Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-03-30
BY KENNETH S. VAN sTRUM.

by KENNETH S. VAN STRUM.
NEW YORK, March 3o.--Probably no
ether industrial group has been more IN
the public eye during the past year
| than the four largest manufacturers OF
popular priced cigarettes. For several
wears they have waged a relentless adj
vertising war for business, and while
several times they have made gestures
toward stopping the seemingly endless
struggle, the industry expects that even
larger advertising expenditures Will be
! made throughout 1929. a@f'
r. J. Reynolds.
The r. j. Reynolds Tobacco Co.
showed the largest earnings of any COM
pany In the American tobacco industry
in 1928. Reynolds main trade marks
are Prince Albert" and Camel" but
manufactures plug and twist besides
smoking tobaccos. In spite of the severe
competition In this field, which has,
among other things, reduced the whole
sale price of cigarettes greatly. the COM
panys earnings have been increasing
steadily year by year.
The companys principal products
have been very popular for number of
years, and, although its advertising
campaigns are less spectacular than
those of other manufacturers, 1t has
managed to more than hold its own in
the industry.
The company's latest balance sheet
indicates a tremendously strong f1nan-
cial condition with $126, 100000 of work.
ing capital, while properties and in
tangible items are written down to very
low figures. This financial security al
lows the company to pay dividend of
$40 share on the new common stock,
while the average earnings over the
past six years were only $2.95. At cur
rent prices the yield is as per cent,
which seems low in view of the small
margin by which the dividend is earned.
Perhaps the low yield may be due to
the conservative financial policies Of
the company.
American Tobacco.
The American Tobacco Co. until 1911
was the dominating force in the tobacco
business of the world During that
year. however. the company was disin-
tegrated under the Sherman antitrust
act, and stockholders were given shares
in the new companies formed. Iron
ically enough, American, when forced
at that time to relinquish control or
sell part of its properties. was helping
to establish the three companies which
are today its bittereSt competitors: r. j.
Reynolds. Liggett & Myers and P. Loril-
lard. After its disintegration American
acquired control of substantial inter-
est in American Cigar, Tobacco Prod
ucts, Cuban Tobacco, Mengel, Schultz
and United Cigar Stores.
Today American Tobacco makes about
one-third of the cigarettes and smoking
tobacco and one-fourth of the plug to-
bacco produced in the country its
principal product is the Lucky Strike
cigarette. BY an intensive advertising
campaign. the expense for which has
been charged off against current earn
ings, it has more than maintained its
competitive position In the industry.
In fact, in spite of lower wholesale
cigarette prices, the company in 1928
showed the largest gain in earnings of
any tobacco company, totaling Sl119 a
share on combined common and Glass
B. which share equally in dividends
after the preferred. Earnings have in
creased steadily for the past six years,
averaging 1851 a share for the period
American Tobacco continues a very
aggressive advertising campaign for its
products. The slogan, Reach for a
Lucky instead of sweet" Is typical Of
the present campaign intended to ap-
peal to women. Incidentally, this CAM
paign has evoked the condemnation Of
many manufacturers Of sweets, and al
though it played large part in in
creasing Americans earnings last year,
its ultimate success cannot yet be pre-
dicted. With $101 900, 900 of work.
ing capital, however, the company Is