The citizen-Republican. (Scotland, Bon Homme County, S.D.) 1???-19??, 1911-12-07
PRESIDENT SENDS HIS
MESSAGE TO CONGRESS-
produce or bring about further violations
OF the act were enjoined.

- Ao OSSi SIlSdSeQ In q SuCCeSSIul
effort to acquire complete dominion over
the manufacture, sale and distribution
OIL and t4 5bat in this country and abroad.
f aan ina TINS mad been done by combine
stuas Inaue with a purpose and effect to
stifie competition, control prices and es-
tapilsh a monopoly, not only In the manu-
anu : Ieor OF tobacco: but also Of ...~sc::
OF It's products of cigars, cigarets and
nnaes; connie mhe c tobacco COS suit presented d a far I
the standa d Oil suit for a decree which
would effectuate the VIII Of the court
and end the violation of the statute.
mere was here no single holding COM
pany as In the case of the Standard Oh
trust; The main company was the Amer
lcan Iobacco company, a manufacturing,
sean d ! and holding company. The plan
restore competition involved the edivi-
sion OF the capital and plants of the
Wnole trust between some of the compa-
panies organized for the purposes of the
decree and made parties to 1t, n num-
bering, new and old, IA.
Situation After Readjustment.
The American Tobacco company (old),
readjusted capital, 500. 900. ooo; the Liggett
& Meyers Tobacco ompany (new), capt.
tai, ss7, 600. OOo; the P. LoriIlard company
new, capital, SAT, 900. 900; and the r. j..
iKeypolds Tobacco company -told),. capital.
S7,525, 900, are chiefly engaged in the man
ufacture, and sale of chewing and smos-
tin foil company is divided into two, one
of $S25, 900 capital and the other of $500, 900.
The one snuf company. is divided into
81, 600, coo, another with a capital Of $s,oo0.-
600. and a third with a capital of IS. 900, 000.
h licorice companies are two, one with
g as ea I Of = .ss sssfo 81. e Hsar sng Iti I,z wlta a g
British-American Tobacco company, a
British corporation. doing business abroad
Rican Tobacco cOmnanv with a CaNita1
of 81, 500, 900, and the corporation of United
Cigar Stores, with a capital of S9,000.00O.
;; g 4 this ~sngemen eaGh OF the
tributed between two or more companies
with a division of the prominent brands
in the same tobacco products. SO as to
make competition not only possible but
necessary. Thus the smoking tobacco
business of the country is divided so that
Il the go present pres in dh;sa len eomPanles Ad have
co company will have 33.0S per cent, the
Liggett & Meyers 29o5 per cent the
thn Rarno, Gdom rom4an 2s,S : e. per per cent cent a aha
stock of the other 10 companies, both pre-
ferred and common, has been taken from
the defendant American Tobacco company
and has been distributed among Its stock
holders. All covenants restricting compe-
tition have been declared null and further
performance of them has been e%njoined.
The preferred stock OF the different COM
panies has now been given voting power
which was denied 1t under the old or
ganization. The ratio of the preferred
stock to the comno was as rs to 40. This
constitutes a very decided change in the
character of the ownership and control of
each
In the original suit there were 20 de-
PENDANTS who were charged with being
the conspirators through whom the il
legal combinations acquired and exercised
its unlawful dominion. Under the decree
these defendants will hold amounts of
stock in the various distributee COM
panies ranging from Al per cent as q max
inum to 2SH per cent as a minimum, eH-
cept in the case of one small company,
the Porto Rican Tobacco company, in
which they will hold 45 per cent. The %
Individual nda are enioined for
three years from buying any stock except
from each other, and the group Is thus
ing that period. All parties to the suit,
and the new companies who are made
parties, are enjoined perpetually from in
n way effecting any combination be-
tween any OF the companies in violation OF
the statute by way of resumption of the
old trust. Each of the IA companies is
enjoined from acquiring stock in any OF
the others. All these companies are en-
joined from having common directors OF
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 indepen.
dent tobacco companies that this settle.
ment was unjust because it left com
panies with very large capital in active
business, and that the settlement thai
would be effective to put all on an equal
ity would be a division of the capita
and plant of the trust into small frac'
tons in amount more nearly equa tt
that of each of the independent companies
This contention results from a m%isunder
standing of the antitrust law and its pur
pose. 1t is not intended thereby to pre-
vent the accumulation of large capital II
business enterprises in which such a com
| hiDDTiOn can secure reduced cost of nrO
duction, sale, and distribution. 1t is di
rected against such an aggregation o
capital only when its purpose is that o
sitting competition, enhancing or CONTROL
ing prices, and establishing a monopoly
If we shall have by the decree defeated
these purposes and restored competition
between the large units into which Thu
capital and plant have been divided, w
shall have accomplished the useful pur
pose of the statute.
Confiscation Not Purpose.
1t is not the purpose of the statute t,
coniiscate the property and capital of tn
offending trusts. Methods of punishment
by fine or Imprisonment of the individual
offenders, by fine of the corporation or b,
forfeiture of its goods in transportation
are provided, but the proceeding in equit.
of the trust by injunction and proven
the future use of the plant and capita
in violation OF the statute.
Effectiveness of Decree.
L venture to say that not in the histor,
of American law has a decree more eff
fect-ve for such Il purpose been catered b.
a court than that against the Tobacco
trust. AS Circuit Judge Noyes said in hi
Judgment approving the decree:
1.-The extent to which 1t has been neces
sary 10 tear apart this combination an
force it into new forms with the attend
ant burdens ought to demonstrate that tn
federal antitrust statute is a drastic stat
ute which accomplishes effective results
which so long as it stands on the statut
books must be obeyed, and which can no
be disobeyed without mourning far-reach
Ing penalties. And, on the other hanG
the successful reconstruction of this or
Eanization should teach that the effect G
enforcing this statute Is not to destroy
but to reconstruct; not to denolish. blu
to re-create in accordance with the cor
/ ditions which the CONGRESS has declare
shall exist among the people of the Unite
States"
Common Stock Ownership.
1t has been assumed that the preser
pro rata and common ownership in a
these companies by former stoCkholdeT
of the trust would insure a c~ontinuanc
of the same old single control of all tn
companies into which the trust has b
decree been d~istntegrated. This is error
eous and is based upon the assumed II