New-York tribune., 1922-01-19
Plot to keepPrices
Up Laid to Three
Tobacco Concerns
American. P. Lorillard and
Liggett 4 Myers CO.. ;
Charged With Conspiring
With Jobbers Associations

WASHINGTON. Jan. Is. Three Of
ne principal tobacco manufacturing
.cmpsnics - the American Tobacco
company, the p. LcYillard Company
md the Ligaett G. Myers Tobacco Com
uny-were charged with engaging in
.onspirscies with numerous jobbers'
associations to keep UP jobbers' prices,
a report transmitted to-day TO the
Senate by the Federal Trade Commis-
ZION.
The three companies, the commission
declared, in giving the results Of an IN
,estigation ordered under resolution
~ Senator Smith, Democrat, South
srolina, were formerly parts of the
tobacco trust dissolved by the Su-
,reme Court. The r. J. Reynolds Com
oAny, the report said, was not q party
o the alleged conspiraces and was
commended for its opposition The
commission promised prosecutions
ohere the evidence disclosed there
ave been violations of law.
There was no conclusive evidence
ne commission stated. of collusion to
seprcss the prices paid to growers for
la2o leaf crop The commission added
however, that ut appears that few
srce buyers had dominant position
and each purchased only certain per
centage Of the offerings
Common buying agencies were
used" the report said, with reference
to the purchase Of tobacco, and secret
purchases were made through indie
pendent dealers, while the ultimate
purchasers held off the market. or
practically so.
Findings OF fact reported by the
commission included:
That beginning with the spring of
1921 there was a nationwide move
ment, having for its object the organi-
7ation of jobbers' association. to fix
prices BY eliminating price cutting
among jobbers. This movement was
fostered and aided principally by the
American Tobacco Company, P. Loril-
ard Company and Lggett & Myers
tobacco Company, followed by the To-
bacco Products Corporation. Bloch
Eros. Tobacco Company ard the Scott
Dillon Company.
Certain of these manufacturers. in
combination with the jobbers. refused
10 sell to those jobbers who cut below
the prices established by the iobbers'
association. This refusal grew out of
The fact that previous to the spring of
l921 competition was resulting in
material lowering of the prices which
obbers charged to retailers and. in
turn. Of the prices which retailers
charged to consumers. which appar-
emily caused the manufacturers to fear
that these price reductions would mean
that the manufacturers would be COM
PEELED ultimately to reduce their own
plices
denominations Of jobbers against
pricc-cutters were greatly encouraged
by certain circulars sent to the trade
By some manufacturer named. in which
1t xas made clear that jobbers were OK
pacted not to sell at cut prices, and
that if they did they would be cut off
from the company's list of customers
"A few cases were found where the
iIbbers went so far as to enter into
assigned agreement with each other to
MAINTAIN prices.
Letters IN the possession of the
commission show cases of jobbers be-
ing actually refused supplies by some
Of these manufacturers in order to
compel them to cease price cutting"
Secret rebates were uncovered. the
report added stating: "Tho inquiry
incidentally developed the fact that
during recent yeats one large tobacco
manufacturer, the American Tobacco
Company has given to favored jobber
customers secret bonuses or rebates,
N round amounts. ranging rom 4 few
hundred dollars to several thousands
OF dollars at time. These payments
have usually been made mi-annually.
and recipients have regarded them AS
secret and confidential"