Troubled Smoke (Cont'd)

Early this month President George Washington Hill of American Tobacco Co. (Lucky Strike) swore a mighty oath that he would run 10-c- cigarets out of business if he had to make them himself. Last week patrons of Great Atlantic & Pacific Tea Co. stores throughout the U. S. could read a big sign behind the cash register: LUCKY STRIKE--CHESTERFIELD-CAMEL--OLD GOLD--10-c-.

Elsewhere, even in chain stores, smokers of the "Big Four" brands had to pay from 11-c- to 15-c- a package. Mr. Hill had not quite kept his promise--yet. He had cut the wholesale price of his Luckies from $6 per 1,000 (to which they were reduced from $6.85 last month) to $5.50 per 1,000. Liggett & Myers Tobacco Co. (Chesterfield), R. J. Reynolds Tobacco Co. (Camel) and P. Lorillard Co. (Old Gold), who always act with Mr. Hill in price questions, followed suit. Dealers get a trade discount of 65-c- per 1,000. A price of 11-c- a package would give the dealers 1.3/10-c- profit. A. & P. was making only 3/10-c- a pack.

At its present production rate American Tobacco on Luckies alone will make $46,000,000 less than last year, may earn no more than $3 a share toward its $5 worth of 1933 dividends. Last month American Tobacco gave up its usual $1 extra dividend and last week Mr. Hill, worried by stockholders' suits, renounced for the future the $380,000 he might have had as a management bonus. But what most worried Mr. Hill was 10-c- cigaret sales. Present estimated annual rate of production gives to two of the ten centers alone 20% of the total, makes the "Big Four" a "Big Six." Figures:

Lucky Strike 34,000,000,000

Camel 22,000,000,000

Chesterfield 20,000,000,000

Wings 14,000.000,000

Twenty Grand 8,000,000,000

Old Gold 5,000,000,000

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