The Washington times., 1911-10-15
IDENTIFICATION OF THE
TOBACCO COMPANY.

-
An official statement of the plan oi
disintegrating the American Tobacco
Company, which win be presented to
the circuit court for the southern dis.
trict of New York, has been issued. II
is complex proposal which, however
may be stated, in substance, in Under.
standable terms. -Four great com.
panies are to take over various allotted
parts OF the business now controlled
by the American Tobacco Company
and to substitute their own securities
bonds of different denominations
common and preferred stockton those
of the present American Company
The statement explains that "none Of
the four companies will have any in.
terest in or relation to the other, al
though at the outset they will OF
necessity have many stockholders in
common t.tf
Plainly enough some plan under
which this result would come about
is the only one by which such . disin-
tegration could equitably be accom-
plished. When it is all done the same
general group of shareholders will con.
troll four companies instead of one, and
the four companies will control the
same business that the original Ameri-
can company controlled.
Commenting on this plan repre-
sentative of the Independent tobacco
interests declared it q transparent
sham, under which the appearance of
disintegration is accomplished, but the
control can easily be left in the hands
of the small group of common stock
holders who controlled the American.
Theoretically, of course, this is true.
1t cannot be avoided, short of some
form of confiscation. If twenty nine
men own property, and it ls divided
into twenty-nine tracts, giving one to
each man, the same twenty nine men
will control the whole after the dis
tribution. The law does not 60 so far
as to provide for actual confiscation of
any mans share, and it's distribution
among outsiders, IN order to break up
the old ownership relations. It is
hardly to be. anticipated that even in
the rigors of the most extreme anti
trust campaign such an effort will be
made.
The very. fact that such criticisms
may be made against any plan Of dis
integrating a huge corporation is ex-
planation of the new turn that public
discussion of the trust problem has
been taking Of late. More and more
the disposition is to question either
the desirability or the practicability
Of substituting many small units for
one great unit of corporate control. The
idea of rigorous regulation-of control
ling capitalization, earnings, operating
conditions, even prices Of the product
if need be-is gaining ground at a rate
which is apparent to the most casual
observer.
Senator Cummins, who is chairman
of the subcommittee that will shortly
begin hearings on this whole set of
problems for the Senate Committee on
Interstate Commerce, has recently de-
clared his opinion. that there is need
for amendment for the Sherman act.
The Senator is still devoted to the
faith in competition. He believes it is,
after all, the safest force of regulation,
and that it's restoration is not impos-
sible. In this view he is by no means
alone among responsible public men,
though there is reason for the belief
that the support given to this plan is
weakening in numbers and force.
The experience with regulation of
railways seems to point the course
most likely to be followed, ultimately,
in the management of the public's re-
lations to the Industrial combinations.
The Sherman act was applied to- the
railroads, through the Joint Traffic.
the Trans Missouri Traffic, and the
Northern Securities decisions, before
it was effectively applied to the in.
dustrials. 1t may fairly be said that
no substantial results flowed from the
effort to enforce competition between
railroads. The Northern Securities
Company was indeed disintegrated; but
business relations and traffic con-
ditions were not materially altered.
The Northern Pacific remained "Hin
road" and continued in close COM
munity of interests with the Great
Northern. If it had not remained a
"Hill road" if the decree for distribu-
tion of Northern Securities assets had
favored Hartman instead of Hill
then the Northern Pacific would have
become a Hartman road.' 1t would
have been transferred from one huge
combination to another; but it would
have remained in a combination, and
the substantial purpose of fundamen-
tallv cha npiuu conditions in tha ,,,,bI:.