New-York tribune., 1911-11-09
TOBACCO TRUST PLAN
APPROVED BY COURT
Two Most important OF the Gov
ernment's Suggestions Are
Rejected.
DECISION IS UNANIMOUS
Right to Reopen Case in Five
Years Denied-Wickersham
and Independents May Go
to Highest Court.

The reorganization plan Of the Ameri-
can Tobacco Company was approved
Yesterday unanimously by the United
States Circuit Court for the Southern
District of New York, composed of
Judges Lacombe. Coke, Noyes and
Ward. who rejected the two most dras-
tic conditions to the adoption Of the plan
suggested by Attorney General Wicker
sham.
The government in its answer to the
proposed plan demanded as the most
important condition that the right
should be reserved TO the people Of the
United States to apply 10 the court at
any time within five years after the
adoption of the plan for further relief
upon a showing that the plan, as mat
ter of fact and not as the result of new
overt acts in violation Of the law, had
not brought about a new condition hon
estly in harmony with the law.
1T is not apparent that this court has
the power so TO do" was Judge La
combes ruling on the question, and the
Attorney Generals other drastic sug
gestion that the stock of the United
Cigar Stores Company be sold and dis
tributed to parties other than the TWEEN
ty-nine individual defendants or other
Of the common stock holders of the
American Tobacco Company was also
refused on the ground that the court
had no power to grant such request.
OF the other seventeen conditions sug-
gested by Attorney General Wickersham
TO guard through .njunctive features and
careful phraseology against a repetition
of a monopoly of the tobacco trade the
judges denied four. They refused the
provision that none of the new corpora
tions should be allowed to acquire prop
erty, tangible or intangible. which would
invest it with as much as 40 per cent in
volume or in value Of any particular line
Of the tobacco business.
They decided that Mr.. Wickershams
suggestion that the stocks of the Lig
gett * Myers and the =. LOrillard COM
panies be deposited with the Guaranty
Trust Company. TO remain under the SUI
pervision of the court until the plan was
accomplished, as had been provided for
i'm the plan, and they rejected the de-
mand that all contracts between any Of
the companies in the combination and
the British American Tobacco Company
giving to the latter company the exclu-
sive right 10 manufacture or sell brands
belonging to any of the companies In the
combination be rescinded or otherwise
terminated. Judge Lacombe held that
the brands thus sold passed to the pur-
chaser for valuable consideration
under an executed contract
The Judges also said that there was nc
good reason for reducing to one year the
proposed term of three years during
which the securities of the American
Tobacco Company held by the American
Snuff Company should be sold or other
wise disposed Of
Three Years for Distribution.
In regard to the governments pro-
vision that the twenty-nine individual
defendants be enjoned for term Of five
Years from acquiring directly or indi-
rectly additional stocks in any of the
new companies, the court suggested that
three years would appear to be de-
srable change TO secure a more rapid
distribution Of present holdings Inas-
much as this injunction would apply to
the stock of the British-American To-
bacco Company now held by the trust,
and which will have to be sold i'm the
open market, the court had this to say:
II may not be "A wise policy TO make it
easy for foreigners to take over the CON
troll of the British American Company, with
its large and growing business in foreign
countries. notably in South Africa and the
Far East now I'm American hands. That
is what would probably happen If the
twenty-nine defendants be prohibited from
increasing their holdings of that stock
We do not undertake to determine this
question of public policy which is one for
the consideration of the executive branch
of the government. IL is sufficient TO say
that a further exception Of the shares OF
that company from tho operation Of this
para graph would not in our opinion. make
the plan repugnant to the law.
Although the decision Of the court was
unanimous and Judge Lacombe wrote