Business: IOC V. I5C

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IOC V. 15C

On the New York Stock Exchange last week tobacco stocks took a deep dive. At the end of the week Liggett & Myers Tobacco Co. was 53, ten points below its Monday high. American Tobacco Co. was down eight points to 61. R. J. Reynolds Tobacco Co. dropped from 31 to 28⅞. P. Lorillard Co., low already, held fairly steady, closing five-eighths of a point off at 13. Wall Street buzzed with rumors of impending price cuts on the four leading U. S. cigaret brands&—American's Lucky Strike, Reynolds' Camel, Liggett & Myers' Chesterfield, Lorillard's Old Gold—whose price is, and has been for years, 15¢ for a package of 20.

Reason for these rumors and the attendant stock decline was not widely known outside Wall Street. September cigaret consumption was 3.9% below that of September 1931, but fewer cigarets have been smoked this year than every month last year except August, and September's showing was better than the nine-month average, which was 10.12% below 1931's. Careful readers of financial pages could find an occasional paragraph tucked away in a corner reporting the price rumors and citing the popularity of cigarets as the cause, but newspapers were not inclined to go deeply into the subject—not so much through fear of hurting important advertisers' feelings as because of a traditional journalistic policy that those who do not advertise, and have no intention of advertising, are no fit subjects for publicity. There was nevertheless, a story in10¢ cigarets—a year ago practically unheard of, today burning up at the rate of about 60 million a day. One out of every five cigarets smoked in the U. S. now is a 20-for-10¢ brand.

Rise. Fourteen months ago 90% of the cigarets sold in the U. S. retailed for 15¢ a package. Tobacco was cheap, cigaret smoking was at its peak. The future looked fine and smoky to Tycoons George Washington (Lucky Strike) Hill, Samuel Clay (Camel) Williams, Clinton W. (Chesterfield) Toms and Benjamin L. (Old Gold) Belt. Acting in concert (though legally disassociated since American Tobacco Co.'s trust was dissolved) they had just upped the wholesale price of their cigarets from $6.40 to $6.85 per thousand (presumably on the strength of the new Cellophane wrapping). Then, all unknown to Messrs. Hill, Williams, Toms & Belt, an old tobacco man named William T. Reed had an idea.

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