The public ledger. [volume] (Maysville, Ky.) 1913-1968, 1920-12-14
JOINT BUYING OF
TOBACCO IS AS.
SAILED IN report
Report Of Commission Of Its Probing
OF Leaf Tobacco In Kentucky
Presented to Congress.

ion of Representative W. j. Fields,
Ninth Kentucky District, calling for
IN investigation of the markets and
market conditions. especially in 1919
and 1920. The recommendations are:
First = That the provision relating
TO the use of common agencies by the
defendant companies in the purchase
Of leaf tobacco which expired by liti-
cation November. 1916. be revived and
made permanent.
Second-That the provision relating
to the defendant companies doing bus
mess under any other than their own
name or that af a subsidiary
controlled by them be
made specific so as to include the pur-
chase of leaf tobacco through agencies
not disclosed to the trade.
Third - That a Federal system Of
grading leaf tobacco be established by
the Department of Agriculture.
The authority to establish such a
system. the report points out, appar-
emily has been given that department
under Section 10 of the United States
warehouse act. The commission be-
lieves. the report says, that this would
tend to stabilize market values under
abnormal conditions such as prevailed
during part of last summer.
Further consideration of possible
violations OF the Clayton act viii me
given by the commission. Evidence ci
the possible violation of the decree ell
tered in November. 1911. as result
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 P. Lorillard Company
the American Tobacco Company. Lig-
gett & Myers Tobacco Company and
the R. ]. Reynolds Tobacco Company
Probably the most important
change that has taken place In the in
dustry since the dissolution Of the
combination has been the formation oi
the Universal Leaf Tobacco Company
the report points out. This agency
has acted as agent for and sold tobac'
co to most of the large interests.
The commission obtained data con
corning prices paid for all types o
tobacco, and compiled these in re
port covering about $50 pages. Aftel
a study of the data il reached the con
clusion that the decline is attributed
to three factors. These factors are;
First - Lessening Of foreign pur
chases due to unfavorable exchang
rates, and the contraction Of domesti
credits resulting in unfavOrable finan
cial conditions.
Second - Increase in quantity @
low grades for domestic absorptio
due to crop conditions and failing fol-
eign markets.
Third = Purchasing methods
large buyers.
"None of these factors alone can b
assigned as the controlling or predon
mating cause of price decline" the n
port states. For instance, while tn
same purchasing methods as wei
used during 1919 appear to have bee
followed the preceding years sine
1915. there was an absence of effect
prices in those years such as is no
under consideration. Nevertheless
certain of the methods are a resuml
| ton of practices which were prohil
tied during the FIVE years prescribe
| in decree, because they were unlaV
full.
There is no uniform system
grading leaf tobacco. This operates
| the disadvantage Of both buyer al
seller, especially the latter.
prices to dealers Of most brands
manufactured tobacco have been Il
creased during the past year, but Il
brands upon which information WI
obtained the increase has not been o.
| of proportion to the Increased ie
cost. The prices paid for the ma1ori
Of grades of leaf tobacco used by u
large tobacco manufacturers durir
the last year were somewhat high
than during 1s1S-l9, and considerab
higher than for 1918.
prices paid growers for the bett
grades OF Burley and certain OF u
dark Western types last season ali
compared favorably with prices pr
yailing during the 1888 seaso
AFTER the opening OF the season
| most Of the sections producing dal
Western and Burley types. prices 9
the common and low grades suffered
decline. and in, some sections befo
the end Of the season became demo
alized. The decline In the prices 9
the dark fired tobaccos was the mo
marked.
As a whole the average price {
Barley was about the same a. Tor 2
1918 crop, while for mosl dark Ws'