AMERICAN TOBACCO CO, AND IMPERIAL TOBACCO CO. 13
Resolved further, That khe President of the United States be, and he is hereby,
requested to direct the Secretary of the Treasury to permit the said Federal Trade
Commission in making such investigation to have access to all official reports and
records in any or all of the bureaus of said Treasury Department. (Senate Res.
290 8Rth Cone... 2d sess.)
In presenting the above resolution Senator Ernst referred to the
prevailing belief among the tobacco cooperative associations that
the American Tobacco Eo. and the Imperial Tobacco Co. (Ltd.) have
an understanding with respect to the sale of manufactured products.
This belief appears to be based on the fact that the English concern
sells little of its output in the United States and the American con-
cern little in Great i However, the main cause of complaint
is with respect to the policy of these two companies in the purchase
of leaf tobacco, it being alleged that they Poth have practically
boycotted cooperative marketing associations composed of tobacco
growers in certain sections of the United States. In addition to
refusing to buy leaf tobacco from these various organizations, it is
alleged that these companies, by various means, have opposed and
attempted to hamper the marketing and sale of tobacco in this man-
ner. Among the means alleged to have been used are (1) the pay-
ment of abnormally high prices for nonmembers’ tobacco on the
auction floor, especially where a crop is split and the owner of one
part is a member of the association and the owner of the other part
ts a tenant who sells on the auction floor, (2) inducing members of
the association to break their contracts, and (3) by encouraging the
Erowing of tobacco in new fields when there is at present an overpro-
uction.
This antagonism, particularly on the part of the ppd Tobacco
Co., is alleged to have existed from the organization of the cooperative
associations. In fact in 1924 a committee representing the growers
associations, was sent to England for the purpose o establishing
relations, if possible, between the English company and the associa-
tions. The committee referred to was composed of representatives
from the Tobacco Growers’ Cooperative lan the Burley
Tobacco Growers’ Cooperative Association and the Dark Tobacco
Growers’ Cooperative Association. According to the report of the
committee, the question directed to the Imperial Co., was: “Will
you buy tobacco from cooperative associations, assuming that they
can satisfy your buyers as to grade, condition, and price?’ No
definite expression of opinion was apparently obtained from the
eompany.
_ The commission has also received a large number of complaints
since the investigation was begun. The majority of these have
come from individual members and the local units of the Tobacco
Growers’ Cooperative Association which is composed of growers in
Virginia, North Carolina, and South Carolina. Unfair activities
on the part of the Imperial and American Tobacco Cos., as well as
dealers and the auction warehouse interests, are alleged in many of
these statements. The alleged unfair acts are of the same general
nature as those mentioned in the statements on which the Senate
resolution was based except that they are limited to activities con-
cerning the purchase of leaf tobacco. The following statement
Seadived from the Forsyth County (N. C.) unit of the association is
ypical: