The times-news. [volume] (Hendersonville, N.C.) 1927-current, 1934-03-27
CICARET TAX
CUT PROPOSAL.
HITS CAROLINA
Fear Reduction Plan to
Cheaper Best Tobaccos
Grown in State
BY J. c. BASKERVILLE
The Timcs-N'w Bureau
Sir Walter Hotel

MOGSSULHdu " ASN'NN
manufacturers of 10 cent cIga-
rettes 80 cents per thOuSaH" q
COMPARED with the present tax on
all makers of cigarettes, Is OF u
mendous Importance 10 the To-
bacco growers in North Caro4Lh'
more than any other stare az
cording to opinion here. expert
enced tobacco growers and ware
bousemen fear that if this pro,
posal should 90 through II Woul"
tend TO lower the price OF the
high grade cigarette TOBACCO
most of which is grown IN North
Carolina but bring increased
prices to growers of hurley to-
bacco most of which is grown IN
other states especially Tennessee
and Kentucky. They also doubt II
the prices of the proper grades
would increase much. since the
makers of the 10 cent cigarette
brands cannot afford to pay out
so much for their tobacco any
way. they point out. -
and 20 cent brands of cigarettes
according to dispatches trom
Washington, maintain that II the
government grants 30 cents dlf-
ferential in the cigarette tax 10
tho manufacturers of the 10 cent
brands by reducing the federal
tax from SO to 1910 per thou
sand. have already announced
that they will then be forced into
the 10 cent field.
"If the government is going to
GRANT a subsidy to the makers OF
10 cent cigarettes. oil the large
manufacturers will be forced to
enter the 10 cent field" S. Clay
Williams. president of the R. j.
REYNOLDS Tobacco company, Is
quoted as saying in Washington
Yesterday. What Williams and all
the large tobacco manufacturers
want with the exception of the
makers of the 10 cent brands OF
cigarettes. is a flat reduction Of
AT least 80 cents in the govern
ment tax on all brands of clga- '
rettes. This, they claim, would I
help the makers of the more eX,
pensive brands. since they could
then reduce their prices below the
Is cents level and at the same I
time the makers of the 10 T
cent brands would be helped. In
this manner the makers of the
higher priced cigarettes could t
continue to pay the higher prices r
they have been paying for the t
better grades of tobacco used In +
their cigarettes. while the makers |
of the 10 cent brands could also
pay better prices for the lower 7
grades of tobacco which they use, !
it is pointed out, so that the to;
bacco farmers would beneht all t
the way through.
The manufacturers OF the hlgn- {
err priced cigarettes maintain that
they have purposely refralned
from entering the 10 cent held
for two reasons, as follows:
/. That they have built up
their business and reputation oy
using a superior quality OF to-
bacco;
2 That they have encouraged :
the tobacco farmers to raise
superior type of tobacco to meet
their needs and that if they went
into the lower priced fields they
would have to go back to the
lower grades. and thus leave the
producers of the better grades
without a market.
That the better grades of to-
bacco have brought consistently
good prices, even when the prices
for poor grades were low, is borne
out by the records of the govern
ment, according to E. H. Floyd,
tobacco specialist in agricultural
extension division of State Col !.
lege here, who pointed out that f.
the better grades brought just as
much in 1892 as in 1888 on those
markets which had government
grading. He declined to COM
ment, however. en- what would be
the result if the large users of
these better grades of tobacco
should go into the 10 cent ciga-
rette field, saying that he did not
have any data showing the type
of tobaccos purchased by the
manufacturers of the 10 cent
cigarettes.
1t is generally agreed that if
the government should decide to
reduce the tax on 10 cent ciga- I
rettes 80 cents per thousand. as .
is proposed. that the growers of .
poorer grades of tobacco and of .
hurley would undoubtedly get !
slightly better prices, since it |.
would bring the larger tobacco |,
companies into the markets for
these cheaper grades. But 1t |
would have tendency also, it is
pointed out, to force the price !
for the better grades down to the
level paid for the poorer grades,
so that the makers Of the 10 cent
cigarettes would be able to buy
the best tobaccos at lower prices.
1t would also mske it possible,
some tobacco men maintain, for
the large tobacco companies to
buy this high grade tobacco they
need for their more expensive
cigarettes at low prices, because
of the reduced competition for
these grades-which would also
mean larger profits on the higher
grades.
Pressure is being brought in
Washington from hurley produc-
ing states in favor of the 80 cent
reduction in the tax on 10 cent
cioarettes since thew feel II would