The sun. [volume] (New York [N.Y.]) 1833-1916, 1911-05-30

its activities to all forms Of tobacco prod
ucts which had been accomplished JUS
prior to orga nization OF the Contnenta
Tobac eco Company. Nothing could -hov
it more clearly than the following:
AT the end of that time the compan,
was manufa ctlrtng SO per cent. or there
about of all the cigarettes produced II
the United States, above 2o per cent ii
all the smoking tobacco, NOR. than ~ De.
cent OF all plug tobacco. 81 per cent Of al
little cigars. per cent. each OF all snuf
and fine cut tobacco and over 2 per cent
OF all cigars and cheroots.
"A brief reference to the occurrence.
OF the second period. that Is from ant
after the organization Of the Gontinenta
Tobacco Company up TO the time Of th'
bringing Of this suit. will serve to max.
evident that the transactions in then
essence had all the characte erstics of tn.
occurrences Of the first period
In the year 1899 and thereafter either
the American or Continental compan,
Tor cash or stock. at an aggregate cos,
Of $50. .OOO. 900. bought and closed up some
thirty competing corporations and part
nerships heretofore engaged in inter-
state and foreign commerce az manufac.
turers. sellers and distributors Of tobacco~
and related commodities. the interested
parties covenanting not to engage in the
business. Likewise the two corporations
acquired for cash. by issuing stock and
otherwise, control Of many competing <
corporations. now going concerns with
plants in various States Cuba and Porto
Rico. which manufactured. bought. sold
and distributed tobacco products or
related articles throughout the United
States and foreign countries and took
from the parties in interest covenants
not TO engage in the tobacco business
/ The plants thus acquired were oper-
ated until the merger in 1904. TO which
we shall hereafter refer. as a part Of the
general system OF the American and Con-
tinental companies. The power resulting
from and the purposes contemplated IN
making these acquisitions by the COM
/ panies just referred TO. however. NAV not
he measured by considering alone the
business OF the companies directly ac-
CURED. since some of those companies
were made the vehicles a. representing
the American or Continental company
for acquiring or holding the stock of other
competing companies. thus amplifving
the power resulting from the accusations
directly made by the American or Conti-
mental company. without o@ten-ibiy
doing so II Is beside, undi-pute ed tha. in
many Instances the acquired CORPORA
tions. with the subsidiary companies
| over which they had control through stock
ownership. were carried on ostensiblv a.
independent concerns disconnected from
| either the American or the Continental
4 COMPANY. ditiOuku tIfN were controlled
and owned by one or the other of these
companies
Plants Bought and Closed.
| 1T is of the utmost importance to OBJ
serve that the acquisitions made by the
subsidisry corporations in some cases
likewise show the remarkable fact stated
above. that is. the disbursement of enor-
nous amounts Of money 70 acquire plants
which on teinS purchased were not
n zn.t h,tf tV,.vv t.l., IL Il
II is also 70 be remarked that the fact.
stated in the memorandum in the margin
show on their face singular identity
between the conception which governed
the transactions OF this latter perod with
those which evidently existed at the very
birth OF the original organization Of the
American Tobacco Company. as exempli-
fed 10y the transactions in the first period
statement OF particular transactions
outside Of those previously referred to as
having occurred during the period in
question will serve additionally TO make
the situation clear. And 10 accomplish
this purpose We shall ~ briefly az NAV be
consistent with clarity. separately refer
I To the facts concerning the organic ion
during the second period OF the five
corporations which were named as de-
fendants in the bill. as herei OF IRE stated
and which for the purpose of designation
We have hitherto classified as accessory
defendants. such corporations being the
american Snuh Company. American Cigar
Company. American Stogle Company
MacAndrews 4 Forbes Company ,ic-
, oriceJ. and Conley Foil Company.
American snuT Company Acquired.
4, The American Snnff Company:
AZ We have seen, the American To-
baoco Company at the commencement
OF the first period produced a very small
quantity Of snuff. Its capacity. however.
IN that regard was augmented. owing
particularly TO the formation OF the Com
tlnentai Tobacco Company and the ac-
QUESTION of the Lorillard company, by
which II came to be serious factor as a
sn,if producer. There shortly ensued an
aggressive competition in the snuff bIsi-
ness between the American Tobacco Com
pany. with the force acquired from the
vantage ground resulting from the
and others in the trade operating inde-
pendentiy of that organization. The
result WAS identical with that which had
previously arisen from like conditions in
the past
In March. 1900. there was organized
American Snuff Company with a capital
OF S25 OOO. one-half preferred and
half common. which took over the
snun business Of the Z. Lorillard Com
pany. Continental Tobacco Company
and the Anne rican Tobacco Company
ssH shst ~ y i1t B- 'OlAIctlloT, VIZ, tna
Atlantic Snuf Company The stock of
the new company was thus apportioned:
Atlantic Snuff Company. preferred. 81
500 900. common SIS GOO. .OOO p. Lorillard
Company. preferred. l.I24. 700. common.
1868, 100. the American Tobacco Com
pany. preferred 81 III. 500 common ,S3 ?27.-
500 Continental Tobacco Company. pre-
ferred. Sl87 800. common. Ssi3. 100 The
stock issued TO the Continental Tobacco
Company and the defendants p Lorillard
Company and the American Tobacco
Company is still held by the latter. and
they have AT all times had a controlling
interest in the snuH company
All the companies. together with their
officers and directors. covenanted that
they would not thereafter engage
AZ competitors in the tobacco business
or the manufacture. sale or Distribute ,
OF snutf.
Among the assets transferred by the
Atlantic Snuh Company 10 the American
Snlh Company were all the shares $500.
900, OF W T. Garrett 4 Sons. Inc then !
and now one OF the oldest and very largest
producers OF snuH. for a long time and |
still engaged at York!and. Del ia inter /
state and foreign commerce in tobacco !
and its produc's and which controlled .
through stock ownership the southern /,
Snun Company. Memphis. Tenn; Dental !
Snuh Company. Lynchburg. Va and |
Stewart Ralph Snuh Company. Ciarks-
vile. Tenn The separate existence of ,
". + Garrett 4 Sons has been preserved |
and its business conducted under the |
La,