ANALYSIS OF TOBACCO GROWERS' ASSOCIATION 77 



The Eclmondson Tobacco Co. had redried 22.8 per cent of all tobac- 

 co redried by the association during its first three years of operation. 

 Of the tobacco redried in plants in which association officials were 

 financially interested, the Edmondson Co. had handled 48.3 per cent. 



In 1925 the association leased redrying plants to redry its tobacco 

 and operated on a cost basis. It cost the association $1.02 per 100 

 pounds ($0.98 green basis) to redry its own tobacco in 1925, whereas 

 when the Edmondson Tobacco Co. charged $1.50 to redry tobacco of 

 the 1924 crop, the total cost of redrying only (exclusive of freight- 

 age, storage, and other charges) amounted to $1.64 per 100 pounds. 

 The Federal Trade Commission found that the cost per 100 pounds 

 to the Edmondson Tobacco Co. of redrying tobacco for the associa- 

 tion was $1.15 in 1922, and $1.01 in 1923. It is evident that the 

 association could have saved a great deal of expense in redrying its 

 tobacco if it had operated its own plants during the first three years 

 of its operation. 



It has been charged by some that when tobacco was sent to redriers, 

 who redried not only association tobacco but tobacco purchased and 

 redried for themselves, they substituted a lower grade of their own 

 purchases for the association tobacco, when repacking. It is not 

 possible to prove this charge, but such substitution is a possibility, 

 and the association was aware of the danger. If this charge is true 

 it would explain why much of the tobacco was found to be ap- 

 parently overgraded when the association was put in the hands of 

 receivers. 



The association was injured not only in a financial way by the re- 

 drying policy but it was injured more by the propaganda, state- 

 ments, and exaggerations based on this policy which were made by 

 interests antagonistic to the association. The redrying was pointed 

 out as one of its policies of mismanagement, and was used to create 

 discontent, suspicion, and disloyalty among the members. 



It has been maintained in defense of the redrying by officials that 

 these officers had saved the association money. It is true that the 

 Edmondson Tobacco Co. in 1924 reduced its redrying charges from 

 $1.75 to $1.50 per 100 pounds and that many of the other companies 

 were forced to follow similar reductions. During the first year 

 (1922) over two-thirds of the tobacco delivered was sold green, the 

 remainder was redried at various independent redrying plants, at 

 prices ranging from $1 to $2.50 per 100 pounds. The average cost 

 or redrying only (exclusive of freightage and other charges) was 

 $1.80. However, it is generally known that any redrying plant 

 that receives a large, certain, and steady volume of tobacco can re- 

 dry it at a low cost. With this kind of volume assured it operates 

 under little risk in competition with plants that operate upon the 

 basis of a smaller or more uncertain volume. 



Apparently little was known by the public in regard to the redry- 

 ing policies of the association until the report of the Federal Trade 

 Commission was issued on December 23, 1925. This report was made 

 upon a resolution passed by the United States Senate on February 

 9, 1925, because of complaints from the tobacco cooperatives, direct- 

 ing the Federal Trade Commission to make an investigation of the 

 charges against the American Tobacco Co. and the Imperial Tobacco 

 Co. of boycotting certain tobacco growers' cooperative marketing 



