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6. From Tobacco Trade to Tobacco Production
- University of Hawai'i Press
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101 Chapter 6 From Tobacco Trade to Tobacco Production It was the rise of the modern cigarette...that most dramatically transformed global tobacco use. —Marcy Norton, Sacred Gifts, Profane Pleasures It is a known fact that factory-made cigarettes are quickly taking over from the home-made cigarette which uses locally grown tobacco. This is a direct result of advertising of these products, which stresses the status achieved by smoking tailor-made cigarettes and tobacco, the convenience of a ready product and emphasizes the unlimited and unrestricted availability of these products. —Martin ToVadek, in Cigarette Smoking in Papua New Guinea Until 1884 nearly all cigarettes were hand-rolled, and cigarettes were far less popular anywhere in the world than alternative means of taking tobacco: smoking pipes or cigars, snuffing, and chewing. But in April 1884 in Durham, North Carolina, James “Buck” Duke’s relatively small tobacco company1 altered the tobacco landscape forever by partnering with the inventor of the first machine that could manufacture ready-made cigarettes . Not only did this allow him to cut the retail price of his Duke of Durham cigarettes, but almost immediately he also embarked on a major advertising campaign. Hiring Edward F. Small to run his advertising, he himself went to New York and opened a small factory there while personally pushing his brands and continuing to undersell his competitors. In April 1889, five years after acquiring the Bonsack machine, Duke had a 40 102 Chapter 6 percent share of the market. In that same month he organized a joint venture with the other four major cigarette makers in the United States, and he became president of the newly established American Tobacco Company in 1890. To grow his business, Duke pursued a plan that “is the same strategy aggressively pursued by today’s cigarette industry: (1) expand foreign trade, (2) recruit new smokers” (Fahs 1996, 102). As a result of a 1902 agreement negotiated between Imperial Tobacco of the United Kingdom (headed by W.D. and H.O.Wills, Ltd.) and American Tobacco (headed by Duke), each agreed to withdraw from the other’s national market and divide up the markets in the rest of the world via a new company (British American Tobacco Company). Two-thirds of this new company was owned by American Tobacco and one-third by Imperial Tobacco. Registered in Great Britain, today the company also has become the parent of Brown and Williamson Tobacco Company of Louisville, Kentucky, and is now called BAT Industries. BAT was an important player in popularizing the cigarette in China during the first half of the twentieth century, and BAT sought to make comparable inroads in India and Indonesia, although with less success (Goodman 1993, 95). Duke set about buying up smaller tobacco firms and squeezing out the competition, and in 1911 the Department of Justice declared that the American Tobacco Company had violated the Sherman Act and the trust was broken up into four newly created companies. These were the American Tobacco Company, Liggett and Myers, R.J.Reynolds, and P.Lorillard (Goodman 1993, 233). In 1913 R.J.Reynolds began to market Camel cigarettes , the production of which grew an astounding four hundred-fold by the next year (from one million to four hundred million cigarettes); by 1919 production of Camels had exceeded twenty billion, and the brand accounted for almost 40 percent of all cigarettes sold in the United States (ibid., 104). The first three of the new companies set up by the trust bust in 1911 produced nearly 80 percent of America’s cigarette output until right after World War II, from which time Philip Morris and Brown and Williamson began to claim a greater market share. Even in 1890, when Duke consolidated the American Tobacco Company , there were twice as many tobacco chewers as smokers in America, and the cigarette remained “a relatively small piece of the whole tobacco business” (Kluger 1996, 32). Indeed, “it was not until 1941 that 50 per cent of total American tobacco consumption took the form of the cigarette” (Goodman 1993, 93). The advent of World War I “certainly was crucial in the cigarette’s gaining acceptance in the United States” (Troyer and Markle [34.238.242.168] Project MUSE (2024-03-29 07:40 GMT) From Tobacco Trade to Tobacco Production 103 1983, 46), and smokers began to outnumber chewers from that time on. This was especially so because “cigarettes were categorized as military supplies” and the U.S. government purchased large quantities...