Richmond daily register. (Richmond, Madison County, Ky.) 1917-1978, 1920-12-15
JOINT LEAF BUYING
MEETS OPPOSITION
Action To Stop Big Practices Is
Urged To Probe Report
Issued To Congress

Kentucky district, calling for a con-
dition of the markets and markes
conditions is attracting widespread
attention. The report was accompa-
panied by the following recommends
tons:
First-That the provision relating
to the use of common agencies bA'the
defendant companies in thevpur&ase
of leaf tobacco which expired by liti-
cation November, 1916, be revived
and made permanent. a
Second-That the provision relat-
ing to the defendant companies doing
business under any other than their
own corporate name or that of sub
sidiary corporation controlled by them
be made specific SO as to include the
purchase of leaf tobacco through
agencies not disclosed in the trade.
Third-That Federal system of
grading leaf tobacco be established
by the Department of Agriculture.
Tendency to Stabilize Market
The authority to establish such
system, the report points out, appar-
emily has been give nthat department
under Section 10 of the United States
warehouse act. The commission be-
ieves, the report says, that this would
tend to stabilize market values under
abnormal conditions such as prevail
ed during part of last summer.
Further consideration of possible
violations of the Clayton act will be
given by the commission. Evidence
of the possible violations of the decree
entered in November 1911, as re-
suit of the dissolution suit will be
made available to the Department Of
Justice at an early date.
Under this decree the tobacco
"trust" was dissolved into four large
companies, the American Tobacco
Company, the P. Lorrillard Company,
Liggett and Myers Tobacco Company
and the r. J. Reynolds Tobacco Com
pany.
Probably the most important change
that has taken place in the industry
since the dissolution of the combina-
ton has been the formation of the
Universal Leaf Tobacco Company,
the report points out. This agency
has acted as agent for and sold to-
bacco to most of the large interests.
Three Factors in Decline
The commission obtained data con-
corning vrices paid for all types of
tobacco, and compiled these in re-
port covering about $50 pages. After
"a study OF the data it reached the
conclusion that the decline is attrib-
uted to three factors. These factors
are:
First-Lessening Of foreign pur-
chases due to unfavorable exchange
rates, and the contraction of domes-
tic credits resulting in unfavorable fl
nancial conditions.
Second-Increase in quantity of
low grades for domestic absorption
due to crop conditions and failing
( foreign markets.
Third-Purchasing methods of the
large buyers.
''NOne of these factors alone can be
| assigned as the controlling or pre-
dominating cause of price decline, %
the report states. "For instance,
while the same purchasing methods
as were used during 1919 appear to
have been followed the preceding
years since 1915 there was an absence
of effect on prices in those years such
as is now under consideration. New
ertheless, certain of the methods are
a resumption of the practices which
were prohibited during the five years
prescribed in the decree, because they
were unlawful.
"There is no uniform system of
grading leaf tobacco. This operates
to the disadvantage of both buyer and
seller, especially the latter.
"Prices to dealers of most brands
of manufactured tobacco have been
increased during the past year, but
for brands upon which information is
obtained the increase has not been
out of proportion to the increased
leaf COST The prices paid for the
majority of grades of leaf tobacco
used by the large tobacco manufac-
turers during the last year were
somewhat higher than during 1918-19,
and considerably higher than for 1917
10.
''Prices paid growers for the better
grades of Burley and certain of the
dark Western types last season also
compared favorably with prices pre-
vailing during the 191S-19 season.
After the opening of the season in
most of the sections producing dark
Western and Burley types, prices for
the common and low grades suffered
decline, and in some sections before
the end of the season became demon
allied. The decline in the prices for