CHAPTER XV EFFICACY OF DISSOLUTION NOTE THE pronounced opposition that developed upon the part of the independents to the method of dissolution proposed by the American Tobacco Company led to an interesting controversy as to the efficacy of the method employed. Effort has been made to set forth both sides of the controversy and also to have the exhibits show how the independents would have worked out the dissolution process. At the moment this book goes to the publishers, a controversy has developed over the efficacy of the dissolution of the Standard Oil Company. As the last exhibit in the chapter shows, it is alleged that this dissolution has been merely a farce.-Ed. EXHIBIT I RESULTS OF THE TOBACCO DISSOLUTION PLAN AS CLAIMED BY THE PETITIONERS 1 Your Petitioners show unto the Court that upon the adoption and execution of this plan the combination heretofore adjudged to exist will have been effectually dissolved, and out of the elements heretofore composing the same, a new condition which will be honestly in harmony with and not repugnant to the law, will have been brought about as follows: The tin foil business now done and controlled by The Conley Foil Company will be divided into two companies having no interest whatsoever the one in the other, and neither in a dominant position with respect to the tin foil business. The licorice business now done and controlled by MacAndrews & Forbes Company will be divided into two companies with no interest in nor connection with each other, and neither in a dominant position in the licorice business. 1 United States of America v. The American Tobacco Company and others. Petition of the American Tobacco Co., In the Circuit Court of the United States for the Southern District of New York, pp. 29–31. American Stogie Company will be dissolved, and its business disintegrated. The business of American Cigar Company will be disintegrated and it will have no dominant position in any branch of the cigar business. The snuff business now done and controlled by American Snuff Company will be divided into three companies, American Snuff Company itself and two other companies to be organized, and none of the three will have any interest in nor connection with either of the others. The American Tobacco Company, through distribution out of its surplus, will have denuded itself of any interest in, or control over, the tin foil business, the licorice business and the snuff business. It will have stripped itself of any interest in or control over R. J. Reynolds Tobacco Company, a company manufacturing and selling tobacco in the Southern States. It will have completely severed all relations with the Porto Rican-American Tobacco Company, manufacturing and selling cigarettes and cigars in Porto Rico, and selling in the United States cigars manufactured in Porto Rico. It will have divested itself of all interest in or association with British-American Tobacco Company, Limited, The Imperial Tobacco Company (of Great Britain and Ireland), Limited. It will have parted with all its interest in United Cigar Stores Company, a company engaged in the retail distribution of cigars and tobacco. The American Tobacco Company itself, as an operating company, will be broken into three companies, each completely equipped for the conduct of a large tobacco business, neither of which will own any interest in any other, and neither of which will be dominant in the tobacco trade, whether reference be had to proportion of sales in any branch of the business, or regard be had to dominating ownership of popular and valuable brands, or regard be had to purchase of any type of leaf tobacco, or regard be had to any other measure of importance in the tobacco trade. All covenants that prevent The American Tobacco Company from extending its business abroad, or British-American Tobacco Company, Limited, or The Imperial Tobacco Company (of Great Britain and Ireland), Limited, from extending their business in the United States, will be terminated, and each will be free to engage in business throughout the world. All covenants not to engage in the tobacco business made by vendors or others will be terminated, leaving all free to engage in any branch of the tobacco business. Thus the business in tobacco and related products heretofore controlled by The Amercian Tobacco Company, or by companies in which it owns a controlling or large interest, will not only be completely divorced from such control, but will be distributed among fourteen separate and independent companies, none of which will have any control over or interest in any other, and none of which will have any preponderating influence in any branch of the business, either as a manufacturing company, a selling company, or as a purchaser of any type of leaf tobacco. Finally, no small group of men, nor even the twenty-nine individual defendants in the aggregate, will own the control of any of the principal, accessory or subsidiary companies defendant, and the control of The American Tobacco Company itself and of the new companies to be formed will be vested in a body of more than six thousand stockholders. EXHIBIT 2 CLAIM OF THE AMERICAN TOBACCO COMPANY WITH RESPECT TO THE 1 Op. Cit. Petition of the American Tobacco Company. Exhibit "B", pp. 38-39. |