Santa Fe new Mexican. [volume] (Santa Fe, N.M.) 1898-1951, 1911-05-29
TOBACCO TRUST
DOWN AND OUT
United States Supreme Court
Says 1t Is In Restraint
of Trade
SAME As STANDARD OIL
History of One of Most Import.
ant Cases Decided at
This Term.

(By Special Leased Wire to New Mexican)
Washington, d. c., May 29.-The To,
bacco trust was held to be in restraint
of trade today by the United States
supreme court.
Story of the Case.
Washington, May 29.-The Ameri.
can Tobacco corporation was made
the target of the second big trust"
prosecution of recent years. The
first was the Standard Oil, because
the testimony taken in the tobacco
case was not so extensive as that in
the Standard Oil, the two cases were
before the Supreme Court for con-
sideration at the same time.
The attempt of the government to
dissolve the Tobacco corporation as
violating the Sherman Antitrust law
took shape in 1907. In that year, a
petition was filed in the United States
Circuit Court at New York. The
government asked that the American
Tobacco Company, its officers. direc-
tors and affiliated corporations, be
prevented and enjoined from restrain
ing and monopolizing commerce in to.
bacco.
The restraints and the monopo.ies
alleged by the government, were said
to have been obtained by an intricate
system of corporate organizations. 1t
began in 1890, when the first Ameri-
can Tobacco Company was organized.
The new company took over the bust
ness of five independent cigarette con-
Germs.
In 1898 the Continental Tobacco
Company was incorporated to take ov-
er the plug tobacco business of the
American Tobacco Company and that
of five independent plug manufacture
ers.
In 1900, the American Snuff Com.
pany was incorporated to take over
the snuff business of the American
Tobacco Company, of the Continent
al Tobacco Company, and of two
other independent manufacturers.
In 1901, the American Cigar Com
pany, was incorporated 10 take over
the business of the American Tobac-
CO Company and other manufactur-
ers and sellers of cigars, cheroots and
stogies.
In the same year, the Consolidated
Tobacco Company was incorporated
to take over in exchange for its bonds
substantially all of the stock of the
American Tobacco Company and the
Continental Tobacco Company.
In 1908, the American Stogie Com
pany was incorporated to take over
the Stogie business of the American
Cigar Company, the American Tobac.
co Company, and the Continental To-
bacco Company.
In 1904, the American Tobacco
Company, the Continental Tobacco
Company, and the Consolidated To-
bacco Company were merged into the
present American Tobacco Company.
The government claimed that all
these organizations were created with
the definite purpose to destroy com.
petition and that they accomplished
that purpose Each step was attack
ed as part of an unlawful plan, whose
development and progress was advan.
ced, it was charged with duress, op-
preston and unfair methods intended
to drive out and keep out competition
and secure monopolies.
The defendants claimed that moth
ing was to be found in the organiza.
ton of these corporations, but the
orderly, natural and legitimate de.
velopment of a great business. They
said the acquisitions had been pro-
per and that no intent to restrain trade
or monopolize trade had prompted the
creation of corporations.
In addition, 1t was charged that the
American Tobacco Company acquired
control of the United Cigar Stores
Company, which conducts retail
stores in large cities. and thereby wal
seeking dominion in the retail bust
ness, an avenue absolutely necessary
to effective competition.
The tobacco organization was char
ged with having monopoly of the
licorice paste, required in the manu-
facture of tobacco, the MacAndrews
& Forbes Company, organized by the
Continental having no competitor, II
was said.
1t was also said that the defend
ants had a monopoly in the tin fol
business, the Conley Foil Company, o.
which the American Tobacco Com
pany held a majority of stock, pro
ducing Is per cent of the tin foil man
ufactured in this country. Both thu
licorice and the foil monopolies wer'
said to have been obtained in viola
tion of the Sherman Antitrust law
Another phase of the litigation con
cemed the foreign trade. The peti
ton charged that the American To
bacco Company had entered into con
tracts with the Imperial Tobacco
Company, the so-called "Brftisl
Trust wereby the latter should lin
Il. its activities to Great Britain ea
cept as to the purchase Of a certai
amount of leaf in America and tn
former should limit Its business i
(Continued on Page Five.)