Decenber 15, 1953 \CKGROUND MATERIAL ON THE CIGARETTE DXDUSTRY CLIENT ‘The following information was given us by the presidents of the ding tovacce conpanies at the Rotel Plaza this morning. I, Participants There is no trade association in the cigarette industry, Thie is because the tobacco companies are prevented by the dissclution decr 1911 and the criminal convictions under the Auti-frust Act in 1939 carrying on many group ectiviti As a matter of fact, before the current health crisis arose, cigarette manufacturers never mat together at any tine except at dinners honoring seme industry leader. The group was celled together by Mr, Paul Hakan, President of the American Tobacco Conpany. The chief executive officers of all the leading companies = R. J, Reynolds, Philip Morris, Beason & Hedges, U, S, Tobacco Company, Brown X'Willlansen = have agreed’ to go along vith'« public rela ‘tions progran oo the health 1 Liggett-@ Myers ds not participeting in the organization because that company feels that the proper procedure is to ignore the whole contro versy. In addition to the cigarette companies, the tro important groups of tobacco growers involved are enthusiastically supporting the nev program, Together these tobacco grevars represent sone 600,000 farms and 2,700,000 farmers., Obviously, the tobacco grovers are the political strength along with the 1,300,000 retail tobacco cutlets, The tobacco growers will be represented by officials of the grower organizations, TE, Organization, Because of the anti-trust background, the conpanies do not favor ‘the incorporation of a formal association, Instead, they prefer strongly ‘the organization of an informal committee which will be specifically charged with the public relations function and readily identified as such, PLAINTIFF'S. l EXHIBIT TRIAL EXHIBIT f° ‘3H 000502 Oo 18,905 70048585st For example, Ur. Hahn reported that ons mame they had considered was the "Tobacco Industry Comittee for Public Infermation.” John #112 duggested that he felt the werd research” should appear along vith * sinformation" in tne title of the committee. III. The Industry's Position The industry is strongly convinced that thet scientific basis for the charges that have been nade, the nore sensational accusations in the recent papers dn sone cases represent publicity issued in the hopes of attracting funds and support for further resaurch, is no sound They potet out thet the National Cancer Institute of the U.S, public Health Administration, which 1s « geverameat agency and supported by Congressional appropriations, has officially refuted the tle-up between cigarette smoking and csncer. Nevertheless, thay cealize that the industry should pot engage merely ic a defensive campaign, replying te and answering individual research papers or nagazine article: ‘They feel that they should sponser a public reletions campaign which ds positive in nature and is entirely *proscigerettes,” They are confident they can supply us with comprehensive and authoritative scientific material vhich completely refutes the health charges. ‘They are also emphatic in saying that the entire activity ts @ Jongetern, continuing progran, since they feel that the problem is one of promoting cigarettes and protecting them fron these and other attacks that may be expected in the future, Each of the company presidents attending emphasized the fact that they consider the progran to be & long-term one, IV, Responses _to Questions ‘The companies! ansvers to questions put thes by John Rill and the undersigned provide valuable background. They are es follows: WilL the cigarette companies orgenize theaselve into an association publically announced, which vill openly sponsor their public relations activities? The companies replied that they had no desire te set up a ancke sereen of "front type of organitation, They are perfectly willing to sponsor any statesents that may be issued or any institutional advertising that aay be recomended and approved, JH 000503 70048586Do they accupt the principle that public health is paranoun? to all else, and would they issue a public statenent spelling this out? : Everyone present wholeheartedly agreed to this principle end readily consented to widespraad disseaination of « sound statezent of principle Distribution of such « statement it was agreed vould probably be the first step in the public relations progran that Hi1i and Knowlton vould recomend, Do the companies consider that their omm adver= ‘tiging and competitive practices have been « principal factor in crenting a health problent ‘The companies voluntarily adnitted this to be the case even before ‘the question was asked. They have informally taiked over the probles ant will try te do sonething about it, They do, hoverer, point out that this is the one inportant public relations activity that night very clearly fall within the purview of the antistrust act, Accordingly, it is doubt= ful that we will be able to make any fermal recomendaticn with regard to advertising or selling practices and clains. Wi11 the companies agree to sponsor new research which will provide definite answers te the charges? A clearecut answer to this question was deferred for the tine ig. The companies all say that they are carrying on much more research in thelr om laboratories and are sponsoring more research at hospitals and universities than is generally recognized, They believe that when we are acquainted with all of the scientific and factual material in the hands of the companies, ve will agree that the major problen is to disseminate information oa hand rather than te conduct nev research, However, John Rill did net agree to this and emphatically warned ‘the companies that they should probably expect to sponsor additional re- arch, Do the companies view this problem as being extrenely sericus and worthy of drastic action? The answer is obvicus since the companies have met together for the first tine since 1999, since they hare promptly proceeded to retain Hi11 and Knoviton, and are tiready considering such expensive techniques as the use of institutional a ‘tising, They ognize the possibility that it might be desirable to use institutional advertising to promote the basic statenent, JH 00080¢ 70048587