Last week Anno Domini 1929 turned in its well-interred grave. The anti-trust laws in decades past have dispersed great corporations: Standard Oil, the tobacco trust, the sugar trust. But the anti-trust laws never stopped men from taking the advice given by every U. S. dollar: e pluribus enum. The mergers of 1929 carried that advice to extremes if not to absurdity. The ghost of 1929 had last week the grim task of watching 1933 prepare to do what the anti-trust laws had never done, and saw one of the gigantic corporations which 1929 had created out of big and little ones, voluntarily and deliberately decide to disband—saw, grimmest of all, the financial community giving tacit approval to the act. A. H. Diebold, president of Drug Inc.. last week sent a letter to his 30,000 stock-holders inviting them to vote Aug. 7 on splitting up Drug Inc. into five companies. What is more he told his stockholders that Drug Inc.'s directors had come to the unanimous conclusion that the company would be better off as five independent units than as one. A business world that in 1929 would have been aghast at such a statement showed its feelings by bidding up Drug Inc. stock from 53 to 60 in the course of a few days.
In the beginning (1928) Drug Inc. was a simple two-way union between a curiously assorted couple that had one thing in common: each earned about $6,000,000 a year. The groom was Louis Kroh Liggett's United Drug Co. The business of United Drug was and is to manufacture drugs and other drug store items for sale exclusively by its own retailers, in chief 10,000-odd Rexall Drug Stores. While United Drug's original business was manufacturing not retailing, some of its Rexall dealers had from time to time decided to retire from business and Mr. Liggett's company had bought them out. Hence sprang United Drug's subsidiary. Louis K. Liggett Co., which in 1928 operated a chain of 500 drug stores in the U. S. In addition United Drug owned 75% of the stock (recently sold) of Boots, a similar drug chain in England.
The bride in this marriage was A. H. Diebold's Sterling Products, which came from a different sort of family. Sterling did no retailing hut manufactured a large assortment of patent medicines which it had bought up in the course of years. It made Cascarets, Danderine, Phillips' Milk of Magnesia, Fletcher's Castoria, Bayer's Aspirin (bought from the Alien Property Custodian in 1919), Mum, California Syrup of Figs, etc. It was evident in the beginning that the marriage between these two parties could never be complete. For Sterling would have lost much of its market if its nationally famed products had been sold only in Rexall and Liggett stores, and conversely United Drug's manufactures could not be distributed by Sterling—they were for sale exclusively by Rexall stores. Therefore the two spouses could beget no common offspring. Yet they at once proceeded to adopt children. The adoptions were made in the joint name of Drug Inc.. but were really of two kinds: 1) The groom's adoptions consisting of several drug store chains: B. & R. Drug Stores (1928), May Drug Stores (1929), Wolff Wilson Drug Co. (1929), Owl Drug Co. (1930).