Tobacco Documents Online

0 pUlNT1FFSEXHJBtT ..~ DATE 99 ROMO G. STIREWALT REG. PROF. COURT REPOMEA December 15, 1953 0 BACKGBOWD HATBRIAL ON THS CICAPET?E IHDUSTRT CLIENT The following information vas given us by the presidents of the leading tobacco companies at the Hotel Pla:a this morning. I. Parti~ ciPanta There is no trade association in the cigarette industry. This is because the tobacco companies are preTented by the dissolution decree of 1911 and the criminal convictions under the inti Trust Act in 1939 from carrying on many group activities. As a matter of fact, before the current health crisis arose, cigarette manufacturers never met together at any time except at dinners honoring soe+e industry leader. The group was called together by Kr, Paul Hahan, President of the American Tobacco Company. The chief executive officers of all the leading companies - R, J. Reynolds, Philip Horris, Benson & Aedgest U. S. Tobacco Company, Brown & Xillianson - have agreed to go along with a public rela- tions program on the health issue. Ligg6tt & Hyers is not participating in the organisation because that company feels that the proper procedcn•e is to ignore the whole eontro- versy, In iiddition to the cigarette coapanies, the two important groups of tobacco growers involved are enthusiastically supporting the new program. Together these tobacco growers represent soae 600,000 farns and 2,700,090 farmers. Obviously, the tobacco growers are the political strength along with the 1,800,000 retail tobacco outlets. The tobacco growers will be represented by officials of the grower organizations. ~ II, Organization Because oi' the anti-trust background, the companies do not favor the incorporation of a formal association, Insteado they prefer strongly the organitation of an informal coemittee Nhich rill be specifically charged with the public relations function and readily identified as such. 3" 000502 CTR HN 0431103

For example, Hr. Hahn reported that one msae they had considered xas the f'Tobacco Industry Cosraittee for Public Information,* John Iii21 suggested that he felt the word *research* should•appear along vith • "information" in the title of the cosnittee: III, The Industry's Position The industry is strongly convinced that there is no sound scientific basis for the charges that have been made, They believe that the more sensational accusations in the recent papers were premature and in some cases represent publicity issved in the hopes of attracting funds and support for further research. They point out that the National Cancer Institute of the II, S. Public Health Adseinistration, which is a goverament agency and supported by Congressional appropriationsi has officially refuted the tie-up between cigarette smoking and cancer. Nevertheless, they realise that the industry should not engage • merely in a defensive campaign, replying to and answering individual research papers or magazine articles. They feel that they should sponsor a public relations campaign which is positive in nature and is entirely epro-oigarettes, They are confident they can supply us with comprehensive and anthoritatitre scientific material which completely refutes the health charges. They are also emphatic in saying that the entire activity is a long-term, continuing prograss; since they feel that the problem is one of promoting cigarettes and protecting them from these and other attacks that may be expected in the future. Sach of the company presidents attending emphasized the fact that they consider the program to be a long-term one. IV. &eagonses to questions The companies' answers to questions put them by John Ail1 and the undersigned provide raluable bac.lrgrotmd, They are as follorst Will the cigarette.eompanies organize thamselres into an assooiation publically announcedi xhich will open]y sponsor their public relations actiritiesT The companies replied that-ther had no desire to set up a slaoks screen or nfront* type of organization, They are perfect],trwilling to sponsor any statements that may be issued or any institutional advertising that may be recomaended and appro.ed. JH 000503 CTR i"IN 043114

-3- Do they accept the prinoiple that public health is paramount to all els~e~~ and would they issue a public statement apelling this out? 0 Everyone present wholeheartedly a;reed to this principle.snd readily consented to widespread dissemination of a sound statement of principles. Distribution of such a statement it was agreed would probably be the first step in the public relations program that Hili and Knoxlton would recoa:aend. Do the companies consider that their own adver- tising and competitive practices have been a principal factor in creating a health problem? The companies voluntaril,y admitted this to be the case even before the question was asked. They have inforaal.l,y talked over the problem anb will try to do something about it. They do hovever~ point out that this is the oae important public relations activlty tha.t sLitht rery clearly fall within the p+irview of the anti-trust act. Acoordingly, it is doubt- ful that we will be able to make any formal recomnendation with regard to advertising or selling practices and claims. Xill the comps,nies agree to aponsor new research which will provide definite answers to the charges? A clear-cut answer to this question was deferred for the time being. The companies a22 say that they are carrying on much more research in their own laboratories and are sponsoring aore research at hospitals and universities than is generally recognised. They believe that when we are acquainted with all of the scientific and factual material in the hands of the companies, we will agree that the major problem is to disseminate information on hand rather than to conduct neY research. However, John Hill did not agree to this and emphatically warned the companies that they should probably expect to sponsor additional re- eearch. Do the companies view this probleA as being J extremely a'erious and worthy of drastic action? The ar.swer is obvious since the companies have net together for the first time since 1939, since they have prosiptl,y proceeded to retain Hilll and Xnoxiton, and aire already-*considerisg sinch es;pensive techniques as the use of institutional adrertising. They raeoanise the possibility that it might be desirable to use institutional advertising to promote the basic statement. JH 000504 CTI ' I  I y! '-I' 43.R. .tn {nyni

-4- As another indieation of how serioms the problem is, the officials stated that salesmen in the industry are frantically alarae4 and that the decline in tobacco stocks on the stock exchange market has caused grare• ooncarn, especially sinoe tobacco earnings nill be much higher next 7ear because of the tezaination of excess profits taxes. Are we primarily concerned with cigarettes rather than all tobacco? There can be no doubt but that the problem is cigarettes and the task is to get out information concerning cigarettes. The attaoks have all been against cigarettes. Of course, it is true that the attacks now sude on cigarettes will ewntual.],r be made against all tobacco if not stopped, and it is also true that anything done in favor of cigarettes will be favorable to all tobacco. Another reason why the emphasis should be on cigarettes is that there are existing trade associations in the cigar and tobacco field. . They are all Jealous of their prerogatives and if we stick to cigarettes we xill avoid all such complications. IY, Other Information . The current plans are for Hill and hnowlton to serve as the operating agency of the companies, hiring all the staff and disbursing all funds. The chairman will probably be Mr. Hahn or the head of one of the other companies resident in New York. There will be a strong subcommittee of chief executives, all resident in Nex York. Tommy &oss, cotmel for American Tobacco Company, has almost completed a nxhite paper" on the scientific facts invol.ed in the health issue which he will make aTailable to ua for use or inclusion in something we will want to distribute to all the press, magazines, ete. It was arranged for Hill and Knowlton to interview the scientific directors of a31 the leading companies. Three interviews are being held today, December 15, at 12s30, 200 and 4 p.st, respectirely. Another xill be held on Wednesday. Followi ng completion of the scientific interviews we will ititer='= riex Tanciy Rosss Ben Sonenberg (counsel for Fhilip Morris), and Sidney J. ltayne Associates (coaWel for Lorillerd). It was also suggested that we might want to interview the adv.er-::. tising people, although the company presidents indicated that the__iid::r:i:> tising agencies did not have a great deal of material bearing npoa`tlis `:~; ~ controversy. They thought it most important for us to see the scientifio:. directors and the public relationspeeple mentioned. - JH 000505 CTR NN 043"11G

i _S_ Th. Question of Pol.l.+t The presidents indicated that they had thosght' about the possi- bility.of a pablic opinion po11. Ne agreed tfiat'snch a poll sdtht pro.v to be necessary,-and Al.so indicated.that a poll of certain 3mport.nt groups such as the doctors themsel.es and teachers miSht be desirabis,- Clearl,q, it is necessary to lmoes (a) the awareness of the probles, and (b) the ext.nt to Yhieh the charges are belirr.d, betore extensi» actioan is recomended. Present at the Heetingt Paul H. galsn President, Aaerican Tobacco Coctpany Joseph r. Cullman,Jr. Chairnan and President, Beason & Hedges 0. Parker HcCanae President, Philip Horris & Co,,Ltd„ Inc, J, Vhitaey Petsrsoa President, U. S. Tobacco Company - - - - P. Lorillard Ccmpan,r . BCG:AO Bert C, Goss JH 000506 C T R ~N 0 4"' 1, 17""

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