cent in 1905
In the cigar busiucss. of which the
combination controls ~ por cent. rs
rate of earnings has never exceeded .
per cent, aud from 1904 90 la0S, ay-
ragged less than 6 per cent This
business, moreover showed heavy
losses iu 1909 ana 1908 Here were
severe competition and low earnlngu,
The combinations rate uf earnings
has FAR exceeded that of its compe,i-
tors ils rate M 1895. a representa-
ave year was about two and one half
times the ayerag. for IS of the most
Important independent manufacturers
81 smoking ana chewing tobacco aud
SNUFF The earnings ~ those indie
renhenis' moreover fairly represents