''United States v. American Tobacco Company'', , was a decision by the

United States Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point o ...

, which held that the combination in this case is one in restraint of trade and an attempt to monopolize the business of

tobacco Tobacco is the common name of several plants in the genus '' Nicotiana'' of the family Solanaceae, and the general term for any product prepared from the cured leaves of these plants. More than 70 species of tobacco are known, but the ...

in interstate commerce within the prohibitions of the

Sherman Antitrust Act The Sherman Antitrust Act of 1890 (, ) is a United States antitrust law which prescribes the rule of free competition among those engaged in commerce. It was passed by Congress and is named for Senator John Sherman, its principal author. Th ...

of 1890. As a result, the

American Tobacco Company The American Tobacco Company was a tobacco company founded in 1890 by J. B. Duke through a merger between a number of U.S. tobacco manufacturers including Allen and Ginter and Goodwin & Company. The company was one of the original 12 members of ...

was split into four competitors.

Facts

Judgment

The

was created in 1890, and in 1907 the

was indicted in violation of it.Brandt, Alan M.: ''The Cigarette Century: The Rise, Fall, and Deadly Persistence of the Product that Defined America'', p. 39. Basic Books, 2007 In 1908 when the

Department of Justice A justice ministry, ministry of justice, or department of justice is a ministry or other government agency in charge of the administration of justice. The ministry or department is often headed by a minister of justice (minister for justice in a v ...

filed suit against the company, sixty-five companies and twenty-nine individuals were named in the suit. The Supreme Court ordered the company to dissolve in 1911 on the same day that it ordered the

Standard Oil Trust Standard Oil Company, Inc., was an American oil production, transportation, refining, and marketing company that operated from 1870 to 1911. At its height, Standard Oil was the largest petroleum company in the world, and its success made its co-f ...

to dissolve. The ruling in ''United States v. American Tobacco Co.'' stated that the combination of the tobacco companies "in and of itself, as well as each and all of the elements composing it whether corporate or individual, whether considered collectively or separately asin restraint of trade and an attempt to monopolize, and a monopolization within the first and second sections of the Anti-Trust Act."

Significance

In order to promote market competition, four firms were created from the American Tobacco Company's assets:

R. J. Reynolds Richard Joshua Reynolds (July 20, 1850 – July 29, 1918) was an American businessman and founder of the R. J. Reynolds Tobacco Company. The son of a tobacco farmer, he worked for his father and attended Emory & Henry College from 1868 to 1870 ...

Liggett & Myers Liggett Group ( ), formerly known as Liggett & Myers Tobacco Company, is the fourth largest tobacco company in the United States. Its headquarters are located in Durham, North Carolina, though its manufacturing facility is 30 miles to the west i ...

, and

Lorillard Lorillard Tobacco Company was an American tobacco company that marketed cigarettes under the brand names Newport (cigarette), Newport, Maverick (cigarette), Maverick, Old Gold (cigarette), Old Gold, Kent (cigarette), Kent, True (cigarette), True, ...

. The monopoly became an oligopoly. In 1938

Thurman Arnold Thurman Wesley Arnold (June 2, 1891 – November 7, 1969) was an American lawyer best known for his trust-busting campaign as Assistant Attorney General in charge of the Antitrust Division in President Franklin D. Roosevelt's Department of Justice ...

in the

United States Department of Justice Antitrust Division The United States Department of Justice Antitrust Division is a division of the U.S. Department of Justice that enforces U.S. antitrust law. It has exclusive jurisdiction over U.S. federal criminal antitrust prosecutions. It also has jurisdi ...

began hosting hearings in the

Temporary National Economic Committee The Temporary National Economic Committee (TNEC) was established by a joint resolution of the United States Congress on June 16, 1938 and operated until its defunding on April 3, 1941. The TNEC's function was to study the concentration of economic p ...

to determine whether the four companies were further engaged together in monopolistic practices. , citing * * That committee found that 3 of the 4 companies were guilty of the charges presented to the court.

References

External links

* United States Supreme Court cases United States Supreme Court cases of the White Court United States antitrust case law 1911 in United States case law United States tobacco case law {{SCOTUS-case-stub

Facts

Judgment

Significance

See also

References

Further reading

External links