Omaha daily bee., 1911-01-07
History Of Alleged Combination Given
by Special Assistant.
TO REMOVE ALL COMPETITION
Competing Plants Purchased Under
Contracts with Proprietors.
WORLDS TRADE PARcEILED oU7
Attorney Alleges as Result of Combi-
nation Competition fn Purchase
of Leaf Tobacco Has Been
Eliminated.
Eliminated.

WASHINGTON. Jan 6-Oral argument
Of the proposed dissolution Of the tobacco
trust were begun late today in the SUI
preme court OF the United States. AS a
year ago. when the dissolution suit Was
argued for the first time before the court.
30 today J. c. McReynolds. special assistant
10 the attorney general IN charge Of the
tobacco fight Tor the government. made
the opening address He had not concluded
his remarks when court adjourned until
Monday. BY arrangement, counsel on both
sides agreed TO conclude their arguments
in twelve hours.
This viii bring the close Of the presenta-
tion about D. m next Wednesday. AT
that time the Standard ON dissolution suit
viii be taken up In oral argument
Wilson Act Invoked.
At least one important result was accom-
plished in the first few minutes that Mr..
McReynolds spoke He surprised some
members Of the court by saying the dissolu-
tion was asked not only under the Sherman
antitrust law, but under the Wilson tariff
act Of 1894
Mr. McReynolds told the court this was
the first case that had ever been brought
under the Wilson tariff act. This. ne ex-
planned, applied 70 instances Of restraint
OF trade where an importer was a party.
Much discussion had taken place in the
trust" cases as 70 whether or not the
phrase restraint Of trade. as used in the
Sherman antitrust law. was equivalent to
restraint OF free competition"
Mr.. McReynolds pointed to the Wilson
tariff act as the congressional interpreta-
ton OF the Sherman act. passed four years
previous, when all doubt as TO the meaning
had been removed by using the phrase
restraint Of free competition"
Nearly the entire time that Mr.. Mercy
nolds spoke was devoted 10 history Of the
tobacco trust" from the time the first
American tobacco company was organized
In 1890 for the alleged purpose of affecting
3 monopoly IN The ciEaretfe trade and Thus
avoiding competition OF Independent cor
porations down ~ thf iprcfporation Of
1906 OF the now American Tobacco COM
pany. oontrolling sizty-five companies in
terested in var.ous branches Of the to-
baoco business.
| He described the plug war" about 1892
resulting IN the organization Of the Con-
! tinental Tobacco company by which, he
alleges peace was restored and oompeti-
tion Of independents. was eliminated. He
told Of similar combinations in the snuff.
cigar and stogie trade.
] IN hemuNe Oum petition.
These combinations he described as de-
signed 10 remove competition. Once or
ganized he told how competing plants were
/ purchased, each purchase being accom-
I panied by covenants on the part OF those
who were selling out not TO engage IN the
business o. manufacturing or selling to-
/ bacco within ten 10 twenty years in the
/ United States except Nevada and a ter
rftory or two.
Finally he turned 70 the contracts OF the
American Tobacco company with the So
called British tobacco trust" the I'm
psrisI Tobaoco company. BY these con-
tracts. he said. the trade OF the world in
tobacco had been parcelled out between
them. the American trust" taking the
United States and Cuba for its own: the
British trust" Great Britain. Ireland and
The Isle Of Man, and the Brftish-Amsrican
Tobacco company, organized by the two
trusts, carrying on the tobacco husl-
ness in the rest OF the world
I As result Of these combinations ne al
legged that the competition in the purchase
Of leaf tobacco had been eliminated in the
United States.
History of the Case.
The suit under the Sherman antitrust
law 10 dissolve the so-called Tobacco
trust" was Instituted in 1907 in the circuit
court Of the United States for the southern
district Of New York The proceedings
were brought by the Department Of Justice
against more than sixty corporations and
a number OF Individual defendants. headed
by James b. Duke
The process of organization Of the com
bnHtion. alleged 10 be unlawful, spread
over many years II began In January.
1850 Then the first American Tobacco
eompaHF was Incorporated for the purpose.
ID is aiieEed. Of taking over the business
Of five indspendent cigarette plants.
In lsss the Continental Tobacco company
was Incorporated for the alleged purpose