Cigarets, Cigars

Last week P. (for Pierre) Lorillard Co. moved into a class by itself as the only major industrial concern in the U.S. to resume dividends in 1931. Lorillard shares had not paid since 1926. From 1925 through 1929 when most companies increased earnings, Lorillard showed a steady decline to a low of 29-c- per share, but last year they jumped to $1.48. The dividend resumption was partly made possible by the calling, last fortnight, of $13,758,000 Lorillard 5 1/2% bonds (TIME, Dec. 7).

Nobody was more pleased than Benjamin Lloyd Belt, oldtime, Virginia-born tobaccoman. In the business 40-odd years, he has been with Lorillard since it became independent in 1911, a result of American Tobacco Co.'s dissolution as a trust. In 1925 Lorillard got a thorough shaking up and Belt for president. When he took hold he found the company had everything except a popular cheap cigaret. Beech-Nut, Lorillard's first venture into the blended field, had failed. American Tobacco Co. had its Lucky Strike, Liggett & Myers its Chesterfield, R. J. Reynolds its Camel. Fat and quick-tempered, Ben Belt is still an excellent horseman, a better salesman. He decided Lorillard should have its Old Gold, in fact must have it if it would stay in the race. The name Old Gold then belonged to a Lorillard brand of smoking tobacco whose sales were almost nil. The name appealed to Belt and the cigaret became his chief care and enthusiasm, still is except for his horses. But cigarets are not made popular in a day. Lorillard earnings shrank almost to nothing during the promotion years. It took many months and millions of dollars to make Old Golds successful enough to pay dividends on the common stock.

Two other bits of tobacco news last week threw sidelights on the industry.

Auction Riot Lexington, Ky. is the scene each year of the biggest tobacco auctions in the U. S. But last week tobacco-men watched the smaller towns of Owensboro and Henderson instead. At Owensboro some 3,000 farmers collected around the main warehouse or ''floor'' for the year's first auction. A big, one-story frame building, covered with sheet metal, the "floor"' is a store room where buyers can see the actual lots of tobacco they buy, while each seller plainly hears what his neighbor gets for his crop. Most tobacco growers are tenant farmers. Their whole living for the next year is the cash they get at the auctions. Quiet and softspoken, the farmers at Owensboro listened to the auctioneer's jargon as last week's sale began.* The farmers understood this queer, rapid language perfectly; the quiet was short-lived. Tobacco began to sell at an average of $4.61 a hundred pounds against last year's $8.47.

Discontented murmurs rose to muttered threats, curses. Prominent beside the auctioneers stood W. G. Crabtree, 50, vice president and general manager of Owensboro Loose Leaf Tobacco Co., operator of six of the seven '"floors" in the town. Farmers rejected bids right & left, began to mill about excitedly shouting. "You can't take our tobacco that way!" In the confusion someone began throwing apples at six-foot Mr. Crabtree, who dodged handily, but the auction, now a riot, was called off. Only 78,000 lb. of dark leaf tobacco, mostly for export to Europe for making cheap cigars, have been sold.

Afterward the farmers held a mass meeting in Owensboro's public square, passed some resolutions. Most important were: 1) no crop to be planted next year; 2) a committee to go to Washington to confer with the Federal Farm Board on a tobacco pool. The farmers expected aid from the Board since its stated purpose has always been "to further co-operative marketing." Besides this, the Board's much-criticized chairman, James Clifton Stone, once organized southern tobacco growers into the Burley Tobacco Growers' Co-operative Assn., saw it become inactive, would know from experience what the Kentuckians were up against. After the demonstration in Owensboro, auctions were broken up in Henderson. Russellville, Franklin. Other imminent auctions were postponed.

Red Readers. The late great Samuel Gompers started life as a cigarmaker's "reader." Cigarmakers long ago found they could work better if their minds were occupied by having one of their number read aloud to them, the workers making up by pro rata contributions the cigars the reader would have made. Sam Gompers used to read from Dickens, Thackeray, John Stuart Mill, and for a time from Karl Marx, though he got over that after he founded the A. F. of L.

Last week 8,000 cigarmakers struck in Tampa, Fla. Their "readers" had been dismissed. Plant managers had caught them slipping bits of Communistic literature into their offerings. The workers struck in protest, claimed that only they could dismiss the readers since they paid them. The strike got serious when the workers went back, found the factories locked as the operators had warned they would be. Now deadlocked, the cigar industry is Tampa's biggest. Normal daily output is more than 1,000,000 cigars, the monthly payroll above $1,000,000.

* Very rapidly: "Thirty-two dollars bid; 32 dollars bid: 32, doo, doo, doo, diddy, doo dollars bid. . . . Thirty-eight dollars bid; thirty-eight dollars bid; 38, nate, nate, nate dollars bid. . . . All done--sole to. . . ."

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