Evening star. [volume] (Washington, D.C.) 1854-1972, 1911-10-15
WILL SUBMIT SCHEME
COURT TOMORROW
70 Give Stockholders Securities of
Subsidiary Organizations.
CHANGES IN VOTING POWER
Control Will Pass From Small Group
to Body of 5000 Persons-Re-
stricted Covenants to
Terminate.

NEW YORK, October 14.-The plan
for the dissolution of the American
Tobacco Company, in compliance with
the decision of the United States Su-
preme Court decreeing it an illegal
combination. was officially made public
tonight. 1t will be submitted to the
United States circuit court of the
southern district of New York for ap-
proval Monday. 1t was decided to make
the plan public prematurely, owing to
the publication today of a summary
purporting to be official, but which, ac-
cording. to De Lancey Nieoll counsel for
the American Tobacco Company, was in
correct.
The official plan provides for division
OF the American Tobacco Company into
stated will have controlling influence
in the tobacco business. The four COM
panies are the present American Tobacco
Company. which will continue its cor
porate existence; the Lggett and Myers
Tobacco Company, which is to be organ
lied; the p. Lorilrard Company. also to be
organized. and the R ]. Reynolds Tobac-
co Company, an existing corporation
Plan of Disintegration.
Disintegration is to be brought about
by selling $115OOO, 900 of the property of
the American Tobacco Company, con-
sisting of factories, brands. businesses
and capital stock of tobacco manufacture
ing companies. now owned and controlled
by 1t. to the Liggett and Myers Tobacco
Company and the p. Lorillard Company
for cash and securities of the two vendee
companies, and by distributing to COM
mon stockholders of the American Tobac-
CO Company two-thirds of the stock of
the r. J. Reynolds Tobacco Company,
now owned by the American Tobacco
The plan also provides for distribution
in the form of dividends Of the SECURITIES
Of the various subsidiary cofhpest4eS corr
trolled by the American Tobacco Conn
pany. manufacturing licorice. snuff. tin
feil, etc, to the American Tobacco Com
pany's common stockholders and the di-
vision Of some of these subsidiary COM
panies. which were held to be Illegal
combinations, into separate companies.
having no interest in one another.
Change in Voting Power.
1t provides. further, for radical changes
IN the voting power of the stock. SO that
the twenty-nine individual defendants,
who formerly controlled the American
Tobacco Company, through the owner
ship of IS per cent Of the common stock.
will surrender this control.
The principal financial feature Of the
plan is an assessment on the O,26O, 100
common stock Of the American Tobacco
Company, amounting to SIG. 651 ,92J. or
about 91 per cent, which will be used to-
ward the proposed retirement and can
collation. of the companys existing bonds
For this assessment. however. the COM
mon stockholders will receive common
stosk of the Liggett & Myers and p.
Lorilfard companies.
The net result, according to the plan,
will be:
Division Of Business.
ITO restore lawful conditions by divid-
ing the businesses in tobacco and related
products heretofore dominated and con-
trolled by the American Tobacco Com
pany. or companies in which it has held
q large OF controlling interest, among
fourteen separate and independent COM
panies. no one of them having control of
or dominance in the trade as to anv of
the products manufactured by il /; no one of
them having any dominance or control
ling position as to the purchase of raw
material of any kind, whether of the
several types of leaf tobacco or other
wise: no one of them having any inter-
est by way of ownership of stock or 9TH
erwise. in any other of them. and each
OF them being a company, whether now
existing or to be created under the plan.
in which the American Company will
have no interest"
In this manner, it is set forth. the so
per cent or the production of cigarettes
in the United States, now controlled by
the American Tobacco Company will be
divided practically 81 per cent to the
American Tobacco Company. Is per cent
to Liggett Myers COMPANY and IL
per cent TO P. Lorillard Company. The
"a per cent OF smoking tobacco controlled
Will be divided practically 33 to the Amer
lean Tobacco Company, 20 TO the Ligeett
q Myers Company. and 80 per cent to the
~
the K. j. Reynolds Tobacco Company
Plug Tobacco Manufacture.
The 81 per cent of plug tobacco will be
divided practically % per cent to the
American Tobacco Company, 81 per cent
to Liggett & Myers Company, 3 per cent
to the Lorillard Company and IS per cent
to the Reynolds Company. The 70 per
cent of tinecut tobacco will be divided
about 10 per cent TO the American To-
bacco Company Al per cent to Liegett a.
Myers and - per cent TO Lorillard Com
pany. The il per cent of cigar manu-
facture controlled will be divided about
per cent to American Cigar Company.
q to the Lorillard Company and ! TO the
American StUgie Company. The 93 per
cent control of little cigars will be d.
vided about u per cent to the American
Tobacco Company. ~ TO Liggett & Myers
and - TO the Lorillard Company The
go per cent OF the SNUFF business will be
divided practically 81 per cent to the
present American SNUFF Company "a
per cent to the george w Heime Com
pany and ~ per cent to Weyman q
Bruton Company. the latter two COM
panies to be organized.
The capitalization of Liggett Myers
will consist of $i5,507. .S37. seven per cent
bonds. Sl5.09,5S9 five per cent bonds
si53S3. Tf9 seven per cent bonds preferred
stock and S2I. f:G.3H common stock max
ing a total stock and bond capitalization
of SCI. al. 49,
The capitalization of the I.orillard
Company will consist of S10.9'3. .4SS pei
cent bonds. SO III .46i > per cent bonds
$40 OSiJ.9S1 : per cent preferred stock, and
SD 15.,,5s1 common stock, making q
total OF SiI ,si.,2. .sO1.
Securities Will Be Paid.
The securities of these two new com
spanies will be paid to the American