The Birmingham age-herald., 1911-05-30

in 1S90 when the first American Tobacco company was organized. NThe new com- pany took over the business of five inde- pendent cigarette. concerns.
 In 1898, the Continental Tobacco conl- pany was incorporated to take over the plug tobacco business of the American Tobacco company and that of five inde- pendent plug manufacturers.
 In 1900 the American Snuff company was incorporated to take over the snuff business of the American Tobacco com pany of the Continental Tobacco com- pany and of two other independent man- ufacturers.
 In 1901, the American Cigar company was incorporated to take over the busi- ness of the American Tobacco company and other manufacturers and sellers of cigars, cheroots and stogies.
 In the same year. the Consolidated To- bacco company was incorporated to take over in exchange for its bonds substan- tially all of the stock of the American Tobacco company and the Continental Tobacco company.
 In 19o3 the American Stogie company was incorporated to take over the stogie business of the American Cigar company, the American Tobacco company, and the Continental Tobacco company.
 The Organization
 In 1904. the American Tobacco company. the Continental Tobacco company, and the Consolidat Tobacco company were merged into the present American Tobac- co company.
 The government claimed that all theso organizations were created with the definite purpose to destroy competition and that they accomplished that purpose. Each step was attacked as part of an unlawful plan, whose development. and progress was advanced, 1t was charged, by duress, oppression, and unfair meth ods intended ta drive out and keepsout competitors and secure monopolies.
 The defendants claimed that nothing was to be found in the organization of these corporations. but the orderly, nat ural and legitimate development of a great business. They said 1.-the acquisi- tions had been been proper and that no intent to restrain trade or monopolize trade had prompted the creation of the corporations.
 In addition, it was charged that the American Tobacco company acquired control of the United Cigar Stores com pany, which conducts retail stores in large cities, and thereby was seeking do- minion in the retail business, an avenue absolutely necessary to effective conpe- tition. ss
 The tobacco organization was charged with having a monopoly of the licorice
 
 bacco, the MacAndrews & Forbes com- pany, organized by the Continental. hav- ing no competitor, it was said.
 It was also said that the defendants had a monopoly in the in foil business, the Conley Foil company of which the American Tobacco company held ma- jority of the stock, producing 75 per cent of the tin foil manufactured in this coun- try. Both the licorice and the foil mon- opoles were said to have been obtained in violation of the Sherman antitrust law
 Another phase of the litigation con- cerned the foreign trade. The petition charged that the American Tobacco com- pany had entered into contracts with the British Trust" whereby the latter should limit it's activities to Great Britain except as to the purchase of a certain amount of leaf in America and the for- mer should limit its business of the United States. It was alleged that the two trusts" 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 ex- isted a restrain of commerce, but said nothing about the charges of monopoliz- ing. In its decree, the court dismissed the petition as to the Imperial company and the Brltish-American company, and from this feature of the decree the govern ment appealed to the supreme court It dismissed the petition as to the United Cigar Stores company, and from this, too. the government appealed.
 The circuit court decreed that the American Tobacco company, the Ameri- can Snuff company, the American Cigar company, P. Lorillard company, R. J. VI Tr~ DI-~ Durahm Tobacco company and the Con- ley Foil company held shares in specified corporations and enjoined them from ac- uuiring the plants or business or voting the shares of and from exercising control over the "subsidiary'' companies, and en- joined the Subsidiary" companies from permitting control. Both the defendants and the government appealed. The latter objected principally because the Imperial Tobacco company, the British American Tobacco company, and the United Cigars Stores company were not included among the "subsidiary'' companies, and because the holding companies were not prohibit- ed from collecting dividends from the .'subsidiary' companies.
 The appeals were argued before the su- preme court, first in January, 1910, and the second time in January, 1911. Promi- nent attorneys appeared. For the gov- ernment, Attorney General Wickersham and his special assistant, J. c. McRey- holds, addressed the court. For the American Tobacco companies there ap- peared John G. Johnson of Philadelphia: Delaney Nicoll and Junius Parker of New York. while William B. Hornblow- CT of New York argued for the Imperial Tobacco company, and Sol M. Stroock of New York for the United Cigar Stores company. EA
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