The Washington herald., 1922-01-19
PRICE CONSPIRACY
LAID AT DOORS OF
3TOBAcCo FIRMS
Federal Trade Commits.
sion Charges Plot
With Jobbers.

Three OF the principal tobacco
compantes OF the country-succes-
sors to the old tobacco trust
are engaged in conspiracies with
Jobbers to keep UP prices. the Fed
eraj Trade Commission charges.
The charges were presented TO
Congress yesterday. In report In
response to Senate resolution
adopted last August
The tobacco companies, the COM
mission asserted. are endeavorine
TO maintain jobbers' prices at wae.
time levels. and are endeavoring to
prevent n drop In manufacturers
prices. although prices paid TO
tobacco farmers have declined
sharply.
Charges Price Agreeneats,
The commission concluded that
that "since April. 1921. the Ameri-
can Tobacco Co.. p. Lorillard Co.
and to q lesser extent. LiEgett and
Meyers Tobacco Co.. three OF the
successor companies OF the old to-
bacco combination, which was dis
solved under the anti trust decree In
1911, have each been engaged In
conspirScies with numerous Sec
tional and local. jobbers associations
to keep UP the price Of tobacco
products through price agreements
and intimidations."
During the same period" the
commission reported, the relation
between supply OF leaf tobacco and
the demand for Il has resulted In
such low prices to growers that to-
bacco farmers raising the more i'm
portant types. hurley and bright
southern. have formed marketing
associations to sell their tobacco
crops comparatively"
One Firm Flights Pist.
The r. J. Reynolds Tobacco Co..
according to the commission, re
fused to lend any support to these
conspiracies and actively opposed
them"
The work OF the commission, IL
was stated. was hampered by the
fact that the p. Lorillsrd Company
and the American Tobacco Com
pany. in part. refused the commits
sion access TO their files. The New
England Tobacco conference. . job
bers' association, 10 charged with
"wilfully and designedly" destroy
ing records a few days before the
commissions representative entered
the once Of the secretary.
The commission appended letters
to its report which il was said sub
stantiated its findings.
Here. in brief. are the principal
conclusions Of the commission:
Il. That beginning with the
spring of 1921 there was q nation
movement having for its object the
organization Of jobbers' associations
TO hx prices by eliminating price
cdtting among jobbers.
Growers Forced to Act.
80. There is at present a large
supply OF leaf tobacco resulting
chiefly from a decrease in the guam
tity used for domestic products and
for export The prices paid to
growers for leaf by the companies
above referred to show large de-
cresses in 1920 as compared with
1919.
20. while no conclusive evidence
was found of collusion to depress
the prices paid to the growers for
the 1920 leaf, II appears that a few
large buyers had a dominant posi-
ton. and each purchased only q
certain percentage OF the offerings,
that common buying agencies were
used and that secret purchases were
made through independent dealers,
while the ultimate purchasers held
on the market or practically so.
=. The growers, as a result OF
the low prices of leaf tohscco nj
the 1920 crop. organized the Tri-
state Tobacco Growers Co-opera
tive Association in the bright
Southern belt, and the Burley To-
bacco Growers Cooperative Associ-
alton in the hurley belt.
Is. Meantime, the prices charged
by manufacturers for their tobacco
products have remained practically
constant at the high levels attained
in 1919"