Show REPORT ON THE TOBACCO TOUCH TRUST Some Interesting Figures Given Given Given en by Commissioner of Corporations Smith I INDUSTRY UNDER CONTROL COMPETITORS SELL OR DRIVEN OUT OF BUSINESS Washington D C Feb 25 Herbert Knox Smith commissioner of at corpora corporations corporations corporations today made public subdivisions 2 and 3 i of part 1 of at his report on the tobacco industry They deal with the present organization of the tobacco combination its degree of control in that industry and the devel development development development of that control These divisions of the report result resulting resulting resultIng ing from a thorough investigation into the business operations of the tobacco combination contain an elaborate dis discussion discussion of the methods by which the tile manufacture of tobacco except cigars has come under the control of or a com corn comparatively comparatively few capitalists Commis Commissioner Commissioner Commissioner Smith says In the tobacco combination are arc the American Tobacco company and its three great subsidiary combinations the American Snuff company the American Cigar company and the Brit company besides eight two other subsidiary concerns doing business in the United States Porto PortoRico PortoRico PortoRico Rico and Cuba The combination rep represents represents represents resents a total net capitalization of over A very small group of ten stockholders controls 60 per cent of the outstanding voting yoUng stock of the American Tobacco company through which company the entire combination Is controlled Some Bogus Independents A list of the subsidiary companies controlled Including over twenty hitherto secretly controlled bogus independent concerns is given ghen In the report It Is shown also that the combination Is practically the only im important important important exporter of tobacco manufactures manufacture manufacture ture tures from this country count Astonishing figures are given in respect to the de development development development of the combination In 1891 it controlled 89 per cent t of f the business of cigarette manufacture and this pro proportion proportion proportion portion practically is maintained to today toda today day da In cigars its output Increased from 4 per cent of ot the business in 1897 to 14 per cent In 1906 while In manufactured tobacco chewing ng fine cut and snuff the combinations combinations combinations output Increased from 7 per cent of the total in 1891 to 77 per cent In 1906 Finally in 1906 the combination com controlled of these separate products respectively plug pluS 82 per cent smoking 71 per par cent fine cut 81 per cent and snuff 9 IS per cent In ln the year 1906 the combination used in the manufacture manufacture ture of its various products nearly pounds of leaf leat tobacco Competitors Absorbed An idea of the absorption of CON com competing plants says Commissioner Smith and Of the changes through combination within the last decade may be had from the fact that in 1897 the combination had ten plants each pro producing producing over pounds of ot manufactured manufactured manufactured tobacco or snuff per year while there were independent plants pants of the same class In 1906 on the other hand the combination had plants of this class and independent manufacturers Especially con conspicuous conspicuous conspicuous has been the absorption of the large plants In 1 7 the combination had eight plants each producing 1000 pounds of or these products per year while its competitors had plants In 1906 the combination had thirtyfour plants of this size and In Independent Independent independent dependent concerns only seventeen Driven Out of Business Despite the combinations enormous expenditures for advertising and in schemes and despite frequent price cutting by b means of Its fight fightIng Ing ng brands there has been in several branches of the industry a constant tendency for competitors to gain busi bust business business bustness ness more rapidly than the combination and thus to reduce its proportion of the output This tendency has ha been over overcome overcome overcome come only by continued buying up of competitive concerns Many weaker concerns have been virtually driven out of business or forced to sell out to the combination either by reason of the direct competition of the latter or as an indirect result results of the he vigorous compe competition competition titian between the Hie combination and larger independent concerns In the case of ot the larger and more powerful concerns which it acquired however the combination has usually secured control only by paying a high price The immense profits of at the combination i have enabled It to keep up this policy |