The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-03-08
MAY PROSECUTE
BIG TOBACCO co.
Federal Suit Against the
Metropolitan Of New
York Expected.
INQUIRY NEARLY ENDED
Discrimination in Dealing
With Wholesale Deal
ers Is Charged.
MAY AGREE IN PHONE CASE
Settlement Of Suit Against Pa
cific Coast monopoly"
Is Probable.
MAY AGREE IN PHONE CASE

WAsHiNGroS. March important de-
velopnents in two cases involving charges
Of violation OF the sherman antitrust act
are expected to result In a few days from
negotiations now being carried on under
the direction OF Attorney General Mercy
noids.
II 10 likely thai an agreement viii he
reached for settlement out 81 court Of the
Governments suit against the American
Telephone and Telegraph Company for
the dissolution of what was charged TO be
q monopoly OF the telephone business IN
Oregon. Washington. Montana and Idaho.
This suit was flied in July. 1913. several
months before the American Telephone
and telegraph Company voluntarily
agreed to reorganze and it's status was
not affected by the agreement
There are strong indications that the
Government will prepare a bill OF indct-
rent under the sherman law against the
Metropolitan Tobacco Company of New
York.
II became known to-day that in the las;
few weeks representatives OF this cor
poration have negotiated with officials OF
the Department of Justice with a view OF
effecting some plan for reorganization
which would do away with the alleged
violations OF the antitrust law but hope
for an agreement Is not strong.
1ayestigation of the Company.
The Government began an investigation
Of the Metropolitan company several
months ago TO determine whether or not
the Supreme Courts decision dissolving
S-h. hx.tr i,,.aI t1
BY the former components of the trust
The Investigation grew out OF charges
filed with the Attorney General by indie
pendent tobacco dealers that the Metro
politan company through Its practices AZ
distributing agent OF the producing com
panies OF the dsntegrated trust had to al!
effects maintained the monopoly which the
courts decree had been designed TO break
The Attorney -t;enerab directed United
States District Attorney II. Snowden Mar
shall Of New York to make this investi-
CATION. The results OF Mr.. Marshall's in
vestigation. while not yet formulated into
. report to the Department of Justice. have
bsea communicated informally to the At
tasney-General and 1t Is understood that
the District Attorney believes that he has
gathered evidence OF serious restraint OF
trade by the Metropolitan company.
The chief discrimination which the
Government is expected to lay at the door
Of the corporation has TO do with its al
legged denial of wholesale prices to whole
sale dealers in New York and other States
who desired to purchase the products of
the former subsidiary companies of the
olA trust.
Nr. MarahaIIs Report.
Mr. Marshall has reported that the
Metropolitan. acting as sole distributing
agent for these companies, demanded OF
wholesale dealers the same prices which
we're asked for small consignments sold
direct to retailers.
The Government IL expected TO charge
that this practice constitutes a violation
Of the Sherman law in that II makes i'm
possible the profitable handling OF these
products by competing distributing cor
porations
Representative OF the Metropolitan
company who have conferred with Of
hctals OF the Government have declared
in defence that the company has worked
q great benefit to the consumer and to the
rstailer because OF the high efficiency 1t
has attained as distributing agent.
They pointed out that the close rela-
tionship between the company and the re-
tail dealers enabled the latter to make
frequent purchases OF small quantities OF
the tobacco products instead OF forcing
them into the risk OF making larger pur-
chases.
No definite plan for the confinement OF
the operations OF the Metropolitan com
pany TO the terms OF the sherman law
he's been laid before the Attorney-Generai.
II 10 said on high authority however that
Mr.. McReynolds VIII foreso sun III
equity only II the metropolitan agrees 70
permit wholesale oea'ers iree conpe.,.,on
with II IN the "'s'rlput,on VI 'ne plo.u' 70
Of the compoh.h'S OF tue iorH'' 'u''
~" sor"r'S" """e"
me prospects for an agreement upon
a decree for the settlement of the suit
,rsinst the alleged telephone merger OF
tina Pacific coast did not cause surprise
to-day, Although it was expressly stated
by the Attorney General at the time OF
the announcement of the Bell company's
agreement that the Pacific coast suit
would not be affected by II, the belie'
has been held since that the case would
he settled out OF court
The same spirit evidenced BY the Bel
management in the general agreement