The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1912-11-18
TOBACCO TRUST
GIVES DEFENSE
P. S: Hill, President, Issues State
ment Saying Court Order
Has Been Needed.
DENIES THAT SECRET
AGREEMENT EXISTS
Declares Common Sense Should Con-
vince Doubters that Dissolu-
ton Is Complete.

New York, Nov. 1.-THE suggestion that
the government proceedings for dissolu-
ton of the Tobacco Trust have not de-
stroyed the monopoly is ridIculed by the
American Tobacco Company. In q five
thousand word frank statement Of con-
ditions." issued today. Percival S. Hill
president Of the company. discusses the
results OF the decree of tie Circuit Court
OF the United States for the Southern
District of New York, providing for the
disintregation OF the trust
rs 1t possible that sane men managing
these various companies" he asks, after
pointing out the larger number of sales
men. jobbers and others in the tobacco
trade, would contemplate collusive and
feigned competition in the face of such
an army OF witnesses. and In the teeth
Of inJunctive provisions of a decree. dis
obedience to which would lead to a con-
dign punishment? What will be the effect
of the competition no man can tell, but
that the competition will continue to be
real and true
He declared that the common stock OF
the company hal sold always under the
shade of an impending government liti-
CATION" and that in the court proceedings
every one had an opportunity to learn the
value OF the properties from the detailed
statement filed.
Relative Market Values.
After the disistegration," he says, ali
Of these securities were sold out from
under the shadow OF a government suit
for dissolution. and ii is well known that
securities whose market value is low
compared with their par value sell for
nearer their real value than those whose
market value is very high. These things
explain the difference in market values
in the aggregate OF what has come to the
common stockholders OF the Americas
Tobacco Company, as compared with the
market value of their stock before the
dislntegration."
Buyers on the exchanges realize that
there is competition between the compa-
mics formerly composing the trust, as
serts Mr.. Hill. and that competition may
mean reduction OF the percentage Of
profits. but Increased volume OF business
that will prevent the actual amount of
profits OF a competitor being diminished.
Here are some further interesting state
ments by Mr.. Hill regarding the dissolu-
ton of the trust:
Regarding Distribution.
THE American Tobacco Company was
holders securities that had produced an
annual income of more than s9.0 10000.
and that therefore had total value of
substantially 100000. Had the Ameri-
can Tobacco Company never possessed
the things of which II thus denuded
itself. il Is likely that II would never
have been proceeded against as mo-
nopoly.
This disintregatIoa. as every disintre-
government has enforced from the case
of the Northern Securities Company TO
the present time, left the same body Of
in the various companies
that were nominal competitors.
These injunctiOns. il obeyed, insure
the reality OF competition. and, II dis
obeyed, then detection is certain and per
sonal punishment is imminent.
Actual Prices High.
so far as the experience OF the Amer
lean Tobacco Company goes. leaf tobacco.
generally speaking, has brought very high
prices since the dislntregation. There
has been competition. vigorous and act
I've. The tobacco business is unique. The
is- always at the mercy of
the ultimate consumer. who. by with
drawing his patronage, can crush any
no matter how large he
may be. Therefore, the success Of the
American Tobacco Company never did de-
pend. and does not now depend. on monop-
by, but the effioSensy of the company and
is ability to please the public. The his
.ory of the tobacco business proves that
price cutting is not a desirable weapon
% use against competitors.
by the terms OF the decree, the prod |
lets Of these subsidiary corporations
which bear the name of the manufacturer
It all must bear a statement showing
he owner OF their stock. Under these
secret ownership is impossible
Not only is there publicity as to the iden- !
ity of the final owner OF the tobacco |
but the whole tobacco business !
S conducted in the OPEN"