Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1922-01-19
bic TOBACCO COMPANIES
CHARGED WITH COLLISION
Federal Trade Commission
Accuses Three Great
Organizations.
WAGE WAR on pnIcE-CUrrERs
American Tobacco Company, IorlI-
lard and LiEEctt n MyersaAllrErd
4" lie Ia Conspiracy to Maintain
High Figures to Consumers.
Try Associated prcss.l

WASHINGTON. Jan. lS.-Chargos
that the American Tobacco Company
t. i.orillard Company. and. To lesser
extent. the I.irrc,t X Myers Tobacco
Company. have each engaged In con-
spiracics Win numerous sectional
and local johbcrs' associations to keep
MP the price Of tobacco products in
the United states through price agree
m-nts and intimidati"ns." were made
IN report sent to the Senate today
Icy the Federal Trade Commission.
Th. commission alleges this Situa-
tion hns existed since April Of last
year. although during the Same Pc
riod the relation hctwecH supply OF
leaf tobacco and the demand for IL
/ has resulted in such low prices TO
growers that tobacco farmers rails
inr the more important types. hurley
and bright Southern. have formed
marketing associations to sell their
! tvaccn crops co-opcrativcly."
. Successors of Combination.
/ Asserting these three companies
were successors "of the old tobacco
! combination. which was dissolved un-
der an antitrust decree In 1871" the
I commissions report continued:
There was one important successor
1 company. namely. Il. j. Reynolds To-
/ haCCo Company, which refused to lend
! any support Ia these conSpiracies but
actively opposed them. In spite OF
strong pressure cNcrtcd by jobbcrs
and jobbcrs' associations, the Rcy-
nolds Company stood stanchly
/ against the practices OF certain OF
it's competitors designed to induce or
I force johhcrs To enter and maintain
I price agreements and In this respect
is deserving of commcndation."
The commission promised prosecu-
tions where tho evidence discloscs
/ there has been violations OF law.
d Few Dominated Market.
I There was no conclusive evidence.
f.. the commission stated. Of collision to
( lcprcss the prices paid Erowprs for
1920 leaf crop. The commission add
ed, however that 1t appears that a
few large buyers had 81 dominant po-
sition and each purchased only a GER
tain percentage of the offerings"
Common buying agencies were
used the report said with reference
To the purchase Of tobacco. land Sc
Crct purchases were made throuch
Independent dealers while the uiti-
mate purchasers held off the market,
or practically So
Finding of fact reported by the
commission included Tina, begin
ming with the spring Of 1927 there
for It's object the organization ot
jobbers' ASSOCIATIONS to in prices by
eliminating price cutting among job
hers. This movement wac fostrrc'l
ana aided principally by the Ameri-
can Tobacco Compnny. l.. l.orillard
Company aud Ligrctt & Myers To-
hacco Company. followed by tn" To-
bncco Products Corporation. Bloch
Erothcrs Tobacco Company. and tho
Scott l.. Dillon Company.
Refused to- Sell Price -Cuttinp Jnbhcrs.
Certain OF these manufacturers. in
combination with tn" jobhc:s. re-
fused to sell Ia these JobHcfs. who
cut below the prices established by
the i"hbers' Association. This rr.u-
"a. grew ont OF the fac; tina; prcvi-
Gus Ia the sir.re Of 1921. cooiir,i-
ION WIS 'csnl,ing in Il IIt',ri"i low
'rIrs OF a. i'rlccS, whicn i .bsarS
'h"tccd To retailers aud IN ;urn. ui
The prices which retailers crar.s 4
TO consumers, which arpnren.ly
cause the manufacturers ~ fear TINT
The price reductions woGil mean
itDt manufacturers would be COM
PEELED. untu lately. To rciGcc hcir
own prices.
Combinations Of johhAr. ,-ain 81
prlce-cGttrrs were greatly cnrour-
f"-"h by certain circulars sent To- the
trade by some ~ the manufacturer
named. In which each company mad.
ci'ar that johh"rs were expected not
|" cell ~ cut prices aul that If rhcy
iid. they would IL" cut on from The
c"mpany's list of customers There
wcr" meetings held al which the
members of associations were en-
""uraH"d hy REPRESENTATIVES 81 onc
or another 90 the manufacturers 10
that IN" pricc-ctutting johbers were
being stricken from the list Of Gus
toners 10 whom the manufactured
would s.li
some Contracted To Keep Prices tn
few eases were found where
ia" J"hh"rs went 50 far as Ia enter
int" signed agreement with cnch
other I" maintain prices. Such IN
Rsi"cm"nt was made by Rhcd. Is.
ihnd Johh"rs. together with certain
Massachusetts j"hbors. The com.
MISSION has in its possession Tho
original OF this agreement siuncd b,
eighteen jobbcrS.
Letters in the possession of ths
commission show c.scs of in,Lcrs hc
ite actually refused supplies ,,v som.
~ these manu- ..cinrcrS in order T.,
c"'nrci Them To cease lri,.-,uitinr
Tie commissions report ,uy..r.,
'"hacc" trade activities from Anri
10 November, 1921. Since lac, Sen,
'e"hcr, IN" report stated. the johhcrs
agreements h"cam" les. .nrrtiy,
through Weakening in the support a.;
the American Tobacco Cnmr,r,
. owing 20 the fact that the commits.
SONS h"la inquiries were on foot.
secret Rebates I uncovered.
, Secret rebates we're uncovered IN.
, report added. stating: That dur.
, inE recent wears III" American 10.
race" c"mrany has siv"n Ia rayorc,
{ J"hhcr customers. secret bonuses OF
relates, In round amounts. rau"ing
, from few hundred dollars 10 soy
cr"i Thousand Of dollars al a time.
~ the time Of the inquiry III.
l'2l hur'"y market was not ",
open III" commission said. For TIA
L par, al tn" bright Southern crop O
North Caroline and Virginia. sold il
september ana oct"ber. 1921. th,
| prices We're somewhat higher tina,
! tor the 1920 crop. though .tilI ia
! below TIA" 1919 prices. However. ~,
: comparison is satisfactory untii ~
II the crop has been sold In SuU,l
: t.:T"linn ur4'cs for tho cu'Ir. l.2
l crop averaged 81. which is abou
4 ih" sam" rs the 'f3 price in tia
: stat. ana about half the 1872
:. price"
The commission also said II VIZ