Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1911-05-30
tu- tn -sat,tf

were 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 Stndard Oil. the two
cases were before the Supreme Court
for consideration 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 gov
eminent asked that the American To-
baceo Company, it's officers. directors
and affiliated corpora tions, be prevent
ed and enjoned from restraining and
monopolizing commerce in tobacco.
The restraints and the .monopoles
|alleged by the government. were said
to have been obtained by an intricate
system of corporate organization. II
began in 1890 when the first American
Tobacco Company was organized
The new company took over the bust
mess of five independent cigarette
concerns.
In S19S, the Continental Tobacco
Company was Incorporated to take
over the plug tobacco business of the
American Tobacco Company and thai
of five Independent plug manufactur-
ers.
In 1900, the American Snuff Com
pany was Incorporated to take over
the snuff business of the American
Tobacco Company. of the Continental
Tobacco Company. and of two other
independent manufacturers.
In 1901. the American Cigar Com
pany was Incorporated to take over
the business of the American Tobacco
Company and other manufacturers
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 1903, the American Stogie Com
pany was incorporated to take over
the Stogie business of the American
Cigar Company, the American Tobacco
Company. and the Continental To-
bacco Company.
In 1904, the American Tobacco Com
pany. the Continental Tobacco Com
pany, and the Consolidated Tobacco
Company were merged into the pres
ent American Tobacco Company.
The government claimed that all
these organizations we're created with
the definite purpose to destroy com
petition and that they accomplished
that purpose. Each step was at
tackled as a part of an unlawful plan,
whose development and progress was
advanced. it was charged. by duress.
oppression, and unfair methods in
tended to drive out and keep out COM
petitors and secure monopolies.
The defendants claimed that moth
ing was to be found in the organiza-
ton of these corporations, but the or
derby, natural and legitimate develop
ment of a great business. They said
the acquisitions had been proper and
that no intent to restrain trade or
monopolize trade had prompted the
creation of corporations.
In addition, it was charged that the
American Tobacco Company acquired
control of the United Cigar Stores
Company. which conducts retail stores
in large cities, and thereby was seek
ing dominion in the retail business. an
avenue absolutely necessary to eff
fective competition.
The tobacco organization was
charged with having a monopoly of
the licorice paste, required in the
manufacture of tobacco. the MacAn-
drav r.. 4 cd
by the Continental having no com
petitor, it was said.
1t was also said that the defendants
had monopoly in the tin foil BUSH
ness. the Conley Foil Company, of
which the American Tobacco Com
pany held a majority of the stock,
producing rs per cent of the tin foil
in this country. Both
the licorice and the foil monopolies
were said to have been obtained in
violation of the Sherman anti-t trust
law.
Another phase of the litigation con-
cerned the foreign trade. The petit
ton charged that the American To-
bacco Company had entered into con-
tracts with the Imperial Tobacco
company, the So called British
Trust whereby the latter should
limit its activities to Great Britain ex-
cept as to the purchase of certain
amount of leaf i'm America and the
former should limit it's business of the
united States. 1t was alleged that
the two trust" organized The British
American Tobacco Company to take
over the export business of both and
divide the world between them. These
contracts were made in Great Britain.
The Circuit Court found that there
existed a restraint of commerce.. but
said nothing about the charges of
In its decree. the
court dismissed the petition as to the
imperial Company and the British
american Company and from this