Richmond daily register. (Richmond, Madison County, Ky.) 1917-1978, 1921-07-05
WHERE TOBACCO
PROFITS WERE MADE
Manufacturers Got 1t All Last
Year With High Cigarette.
and Low Price For Weed

liS INC SrcdtcSlspTOntS III the MS
tory of the industry"
The Wall Strest9 Journal, pro
badly the most Authoritative fl
nancial journal I'M the, country
makes this statement on the basi:
of figures complied by experts
and by the manufacturers them
selves. Such a pronouncement
should be OF great interest to the
tobacco growers, since the prices
paid to the farmers OF Kentucky
during this period. were much
lower than the prices during sew
eral previous years. In fact, this
decrease i'll the price paid to the
farmer is offered as one of the
principal reasons for the enor-
nous profits made by the manu-
faCturerS.
In 1920. Kentucky produced
407 100000 pounds of tobacco
According to Wall Street figures
the average price for the 1926
crop was 23.2 cents less than the
price of the 1919 crop. This re-
duced price meant increased pro
fits OF more than $lO7 100000 tC
the manufacturers. \ certain
part OF this decline is held by
some persons to be due to the
1920 crop being of inferior quail
ity. Expert tobacco men at Lex
ton and the Blue Grass say. how
ever, that the 1920 crop was
very useful one for smoking to-
bacco brands.
But granting that the 1920 crop
OF tobacco was not of the most
valuable quality, this-iactor woule
be counteracted by the lower la
Dor costs i'll manufacturing. as tn
cost of living declined.
1T was estimated last year
that 20 per cent OF productions
costs went for leaf. With prices
for leaf cut in half compared with
those for the 1910 crop, the cnor-
nous saving to the cigarette man
facturer is obvious"
Add to- these considerations the
fact that the price of cigarettes in
which Burlcy tobacco is used has
not been reduced, and it becomes
apparent that the greater part Of
the money represented by the re-
duced price paid growers for to-
bacco must have . gone to the
manufacturers as profits. To
swell these figures still further. a
great increase in the use of Gig
arcttcs is indicated by figures for
the first four months OF the year
"A production OF 49.OOO,OOO.OOO
cigarettes ESTIMATED total 1920.
would mean an increase in profits
(to the manufacturer of $24,-
100000" says the Wall Street
Journal ''As a result of lower
leaf prices. cigarette manufacture
crs are making unprecedented
profits. 1t is officially estimated
that one of the big manufacturers
purchased its 1920 supply of to-
bacco at something like $2O,OO0.-
900 less than it cost in l9l9.* IS =
The increased demand for cigar
cites makes unlikely a reduction
i'll cigarette prices for the time
being.
These statements are not made
by the Wall Street Journal nor
quoted by this newspaper to
prove that the manufacturers arc
treating either the grower or the
public unfairly. Plainly, the
manufactures arc only follow
ing principles found to be sound
in any business. They buy the raw
product at the lowest price that
insure continued supply, and sell
the finished product at the high
est price that will losure con-
tinued demand.
But something evidently is
wrong when the producer loses.
or at least does not make money,
when the public demand is great
er and when the manufacturer
profits unparalleled in history.
What is wrong then, and what
is the remedy?
The chief offender, we believe
is the present system of market
ing tobacco. The remedy is the
system of cooperative marketing
of tobacco which is being put be-
fore the Kentucky growers at this
time
Under the present system, all
the Kentucky tobacco crop is
dumped ON the market usually i'll
a period of less than three
months. Since the money need
ed to move the tobacco crop from
the producer to- the factory runs
into hundreds of millions of dol
lars, it is evident that such sud-
den demands cannot readily be
met by even the largest compan-