Evening star., 1940-07-31

never submitted s
to any grand
jury, but advan- David Lawrence.
tage was taken of the alternative
method of filing an 'informa-
ton" which avoids the necessity of
going before a grand jury The
effect is the same as an indictment
and the public accusation is as far
reaching.
Second, it appears now that one
of the companies which has
reached a commanding position in
the tobacco industry as well as its
executives has been omitted from
the list prosecuted. This corpora
ton has managed in the last few
years to become one of the leaders
In the industry and has partici-
pated in the same marketing condi-
tions which are complained of
against the other companies. Why
was this company omitted from the
list?
List Omits New Dealer.
Third, although prosecution was
begun against many companies with
virtually all their officers listed as
defendants, there is one instance in
which prominent New Dealer who
Is a conspicuous officer of one of
the companies prosecuted has been
omitted from the list. Maybe it
was an oversight.
Fourth, the document filed in
court complains that the tobacco
growing farmer doesn't get enough
income out of the gross revenue
derived from tobacco products, but
nothing is said about the fact that
the Government collects five to six
times as much revenue as goes to
the farmer and far more than is
paid to the growers, the laborers.
the manufacturers, the jobbers and
the distributors combined.
If the New Deal is really interested
In raising the income of the tobacco
farmer, there is simple and quick
way to do it, and that's to make a
drastic cut in the Federal tax rates.
On every 15-cent package of ciga-
rettes the Government takes 612
cents. Likewise on every 10-cent
package the Government collects
6l2 cents. If tax rates were lowered,
the Government would collect more
total revenue because more packages
would be sold, due to lower prices.
Proposals Rejected.
For some time the makers of the
10-cent cigarettes have been trying
to persuade Congress to impose a
graduated tax based on selling price,
but the House Ways and Means
Committee has always rejected the
proposal as in the long run hazard
Gus to the income of the farmers.
Having failed to get virtual sub
sidy for the cheaper cigarette in that
direction, it would appear that these
interests have persuaded the De-
partment of Justice to become part
of the internal war in the tobacco
industry, taking sides with those
who stand to profit by breaking
down of some of the leaders in the
industry.
What seems to be particularly
objected to by the Department of
Justice is the fact that some of the
leading tobacco companies have been
successful in their legitimate sales
methods. The department says:
Said defendants have by extern
sive and continuous Nationwide ad-
vertising and by various sales pro-
motion schemes created and main
tained such public acceptance and
demand for their major brands that,
the Offering of such products for
sale being a necessary adjunct to
the conduct of numerous wholesale,
retail and service establishments,
such establishments are forced to
handle the products of defendants
and others, even on unreasonable
and arbitrary terms, and at such
prices"
Widespread Publicity Opposed.
In other words the widespread
publicity given the various brands of
cigarettes so that public demand may
be created is looked upon with dis
favor by the department. This is
not new. Last year the spokesman
for the administration who is in
charge of antitrust matters publicly
declared it mistake for large COM
panies to use their capital to secure
a dominant position by advertising
when, he said, everybody knew there
wasn't any basic difference between
brands anyway.
This direct attack on advertising
has alienated many persons from
President Roosevelt's administration
first, because it is blow aimed at
large-scale salesmanship, without
which large volume of sales coulc
not possibly have been attained and
second, because it is transparency
an artificial and inconsistent posi-.
ton.
For if anybody happens to notice
It, advertising is fine thing ane
welcomed with open arms by the
present administration when large
=. sums are collected from liquor inter.
tests and contractors and other ben.
eficiaries of the New Deal for tht
presidential campaign textbook o.