Tobacco Documents Online

0 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON CIVIL NO. 70-86 PACIFIC TOBACCO CORP., an Oregon Corporation, dba PACIFIC TOBACCO COISPANY, Plaintiff, vs. THE ANERICAN TOBACCO COr'iPANY, INC., a Delaware Corporation, et al Defendants. Deposition of: CHARLES B. WADE, JR. . ._.._. . , . w r .. .. w .. .. .. w The deposition of Charles B. Wade, Jr. was taken in Room 217 of the Downtowner'Pgotor Inn, Winston-Salem, North Carolina, commencing at 1:30 P. M. on the 2nd day of Febru- ary, 1971. APPEARANCL'S For the PlairJ1-,iff: ROGr'R TILBURY, Lsq., of the law firm of Tilbury and Kane, 1110 Standard Plaza, Portland, Oregon, 97204. For the Defendants: MAX CROHN, JR., Esq., Reynolds Tobacco Company, 401 Main Street, k'inston-Salem, North Carolina, 27102. THOMAS P. GRIESS, Esq., of the law firm of Davis, Polk & hardell, 1 Chase Manhattan Plaza, New York, I1. Y. DONALD W. McEWL'N, Esq., of the law firm of Cake, Jaureguy, Hardy, Buttler & Mcy`wen, 1408 Standard Plaza, Portland Oregon, 97204. DANIEL J. 0'NEILL, Esq. of the law firm of Chadbourne, Park, kr'hitesida & Wolff, 25 Broadway, New York, N. Y. 10004. J. Edward Switzer, Jr., Official Court Reporter. ~ GRAHAM ERLACHER & ASSOCIATES OFFIC/AL GOURT REPORTERf ASHE DRIVE WINSTON•SALEM. N. C. PtiONE: 765•0636

I N D E X I 2 3 4 5 6 7 8 9 10 11 12 13 14 1S 16 17 18 19 20 21 22 23 24 25 1r, ITt1ESS EXAMI?dATION BY Charles B. Wade, Jr. Mr. Tilbury S X H I_ BI T S PAGE 4 NUt.SBER IDMIFIED 0 0 f 00 6~- 0 0 ~ GRAHAM ERLACHER 8 ASSOCIATES . OIFICIAL COURT RErORTERf ASHE DRIVE WINSTON•SALEM.N.C. PMONt: 763 •0636

. 1 STIPULATION 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 By consent of Counsel for the Plaintiff and the Defendant, the deposition of CHARLES B. WADB, JR. was taken by J. Edward Saitzer, Jr., Notary Public, at the Downtowner Motor Inn, Room 217, Winston-3alem, North Carolina, commencing at 1:30 o'clock P. M., on Tuesday, February 2, 1971. All formalities with reference to notice of time and place and purpose of taking the deposition were expressly waived. Formalities with reference to sealing and filing the deposition were waived, and it is stipulated that the original transcript, upon being duly certified by the undersigned Court Reporter, shall be filed with the U. S. District Court Clerk, District of Oregon. It is further stipulated that all objections to questions and motions to strike answers need not be made at the time of the taking of the testimony, but may be made at the time the testimony or any part thereof is offered in evidence. GRAHAM ERLACHER 8 ASSOCIATES Oi11C1AL COURT REPORTER{ ASHE DRIVE WINSTON-SALEM. N. C. PMONE:765.0616 3

C 6 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Z%::REUPON, N r CHARi.I'S B. h'ADr,, JR. - . . .. _ -. - :~ first being duly sworn, testified as follows: .:. LXAV:II3A T I0N BY MR. TILBURY Q Mr. j;ade, would you state your name and address for us, please? A My name is Charles B. '0.ade, Jr., my-office address is for the 1-:ain Street R. J. Reynolds Tobacco . Company, Winston-Salem. Q How long have you lived in Winston-Salem? A Thirty-three years. Gt How long have you been employed by R. J. Reynolds, Tobacco Company? A Thirty-three years. Q In what capacity, sir? A My current title is Senlor Vice President and Director. Q: And what other positions have you rad in the Company? A I started as a foreman, vtorked in production, ~ecccm e I cams Assistant Personnel Manager and then Assistant Superintendent of Manufacturing and then Personnel Manager then Vice President and Director. . Q Now Senior Vice President, are you the third ranking officer in the Tobacco Company? : - GRAHAM ERLACHER & ASSOCIATES OlfiCiAL COURt REPORtERS ASHE DRIVE WINSTON•SALEM. N. C. PHONE~.*765•0636

A Yes. t 3 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q And you are with the R. J. Reynolds Tobacco Company? A Yes, I am.also Director of R. J. Reynolds In- dustries. Q All right, sir, are you a member of the 1-'cecutive Co=:..ittee of either of those comoanies? A I am not. Q Are you on the Board of any other companies, except °or Reynolds? A Yes. Q Of which companies, please? A I am a member of the Board of h:anagers of 'Wachovia Bank F, Trust Company, and a member of Board of Atlantic and North Carolina Railroad, and I am a member of the Board of fsennis Freight Lines. Q Have you also served on the Tobacco Institute? A Yes. 0 In what capacity, sir? A As Chairraa.n of it's Public Relations, and now cali~~d C=unications Cory,m-ittee. Q ,~Fould you tell us what that Committee did? A That Co=ittee is composed of representatives of other companies, other companies who are members of the Tobacco Institute, and it meets at the call of the Chairman GRAHAM ERLACHER 5 ASSOCIATES OFFICIAL COURT REP'JRTERS ASHE DRIVE WINSTON -SALEM. N CPnONE.765•0636

I 0 2 3 4 5 6 7 8 9 10 11 16 17 18 19 20 21 22 23 24 25 or at the call of the President of the Tobacco Institute td explore the problems of the induatry and make recommenda- tions to the industry concerning those problems. Q What type of problems for example? A Well, the greatest type of problem is that which relates to the public, the reaction to the smoking and hcalth controversy. : Q And what in particular has the Tobacco Institute done with regard to this controversy? A The Tobacco Institute has tried to make visible the other side of the smoking and health question. Q How has it done so? A News releases primarily, so:ne publications for handouts in the form of pamphlets, and some advertising which would r,ormally be called institutional advertising. Q Has it conducted a scientific experimentation of any kind? A The scientific experiments are done in another or4anization which we support - The Council for Tobacco R:~search; very often the material that we use in the Tobacco Institute comes from studies done by the Council's Tobacco Research. Q Is there any connection bets;een the two Organi- zations? A None. GRAHAM ERLACHER & ASSOCIATES OiFIC1AL COURT REPORTERS ASHE DRIVE WINSTON•SALEM. N. C. P..or.[: 765-0696

3I t1 G Who are the members of the Tobacco Institute, e 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 20 19. 17 18 21 22 23 24 25 the Company or corporate members? A Yes, sir, rather than the individual members. I think every maJor manufacturer of tobacco products in the United States is a mcwber at this time except the American Tobacco Company. Q Are there some minor ones as well, and if so, which ones, please? A The U. S. Tobacco Company; Larus & Brotheri; 6ECr~c•fu Ia .... I do not recsa.l. Q Have they employed lobbyist, the Tobacco In- stitute, that is? A Yes. 4 And have these lobbyist entered into the contro- versy with regard to health problens, if any? A Not to my knowledge. Q Hotave they lobbied the Federal Trade Commis- sion or i:embers of Congress in support of their position on this subject? A They, of course, have conversations with the F'ri rrln.•/ ~~l Federal Trade Coru.ission and Members of Congress, Prima:Vy to furnish information that is not obtainable from r~a~ sources other than the Tobacco Institute and the Research arm of the industry. t>i How is it financed, that is the Tobacco Institute GRAHAM ERLACHER & ASSOCIATES Di//C1AL COURT RErOR1ERS ASHE DRIVE WINSTON-SALEM. N. C. PHONE: 765.0636

c 0 3 4 5 6 7 8 9 ~ P 10 il 12 13 14 15 16 17 18 19 20 21 . 22 23 24 25 A By proportionate share of the dues based on published figures about the share of market of the parti- cular company. Q 1;here are these figures published? A For years we have based the matter on what is called the 1,iaxwell Report; the Maxwell Report has been published in several, in at least two publications. Q Does the share of the Reynolds exceed that because of its greater volume? A Yes. C Your Company, I believe, is number one in manufacturing of cigarettes in the United States. A Let me go back to the question-the share of Reynolds is no greater than any other company's share based on it's sales. Q Will you explain that a little for me, please? A ttell, if we are paying- on a basis of thirty-two percent of the share of market, that share to our company and to it's stockholders is no greater than the share of a cozpany that has fourteen percent of the markot. It's more money but it's not more corporate proportion of the money. _ 0 Nvho has done the public relations tUnctions for the Tobacco Institute? A Currently? GRAHAM ERLACHER & ASSOCIATES OfFICIAL COURT REPORT[Rf ASHE DRIVE WINSTONSAL.EM. N. C. ' F'-ONE: 765-0636 0

• , 0 2 3 4 6 7 8 13 14 15 16 17 ls 19 20 21 22 23' 24 25 A Yes, sir. Currently the Tobacco Institute does not retain public relations counsel in terms of a firm, it retains a man who for::lerly was a public relations counselor but he heads no organization. Q And the name of the individual please? A Harold Brayman, Wilmington, Delaware. Q Is he a full-time employee of Tobacco Institute? A No. Q Has Reynolds distributed some of the publication of the Tobacco Institute? A Yes. Q To whom? A To our employees and our stockholders. Q Has your company undertaken to do any investi- gation of itE own with regard to the health aspect of smoking? b«I A. Not internally, and we have in years past had a few cracks im medical scnools, but we do not do basic scientific research in the smoking and health area. Q Does your lcompany work ::~ostly in the area of 1'E'Sc.'4!'[~7 ~Yl7Pr'S cancerAthrough txrbacca- research,, for this problem? A Yes. 4 hvcq~i :IYoes it work for any other organizations? - A- The American iiedical Association Research Foundation. GRAHAM ERLACHER & ASSOCIATES OFFI(:IAL COURT REPORTERS ASHE DRIVE WINSTON-SALEM. N. C. P..owE: 765-0636

, 0 0 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 1s 19 20 21 22 23 24 25 Q With regard to Tobacco Institute, is this open to all manufacturers of cigarettes in the United States? A Yes. Q Have there been any companies that have been rejected for membership? A TJo, to my knowledge, not. Q Do you know whether or not membership was open to the Pacific Tobacco Company, my clients? A Ameri-cary--T'obaceoz~Campany 2 0 No,Pacific Tobacco Company, my clients company, or their manufacturers. A I suppose that depends on how we define the term, their cigarettes were manufactured by somebody else, they were not mainufactured by themselves. I.have no knowledge of that. Q Are you familiar with Continental Tobacco Company? A Is it a manufacturer? Q I believe it vras at one time. A I am not. Q You know of no companies vrho have applied have not bcen granted membership? A No. U Is there sone measures for enforcing decisions made by the Tobacco Institute? GRAHAM ERLACHER & ASSOCIATES Oii1C1AL COURr REPORTERS ASHE DRIVE WINSTON-SALEM. N. C. P..OrrE: 765 0636