Perth Amboy evening news., 1911-12-05

foil company Is divided into two,
of 1926 900 capital and the other Of
100000. The one snuff company IL
divided into three companies, one with
a capital of sis, 100000, another with n
capital of $4,000 900 and a third with
a capital of $3.000.0o0. The i.corlce
companies are two. with a capital
of $5.75S.300 and another with q capi-
tai of 100000. There is also the
British-AmerIean Tobacco company, a
British corporation. doing business
abroad with a capital of $26.000,a00.
the Porto Rican Tobacco company.
with a capital of $1,000. 900, and the
corporation Of United Cigar Stores.
with u capital of 10000. 900.
Under this arrangement each of the
different kinds of business will be dis
tributed between two or more compa-
MES with a division OF the prominent
brands IN the same tobacco products.
SO as tosInake competition not only
possible. but necessary. Thus the
smoking tobacco business of the coun-
try Is divided so that the present in
dependent confpah.es nave 2l.39 per
cent, while fine American Tobacco CON-
pany will have S3,0S per cent, the Lig-
gett & Meyers 20.05 per cent, the Loril-
lard company 22.S2 per. cent and the
Reynolds company 2.86 per cent. The
stock of the other thirteen companies,
both preferred and common, has been
taken from the defendant American
Tobacco company and has been dis
tributed among IFS stockholders. All
covenants restricting competition have
been declared null and further per-
formance of them has been enjoined.
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 rs
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 TWEEN
ty-nine defendants, who were charged
with being the conspirators through
whom the illegal combination acquired
and exercised It's unla wful dominion.
Under the decree these defendants win
hold amounts of stock in the various
distributee companies ranging from Al
per cent as a maximum to 2S1h per
cent as a minimum, except in the case
Of one small company. the Porto Rican
Tobacco company, in which they win
hold 45 per cent.sThe twensy-nine in
diyidual 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-
troll during that period. All parties to
the suit and the new companies who
are made parties are enjoined perpet-
uaily from In any way efYecting any
combination 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
enjoined 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
Inent 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 nea
ly equal to that of each of the indie
pendent companies. This contention
results from a misunderstanding of
the antitrust law and its purpose. 1t
Is not intended thereby to prevent the
accumulation Of large capital In bust
ness enterprises In which such a com
production. sale and distribution. 1t
Is directed against such an aggrega-
ton of capital only when its purpose
is that Of sitting competition, enhanc-
ing or controlling prices and establish
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
accomplished the useful purpose Of
the statute.
confiscation Not the Purpose of tho
Statute.
1t Is not the purpose of the statute
to confiscate the property and capital
of the offending trusts. Methods OF
punishment by fine or Imprisonment
Of the individual offenders. by fine of
the corporation or by forfeiture of its
goods In transportation are provided.
but the proceeding in equity is a spe-
ciic 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 Dscres.
/ 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 combina-
ton and force 1t into new forms with
the attendant burdens ought to demon
strate that the federal antitrust statute
is a drastic statute which accomplishes
effective results, which so long as 1t
stands On the statute books must be
obeyed and which cannot be disobey-