Manchester Democrat. [volume] (Manchester, Iowa) 1875-1930, 1911-12-06

smoking tobacco and cigars. s. The
former one tin.foil company, Is d.
vided into two, one OF 1925. 900 cap
ital and the other Of 100000. The
one snuff company is divided into
three companies, one with capital
of $15,000,000; another with a cap
ital Of 100000; and third with a
capital Of $s.000.000. The licorice
companies are two, one with cap
ital Of $5,75s,O0 and another with a
capital of s2.O0O.O0O. There is. also,
the Br1tish-American Tobacco COM
pany, British corporation. doing
business abroad with capital Of
s26, 100000, the Porto, Rcan Tobac-
co company with Ia capital Of
s1,soo,ooo. and the forporation OF
United Cigar Storess with capital
Of 100000. Under this arrange
ment each of the different kinds of
business will be distributed between
two or more companies, with d.
vision Of the prominent brands in the
same tobacco products, so as to make
competition not only possible but
necessary. Thus the smoking tobac-
co business Of the country is divided
SO that the present independent COM
panies have 21.39 per cent, while the
American Tobacco company will have
33.O8 per cent, the Liggett and
Meyers zoos per cent, the Lorillard
company 22.s2 per cent, and the
Reynolds company 1855 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 its stockholders. All
covenants restricting competition have
been declared null and further per-
Torrance Of them has been enjoined.
The preferred stock of the different
companies has now been given vot-
ing power which was denied 1t under
the old organization. The ratio of
the preferred stock to the common
was as 70 to 40. This constitutes a
very decided change in the character
| OF the ownership and control Of
each company
In the original suit there were twen-
LYNNE defendants who were charged
with being the conspirators through
whom the illegal combination acquired
and exercised it's unlawful dominion.
will hold amounts of stock In the va
rious distributee companies ranging
from Al per cent. as maximum to
2811 per cent. as minimum, except
in the case Of one small company, the
Porto Rican Tobacco company, In
which they will hold As per cent. The
Twenty-Five individual defendants are
enjoined for three years from buying
any stock except from each other,
and the group is thus prevented from
extending its control during that Pc
riod. All parties to the suit, and the
new companies who are made parties,
are enjoined perpetually from in any
way effecting any combination be-
tween any of the companies in viola
ton Of the statute by way OF resump-
ton of the old trust. Each of the
fourteen companies Is enjoined from
acquiring stock in any of the others.
All these companies are enjoined from
having common directors 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 1t left
companies with very large capital In
3ro HuC h.
ment that would be effective to put all
on an equality would be division Of
the capital and plant Of the trust into
small factions in amount more nearly
equal to that OF each OF the independ-
ent companies. This contention re-
suits from a misunderstanding OF the
antitrust lay and its purpose. 1t is
not intended thereby to prevent the
accumulation Of large capital in bust
ness enterprises in which such COM
bination can secure reduced cost Of
production, sale and distribution. 1t
is directed against such an aggrega-
ton Of capital only when It's purpose
is that OF sitting competition, enhanc-
ing or controlling prices and estab-
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 the
Statute.
It is not the purpose of the statute
to conflscate 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-
cifc 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 Decree.
venture to say that not in the his
tory of American law has a decree
more effective for such purpose
been entered by a court than that
against the Tobacco trust. AS Circuit
Judge Noyes said in his judgment ap-
proving the decree:
The extent to which it has been
necessary to tear apart this combina-
ton and force 1t into new forms with
the attendant burdens ought to dem
onstrate that the federal antitrust
statute is drastic statute which &C.
complishes effective results; which so
long as it stands on the statute books
must be obeyed. and which cannot
be disobeyed without mourning far
reaching penalties. And, on the 9TH
er hand, the successful reconstruction
of this organization should teach that
the effect of enforcing this statute is
not to destroy. but to reconstruct; not
to demolish but to re-create in &C
cordance with the conditions which
the congress has declared shall exist