Norwich bulletin., 1911-12-06

Under this arrangement each of the different kinds of business will be dis tributed between two or more compa- nies with division of the prominent brands in the same tobacco products. Sc 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 l dependent companies have 21.39 per | cent. while the American Tobacco com ! pany will have 33.OS per cent. the Liz { gett & Meyers 20.05 per cent, the Loril- ! lard company 22.S2 per cent and the i Reynolds company 266 per cent. The stock of the other thirteen companies. i both preferred and common, has been
 taken from the defendant American l Tobacco company and has been dis 1 tributed among its stockholders. All ] covenants restricting competition have
 been declared null and further per formance of them has been enJofned. 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 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 it's unlawful dominion.
 Under the decree these defendants will
 hold amounts of stock in the various
 distributee companies ranging from fl
 per cent ss maximum to 2S1z per
 cent as a minimum, except in the case r of one small company. the Porto Rican Tobacco company, in which they will
 hold 45 per cent The twenty nine in- dividual defendants are enjoined for three years from buying any stock ex- cept from each other, and the group is thus prevented from extending it's con trol during that period All parties to the suit and the new companies who are made parties are enjoined perpet- ually from in any way efrecting any ombinat1on between any of the com panies in violation of the statute 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 enjotned 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 a division of the capital and plant Of the trust into small fractions in amount more near ly equal to that of each of the inde- pendent companies. This contention results from 8 misunderstanding of the antitrust law and its purpose It Is not intended thereby to prevent the accumulation of large capital in busi- ness enterprises in which such a com blnat1on can secure reduced cost of production, sale and distribution. It is directed against such an aggrega- tion of capital only when it's purpose Is that of stifing competition. enhanc- ing or controlling prices and establ1 ing a monopoly. If we shall have by the decree defeated these purposes and restored competition between the large units into which the capital and plant have been divided we shall have l accomplished the useful purpose of | the statute
 Confiscstion Not the Purpose of the |
 Statute
 It Is not the purpose of the statute | to confiscate the property and capital | or the offending trusts Methods of | punishment by fine or Imprisonment | of the individual offenders, by fine of | the corporation or by forfeiture of it's goods in transportation are provided. but the proceeding in equity ts a spe- cific remedy to stop the operation of the trust by injunction and prevent the future use of the plant and capital | in violation of the statute.
 Effectiveness of Decree.
 venture to say that not in the his tory of American law has a decree more effective for such a purpose been entered by a court than that against the tobacco trust As Circuit Judge Moves said in his judgment approving the decree:
 The extent to which 1t has been necessary to tear apart this. combfna- ton and force 1t into new forrns with l the attendant burdens ought to demon strate that the federal antitrust statute IS drastic statute ewlsich4acconpIishes effective results, which so long as 1t stands on the statute books must be oheyed and which; cannot be disobay- ed withouts incurring g. (fareacAing spen- alties, And.i on the other hand, the successful reconstruction of this or ganiZation Hhould teach that the effect of enforcing this statute is not to de- stroy. but. to reconstruct; not to de- molish, but to sFeGeRte in .accordancs with the conditions which the congress hah sdeclared shah exist among the people oftha United sstates."
 Common ekae< os~r.rehip.
 It has ihem Saszuredst sthat the pres at prosrataEsnds aeuaons snzpnarshjp in M these cnmranies hx former stscsk- | lciders of the ktrust yWAuid insure sa | nntinuarGe. .ef sstteIsaMes seh> slrs5e con. lr rel ef aIls thes eaEanentes. ipen whieh he trust has 'by decree been disinee-