solute separation of types and classes of brands for the different companies. The method of distribution by plant which has been followed has resulted in the grouping of similar classes of brands, so that the high-grade cigarette, ordinary domestic cigarette, granulated tobaccos, long-cut and plug-cut tobacco, fine cut, plug and twist brands assigned to each company will not be exactly evenly divided. The predominance of one company over another, however, is not such as to entirely exclude one company from encroaching on the territory of another. To some extent the predominance of one company over another, in a particular line of product, is necessary on account of the very large output of such individual brands. The company, for instance, to which Bull Durham tobacco is assigned on account of the very large preponderance of this brand in its class will obtain a preponderant position in the higher-priced granulated business. The advantages are, however, offset by new brands distributed to each of the other concerns, such as 'Velvet,' 'Prince Albert,' and 'Our Advertiser.' Each of these newer brands has in it the elements of strong competition, and each seems fair to develop strength enough in its own particular line to make a formidable competitor. In the low-grade granulated tobaccos the Liggett & Myers concern have a predominating position on account of the great importance of the Duke's Mixture brand, which makes up nearly 80 per cent of the low-grade granulated tobaccos produced by the combination. Such a distribution, therefore, which should give each of the companies approximately the same proportion of a particular class of goods, is practically impossible as long as particular brands make up a large proportion of a single line of product. "In plug-cut tobaccos, principally distributed by P. Lorillard and the American Tobacco Company, the latter will hold a predominating position, but not to the extent that I had supposed. A number of the plug-cut brands of the Lorillard Company are directly competitive with those of the American Tobacco Company, which, as well as those of the former concern, have a large sale in New England, Pennsylvania, and the Central States.

"Long-cut brands have been assigned to all three concerns. It can not be said that any one company has local control over this class of product. Although the Liggett & Myers output concerns itself principally with Chicago and its immediate environment, it has brands which are strong competitors of the American, and which will compete in almost all the States directly with the American and Lorillard Companies for this class of product."

I will not go through that, but he has reviewed the great distribution of brands and finds that in each instance, while there is predominance given to one company which has a particularly profitable brand of very large sale, there is in every instance a certain competitive interest assigned to one of the other companies, preventing what is called a monopoly in one field being given to any one of these companies, even the one which secures the very large selling brand.

Take the purchasers of leaf tobacco. He has prepared a table which is annexed to this report-that is, the companies have prepared it under his direction-showing the full distribution after disintegration.

"It is apparent from this tabulation that no one of the companies will have an exclusive or monopolistic field in the purchases of any one type or any one grade of a type of leaf. In fact, the American Tobacco Company, the Liggett & Myers concern, the Lorillard Company, and the R. J. Reynolds' Tobacco Company will each of them be large and important purchasers of Burley tobacco. A consideration of the amount of purchases of different grades of Burley tobacco showed, moreover, that these companies would each purchase a very considerable amount of the different grades, so that no one company can be said to have the field in the purchase of any leaf grade exclusively to itself. There will be not only an increase in the number of leaf buyers in the Burley market, but also active competition for the same, or similar grades. The Southern Leaf situation is very much the same as the Burley situation. The American Tobacco Company, the Liggett & Myers concern, and the British-American Tobacco Company will be each large and important purchasers of Southern Leaf of practically the same types and grades, and no one company will purchase a preponderating proportion of any particular group of grades of this type.

"The same type and grade of Southern Leaf may be used in the manufacture of such types of cigarettes, in the manufacture of granulated smoking, and in the manufacture of plug tobaccos. It is a fact, therefore, that though some of the concerns may not purchase leaf for the same products in supplying their needs for the entire field of their operations, they must come into active competition against each other.

"The American Tobacco Company will purchase by far the larger proportion of the dark western tobaccos. Neither the

Liggett & Myers nor the Lorillard Company, or the R. J. Reynolds Company will purchase an appreciable amount of this type of leaf. The total purchases of the American Tobacco Company in this field will amount to about 19,000,000 pounds, while that of the other companies will be only a few million pounds annually. The combination, however, is only a small factor in the western dark leaf market. By far the greater proportion of this class of product is purchased for foreign governments. The fact that the American Tobacco Company will have no material competition in this field from Liggett & Myers or P. Lorillard, therefore, does not deprive the market of a fair amount of competition.

"While the American Tobacco Company is the only concern in the above group that will purchase dark western types, it should be borne in mind that there will be competition to a certain extent with the American Snuff Company and Bruton & Wayman Company and George W. Helme Company, which require this same type of leaf for their products."

1

I lay great stress on that report because it is the report of an expert who is unusually familiar with the subject, and who possesses great knowledge on the subject, and it comes as the result of an investigation undertaken for the purpose of determining and advising me of the attitude which I should take with respect to the practical commercial features of this plan; and I know of no better way of securing within a short time for the consideration of the Court the commercial and economic facts by which you must be guided.

Now, there is one feature of this combination which, in my personal experience, has been the subject of more complaints than all of the rest put together. That is the United Cigar Stores Company. The connection of that organization with this combination had given the combination the greatest opportunity to-I do not know that I can say to injure, but certainly to harass, the domestic trade and to incense a larger number of people than anything else they have done, because they have gone in and reached the poor corner dealer, bought the house over his head, and when his lease came to an end, instead of his being able to renew it as formerly, he finds that he can not get a renewal of the lease, that it has been taken by the United Cigar Stores Company. It was the 1 Thus in original. Should be Weyman-Bruton.-Ed.

hand of the big trust; it reached out and touched the little man who has nobody to protect him. I have on my files in Washington letters-my files are full of letters and complaints running down to within the last few days, and I do think if that concern can be cut loose, if as a condition of this plan your honors require them to get rid, require these defendants to get rid of their stock in that concern, it would do more to make the rest of the plan acceptable to the people of this country than anything else that could be done. Of course Mr. Stroock naturally, speaking for the United Cigar Stores Company, objects to that, because it cuts him away from that convenient, intimate, and friendly relationship with the sources of supply which in the past has been the means of enabling the company to so prosper. But they have gone along; they are a great big organization to-day. They have something like a thousand stores, or seven hundred or eight hundred, at least, scattered throughout the country, and they have ample capital, and, with the impetus that they have got, they are the most potent competitor of the small dealer in the United States. I know they have not been adjudged to be, in specific language, an illegal combination, but each and every part of this combination has been adjudged by this decree to be illegal. The decree is comprehensive enough to include them, if your honors shall be so advised-comprehensive enough to empower your honors to include them, just as much as any one of the corporations or combinations before you. Therefore, I say, it is entirely within your honors' power, whether you choose to exercise it or not, to say, as a condition of this plan: You have got to get rid of them and turn them loose so that that concern will no more have any connection with the American Tobacco Company or with any of the distributive companies or with any of these individuals who have built up this combination through so many years.

EXHIBIT 6

OBJECTIONS OF NATIONAL CIGAR LEAF TOBACCO ASSOCIATION, THE CIGAR MANUFACTURERS' ASSOCIATION, AND THE INDEPENDENT TOBACCO SALEMEN'S ASSOCIATION TO THE PLAN OF DISINTEGRATION, FILED BY THE AMERICAN TOBACCO CO. AND OTHERS OCTOBER 16, 1911'

Louis D. Brandeis, Felix H. Levy, counsel for remonstrants. United States of America against American Tobacco Co. and others. To the honorable circuit judges sitting in the southern district of New York:

The above-named associations, in pursuance of leave granted October 18, 1911, respectfully submit herewith certain objections to said plan.

We submit that the plan is not in accordance with the opinion of the Supreme Court of the United States in this cause. The plan if approved, would result in legalizing monopoly instead of restoring competition. Its effect upon the tobacco planters, independent tobacco manufacturers, the jobbers, the retailers, and upon labor engaged in the manufacture of tobacco products would be more injurious than the continuance of the present illegal monopoly.

I.

FUNDAMENTAL DEFECTS.

There are five fundamental defects in the plan, each so serious that it forms alone a sufficient ground for the rejection of the plan.

COMMON OWNERSHIP.

First. The plan proposes to divide the main properties of the trust among several corporations legally distinct, but to distribute the stock in these several corporations pro rata among commonstock holders of the American Tobacco Co. No plan can be effective to restore competition which does not include as an essential condition a provision that the separate corporations or segments which are to carry forward the business of the trust shall at the outset and for a

1 Hearings before the Committee on Interstate Commerce on the Control of Corporations, Persons, and Firms engaged in Interstate Commerce. United States Senate, 62nd Cong., 2nd Sess. 1911-1912, pp. 315-322.