The Mena weekly star., 1911-09-28
|RlCCO COMBINE
 |Ie0jffITS EXPOSED
.0.r,pN COMMsSI 0 NER |l,vs BARE SECRETS OF
 MONOPOLY.
r..,,,ues IIeapcd Up-Net Cap ! s.s,ion Climbed From p Mill ' ''.ns to Si6 Millions in
 Eight Years.

abingdon, Sept. 25.-Herbert
 smith, commissioner of cor
 ,;ons has submitted to the
 s,asnt. in lengthy report, the
 nu. of his investigation of the
 .,ican tobacco trust. It con-
 eome startling statements in
 sh finance;
 .Tbe report MT. Smith will say
 n;s letter of submission, shows
 vast earning power that arises
 .m substantial control of a large
 aaslry. The great tobacco combi-
 non. which centers around the
 nprjean Tobacco Company, started i lsq0 with $25 100000 capitalize
 nj operating only i'll cigarettes. \ ioOS it controlled aabout four *iIbs of the whole domestic tobacco Elnstry. except cigars, and it's net [olalization exceeded S3i6,000,000. khis concentration is the basis of |Se combination's great earning POwer. High rates of earning have 'ne with monopolistic control of be industry, and the less the degree If control the less the rate. The 'rof of this follows here. (Rates i earnings are herein computed in n cases on the actual investment lcnding borrowed funds-as es- lblshed by the bureau. Earnings re the net before deducting in- rest charges
 Earnings as Whole.
 Tn 1890 the combinations earn gs were over IS per cent on the tual investment. They rose in gl to more than 2i per cent. ItI $ then operating principally, and tn a practical monopoly, in cig- cites. In 1895 came expansion in- other branches, a keen competit- , struggle and sharp drop in rnings. But by 1900 the combi- tlon's broad domination of the oe industry took effective shape.
 earnings from that date cover , whole bulk of the industry. In I they were f3 per cent, in 1903 T i6 per cent and from 1904 U s the average was i9 per cent, S3l, 100000 yearly.
 Earnings in Branches. Here appears, even moro strlk- iy, the earning power of concen- ted control. Tn the snuff busi- s the combination has an almost lplete monopoly-96 per cent of
 whole business. From a rate less than 9 per cent in the first T (i90l), the earning rose in 1903 D per cent, and in 1906 to over p cent. The common stock of the If company, originally all water, | 20 per cent dividends in 1909
 27 per cent in 1910. In the highly controlled smoking aceo business the average earn of it's important subsidiaries in- ased from IT per cent in 1900 to per cent in 1908.
 Conversely, the subsidiaries en- ed in the ilat-plug business, with re active competition, i'll no year ned i9 per cent, and in 1906 less n s per cent.
 in the cigar business, of lch the combination controls not T i5 per cent, it's rate of earning never exceeded 9 per cent, and m 1904 10 1908 averaged less than CT cent. This business, moreover, wed exceedingly heavy losses in 2 and 1903. Here were severe lpetition and low earning.
 Earnings of Independents. The combinations rate of earn has far exceeded that of it's lpetltors. It's rate in 1906, a rep antative year, was about two and -half times the average rate for Of the most independent manu- Iurers of smoking and chewing acco and snuff. The earning of SC independents. moreover, fair 'epieseit the average average nata Tn tiie acco business before the forma- of the combination--roughly aklng, the competitive rate In CT words, the combination has