NYSA Indexed
CIGARETTE PACK ART
Abstract
The author and pubhshers gra~-fulIy ackno;vledge the inva/u~ble help of all those who have contributed to the compilation of this book They would particularly hke to thank the following:
Fields
- Box
- 8864
- Type
- Book
- Author
- Mullen, Chris
- Named Person
- Barefoot, Pamela
- Barker, Alan
- Barnum, P.T. (Circus Promoter, Ante-bellum Antismoking Advocate)
- Barrie, James
- Benny, Jack (Entertainer, Advertised for Luckies Cigarettes)
- Benton, Thomas Hart
- Biggers, Earl Derr
- Blair, John F.
- Blake, Barney
- Bollman, John
- Bowden, Alfred F. (ATC, VP of Operations)Vice President - Operations
- Boylan, Richard J.
- Brady, Alice
- Brady, Anthony
- Brashear, Douglas
- Bryan, William Jennings
- Bunyan, Paul
- Carlyle, Thomas
- Carnegie, Andrew
- Carroll, John W.
- Cartier, Jacques
- Chapin, James W. (UST Attorney & VP, Smokeless Tobacco Counsel President)James W. Chapin was a Vice President and General Counsel for U.S. Tobacco. (PMI's Introduction to Privilege Log and Glossary of Names, Estate of Burl Butler v. PMI, et al, April 19, 1996)
- Chew, Virginia
- Clay, Henry
- Cleveland, Grover
- Cobb, John Blackwell
- Collins, Chris
- Collins, Dorothy (Singer, Lucky Strike "Hit Parade")
- Columbus, Christopher (European explorer, Introduced tobacco in Europe)
- Connors, Thomas P.
- Coolidge, Calvin
- Coon, James S. (Attorney for Plaintiffs, Swanson Thomas & Coon)
- Coon, James R.
- Cotton, King
- Crowe, John A.
- Crown, Royal
- Cusack, Thomas
- Dare, Bill
- Denyer, Richard
- Dickens, Charles
- Dowd, John S.
- Duke, Benjamin
- Duke, Buck
- Duke, James Buchanan
- Duke, WashingtonDefense
- Dyer, Michael
- Elliott, Richard
- Findlay, A. Gordon
- Fowler, Preston
- Fowler, Preston L.
- Ginter, Lewis
- Gold, Albert
- Gorman, Pat H., Sr.
- Green, John
- Gregg, Albert
- Griffith, David W. (RJR Biochemist)
- Hahn, Paul Meyer (ATC President (1950-63); TIRC Chairman (1954))
- Hanmer, Hiram R., Ph.D. (ATC director (1896-1976))Developed standards of measuring cigarette smoke in machines
- Harriman, Edward H.
- Harris, Phil
- Hart, Thomas
- Harvey, Edmund A.
- Held, Anna
- Henry, John
- Hernandez, Francis
- Hill, Ed
- Hill, George Washington (ATC President 1929)Defense
- Hill, James J.
- Hill, Percival (ATC President , died 1925)Defense
- Hill, Percy
- Hilyard, Harry
- Hollands, Norman
- Hoover, Herbert
- Hope, Anthony
- Hutch, John R.
- Hutchings, John
- Janson, A. Leroy
- Jefferson, Thomas (3rd president of United States, 1801-1809)
- Johnston, Joe
- King, Wayne
- Kingsley, Charles
- Kinney, Francis S.
- Kornegay, Burt
- Kyser, James
- Kyser, Kay
- Lasker, Albert D.Defense
- Leacock, Stephen
- Lind, Jenny
- Lipscomb, Jim
- Longfellow, Henry Wadsworth
- Lorillard, Pierre (Founder of Lorillard Tobacco Company)
- Lowell, James Russell
- Mackler, Jerry
- Marshall, Thomas R.
- May, Kitty
- Moore, Jean
- Morgan, J. P. (19th century "robber baron")
- Mullen, Chris
- Nichols, William
- Nicot, Jean (French Ambassador to the Netherlands, championed smoking in )French Ambassador to the Netherlands, championed smoking in 1560, namesake of nicotine
- Palmer, John
- Patterson, Rufus L.
- Penn, Charles
- Penn, Thomas Jefferson
- Penn, William
- Pershing, Jack
- Pinkham, Lydia
- Polo, Marco
- Raleigh, Sir Walter (Introduced Virginia tobacco to England)Sir Walter Raleigh introduced Virginia tobacco to England (R. Klein 1993).
- Reynolds, Josh
- Rigg, Vincent
- Riggio, Vincent (Vice Pres. for Sales and later CEO of American Tobacco Co.)
- Rio, Del
- Ritchie, Norman
- Rolfe, John (first tobacco farmer)Defense
- Roosevelt, Franklin D.
- Roosevelt, Teddy (US president)
- Ross, Lanny
- Roye, John
- Russell, Lillian
- Ryan, Thomas Fortune
- Salisbury, I. Lord
- Schley, Grant B.
- Schweitzer, Peter T.
- Sims, Ginny
- Sinatra, Frank (Singer)
- Smith, Alfred E.
- Smith, Bruce W.
- Smith, H. Allen
- Smith, Robert J.Manager, Hamner Division
- Strickland, James F.
- Sylvester, Allie
- Taft, William Howard
- Tay, Ivan
- Tennant, Richard
- Tennyson, Alfred Lord
- Thompson, Dorothy
- Towers, Bill
- Tucker, Sophie
- Tuckett, George
- Walker, Johnny
- Washington, George
- Waz, Johnny
- Whelan, George
- Whiteside, George W. (TIRC Chadbourne Park)Defense
- Whitney, William G.
- Wickersham, George W.
- Wilson, Woodrow
- Wright, Richard H.
- Named Organization
- Advertising Research Foundation
- American Cigar Company (ATC subsidiary)A wholly owned subsidiary of the American Tobacco Company
- American Tobacco Company
- Army
- British-American Tobacco Co Ltd (British-American Tobacco Co. Ltd.)British-American Tobacco Company Limited was a operating group under B.A.T. Industries P.L.C. in 1985.
- British-American Tobacco Company (Hong Kong) Ltd. (British-American Tobacco Company (Hong Kong) Ltd.)
- Continental Tobacco Company, Inc.
- Damon Runyon Cancer Fund
- Department of Agriculture (USDA)
- Duke University
- Ecusta (major cigarette paper supplier)
- Export Leaf Tobacco Co. (Purchases, processes and stores U.S. tobaccos.)Purchases, processes and stores U.S. tobaccos.
- Federal Trade Commission (Enforcement agency for laws against deceptive advertising)Enforces laws against false and deceptive advertising, including ads for tobacco products. Ensures proper display of health warnings in ads and on tobacco products;collects and reports to Congress information concerning cigarette and smokeless tobacco advertising, sales expenditures, and the tar, nicotine, and carbon monoxide content of cigarettes.
- Food and Drug Administration (FDA)
- General Motors Corporation
- Imperial Group Limited (Has a 1982 patent on an alternative nicotine delivery system)Has a 1982 patent on an alternative nicotine delivery system
- Imperial Tobacco Co. (Determined optimum nicotine levels for cigarettes)Did testing pre-1972? of U.K. smokers and concluded that the optimum nicotine delivery for the cigarette, and that stepwise reductions in delivery caused progressive rejection by consumers (see Project Wheat)
- Justice Department
- Library of Congress
- Liggett & Myers Inc. (Pioneer in the generic cigarette business)Cigarette manufacturer; Pioneer in the generic cigarette business; L&M is the manufacturer of Chesterfield, Decade, Dorado, Duke of Durham in 1958, Eagle, Eve, L&M, Lark, Pyramid and Stride cigarettes
- Lord & Thomas
- Medical College of Virginia
- P. Lorillard Company
- Papeteries de Mauduit (supplier of tobacco papers)
- Philip Morris & Co. Ltd. (Cigarette manufacturer, incorporated in U.S. in 1902)Philip Morris & Co. Ltd.., was incorporated in New York in April of 1902; half the shares were held by the parent company in London, and the balance by its U.S. distributor and his American associate. Its overall sales in 1903, its first full year of U.S. operation, were a modest seven million cigarettes. Among the brand offered, besides Philip Morris, were Blues, Cambridge, Derby, and a ladies favorite name for the London street where the home companies factory was located - Marlborough.
- Pinkerton Tobacco Co. (Leading producer of chewing tobacco in 1987)the leading producer of chewing tobacco in 1987
- PMI (See Philip Morris Inc.)See Philip Morris Inc.
- R.J. Reynolds Corporation (second tier subsidiary of RJR Industries)
- Red Cross
- Saturday Evening Post
- Senate
- Time Magazine
- Tobacco Institute (Industry Trade Association)The purpose of the Institute was to defeat legislation unfavorable to the industry, put a positive spin on the tobacco industry, bolster the industry's credibility with legislators and the public, and help maintain the controversy over "the primary issue" (the health issue).
- Tobacco Trust
- Treasury Department
- Trinity College
- U.S. Department of Agriculture
- United States Supreme Court (Judicial branch U.S. gov't)
- Union Pacific Corp.
- United Nations
- United States Tobacco Company (Producers of Copenhagen/Skoal chewing tobacco)Producers of chewing tobacco
- University of Chicago
- W.D. & H.O. Wills Ltd. (Australian tobacco company)Australian tobacco company whose parent company is Aamatil Ltd, a subsidiary of BAT.
- Warner Brothers
- Williams College
- Yale University
- Thesaurus Term
- Cigarettes
- Packaging
- Tobacco Farmers
- Publications
Document Images
T156850001
T!56850002
ST. MARTI2WS PRESS
New York
T!56850003
ACKNOWLEDGEMENTS •
The author and pubhshers gra~-fulIy
ackno;vledge the inva/u~ble help of all those
who have contributed to the compilation of
this book They would particularly hke to
thank the following:
Pack collectors in Britain and the USA, who so
generously allowed access to their
collectinns for photography and helped with
information, research and dadng: Alan
Barker, Nat ChaR, Hflary Humphries in
Britain; Richard Elliott, Roger Hordines.
Jerry Mackler and Norman Ritchie in the
USA; and other British collectors who loaned
further items for photography: David Griffith
and Ivan Tay].or.
All the many international companies who
loaned packs, supplied information and gave
permission for their products to be
reproduced here, especially: American
Brands Inc, New York: Bacon's, Cambridge:
Mrs Myers; British-American 'lbbacco,
London: Brian Hearushaw, John Palmer
(particularly for the kind loan of their
photograph album of BAT in China); Brown &
Willamson Corporation, Kentucky; Carreras
Rothrnans Ltd, Aylesbury: Tom Dir~anock.
Jean Moore and Connie. Sutton, Curator of the
Niels Ventegodt Collection: Gallaher Ltd,
Lcndon; G-zm~ Records Ltd. L~_ndcn (for
perm~-~ion to reproduce ~e ~,~ge ~
cover); G;mn~ ~d GauIom~, L~ndon ~d
P~; Imperial Group. B~tol: Brian Fr~
]ap~ese Tobacco ~ora~ion, To~o;
~ Bros Tobacco ~; L~gge~ Group,
Nor~ Carol~a (pa~ly for pelion
~o reproduce the advertmement on
page 104); Mardon, Son & Ha~, BAstol: Brace
Yo~g; P~ip Mor~ ~c, New York: John
Player & Sons, No~gh~: ~ Dobson;
R J Re~ol~ Ind~ies Inc, Nor~ Caro~a
(pani~larly for pe~i~ion to reproduce
their ~me] pack ~n ~h~ [rent rovm ~ ~h~ US
and C~nadian editions) Scotten-Dfllon C¢:.
O~o; j I, Tiedemann 'Ib~ikfabnk, Os~o
Sigmund PiPe]and Tlllo~son CartonDi~mn.
~verpooh Hewed Jamrack; US Tobacco Co.
Co~ecti~t W D & H O Wills. Br~stol: Da~d
Redway, Hu~rt ~. Bill Towers.
~ose who worked so hard on ~e
production of ~e book ~ bo~ BAtain and
~A: A~ Bond, Ly~ Fran~m, D~e
Hun~i~er and Georgiana Pa~-Crooke for
lia~on ~d research; Reg Booter for ~e
d~ign of~e book; Bill Dare for ~e
fll~tration on the title page ~d front jacket
of the ~ edition; No.an Holl~ for fhe
photography; ~d Ch~lo~e Parw-Crooke
for ~he editori~ co-ordMa~on of fhe proje~.
Fina.Ily Juhanna Borsa. Paul Frev,'m, Dor~ald
Marguhes and Robert Smith for all ~eir
usefulsuggestions ard OnoleMullen forher
company on pack expe :ations, checking of
the text and for her support throughout
All the photographs m th~s book were taken
by Norman Hollands except for those taken
or kindly provided by the follovnng:
Chris Collins Studio, New York: 15 (top), 42,
50.51,52, 57 (top), 93. 94, 105, 108 (top), 116,
117, 125: Richard Denyer, Norwich: back
flap; Michael Dyer Associates, London: 8
[top). 12. 15 (bottom), 17 (top) 28. 29, 92, 9Y,
99.104. 110~ 112; J L T'.'edemans Tobakfabnk,
Oslo: 69 (bottom left); W D & H O Wills Ltd,
Bristol: 17 (bottom), 18 (left), 97.
PUBLISHERS'NOTE
Pack Dimensions: most of the cigarette packs
reproduced in tl:ds book are shown as near
lffe-s/ze as possible. In some cases however.
packs have been enlarged or reduced ou
account o~the design of the book.
Correspondence: all correspondence
concerned with this volume shouldbe
addressed to Venture Pubhshing L~d,
London.
First pubhshed in the United States in/979 by
St Martin's Press Inc.. 175 Fifth Avenue. New York. NY 10010, USA
Copyright ¢'£) 19"/9 Venture Publishing Limited London
Created. designed and produced by Venture Pub!ishing Limited
44 Uxbrldgo Street London W87TG. England
All rights reserved No par t of th/s publication may be
reproduced, stored in a'retrieval system, or transmitted
in any form or by any means, electronic, mechanical,
pho:ocopymg, recording or o:hervnse, without the permission
of Venture Publishing Limited
ISBN: 0-312-13842-3
Library of Congress Number: 78-64957
Fflmset in Great Britain by SX Composing L~.mited. Rayle*gb- Essex
Origination by Colour Workshop Limited, Hertford. Herts
Printed and bound in Spain by Grafic,omo, S.A. C6rdob~
Ti56850004
C01 rFENTS
FOREWORD. Page 6
INTRODUCTION. Page 7
FURTHER READING. Page 22
CHAPTER ONE
THE EARLY DAYS OF THE PACK. Page 23
CHAPTER T~VO
THE GREAT WAR AND BEYOND. Page 37
CHAPTER THREE
CLASSIC PACKS I. Page 45
CHAPTER FOUR
SAILORS AND THE SEA. Page 59
CHAPTER FIVE
PEOPLE ON PACKS. Page 67
CHAPTER SIX
LUCKY DREAMS. Page 75
CHAPTER SEVEN
THE GREAT OUTDOORS. Page 83
CHAPTER EIGHT
ADVERTISING THE PACK. Page 91
CHAPTER NINE
CLASSIC PACKS 2. Page 109
CHAPTER TEN
MODERN PACK ART. Page 121
PACK IDENTIFICATION IN'DEX. Page 126
GENERAL INDEX. Page 128
T156850005
CIGARETTE PACK ART
The art of smoking- a fabulous
array of graphic splendor
From Luckies to Chesterfields cigarette
packs are pop art at its finest. Exploring
the fascinating relationships between
cigarett.e packs and popular culture over
the last century, this book covers both the
historical development and the
dominating and wide-ranging themes of
cigarette pack art. With the assistance of a
team of cigarette pack collectors from the
USA and Great Britain, Chris Mullen
presents a fascinating and funny history of
the most popular, most pecul, iar, most
enduring and most newsworthy brands
in the world.
TI56850006
---
CONTENTS
:FOREWORD
THE MAKINGS OF A NATION
PRO BONO PUBLICO
OUT OF MANY, ONE
ASK DAD, HE KNOWS
"WI-]AT THIS COUNTRY NEEDS..."
NATURE IN THE RAW
MODERN DESIGN
L.S./M.F.T.
PARTICULAR PEOPLE
1492-1864
1865-1903
1904-1911
1912-1925
1926-1938
1939-1946
1947-1949
1950-1954
"5
7
17
35
45
59
73
87
99
113
TI56850008
SOLD AMERICAN!"
--T H E F I R S T FIFTY YEARS
T!56850009
COPYRIGHT, 1954
THE AMERICAN TOBACCO COMPANY
"SOLD AMEPJCAN!" PRESENTS A PICTURE OF
TI-IE EVOLUTION OF TIIE COI%IPANY, REFLECTING
CHIEFLY EVENTS OF SUCCESSIVE PERIODS OF
CHANGE DI/RING TI-IE LAST FIFTY YEARS, AS
COUNTED BY THE AUTHOR. THE AUTHOR HAS
DRA%VN UPON LEGENDS AS WELL AS HISTORICALLY
ESTABLISHED FACTS AND UPON THE COMPANY'S
RECORDS AND TI-IE PERSONAL RECOLLECTIONS OF
ITS PRESENT-DAY OFFICIALS, PERSONNEL AND
ASSOCIATES. IT IS NOT INTENDED AS A STATEMENT
OF COMPANY POLICY AT ANY GIVEN TII%IE.
Powhatan, symbol oI American Tobacco, was a chief
of Virginia Indians. His daughter Pocahontas wed
John Rolfe, the first white man oI the Jamestown
settle~nent to grow a co~nmercial crop of tobacco.
I
T!56850010
FOREWORD
ON OCTOBER 19, 1904, The American Tobacco
Company in its present legal form came into
being. In a legal sense, then, this history marks our
fiftieth anniversary.
Like many other statistics, this one tells a very
incomplete story. In point of time, American Tobacco
goes back a good deal farther than its 1904 re-incor-
poration. Under a different corporate structure but
w~th the same name, the Company goes back to 1890.
And the management of The American Tobacco
Company traces in an unbroken line all the way from
1865, when Washington Duke and his sons started a
home tobacco manufactory in their little log cabin
outside Durham, North Carolina.
In point of manufacturing tradition, American
Tobacco is even older. The Lucky Strilce brand,
for instance, was begun as a smoking tobacco mixture
by a subsidiary company founded in Richmond in
1853. Some of the fine Havana cigars made by the
Company go back even farther.
In point of product, our enterprise has its roots
in the pre-Columbus years when the misnamed
"Indiang' of this hemisphere grew tobacco to be
smoked in crude pipes and rolled into rough cigars
and cigarettes. With the passage of time and the
acquisition of knowledge, tobacco and its curing and
manufacture have been greatly changed, greatly
refined. But the leaf seems to give the same solace to
modern, civilized Americans that it yielded the naked
savages of five centuries ago. This is not so strange
as it may sound at first; for the cigarette holds enjoy-
ment for many different kinds of people in our own
day. A Lucky Strike, or a Pall Mall, or a Herbert
Tareyton, can be smoked with pleasure by a farmer
between furrows, a G.I. in Korea, a clerk "taldng
five" from his office desk, or a well-dressed patron in
some fashionable dining place.
Whatever age we assign The American To-
bacco Company, wherever we place the start of the
American smoking tradition, we are not celebrating
numbers alone. It is true that this Company has made
and sold more cigarettes than any other. And it is
true that its founders changed the nation's smoking
tastes with their bold gambles on machinery, and on
fresh uses of the printed word. But by these tokens
it is also true that our Company has had more experi-
ence in cigarette making, more opportunity to learn
our business, than any other.
This means that we have managed to plow
that knowledge back into our blending and testing
and leaf-buying and manufacturing over the years.
If we had not, if our experience were not refldcted in
the highest quality men and machines can attain,
some other company would be the leading manu-
facturer of cigarettes.
We are confident that we shall remain so, that
Americans will continue to use our products at an
accelerating rate.
Our confidence is based on two things. First,
tobacco itself has been part of the American heritage
as long as men have lived in this favored corner of the
world: even the cliff-dwellers of the New Mexico
desert left smoking implements behind them. Second,
it is American Tobacco's policy to place quality of
product above all other considerations. We believe
this policy accounts for our volume of business, and
so make it the starting point for everything we do.
We believe it is best'for our customers, our employees,
our stockholders, our suppliers and for the American
tradition of smoking.
Unlike many a volume business, ours does not
stand or fall on this year's new design or next year's
fashion, for smoking "tastes change slowly. We gather
the best tobacco leaves we can find, age and blend
and flavor and shred them. We package and pass
them on to the smoker in the form he prefers, rolled
in white paper or Havana leaf or Connecticut wrapper
or packed in tins. But the heart of our business-the
tobacco-is recognizable in any of these forms. It
originated in Ameri'can soil; it is sanctioned by
ancient custom; it is part of our habit of life.
So we are proud to dedicate "Sold American!"
to the American public. Their~ good taste has made
it all possible.
Paul M. Hahn -
President
TI56850011
West ]nd~es-smoked bur~ng rolls of tobacco, also
sniffed 4t through a yoshaped tube. The Spaniards
con]used tube, or tobago, ~ith leaf. Thus, tobacco.
6
| I
T!56850012
THE MAKINGS OF A NATION
THEY CAME for gold, and they found tobacco.
The first American smoker they saw was puff-
ing a primitive cigarette. Two of the mariners
described it as a huge "firebrand": dried tobacco
leaves wrapped in leaves of palm or maize.* The date
was November 6, 1492, less than a month after the
three ships anchored off San Salvador. Wrote Bar-
tholomio de Las Casas, who later edited the journal
of Christopher Columbus: "The natives wrap the
tobacco in a certain leaf, in the manner of a musket
formed of paper.., and having lighted one end of it,
by the other they suck, absorb or receive that smoke
inside with their breath."
Almost four centuries went by before James
B. Duke, founder of The American Tobacco Com-
pany, • rediscovered the cigarette. It was not until he
did that Americans took up smoking in a big way.
The cigarette, as the folk of Duke's day were to dis-
cover, is tailor-made for an industrialized, urbanized,
hurry-up society. It fits neatly into the chinks of
respite that break up a busy day. It requires less
paraphernalia than a pipe, less leisure time than a
dgar, less attention than either. And it is a more
universal form of tobacco consumption than "eatin'
*A cigar is a roll of smoking tobacco wrapped in a to-
bacco leaf. A non-tobacco wrappdr makes it a cigarette.
tobacco," whose rough-and-ready appeal is almost
specifically masculine.
The first Americans, however, were neither
industrialized nor in a hurry. They did not require
careful blending, delicate flavoring or precision wrap-
ping in cellophane. But they did relish tobacco in
some form, primitive or no. And the first explorers
of the Carib islands and the South Atlantic littoral
soon came to share their pleasure in the "Soverane
Herbe."
With French and English vying with Span-
iards for footholds in the New World, it is not sur-
prising that the plant should have received many
names. West Indian natives used a Y-shaped piece
of hollow cane as a pipe for smoking or sniffing
tobacco. Columbus himself is supposed to have used
their word for this instrument, tobago, to describe a
Y-shaped Caribbean island still called ,Tobago. The
Spanish themselves preferred the weed in its rolled
form; the word cigar is theirs.
The Sacred Book of the Quichd Mayans indi-
cates smoking was an honored practise in Guatemala
long before its conquest by one of Hern~n Cortes'
captains. The Lords of Xibalba, goes the legend, held
council by the light of fat-pine torches and smoked
cigars. Tobacco was "z~q" in Quichd and the verb for
TI56850013
Monardes' "Newes of the New-found Worlde" in 1596
pictured lea]: "The name o] Tabaco is given to it
by S~aniards by reason of an Island named Tabaco."
Exploring the St. Lawrence in 1585, Jacques Cartier
saw Indians carrying small bags of tobacco around
their necks, but it "bit our tongues like pepper."
smoking, "z~kar." Perhaps this had some relation to
the Spanish "cigarro." Whatever the word's origin,
Spain was quick to discover that the leaf grown in
Cuba made the finest cigar,
Pipes, pikes and petum
Farther north on the mainland, where the first
skirmishes of the battle for the New World were
fought between Spaniards and French, pipe ~moking
was all the rage. The earliest known picture of Ameri-
can pipe smokers was painted by one ~Iacques Le
Moyne de Morgues. An all-around artist, Le Moyne
came to Florida with Ren~ de L~udormibxe's second
expedition to Florida to chart the coastline and sketch
the natives. Laudonni~re's objective was the usual
one: g01d. His mission was the establishment of a
seacoast fort from which to raid Spanish galleons
returning from the Indies through the Straits of
Florida. A Spanish "task force" was sent to Florida
to prevent this, and did, by slaughtering the garrison
in 1565; Le 1V~oyne was one of a few ~vho escaped. All
but one of his forty-seven paintings were later lost,
but not before a Flemish engraver made copies of
them. Le Moyne's rendering of the strange, naked
smokers was accompanied by this caption:
•.. They also have u plant which the Brazil-
ians call petum and the Spaniards tapaco. After
carefully drying its leaves, they put them in
the bowl o£ a pipe. They light the pipe, and,
holding its other end in their mouths, they
inhale the smoke so deeply that it comes out
through their mouths and noses; by this
means they often cure infections.
What became of Le Moyne is not precisely
known, except that his rescue ship was swept off
course and landed him in England instead of France.
From Swansea Bay Le 1Vioyne is supposed to have
journeyed to London, married, and become % ser-
vaunt to Sir Walter Raleigh."
Perhaps Le Moyne's paintings ~nd his stories
of the New World had something to do with Raleigh's
first expedition to Virginia in 1584. But tales about
America in general and tobacco in particular were
well known in Europe and in England long before
Le Moyne escaped the Spaniards' pikes. Only ten
years after Columbus, Spanish sailors picked up the
art of che~q_ng tobacco from South American Indians
and carried the habit back to Spain. Jacques Cartier
II
T1568b0014
paddled up the St. La~rence River in 1535 and re-
ported that "the Indians have a certain herb, of
which they lay up a store every Summer, having first
dried it in the sun. They always carry some of it in a
small bag hanging around their necks. In this bag
they also keep a hollow tube of wood or stone. Before
using the herb they pound it to powder, which they
cram into one end of the tube and plug it w~tli red-hot
charcoal. They then suck themselves so full of smoke
that it oozes from their mouths like smoke from the
flue of a chimney. They say the habit is most ~vhole-
some." Unfortunately, Cartier visited North America
more than 60 years before the strong, native N/co-
ld,ha rusgca was supplanted by mild Nico~ana
taba~um from Central and South America: "We found
that tobacco bit our tongues like pepper."
Fifteen years after Carrier's tonguebite, Phillip
II of Spain-the same ambitious Phillip who was to
wipe out Laudonni~re's expedition-sent one Francis
Hernandez de Toledo on a mission to Mexico. Toledo
was the first to bring back living tobacco plants for
cultivation in Europe. And in 1561 Jean Nicot, Lord
of Villemain and ambassador to Portugal, took some
Florida tobacco plants to Paris. They were given to
Catharine de Medici, who later learned to like snuff-
so much so that the first French name for tobacco
was herbe Medici. But it was Nicot, the first influen-
tial promoter of tobacco, who finally gave his name
to the species Nieotiana tabacum.
The most famous tobacco promoter, of course,
was Sir Walter Raleigh. In establishing the first Vir-
ginia colony, he commissioned one Thomas Harlot to
spend a year in the New World as surveyor and
historian. Hariot returned in 1586 with two related
plants-the tobacco and the potato-and a sheaf of
notes. The latter were titled "A briefe and true report
of the new found land of Virginia: of the commodities
there found and to be ~ised, as well marchantable,
as others for victuall, building and other necessarie
uses for those that are and shall be the planters
there," etc.
Uppowoc
Before the manuscript was even published,
Raleigh had planted a patch of tobacco in Ireland,
where he was Governor of Kilcolman. The story goes
that Sir Walter smoked his fa'st tobacco in Ireland-
Jean Nicot, French ambassador to Portuguese court,
sent tobacco to Ca~har~ne de Medici. So the plant
was at first herb~ Medici, then Nicotiana tabacum.
In England, Sir Walter Raleigh was credited with
making pipe-smoking a fashion at Queen Elizabeth's
court. Tobacco spread to Persia and the Far East.
Wooden Indians were used by London tobacconists ~o
suggest the faraway source of the .fragrant leaf. In
France, tobacco was sold as a medicine by druggists.
T156850015
Father o] the American tobacco industry was John Roye,
who smoked Spanish tobacco in his pipe before sailing
to Jamestown in 1610, Rolfe noted the biting taste of
t~ ~tive Virginia ~af; he imported West I~n seed
to grow a milder variety, exported a shipmen~ in 1613.
Industry's "mother" was Pocahontas, whose marriage to
Rolfe established peace between Indians and colonists.
in a pipe, naturally. One reason for his enthusiasm
may have been Hariot's original testimonial:
There is an herb called uppawoc, which sows
~ itself. In the West Indies it has several names,
according to the different places where it grows
and is used, but the Spaniards generally call it
tobacco. Its leaves are dried, made into pow-
der, and then smoked by being sucked through
clay pipes into the stomach and head. The
fumes purge superfluous phlegm and gross
humors from the b~ly, but if there are any
obstructions it breaks them up. By this means
the natives keep in excellent health, without
many of the grievous diseases which often
afflict us in England.
This uppowoc is so highly valued by them
that they think their gods are delighted with
it. Sometimes they make holy fires and cast
the powder into them as a sacrifice. If there is
a storm on the waters, they throw it up into
the air. This is always done with strange ges-
tures and stamping, sometimes dancing, clap-
ping of hands, holding hands up, and staring
into the heavens...
While we were there we used to suck in the
smoke as they did, and now that we are back
in England we still do. We have found many
rare and wonderful proofs of the uppowoc's
virtues, which would themselves require a vol-
ume to relate. There is sufficient evidence in
the fact that it is used by so many men and
women of great calling, as well as by some
learned physicians.
The 1613 shipment sent by John Rolfe from
Jamestown was by no means the first to come from
the New World. Leaf from the West Indies and from
what is now Latin America was reaching Europe fre-
quentiy in Spanish bottoms. The original Virginia
tobacco was a thick-fibered, powerful product, Nico-
tiana rustica. The leaf cultivated by Rolfe and his
wife Pocahontas, though much darker than today's
"Bright," was an improved strain of Nicogana ~ab-
aeum whose seed came from the Spanish possessions
in Latin America.
Long before Raleigh's death in 1618, tobacco
had spread from England to Sweden, Russia and
Turkey; from Turkey to Egypt and Persia; from
France to Holland; from Portugal to India, Java and
China. At the last, when Raleigh had lost favor at
Court and was about to lose his head on the scaffold,
tobacco remained as "a lone man's companion."
Waiting in the Tower of London for the executioner,
Raleigh had his last smoke.
10
TI568~0016
Royal blast
It may have been that Raleigh's fondness for
smoking contributed to his demise~ For the monarch
who beheaded him was also the first great tobacco-
hater, James I. Qt~'pped one London wag of the King's
obsession: 'q~here there's smoke, there's ire." In h~s
Counterblaste to Tobacco, issued in 1604, James blamed
smoking for virtually all the sicknesses to which flesh
is heir. "And now good Countrey men," thundered
he, "let us (I pray you) consider, what honour or
policie can move us to imitate the barbarous and
beastly manners of the wilde, godlesse, and slavish
Indians, especially in so vile and stinking a custome?
... Why do we not as well imitate them in walking
naked as they do?" The cantankerous Tudor was, in
fact, the first major obstacle the American tobacco
industry had to surmount. That it did was an early
proof of the strong attachment the world had-and
has-for the fragrant herb.
In many ways, the infant industry, then con-
centrated in Virginia, faced the same general prob-
lems it was later to encounter again and again: heavy
taxation,, denunciations from puritanical crusaders,
negative reactions following exaggerated claims. (In
France,. the weed ~vas sold only by apothecaries as a
medicine, as a result of explorers' wild tales of its
"healing qualities.")
Motivated by hatred of Raleigh and of the
Spanish who then did most of the commerce in
tobacco, James raised the import duty from tuppence
per pound to six shillings tenpence. Despite this
4,000% increase-possibly the largest percentage tax
boost ever recorded-trade in Virginia leaf flourished.
The high duty, naturally, led to smuggling on a wide
scale; but it aisb encouraged the cultivation of to-
bacco in England itself.
Money crop
In many colonies of the New World, tobacco
leaf was legal tender for the payment of wages, debts
and taxes. And no wonder. It was the greatest single
source of wealth for Virginia, Maryland and even-
tually North Carolina. Until 1803, when cotton be-
came king, tobacco ~vas the nation's most valuable
export commodity. It was, in a double sense, the
"makings" of a nation.
Fortunately for the impoverished settlers of
James I of England hated Raleigh, tobacco-sh~pping
Spaniards, and the weed itself. His Counterblaste
$o Tobacco blamed smolcing for all earthly ailments.
James raised duty on Virginia leaf by ~,000%, but
tobacco warehouses thrived on London docks. Imports
grew from ~0,000 pounds in 1617 to 500,000 in 16~8.
European demand made tobacco the foremost commodity
of the Virginia and Maryland colonies. For the
nezt ~wo centuries, it was America's No. 1 export.
1I
T!56850017
To keep export quality high, Virginia leaf had to sold. Tobacco was kept in
bonded public warehouses
be approved by government inspectors before being while negotiations tool~ place
with "tobacco notes."
Virginia, the European market for tobacco was well-
established before 1607, date of the colony's official
founding. Despite the Counterbhste, the custom of
smoking took London by storm. By 1614 there were
7,000 shops.in that city alone which stocked tobacco.
And this was only the beginning. In 1617, Virginia
shipped 20,000 pounds to England; in 1628, 500,000
pounds; in 1638, 1,400,000 pounds. By 1771, England
and Scotland were importing about 102,000,000
pounds a year between them, virtually all from tho
Chesapeake colonies. This was no mean quantity for
the age of wooden, wind-driven bottoms. Total ex-
ports 150 years later, for example, were in the
neighborhood of 590,000,000 pounds. About half of
this was exported through the Virginia ports-most
of it in the lighter, milder flue-cured types rather than
the colonial "shipping leaf." But the 1771 leaf traffic
from the Chesapeake area was considerable, even by
present-day standards.
Once the mother country recovered from its
disappointment over the lack of New World gold, it
set abot~t fencing off its new commerce in tobacco.
Tariff walls were thrown up: Virginia Company im-
ports were taxed only half as much as those from
Spain. In 1620, cultivation of tobacco in England was
prohibited; three years later, England excluded Span-
ish imports almost entirely. In return for this
thoroughgoing protection, the colonists agreed to
export tobacco only to England.
One reason for the close control was the matter
of internal revenue taxes, based on the firm popu-
larity of smoking. During the century ending with
the Treaty of Paris and the birth of a free United
States, import duties ran from four to six times the
planter's net price-in addition to Virginia's own levy
of two shillings on each hogshead of tobacco exported.
To complete the parallel with modern times, a crude
form of crop control was also practised by the colo-
nial legislatures. At first, second-growth farming was
banned and inferior grades were burned; later, a
system of inspectors and public warehouses insured
that no low-grade leaf was approved for sale. Ap-
proved tobacco remained in bond; actual negotiations
for it were accomplished through inspectors' receipts.
These so-called "tobacco notes" performed the same
economic function as the banknotes and greenbacks
of the next century.
The Tobacco War
During the Revolution itself, tobacco was
doubly important. Virginia leaf was used to pay
interest on loans from France and to pay for war
materiel. In 1776, the year New York City was lost
to the British, General George Washington appealed
to his countrymen: "I say, if you can't send money,
send tobacco." Washington knew his men and he
knew his tobacco: he was one of the larger tobacco
planters and exporters of his time. Nor was the stra-
tegic value of Virginia leaf lost on the enemy. The 1781
campaign waged by Phillips and Arnold in the Old
12
I I
T!568~0018
Dominion was later recalled as "the Tobacco War,'"
since the British troops seemed more anxious to
off green tobacco plants than blue-coated Revolu-
tionaries. At the close of the war, Virginia's General
Assembly was fixing salaries in terms of leaf tobacco,
currency having lost its stability.
After the Revolution, a subtle change in
America's smoking habits got under way. Snuff, the
modish form of consumption, gave way to chewing,
a cheaper and more practical habit for a nation of
people on the move. Thus, as in every major shift
of tobacco usage, economics played as big a part as
fashion.
The Spanish sailors had picked up the chewing
habit from South and Central America; from the
North American Indians, who were exclusively pipe
smokers, the English had taken up the "bright glow-
ing stove." The first tobacconists' Indians, symbolic of
the leaf's romantic origin, stood in front of London
shops. But as pipe smoking became more "common'"
and filtered down to the lower classes, the style-
setting haute monde looked for something more deli-
cate. Snuff-taking became fashionable in Parisian
circles, partly because it overcame some ladies' objec-
tions to smoke, partly because it enabled other high-
born ladies to use tobacco daintily. Snuff had other
advantages: it required no tinder-boxes, it carried no
danger of fire, it was well suited to the ostentatious
display of finger rings and bejeweled boxes. Even-
tually, the "lust of the longing nose" made its way to
England and thence to the Anglo-Saxon high society
of the colonies.
The independent smoker
So, after the cord to the mother country was
cut, snuff became less popular. It was associated with
the hated English dandies and its rejection was, in a
way, a declaration of independence. Also, early in the
nineteenth century, tobacco ceased to be the prime
commodity of export. More of it was consumed at
home, by farmers less interested in modishness than
in convenience and cheapness. Home-gro~vn tobacco
could be taken via the pipe, or simply chewed, and
so it was. "Unmanufactured tobacco" was the choice
of the unmannered American during the Agrarian
Age, lasting until the War Between the States.
~{eanwhile the pipe remained as the tradi-
In 1776 the colonies prepared to fight Britain ]or
their independence. General Washington appealed for
supplies: "'If you can't send money, send tobacco."
In rejecting the mother country, Americans rejected
many of its fashions as well. Snub-taking, a hab~$
associated with British dandies, lost popularity.
13
TI56850019
The pipe, called a calumet by Indians, was the old,
traditional way to smoI~e, although chewing tobacco
was handier. In 1875, redmen st~ll smoI~ed calumets.
tional smoking instrument. Even the sailors and
wanderers who chewed during the day were likely to
take an evening pipeful. Just as the calumet or peace-
pipe symbolized calm goodwill to the North American
Indians, so the polished briar or rough corncob came
to mean solace and serenity to his white conquerors.
A good deal of fanciful allusion to "the philosophical
pipe" entered the literature, but perhaps the most
impressive lines were Longfellow's, from Hiawatha:
On the Mountains of the Prairie,
On the great Red Pipe-Stone Quarry,
Gitchie Manito, the mighty.
From the red stone of the quarry,
With his hand he broke a fragment,
Moulded it into a pipe-head,
Shaped and fashioned it with figures.
From the margin of the river
Took a large reed for a pipe-stem,
With its dark green leaves upon it;
Filled the pipe with bark of willow,
With the bark of the red willow.
Break the red stone from this quarry,
Mould and make it into Peace-Pipes,
Take the reeds that grow beside you,
Deck them with our brightest feathers,
Share the calumet together
And as brothers live hence forward!
Whether Gitchie Manito ever smoked red willow bark
is problematical; the poet," however, was rarely with-
out his sack of Bull Durham and is known to have
recommended it to many of his friends. Longfellow's
manly vision of tobacco as a mystic expression of
comradeship was inspired partly by a cigar store
Indian which stood before a shop on the Boston-
Cambridge road. Made of metal instead of the
customary wood, it became known as the "Long-
fellow Indian," since the poet himself often stopped
to admire it. The figure now stands in the Company's
New York headquarters.
Regardless of the poetic significance of smok-
ing, the quality of tobacco in the antebellum years
was poor. New England grew a harsh, narrmv leaf
called "shoestring." The South produced a dark,
heavy "shipping leaf" quite different from the light,
sweet Bright tobacco raised today. Smoking tobacco
and "chaw" were one and the same for many users:
it was not until 1864 that White Burley was first
grown, a strain distinguished by a remarkable capac-
14
TI56850020
i~y to absorb sugar and flavoring. This Burley, first
raised in Ohio and now predominantly a Kentucky
and Tennessee product, made possible the manufac-
ture of sweet plug. After the Civil War, it was to
revolutionize the smoking and chewing industry; and
during World War I it was to revolutionize the cigar-
ette i~dustry. But before 1860, commercial leaf was
essentially the same harsh, powerful stuff the early
colonists exported. Its enjoyment-except, perhaps,
in the form of scented muff-required a virile palate
indeed. This, together with the general turmoil of
immigration, wes~vard pioneering and the small size
of cities (£e., the lack of compact primary markets)
kept per capit~ consumption of tobacco from increas-
ing between 1813 and 1870.
The better roll
Americans are not Americans, however, unless
they are looking for something better. Among other
places, they looked to Cuba, where cigars were being
rolled even before the War of Independence. Cigar
imports from the Antilles reached the 4,000,000 level
by 1804 and the 20,000,000 mark by 1811. And a
domestic cigar industry sprang up to give less affluent
citizens an imitation of the luxurious imported Ha-
vana. The stogie was a roughly rolled smoke of cheap
domestic tobacco, tapered only at the mouth end; the
cheroot was an even simpler cylinder, open at both
ends. The trend was helped by the 1847 campaigns
in Mexico, from which American troops returned
smoking cigars. Even so, the nation did not become
cigar-conscious until the "Brown Decades" following
the Civil War, when the imported claro became a
symbol of means. At this point, the cigarette appears
on the scene.
Powder and smokes
When the paper-rolled cigarette was born is
something of a mystery. Many tobacco chroniclers
place its birth in 1832, when the Egyptians were lay-
ing siege to the Turkish city of Acre. A cannoneer,
the legend goes, improved his rate of fire by rolling
his powder in paper tubes or "pistils"; his com-
mander, pleased, sent a gift of tobacco to the gun
crew. Since a Turkish ball had shattered the only
available pipe, the Egyptian soldiers proceeded to
smoke the tobacco rolled in the powder paper. The
Longfellow's Hnes on the peace ~ipe were inspired
partly by this tobacconist's Indian, which stands
in the New York headquarters of American Tobacco.
15
T!56850021
practise soon caught on. Only eleven years later
Fiance made cigarette manufacture a government
monopoly. But even at that late date (1~3), the
cigarette was virtually unknown in England. There
is a literary reference in that year to "paper cigars,"
and in an 1854 letter Charles Dickens asked a British
friend to send him cigarettes, although he may have
used that word to refer to small cigars. The new form
of smoking attained world-wide notice after the
Crimean War (1854-56), when English officers picked
up the "papalete" from their Turkish, French and
Italian allies.
In the beginning, every cigarette, even in the
salons of London, was a "roll your own" type; it was
not until 1866 that "tailor-mades" were turned out
in England and the U. S. They were, of course, hand-
rolled. Most were larger than present-day cigarettes,
and all were made from "Turkish" tobacco, grown
in Greece and Bulgaria as well as Turkey.
The Turkish cigarette, as any Melachrino
smoker can testify, is a unique smoke. Its scent is
rich, foreign, exotic. At that, the only market of con-
sequence in America was in New York, x,.-ith its large
foreign-born population. And because hand-rolling
required a great deal of labor, New York with its pool
of workers was the logical manufacturing site.
But the rise of the cigarette was based on
nothing so fortuitous as the chance flight of a Turkish
cannonball at Acre. Nor were the beaux of London
sufficiently influential to generate a new industry on
this side of the Atlantic. Just as tobacco itself had
sprung from the soil of the New World, so the cigar-
ette was to dominate the entire world's smoking
tastes by reason of a specific patch of American earth.
In 1838, the first crop of a tobacco which cured to a
bright yellow was raised in the sandy, porous soil of
Caswell County, North Carolina. First used in cigars,
it was a leaf of exceptional sweetness and fine texture.
From this little ridge of sandy soil came the American
cigarette, now by all odds the smoking standard of the
globe. From it, too, came The American Tobacco
Company.
In ~he colonies tobacco was trundled to the market
in hogsheads rolled along "tobacco roads." For two
and a half centuries th~s method o$ leay transport
continued unchanged: this woodcut is dated 1869.
16
T!56850022
PRO BONO PUBLICO
CHARLES KINGSLEY, the English adventure
novelist, described tobacco as "a lone man's
companion, a bachelor's friend, a hungry man's food,
a sad man's cordial, a wakeful man's sleep, and a
chilly man's fire." If Kingsley was correct, it is
entirely logical that the great shifts in tobacco fashion
should follow wars. For soldiers are lonely, hungry,
sad, wakeful, chilly; and they live, perforce, like
bachelors. Since the days of Marco Polo, soldier-
adventurers have been the great diffusers of inven-
tion, of language, of custom. Returned to civil life
from their travels and travails, they become the
nucleus of what economists call "the consuming
public."
It was on the receding tidal wave of a great war
that Washington Duke of North Carolina launched
his tobacco business. He was a serious and thrifty man
who had attained a 300-acre farm four miles north of
Durham and four children: Brodie by his first wife;
Benjamin, Mary and James by a second. A widower,
Duke did not enter the Confederate army until 1863;
he was captured in the retreat from Richmond before
Lee surrendered at Appomattox Court House. In
1865 the forty-five-year-old veteran was released
from Libby Prison and sent to Ne~v Bern, North
Carolina, 137 miles from home. Having only 50c in
hard cash, obtained from a Federal soldier in exchange
for a five-dollar Confederate bill, he walked the 137
miles.
The farm had been ransacked by Federal
troops, except for a little Bright tobacco leaf and
some flour. To raise working capital Duke sold his
land and rented back a few acres of it. After sending
for his children, whom their grandparents had kept,
he pulverized and cleaned the tobacco in a small log
barn. Packed in muslin bags labeled Pro Bono Pub-
lico,* it was loaded onto a wagon drawn by two blind
mules. Reins in hand, Duke rattled east toward
Raleigh, sleeping by the roadside at night and cooking
his own food in a frying pan-bacon, corn meal, sweet
potatoes. The expedition was a success. Duke ex-
changed his flour for cotton, which he sold in Raleigh;
part of the proceeds went into a present for his
children-a bag'of brown sugar. (Buck, the youngest,
ate so much of it that he lost his "sweet tooth" for
the rest of his life.) More important, the tobacco
found a ready cash market, and yielded enough
money to buy a supply of bacon.
The ready market for Duke's tobacco was not
entirely a local one. Shortly after the surrender at
Appomattox, General Joe Johnston and 30,000 Con-
*Which, translated, means "for the good of the public."
17
Ti56850023
/-
Be.fore World War 1 cigarette sales were relatively minor. Plug, identified with tin tags, was the
big seller.
federate troops retreated from Raleigh and passed
through Durham in their pell-mell westward flight.
Their pursuer, General William Tecumseh Sherman,
first sent his cavalry into Durham and later came
himself to discuss a truce with Johnston. Thus both
Federal and Confederate troops were "stationed," so
to speak, in Durham, long enough to sample tobacco
from the Golden Belt. (Although tobacco rations for
both Federal and Confederate troops were authorized,
it appears that they left considerable to be desired in
quality and in regularity of issue.) By 1865, the
Caswell County yellow leaf had spread to Person,
Warren, Orange, Granville and Rockingham-now
the heart of the Bright tobacco region-and Durham
was the manufacturing center for it. One factory
which turned out Best Flavored Spanish Smoking
Tobacco was cleaned Out by the Federals. Its pro-
prietor, John Green, first thought he was ruined; but
the raid was a blessing in disguise. After they were
mustered out, the Federal soldiers remembered the
fine smoking tobacco made in Durham and began to
send orders for it. So, in time, did such notables as
James Russell Lowell, Henry Wadsworth Longfellow,
Alfred Lord Tennyson and Thomas Carlyle.
Eventually, Green's mixture was renamed
Genuine Durham Smoking Tobacco, ~vith a bull's pic-
ture between "Genuine" and "Durham." When
Green died in 1869, a former tobacco retailer named
Blackwell bought the Bull Durham business. He and
his successor advertised heavily, and Durham soon
became "the town renowned the world around." The
W. T. Blackwell Company for a time commanded the
tobacco industry of Durham; and like every other
local tobacco man, Washington Duke considered "the
Bull Factory" his major competition.
Bull Fight
The extent of Bull Durham's vogue can best
be appreciated by the number of its imitators, which
came onto the market in a steady stream during the
1870s. All used the rectangular bronze-on-black label.
There was Sitting Bull Durham (!) garnished with a
sketch of that worthy Sioux medicine man. There
were Durham Gold Leaf, Magic Durham, Jersey Bull,
El Burro, The DURHAM Smoking Tobacco, Pride of
Durham, Billy Boy DURHAM (made in Rochester),
Black Bull, Dream DURHAM, Nickel-Plated Durham
and D/me Durham. One local manufacturer, Morris
& Son, tried a variant of the original Blackwell name
-Eureka ST~anish Flavored Durham. Another firm,
F. W. Felguer of Baltimore, had several entries in the
Bull ring: Stokes vs. Durham, whose label showed a
lady bullfighter spearing a Spanish bull, Globe Dur-
ham, Steer, Bully, Buffalo, Wild Buffalo and Buffalo
Bill. By the time the last of these were registered in
1876, imitation bulls were "old hat"-the latter,
ironically, being one of iPelguer's own smoking to-
bacco brands. Gall & Ax carried the Spanish theme
a step further with Los Toros Tobaeo de Fumar. And
as late as 1878 Wilkens of Baltimore weighed in with
Old Bull, Bull's Head, Bison and The Brindle. Al-
though Washington Duke's early labels were printed
in bronze on glossy black, he stubbornly refused to
ape the Bull. Duke of Durham smoking tobacco bore
18
T!56850024
the image of a pipe-smoking nobleman, and the _Pro
Bono PubI~co label kept its 1868 format, showing an
Indian chief smoking a calumet next to a cask of
"Duke's Durham Tobacco," with a small caption
reading "Do this."
In view of Bull Durham's dominance, it seems
rather remarkable that a penniless ex-Johnny Reb
should start out from scratch to give it battle. To the
forty-five-year-old Duke, ~owever, the tobacco busi-
ness had certain obvious advantages. With the slaves
emancipated and no cash to lay out for wages, a man
and his sons could grow, flail, bag and sell tobacco
all by themselves. And with Blackwell's advertising
making Durham products world-renowned, the mar-
ket was growing. Using first the log cabin, then a
stable, and later a frame building right on their farm,
W. Duke and Sons turned out 15,000 pounds of prod-
uct in their first full year, 1866. At 80c or 40c per
pound after revenue taxes, this brought in about
$5,000. The brand name was still Pro Bono Publi~o.
In 1869 Brodie Duke, the eldest son, moved into an
old two-story building in Durham where he made
(1) his own meals and (2) a brand of smoking tobacco
called ~emp~r !dem and, beginning in 1871, Duke o]
Durham.
Five years later the four Dukes were together
again in their own Durham factory, a false-fronted
affair on Main Street topped off with a cupola. But
Duke o.f Durham was no match for Bull Durham, and
young James Buchanan Duke, then in charge of
manufacturing, came to a decision. "My company,"
he told a local lawyer, "is up against a stone wall.
It can not compete with the Bull. Something has to
be done and that quick. As for me, I am going into
the cigarette business." In 1881, he did.
Bonsacks and taxes
Thinking big was Buck Duke's lifelong char-
acteristic, and he started acting big in 1881, at the
age of twenty-four. Loth to experiment with cigarette
manufacture, he brought a factory manager and
skilled rollers from New York. Shortly thereafter a
Virginian, James Bonsack, invented a making ma-
chine said to reduce manufacturing costs from 80c
per thousand to 30c. The leading cigarette firms-
Allen and Ginter of Richmond, Kimball of Rochester,
Kinney, and Goodwin, both of New York City-
hesitated to lease Bonsack's maker. They felt con-
sumers would resent the replacement of hand-rolled
cigarettes by machine products.
In view of the machine's riskiness and un-
proved performance, Duke contracted to use Bon-
sacks at a royalty of 24c per thousand rather than
30c. (Later a clause guaranteed that Duke's royalty
should always be 25% less than the standard rental.)
It turned out that two machines Bonsack delivered
were not efficient, but with the help of a brilliant
young mechanic named William O'Brien, Duke was
able to improve them to turn out 200 cigarettes a
minute (today's machines have a top speed of 1,600
and a "cruising speed" of about 1,800).
Manufacturing taken care of, Duke turned his
attention to packaging ~nd invented the slide-and-
shell box. This done, he narrowed his profit margins
19
T1568b0025
From Richmond's Libby Prison, once a tobacco plant,
Washington Duke returned to Durham in 1865. On his
ravaged .farm, only an old pile of tobacco remained.
In a tiny log cabin, Duke and his young sons beat
the tobacco, labeled it Pro Bono Publieo, sold i~
from a wagon. The leaf was good; so was business.
Decision to make cigarettes was made by young Buck
Duke in 1881. Three years later, Buck went to New
York City, then the heart of the cigarette market.
to the minimum in anticipation of mechanization
savings. Ten Duke of Durham cigarettes were sold for
a nickel, compared with the then-standard price of
10c. In this, young Duke was helped by a reduction
in the government tax from $1.75 to 50c a thousand.
The new rate became effective in 1883, just before the
Bonsack machines achieved full efficiency.
Given these factors-choice leaf, efficient man-
ufacture, the right price-only the problem of mer-
chandising remained. Duke's sales chief, Richard H.
Wright, spent almost two years in Europe, Africa,
India, Australia and New Zealand. Other salesmen
opened up domestic markets by selling jobbers and
retailers, doubled in brass by reporting on the buying
public's reactions to the various brands. In 1884,
Duke himself went to New York, established a loft
factory there on Rivington Street, personally can-
vassed the retail trade, invested heavily in billboard
and newspaper advertisements, devised sales lures
like the premium coupon and the celebrity picture,
one in every package. The pictures, mostly of
actresses and athletes, came in numbered sets to
provide an extra incentive for repeat buying. For
seventy-five coupons, a Duke customer could obtain
a folding album depicting the country's reigning
beauties in color. During the day he watched over
his manufacturing operation, seeing that his cigar-
ettes were tightly rolled and well-packaged in the
slide-and-shell boxes. At night he would make the
rounds, counting discarded cigarette boxes on the
street to gauge progress of the various brands. At first
he lived in Harlem, but the long commute seemed a
waste of time and he moved to a two-dollar-a-week
hall bedroom in the Bowery.
Major Ginter' s mistake
The simultaneous exercise of Duke's foresight
in all these directions added up to a management
tour de force. In 1880, before he made his cigarette
move, the four leading firms did about 80% of the
nation's business, totaling around 409,000,000 cigar-
ettes. By 1889, annual production was 2,152,000,000,
of which the Duke firm did 38%, the other four
splitting the remainder. During that year Duke
approached Major Lewis Ginter to talk merger, was
told: "Listen, Duke, you couldn't buy us out to save
your neck. You haven't enough money and you
20
TI56850026
/.-
The curing of.l~ght, yellow tobacco in the Old Belt
made Durham tobacco famous. Demand for the flue-cured
product soared during and after the Civil War; any
tobacco marked "Durham" was readily received. Thus,
actual Durham makers tool¢ pains to use "genuine" on
their labels. Bellwether brand was Bull Durham, its
trademark supposedly inspired by that of a mustard
made in Durham, England. First brand of W. Duke, an
enterprise later to grow into American Tobacco, was
Pro Bono Publico, a granulated tobacco sold in bags.
couldn't bon'ow enough." Ginter was wrong on both
counts. Buck Duke was widening his market with
Ginter's own specialty, advertising-t800,000 worth
in 1889, or about 96c per thousand cigarettes. His
four big rivals lacked both his zest and his talent. In
1890, they joined forces with W. Duke Sons and
Comp.any to create a new corporation, capitalized at
$25 million. The President xvas, of course, James
Buchanan Duke; the name of the new firm, The
American Tobacco Company.
The brand names on the books of the new
company were almost too numerous to count. Con-
norton's Tobacco Brand Directory had listed only
108 cigarette names in its 1885 edition, published in
Chicago. Among the entries were such shudder-pro-
ducing appellations as Catarrh, Hunkidori and Old
Rip. The more important brands included Allen and
Ginter's Dubec, Bon Ton, Matchless and Napoleons,
along with Old Rip (Van Winkle); Goodwin's Canvas
Bad¢, Old Judge and Wdcome; Kimball's Cloth of
Gold, Fragrant Vanity Fair, Turl~ish Orientals, Old
Gold, and Three Kings. Kinney had the renowned
Sweet Caporal brand, still made by The American
Tobacco Company. Virtually all were straight Bright
tobacco smokes, although the "Sweet Caps" were
thought to contain a seasoning of Turkish leaf.
To this array Duke brought the Duke of
Durham brand, Cyclone, Cameo, Cross Cut and Duke's
Best, the last four introduced in cigarette form when
he invaded New York in 1884. Cyclone was labeled
"Everything in quality, but little expended for deco-
ration." Other Duke cigarettes included Pedro, Town
Talk and Pin Head, the latter bearing the proud
inscription, "These cigarettes are manufactured on
21
T!56850027
were big buying incentives. Duke varied these with
billboard and poster ads to presell has new brands.
the Bonsack Cigarette Machine." Before 1898, the
Cycle brand was labeled "The best that can be made
for the money," and after that year the package
further emphasized economy in these capital letters:
"1 BOX OF 10 FOR 3 GENTS-2 BOXES OF 10
FOR 5 CENTS." Prominent among the early Ameri-
can Tobacco cigarette brands, as distinct from the
Duke brands, were Fair P~ay, Battle A~c, Motor,
Colonial and Indian Head, the last bearing the Pow-
hatan trademark. The original smoking tobacco, Pro
Bono Publico, was still being made, and the original
Duke was still seriously living up to that dignified
phrase: in the early 1890s, having passed threescore
and ten, he devoted himself to local affairs. His most
prominent activity was the bringing of Trinity
College to Durham. Following his initial contribution
of $85,000, Washington Duke and his sons continued
to invest in the school, which soon became the largest
endowed college in the Southeast. The last and
largest gift of $40 million was made by James B.
Duke in 1924, when Trinity College became Duke
University.
But in the first year of American Tobacco,
Buck Duke's investments were strictly along business
lines. The first prize on his list, the National Tobacco
Works of Louisville, was acquired in 1891. National
was famous for plug, particularly its Piper Heidsiecl¢
brand (still sold by The American Tobacco Com-
pany). Its purchase by American moved the Drum-
mond company to cut the price of its che~p brand:
Duke answered by pricing Battle Ax at a penny less,
and a round of plug plugging followed.* As a result
Drummond, Lorillard, Mayo and several lesser com-
*As in the case of Bull Durham, competition in plug was
often nearly synonymous with imitation. Piper He~d-
siecI~ was registered as a tobacco brand in December of
1882 by Pfmgst, Doerhoefer & Company, which later
became the National Tobacco Works of Louisville.
Inevitably, a Mumm's Extra Dry plug was registered in
1884 by a small manufacturer in nearby Covington,
Kentucky.
22
T!56850028
parties were bought. In ~898 Duke's large stock°
holders persuaded him to head a subsidiary, Conti-
nental Tobacco, newly incorporated to handle the
plug lines. At the time this was a far more important
consolidation than the five-sided cigarette merger of
1890. The greatest part of tobacco consumed, in
pounds if not in dollar value, was chewed. Nor was
plug a lowbrow or even a middlebrow commodity:
every man of parts, from ex-president Grover Cleve-
land to the executive in his city office, was equipped
with a personal cuspidor. But although American
Tobacco achieved 60% of plug sales by the last of the
gay nineties, the manufactured-tobacco market itself
increased only 2°,/o. By contrast, the cigarette was
going through a riotous proliferation of brands. New
factories sprang up in every city, and production
increased 26% in the ten years ended 1899.
it was Duke's preoccupation with the plug
Premiums wets s~lk flags or pictures. Lithographs
o.~ $~rs. Langtry (left) and Lillian Russell were in
trade that finally led to the purchase of ~ old
nemesis, Blackwell's Bu~.l Durlzam. A group of New
York financiers had bought control of the old Black-
well company, and, aware of Duke's interest in plug,
an option on an interest in a St. Louis plugmaker,
Liggett and Myers. In addition the New York group,
operating as the Union Tobacco Company, had taken
over National Cigarette and Tobacco Company of
New York, an important cigarette manufacturer.
Duke bought Union at a price requiring the issue of
new common stock: $12.5 million in American com-
mon was exchanged for $3 million in cash and the
securities of Union.
• It would be a mistake, however, to assume that
Duke's purchases revolved only around tangible
assets like plants or intangible assets like brand names
(book-valued, in 1890, at $20 million of The American
Tobacco Company's $25 million asset worth). Tall,
ths costume album; smaller ones ~ner~ slipped into
cigarette boxes, numbered to induce "chain buying."
23
TI56850029
red-haired, austere, J. B. Duke was then a handler
of men, a professional executive rather than a finan-
cier. He owned far less than a controlling interest in
American Tobacco common. In 1897 Colonel Oliver
Payne of Standard Oil cornered a working majority
of the stock, and Duke told Payne he would sell his
shares and start a new company if Payne's group
desired it. Payne backed down and gave Duke a free
hand from that point onward. Not that Duke was
"agin'" the men who furnished capital: in fact, his
principal motive in buying Union was to bring into the
American camp such well-connected men as Thomas
Fortune Ryan, William G. Whitney, Anthony H.
Brady and P. A. B. Widener. Along with Blackwell's
battle-tested Bull Durham brand, Duke secured the
services of' its manager, a Philadelphian named
Percival S. Hill. The latter quickly became Ameri-
can's Vice President in charge of sales, and eventually
brought his son, George Washington Hill, into the
corporation.
By now, Buck Duke's operating formula was
apparent to his rivals. Its essence was volume first,
profits second. The modus operandi: (li devise a
superior product; (2) hire the best people to make it;
(3) price it as low as possible; (4) mechanize, organize,
merchandise. This strategy, abetted by premium
giveaways, led to a volume great enough to com-
pensate for the low profit margin per unit of sale. It
also gave Duke's l~roducts a lasting market, as con-
trasted with the sporadic demand for the high-priced,
high-margined specialties on which less foresighted
manufacturers pinned their hopes. Duke's methods,
of course, were not uniquely his. The improvements
in quality-controlling machinery and in national
communication which made volume possible were
being adopted by the smartest managements in
meat-pac)dng, in oil, in lead, in sugar, in whiskey, in
cottonseed-oil, in copper, in cordage. The Rocke-
fellers, the Carnegies and the rest soon were to domi-
nate their respective industries, and their head starts
in the new producing and selling methods led inevi-
tably to monopolies. Despite the legal penalties later
imposed on such leadership, the new concept of big
business was to continue and create a new national
economy, greater than any the world had ever seen.
In the wars of the twentieth century, concentrated
volume production was to prove the nation's most
Un$il 1888, cigarettes were handmade. This pretty
roller in Allen & Ginter's 1~ichmond ]ac~ory made
]our cigarettes a minuSe. Machines now make 1,600.
indispensable military asset. And during the intervals
of peace, the new "brand land" showed a rising
standard of living that is still the envy of the world.
Plug and nickels
In 1900, however, neither James Buchanan
Duke nor his industrial contemporaries could foresee
all this. Duke was, in fact, gravely concerned about
his cigarette business. Since 1897, the nation's con-
sumption of cigarettes had dropped off each year.
A big reason was the tax, which had gone from 50c
to $1.00 per thousand in 1897, thence to $1.50 in
1898. One of Continental's nickel brands, Cycle, was
unable to hold the price line and dropped from
600,000,000 to 40,000,000 sales in two years. The
other inexpensive brands, which had shown the
steepest increase during the nineties, suffered simi-
larly when odd pennies were added to the price.
Furthermore, cigarette distribution was by no means
I I
T!56850030
Use of making r~achines, along with improved leaf
quality and aggressive advertising, enabled Duke
to win more than a tldrd o.f cigarette sales by 1889.
But mechanization also increased the cigarette market
as a whole-#ore about 650,000,000 units in 1883,
the first machine year, to about 2,152,000,000 by 1889.
national; Duke himself ma)- have wondered whether
they represented a big-city fashion, possibly a passing
one. This suspicion appeared to be confirmed by the
gains registered by his top smoldng tobacco, Duke's
Mixture. This was the old Pro Bono Publico, renamed
in 1889 as a challenge to Blackwell's Bull Durham.
The brand jumped from 8,600,000 to 5,500,000
pounds between 1896 and 1897-the very year that
cigarette, sales began to soften. Even after the Bull
was brought into American's brand stable, Duke's
Mixture continued to grow, topping the ll,000,000-
pound mark by 1900. With the bulk of the tobacco
business still in cigars and manufactm'ed (smoking
and chewing) leaf,* Duke turned to them.
The previous year, Duke had reinforced his
*In 1904, when the new American Tobacco Company
was formed, cigarettes accounted for only 5c of the
consumer's tobacco dollar. Cigars accounted for 60c,
chewing and smoking tobacco for 33c, snuff for 2c.
plug position by investing heavily in a small but
prospering business in Winston-Salem, owned by
Richard Joshua Reynolds. The limited financial re-
sources of Winston-Salem could not supply the
expansion capital Reynolds needed, and in 1899 he
re-incorporated in New Jersey. American held a two-
thirds interest in the reorganized Reynolds company,
but played no part in its actual operation. One reason
was the unique character of Reynolds' principal
product, flat plug; another was the stubborn indi-
viduality of Josh Reynolds himself, who resented his
dependence on Northern capital. One historian
quotes him with this apology: "Sometimes you have
to join hands with a fellow to keep him from mining
you and to get the under hold yourselL" Another
small finn permitted to operate more or less autono-
mously after .american bought it out was Lorillard.
That company contributed lines of plug, smoking
tobacco and snuff.
25
TI56850031
Tobacco was emerge.nO as a biO bueiness throughout
the world. In Great Britain, whose demand for the
Virginia leaf first made tobacco a staple, smoking
flourished in all its forms. The extent of tobacco
manufacture in England is suggested by this woodcut
o.f Cope & Company's huge cigar ]aetory in Liverpool.
During the eighties and nineties, tin tags
pronged into plug tobacco served the same function
as fancy embossed bands did for cigars: they lent
individuality. During the early 1900s they constituted
important sales incentives, for the tags were redeem-
able at an average penny-and-a-half per pound
(sometimes in cash, sometimes in prizes). Ia 1902, a
year in which the organization sold 132,600,000
pounds of plug tobacco, the "tin-tag fund" was
credited with over $2,000,000. Of this, $1,567,000
was spent in redeeming tags and the rest returned to
the income account. Other funds provided for re-
demption of coupons or box fronts from cigarettes
(especially Sweet Caporal), little cigars, and pipe
tobacco.
By the turn of the centms-, then, American
Tobacco had about three-fifths of the nation's smok-
ing and chewing tobacco business. The twentieth
century's first year also saw the organization of
American Snuff Company. The new subsidiary took
over the snuff-making assets of Lorillard, the George
W. Helme Company, and Atlantic Snuff, together
with Continental Tobacco's accumulation of lesser
snuff properties. Although American Snuff began with
80% of the U. S. market, snuff sales were not only
negligible but declining. The product was a full two
centuries past its heyday of fashion; it was no longer
sniffed but rather "dipped," that is, applied between
gum and cheek with a stick dipped into the container.
By its transfer from nostril to mouth snuff lost all
its original hauteur and became merely a variant of
straight "eatin' tobacco." In this form it still retains
a small loyal clientele among outdoor workers and
employees of factories where smoking is prohibited.
26
II
T156850032
In 1890, when Dulce's four big rivals joined him to
form the first American Tobacco Company, machines
and mass advertising were creating big businesses.
A Cleveland oilman named Rockefeller wa~ organizing
the Standard Oil Trust, and a little ,~cot, Andrew
Carnegie, ruled the world's greatest steel empire.
Duke was strongly attracted to another great
prize: the cigar trade. Sales of this most aristocratic
and most expensive form of tobacco increased a cool
62% between 1~90, when the old American Tobacco
Company was organized, and 1904, whea the new
corporation was formed. The strength of the market
is best indicated by the fact that 6,700,000,000 cigars
were consumed in 1903-more than the total bought
in 1953. When allowance is made for the increase in
population, per capita consumption in the earlier year
Capital to expand American Tobacco came .from such
financiers as P.A.B. Widener, Anthony Brady, W.C.
Whitney. James Duke owned less than a controlling
interest, but no one else could run the business.
When one financier bought control, Duke squelched
him by threatening to resign and start a new firm.
27
TI56850033
Cigar box art during the late Igth century ran the
gamut .from the naive to the sophisticated. Joyful
nymphs and reluctant satyr on the inside label of
was about eighty-four, compared to a recent average
of thirty-eight. To put it another way: more than
two cigars were smoked in 1903 for every cigarette
consumed.
The cigar, Duke found, was a smoking roll of
a different color, quite apart from its dark wrapping.
It was essentially a handmade item (even today the
Araer~can Cigar's Hoffman House cigar bo~es suggested
the famous painting by Bouguereau which hung in the
Hoff~nan House Bar, rendezvous of actors and notables.
machine has not completely replaced the human
being in its bunching,, shaping, binding, wrapping,
and boxing). This being so, there was no economic
reason for a large, aggressive organization to domi-
nate cigar making. So the American Cigar Company
never achieved more than one-sixth of the nation's
cigar trade, although it did become the largest manu-
At the top of the line were such imported Havanas as
Villar y Villar. Its boxes were ornamented by this
rather complicated but very dignified steel engraving.
From the first, Cremo was one of the popular five-cent
brands of American Cigar (as was Hoffman House).
inside label bore this commercial lithograph, ~n color.
T!56850034
Anna Held was a five-cent cigar, one of a zcore oY
decade under John B. Cobb and Percival S. Hill.
Caswell Club ranked among the finest of domestic
cigars. Brands ~n this "~n-betwsen'" class showed
less staying power than the more expensive Havanas.
facturer shortly after its founding in 1901. In 1912,
when Allie Sylvester succeeded Percy Hill as its
president, American Cigar had 40 domestic and 20
Cuban factories and employed 37,000 people. (While
the number of cigar-making enterprises has dwindled
considerably, from an estimated 20,000 in 1911 to
about 1,500 at present, no manufacturer has a very
great share of th~ market. In 1953, for example, the
three largest cigar manufacturers-one of which was
The American Tobacco Company-accounted for
only 27% of the business among them.) Because it
did not lend itself to volume production by machine,
and because most retail sales were in units rather than
in packs, the cigar was not a very profitable item. In
fact, Duke's cigar subsidiary lost $3.5 million in 1902
while doing 16.4% of the nation's cigar business. Net
profit on cigar sales of $154 million during 1902-1908
totaled only $1.9 million-l.2%.
Antonio y Cleopatra, always a clear Havana, was
"made expressly for persons of taste.'" Its label
is still embossed in gold, printed in your colors.
By 191~, when All~e L. Sylvester became president,
A~erican C~gar ~as bigger than its parent Company,
employed 37,000 employees ~n sixty cigar factories.
29
T!56850035
In 189I American bought National Tobacco Works of
Louisville, maker of famous Pi~er Heidsieck ~lug.
Drummond, Mayo and other ~lug companies followed.
Like cigars, plug comprised a rich, often sweetened
filler in a smooth wrapper leaf. It came in twists
or blocks, the latter being shaped in wood molds.
The manager of National Tobacco (second from left,
seated) was a man of standing. Company's main item
was plug, and Mr. Pfingst was a major plugmaker.
Low profit or no, cigar brands seem to live
longer than other tobacco forms. Brands like Anna
Held and Caswell Club, popular during the early
1900s, were to hang on tmtil War II production
limitations forced their discontinuance.
It was not long before J. B. Duke was looking
for new worlds to conquer. And the new world, in
his case, was the Old World-more particularly,
Britain. Ever since R. H. Wright's globe-girdling
sales junket in 1884, the Company had been the
major force in cigarette exports. But most of these
were cheap cigarettes sent to the Orient; high tariff
walls kept the Dukes out of Britain for all practical
(i.e., profitable) purposes. In 1901, therefore, Ameri-
can Tobacco purchased a Liverpool tobacco maker,
Ogdens, Ltd., with an eye to securing a share of the
British market. The English response was immediate
and frantic: thirteen large firms combined as the
Imperial Tobacco Company, lowered their prices to
meet Duke's, and initiated a vigorous "Don't Buy
American" campaign. Mter a year, the t~vo sides
called a truce. Duke agreed to stay out of the United
Kingdom, while Imperial agreed to stay out of the
U. S., Puerto Rico, and Cuba; a new corporation,
British-American Tobacco Company-two thirds
American-owned, one third British-was formed to
do the export business of both companies elsewhere.
From the Carlton Hotel on London's Pall Mall, Duke
cabled his father in Durham: "I have just completed
a great deal with British manufacturers, covering the
world, securing great benefit to our companies."
(Twenty-six years later American Tobacco was to
re-enter the English industry with the purchase of
J. Wix & Sons, Limited, a London corporation which
now makes Kensitas and Bar One cigarettes for the
United Kingdom market.)
The Turkish rush
Despite Duke's impressive start ia smoking
tobacco, chew, cigars and snuff, these branches of
the trade had gone about as far as they could go.
Cigars and chew were well past their peaks, as meas-
ured by per-capita consumption, by 1904; smoking
tobacco and snuff were to reach peak use during
World War I, but showed very little increase after
1900. It was the cigarette, after all, that was to win
the natioa's smokers. Total sales, ~vhich in 1901 had
30
T!56850036
dropped to about the 1890 level, turned up again in
1902. It was certainly no coincidence that the tax of
$1.50 per thoumnd was reduced in that year-to 54c
on brands wholesaling under $2.00 per thousand, to
$1.08 on more expensive kvpes. But as always, it was
the public which foreshadowed the new uptrend. A
number of small New York manufacturers-mostly
men of Greek, Turkish or Egyptian origin-were
concentrating their efforts on all-Turkish cigarettes.
Many were retailers who hand-rolled the aromatic
Turkish smokes in back rooms. In the five years from
1899 through 1908, their combined sales jumped from
200,000,000 to 750,000,000 cigarettes, the latter figure
representing a full fourth of the cigarette market.
Duke made his move, but not too quickly. In
addition to the development of straight Turkish
brands, some purchased and some begun from scratch,
the Company broadened its line to include Turkish-
Virginia blends, making possible a comprom/se be-
tween the v.ery high price of Turkish leaf and the
more modest cost of domestic tobacco. Among these
blends were Hassan, Mecca and Fagma. At the same
time a new all-domestic cigarette, Piedmont, was
brought out, and the new entry soon passed Sweet
Capora~ as the No. 1 seller. In just two years, 1902
and 1903, The American Tobacco Company's Turkish
sales climbed to about 870,000,000, or half the inde-
pendents' total. At the came time the new Turkish
blends, some made in oval shape and all festooned
with Oriental names and package designs, pushed
Duke's sales of inexpensive cigarettes above the two
billion mark.
Although the Turks came on with a rush, they
were essentially what are sometimes called "big-city
cigarettes": fads which die out fairly quickly and
whose demand springs more from novelty than from
the taste of the broad American public. Because they
achieve insignificant volume, such passing fancies are
rarely a bargain either for consumer or producer.
During the Oriental rage of 1900-1910, the profit
margin on American Tobacco's straight Turkish
brands was never as great as that on its domestic
blends, although the former sold from 10c to 25c per
box of ten, compared with 5c for the latter. The lesson
in volume economies then learned by Duke has stuck
with the Company through the years following.
Although some of the turn-of-the-century Turk~h
In I898 there were hundreds of c~garette brands on
the market. Duke's originals-Cameo, Crosscut and
Cyclone-were still made, though trebling of federal
excise taxes .from lc to 8c played hob wish the old
nickel price. As shown by Cycle's registragon in
Hawaii, even nickel brands got global d~s~r~bugon.
31
T!56850037
Treasury Department ~n American Tobacco's Broadway
ol~ce looked lilce this during the nineties. Late in
the decade Union Tobacco bought out the Blaokwell
company along with Bull Durham, and A~erican bought
Union. After 85 years the Bull had become the most
famous of brands, flattered by numerous ~mitations.
brands are still made by American Tobacco out of
deference to the habits of longtime customers-
Egyptian Prettiest, Egyp~ien-~e Straights, Melachrino,
Natural, and the straight Turki~ Pall Mall-the
great effort has always been spent on national brands.
No brand's land
But as yet, in spite of Duke's mighty efforts
to rear a great corporation, there were no truly all-
American tobacco products except, perhaps, Bull
Durham. Connorton's Directory for 1903 listed no
fewer than 9,005 brands of plug and twist, 3,625 fine
cut chewing tobaccos, 7,046 smoking tobaccos, 3,646
different kinds of snuff and 2,124 "cigarettes, cigarros
and cheroots." Tobacco manufacturers were listed in
every city of any size. The typical brand could hope
for a localized market only, and a firm with national
aspirations like American Tobacco simply multiplied
the number of its brands to get more business.
In theory, this vast profusion of brands was
aimed to please every variation of consumer psy-
chology. Some had nostalgic appeal, like the Louis-
vflle cheroot named Befoe de War. One wonders,
however, what kind of merchandising theo~T ex-
plained such brands as Bogaboo, Coal Smol~e, Corn
I
T156850038
Under amplecheeked President Cleveland the U. S. was
a tobacco-chewing nat~on. No public place, even the
busy Wall Street broker's ol~ce, lacked ousp~dors.
By 1903 a new fad for Turkish cigarettes had swept
~5% of the market. Some cigar store Indians became
Turks. Duke brought out Turkish blends like Mecca.
Husk, Gloomy Gas, Jack the Giant K~ller, P~gs Foot,
Peoria Sweepers, Straw Board and Total Eclipse.
There was a Wah Hog smoking tobacco made by
tPinzer of Louisville, and an implausibly-named T & B
brand put up by one George Tuckett of Danville,
Virginia, and Hamilton, Canada. Gall & Ax had a
Black Horse Infantry brand whose label pictured ~vo
pink babes on a black pony. Elder, Dempster sold a
plug called Catch Me Willie, complete with a beautiful
lithograph of a bosomy maiden eloping from her
second-story window. Another smoking tobacco,
"patented" ten years before, was called Dental. Ac-
cording to its package, Dental cured "Asthma, Neu-
ralgia, Bad-Colds; Toothache, Headache, Catarrh,
Deodorizes the Breath & Preserves the Teeth." Its
trademark was a large denture, and its manufacturer,
incredible as it sounds, was a Martinsville, Virginia,
company named English, Belcher. A brand of stogies
was called Mayer Rat Tail and another Detro~
Sweepers (the latter, quixotically, made in Colambns,
Ohio). Sen-sen was the name of g cigarette made in
Richmond; Quaker Oats cigarettes were made in
McSherrystown, Pennsylvania. And a Pittsburgh
firm, Dilworth Bros., was turning out a toby-a long,
slender, cheap cigar-under the brand name L,ttcky
Strike.
Many of the 2,000-odd cigarette brands were
credited to subsidiaries of American Tobacco opera-
ing under their own names. Some brands were made
by more than one firm, indicating an early disregard
for the sanctity of the trademark. An exception to
this was the roster of eighty brands belonging to
Duke's Continental Tobacco Company; almost all
were asterisked by Connorton, indicating "ownemhip
T!56850039
proven and incontestable:' Among the lesser-kno~-rn
were such names as Admiral Dewey, Ameri~n Beau-
t/is (first use~ as a "fighting" or cut-priced brand),
Cap~. Kidd, Columbus, Cream of Virginia, Genteel,
Honey Chunk, Klondike, Royal Crown, Silk Plush,
Vogue, Good Luck, and Old Colonial. One was called
Horse Shoe and another, inexplicabl~z, Fire Cracker.
The American Tobacco Company proper listed only
a few brands; Continental was the major cigarette
repository.
In the smoking tobacco department, among
such weird names as Ham Bone Granuhtted, there were
Half and Half, then made by Cameron & Cameron
of Richmond, and Lucky Strike, made by R. A.
Patterson of the same city.
Duke's corporate structure itself bore some
resemblance to the catalogue of registered brand
names. To preserve the valuable local reputations of
subsidiary firms, many were not consolidated but
kept intact as corporate entities. American Tobacco
and Continental were themselves subsidiaries after
1901, when Consolidated Tobacco was set up as a
holding company, after the financial fashion of the
day. Its directors, however, were no longer men like
Ginter, Kinney and Kimball. They had sold out, and
their places were taken by New York financial powers
who had helped Duke to get expansion cash. Also
represented on the board were the Union Tobacco
entrepreneurs already mentioned, industrial notables
like Ryan, Payne, Schley, Widener, Brady, Whitney.
The character of ownership had been transformed;
tycoons rather than tobaccomen were in command.
Washington Duke himself no longer took an active
part; like Ginter, Kinney and Kimball, he had neither
the talent nor the taste for high fmance. At one point
the elder Duke is supposed to have confessed: "I wish
Buck had never put us into the company and that we
could carry on our business like we used to do it."
But for Buck, there was no turning back. He too was
making the transition from tobaccoman to tycoon.
By 1908 Duke's combine was in full flower. But at
88, old Wash Duke (second from left, seated) was
devoted to Durham civic affairs, left the business
to Buck (third .from left, seated) and Ben (left).
T1568b0040
OUT OF MANY, ONE
THE YEAR 1904 was noteworthy for two reasons.
One: James B. Duke finally gathered his many
tobacco manufactories into a single corporation. Two:
a Williams College sophomore named George Hill
quit school to work for American Tobacco at $5 a
week, hauling purchased leaf from the warehouse
floor at Wilson, North Carolina.
The motive for the corporate reorganization,
in which American, Consolidated and Continental
merged in a new American Tobacco Company, was a
legal one. The U. S. Supreme Court had just declared
the Northern Securities Company illegal. Like Con-
solidated Tobacco, Northern Securities was purely a
holding company. It was set up as a settlement of
the famous railroad war between James J. Hill, who
controlled the Northern Pacific and Great Northern
roads, and Edward H. Harriman, who controlled
Union Pacific. By placing all three lines under a
holding company in which the two titans shared
ownership, a long and costly financial battle was
ended. But since the arrangement also ended real
railroad competition in the nation's northwestern
quarter, the Supreme Court decided the Sherman
Anti-Trust Act had been violated. The Northern
Securities case broke new ground for the application
of that Act.
Meanwhile, Duke kept up his growth pace,
following the rules of the game as they had evolved
dining the nineties. The first half-dozen years of the
new American Tobacco Company saw its Bright
cigarette sales rise from two to more than five billion,
while the more expensive Turkish brands went from
400,000,000 to 1,700,000,000. The latter figure,
reached in 1910, represented a little over half the
Turkish market.
Stable profits...
During these years profit on domestic sales
was remarkably constant-a little under one mill, or
one-tenth of a cent, per cigarette. (The 1953 profit
was about one thirty-fifth of a cent net.) Thus in 1904
the reorganized Company showed a profit of $2.4
million on domestic sales of 2,600,000,000 cigarettes;
as unit sales went to 7,100,000,000 in 1910, the
cigarette profit climbed to $6.9 million. Expressed as
a percentage of dollar sales, the profit margin was
likewise very constant. This reflected a lack of varia-
tion both in the cost of leaf tobacco and in the price
charged for packaged cigarettes.
... stable prices...
Nickel denominations were still the rule, and
T!56850041
Duke turned out at least one lusury item in every
line, even if i~ yielded minimum profit. Thus in
Turl~ish cigarettes he had Egyptienne Straights and
Pall Mall Originals; in cigars, La Corona along
• with Bock and Caba~as; in plug, Piper Heidsieck; in
smoking tobacco, Imperial Cube Cut. Significantly,
all of them are still manu.factured and sold today.
the law allowed packages of ten, twenty, fifty or a
hundred cigarettes. The cheapest of American's
brands-Coupon, King Bee, Home Run-sold at
twenty for a nickel. The "standard brands" of the day
-Sweet Caporaland Piedmont-went at ten for a
nickel, as did the cheaper Turkish blends, Mecca and
Hassan. The better Turkish blends sold up to 25c for
ten. It was Duke's policy to set u price and stick to
it if at all possible, but in 1910 taxes were raised
again. Fortunately, boxes of eight and fifteen cigar-
ettes were made legal at the same time, so the Com-
pany was able to reduce the size of the package
instead of changing the price. Coupon and Home Run
were then sold in boxes of fifteen to retail at the
customary nickel.
• .. stable leaf..•
Notwithstanding the off-again, on-again tax
levies, Duke was lucky enough to strike a period of
stable leaf cosus. Then as now, tobacco itself was the
major expense of manufacture, amounting to half the
price to jobbers or even more, net of excise taxes.
During the first thirty years of Duke's cigarette
operations, Bright tobacco averaged a fairly steady
10c a pound on the Danville market, going no higher
than 13c and no lower than 7c in a few exceptional
years. This stability was logical enough: for one thing,
cigarette consumption was only a small part of total
tobacco use; secondly, the price of leaf was deter-
mined by a really free bidding system.
... unstable mood
Lucky as he was in the matter of leaf prices,
Duke was unlucky in the climate of his public rela-
tions. The two decades ending in 1910 was a time of
bubbling unrest among the farm population. The
Agricultural Revolution had not caught up with the
Industrial Revolution, and the profits registered by
the new big business organizations led first to envy
and later to muckraking. William Jennings Bryan
shouted "You shall not crucify mankind upon a cross
of gold" (he would have settled for a cross of silver),
and the social pangs of mechanization and urbaniza-
tion were often blamed on the trusts.
During the "gay" nineties, many of which
were years of economic depression, resentment against
giant corporations sharpened. Antitrust suits were
brought against the Duke firm in North Carolina,
New Jersey, New York, Missouri, Illinois, Kentucky
and Massachusetts. All were thrown out but the last,
in which an overzealous Continental Tobacco sales-
man was convicted of restraining trade by persuading
jobbers to deal only in his company's goods. Never-
theless, until the Northern Securitics decision of 1904,
the rules of the game seemed in no danger of being
changed. In the Knight case of 1895 the Supreme
Court itself refused to break up the Sugar Tt~ast,
which refined 98% of the nation's sugar. And com-
bination was encouraged by New Jersey, Delaware,
Maine and other states, whose laws specifically
authorized chartered corporations to hold stock in
other corporations. In 1904, the year of re-incorpora-
tion, Duke's combine made 88% of the nation's
cigarettes, 80% of its quid, 75% of its smoking
tobacco, over 90% of its snuff, and 14% of its cigars.
It was not at all strange that old Wash Duke, now
a wry and whimsical eighty-four, should have intro-
duced himself on a European trip as the "Duke of
Durham•"
AT in 1906
V~rhat, exactly, made up the Dukedom? Forty
years after Wash Duke made his wagon junket to
Raleigh, The American Tobacco Company had a
36
TI56850042
capitalization of $285 million, of which $78.7 million
was in preferred stock, $~0.2 million in common stock,
and the rest in bonds. Of the common stock, $35.5
million was owned by fifty-two people, and the ten
largest stockholders owned 68%. These included six
directors-James and Benjamin Duke, Thomas For-
. tune Ryan, Anthony Brady, O. H. Payne and P. A. B.
Widener-along with the Wall Street firm of Moore
& Schley, Grant B. Schley himself, and the Whitney
and Elkins estates. Among those owning $100,000 or
more in common stock were Percival Hill, George
Arents, R. J. Reynolds, Pierre Lorillard and R. A.
Patterson, originator of the Lucky Strike smoking
tobacco.
In turn, American Tobacco owned 66% of
British-American Tobacco, 83.5% of American Cigar
and 43% of American Snuff. There were also seventy-
seven smaller subsidiaries, grouped as follows:
Cigarette group: S. Anargyros, John Bollman,
Wells-Whitehead, and Monopol. More than half the
Company's cigarettes were made in New York, at the
Kinney-Duke branch on 22nd Street and in the
Anargyros Turkish factory. Most of the remaining
half were turned out in Richmond. The Brooklyn
plant, called ~he Penn Street Branch, had not yet
attained the volume which was to make it known as
the "House of Mecca." There were a scattering of
lesser factories in New Orleans, Wilson (North Caro-
lina), and San Francisco, as well as little-cigar plants
in Danville, Baltimore, Philadelphia and New York.
Plug group: F. R. Penn, R. J. Reynolds, D. H.
Spencer & Sons, Lipfert-Scales, Nall & Williams,
Nashville Tobacco Works. Almost half the Com-
pany's plug was made in the St. Louis plant of
Liggett & Myers-Drummond. Most was navy plug
and twist, heavily flavored and sweetened dark Bur-
ley leaf, sold under the Star, Horse Shoe, Big Gun,
Good Luck, Natural Leaf, Burley Cable, Honey Dip and
Oklahoma Twist labels, among others. Second in size
was another navy plug manufactory, the National
Tobacco Works at Louisville. Its brand names in-
cluded American Eagle, Autumn, Battle Ax, Black
Bass, Brandyurine, Burr Oak, Jolly Tar, Newsboy,
Tennessee Cross Tie and the famous "champagne"
brand, Piper Heidsieck. Third largest was the Rey-
nolds plant at Winston, specializing in flat sweetened
plug. The F. R. Penn Company, at Reidsville, North
As excise tax dropped to 1.08c per pack, five-cent
cigarettes revived. Home Run was among American's
many nickel brands, as were Coupon and King Bee.
Same name was used on smoking and chewing tobacco,
cigarettes, cigars, cheroots and even snuff. One
such name was Crosscut, first registered in 1881.
Next to Pro Bono Publico label, the Duke of Durham
brand (1871) was American's oldest. In Europe, wry
old Wash Duke was introduced as the Duke of Durham.
37
II I I
T!56850043
Carolina, produced a plug end a smot~ng tobacco
under the mine name-P~n's No. 1.
Smoking tobacco group: Blackwell's Durham,
R. A. Patterson, John W. Carroll, R. P. Richardson,
P. Lorillard, Spaulding & Merrick, F. F. Adams.
Much of their so-called "smoking tobacco" w~s
actually chewed. There were three kinds-granulated;
long-cut, which was shredded into long strands in the
manner of cigarette filler; and plug cut, which was
pressed into solid slabs before shredding. The entire
output of Duke-Durham and B|ackwell's Durham
branch-more than a quarter of the Company's out-
put-was granulated. The other big smoking tobacco
factory at Jersey City made all three types, plus
"scrap," a cased (flavored) assortment of cigar cut-
tings. The major scrap factory was the Luhrman &
Wilbern Company at Middletown, Ohio. Also classi-
fied in the scrap tobacco group: Queen City and Day
and Night tobacco companies of Cincinnati, and the
Pinkerton Tobacco Company of Zanesville, Ohio.
Contributory group: MacAndrews & Forbes, a
licorice importer; the Mengel, Columbia and Tyler
box companies; Golden Belt, a bag manufacturer;
Conley and Johnston foil companies; American Ma-
chine & Foundry, New Jersey Machine, International
Cigar Machinery, Standard Tobacco Stemmer and
Garson Vending Machine companies; Kentucky
Tobacco Products and Kentucky Tobacco Extract
companies; Baltimore and Manhattan briar pipe
companies; Amsterdam Supply, a purchasing sub-
sidiary; and Thomas Cusack Company, a bill poster.
Distributing group: United Cigar Stores, com-
prising 892 retail outlets under four corporations,
along with five other distributors.
Snuff group: W. E. Garrett, Weyman & Bro.
(now evolved into the United States Tobacco Com-
pany) and Standard Snuff.
Cigar group: American Cigar, Federal Cigar,
First decade of this century was the heyday of the dealer ~n tobacco exclusively. Storefront
sculpture throve.
T!56850044
Henry Clay &Bock, Cuban Land and Leaf Tobacco,
H. de CabaNas y Carbajal and twenty-three other
organizations of which the largest (next to American
Cigar) were American Stogie, Havana-American,
Havana Tobacco, Havana Cigar and Tobacco Fac-
tories, and Porto Rican-American.
In most cases, ownership in these subsidiaries
~mounted to 50% or more.
This rather complicated hierarchy was main-
rained for several reasons. First, many of the sub-
sidiaries were really investments, which could be
controlled with a majority holding at half the cost
required for outright consolidation. Second, the best
of these subsidiaries were going concerns with smart
and interested managers like R. J. Reynolds and
Pierre Lorillard. They were stronger as semi-autono-
mous operations, since the men who built them
retained some ownership interest as an incentive.
Third, there was the merchandising value of estab-
lished company names: in many cases this was a
subsidiary's only valuable asset.
Two-legged assets
For the historian, the growing sentiment
against the trusts was perhaps the outstanding
feature of the twentieth century's first decade. But
for The American Tobacco Company, only one of
many combinations to be broken up, these years saw
the creation of assets no court could dissolve: skilled
management. After Duke left American Tobacco in
1912, these two-legged assets remained; they sa~v the
cigarette business change radically from the multi-
branded merchandising melee of his reign, and they
reconstituted American Tobacco as the leader in a
new kind of market. George Washington Hill, most
notable product of Duke's training school, later
recalled his experience of 1905:
I was working in the tobacco market at
Besides wooden Pocahontases and ballplayers (opposite page), one could see a French trapper, Jenny
Lind, or Punch.
T!56850045
South Boston, Virginia. We had one buyer
there who was unique. One of my first impres-
sions of th~s man was that he could recognize
at the "prizery," where the tobacco is put in
hogsheads, every single pile of tobacco he had
previously bought, regardless of what sale it
had been bought on, what price he had paid,
or what time of the day he had bought it. His
name was Jim Lipscomb and his knowledge
of tobacco w~s a by-word.
I never forgot Jim Lipscomb as a buyer of
tobacco, and when it came to my lot to hold a
more responsible position with the Company
than I did in those days, I w~s not satisfied
until he was made our head buyer, in charge of
all our purchases of tobacco.
Two years later, the Company acquired a
small New York outfit called Butler-Butler, and
young Hill was put in charge• Like most cigarette
companies, Butler-Butler owned many brands, but
Hill decided to concentrate on only one. The era of
the "big brand" may be dated from that decision.
His choice was a straight Turkish cigarette, Pan Mall.
In 1940, when Pall Ma/l was getting started as a
king-sized Burley blend, Hill remembered that
•.. in Butler-Butler, there was a man named
Vincent Riggio. When I took charge he had
just been proinoted from the sales force to the
position of Division Manager. He had eight or
ten men working under h~s supervision in and
around New York City, and he was doing a
fine job.
In men and in brands, the contribution of
little Butler-Butler was way out of proportion to its
size. In addition to Riggio, who was a barber before
he was brought into the firm as ~. bottom-rung
salesman, there was another New York lad named
Edmund Harvey who had come to the Butlers in 1898
as a fourteen-year-old office boy. For forty years after
George Hill took over Butler-Butler, Harvey served
as his No. i troubleshooter. At various times he was
Field Sales Manager, Credit Manager, Auditor of
American Cigar, Treasurer, and is currentlyVice Presi-
dent for sales. Brandw~se, B-B brought to American
two Turkish brands which for a time rivaled the
domestic blends in importance-Pall M#/l and Egyp-
~enne Straights. Among the oddments were a Bright
cigarette called Sovereign, another called Horse
Guards and a "Frenchified" brand named Laur~s,
each box of which contained five playing cards.
The cfgare~ sandwich
H~ll himself had undergone a rigorous trainee-
ship. After hustling tobacco on the flue-cured markets,
he followed the leaf one step further as a sub-
manager of the Durham stemmery. For a t~me he
manufactured Carolina Bright cigarettes at Wilson,
North Carolina, then went on the road as a salesman.
By the time he moved "inside" as President of Butler-
Butler, he had reached the conclusion-one doubted
by Duke-that cigarettes were the coming thing. Hill
labored over the "gorgeous" red Pall Mall package,
then a box, supervised magazine advertising, devised
new variants of the prize-in-every-package. Many of
the miniature flags and blankets he sandwiched be-
tween rows of Sovereigns ended as homemade scarves
or pillows. At one time, Egyptienne Straights boxes
contained short stories instead-printed tales by
Rudyard Kipling, Stephen Leacock, Earl Derr Big-
gers or Anthony Hope in the form of little booklets,
whose size-about two by three inches-guaranteed
that the stories were truly "short."
It must have required a very prescient mind
indeed to single out the cigarette as the star of the
future. Of the 281,000,000 pounds of leaf utilized in
all of the factories in 1906, less than 10,000,000 went
into domestic and blended cigarettes at the three big
factories in New York, .Richmond and New Orleans.
The Turldsh factories in New York and San Fran-
In 1905 two4h~rds o] America~ Tobacco common was
owned by ten men. Thomas Fortune Ryan was one of
them, along with financiers Brady, Payne, Widener.
40
Ti56850046
cisco accounted for 1,874,000 pounds more; Wells-
Whitehead's Caroline Brights, on which George Hill
cut his sales teeth, consumed 301,000 pound~ The
cigarette total was only half the tobacco processed by
the Duke-Durham smoking branch alone, less than
a fourth of that used in the St. Louis plug plant.
Percy Hill, first lieutenant
In devoting himself almost wholly to ciga-
rettes, young Hill doubtless encountered some
paternal resistance from his father. Percival S. Hill
was now one of J. B. Duke's top Vice Presidents; prior
to 1904 he had been marked as one of the Company's
elite by his directorship in the holding company,
Consolidated Tobacco. The elder Hill, more of a
traditionalist than his son, had been raised on the
glories of Bull Durham. He had personally engaged
Rosa Bonheur to create a new image of that mighty
beast. And in 1898, American soldiers in Cuba and
the Philippines had derived solace not only from the
famous smoking tobacco but from postcards dis-
tributed by the Blackwell company-each card,
naturally, bearing a pictorial reminder of its taurine
trademark. By the time George Hill was getting Pail
Mall fairly started, Bull Durham was acknowledged
to be "the standard of the world." It was, certainly,
the most widely used single tobacco product: in 1912,
for example, American departed from usual policy to
publicize its sales total of 350,000,000 bags. This was
enough to roll almost twelve billion cigarettes-more
than the number of "white rolls" being manufactured
by machine.
But George Hill had become an acute trend-
reader during his drummer days. In the first two
years of ~he new American Tobacco Company, tax-
paid withdrawals of chewing tobacco were down. And
although "chaw," along with smoking tobacco, later
resumed its slight year-by-year increase, neither kept
up with population growth. The weakening in per
capita consumption of manufactured tobacco was
particularly evident between 1904 and 1910, during
which period the fictional "average citizen" increased
his cigarette usage by 138%.
These years, however, were bringing more
than a subtle change in smoking tastes. Time had run
out on Washington Duke, who died in 1905. It was
running out on the trust as well. In July, 1907, two
months after the acquisition of Butler-Butler, the
U. S. Government brought suit against The American
Tobacco Company for combination in restraint of
trade. The suit, begun by Trustbusting Teddy Roose-
velt, did not reach its climax in the Supreme Court
until November 16, 1911. At that point William
Howard Taft was President of the United States;
very shortly thereafter, James Buchanan Duke ceased
to be President of The American Tobacco Company.
Also an owner-director was Benjamin Duke (left), J.
B. Duke's older brother. Pierre Lorillard (center)
and R. J. Reynolds each owned more than ~100,000 of
the common stock,. Combination was not ~llegal; in
fact, the holding of one company's stock by another
was encouraged by laws in New Jersey and elsewhere.
T!56850047
Out of one, rnhny
It was ironic that the man who actually dis-
mantled the Tobacco Trust was the man who built it,
J. B. Duke. In May, 1911, the Supreme Court held
the combination "in restraint of trade and an attempt
to monopolize and a monopolization." It provided
eight months "to hear the parties.., for the purpose
of ascertaining and determining upon some plan or
method of dissolving the combination..." The plan
was prepared by Duke, approved by the Attorney
General, and published as a Court decree on Novem-
ber 16, 1911. After this, Duke himself virtually dis-
continued his active participation in the day-to-day
affairs of the Company, and scarcely used his office
at 111 Fifth Avenue. Early in 1912 Duke left the
Company to become board Chairman of British-
American Tobacco, a post he held until 1923.*
The plan spun off many of the more inde-
pendent subsidiaries. MacAndrews & Forbes (which
had been decreed a licorice paste monopoly in 1907)
was separated, along with Amer/can Snuff, Conley
Foil, American Stogie, British-American Tobacco,
Imperial Tobacco, United Cigar Stores, R. J.
Reynolds, and Porto Rican-American Cigar. The
purchasing subsidiary, Amsterdam Supply, was killed
outright. American Machine & Foundry was turned
loose voluntarily, since it could not legally do
business w/th the new companies while still part of
American.
The American Tobacco Company itself was
pared to $98 million in asset value. Of the remaining
assets, $67 and $48 million went into two new
companies, Liggett & Myers and P. Lorillard. About
half the book assets represented "brands and good-
will." In this most vital aspect of the dissolution,
Lorillard got Helmar, Egyptian Deities, Turkish
Trophies, Murad and Mogul, or about 15% of the
nation's cigarette business. Liggett was given P/ed-
~nong, Americc~n Beauty, Fa~ivna, Home Run, Impe-
riales, Coupon and King Bee, representing a 28% slice
of the cigarette market. American retained a 37%
share of the cigarette market. The rather uneven
re-alignment of the cigarette business (and that of
plug and smoking tobacco as well) resulted from the
*Duke never strayed from his emphasis on Bright
tobacco, which partly accounts for the lasting popularity
of "straight Virginia" blends in Britain.
ass/gnment of whole factories to the succe~or com-
pan/es to avoid undue "disturbance" to operations.
D/stribution of the cigarette brands was not,
relatively, a major feature of the asset split-up. In
1910 cigarettes contributed only 21% of the Com-
pany's operating profit. Cigarette earnings were less
than those from either plug or smoking tobaccos--
less than the combined profits from snuff and cigars.
Not until the early 1940s would the white rolls
account for more than 90% of the Company's
business, as they do today.
Among the human assets lost to the Company
was a young manufacturing man named Preston
Fowler. Among other things Fowler had supervised
F. R. Penn, a ~lugmaki~g subsidiary, was the major
~ndustry ~n Reidsville, North Carolina, ~nade Penn's
Natural, Red J, Gold Crumbs. A shipment o] $5,000
pounds of Gold Crumbs in 1909 rated this pho$ograph.
the production of Turkish cigarettes and was
"awarded" along with them to Lorillard. In 1930,
however, Fowler "came home" to American Tobacco
and is now Vice President in charge of manufacture.
The Attorney General himself, George W.
Wickersham, felt the agreed division far more desir-
able than utter disintegration which would have led
to "injury to the general business condition of the
country." For his pains Wickersham was verbally
tarred by the self-styled "Tar Heel Editor," Josephus
Daniels, who took to printing the official's name as
Wickersham. It was Daniels who quoted Josh
Reynolds" exuberant reaction to dissolution: "Watch
me and see if I don't give Buck Duke hell."
42
T!56850048
There were cons as well as pros. The original
antitrust verdict of 1908, in the U. S. Circuit Cour~
of New York, had declared in par~: "The record...
does not indicate that there has been any increase in
the price of tobacco products to the consumer. There
is an absence of persuasive evidence that by unfair
competition or improper practices independent deal-
ers have been dragooned into ... selling out ......
The price of leaf tobacco.., has steadily increased
until it has nearly doubled, while at the same time
150,000 additional acres have been devoted to tobacco
crops.., new mark.eta have been opened in India,
China and elsewhere."
All of which, the majority decision went on,
Before War I Reidsville's baseballers were called
"Red Js." Smiling shortstop (standing, second from
left) was William Nichols, now manager of Compa~.y's
Reids~ille pla'n~. Ballplayers are now the "'Luckies."
was overshadowed by the ne~v construction of the
Sherman Act, as outlawing any combination in
restraint of competition. Wrote one embittered
jom~aalist following the Supreme Court's confirma-
tion of this view: "The only serious complaint against
the tobacco company comes from American com-
petitors, who have not the experience, capital,
business foresight, sagacity and energy to enter the
field like true warriors... But business success in this
country does not come of childish whining."
But neither could adult carping reverse the
course of legal history, and the division stood. In
addition to the cigarette split-up, Loril]ard and Lig-
gett each got a fifth of the smoking tobacco business;
Liggett a third and Reynolds a fifth of the plug trade;
Liggett two-fifths and Lorillard a fourth of the fine-
cut smoldng tobacco market; and Lorillard about
half the trust's cigar business, ~vhich had amounted
to about 13% of all unit sales.
To all this, the reaction of J. B. Duke himself
was astonishingly unemotional. Possibly the dissolu-
tion held a personal challenge for him because J. P.
Morgan thought it impractical: "You can't un-
scramble eggs," said the mighty banker. In any
event, Duke later recalled: "I don't know that the
combine was really of much advantage to us after
all. We were doing well as we were; we were beating
the other fellows in manufacturing and selling any-
way. I believe we would, in time, have put them out
of the running and gotten practically all the business
if there never had been any combination."
What was the effect of the great dissolution
on the consumer? It was, to begin with, surprisingly
slight. In 1913 the successor companies had the same
combined share of the plug, smoking, fine-cut, snuff,
cigarette and cigar business as the 1910 trust-give
or take a couple of percentage points. Retail prices
did not change. Leaf prices varied no more than
ordinary crop differences would account for. Factory
costs remained constant. But one thing did change:
the cost of selling. Competition among the new Big
Four increased sales costs from 1910's $7.2 million to
$9.8 million in 1913; advertising expenditures went
from $10.9 million to $23.6 million. As a result, the
Commissioner of Corporations ~vryly noted that "the
aggregate amount of profit of the successor companies
in 1913 was slightly less than that of the combination
in 1910 in spite of a larger volume of sales." The
profit shrinkage showed most, naturally, where the
competitive scramble was keenest, i.e., in domestic
cigarettes. The combination's margin of 76c per
thousand was cut to an average of 27c for the suc-
cessor companies in 1913.
The reason for this lay in the dissolution
decree itself. Instead of parceling out a selection of
brands to each successor, the decree awarded Loril-
lard most of the 10c and i5c Turldsh brands, Liggett
the only 15c Turkish blend and the low-priced
domestic brand names, and Reynolds nothing in the
cigarette line. American kept the highest-quality
Turldsh brand, Pall Mall, along vdth the domestic
43
TI56850049
Duke was in his prime when d~ssolution was ruled.
about ~he business to "unscra~nble the tobacco egg."
Sweet Caporal and Ha~san and Mecca in the low-
priced Turkish field. Elements of confusion were not
lacking: Cameo as a cigarette was awarded to Liggett
& 3/Iyers, while Ca~neo as a smoking tobacco-with a
label almost identical-was retained by American.
Each company struck out at once to plug the
gaps in its cigarette line. American brought out Omar,
a high-grade Turkish blend. Liggett tried a Turkish
item called ~afiadis and tested a new domestic
cigarette under the old name of Chesterfield. Lorillard
made Zira and Nebo to fight Mecca and Ha~san.
Reynolds .tried Reyno in the nickel class and Osman in
the 15c category. ~/iost of this experimentation, it
will be seen, was directed at the growing taste for
Turkish names and atmosphere, if not Turkish
tobacco in straight form. It was to evolve something
quite non-Oriental, however, in everything but name.
In 1907, the ]ackbooted Josh Reynolds had
devised a new granulated plug cut smoking tobacco
named Prince Albe~t. The mixture contained a large
dose of strong, heavily-flavored Burley leaf and
appealed immediately to the rustic trade. By 1913,
George W. Wickersham, U. S. Attorney General, made
up the plan of division with Duke. He was against
disintegration lest it har~n the country's econo~ny.
P. A. was an established and successful smoking
brand and Reynolds, disappointed at the nation's
indifference to Reyno and Osman cigarettes, decided
to adapt the Prince Albert formula to the white roll
market. Although the result was a blend as far from
Turkish as Kentucky itself, he gave it an Oriental
name-Camel-and festooned the package with pyra-
mids and minarets. And, mindful of the source of
Prince Albert's growth, he introduced the new ciga-
rette outside the big-city markets. Like Reyno and
Osman, the new brand, which became known to the
trade as "The Hump," was intended as a down pay-
ment on the hell Reynolds had promised to give Buck
Duke. Had Duke remained with American, he might
have acknowledged it with thanks. For Camel touched
off an advertising and promotional rivalry which
swept both Turkish and straight Bright cigarettes
into the background and began the era of the big
brands, the blended brands, the standard brands. The
industry was to achieve mass production of a kind
Duke never dreamed of in the chaotic no-brand's-
land of 1900.
T156850050
ASK DAD, HE KNOWS
IT 1S TRUE enough that George Washington Hill,
as a brash young man of twenty-five, began the
"big brand" era in cigarettes. He was responsible for
Butler-Butler's'concentration on Pall Mall, a con-
centration at wide variance with the old pattern, the
crowded battlefield of brands. He followed the hal-
lowed custom of premium lures developed by Major
Lewis Ginter and J. B. Duke, but started something
of his own by advertising Pall Mall on back covers
of magazines ("A Shilling in London, A Quarter
Here"). Later he dog-fought Josh Reynolds on a
broad, bold scale which led to national advertising
and real mass production.
But to do any of this, he had to ask his dad.
And his dad kne~v the ans~vers. Percival S. Hill was
named President of American Tobacco by the depart-
ing Buck Duke, and held that office for fourteen
years until his death in 1925. He was a quiet, mod-
erate man who had been devoted to Duke. He had
learned the smoking tobacco business as the handler
of Bull Durham, and had been given charge of the
trust's~cigarette business by J. B. More important,
he had absorbed Duke's theory of handling men, of
getting the best out of his managem. As we have seen,
the major reason for Duke's policy of partial rather
than complete ou~nership of subsidiaries was psycho-
logical: he wanted his properties run "by men who
had a stake in them." And within his o~vn executive
family, Duke was a delegator; "What do you think
of it?" was his favorite phrase, put to his executives
before every major decision. Duke himself outlined
Article XII of the Company's by-laws, providing that
10% of the profits in excess of the 1910 figure be paid
out as bonuses to the President and five Vice Presi-
dents. (On a greatly reduced scale of payments, the
by-law is still in effect.)
The delegator
Percy Hill extended the Duke theory of indi-
vidual responsibility all the way down the line. While
he concerned himself with the Corporation's finances
and with what are called %road policies," he left the
tactical decisions to subordinates and let them alone
as long as they got results. John Crowe, now one of
the top six officers, remembers his fii'st man-to-man
encounter with P. S. Hill. After a few years in the
Louisville plug plant, he had been brought to New
York as a kind of trainee-assistant to the manufac-
turing chief, Charles Penn, and his first lieutenant,
Charles Ne[ley. One day while the t~vo top men were
on a factory tour, Crowe was called into an important
conference in Hill's office. A special promotion on
T!56850051
After 1911 Duke left American Tobacco and Percival
Hill 5ecome President. Hill had come up as a Bull
Durham salesman to 5ecome Duke's right-hand man.
Manufacturing chief was Charles Penn, son of the
Reidsville plugmaker Duke had bought out. Bred in
the trade, Penn had an uncanny knowledge of leaf.
Tuxedo smoking tobacco was being worked out, and
Crowe was asked whether he could get several car-
loads of the brand to the West Coast within a week.
"I hadn't the slightest idea whether it was possible,"
recalls Crowe, "and besides I was scared stiff. What-
ever I said, it was certainly no answer." Later on Hill
called the young trainee back to his office for a private
conversation: "Crowe, this business is mostly horse
sense. If you don't know, say so. But your job is to
get so that you do know." It was Hill's way of putting
the young manufacturing man on his own, and it
succeeded.
Mr. Penn of Carolina
Like the other executives George Hill was
given a fairly free reign over his own domain, sales
promotion. But his dad knew what things George
didn't know. One of them was manufacturing, and in
this department Charlie Penn's word was, by Percy
Hill's own edict, law. On several occasions Penn had
to stand up against the youthful Sales Vice President's
bright ideas, which were generated out of a scant
year's experience making Carolina Brights. And Penn
did just that quite successfully in his gruff, unshake-
abIe way.
For Penn, even more than George Washington
Hill, had been bred with tobacco. His grandfather
was Thomas Jefferson Penn, a direct descendant of
Thomas Jefferson and William Penn. His father was
the well-known F. R. Penn, whose Reidsville plug
business, founded in 1838, was bought out by Buck
Duke. Penn's No. 1 and later Penn's Natural Leaf
(still made by American Tobacco) achieved wide ac-
ceptance as a unique product-Burley filler wrapped
in flue-cured leaf. The town of Reidsville itself (now
centered around the production of Lucky Strike cig-
arettes) was also unique. It was a typical Southern
town, as suggested by some of Penn's lesser brands-
Kitty May, Rebel Girl, Famous Friend, Dew Drop,
Little Pearl, Little Daisy, Native, Old Virginia Chew.
But even more than Durham, Reidsville had been put
on the map by tobacco and tobacco alone. As a
manufacturing man with a knack of maintaining con-
sistent quality control and an uncanny knowledge of
leaf, Charlie Penn was also unique.
It is a peculiar fact of the tobacco business that
the manufactm~ng side wages a continual defem~ive
46
TI56850052
while the selling side is constantly on the go, con-
stantly chang/ng, constantly on the offense. For the
b~ic requirement of sales success-quality of product
-is always being threatened. Any one of a number
of factors-variations in the nicotine or acid or am-
monia content of each year's leaf crop, shortages in
flavoring mater/als, shifts in the factory forces-can,
if permitted, disturb the character of a cigarette
blend, a smok/ng mixture or a t~v/st. It was Penn's
job, and later Charles Neiley's job, to defend the
organization's products and processes against such
influences. As saies mounted, the task became more
difficult and at present, two of the five Vice Presi-
dents handle it: Preston Fowler and John Crowe.
Selling bee
Selling, of course, is a different matter. Getting
through to the public was, and is, a problem of sensing
the public mood, tuning in on its precise wavelength,
sounding the right note. And here Hill did for cigar-
ettes what P. T. Barnum had done for Jenny Lind:
he made them live in the public consciousness.
How?
The best clue to George Hill's early thinking
is contained in'a loose-leaf "diagram book" sketching
his strategy for each brand. Under "Sovereign," Hill
wrote:
The Sovereign cigarette is made of the finest
Virginia and Carolina stock.., by reason of
their Southern birth and tradition, the people
of the territory in which Sovereign cigarettes
are to be advertised.., have very strong and
fixed ideas of the value of family ties.., if we
may impress these people with some thought
that will convey the idea that Sovereign cigar-
ette is a product of genuine blood heritage and
smacks of the best breeding of the Southland
• .. we shall have something ... Hence our
idea for popularizing Sovereign must be some-
t~ing that will leave this impression of good
will toward what we may call a "gentlemanly
brand."
Based on the foregoing, we propose to...
humanize the cigarette; that is, make it speak
in the first person as a human being and tell its
own story. Having created a Sovereign "char-
acter" we shall have him speak as a young
Southern gentleman should speak, and treat of
each detail in his life in the plain, homely,
colloquial terms of his section.
The heart of the plan and the selling argu-
ment is to be expressed as follows:
The expensive Pall Mall An 1915 was "a shilling in
London, a quarter here." By I919 the price was 80e.
In those years it was a straight Turlcish eigareSte.
|1
Pall $~all is the London street where English once
played croquet, which Italians called palla-maglio,
the French pale maile, and the British pall mall.
47
T156850053
when the light went
out? Groping around
for a pack of Mecca. !
After 1912, George Hill was advertising strategist.
Mecca combined "flavor o] Turkish with character
o] American." 3weet Ca~oral, an 1868 Kinney brand,
was given the nostalgic line: "Ask dad, he Icnows."
and
President ?
Sccerdgn cigarettes for the gentlemen of the
South-the ldng of them all. We folks of the
South ]mow good blood. We folks of the South
know good tobacco. And Sovereign cigarettes
come from the very best stock of Virginia and
the Carolinas. They are made in one of the
finest, cleanest, whitest homes in all the fair
Southland at Durham, N. C.
The new "print media" advertising did not
take hold all at once_ Inserts remained: " . .. for
twenty SOVEREIGN coupons, packed only in SOV-
EREIGN 5c Packages, we will send 10 Rugs, or SOV-
EREIGN Coupons are redeemable for ,b~ cent cash."
In 1912 Mecca postcards, lacking stamps but other-
wise eminently suited for the U. S. mail, could be had
for the asking at any United Cigar Store. By 1914,
the cigarette sandwich began to disappear, and the
premium department announced in four languages:
"We will continue to pack HASSAN blankets for a
short time only, as many of our consumers advise us
that they have accumulated a sufficient supply of
these Flag Blankets. We will then pack a Valuable
HASSAN Coupon which we will redeem for useful
presents of unusual value." The presents: shaving
sticks, talcum powder, razors, shears, knives, clocks
and, naturally, cigarette cases. Premium lures were
ceasing to satisfy by the beginning of War I, and
after 1920 they were not a major factor in the sales
of any important brands. The sales argument, the
"reason why" became more potent than prizes.
Hill's formula was to find an attribute in each
product that could be conveyed in vivid, impression-
istic terms, in a 1916 memo to his advertising man-
ager, he groped for a Sweet Caporal theme:
Mention the name Sweet Caporal to almost
any man you meet and his reply, with some
interesting tale of his younger days will be:
"Sweet Caps was my firs~ smoke and it ~vas
good too."
To the millions of men who found in their
first smoke solace, comfort and joy in Sweet
Caps, the very name brings back to their
memories the romance, the interesting events,
the struggles and yes, the frivolities of their
younger days.
Therefore, our plan is based on the reminis-
cent appeal to Dad's generation and the
romantic memories of it by the present genera-
tion. The heart of this plan and the selling
argument is to be expressed as follows:
Sweet Caporals are dad's cigarettes because
48
T!56850054
Low-priced Turkish e~garettes did well until alter
War I. Lord Salisbury, American's entry, was "the
only 100% pure, all-Turkish cigarette in the world
that sells.for as l~tt~e vnoney a~ 15e .for twenty."
the~'re the purest way to smoke tobacco.
Sweet Caps certainly stood the test of forty
years because more are sold today than ever.
They must be pure and mild and good or they
would have been forgotten long ago-like
Mother's pie, they simply can't be improved
on. Ask dad, he knows.
Hill pored over every cigarette and tobacco
brand, developing his aptitude for combining strong
logic with picturesque language. The Lord Salisbury
brand had this selling argument: "... the only 100%
pure, all-Turkish tobacco cigarette in the world that
sells for as little money as 15c for Twenty, Twenty,
TWENTY Cigarettes." Hill's thoughts on the Mecca
blend were subsumed under the heading, TO ALL
PEOPLE MECCA MEANS GOAL:
When Turkish tobacco was brought to this
country, smokem thought for a time they had
found the cigarette they had been looking for.
But they soon found that Turkish tobacco
lacked something. It had flavor, but it lacked
character. On the other hand, straight Ameri-
can tobacco didn't have quite the flavor
smokers wanted. The Mecca blend solved the
question. Mecca ... combined the flavor of
Turkish tobacco with the character of Ameri-
can. So Mecca became "the blend men were
looking for-a real man's smoke-the goal of all
cigarette smokers."
Hill's efforts, like those of all creators, were
.~ariab!e. The "logical premise" for Omar, the Turkish
and domestic blend, was:
OMAR OMAR spells Aroma (salesman
should here take his pencil and illustrate the
trick). Omar is Aroma-Rich and Ripe Aroma.
Aroma makes a cigarette; they've told you that
for years. Smoke Omar for Aroma.
Despite his passion for the cigarette, :p-oung
Hill did not neglect the smoking tobaccos which were
still the backbone of American's business. Bull Dur-
ham's slogan, "The Makings of a Nation," was
elaborated via this copy:
You can make for yourself, with your own
hands, the mildest, most fragrant cigarette in
the world-and the most economical. Machines
can't imitate it. The only way to get that
freshness, that flavor, that lasting satisfaction
49
T!56850055
A SOVEREIGN RUG
in Each Package of 20
SOVEREIGN
CIGARETTES
ForTW~N~ SOVEREIGN Coupons,
packed only in SOVEREIGN 5c. Pack-
ages, we will send 10 Rugs, or SOVER-
EIGN Coupons are redeemable for ~
cent cash.
Send Coupons to PRF_~IIU~ DEPARTMENT
Once a prime attraction, miniature rugs and flags
were on the way out by War I. Hassan smokers, who
"advise us that they have accumulated a sauciest
supply of Flag Blankets" were given notice in four
languages that the old inserts would give way to a
coupon redeemable ]or clocks, razors, knives, etc.
is to "roll your own" with good old 'Bull'
Durham tobacco.
Sugar for the Bull
Despite this appeal, the tailor-made cigarette
was clearly displacing the hand-rolled variety. Hill
recognized this by inventing a second theme for the
aging Bull, "Like Sugar in Your Coffee." This was a
suggestion to pipe smokers to "just try mixing a little
genuine Bull Durham tobacco with your favorite pipe
tobacco." As Hill explained it to his advertising man,
"The distinct, mellow-sweet taste, which is so indi-
vidual a factor of Bull Durham, does give just that
added touch to pipe tobacco that sugar gives to
coffee."
Omar, added to the older Mecca and Hassan among
Turkish-domestic blends, soon outstripped either:
during War I, most Omars went overseas to soldiers.
Chocolate for Tuxedo
One of Hill's favorite copy subjects was Tuxedo
smoking tobacco. Like any Burley blend, the leaf was
heavily flavored (unlike Bright tobacco, the Burley
leaf contains no natural sugar). But instead of using
only rum or juices, the normal Burley casing, Tux-
edo's formula also called for chocolate. "We find by
actual test," memo'd Hill, "that Tuxedo, when
rubbed in the palm of the hand until the heat gener-
ates and brings out its full odor, compares very
favorably and indeed, is superior in flavor and fra-
grance to other tobaccos to which this same test is
applied. This point and thought is, we believe, ex-
50
T156850056
pressed dearly in the sentence, ~Your Nose Knows"
and it is this thought that we propose to develop.
"The reason for this difference is fundamental
-Tuzedo is flavored with chocolate and not with rum;
other granulated Burleys are flavored with rum...
The comparison is therdore very strong. The knowl-
edge of this comparison and of Ta.zedo's superior
flavor and fragrance will, we believe, increase the
sale~...~" The actual slogan used to promote Tu.zedo
was "Your Nose Knows"; but this is less interesting
than that part of the copy which read: "Rub ~ little
Tuxedo briskly in the palm of your hand to bring out
its aroma." This was the germ of the demonstration
idea, later to blossom in Hill's fertile mind with sur-
prising results.
Shakedown cruise
The experimentation of the post-dissolution
years was not confined to advertising. For the first
ten years of Percy Hill's presidency, both the sales
and manufacturing departments were on a kind of
shakedown cruise. Not until 1923 did the corporate
organization settle into a shape approximating its
present one.
At first, George Hill split his sales force into
divisions which competed with one another, like the
divisions of today's General Motors Corporation.
Vincent Riggio and R. L. Armstrong had the Butler
brands; there was a Mecca division, a Hassan divi-
sion, a tobacco brands department, and a general
sales department which embraced plug. Tying the
cigarette business together was a cigarette committee,
of which Edmund Harvey was secretary.
Decentralization, to be sure, had worked be-
fore-Reynolds had built up a respectable smoking
tobacco trade and enlarged its plug business in com-
petition with other arms of the trust, and its success
with the new Camel may have further impressed the
Hills with the virtues of small, self-contained units
free to act independently. But in practise, the theory
didn't hold. Atomization of the sales effort produced
-competition, but it also led to wasteful duplication
and even to personal friction between division chiefs.
Besides, as Hill testified twenty-five years later, "We
had plenty of competition from the outside." Even-
tually, the sales group was recentralized. Harvey was
sent on a four months' tour of the U. S. to map out
the santo remon. But the~ is a big difference in the
Quality and ldnd of tobacco flavorings. Tuxedo, the
finest of properly aged hurley tobacco, rues the purest,
most wholmmne and deficiou, of all flavork~--c/,o~.
That is why "¥o~ Nose Know=" Tuxedo h'om
all other tobau~m--by tt~ deli~iom pure fi'agran~e.
T~' Thf~ T~t ~ Rub a l;t~c Tuxedo br[~[¥ [.
Tu~.cedo tobacco was a .favorite of George Hill's, for
its chocolate flavoring lent itself to interesting
advertising, led to the tao line "Your Nose Knows."
Along with these media ads, ~rize coupons continued.
51
TI56850057
National distribution made the era of big brands
1~ossible. American's salesmen got exac$ routes to
follow as well as Model T Fords to follow them in.
Salesmen did more than unload goods. They saw that
stale stock did no~ remain on retail counters and
aided sales with point-of-purchase display cards.
Edmund A. Harvey, who began w~th Burr-Butler, was
G. W. Hill's troubleshooter from the first. He served
in treasury, credit and sales, is now Vice President.
salesmen's routes. There was no precedent to guide
him; the scientific consumer survey and the sales map
bristling with pins had not yet appeared in the
nation's head offices. Distribution, now as impoiC~nt
as manufacture itself, was in its infancy. "What we
did for ourselves," recalls Harvey, "'we did for the
industry."
New sights for sales
Among other things, Hill and Harvey pulled
their ~lesmen off the milk runs and outfitted them
with Model T Fords. Just as tiffs was accomplished,
Percy Hill called Harvey in to discuss another prob-
lem. "We're losing $1.2 million a year on damaged
goods. That's too much." Harvey got to work, re-
vamped selling policy. The answers he came up with
were soon a part of standard operating procedure, not
only for American Tobacco but for the indust13r.
The first item was the use of the sales force to
monitor distribution, to see that jobbers moved the
old stock first. This was implemented by a modifica-
tion of refund policy-after six months, old goods
could not be returned at 100% of the purchase price.
Goods were dated to facilitate quick checkups, as is
still done. A beginning in the art of fresh-packaging
was made with Penn's Natural Leaf plug, which was
vacuum-packed. (Cellophane, along with the other
wonders of the Plastic Age, was still a long way off.)
New sites for manufacturing
On the manufacturing side, cigarette activities
were concentrated in New York. There was the old
Kinney-Duke branch on 22nd Street, turning out
~gwee$ Caporal, Mecca and Hassan; the Buffer-Buffer
branch a few blocks uptown, producing Pall Mall and
Egyptienne Straights. There was a miscellany of
brands made at the old Penn Street branch in
Brooklyn, later moved to that borough's Park Ave-
nue. The National Tobacco Works Branch at
Louisville was devoted entirely to plug: Battle Az,
the old fighting brand; Pi~r Heidsieek, the "genffe-
man's quid," still a big seller; and Blade Eagle, made
of sun-cured tobacco. Red J and, of course, Penn's
Natural Leaf were still made in Reidsville, N. C.
In 1916, George Hill's whole-souled devotion
to Pall Mall must have seemed like a mistake. Al-
though the "Famous Cigarettes" were far and away
T1568b0058
Pa~kaoing bega~ to be modernized ~nder Percy H~ll.
Penn's Natural plug was ~acuum-paeked. CigareStes
like Omar were wrapped, above, in "cup packages'"
in lieu of boxes, hard to handle and slow to Jill.
the leader in their price class, there was as yet no
volume market for a 25c product. Furthermore, the
fancy for Turkish straights and even Turkish blends
was dissolving. Fatima, Liggett's Turkish blend, was
being thrust into limbo by the fast-rising Burley-
blended Camel, and the two big Bright blends-
American's Sweet Caporal and Liggett's Piedmont-
were likewise beginning to be superseded. The answer
to this situation was Lucky Strike.
Enter Lucky Strike
The name was taken from an old smoking
tobacco, made in Richmond for many years by R. A.
Patterson, who first registered the brand in May of
1871. The Burley blend, which competed with that
of the new Camel cigarette, was devised by Charlie
Penn in the Brooklyn factory. George Hill worked
with artists to eliminate the curlicues from the old
trademark, and puzzled over means to sell the new
cigarette under it.
Oddly enough, George Hill finally concluded
he didn't want to put the new creation on the market;
as chief of sales, he would have been responsible if it
failed. James B. Dfike, still a good friend of the man-
agement, sided with young George in a friendly way;
American, he thought, had plenty of brands already.
But Riggio, in the front lines of the struggle for sales,
demanded something to pit against Camel, and this
convinced Percy Hill. Told to bring it out, G. W.
wandered over to the Brooklyn factory. Three blocks
away, he inhaled the rich aroma of tobacco passing
through the machines and this stimulated his pro-
motional instincts.
Back at 111 Fifth Avenue, he remarked to his
father: "You know there is something in that process
of Charlie Penn, and I cannot express it... he cooks
it, cooks the tobacco." The elder Hill was unim-
pressed: "That doesn't mean anything, he cooks the
tobacco. That doesn't leave any appetizing thought
particularly." At this point a cigar man, Gerson
Brown, entered the room in time to catch a question
from Percy Hill: "Gerson, what do you have that is
appetizing to which heat is applied?" Brown imme-
diately mentioned his morning toast, and the elder
53
TI56850059
TURKISH
ClGARETT£S
The rise of cup-packaged Omar was interrupted not
only by War I-which ended the Turkish fad-but
by a trend toward Burley blends like Lucky Strike.
First ad for Lucky Strike was sim~le layout below,
which broke in 1917. Designed for newspapers, it
emphasized taste with its fork and piece of toast.
LUCKY STRIKE
CIGARETTE
yOU'LL enjoy th/.s rea~l Burley cig-
arette. It's full of flavvr--just as
good as a pipe.
IT'S TOASTED
The l~urley tobacco is toasted; makes
the taste delicious, You know how
toastLng improves the flavor of brea~.
And it's the same with tobacco exactly.
I0c
Hill lit on the happy phrase: "That is it-it is
toasted."
Burley in the bulk
There was, of course, a good deal more to
launching the new brand than coining a slogan. The
distinguishing ingredient of Lucky Stril~e was its gen-
erous proportion of Burley leaf, dipped in flavoring
essence and "bulked" or allowed to stand in great
piles for twenty-four hours or more while the tobacco
absorbed the added flavors. But there were no dip-
ping or bulking facilities in New York, and the Burley
was first treated in Richmond and shipped to the
Kinney-Duke Branch in New York to be blended
with other tobaccos (Bright, Maryland, Turkish) and
made into cigarettes. Within a year, as the new blend
caught on, this makeshift had to be changed, and
Brooklyn became the center of production.
"It's Toasted"
What made the brand catch on? There were
as many answers as George Washington Hill had
ideas. The basic reason, probably, was the public's
whetted taste for Burley tobacco. An estimated
35,000,000,000 cigarettes were rolled by hand from
Burley mixtures in 1916, a year in which only 21,000,-
000,000 ready-made ciggrettes were sold. American
Tobacco had been experimenting for five years to
develop a satisfactory Burley cigarette, but as a Hill
memorandum explained, "It was a problem ... to
discover some method of handling Burley tobacco so
that it could be used in a cigarette that would remain
in good condition for a reasonable length of time.
This has been accomplished by the application of a
new principle in cigarette making. Under this new
principle the Burley tobacco is toasted. This... held
the Burley flavor in cigarette form. The result is
Lucky Strike, the real Burley cigarette. It is based on
the original In~cky Strike formula.
"This new principle can for advertising pur-
poses be compared to the toasting of bread-'like
toast, buttered hot.' The technical and chemical
details of what takes place in the toasting need not
be explained in advertising. They would not attract
the public as much as this simple suggestion of the
familiar, homely toasting fork, which everyone has
seen used over the kitchen stove."
TI56850080
The main thrust of advertising was not applied
to the new cigarette until January, 1917, when the
slice of toast on a fork appeared in hundreds of
ne~vspapers and billboards-always, by Hill's order,
in %rural black." In later months Hill composed
several variations on the cooking theme. Steak,
broiled and buttered, was used as well as toast. After
the U. S. entered the World War, and Herbert
Hoover's Food Administration began to promote the
potato, that tuber (closely related to Ni¢otiana taba-
cure) found its way into Lucky Strike ads: "... what
cooking does for raw potatoes it does for 'raw' to-
bacco-gives flavor."
Having translated the technical details into
popular language, Hill was still unsatisfied. He
wanted to get across the long effort American had
made to come up with a top-flight Burley-blended
product. Extra advertisements and throwaways were
made up to tell the story behind the toasting, in the
words of Hill's own memorandum.
With Riggio's sales missionaries telling the
toasting story all over the country, the introduction
of Lucky ,~$rilce, beginning in Buffalo, was a walloping
success. By May of 1917, Vice President Charles
Penn contradted for construction of a factory in
Reidsville, to make Luekies exclusively. Within
eighteen months, sales of the new brand were pushing
6,000,000,000-then representing abou~ 11% of all
cigarette sales. But in the last half of 1918, its ~hare
of the market inched downward, month by month,
to finish the year at a mere 6%. What happened?
For one thing, Lucky Strike's genius had gone
to war, as its green pack was to do twenty-five years
later. Hill first went overseas as u Red Cross major.
Having heard shots fired in anger on three fronts
without returning the compliments personally, he
came back disgusted at his non-combat role. He
persuaded the Army to give him a commission, went
to Washington to systematize the Motor Transport
Corps, was scheduled to sail for Europe on November
14, 1918. By then, of course, the big show was over
and he shed his khaki.
"tobacco as much as bullets"
For another, the war itself turned the spotlight
on established brands and temporarily arrested the
promotion of new ones. This was no slur on the
In France, BlaeI¢ Jack Pershing called for "tobacco
as much as bullets" to win the war. Zn New Yor/c,
the "Our Boys in France Tobacco Fund" spared no
horses ~n answering General Pershing's request.
Ti56850061
The Democracy of
"'BULL DURHAM
In I91~,, Bu~ Durham ad stressed democracy of tobacco.
"tailor-made" cigarette, whose per capita consump-
tion had tripled since 1911. But new brands were
hardly appropriate to send overseas in response to
Black Jack Pershing's ringing appeal: "You ask me
what we need to ~ this war. I answer tobacco as
much as bullets." In the spring of 1918 the U. S.
contracted for the entire output of Bull Durham, and
the old brand became "the makin's of a nation" in
a double sense. The government also bought up some
of the Omar output, but when the doughboys got
back the Turkish vogue had all but disappeared.
During the war, Oriental leaf had become scarce and
expensive, while the trend to,yard homegrown to-
bacco was accelerated not only by new brands like
Lucl~y Strilce and Camel but by the gre~t drive to
send the makin's-i.e., Bull Durham-to the boys in
the trenches. After the Armistice, Turkish leaf con-
tinued to be hard to get, and the halcyon days of
Mecca, Hassan and Omar ended by default.
The demonstrative sell
Partly for this reason, Hill gave his oldest
domestic brand a last fling. Sweet Caporal was pushed
hard alongside Lucky with the tag line, "Ask Dad, He
Knows." Dad may have known, but he shared with
younger men a liking for the new Burley blends. Hill
stuck to his guns for several years, however, and it
was Sweet CaporaI that furnished the flint example of
selling by demonstration. "Ed," Hill told Harvey one
day in 1923, "I've got a new idea." The paper used
in Sweet Caps had been changed so as to yield a fine
white ash instead of the sooty black residue which
standard cigarette paper then gave. Hill's idea was
to take some of the paper right to the public and
show them how freely it burned.
Sweet Cap's chief rival, Piedmont, was selling
well at that time on the New York waterfront, so the
In the spring of 1918 the U. 8. contracted.for the entire Bull Durham output to be shipped to the
doughboys.
56
T156850062
West Side pier area was chosen as the testing grotmd.
Harvey picked out a six-foot salesman, a big wooden
table and a roll of the new paper. Although they were
not allowed to take their gear on the 23rd Street
trolley and ~vere even threatened with arrest, the two
.finally set up the table in front of a store and went
into their pitch. Unfortunately, those who stopped
to watch the new paper burn to a white ash were
loafers rather than buyers. Then school got out, and
an uninhibited urchin grabbed the change Harvey
had left casually on the table. In the excitement the
table was knocked over, the six-foot salesman quit
and Harvey, bereft of his ammunition, retreated.
Although the demonstration was standardized with
a smaller table and had some success outside factories
(where one could find men with jobs and change of
their own), the "selling principle of demonstration"
was to be reserved for Lucky 8tr~ke in the future.
The big brand arrives
~ But 1923 was a pivotal year for American
Tobacco in spite of ~weet Cttporal's decline. Percy Hill
was now in his 61st year, a dignified gentleman whose
steel-trap memory for figures concealed a softening
heart. Alth6ugh the first rule of keeping a tobacco
business solvent is to limit credit, the elder Hill, loth
to crack down on one hard-pressed jobber, asked an
executive to "see if he could do something for him."
By now advertising was his son's great specialty-and
with the big Burley blends coming on with a rush,
advertising was the spearhead of the business. Ready-
made cigarettes were "it." Harvey was sent to dispose
of the Manhattan Briar Company, for which a cer-
~ Read What
Pershing's Boys Smoke
"Over There"
GI~NUINE;
"BULL DURHAM
TORACCO
1917 ad recorded demand for Bull Durham ~n the services.
tificate of dissolution was filed in January, 1923. At
the same time the Tobacco Products Corporation, an
independent manufacturer associated with the Whe-
lan and Schulte stores, sold its plants and rented its
Whole trainloads of muslin bags left Durham ]or the ports. Each bag had rnalHn's of tMrty-three
cigarettes.
57
T!56850063
brand names to American. Among the latter were
Herb~'~ Tareyton and MeIachrino. The same year
manufacturing was centralized under Charlie Penn.
Reidsville, where Penn's father had made the family's
products and reputation, was transformed into
"Lucky Strike Town" (the Company's plant there
has bJso made Pall Mall since mid-1954).
Not only on land hut also iu the air was there
evidence of the big push behind Lucky Strike. The
Company turned to skywriting as a new advertising
medium, and during 1923 people in 122 cities from
Jersey City to San Francisco craned their necks to see
"Lucky Strike" spelled out at 10,000 feet. Since aerial
chirography had only been invented the year before
by Major J. C. Savage of the RAF, the message
received rapt attention from the nation's groundlings.
They could hardly fail to notice it, since the
alone was a mile in length. Advertising, and American
Tobaeco, had changed quite a bit in ten years.
~nd of an order
Actually, the company had been undergoing
two transformations at once. It was making the
changeover from the prewar emphasis on manufac-
tured tobacco to the postwar cigarette race; and the
war's aftetTnath had suddenly rendered its broad line
of cigarette brands obsolete. By 1925, the day of the
one big brand had arrived: American Tobacco sold
17,400,000,000 cigarettes of which 13,000,000,000
were Lucky Strikes. And the competition was even
more dependent on cigarettes. Reynolds sold more
than 84,000,000,000 Camels, Liggett & Myers over
20,000,000,000 Chesterfields. These three commanded
82% of the entire domestic cigarette market, and
were to command even more.
Toward the close of the year, the old order
ended. In October ~lames Buchanan Duke died, and
in December his old lieutenant, Percival Smith Hill,
followed him. It was no longer possible to ask dad.
After 1918, the old assortment of cigarettes gave
way to one big brand, Lucky Strike. Pipe tobacco
and "'ehaw" gave way to the "tailor-made" cigarette.
American's major effort centered around Luckies,
and Reidsville, North Carolina, became known as
"Lucky Strike Town." In 1923 people of 1~ cities
including these citizens near New York's ~ity Hall
watched skywriters spell out Lucky Strike in smoke.
T!56850084
THIS COUNTRY NEEDS..."
TwHE YEAR 1925 also saw the passing of a man
ho is more famous for a chance remark than
for having been Vice President of the United States.
The man wa~ Thomas R. Marshall, an Indiana Demo-
crat who was Woodrow Wilson's running mate in 1912
and presided over the Senate during World War I. The
remark was made on the rostrum of the Senate after
a Republican Senator had orated grandly and at
length about the nation's needs. "What this country
needs," whispered Marshall to a secretary, "is a really
good five cent cigarl"
Marshall's deathless phrase is, at today's price
level, a contradiction in itself. A really fine cigar is
the aristocrat of smoking, no more subject to nickel
production than fine vintage wine. Like the best
grapes, the best cigar tobacco grows only in certain
areas where sun, soil and water are just right. Top
leaf comes from a tiny corner of Cuba, Pinar del Rio
Province in the Vuelta Abajo area, and it takes far
more than a nickel's worth to make a single fine cigar.
The spell of Spain
Since Cuba was a Spanish possession until
1898, it was natural that cigar smoking should first
take hold in Spain. Connecticut Valley farmers were
producing cigar leaf in Revolutionary days, to be sure,
but most of their crop was for export. During the
build-up of American flag shipping that began with
the War of 1812, a homemade cigar industry sprang
up in the Nutmeg State. The products were more like
stogies than real cigars: the limited leafsupply pre-
vented much blending, and they must have burned
like powder fuses. Sailors and laborers formed a mar-
ket; taverns used them as giveaways and itinerant
peddlers are supposed to have carried them in their
wagons.
But Americans only encountered "really good
cigars" when they met Spaniards. General Putnam
brought some back from Havana after his 1762 expe-
dition, and importers of Cuban sugar in the eastern
seaports followed his lead. The cigar carried the exotic
appeal of distant, tropical places, and its rise paral-
leled the rise of the clipper ships-just as the carving
of ship figureheads and cigar store Indians was accom-
plished in the same era and by the same craftsmen.
A rather exclusive clientele developed in the East,
and since mass traditionally follows class, "Spanish"
became a popular adjective for advertisers of tobacco.
(Even John Green's original Bull Durham started out
as Best Flavored Spanish Srnolc~ng Tobacco.)
By 1840 or so, cigar-rolling was a sizable
industry along the Atlantic seaboard, where immi-
T156850085
Cigar demand grew slowly before the war with Mexico
made brown rolls fashionable. By 1859, many of the
Boston Common "smoking circle" puffed fine cigars.
Seldom seen sans cigar was Ulysses ~. Grant. After
the battle of Lookout Mountain in Tennessee (I868)
Grant and cigar were photographed on the heights.
Notable cigar fancier around Z 900 was J. P. Morgan,
who did ~zot like photographers. Morgan's cigars-
eight-inch Kohinoors-were made by the Company.
grant labor was plentiful. After the ~Iexican War, the
cigar became more or less nationalized. The cigar
actually preceded the pipe as a badge of the "college
man," for elder-aping sophomores took to the brown
roll around this time, no doubt stimulated by the.
example of troopers returned from Mex/co.
Brown Decades, brown rolls
Because the good cigar is, in the nature of
things, expensive and because it is best smoked
slowly, it was a perfect after-dinner adornment for
the gentleman in the drawing room. As the country
began industrializing after the War Between the
States and prosperity became something to be dis-
played as much as enjoyed, the expensive cigar flour-
ished. It was a symbol of the Gilded Age: cigar bands
matched the gingerbread woodcarving of the post-
bellum veranda in their ornate tracery. Big-city shops
began turning out cigars made entirely of imported
Havana leaf. By the time of the gay nineties, well
over half of every dollar spent on tobacco went for
cigars. And it was no wonder that J. B. Duke went
for cigars too: they represented the quality product
of the tobacco industry, and they seemed to promise
the most growth as well as the most gross.
In these respects, Duke was correct. But after
the American Cigar Company was formed in 1901, he
discovered that his method, the method of volume
production and mass distribution, ~vas not appro-
priate to cigars. It was true then, as it is true now of
the clear Havana product, that hand labor was as
important as fine leaf-not so much in final rolling,
now largely mechanized, but in sorting, stripping and
casing the Cuban tobacco. There was thus little ad-
vantage to be gained by great capital investment.
Most cigars, like most early Turkish cigarettes, were
rolled by hand in small shops or in tenements on a
piecework basis. Smaller and less scrupulous manu-
facturers took advantage of poor immigrant folk to
widen their profit margins; indeed, the rise of the
American Federation of Labor traces to the segar
shops in which Samuel Gompers was employed before
the century's turn.
Cuba
Duke's far-ranging search for the best led him
inevitably to the Pearl of the Antilles, where he added
•
TI56850066
the finest factories to his long list of investments.
Among the~e were the Havana Cigar and Tobacco
Factories, Ltd. which owned the La Corona brand
originated in 1845 by Alvarez Lopez. In 1902 Ameri-
can Cigar organized the Cuban Land and Leaf
Tobacco Company, which st91 owns, leases and cul-
tivates more of the choice Vuelta Abajo tobaccoland
than all other cigar companies combined. The fine old
names also included Henry Clay, Boca, L~ Veneedora,
H. de Caba~as y Carba]al and Villar y Villar. It was
in a Company factory in Cuba that 5. P. Morgan
the elder found the right cigar for himself-a mighty
roll eight inches long. (This shape, the Kohinoor, cost
$1.25 apiece and was ordered by Morgan in batches
of 9,000. J~ P. Morgan the younger preferred a smaller
cigar from the same factory, called "5.P.M.") An-
other financial family, the house of Rothschild, got
its cigars from the Villar factory in Havana-a shape
(front-mark) named "Excepcionales de Rothschilds."
In part, Duke's interest in cigars-like his
interest in plug-was defensive. Around the turn of
the century, when paper cigarettes were not only
overtaxed and undersold but threatened with restric-
tive legislation, he began production of Recruit, a
cigarette-si~ed cigar, as a hedge.
For cigars as for cigarettes, the great growth
impetus seems to have been furnished by wars. When
Wash Duke was peddling Pro Bono Publ~co in his
Conestoga wagon, the per capita consumption of large
cigars* was around twenty-five. In five years it went
to forty-three; when the old American Tobacco Com-
pany was formed in 1890, it was almost sixty-five;
and in 1901, the founding year for American Cigar,
it was seventy-four. Perhaps the Spanish-American
war gave the luxury roll an extra push; from a
national sales total of 4,063,200,000 in 1897, the
business went to 6,'/86,400,000 in 1908-an increase
of just 67% in six years.
Slow roll
Although cigar sales held at seven or eight
billion a year until 1920, the brown roll was being left
behind by the white one. Its use did not keep up with
population growth, and 1907's per capita consump-
tion of eighty-six was to be the peak (current per
capita consumption ~s less than forty). And after
*Tho~e weighing more than three pounds per thousand.
Be-fore 1901, the year James Duke.founded American
Cigar, most brown rolls ~ere turned out by small
operators or retailers. At the century's turn there
were about $0,000 o,f them. Employees worked aS home
or in t~ny back rooms of shops like the one above.
Samuel Gompers began as a cigar maker. He argued
-for better conditions in cigar -factories, went on
to found the American Federation of Labor itself.
T156850067
Handmade Spanish cigars (above) were the standard
o$ excelIenc~ after the Revolution. As late as 1980
the best were made in Guba in the Spanish fashion.
Marshall mad~ his famous r~mark about the "really
good five cent cigar" during Wileon's first term.
Today, a good ten cent cigar is a print~ achievement.
Many cigar machines were tried and failed. This de~n'ce,
advertised .for sale in 1857 by John Prentic~ o.f New
York, used "'pedals ~noved by the feet" for its power.
1907, even Duke must have had doubts about his new
cigar empire. The next two years saw losse~ of 8.5%
and 7.7% on his Havana business. And in 1910, on
sale~ of a billion cigars (of the nation's seven billion),
the profit on Havana product was a mere &l%, on
domestic cigars 5.8%. In those years, before the cor-
porate income tax was levied, such margins were
positively whiskerlike"
The reason for these relatively low profits was
twofold. First, the hand-labor nature of cigar-making
permitted family enterprises to invent and sell small
brands at prices ~vhich reflected less labor cost than
the least skilled workers could command in the open
market. And second, quality of product was difficult
to detect except over a period of time. The small fly-
by-night roller who ran out of good leaf usually had
no compunction about degrading his brand name-or
if he had, it was easy for him to change it. Since only
a small percentage of smokers were connoisseurs in
any degree, the maintenance of consistent leaf stand-
ards was not a guarantee of quick financial success.
In any event, it is unlikely Duke or his asso-
ciates shed too many tears ~vhen the Supreme Court
halved his cigar business. From the quality point of
view, dissolution left The American Tobacco Com-
pany with the fine old Cuban names; it was mainly
the domestic brands that were awarded to the recon-
stituted Lorillard company.
During the tenure of Percival Hill, the cigar
department was probably his most static. There were
the domestic brands remaining after dissolution-
mainly Cremo, Chancellor and Roi-Tan. And there
were the clear Havana types, La Corona, Antonio y
Cleopatra, Caba~as, La Vencedora, Villar y Villar-
all made in Cuba. As the import duty on these
climbed, the market narrowed. And while the great
number of cigar makers dwindled-to 17,000 in 1917,
14,600 in 1921, and 10,800 in 1925-so did per capita
consumption.
Patterson's machine
It was during the early twenties that a glim-
mer of hope for five cent cigars first developed. A long
line of Rube Goldberg contraptions had failed to do
for cigars what the Bonsack machine had done for
cigarettes. There were, to be sure, several devices
which supplemented manual dexterity if they did not
I
T!56850088
replace it entirely-bunchers, molds, stemmers, suc-
t/on tables to hold the wrapper for the roller's knife.
Toward the end of War I, however, an "alumnus"
of J. B. Duke's trust came up with a workable mech-
anism. Rufus L. Patterson, president of the American
Machine & Foundry Company, had produced im-
proved cigarette machines, some of which are still in
use. His 1917 cigar maker laid the filler, applied
binder and wrapper and even turned the ends, yield-
Lug 480 complete cigars in an hour. This seemed to
open the way for a realization of Marshall's half-
serious desire, and machLue-made cigars zoomed. By
1926, the first year of George Washington Hill's presi-
dency, one cigar in every five was mechanically rolled.
Four years later, the proportion was one in three.
The case for Crerno
Impelled by the same vision of volume which
brought J. B. Duke to New York, G. W. Hill put the
weight of his advertising behLud one of the old
brands, Cremo, made on the new Patterson machines
to sell for a nickel. It was, in fact, promoted as the
"5c cigar that America needed." In his enthusiasm
for the advantages of the new crush-proof, foil-
wrapped cigar made with scientific purity, Hill talked
plainly-a little too plainly, according to his critics.
"Spit," went the classic Cremo ad, "is a horrid word.
But it is worse on the end of your cigar... Why run
the risk of cigars made by dirty, yellowed fingers and
tipped in spit? Remember, more than half of all
cigars made in this country are still made by hand,
and therefore subject to the risk of spit!"
Hill's personal popularity was not helped by
this ultra-vivid copy. But regardless of his choice of
words, the message was both logical and true. After
two years, Cremo sales reached a peak annual rate of
1,400,000,000-fully 23% of the entire cigar market.
At that level it could have justified the heavy adver-
tising expense behind it. But the cigar competition,
thoroughly alarmed, took drastic measures. One
popular brand, visibly larger than Cremo, reduced its
price from three-for-20c to a nickel, with marked
effects on Cre~rw's volume. At this juncture, too, a
distinct downward trend appeared in the nation's
consumption not only of cigars, but of cigarettes and
chewLug tobacco as well (see chart, page 93). Even in
1929 cigarettes accounted for over 80% of the Corn-
After the 1918 Armistice, American Machine & Foundry
machine got a factory trial. Invented by Rufus L.
Patterson, it now ~nal~es virtually all U. S. cigars.
Albert Gold came to American Cigar's Trenton plant
in 1903, trained a cadre of cigarmakers. In 193~ he
moved La Corona produetion from Cuba to New Jersey.
To do this, Company built a new plant duplicating the
humidity of Cuba. Alfred E. Smith, presidential
candidate in 19~8, helped G. W. Hill dedicate plant.
T!56850089
party's revenue, and George Hill abandoned the
dream of Crerno volume. To get rid of his huge inven-
tory he cut the price to three for a dime. At the same
time Cremo's advertising budget was sharply curtailed
and this, together with the abrupt downpricing,
constituted a strategic retreat from the nickel
battlefield.
From mass to class
The Crerno campaign was by no means the
whole show so far as American Tobacco's cigar busi-
ness was concerned. Although that attempt to edge
dowmvard into the mass market was written off,
Chancellor and Roi-Tan remained as American's
entries among the domestic grades. And the fine cigar
field vms still an American domain. Most prominent
in the clear Havana department were the famous La
Corona line and Antonio y Cleopatra, mildest of the
clear Havanas. Along with Book, Caba~as and Villar
y Villar, La Corona was being made in Cuba as it had
been for almost a century. It was, and still is, the
world's standard of excellence, the ultimate luxury
product in a de Iuze field.
The market itself was split into literally hun-
dreds of segments. At one point La Corona alone was
made in no less than 1,300 different sizes, of which
BILLIONS OF CI,~ARS SOLD
10
.5
.I
o05
191o
Fewer cigars are sold today than in 1905. But the
Company's clear Havana brands have quadrupled since
193~. Plotted on a logarithmic scale to show rates
of change, the dotted line shows sales of all cigars,
1930 19~ 19~0 1950
the solid line combined sales of La Corona, Antonio
y Cleopatra, Henry Clay, Book, Veneedora and V4llar.
El Roi-Tan, Company's top domestic ~igar, has shown even
faster growth (broken line) and is now the leading 10c cigar.
64
T!56850070
,l
Best known of American's clear Havana brands ~,s Ln
Corona. Its most famous shape ~s the Corona, making
"La Corona Corona" a synonym for the finest in eioars.
some 260 were standard production shapes and the
remainder custom-rolled for individual smokers in
uneconomic batches of a few hundred at a time. No
wonder Hill, bothered by the demise of Cremo, dis-
missed the cigar trade as unrewarding and resumed
his concentration on Lucky Strike.
A further factor squeezed the famous old
brands into the limited upper reaches of the market-
duty on finished cigars, which was exactly 900%
higher thorn duty on baled leaf. Albert Gregg, who
took over in 1932 as President of American Cigar,
estimated that the La Corona Perfecto, then selling
at three for a dollar, could be reduced to half that
price if manufactured in the United States from the
same tobacco. Similarly, the line leader, La Corona
Corona, could be sold at three for a dollar if rolled
domestically as against a 60c price tag for the im-
ported product. So it was logical that in 1982 L. S.
Houston, Pat H. Gorman, Sr., and Albert Gold
(later named chief of cigar manufacture) were author-
ized by Hill and Gregg to build a rolling plant in
• Trenton. They air-conditioned it to duplicate the
atmosphere of Havana, where humidity averages
80%. Although the press expressed some doubts at
the time, the shift in manufacturing site was no
gamble: production of Antonio y Cleopatra had been
moved successfully from Tampa to Trenton two
years before. Brought closer within reach of the
average American cigar smoker, La Corona began a
growth climb that is still continuing. Along with the
Company's other brands of clear Havana leaf-the
first nationally distributed cigars manufactured in
What Champagne country is to wine Cuba is to cigars.
West of Havana the island crooks downward; this end,
-the Vuelta Abajo or "down turn"-grows top leaf.
Within Vuelta province of Pinar del Rio, best leaf
comes from District One. Amerivan's subsidiary owns
and cultivates more land there than all its rivals.
District One dominance springs from rleh so~l, 80 %
humidity, bright sun--and the local tradition that
"everyo~te is a good .father, especially to tobacco!"
Ti56850071
~eedlings planted in October are weeded and watered
every day. After two mo~ths they are sis inches high
and ready for transplanting .from seedbed to field.
Wrapper leaf ~s grown under cheesecloth. This makes
plants taller and leaves larger and lighter. Most
cigar smokers prefer a ~mooth, l~ght green wrapper.
Remova~ of ]lower buds is called "topping," channels
full nourishment into leaves. Each shadegrown plant
reaches sis-foot height, yields about s~zteen leaves.
bond-it now accounts for almost a fourt~ of the
fine cigar market.*
One and only district
Like the ri~e of the paper cigarette, based on
the devdopment of Bright tobacco in North Carolina
and White Burley in Kentucky, the growing market
for dear Havana cigars has its roots in good earth.
The choicest plantation land in Pinar del Rio sur-
rounds the little villages of San ~Iuan y Martinez and
San Luis, known as District One. Most of this dis-
triet's leaf land is owned or leased by the American
Tobacco subsidiary furnishing leaf for La Corona.
The crop ]s harvested in February and March,
after which the loamy brown soil is permitted to rest.
Heaps of fertilizer are left on the ground to decom-
pose, and in June it is spread over the fields and
harrowed, tteavy summer rains work the nourishment
into the earth; then the top soil is loosened again and
refertilized with cottonseed meal and potash. The
entire process of revitalization is supervised by a
scientific laboratory near San Juan y Martinez.
Before the crop is laid out, the fields are given
a fall cleaning. Two or three plowings and harrowings
break up the soft to a powdery softness, and any
dried weeds are pulled out. Sometime in October the
tobacco seedlings are planted in special beds which
are irrigated every night and weeded by hand every
day. By December the best of these seedlings-about
six inches high-are ready for transplanting to the
fields proper.
Some tobacco, destined for use as wrapper, is
grown under great sheets of cheesecloth stretched
above the. ff~ound like so many flat circus tents. Par-
tial screening from the sun makes the leaves lighter,
larger and finer in texture; although their flavor does
not differ from that of sun-grown leaf, light-colored
cigars are more pleasing to the smoker's eye. Each
year an amount of Cuban acreage equal to more than
a thousand football fields is covered with cloth to
produce shade-grown wrappers for La Corona.
Whether grown in sun or shade, the tiny
*The "fine cigar m~rket" is defined by the tax classi-
fications F and G, comprising cigars selling for more
than lfc at retail. The other elates include A, cigars
selling for 2.5e or less; B, 2.6 to 4c; (3, 4.1 to 6c; D,
6.1 to Be; and E, 8.1 to 15c.
66
T156850072
plants are iusp~ed every day. The sucker leaves are
removed as are the flower buds, for all the plant's
strength must be funneled into the leaves. There will
be ten or twelve large leaves on each sun-grown plant,
fourteen or sixteen on the shade-grown. In the two
months it takes these plants to reach four and six
feet, respeet/vely, the soil/s constantly being hoed,
irr/gated, sprayed and fertilized. Finally, in February
and March, the leaves themselves are gathered.
"The L~ Coror~ worker," goes a saying, "is a
good father-especially to his tobacco." Wrapper
leaves are pampered like children, removed individ-
ually as they mature and taken first to the drying
barn. There, strung in pairs on cotton thread, they
are hung on poles to cure. This curing is mostly "con-
trolled" by fire, which renders the wrappers extra
light ("golden claro"). Sun-grown leaves are removed
in pairs with part of the plant stalk still holding them
together. They are hung out in the sun for a time
before they are put into the drying barn to be air-
cured or "natural-cured."
All this, however, is only a beginning. When
the rains begin in May, the dried leaves again become
moist and pliable enough to be handled. For a month
they are pildd in the farm warehouse to "heat" in
rectangular stacks. This induces fermentation, and
the temperature is kept under 120 degrees to prevent
damage to the leaf. This stage is called "bulking" or
"sweating," words which are used in cigarette manu-
facture with a somewhat different meaning.
"in their time"
Always soft and pliable, so that they may be
handled without damage, the leaves are then so,ted
by she, kind of leaf, and the probable curing time.
The graders separate the dry, extra dry, thin, pliable,
medium, medium heavy and heavy leaves, each of
which requires a different period of curing in bale-
anywhere from six months to three years. "Our
tobaccos," say the plantation managers, "are worked
in their time."
The graded leaves are first tied in bunches or
"hands"; these are kept for a whih in large cedar
boxes and then tied in bundles of four called "carots."
Eighty of these carots make a bale, which is v~mpped
in stit~ Royal Palm leaves and tied with fiber of
majagua bark. Each bale is exactly the same as the
Ripe leaves are removed one by one in February and
March. Wrapper is "control-cured" with artifioial
heat to achieve desirable "golden claro" lightness.
Sun-grown leaf, used as filler and binder, is hung
in the sun for a time, then moved to an air-curing
barn. In two or three months, it turns rich brown.
All tobacco in La Corona and Antonio y Cleopatra
comes from Cuba. American's wer~ the first cigars
manufactured in bond having national distribution.
T!56850073
Graders separate leaves by size and type. Cure time
varies with grade up to three years. Forty to sixty
leaves tie into a "hand," four hands into a "earot."
After a cedar box siesta at the ~oaeking barn, leaf
is moistened to make it pliable. This conditioning
or "easing" ~s repeated often during manufacture.
Bale of cigar leaf holds eighty tarots, wrapped in
"yaguas'" or leaf-ends of Royal Palm. One bale of
fine wrapper may sell for ever a thousand dollars.
next, dovrn to the last fiber knot, and weighs between
six,y-five and one hundred pounds.
During their long siesta in the warehouses of
Havana, the bales are turned from time to time to
take the weight off the bottom leaves. Toward the
end of the curing time, a earot or two is pulled out
of a bale; it is smelled, felt, and even smoked to deter-
mine whether it is ready for use. If so, the stems are
removed-by hand-and the pure tobacco then gets
its final six-month "barbacoa cure" in barrels.
("Barbacoa" derives from the old Indian word for a
low-ceflinged room.) This final step, however, is
omitted in the case of wrapper leaf, which is too
delicate to be given the additional handling. It will
be stemmed at the factory.
Once more wrapped in "yaguas," as the stiff
lower extremities of palm leaves are called, the leaves
are burlapped and shipped to the United States.
Left handed and right
Again "cased" or conditioned with moisture,
the filler and wrapper leaves are laid out for rolling
into a wide variety of shapes and lengths. Each
bundle of long filler is rolled in one-half of a wrapper
leaf; and because the smooth, silky top side must
ahvays be on the outside, the rollers and the cigars
they make are either "left handed" or "right handed."
After passing inspection, La Coronas are seasoned
another two months in rooms lined with Cuban cedar.
Wrapped in cellophane and banded, they are then
boxed. Even the cases in which the boxes go out to
the wholesaler are lined with protective material
which varies with the climate to which La Coronas are
being sent. American Tobacco salesmen follow them
all the way to the retail counter, seeing that they are
not exposed to excessive heat or dryness, cautioning
the tobacconist against displaying them alongside
candy lest the redolent Havana leaf absorb alien
odors.
This kind of follow-up is, of course, vital to
attaining distribution. Recent surveys show that
more American Tobacco de luxe cigars are displayed
in the nation's showcases than all others combined.
This point-of-sale penetration has been carried one
step further than the tobacconist: during the four
years ended in 1953, no fewer than 70,000 cigar
smokers were "sampled" by A. Gordon Findlay's
TI56850074
field men. Each received a miniature dgar box con-
raining five La Coror~as or A~onio y C/eopa~ras after
a personal chat about the details of production that
make them "supreme the world over."
Volume vantage
These details are just as responsible for the
growth curve as field promotion. They make possible
volume acceptance, but they in turn are made
possible by volume production. In the simple but
crucial matter of combining tobaccos prior to rolling,
the Havana leaf is divided into five kinds. Each fac-
tory worker must take a certain proportion of each
kind to "bunch" every batch of fifty. The normal
course of manufacture, even in Cuba itself, is to
spread out all the tobacco in a single pile, and the
normal result is that workers pick the easiest-rolling
leaf first. And it is volume on the plantation which
makes selective aging possible and makes "Our to-
baccos are worked in their time" more than a slogan.
It is a curious fact that only mass production permits
control of a kind impossible for hand craftsmen. Since
1952, for instance, an extra step has been added to
leaf preparation. After newly-arrived wrapper is un-
baled and moistened, the leaves are hung with the
tips down so that any extra water will drain off. This
avoids dark streaks-water stains-in the finished
cigars.
But maintaining uniform and high quality
depends more upon people than upon plans and pro-
cedures. Keeping the Company's people particular is
the prime task of the Company's management. To
impress on his rollers the importance of blend, the
head of one Antonio y Cleopatra plant recently had a
batch of cigars made using only one kind of leaf.
Smoking these unblended samples drove home the
point better than words could have done. Since many
of the plant's people are women, some special corn
bread was baked, without salt. A few mouthfuls illus-
trated the same point on the distaff side.
Sometimes customers must be kept particular
too, for fine cigars will not take care of themselves.
Last December President Paul Hahn dined at a well-
knovm New York restaurant, one of those "where
particular people congregate." The after-dinner
Havanas were brought to the tables on open trays,
and one tray- was left on a stand where a waiter
Baled leaf is .frequently inspected by warehousemen
who may make a sample cigar to test readiness for
rolling. La Corona tobaccos are worked "in their time.'"
Final cure .for filler and binder leaf is in barrel.
Each is slotted for ventilation, and a center well
permit~ warehousemen to check inside temperatures.
The "'barbacoa cure"--so-calIed from the Indian
name for a low-ceilinged room-completes process
of leaf fermentation. It lasts siz months or more.
TI56850075
.for the U. ~q. One bale contains enough filler for
7',000 dear Hava~as or enou~ wrapper Jot ~£,000.
bit o$ transplanted Havana. Many oj the men who
worked his flaming magic on a stack of
Hahn suffered through this performance only once:
shortly thereafter, particular smokers noted that the
restaurateur's cigars were housed in a cedar tray
hooded with transparent lucite.
New shape/'or e~gars
Like the cigarette brands, cigars have tended
to narrow to a relatively small number in contrast to
the former long lists. During Percival Hill's early
years as President, the American Cigar subsidiary
marketed some twenty-one 5c cigars including Cremo,
Anna Held, F~aro, bit~ Chancellor, Harmer, Cuban-
ola, Gag. Peabody, Hoffr~an Ho~se and others. In
addition to Chancellor, the high grade domestic llne
included El C-ut~n, Ben M~rz~, C~welt Club and Ls
aerania. The blended Havanas included ~Piber~ and
0sm~ as well as/gl Rob.Tan. The "International
Brands" included Za Mer~/ana, Za Carolina and
~snna! Garda as well as the Caba~zs, L~ Corona,
Henry C~y, Vil]~r ~/ V~llar and Boek lines. During
those years all the Internationals were made in
Havana; seven other brands were made of all.Havana
lea~ in this country-Antonio ~ Cleolaatrs, /rlor de
C~bs, ~ E@eranzc~, El Prine/~e de Gales and/rams
Un~versa~ In Tampa, El Belmon~ and Ls Belle, ~rmperia
in New Orleans. In all, there were thirty-seven d~er-
ant cigar names, as against ten today.
But to make these ten cigar brands is vastly
more complicated than the manufacture o~ ~teen
aigrette brands, the current number. L~ Coroaa
comes in twenty-~our shapes, E~ Rof.Tsn in five,
Anton4,o y Cleopatra in nine. Since dimensions greatly
affect smoking characteristics, each shape has its own
blend, its own proportions o~ the various lea~ types.
And unlike cigarettes, which have produced only two
maior sizes in ~ty years, new dgar shapes appear
and old ones disappear almost yearly.
Although L~ Corona, Caba~as, Boc/¢ and
Antonio y Cleopatra still dominate the clear Havana
market, the machine age has reshaped the cigar
business as a whole-~ust as George Hill anticipated.
Almost 90% o~ the cigars consumed in this country
are relatively inexpensive imitations o~ the Vuelta
Abajo brown roll. By the same token, three-Iourths
o~ American Tobacco's cigar sales are in the popular-
priced Ro~,.Tan series. (This year, the I/ne is being
T!56850076
rounded out with the revival of green-boxed C~zn-
cd~rs, to compete with the more expensive domestic
cigars in clas~e~ E and F. One of the Company's
oldest cigar names, Chancellor was taken out of pro-
duction during the stringent years of War II.)
The growth of Roi-Tan is one of the unsung
phenomena of the modern tobacco industry. In the
pit depression year of 1932 hardly more than 6,000,-
000 were sold on the domestic market. By 1953, unit
sales had increased 8,400% to over half a billion, and
Eo~-Tan sales alone accounted for 9% of all cigars
withdrawn from U. S. factories. Most Ro/-Tans are
priced at i0c and the cigar, led by its Perfecto Extra
shape, is the leading seller at that price. Made of
Havana and Pennsylvania filler, Rob-Tan has a
Wisconsin binder and a Connecticut shadegrown
wrapper, much of the latter grown by the Company's
own subsidiary, Hatheway-Steane. It is manufac-
tured in Wilkes-Barre, Scranton, Charleston, Ashley,
Louisville and Philadelphia.
One of Ro/-Tan's distinguished characteristics
is the punctured head: it is advertised as "the cigar
that breathes." Although pre-puncturing has spread
to rival domestic brands and even to the Company's
Antonio 7t Cleopatra Havana line, it was a L~ Corona
clgar-the slender Eloisas Listas-in which the hole
first appeared, sometime during the nineteenth cen-
tury. Jobbers have often inquired why the La Corona
line is not punched too. The answer to this question,
as to many others about product design and packag-
ing, goes back to the ultimate consumer. Whether he
is called conno~seur or simply creature of habit, the
smoker is apt to regard his pipe or cigar more as a
companion than an expendable bit of agricultural
produce. He resents change, and may regard even an
improvement as "evidence" of downgrading in
quality.
Clearly daro
George W. ~Iill, whose career spanned the
metamorphosis of American Tobacco from the plug
and smoking era to the age of the cigarette, grew to
respect this nostalgic attachment.* Hill once received
a complaint from a smoker in Florence, Keatucky,
*He was notoriously reluctant to make changes in
package design, and refused to kill even the most super-
annuated minor brands.
Each whole shadegrown leaf makes two wrappers, one
half spiraled clockwise around its cigar, the other
half counterclockwise. The smooth ~de ~s outside.
Most La Coronas are made and wragped by machine,
~#h~ch does a better job than hand-rollers. Hand
labor, however, is v~tal.for curing, casing and sorting.
Shapes too long to fit machines are made by hand.
These are the very large, extra long types such as
Aristocrats, After Dinners, Premiers and Campanas.
T!5685007"7
Before cellophani~zg, La Coronas are seasoned i~ cedar
finishing room. Here they "~ntermarry," a~d achieve
uniform aroma. Albert Gold, above, retired ~ 1958.
C~gars are packed .for uniform color. It takes four
days to color-select, band, ~orap, pack and labe~
each box; it as four years from seedbed to smoker.
to the effect that Roi-Tan quality was deteriorating.
"We have a Roi-Tan Club here in Florence," the
letter read, "and our members have tried every one
of the shapes in which Ro~-Tan is made." Anyone
who knew the precise number of shapes in the line,
reasoned Hill, was no crank. Down to Kentucky went
one of the cigar executives to investigate. The trou-
ble? Dark cigars. A shipment of "colorado" cigars
with reddish brown wrappers had gone to Florence in
place of the usual "claros"-the same cigar but w~th
a wrapper of light, greenish-brown leaf. So sensitive
to color are cigar smokers that most demand the
lightest possible wrapper, feeling that the darker out-
side leaves denote a heavier smoking quality. Vet-
erans of the brown roll, though, testify that the darker
wrappers-even the nearly black "maduro"-taste
better than the light ones. For them, La Coronas are
supplied in red-tabbed boxes signifying sun-cured
wruppers.
But although fine cigars are the quality leader
of American's product list (President Paul Hahn, like
his predecessor Vincent Riggio, is an inveterate
smoker of Antonio y Cleopatra), the more portable,
more convenient cigarette is the everyday choice of
the public, accounting at present for 95% of American
Tobacco's dollar sales. And even before it attained
its place in the lips and hearts of Americans, it was
the choice of George Washington Hill.
C~gars have their own separate sales force, headed
by A. Gordon F~ndlay. Manufact~tring supervision of
all cigar lines came under a single head early in. 1955.
Cigar merchandising eztends all the way to retail
showcase. If they are too dry, too hot, too ~noist,
or mi~ed with other items, aroma will be impaired.
T!568,~0078
NATURE IN THE RAW
GEORGE WASHINGTON HILL was one of the
very few men who become legends even while
they are still alive. Like Paul Bunyan, John Henry,
and many another legendary figure, Hill was a
"natcheral man." This, perhaps, is the best explana-
tion of his raw genius, his frequent disregard of
protocol, his driving impatience. Unlike his father,
Percival Hill, George was not a mild man. But nature
in the raw, as Hill himself put it, is seldom mild.
Despite his early training in leaf-buying and
manufacturing, Hill was too impatient a man ever to
really master those skills-although he could appre-
date them in others. And despite his tutelage under
James Duke and Percival Hill, G. W. differed from
them in another aspect of management-delegating
authority. Here also his innate impatience impelled
him to make all the decisions himself.
In an organization less fortified with seasoned
tobacco men, Hill's particular talents might not have
flourished as they did. But he was surrounded by a
core of proud, professional experts, many of them
veterans of Duke's combination. They did not always
admire Hill's bravura manner, but they had to admire
his salesmanship. And Hill's instinctive empathy for
the Common Man plus his flair for sho~nanship
were just what was needed during the flowering of
brand land, with its critical dependence on advertis-
ing. He could sell cigarettes.
Young Hill did not take full command imme-
diately after his father's death. A new position, board
Chairman, was created in December, 1925, and for 40
months it was filled by Junius Parker. "The Judge,"
as Parker was called, enjoyed a reputation as the dean
of the industry. As an aide to Duke since 1905 and
Company Counsel since 1912, Parker knew the busi-
ness from the inside out. Although the by-laws did
not designate him "chief executive officer" in 1925,
he acted as a steadying influence on George Hill-not
only as Chairman but even after his official retire-
ment in 1929.
Although some of his stockholders were to hale
Hill into court to defend his high salary, he was true
to them in his own fashion. Hill did not make a
practice of attending annual stockholders' meetings,
on the ground that chattering with the minority who
attended was a waste of his time, and therefore not
in the best interests of the majority who paid him to
run the Company. He felt more qualified to make any
decision than anybody else partly because he spent
more time than anybody else on the business. In his
Irvington home there was a radio in every room,
where he could tune in his own commercials or those
TI56850079
Lucky Str~ke trademark, .first registered in arm-
and-hammer design, was changed by R. A. Patterson
of rivals. In the garden there were tobacco plants.
One of the first things he did on acceding to
the presidency of American Tobacco was to clear the
decks for concentrated action. Within a year of his
appointment he leased several minor cigarette brands,
including /-/erber~ Tareyton, to George Whelan's
Union Tobacco Company. American still made the
brands, but Whelan worried about selling them.
When Hill took over, the big brand-Luclcy
~tri/ce-needed his attention. Once-potent names-
~orerei~n, Sweet Ca~oral, Lord Sa~b~ry-were losing
Patterson company in 1908, bought ~ out ~n 1905.
their earlier vigor. Lucky was the third entry in the
Big Three race, and both Camel and C/~st~rfie/d had
made good use of their head start, though Liggett &
Myers appeared to be giving its maximum push to
Turkish blends even after War I. Came~, of course,
did not labor under this handicap, since it was Rey-
nolds' only cigarette. Possibly for this reason it
accounted for 41~ of the national output in 1925, vs.
Chesterfie/d's 24% and 16% for L~/cy
Late in that year Hill retained Albert D.
Lasker, whose agency, Lord & Thomas, brought fame
Be,fore 1950 Lucky Stri$~e label had the /c~r@e bullseye on .front, a smaller vernon on bacl~.
T1568b0080
and national distribution to Sunki~ oranges, Kleenex,
Pepsodent, Quaker Oats and Frigidaire among others.
Like Hill, Lasker relied on inspired word.jockeying
to stamp his message on the public mind; and like
lZAI1, Lasker had no patience with bland "reffmder
advertising' that lacked the "mason why~' element.
The two made an effective team.
Real live women
Their first break with tradition was the use of
women in testimonial advertisements, real live Ameri-
can women like actress Alice Brady. Other tobacco
companies had daintily skirted the question of lady
smokers by using foreign-born opera singers, veiled
Orientals, and imaginary lady pirates in ragged
shorts. Since millions of American women were al-
ready confirmed smokers, Hill and Lasker discarded
the roundabout approaches and made their appeal
direct. This done, they searched their minds for new
variations and settled, typically, on one of I-Iill's ideas
-"Reach for a Lucky Instead of a Sweet."
"I was riding out to my home," Hill later
recalled, "and I got to lt0th Street and Fifth Avenue;
I was sitting in the car and I looked at the corner,
and there was a great big stout lady chewing gum.
And there was a taxicab-it was in the summertime-
coming the other way. I thought I was human and I
looked, and there was a young lady sitting in the
taxicab with a long cigarette holder in her mouth,
and she had a very good figure. I didn't know what
she was smoking...
"But right then and there it hit me; there was
the lady that was stout and chewing, and there was
the young girl that was slim and smoking a cigarette.
'Reach for a Lucky Instead of a Sweet.' There it was,
fight in front of you."
The campaign broke in 1928 and in two years
there was Lucky 8fr~ke, right in front of Cannel and
Ch~ter.f~Id, with sales of 42,000,000,000 cigarettes for
1930. The candy industry was more than slightly
outraged, although the theme had been used before
(in 1891, Lydia Pinkham urged ladies to "Reach for
a vegetable instead of a sweet").
Lucky 3$r~ke continued to lead the packs; in
1931 its sales of 44,500,000,000 were some 11,200,-
000,000 units ahead of the No. 2 brand. The climb
was doubtless made possible by e~ective advertising,
but it depended on more than ttill's choice of words.
The taste was, and is, unique-the toasted Lucky has
always been easy to identify in a blindfold test.
But toward the end of the year, two widely-
held notions were exploded: one, that the precipitous
Wall Street crash of 1929 didn't necessarily presage
a drastic bus~ness depression; and two, that the cigar-
ette business was "depression-proof." As wages,
prices, jobs and purchasing power declined, so did
TI56850081
cigarette consumption. Among the lowered prices was
the price of leaf tobacco, and this led among other
things to the "ten centers" or "economy brands."
In two years, the average price of flue-cured
cigarette leaf had tumbled from 19c to 12c per pound,
and Burley had fallen from 25c to llc. Since leaf ~s
the major cost item in cigarette making, it was now
possible to market a smokable 10e cigarette. Thus the
pit year of depression, 1932, saw a not-very-gradual
rise in the sales of cheap cigarettes; by the end of the
year, one out of every five packs sold was a ten center.
At the same time, consumption of all cigarettes
dropped a cool 10,000,000,000, a market shrinkage
of 9%.
Statistics on manufactured cigarettes, how-
ever, do not tee the whole story. For ia the same
pit year enough cigarettes were home-rolled (based on
the increased use of cigarette paper) to boost cigarette
smoking by an estimated 10,000,000,000 units. In
the thick of this was old Bull D~rham, whose sales
CIGARETTES CIGARETTES
II I I
Aclu.al war revision in 195~ eli~inated green. Gold ink around b~tllseye became grel¢.
76
T156850082
I II
"Reach for a Lucky" theme in 1928 was among Hill's
most effective, pushed Lucky Strike to top by 1930.
increased from 6,000,000 pounds in 1980 to over
15,000,000 pounds in 1982. The increase in Bull
Durham alone was enough to make 3,500,000,000
cigarettes, cancelling out almost a fourth of the dip
in tailor-mades. And the muslin bags with the bull-
headed tags were still going strong in 1940, when
nearly 20,000,000 pounds were sold-enough to make
7,000,000,000 roll-your-owns. At a nickel, a sack of
the Bull was equivalent to 83 cigarettes in the hands
of a skilled roller. Breadlines or no breadlines, the
nation was not willing to give up cigarettes.
Luxury or staple?
While the nation was in the throes of the
"shorts," purchases of staples and luxn~ries alike
shrunk alarmingly. But it is interesting to note that
tobacco consumption, which peaked at 7.18 pounds
per capita in 1929, slipped off very gradually to 6.01
pounds in 1982 and in four more years was up to 7.16
pounds again. Comparing this relatively mild slump
to that experienced in other lines, one might well
conclude that tobacco is more necessity than luxury-
a conclusion that the nation's generals reiterate at the
outbreak of every war. Perhaps the best expression
of tobacco's place in war, in peace, and in depression
-though not, perhaps, the most literary-was the
immortal line of 1914: "While you've a lucifer to light
your fag, smile, boys, that's the styleI"
The depression, which dramatically demon-
strafed the solace to be derived from tobacco, also
witnessed a decline of the anti-tobacco crusades that
seem to accompany times of boom. In 1937 North
Dakota wiped from its statute books an old law for-
bidding smoking in public conveyances or restaurants.
And in spite of one zealot's claim that smokers tended
to beget more daughters than sons (the overall birth
77
TI5~850083
ham flavoring as late as the 1920s. But even after
tlt¢ ltam was omitted, tlte Boar Mend ¢ontin~ted to w~,t
pi?e smokers, became Amer~oa~'s top "lt~gh grade" miz.
This was the ~rst "Hal$ and Haft" trademark,
proportions are the other way around), the sound and
the fur~ of the twenties subsided. Even while the
counterbl~ters fulm~ated over the steep r~e in
bacco consumption, the vital statistics were revealing
greater longevity for Americans of every class. In the
end, the pronouncements of doom si~ified nothing.
P~o~ line.s
While Lzuc~ ~Stri~e was being built up during
the younger Hill's first years as President, non-cigar-
ette lines were not ignored. Ha~.f am~ Hat.f, currently
the Company's leading smoking tobacco brand, was
revived in 1926 and in five years achieved a fifth of
B~d~ Dttrham's poundage. The name itself was not
new: in 1878 Francis S. Kinney had brought out a
smoking tobacco with the numerical mark, "~ & ~."
Following the competitive mode of the day, the little
Hernsheim company registered 'Al.f and 'A~.f as a
trade name in 1880. During the early 1900s American
Tobacco's Marburg Branch made a Hall aml
of "Fine Perique and Virginia Mixed," among a
number of other tobacco brands including Y~ttle
Bro~ J~g, LiU~ Flirt, DittOs Red R~ding Hood, Little
F/ore and /~/ttl¢ Dorr/t. As its name suggests, the
modem Hd~ a~ Ha~] mix, re incorporated both
Burley and Bright-the former represented by
Strike smoking tobacco, the latter by the old B~-
i~¢ham blend. By 1989 the new blend was selling
almost 8,000,000 pounds a year. This was about ~0%
oI Butt Durham's product weight and gave Half
Translated from ¢~tmbers into words, the brand name
Buckingham, h~f Lucb~ Strike smoking tob~co. With
the aid oy advertising ~d the de,reaSon surgo of
manufactured tobacco, the blend became ~umber your
among the top j~ve's smocking brands b~t 1989. Half and
Hal.f saks then amou,tted to ~0% o$ Bu[~ Durham's.
Moder~ Hall a~d Half label ~t~ll bears trace~ o] the
~ky ~tr~ke de,on, thigh ~cky ~lr~ke ~i~e tob~co
Ti568~0084
tl ER H El40
u~ed Bull Durha~ sale~ to the equivalent
billion cigarettes. The Bull was advertised only by
HalJ the fourth position among the top fire's smok-
ing tobacco brands. It must be added, though, that
the Bull sold nearly 20,000,000 pounds in that year
without any advertising whatever, while Half and
Hal~ had an ad budget amounting to 3c a pound.
Another pipe tobacco which made the transi-
tion from a specialty to a "universal blend" was BI~
Boar. As late as 1923 that mixture, an old Marburg
brand, was being given a ham flavor by exposing it
to the aroma of smoking hams. Lfke the chocolate
in Tu~e&, the ham hocks used to make Bl~ Boar
have disappeared. But the mixture itself, a rich,
rough-~ut and rather strong blend of Perique, Late-
kia, Burley and Bright leaf, has outlasted many
others and. is now the Company's top premium pipe
tobacco.
B~ Boar, however, is very much the excep-
tion. Even in the days of Richmond's glory as the
No. I tobacco manufacturing center, individual high-
grade pipe mixtures had never run to any volume.
Said a Company booklet during the twenties: "The
greatest experimenter in the world is the user of
smoking tobacco. No matter how strongly wedded a
man may be to one particular ~e, back in the
deepest recesses of his mind there is always the
fear that he is overlooking a good bet ..... " So
b~g Vo[~. ~my~zl Cube Cut ~ th~ ~rcad~ mixture
I98I; the ~ber was ~5 as late as 19~0, ~s 17 ~oday.
.fanciers are generally reluctant to change flom thdr
accustomed b~ends, wh~ck accounts for the long Her.
Also, ~pe miztures are made ¢n a ~id~ vgriety of
ble~ds than ci~arette~, use many more less
TI56850085
spedal/sts in the field, like the old Falk Company,
had to turn ouL a long list of brands in order to
achieve respectable total volume. "It's a small brand,
but there are those who love it" best describes the
typical pipe puffer's ai~achrnent to the mixture of his
choice. In 1931, for example, American Tobacco mar-
keted 126 smoking tobaccos, 27 of them in the
high-grade category. Even today, the price list in-
cludes no fewer than 17 high-grade mixtures and 45
"smoking and chewing" brands, most of which are
suitable for use in a pipe. Among the latter, Corapaas,
Cutty Pipe, Five Brothers, Peerless (Adams), Standard
(Adams), Tuxedo, Liberty, Ivanhoe and Virgin Leaf
(MeAlpin's) are strong favorites. Among the high-
grades are the old Arcadia mixture, celebrated in
James Barrie's "My Lady Nicotine," Imperial Cube
Cut, still made in both mild and medium strengths,
Personal, Pinl¢ussohn's Potpourri, Old English Curve
Cut, and Serene. In 1930, 1931 and 1932, as sales of
The old Kinney factory in Richmond was renovated in
1980 and put to use as a stemmery and redrying plant.
Same year saw completion of a new factory across the
street. It now produces 25% of Company's cigarettes.
tailor-made cigarettes dropped off, sales of smoking
tobacco climbed. Since "package terbaker" is a not
No raw tobaccos in Luckies
-that's why they're so mild
W£bu)'thcfin,'s¢,lh~-~t-rt. proper ~gi~g a~d
Though spe~a~lar, "'Nature in the Raw" did ~og ran~
with best. Eric the Red sailed into print in 1982.
During the depression Hill u~ed some "reminder ads.'"
Simple layouts like this appeared in 1988 and 193~.
80
T!56850086
Along w~th leaf storage sheds, stemmery and factory
gave American a fully integrated cigarette eent~" at
1~ehmond. Today there are three other centers, each
of s~m~lar s~ze-Re~dsv~lle, Durham and Lou~lle.
unprofitable item, Hill might well have been tempted
to get back into the briar pipe business and ride what
appeared to be a shift of the nation's smoking habits.
To his credit, however, he refu~ed to he panicked into
taking his eye off the ball, and met the problem in
his characteristic head-on fashion.
Deflation
A realist, Hill was not thrown into despair by
the decreased consumption of cigarettes at the stand-
ard price, $6.04 per thousand to wholesalers: after
all, there was less money to be spent on every com-
modity. But he was determined not to let the curve
of cigarette consumption drop. In 1933, American
Tobacco cut its price to $4.85 a thousand.
In the midst of this price upheaval there were
other developments. The standard cigarette package
was greatly improved by a wrapping of moisture-proof
cellophane, which kept the contents fresher longer.
And Hill went the trend one better with the addition
of the Lucky Tab for quick opening. But this advance
White building at Blackwell and Pettigrew Streets,
Durham, was buil~ by the old Blaekwell Company as
a Bull Durham factory. It now houses headquarters
for Durham branch and for American Suppliers, Inc.
T156850087
In 1931 Charles Neiley tooI~ charge of all manufacture
and leaf buying. A bear for detail, Neiley supervised
cigar malting, handled his own tabor relations as well.
The same year a young lawyer named Paul Hahn joined
American Tobacco, did administration, advertising,
public relations. Vincent Riggio (right), a veteran
of the Butler-Butler days, was sales Vice President.
was almost overlooked in the price-conscious mood
of the day; the No. 2 cigarette company advertised
the new wrap heavily without a flicker of sales
response, and the makers of some cigarettes adver-
tised gleefully "you can't smoke cellophane."
Falling leaf prices were not as gleefully re-
gamed in the tobacco patch. They reflected bitter,
biting hardship among the thousands of small farmers
for whom the golden weed was, just as in colonial
days, the money crop. President Hoover asked for
help in mid-1931 and Hill announced: "Without
regard to price and without regard to what any other
tobacco company may do, The American Tobacco
Company will commit itself to buy from 12% to 14%
more poundage in 1931 than it bought in 1980." A
minimum average purchasing price was also stipu-
lated, and the arrangement repeated in later years.
Throughout the emergency the Company did better
than its promise, as to both quantity and price.
Despite some consumers' apparent indifference
to the quality of what they smoked, Hill hewed to
the line that had begun in 1917. "Sunshine Mellows,
Heat Purifies"; "Consider Your Adam's Apple";
"Nature in the Raw is Seldom Mild" were among
the new themes.
New ideas were not limited to the advertising
department-which, in effect, consisted of George
Hill and Lasker. In 1929 Charles F. Neiley was made
Vice President, and emerged from C. A, Penn's
shadow as a key figure in the moderu Company. He
was a remarkably vermtile .m.mn in an organization
run by all-round executives rather than specialists.
At various times Neiley had been corporate Secretary,
leaf buyer and factory man. He is remembered as a
"detail hound," but one who was really loved. It was
natural that Neiley should handle labor relations (he
personally negotiated with the unions, a tradition
followed by Vice Presidents Fowler and Cro~ve) in
addition to running the factories. In 1931, after
Penn's death, Neiley was given charge of leaf buying
also, with Jim Lipscomb reporting to him. The Rich-
mond constellation of plants was completed about
the time of Neiley's accession, carrying out the idea
that each major location should be a complete unit
in itself, embracing leaf storage, stemming and
manufacture.
The year of Lucky Strike's emergence as top
82
TI56850088
brand, 1931, s.aw an unusual departure in manage~
ment practise. A young lawyer with the Company's
attorneys had attracted the officers' attention for his
alertness and knowledge of the tobacco business.
They decided to bring him into the Company as a
director and Assistant to the President, a title that
was changed to Vice President inside of a year. Al-
most from the first, Paul Hahn was a "policy man,"
supervising the Company's public relations as well as
its legal a~airs and figuring prominently in sales and
advertising planting. It was Hahn ~vho handled the
annual meeting of stockholders in Hill's absence.
New-fashioned salesman
Quiet, and as slight in build as Hill was big,
Vincent Rigg[o was introducing new concepts of sell-
ing. He also put into effect Hill's "formula" for
placing advertising materials in retail stores: at eye-
level and either near a moving object, in a strong
light, or in an aisle. Riggio was in the ear with George
Hill the day two women, one stout and one slim,
inspired the "Reach for a Lucky" idea. His knee was
the one Hill slapped in the first enthusiasm of dis-
covery; but the sales chief was not too quiet when
Hill's copy themes seemed too extreme. Riggio, who
had been born in Sicily and was a tailor's assistant
while Hill was attending Williams College, told Hill
to his face that "Nature in the Raw" was a poor idea.
And he may have been right: sales dropped seven
billion units in 1932, although depression and the ten
centers had a good deal to do with the drop in all
three of the standard brands.
The new notions Riggio brought to the trade
revolved around treatment of the dealer. He would
rather lose a sale or two than load a tobacconist with
an oversupply that would lead to selling dried-out
cigarettes. He was able to temper the old-fashioned
drummer's "get-the-order" philosophy with a regard
for the Company's reputation that amounted almost
to a sixth sense, now called "public relations."
In center leaves, no sand
During the lean years of the thirties, the
national mood was quite different from that of the
Roaring Twenties, the "Era of Wonderful Nonsense."
So was Hill's. In cooperation with Riggio, he worked
out a number of quality themes that lent themselves
",~oinning Jinny" demonstrated the selling principle
of demonstration. The smaller eoffwheel represented
direct sales contact, the larger one, advertising.
"Center leaves" advertising in ~93.~-85-36 was tied
in with one of Lucky Strike's most successful sales
demonstrations. Taken apart and shaken out, a Lucky
,yields no sand, one indication of lea] types used.
T!56850089
Prominent in the Company's radio programs during
the late thirties was Eddie Duehin. Though a virtuoso
of classical stripe, Duehin preferred popular music.
"This is the old maestro, Ben Bernie and all the lads
--yowsah," was .familiar signoff on Company's radio
offerings during the same era. Bernie, seldom without
a cigar, was a talented band leader a~,.d comedian too.
more to demonstration than excitation: "Center
Leaves," "Cream of the Crop," "A Light Smoke,"
'%Vith Men who Know Tobacco Best, it's Luckies
2 to 1." As early as 1917, the Company's salesmen
had carried a little set of pans in which to toast
Lucl¢y Slrike tobacco. Late in 1926, a year after
George Hill succeeded his father in the President's
chair, a permanent exhibit was set up in a New York
store, on Broadway near 45th Street. Passing pedes-
trians could look in on a cigarette machine actually
rolling and packing Lucky Strikes. Legally, the
"store" was a registered tobacco factory, subject to
federal inspection; its Broadway run lasted almost
five years. In 1934 came the "sand demonstration."
Two cigarettes, one a Lucky and one a competing
brand, were taken apart over a slip of white paper.
The lack of sand and sediment under the dismantled
Lucky demonstrated the use of "Clean Center
Leaves" with a vividness no advertisement could
match. The same procedure made it possible for the
customer to observe the long strands of leaf in the
Lucky blend, a feature which is still apparent in the
brand's "tear and compare" demonstration. Toward
the end of the decade salesmen were equipped with
phonographs and even with a motion picture pro-
jector which combined the Lucky Strike "commer-
cial" with filmed entertainment.
Although Hill regarded each successful demon-
stration as a small cog which would set a bigger
word-of-mouth wheel in motion,* there was a distinct
limit on the number of people one salesman could talk
to on a given day. Furthermore the number of sales-
men was shrinking-from 1,000 or so when George
Hill took over to about half that number ten years
later. The one-word reason: radio.
On the air
In broadcasting as in print media, Hill himself
was a kind of one-man ad agency. And his concen-
tration on national advertising even to the exclusion
of salesmen paid off in volume. His first network show
came in 1928, radio having graduated from the crys-
tal-set-and-earphones stage. The Imcky Strike Radio
*Hill actually demonstrated this theory of demonstra-
tion with a small wheel meshed to a larger one. The
gadget was duplicated by the dozen and issued to
members of the sales force.
Ti56850090
Hour (which evolved into Your Hit Parade) consisted
simply of the most popular tunes played in a rhythmic
beat with a minimum of cadenzas and "arranging."
Among the commercials which interspersed the hit
tunes that first year was "Reach for a Luck~ Instead
of a Sweet." Hill insisted the tunes be played just as
people ordinarily heard them, feeling that the familiar
context would help his commercials get across. They
did. Critics objected to his tempi and his fortissimos,
but people listened and smoked Luc~ Strike. Al-
though Hill was known as a big spender in the adver-
tising world, he spent far less on advertising per
thousand cigarettes sold than the industry average
(a fact, incidentally, which has held true up to and
including 1953).
Hill's career as a radio impresario included the
Metropolitan Opera, the Hit Parade, Ben Bernie,
Kay Kyser, Eddie Duchin, Jack Benny, Phil Harris,
Wayne King and even columnist Dorothy Thompson.
In 1937, Hill contracted with Warner Brothers for
the radio appearance of any or all of its movie stars.
"Your Hollywood Parade," heard on Wednesdays
while "Hit Parade" broadcast on Saturdays, pre-
sented dozens of luminaries from the world of cellu-
loid. And during the 1938-39 season Sophie Tucker,
"last of the red hot mommas," did a stint for Eoi-Tan
cigars.
Off the ant hilZ
Hill probably thought more, and certainly said
more, about the theory of advertising than any of his
contemporaries. In 1929, he had mused:
•.. only in burst~ of m~bconscious enlighten-
ment do we detach ourselves from what we
want long eriough to realize that the customer's
vision of what h~ wants.., is the only ~hing
that differentiates us from the simple economy
of the ant hill, where competition has been
obliterated.., competition ~herefore reduces
itsel~ to the field of human consciousness.
Ten years later he had tempered this mystic
view to include the role of manufacturing:
Now all the "hot air," the "bank" and the
"hooey" in the world won't make Mr. Con-
sumer buy the second time if he ia no~ satisfied
with his first purchase. So the vrise advertiser
must speak truthfully of the merit of his
product ... no one in ~he tobacco business
makes a profit on an initial sale. It's the repeat
busine~s that pays dividends, therefore, the
3oph~e T~t, cker was amon9 the Broadwa~¢ and Holl~twood
l~rainar~es who advert~ed American Tobacco ~oducts
durin~ the thirties. Othe~ included such popular
orchestra leaders as PMl Harris and Wa~/ne K~.
T!56850091
Early career of Frank Sinatra included appearances
on the Lucky Strike Hit Parade. First o.f a new kind
of crooner, ,~inatra was soon dubbed a "teensation.'"
importance of "'quality of product," the im-
portance of pleasing the consumer so that he
will return to make the repeat purchase.
In 1938 Hill received his most treasured testi-
monial almost accidentally. A business professor of
the Harvard Graduate School was assigned to study
the tobacco industry, and after a visit to the Rich-
mond factory spelled out his impressions:
I was truly amazed at the constant and re-
lentless emphasis on quality. Tremendous
expense in equipment and costly processing
treatments were apparently being undertaken
to give every assurance to the smoker that
when he smokes a Lucky ~trike he should never
be aware of the slightest variation in quality.
It was surprising, because as a layman and a
somewhat indifferent smoker I had never real-
ized the enormous effort and expense devoted
to quality in a cigarette.
The good fight
The Cigarette Fen'is Wheel, as the standard
brand battle was called, continued to revolve. With
Hill drumming the radio beat and sloganizing the
printed copy, it was by far advertising's most spirited
contest-in magazine pages, in newspapers, on radio,
via point-of-sale pieces and rural billboards. Except
that the new dimension of television has been added,
it is waged with equal fervor today. "A good fight,"
said Hill in 1941, '~helps everybody."
He was correct, but the fight that helped most
was not the kind of fight he had in mind. Cigarette
consumption did not climb sensationally during the
thirties, and Lucky ~trike sales finished 1940 just
about at the level of 1930. But all three big brands
profited greatly from the War II stimulus, each mov-
ing up from the 35-45,000,000,000 range to a 55-70,o
000,000,000 zone in 1945. Following that year Lucky
Strike and Camel broke out of the trio to a 1948 peak
around the hundred billion level.
When Hill's t~venty-one-year tenure ended,
the Ferris Wheel had put him on top more often than
not. Lucky Strike was number one in t~velve of the
twenty-one years, number two in five years, number
three in four. But well before Hill's career ended, and
even before War II clamped down on experimenta-
tion, a new influence came on. The war was to cloud
its importance for a while, but in the end the new
factor was to add a n~v dimension-literally and
figuratively-to cigarette competition.
86
T156850092
MODERN DESIGN
~0 ONE can say when Americans first became
conscious of "modem" design. Europe was first
with the glass wall, the apartment house on stilts, the
clean and uncluttered line. In this country, teardrop
contours were tried on automobiles-unsuccessfully-
as early as 1933. But it is safe to say that the New
York World's Fair of 1939 brought the trend to a
focus: the long, low building silhouette; the stark,
undecorated facade; the "functional look."
American Tobacco's structure at the Fair was
as modem as the rest. In a setting of picture windows,
simple planes and dioramas showing how tobacco is
grown and manufactured was a real production line.
After sniffing a trayful of blended and shredded
tobacco, spectators saw it pass through making and
packing machines to emerge as cartons of Lucky
S$ri~s cigarettes. Toward the Fair's close in 1940,
there was something modern around each score of
smokes: Raymond Loewy redesigned the green pack-
age, cleaning up the lettering and putting the red
bull's-eye trademark on both front and back.*
The new awareness of design, interrupted by
War II, was to result in the ranch house, the stream-
*Some years later Loewy also took a look at the Pa~.l
Mall package, reported he could see no way to improve it.
lined electric iron, the chair that crouched like a
spider and the automobile resembling a bullet with
false teeth. But all this was foreshadowed, in a way,
by the everyday cigarette. And the cigarette by then
was an everyday item-on the average, every Ameri-
can of smoking age used about five each day. It was
an accepted accessory of the up-to-date citizen. Presi-
dent Franklin D. Roosevelt, a pipe smoker during
the early twenties, now sported a cigarette in a long
holder. Perhaps this had some cosmic connection with
"modern design" in smoking-the king-sized cigarette.
The La Corona of cigarettes
In any event, 1939 saw the coaversioa of Pall
Ma~l to the eighty-five millimeter length,* about a
fifth longer than the standard seventy millimeter
cigarette. It caught on fast. In spite of the ensuing
war, which actually eliminated Pall Mall advertising
for a time, the sales curve climbed more steeply than
any major brand before or since. The reasons? Mild-
ness had something to do with it: tobacco is its own
*The length and circumference were indirectly limited
by the tax statutes, which define "small cigarettes" as
those weighing not more-than three pounds per thous-
and. Above that weight the excise tax increases.
87
T156850093
World's Fair o.i 2989 on Flushing meadows included a
Lucky ,gtrike build4.ng. Inside, machines rolled and
wrapped tobacco into finished pack8 o.f Luckies. In
1950 ~tte average adul$ smoked fiw cigaref~es a day.
best filter and the longer unsmoked butt of the longer
cigarette was just that. Package design doubtless
helped too-the brilliant Pall Mail red was the first
"decorator color" to surround a big brand. And the
shape of the cigarette itself made a difference, for long
and slender were by now synonyms for "fashionable."
Women particularly liked the new length at first,
although men took it up too, just as they were taking
up longer, thinner Corona and Panatela cigars (new-
est shape in the La Corona line, for instance, is a
longer and thinner version of the Corona shape, the
"Rajah").
For thirty years after the Company bought
Pall Mall along with Butler-Butler, that brand name
had been attached to extra-special (and extra-expen-
sive) Turkish cigarettes. By the early thirties, there
were fully thirteen different sizes and shapes of _Pall
Ma//, boxed in the distinctive red and crested in gold.
In 1936 it was brought out as a "modem blend" with
less Turkish leaf and no flavoring. In a sense, this
was a throwback to the days before the Burley
blends; the new domestic cigarette was put up in the
regular "cup package" and priced with the standards.
In this form it did a reasonably good business, reach-
ing an annual rate close to 600,000,000 units by the
year of the World's Fair. At this point the "modem
blend" was made a flavored Burley mixture; the
standard length gave way to "modem design." To
give it separate sales and advertising attention, Pall
Mall had been leased to the American Cigarette and
Cigar subsidiary (the old American Cigar Company,
renamed in 1936), which was headed by Albert Gregg.
The first advertising of the present blend began late
in 1939; early in 1940 Paul Hahn took over as presi-
dent of Cigarette and Cigar.
From the first, the Long Reds were "class"
cigarettes. They were introduced with great dignity,
and great expense, by ~rect sampling on gtlver salvers
TI568BO094
I
at 497 of the nation's finest hotels. And the four-color
advertisements which ~n 1940 followed up this top-
level debut were models of distinguished desiga~ in
keeping with the 'qonger, more distinguished
cigarette."
Paul Hahn and Pall Mall
It was Hahn who masterminded the mass pro-
motion. His clinching campaign for Pail Mall was
tuned as closely to the public consciousness, perhaps,
as any advertising can be. "Modern design makes the
big difference" was the tag line, and apt illustrations
were provided by the progress of rearmament. Mod-
em design in tanks, rifles and aircraft was compared
to the cigarette's new shape; so successful were the
ads themselves that billboard copies of them were
• being used in China ten years afterward-with the
name Pall Mall blotted out and any one of a number
of commodities substituted! As war came closer,
another historic campaign emphasized the military
theme via radio "spot commercials" of a minute or
less. "On the land, in the air and on the sea," punc-
tuated by the rising beep, beep, BEEP of a destroyer
whistle went on the air 4,490 times a week. The war
sidetracked this campaign for the duration-among
other things, the war mobilizers thought the triple
beep might be taken for an air-raid warning. Later,
problems of securing distribution in a topsy-turvy
market-not to mention leaf and people-put Pall
Mall advertising temporarily on the shelf.
Nevertheless, the 1940 drive had doubled Pall
Mall sales in a year and brought a flock of imitations
to the market. Even in his preoccupation with Lucky
Strike, George Hill was impressed. That same year
the parent company converted Herbert Tareyton to
"modem size," although the brand had been doing
well-dose to a billion unit sales in 1938 and 1939.
Tareyton had a peripatetic past, both as a
cigarette and as a high grade pipe tobacco (the latter
still sold by the Company). The name referred to no
actual person: Herbert had been plucked out of the
air by the Falk Tobacco Company of Richmond and
New York, registered as a cigarette trademark in
1913. The cigarette started life as a "drop shipment
brand" with the Falk Tobacco Company, which was
then a pipe tobacco house specializing in high-grade
and private brands. Among its products were Serene,
The rich aroma of tobacco "in sweet case"-once
reserved .for cigarette makers-was one attraction
for visitors to the Lucky Strike exhibit at the Fair.
Radio celebrities included L. A. "Speed" Riggs, the
.fast-talking auctioneer who chanted "Sold AmericanF',
and Lanny Ross, one of the Hit Parade's s~nging stars.
Other visitors included James Kyser, better known
as Kay, and Ginny Sims. Her songs and his College of
Musical Knowledge advertised Lucky Strike on radio.
T!56850095
Look around~Amerlca.
Look in the Service. Look wherever yon
see yotmg people. Something is happening in
the cigarette business. A basic improvement
in cigarette design is here.
It's Pall Mall--modern, streamlinedr-over
20 per cent longer than your old cigare~e.--
designed for better smoking.
See what this step-forward in cigarette
design does for yotd
It is a scientific ~ct that tobacco is its own
~rue ~lter. In Pall Mall the addlt~onal length
travel~ the smoke luther--giving you not
alone a longer cigarette but a better cigarette
--a definitely milder, a definitely cooler
smoke.
Pall Mall is a smoother cigarettet too.
BULKInG--that natural process revived by
Pall Mall--lets time do what fnachines can
only approxlmat~ BELKING causes t~e tra-
dltlonally fine tobaccos of Pall Mall to mel-
low, softens all t~ces of hanhness. As a result,
Pall Mall is a ~ally smother smoke.
Provelt --your~elf, t~ P~l Mall cdti~lly.See
if you don't agree with millions t~t something
is happening in the cigarette business~
~, ~U~cE ',,ou. o~ ae^.ErrE .e.E,
"WHEREVER PARTICULAR PEOPLE CONGREGATE"
9O
T156850098
L~rdon 8herb~r~ and ManhaV.a~ Coebla~'~ tobacco
~d Johnny WaZ~ ~ a ~gher p~ce bm~et. To p~h
thee blends ~h revilers, Albe~ F~k made up
H~b~ Ter~ ei~re~es to be sen~ M revilers
~d of pre~um, tt w~ no~ until one delighted jobber
s~t in an order ~or 25,000 that F~k even put a price
on the new product. L~e the best of Ns pipe tobaccos,
Tar~ COhered ~a tobacco. ~ether this
f~re appealed ~ p~pe smokers or whether it
w~ other in~edien~ in the blend, there was som~
thug about them smokers ~k~. (The ~n still
b~rs the ph~e, "There's something about them
you'll like.") At any rate, the brand w~ f~ t~ good
to remain a pre~um ve~ long; before Falk put a
p~ce on Tare#~, dealers w~e selling it at 2~ for 20,
a high fi~re for the days before W~ I.
L~ from Tobacco ~odu¢~ in 1928,
~n w~ f~ed out to Union Tobacco M George Hill's
~st y~ ~ Pr~ident. But it returned to AmeM~n
Tobacco in 1930 when Union w~ unable to pay the
rental fee. T~ze~o~'s blend was the kind favored by
BMt~h smokers-mostly BMght tobacco, ~th no
flavoMng. Its 10% se~on~ng of Lata~a w~ oM~ally
unique, ~d provok~ imitation by at le~t two major
brands. The monocled "Dude" w~ a s~bol
BMti~ blend and the genuMe cork tip w~ unu~al
for a popu]~ cigarette. ~ile a specialty cig~e~e,
market w~ limit~; llke the sp~ial ~r~sh blends
of the old PaE~ Ma~, it w~ a ~nd of ca~over from
the e~ly days. In fact, H~b~ Tazey~o~ ci~rettes
were the l~t to include pre~s in the pack-thr~
dimeBional fold-ou~ of English ~%hedrals ~d
~tles, litho~phed ~ color. Ben the product and
i~ pack were len~hened M 1940, the enveloped
i~e~s disappeared. But late in the ~venti~ Tarey~
had b~n Wen a ~e of the ~me ~am~ly ~ the
~y S~r4k~ and the new P~ Ma~ blends. The,
~gether ~ i~ ele~nt, cork-Gpped len~h, made
Tarey~ P~I~ M=Ws chief ~ng-s~e compeGtor, a
position it still holds.
Battle of Lexington
Along with new designs for living, the prewar
years brought newly-designed interpretations of the
old Sherman Antitrust Act. In 1940 the Justice De-
partment began an action against the eight largest
as the 1989 Pall Mall ad on the opposite page made
clear. Modern design--meaning the k~n~ s~ze--was
beginning to make a bi~ d~fferenee to smokers. So
succ~sful was the k~nged PMI Mail that in 19~0
H~bert Tareyton was also ~ade 85 ~ill~meters long.
91
T!56850097
tobacco manufacturers, claiming "conspiracy or com-
bination in restraint of trade" There was no direct
evidence of collusion. Government attorneys stressed
that uniformity of leaf and product prices were the
equivalent of a kind of tacit agreement not to indulge
in price competition. This was the new concept of
"conscious parallel action."
The trial took place in Lexington, Kentucky,
the three largest companies defending, the others
agredmg with the prosecution to abide by the result.
The point at issue was "oligopolistic" control as
distinct from monopolistic control in 1911. The to-
bacco companies pointed out that uniformity of
prices, not only in products sold but also in leaf
bought, could be explained as readily by competition
as by "combination." The nickel candy bar and vari-
ous other items of standard price were cited as
evidence that simple supply and demand led inevi-
tably to uniform policies in pricing and in other
aspects of doing business. For five months during the
summer and fall of 1941, the defense counsel for
American, headed .by George Whiteside, analyzed
activities on the leaf and finished-product markets in
terms of economic competition. The Government
insisted that the identity in leaf and finished-product
prices were circumstantial evidence of conspiratorial
action. The verdict, which had to be based on circum.
stantial evidence in the absence of any indication of
direct collusion, went against the industry.
The results of what is now called "the second
battle of Lexington" were overlooked by the public
in the excitement of the times, since the District
Court's ruling came four days after Pearl Harbor. In
any case, the precise reforms in industry practise
desired by the Government were difficult to establish,
let alone describe. Wrote Yale professor Richard
Tennant in 1951:
... the objectives of public policy are not en-
tirely clear. If the law condemns market
structure, does it condemn structure for its
own sake or for certain undesirable results
which are supposed to follow?... It is difficult
to make a strong case for reform in the struc-
ture of the cigarette industry on noneconomic
grounds alone... Although the law condemns
size and concentrated power ... it does not
appear that the cigarette firms are large enough
or powerful enough to be a suitable object of
attack on these grounds alone.., there is no
92
T!56850098
PER CAPITA CONSUMPTION IN POUNDS
First fifty years of the new American Tobacco have
seen both kinds of manufactured tobacco-chewing
and smoking-fade in popularity as cigarettes grew
phenomenally. Steepest cigarette increase has come
during the last ten years. Sudden 1955 spurt in use
of smoking tobacco (light line) was largely due to
shortage of cigarettes. Although consumption of all
cigars is down, purchases of fine cigars are higher.
Snuff is omitted from graph, since its consumption
is too small to show up clearly on this scale. All
p~ots represent per capita consumption in pounds of
unstemmed tobacco. Heavy line represents the use of
cigarettes, dotted line cigars, broken line chewing
tobacco and light line the use of smol¢ing tobacco.
occasion for renewed major surgery on the
structure of the industry. ("The American
Cigarette Industry," Yale University Press.)
In explaining this structure with respect to
price, George Washington Hill testified that '% slight
differential in price was possible as between trade-
mark brands" but "a large differential was prac-
tically, or was actually impossible unless a man
wanted to sacrifice his business." And "only one con-
sideration-that ore" busine~ is built on the basis of
service to the consumer-leads us to wish our products
be sold no higher than competing brands." It could
have been a classical economist speaking, for Hill
was expressing the basic idea from which the cigarette
industry-and every other competitive industry
based on mass production-has grown. And it re-
quired considerable study by the industry's lawyers
to devise ways in which tobacco companies could
change some of their practises and thus show their
~villingness to conform to the decision. Nor could the
leading analysts of the press make any suggestions.
Concluded Time Magazine, scratching its puzzled
93
T!56850099
GONE TO WAR !
fine tobacco
copper was saved i~ a year to provide bronze
.for 400 l~ght tanks. Hill's ad was a lucky stroke
indeed-~t broke ]ust as North Africa was invaded.
editorial head:".., nobody had any ~otion of how
else the cigaret industry could or should operate."
After Lexington, the country and the Com-
pany faced more tangible problems in Europe and in
the Pacific. In an Executive Order President Roose-
velt listed tobacco as an essential food, and local
draft boards were directed to defer tobacco farmers
to insure continued output. Civilian smokers strug-
gled with allocations while their favorite brands were
shipped overseas by the billion. (Between 1940 and
1946, Lucky sales zoomed from 42,000,000,000 to
103,000,000,000, most of the increase going abroad.)
Short green
Competition, though, did not abate. In 1942,
year of Roosevelt's Executive Order, a chlorophyll
promoter suggested all cigarettes be treated with his
product. The green stuff, said he, would protect the
tobacco. But it was the elimination of green-the
green on the Lucky ~trike package-that made the
year's big advertising story. The "Lucky 8trifle Gree~
Has Gone to War" campaign broke very dose to the
North African invasion of 1942; in six weeks sales
of the brand increased 38%.
This was one advertising campaign that origi-
nated in the Purchasing Department, headed since
1926 by Richard J. Boylan, who had started with the
Company in 1900 as a knee-panted office boy. Early
in 1942 Boylan told Hill that the gold panels on the
Lucky Strike pack would have to go: the ink base
was copper powder, and copper was way up on the
critical list. Purchasing had got-tea government
proval to use some discarded gold ink, but somewhere
the ink had picked up an odor and was useless for
American Tobacco's purposes. Soon afterward chro-
mium, essential to the solid green used on Lucky
labels, began to run low; Boylan had only a three
months' supply of green ink when he approached Hill
again. In his folder were substitute labels-red on
black, red on gray, red on pastel green. "Is this the
best you can do?" asked Hill. Boylan shrugged: "Just
like the soldiers, green ink has gone to war." Hill's
palm hit his glass-topped desk like a thunder-clap.
For the next few days he pondered over the verbal
possibilities, and "Lucky g~rike Green Has Gone to
War" was the result. Some commercials heard on the
"Information Please" radio program consisted of
those seven words repeated over and over again.
The late thirties had witnessed another supply
save that turned out to be crucial. During War I,
odorless cigarette paper was hard to find and after
the Armistice Percival Hill went to France and
bought a paper mill, Soci~t~ Anonyme des Papeteries
de Mauduit. The mill eventually turned out more
cigarette paper than American Tobacco could use,
and Harry Strans, a cork salesman, was given the
agency to sell the excess French paper. Around 1937,
when the oncoming war could almost be smelled,
Straus and others set about building paper plants in
this country. Three of the Company's competitors
put up capital for Straus' Ecusta Paper Company.
American Tobacco backed a second company, Peter
T. Schweitzer, Inc. The new American mills got into
production just about the time Hitler overran France;
Araericau now buys from both. The old French
Papeteries de Manduit was sold in 1951.
94
Ti568b0100
The war brought other changes. The crest on
PaI~ Mal~'s package, traditionally gold, was changed
to white. With manpower short, the new Long Reds
went on allocation and in 1944 and 1945 Pall Mall
advertising was eliminated. But the brand, in seventh
place by 1943, had made its mark. Late that year
George Hill wrote a letter to the Company's em-
ployees who were overseas with the military. "At-
tached hereto," the letter read, "you will kindly find
two good old American dollar greenbacks, which I
ask that you invest wherever you may be in the
cigarette of your choice." Hill was careful to mention
Pall Mall as well as his beloved Lucky-something
that would have been unthinkable two years earlier.
Cats and courts-martial
Not only production but distribution as well
posed a problem for the industry at war. Despite vast
overseas shipments of the big brands, troops in the
• field often had to make do with the "over-night
brands" inspired by the shortage. The Supreme Com-
mander in Europe threatened to court-martial anyone
caught pilfering cigarettes intended for the armies in
Europe. As one of its contributions to the total effort,
American began to load its cigarette cases four and
five high in freight cars, although rail carload rates
were based on three-high stacking. Five layers took
up 112.5 inches of the standard 120-inch clearance-
"You couldn't get a cat up there," recalls Traffic
Director Thomas P. Connors. But the new loading
saved one freight car out of three. And beginning in
January, 1946, Connors got the railroads to discount
the excess over-the-minimum weight to 80% of the
regular carload rate. The rest of the industry, of
course, benefited too from the new arrangement.
In 1944, as Operation Overlord was closing in
against the Siegfried Line, Hill received a letter from
the Army Service Forces depot at Jersey City.
"Special commendation," it went, "is extended to
your company for meritorious service rendered to our
Armed Forces Overseas. It is a pleasure to collaborate
with your organization in supplying American troops
with Lucl~y ~trike Cigarettes, Half and Half and Blue
Boar Smoking Tobacco. Despite difficulties in obtain-
ing packing materials, the mission assigned your
organization has always been accomplished promptly
... " Ix~cky Strike itself, as well as Lucky Strike
Ecu~ta paper mill ~n North Carolina's Pisgah Forest
bega~ production ]~st before Nazis overran French
plant, makes cellophane as well as cigarette paper.
Richard J. Boy~an, who took charge o.f purchasing in
19~6, now buys from 8,000 suppliers. His r~mark led
Hill to phrase, "Lucky Strike Green Has Gone to War."
Evc~ in combat tobacco was v~tal-to sailors as
well as ground troops. Supreme Commander promised
court-mar~ial ]or those s$ealing soldiers' tobacco.
95
TI56850101
green, was go/ng to war. In one year more than half
the brand's volume, then approaching the 100,000,-
000,000 level, wen~ overseas for American troops.
Th/s was a vote of confidence from the nation's young
men; but it pinched the civilian market considerably
and led to the, smoking of substitutes on the home
front, a bleak happenstance for any brand manu-
facturer.
Still, production and financial difficulties were
the same for all as leaf prices more than doubled
between 1940 and 1946. The statistics suggest, in
fact, a degree of brand loyalty that one would not
have imagined feasible after a four-year pinch. When
the troops streamed back home, smokers turned back
to the standard brands in such numbers that the three
largest increased their market share from 72% to
83% in two years. In 1946 alone, domestic sales of
Lucky Strike increased by 32,000,000,000-by far the
greatest one-year increase in the history of tobacco.
In that year the Company reflected more than ever
the dogged, one-product concentration of G. W. Hill.
Some 95% of its dollar sales-then $764 million-were
contributed by cigarettes; and 95% of the cigarettes
were Lucky ,Ttrilce.
The pressure of wartime demand left an odd
hangover in Europe, where cigarettes for a time took
the place of money. Armed v.~th a carton of American
smokes, anyone could secure food, dr~nk, lodging or
clothing not only in bombed Berlin but in France,
Italy and even Switzerland. The use of cigarettes for
this purpose was later stopped at the source, by
limiting postal shipments to the occupation troops
from this country.
The blueprint
One thing the war did not stop was Lucl~y
S$rike advertising. Kay Kyser's College of Musical
Knowledge continued every Wednesday night, vir-
tually all his shows being given before soldier audi-
ences at army camps. The Hit Parade on Saturday
turned up a ne~v "teensation" named Frank Sinatra.
He was not long, however, for the show world of
G. W. Hill; his slow delivery and lazy syncopations
did not fit the rhythmic drumbeat on which Hill still
insisted.
In 1943 an Advertising Research Foundation
survey named a Lucky S~ri~¢~ ad as one of the ten
best-read in the nation's newspapers. Containing only
six words-"Yes I Lucky Strike Means Fine Tobacco"
-the ad pictured an overalled farmer rising from a
field of tobacco. Since this was one of a number of
tobacco-country paintings Hill had commissioned,
American Tobacco ~nen who know tobacco best operate
American ~uppliers, domestic leaf-buyin~ subsidiary.
President James F. S~ric~land (left) makes h~s base
in Bright region as does John R. Hutch~nps (center),
a Vice President. Burle~ purchases are handled by
Ezecutive Vice President John S. Dowd of Louisville.
96
TI568b0102
IN A CIGAR|TT|, IT'S THE TOBACCO THAT COUNTS
...and Lucky Strike means fine tobo¢¢ol ~ndependent tobacco experts--buyers,
auctioneers, warehousemen~see us consistently pay the price to get the
~he milder leaf...These men make Lucky Strike their own choi~e by more
than 2 Io I.
Isn't that worlh rememberlng...worth acting on...nexr time you buy cigore~tes~
With men who know tobacco best--it's Lucklas 2 to
Tobacco farmer with golden leaf was painted by James
Chap~n, one of a ser~es commissioned by George Hill.
"George's Genie" featured newspaper ad later named
one of best-read by Advertising Research Foundafion.
97
T!56850103
the massive figure became known as "George's
Genie." Around this time Hill's own son, George
Washington Hill, Jr., had come into his own as a
potent force in the Company's management. Though
not the dramatic personality his father was, Hill, Jr.,
had gradually taken over most of the advertising
supervision. He was instrumental in obtaining the
"Information Please" program and did much to make
the chant of the tobacco auctioneer part of the
nation's stream of consciousness, along with the
phrase, "Sold American!"
In 1945 the Saturday Evening Post surveyed
ten years of cigarette sales and advertising and found
that Lucky Strik~ had spent only $55.5 million in
_magazines, newspapers and radio time to sell 436,o
100,000,000 cigarettes. Over the same span, the Post
figured, its two big rivals spent $85.9 and $84.2
million to sell 817,600,000,000 units between them.
Luc~y's "traceable ad costs" were thus 12.7c per
thousand, against 20.8c per thousand for the brand's
two major competitors. Ever the sho~vman, Hill had
the charts and tables reproduced in white on dark
blue and bound them into the 1945 annual report.
This was the "blueprint" of his ten-year drive to
the top.
The Post's advertising study was, in a sense,
Hill's personal epitaph; the 1945 annual report, issued
in the spring of 1946, was the last he signed. In
September of the latter year Hill died at his Quebec
fishing camp.
98
~ ~ T!56850104
L.S./M.F.T.
VINCENT RIGGIO had always been a kind of
balance wheel for G. W. Hill. It was somehow
right that the job of charting a new and more bal-
anced course should fall to the trim little salesman.
To begin with, the great gains racked up by
Lucky Strike during the Second World War could he
credited to the manufacturing department under
Preston Fowler and John Crowe, rather than to in-
spired advertising. Any of the major manufacturers
could have sold 50% more cigarettes on the home
front, had the usual flow of materials been available.
There were restrictions on sugar, on tinfoil, on gly-
cerin (the hygroscopic agent which helps cigarette
tobacco stay moist). A "lend-leaf" program was set
up for the United Nations, since tobacco commerce
outside the U. S. was seriously disrupted.* And the
most crucial element of all-people-was also in short
supply, as 3,067 of the Company's 18,815 employees
marched off to the wars.
No department, no line of products was ex-
empt. Hall and Half had been endowed with a two-
part tin can which telescoped as the tobacco was used
up: the war killed it. And for a time, one of the big
*Between March 1941 and the end of 1945, $267 million
worth of leaf was "loaned." This was a substantial
poundage: in 1945 American Tobacco's leaf purchases
totaled $145 million.
brands-Herbert Tareyton-was actually taken out of
production.
American weathered all this. Herbert Tar~y~on,
whose production suspension had lasted for several
months, was put back. on stream. But another short-
age, not entirely born of war, soon became evident-
in the sales force. Hill's reliance on advertising had
literally decimated it, and the military draft had
almost finished it off. As long as Hill continued his
virtuoso verbalizing, the shortcoming was not appar-
ent in the sales curve. But after he died, the lack
was glaring.
V-R Day
Riggio's task, therefore, was a double one. A
new sales army had to be recruited almost from
scratch, a time-consuming task. Meanwhile, Riggio
had to depend largely on advertising. The latter was
easier said than done, for the battleground of brand
rivalry had changed. Hill's greatest triumphs had
been won during the twenties, when the public heart
was young and gay. Company advertising during the
thirties took on a changed tone as new competition
and a more sober national mood ruled out "nature
in the raw." Hill himself, the master showman, had
sensed the difference. His ne.~ few efforts-"Luc~y
for You, It's a Light Smoke!", "I'm Your Best
TI56850105
CIGARETTES
CIGARETTES
MODERN SIZE
TAREYTON
Until I9~8 Tarcyton was a Bright blend. Added Burley plus extra length spurred sales.
Friend," "Have You Tried a Lucky Lately?," "Better
than Ever Tobacco Crops Plus Toasting ~VIake
Luckies Better than Ever"-were definitely milder.
But in 1942 he turned out a phrase which delighted
Riggio: "Lucky Strike Means Fine Tobacco." The
sales chief frequently told Hill those five words would
last longer than any other advertising the Company
had coined. After a while, Hill came to share his feel-
ing. In 1944 the phrase was well enough known to be
reduced to "L.S./M.F.T." In his own broad pen-
strokes Hill wrote out the initials and ordered them
printed on the bottom of the white Luc/cy pack. They
are still there, just as he wrote them.
In every year of Riggio's Presidency, which
ended early in 1950, "L.S./M.F.T." was a prominent
feature of his advertising. Among the other campaigns
of his regime were "Lucky Strike Presents the Man
Who Knows," "First Again with Tobacco Men,"
"Smoke a Lucky to Feel Your Level Best."
Losing business to the rising Pall Mall and
Herbert Tareyton, sales of Lucky Strike receded from
the 1946 peak. The sensational success of Pall Mall
and "modern design" brought rivals into the king-
size market, and the standard-size market as a whole
began to decline. Once the new trend became estab-
lished, however, the dowmvard direction of Lucky
Strike sales began to seem less of a tragedy to the
old-timers who had for many years put sweat and
tears, if not blood, into that brand. And a vast seg-
ment of the public still recognized that "L.S./M.F.T."
In 1953 it was second only to Camel and in that year,
which saw the standard-size market shrink by nearly
15%, domestic sales of Lucky Strike dipped only 9%.
Original Tareyton design included crown but lacked
Dude, ~cas registered by Fal~ Tobacco Company in I918.
T1568b0106
I
PALL ALL
O~ee straight Tur]cish, Pall Mall was "domesticated" i~ 1986, gCven cased Burley ¢~ 1989.
While the Company's own twin kings chipped
away at sales of standard-length cigarettes, including
Luc/~y, American's share of all cigarette sales in-
creased from 29.6% at war's end to 32.6% in 1953.
It was, and is, impractical to add "P.M./M.F.T."
and "H.T./M.F.T." to the original Lud¢y leaf
phrase. But it is significant that both Pall Mall and
Tareyton are made of the same fine tobacco grades as
Lucky, although they are blended differently. And it
is also significant that since the 1890s American
Tobacco has bought most of its own cigarette tobacco
not through leaf dealers but direct from the farmer
on the loose-leaf auctions.
But merely importing the new species did not
guarantee the growth of so-called "sweet-scented"
tobacco. (The best results were to come later from a
shift to sandy, poorer soil.) The "best" was defined
by the market, at that time Europe: smokers them-
selves discovered that bright leaf was the sweetest,
and "fancy yellow" brought premium prices a century
before the Revolution. But its production was acci-
dental: after 1750 much tobacco was fire-cured, and
the smoke itself has a discoloring effect. Not until
shortly before the Civil War was a flue-curing appara-
The matter of leaf
The importance of this fact requires some ref-
erence to the history of tobacco itself, for the plant
grows in a vast and variegated number of grade~. The
tobacco Rolfe first found in the Virginia tidelands
was Nicotiana rusffca, a dark coarse plant with a very
high nicotine content. This was "uppowoc." To get
a smokable leaf, the early Virginians imported seed
from the Spanish possessions; Trinidad or Orinoco
leaf was the Nicoffana ~abacum species that aroused
Europe to enthusiasm, via Portugal and Jean Nicot.
Original Pall Mall was boxed, came in several
Banquet s~ze was, and ~s, 92 tara-longer than
10I
....
T!56850107
Coarse "sh~I~in~ leaf" of 17th century was rolled to
market ~n the hogshead. In m~d-1800s, fine-tezt~red
e~garette leaf same ~nto demand and forced a ekanoe,
Honshead sales made quality purchasin¢ a ~roblem. It
was d~e~l~ to sample a hooshead, easy to "~es~"
tobacco, ~.e., eo~ceal trash inn~de fine outer la~er.
Dur~n~ no~ne for men.face.red tobacco, sales by
hooshead were the rule, a~ in Louinville, above. Much
leaf was sweetened, had to be touoh to make
tus worked out which would "starve" the darkness
out of the leaf without "smoldn~' it.
Too, the earlier method of transporting tobacco
militated against the Bright. The planter packed his
rough leaf into hogsheads which were dravrn like
wheels along the dirt trails, spikes behag driven into
the ends to serve as axles. These paths, or rather
ruts, came to be known as "tobacco roads." Under
such treatment, the fine leaf of today would probably
end up as snuff,
The Slades of Caswell
Rustic experiments with charcoal, with primi-
tive flues and with steam heat went on, all three being
means to avoid "smoking" the leaf dark. Around 1825
the only yellow leaf of note was grown in Maryland
and Ohio. Then, around 1838, the Slade brothers,
whose farm was just below the Virginia-Carolina line
south of Danville, solved the problem. Three factors
were necessary to grow thin-leaved Bright tobacco:
(1) light, porous soil, (2) some way to apply constant
heat to the leaf without smoke, and (3) heat-tight
curing barns which could be ventilated at will. The
last was important; toward the end of the cure the
moisture driven out of the green leaves must be gotten
out of the barn lest it condense on the half-dry
tobacco and stain it. The new method was risky. To
get the lemon coloring great heat was needed, and
a hotted-up barn full of dry leaves was a good tinder
box for any stray spark (and still is). Nor could soil
be selected for Bright cultivation just by looking at
it. A given acre could yield leaf of a fine light color
and flavor, while land across the road might grow
nothing better than "shipping leaf."
When word of the $1ades' bonanza crop got
around, the piedmont took up tobacco cultivation.
The reason? Most of the soil was useless for anything
else. North Carolina, "the land of tar, pitch and
pork," was mostly a piney desert sparsely populated.
Tobacco changed everything. Ten years before the
Civil War, Caswell County land was selling at $25 per
acre (it went for a couple of dollars in the pre-Slade
days). Durham Station metamorphosed from a whiz-
tie stop into a thriving town devoted to tobacco
manufacture, and the influx of Sherman's blue troops
and Johnston's grays in 1865 did the rest. At the
~ame time Richmond began to lose out as a tobacco
102
TI58850108
town: IAbhy Prison iL~eif was originally a tobacco
factory which had been sold to a ship-chandler just
before Sumter.
Gold ~eaf and white
As Old Belt planters rushed to buy flues and
get in on "gold leaf" prices, selling in hogsheads gave
wuy to the loose-leaf auction.* Prizing (pressing to-
bacco into hogsheads) tended to injure the most
delicate leaves, which came into demand first as plug
wrappers, then as "cutters" suitable for shredding
into cigarettes. Besides, manufacturers developed
greater consciousness of grade, and proper sorting of
top and center leaves, lugs and primings was facili-
tated by loose-leaf selling. As the cigarette brands
with their special needs grew, grading became even
more important. And as King Cotton was dethroned
and "fi-cent cotton" appeared, tobacco cultivation
spread to the coastal area of North Carolina (the
"new belt") and into South Carolina. The panic of
1893, which drove cotton down to 4.6c, accelerated
the changeover. Virginia, long accustomed to fire-
curing, was somewhat slower in turning to Bright
leaf. By 1918, Bright farming began in Georgia and
Florida, but even today the great bulk of "bright
canary yellow" is grown in North Carolina.
The second great development in tobacco,
Burley, was more of a happenstance than the long
and tortured evolution of Bright. Along the bottom
lands near the Ohio River as along the tidewater of
colonial Virginia, Kentuckians and Ohioans had
taken up the cultivation of dark, fire-cured leaf. The
"breaks" centered in Cincinnati, from which town
hogsheads could be shipped by water to the New
Orleans wharves. In 1864, a new variety was dis-
covered in Ohio; its leaf had little or no sugar content
and could absorb great quantities of sweet liquids.
It was thus ideal for the makers of navy, or sweet,
plug. Since it was also lighter-bodied and milder, the
new type later modified the cigarette with the
astounding volume results already described.
All White Burley, which is really a warm light
brown, is said to be descended from the seed of a
single plant. The original plant seems to have been
*The new auctions continued to be called "breaks," a
term derived from breaking open the hogsheads for the
buyer's inspection.
Surrender of Johnston's Confede~afi~ Army to Sherman
took. place near Durham. While awaiting terms, troops
had chance ~o sample th~ new flue-cured Bright leaf.
Prizing tobacco on the farm tended to injure finely-
textured leaves. These came into favor first as plug
wrappers and later as "cutters" for cigarette use.
103
T156850109
Bright leaf is produced in North Carolina, Virginia,
South Carolina, Georgia ~d F~orida. H~gh ~ su~r
conten~, ~t ~s the main ingredient in all b~g brands.
a mutation or "sport," a biological accident. Burley
soon displaced the former dark leaf in Kentucky,
helped along by the fact that it was air-cured (i.e.,
hung up to dry) instead of fire-cured.
Circuit riders vs. pinhoohers
Almost from the founding of American To-
bacco in 1890, much of the Company's leaf was
purchased by its own buyers, whose traveling super-
visors are s~ill called "circuit riders." Beginning dur-
ing the nineties, buyers went from town to town and
even from farm to farm, buying the Company's
tobacco direct from growers. Although American
Tobacco's management has run more to all-around
Burley tobacco grows in Kentucky and in Tennessee.
Lacking sugar, it readily absorbs flavoring, is
ideal for sweet plug, smoking tobacco, cigarettes.
executives than to specialists, the leaf men remain a
race unto themselves. They constitute a separate
leaf-buying subsidiary, American Suppliers. It takes
five years training before a man can buy leaf on his
own; recognizing the Company's requirements by feel
and sight, and more often by sight alone, is an art.
Oddly enough, the judgments of good leaf buyers as
to nicotine content, sweetness and mildness preceded
scientific analysis of leaf in the laboratory. In some
respects the chemists only confirm what the leaf man
already knows.
Duke's leaf buyers, who were more particular
than exporters, had a good deal to do with the end
of the hogshead break and the spread of loose-leaf
Turkish leaf is small, expensive and aromatic. Few
big brands nowadays lack a seasoning of Turkish-
Io% or less. Subsidiary buys American's needs direct.
Srnall amounts of Maryland tobacco are blended into
cigarettes, contribute distinctive flavor. Air-cured
and free-burning, it is still marketed in hogsheads.
104
' " TI568b0110
fi~e tobacco, seed ~ust be of proper strain and fr~e
of f~ngus spores. A tablespoonful plants six acres.
buying from Danville west to Louisville, Cincinnati
and Lexington. And they soon became a more im-
portant factor on the market than the export brokers.
Perhaps naturally, farmers were more apt to damn
Duke as the author of their ills than to credit him
with providing an expanded market for their crops.
The new loose-leaf buying ended "nesting"-packing
good leaf around the outside of a hogshead and filling
the center with trash. Loading the hands of tobacco
with soil- "sanding" -w~s also largely eliminated.
And direct purchase by the manufacturer did not sit
well with the old time leaf speculator or "pinhooker."
One of these small dealers, who skimmed profits by
re-grading poorly classified tobacco or buying leaf on
Befor~ seeding, bed is hoed and burned over to rid
soil of weed seeds and insect eggs. Then the earth
is raked smooth and the seed sown early ~n spring.
the street from impatient growers, saw that the game
was up and joined American Tobacco. He was John
Blackwell Cobb, father-in-law of George Washington
Hill, one of Duke's Vice Presidents during the nine-
ties and later President of American Cigar.
Pools, prices and politics
But most tobacco speculators resented the big,
new New York organization which was relegating
them to the sidelines. Their resentment seems to have
spread to some warehousemen and to the farmer
himself. After peace was declared between American
and the English Imperial Company in 1902, one
Danville leaf man opined that competition between
To protect tiny seedlings from raw spring weather,
the bed is covered with cheesecloth pegged to the
border logs. Six-inch seedlings are transplanted.
Young tobacco plants are set out ~n rows three or
four feet apart. Planting ~s usually done through
a tapered chute which punches ho~es in soft ground.
105
T!56850111
Among the early loose-leaf warehouses ~oas Parrish's
in Durham. In 1881~ ~t advergsed sales of "nearly
~ght m~ll~on ~ounas" the ~rev~ous year, about one-
third of North Carolina's total ero:p. There are more
warehouses now, but few sell over eight million ~ncls.
I~ Kentucky, d~spute between ~ndependent farmers and
those who wanted to pool their leaf led to viotence.
The military was ordered out to quell "night r~ding."
the two giants would eeaze, and lower leaf prices
would result. But the Danville average went from
7.94c a pound in 1908 to 8.55c, 9.42c, 9.11c and 11.42c
in successive years, the last~named figure representing
a seventeen-year high. Nevertheless, farmers in both
Bright and Burley areas did not feel very friendly
toward anybody: chewing leaf came into an over-
supply, heavy rains spoiled an occasional crop, beetles
attacked, Japanese buyers got their leaf from brokers'
storage instead of from warehouse floors, and the
panic of 1907 topped off their troubles.
The farmers' discontent was not, in truth, new.
During the 1870s, the Granger movement had trained
its guns on the warehousemen of Danville, but the
Grange could not counteract poor crops as a cause of
low prices and when the leaf market turned up in
1878, Gmngering faded out. A decade later the
Farmers' Alliance in the Bright Belt demanded that
warehousemen eliminate some of the weighmen,
salesmen, clerks and factotums who padded the
spread between farmers' and manufacturers' prices.
In 1887 the Alliancemen hit on the idea of cutting
back the crop to force prices up. Next year Old Belt
production went down slightly, but so did prices.
Alliance warehouses were set up, but no extra eff~-
ciency was achieved, and the warehouse commission
was not lowered.
The old Alliance evolved into the Tobacco
Growers' Protective Association. Local politicians
campaigned for office by "cussin' out" American
Tobacco, counting on the farm vote to ride them into
office. By 1909, however, the Bright tobacco pool had
settled on a simple means of improving their lot: they
redried their leaf and stored it for direct sale to the
manufacturer. This outcome was most satisfactory
on both sides. When James B. Duke returned to the
piedmont from England at the outbreak of War I,
he was nominally engaged in forming the Southern
Power Company (later Duke Power). But he still
indulged his old fondness for talking tobacco with
farmers, and continued to encourage cooperative
marketing. Among other things, Duke did not want
to see more leaf grown than the world could smoke.
During the war to end wars, leaf prices sky-
rocketed as high as 54c and in 1920 comparable grades
fizzled to 22e or even less. New cooperatives, the
Tri-State Tobacco Growers and the Burley Tobacco
106
T156850112
own, ~nanufact~rers found it ~tecessary to 2~i~k and
choose more and finer grades-a procedure which
(~rowers, were formed. American Tobacco explicitly
told its leaf buyers that "This company is not
antagonistic nor opposed to this idea if it can benefit
the farmers and manufacturers." But after a few
years, the pools evaporated. Leaf prices climbed out
of the 1920 pit, suggesting to farmers that the co-ops
might be unnecessary after all; the pools developed
high-priced "managements" and did not seem to
perform the grading function adequately; and the
independent warehousemen refused to shut up shop.
Fortunately for the future of the leaf market, the
large manufacturers including American Tobacco had
continued to buy on the auction sales as well as from
the pools. American and Imperial, the largest buyers,
were accused of boycotting the latter, but the Federal
Trade Commkssion dismissed the charge as groundless.
Calvin Coolidge, a farmer himself, o~posed bill to
support farm ~rices. He.feared one-crop farmi¢~
e~haust~on of the soil would be the ulti,nate result.
I07
T]56850113
Too m~ch rainfall weakens and thins out the leaves.
Far~ners weed the rows constantly, hope against ha~l.
"There ought to be a law... '"
By 1925 the pools had ceased to hold the
interest of tobacco planters, who were now looking
toward Washington. In 1924 the first McNary-
Haugen bill was introduced, calling for a government-
financed export corporation. This would buy up farm
surpluses so as to keep a constant ratio between
agricultural prices and the general industrial index.
But tobacco growers did not take kindly to "export
dumping," and farmers generally were mixed in their
reactions. In I927 a fourth version of McNary-
Haugen was passed in the Congress but vetoed by
President Coolidge. His grounds: commodity price
supports would discourage diversified farming and
Flowers are nipped in the bud to divert all of the
ylan$'s energy ~nto the leaves. Deflowered plants
send out suckers which are cut for the same reason.
lead to one-crop efforts and possible soil exhaustion.
During the twenties, all this was academic
economics. By the early thirties, it had become a
matter of downright hunger. With the desperation of
the starved, Americans wanted no truck with theory.
For every wrong there ought to be a remedy, "there
ought to be a law... " In this context the Federal
Farm Board extended credit to cooperatives and
tried, unsuccessfully, to stabilize cotton and wheat
prices. Finally in 1933 the Agricultural Adjustment
Administration grappled directly with the supply-
demand equation by providing for acreage reduction
and crop storage. This was the age of the "plowed-
under pig and the rotting potato," and tobacco was
"'Priming" refers to single-leaf harvesting, which
permits each leaf to reach .full ripeness. Chemical
conten~ varies with
Narrow mule-drawn sleds are used to gather tobacco
o~ ~nos$ farms, since rows are spaced too close for
tractors. Need for judgment prevents mechanization.
108
T1568b0114
._I
Tied to sticks, the green leaf is taken to curing
barns. These are cube-shaped, twenty or twenty-five
feet square. Leaf-hanging is often a family affair.
Leaves are spaced evenly so that each will get its
full share of heat. The curing barn is chinked and
its roof sealed so that the heat can be regulated.
one of the seven basic commodities to come under
AAA. Because most tobacco growers were small
farmers, cutbacks were not widely made. But the
acreage control put a brake on leaf output, and prices
rose somewhat. A second depression in 1938 led to a
new farm bill, establishing marketing quotas. These
quotas were announced by the Secretary of Agricul-
ture and validated by a two-thirds vote of the farmers
concerned. 0ver-quota sales of tobacco carried a tax
equal to 50% of the selling price. Acreage controls
and loans against surplus production were continued,
and outright "parity payments" to farmers were
authorized. In 1942, tobacco price supports were fixed
at 90% of parity.
Under the new system, tobacco expansion
followed government announcements of increases in-
stead of the market for leaf. The general direction of
farm legislation was to curtail farm production to
keep prices up. At the same time, manufacturers of
cigarettes were attempting-successfully-to broaden
the demand for their national brands. As a natural
result, during the earlier years of War II, this put
tobacco in short supply: not until 1944 did farm
output of leaf regain the level of 1939. To keep
up with rising cigarette sales, the Company had to
dig deeply into its leaf inventory; and to replenish
leaf inventory at higher prices, it was necessary to
float debenture issues-S100 million in 1942 and a
Firing a barn]ul of tobacco is a delicate, tiresome
process, requiring a vigil of four days or more. I]
a flue breaks, a whole year's work goes up in smoke.
After curing, Bright leaf is orange or lemon-yellow.
Burley and Maryland are air-cured under shade, while
Turkish tobacco is cured in sun, covered up at night.
109
TI56850~115
like amount in 1941-plus a ~50 nn~l~on common
stock flotation in 1947.
The big squeeze
Flexible parity prices were worked into the
1949 Act, hut tobacco supports remained at 90%.
With the supply of leaf controlled, the increasing
demand for tobacco products after 1940 kept leaf
prices on an ever-upward spiral. From the Company's
standpoint this worked a double hardship, since retail
prices of cigarettes and other packaged products were
held rigid by OPA ceilings during War II and again
during the Korean War. As a consequence, the profit
margin on sales (before corporate income taxes) nar-
rowed from 1940's 13.6% to a low of 6.5% in 1946
and struggled slowly up to 9.3% in 1953. Likewise
common stock dividends, which were paid at a $5.00
rate in 1940, shrunk to $3.25 during the war years.
After regaining a level of $4.00 during 1949-1953, the
indicated rate was increased to $4.40 early in 1954,
as the excess profits tax expired.
Financial writers described the Company's
situation as a "double squeeze" between fixed cigar-
ette prices on the one hand, propped-up leaf prices
and the greater leaf requirements of king-sized
cigarettes on the other. Underlying the narrowed
margin, however, was the very policy responsible for
the Company's growth-the policy of "L.S./M.F.T."
CENTS PER POUND
75
70
65
60
35
15
10
Actually, as cigarette business has grown, need for
better grades has pushed up prices paid to farmers.
As calculated by Department of Agriculture, farmers'
average price for flue-cured leaf, above, has ~ncreased
568% since 1981. In e~ery year, American Tobacco's
~.~urchas8 ~rice for Burley a~ut Bright exceeded average.
II0
T1568b0116
Under th~s policy, American Tobacco does not
buy to price in the leaf auctions-a fact which seems
almost anomalous in the age of cost accounting and
expensive distribution. How do the buyers buy? Said
one of the Company's Vice Presidents in 1940: "'The
grade is all important in buying tobacco. The trade-
mark determines the grade. The law of supply and
demand-open competition-determines the price.
We do not buy to price-if we did we would destroy
our trademarks."
In this light, it was not surprising that Riggio
should have picked "Luctcy Stri~e Means Fine To-
bacco" as the most deathless of Hill's carefully-turned
phrases. But Riggio, for fifty years a master ~lesman,
could not ignore the revolution in America's smoking
habits. L~c~y 3tri~e was being hammered dovrn by
its own running mates: the Company's t~in kings
accounted for one of every eight cigarettes sold in
1946, one of every four by I950, the year of Riggio's
succession by Paul Hahn.
As it turned out, the expansion of the king-
size market confirmed the importance of leaf and
g~ve the lie to cynics who claimed the public couldn't
really distinguish between cigarettes hut only be-
tween brand names. When the rest of the industry
began to create king-slze brands, it soon became
apparent that the public taste demanded more than
added length alone. The "secondary brands" as the
Before War II, an acre of tobacco yielded ~Z85; i$
now yields $6~0. This is due not only to the rise
in price (chart, o~posite page) but to an increase
in poundage yield, from 900 to 1,950. Value of the
tobacco crop averages well o~er ~I bill~on-abouf
eight p~rcent of th~ entire U. S. crop value. ,.%me
60% of a typical crop is flue-cured and 98% Burley
-the rest Maryland, cigar wrapper and fire-cured.
111
TI56850117
trade dubbed them went exactly nowhere. And they
were secondary: one appeared without a trace of
Turkish leaf, an expensive but necessary "seasoning
ingredient" in every successful brand. The upshot, in
retrospect, was logical-as recently as 1951, Pall Mall
and Tareyton-rolled from leaf of Lucky S~r~Ice quality
but blended to different formulae-had 90% of the
entire king-size market between them. The next year,
in a belated bow to the public palate, one of the lead-
ing makers kinged its standard cigarette. Others fol-
lowed. But it was only these "primary blends" which
succeeded in the developing ldng-size market, blends
which had already won followings in standard length.
As one company after another kinged its principal
brand, its standard cigarette began to recede as Lucky
Strike had. In war, as the nation's senior general
thundered from Tokyo, there is no substitute for
victory; and in cigarettes, as Buck Duke discovered
in Durham, there is no substitute for fine leaf.
During Vincent Riggids stewardship, the Big
Brand Era had sprung up, flowered and finally faded
in favor of the "department store" age of cigarette
merchandising. American Tobacco no longer stood or
fell on the strength of one advertising slogan: diver-
sification had given American Tobacco a '"oig three"
all its own, the No. 2, No. 4 and No. 7 brands.
Riggio, ailing, was ready to vacate the chief execu-
tive's ch~ir for the quiet ex-lawyer who had turned
brand land upside down. In April, 1950, Paul Hahn
became the Company's fifth President.
112
Ti56850118
PARTICULAR PEOPLE
~I~KE THE RECIPE for grandmother's mince pie,
the blend of a cigarette is as much a tradition as
it is a formula. And like any tradition, it lives only
as long as there are particular people who will take
some pains to preserve it.
These "particular people" are not limited to
the 19,000 employees of American Tobacco. Preser-
vation of a great blend like the toasted Lucky Str~ke
or the newer Pall Mall and Herbert Tareyton is rooted
in the taste of the consuming public. It is up to the
hundreds of Company salesmen-really servicemen-
to keep close to that public, to sniff out changes in its
taste almost before they occur. There are always new
mixtures being tried in Durham, now as in Wash
Duke's day the incubating place for new brands. And
these experimental blends are constantly being tested
at the Richmond research laboratory.
At the other end of the cigarette line, literally
at the roots, are scouts from the leaf subsidiary. As
the seedlings of the Golden Belt peep up through the
soft April loam, these scouts are very close to the
farmer himself. They have been worldng all year with
the Agricultural Expsriment Stations of the states
and the Federal government-watching test crops,
trying new fertilizers, collecting leaf samples fox"
analysis. All this leads to advergsements placed by
the Company in farm periodicals to show the planter
the latest methods to guard his soil and h~s leaf
against tobacco's natural enemies, beetles and fungi.
And leaf men are moving spirits behind new advances
in tobacco culture, like the experimental growing of
Turkish-type leaf in the Carolinas.
Until the early 1940s, manufacturers had kept
out of the tobacco patch. Growing leaf had been the
farmer's province; processing it, the manufacturer's.
Two new influences changed this. First, foreign out-
lets of tobacco diminished, lowering demand for the
grades unsuited for domestic use. At the same time,
the growing domestic business needed a larger pro-
portion of the crop. Only a third of the flue-cured
crop, for example, was used in domestic cigarettes
before War II, compared with two-thirds today.
The second influence was the encroachment of
diseases like root rot, black shank and granville wilt.
These had been controlled w~th crop rotation, but
Federal acreage restrictions and the resulting one-crop
farming gave the pests a chance to "dig in." At this
point The American Tobacco Company initiated a
program of research in collaboration with Federal and
state Experiment Stations. The pro~axn's findings are
113
T!56850119
American Tobacco's research :program dates back to
1911; 1oresent building ~n Richmond was erected in
1939. Laboratory now employs a total of 90 people.
disseminated to farmers by the Agricultural Exten-
sion Service as well as by the Company's own
advertisements.
Typically, the Experiment Stations contract
with farmers to grow tobacco from seed of advanced
breeding lines, and the Company agrees to buy this
leaf at the market average for its grade. The new
strains are compared with standard varieties in fac-
tory and laboratory tests.
Field experiments began in 1949 in North and
South Carolina, Virginia, Kentucky and Tennessee,
later being extended to Georgia, Florida and Mary-
land. The principal emphasis has been on variety
improvement, although field survival and increased
Smoking machine, which simulates puffing of human
being, was devised by American Tobacco scientists,
is now standard apparatus for world's researchers.
yield have also figured. Studies embrace fertilization,
topping and suckering practises, sucker control, irA-
g~tion, harvesting, curing and other farm operations.
Others followed the Company's lead in this
field-Liggett & Myers since 1950, Reynolds since
1951, The Imperial Tobacco Company in 1951 and
in 1958, Philip Morris and the Export Leaf Tobacco
Company in the last-named year.
The work of the scouts has a practical as well
as a long-range value. Before the summer heat has
sent up the tall tobacco stalks and ripened the floppy
green leaves almost to the size of elephant's ears,
specimens of the new crop are inside the tan brick
building on the Petersburg Pike. There some sixty.
Leaf scouts go r~ght to the .farm ]or advanea line
on crop quality. Samples are fully analyzed in the
Richmond lab before cro~s themselves are mar~e~ed.
When farmers are readying cured leaf for auction,
Company ezecutives are estimating the amounts of
suitable c~arette tobacco which will be available.
114
T156850120
First step in auction procedure may take place at
night. Farmer and warehouseman make up baskets of
leaf so that quality is uniform within each one.
odd scientists and trained specialists are breaking
down the leaf in their retorts, testing its content of
sugar, nicotine, bases. Before a hand of tobacco has
appeared on the warehouse floors, the leaf buyers of
American Suppliers have an accurate idea of where
the best tobacco will be grown, how much of it will
be suitable for the Company's blends. If a given crop
promises to be unusually poor, the manufacturing
Vice Presidents in New York are alerted; often a
portion of the Company's needs can be filled from
stored leaf in Government warehouses.
At every step of the long journey from seedbed
to finished cigarette, the Ph.D.s of the research lab-
oratory are analyzing. They receive leaf from curing
nods and thumb-twitching. Auctioneer and warehouse
clerks walk on one side, rival buyers on the other.
barns, from warehouse floors, from hogsheads in the
silent storage sheds, from each day's tumbling bins
at every factory. After the leaf has been rolled into
cigarettes and packages, they are still analyzing
samples from the factory, from the distribution pipe-
lines, even from the counters of retail shops.
Like the cigarette tobacco itself, which must
age and sweat in the dark before it is ready for blend-
ing, an organization must age and sweat its way to
maturity. The American Tobacco Company's re-
search lab, the industry's first, was set up in 1911.
As its scientists learned of more things to be particular
about, the laboratory expanded. The present main
building was finished in 1939. Today a new wing is
Auctioneer's singsong chant is a means to save his
voice, consists of prices repeated over and over.
There is no pause between one basket and the next.
Letter "A" on bright cigarette leaf indicates that
lot has been "sold American." If farmer feels price
is not right, he can turn the ticket and void sale.
115
T!56850121
American Tobacco Company of the Orient. In Turkish
7~orts too shallow for direct loading, barges
Orpheus D. Ba~alys, a director of American Tobacco,
covers entire Middle East, makes hie o~ce ~n Athens.
A~other Company director, Hiram R. HanTner, ~nanages
research ~rogram. His findinOs raake possible .farm
ads (opposite page) to i~aprove ~ield and quality.
being built to double the square footage of working
Refinements in processing now accepted as
routine are the remlts of years of painstaking studies,
headed since 1932 by Hiram R. I-lanmer. Chemical
make-up of leaf in its man)- vmJeties; effects of proc-
essing on aroma; fundamental research on the com-
position and taste of cigarette smoke-four decades
of this lie behind today's manufacturing standards.
Recent experiments with farmers themselves, insur-
ing a continuing supply of good quality tobacco, are
just another widening of the laboratory's horizon of
knowledge.
Controlled construction
One of the things learned by Research Director
Hiram Hanmer and his staff is that there is more to
cigarette making than leaf, more than the secret
flavoring formula sprayed on the sugarless Burley.
The strands of shredded tobacco must be long enough
to burn evenly, packed tightly enough to avoid loose
ends or air pockets-yet they must be packed loosely
enough to be free and easy on the draw. The package
must be effectively sealed to prevent drying out in
transit, the moisture content just right to preserve
the full flavor for the smoker. Not only the paper
wrap but the very ink on the label must be tested, lest
the finished cigarettes absorb alien odors.
The massive routine of inspecting for all this
-"statistical quality contror'-is the responsibility
of Research. Representative samples from each batch
of labels, glue, cellophane, cartons, bags, boxes,
syrups and extracts must be chemically analyzed and
approved before entering the main stream of manu-
facture and distribution. This is the kind of control
which lies behind the rise of the leading brands and
the replacement of "roll your own" by the machine-
made cigarette. For the taste of a cigarette depends
as much on its manufacturing process, physical "con-
struction" and dimensions as on the excellence of its
ingredients. This is a fact t~venty-seven-year-old Buck
Duke sensed when he led the industry into the
machine age with his Bonsacks of 1883. It is a fact
every cowboy learns when he first rolls his own from
Bull DurImm makin's and the Rie La Croix paper
attached to the sack. It is a fact which the public has
come to appredate over the years..~md it is a fact
116
T!56850122
TOBACCO field cultivation in the Flue-cured area
has an importance not always fully reali~,ed by the
grower. Actually, cultivation practices have a great in-
Ihtenre on the sncc~ ~n" failure of the crop. Correct
cultivation methods help prevent erosion, help pro-
sect the growing plants, and contribute to the develop-
ment of larger, healthier plants. Federal and State
Experiment Stations have conducted tests and studies
over a period of years to determine the most eflh'ient
and beneficial cultivation methods. The resulv; can be
of great value to farmer.~ of the Flue-cured area.
NEXT MONTII -DISEAgE CLINI~Lg
Good Field Cultivation
Promotes Tobacco Growth
Field of tobacco beln~ cultivated with harrow and
mule (the old method~ but still being used by many).
There are many definite benefits to be gained
by paying dose attention to proper field cultl-
vation. Chief among these benefits is the con-
trol of weeds and grasses. Weeds and grasses
rob the crop of water and plant nutricnu which
it otherwise would get, In this manner proper
cultivation may aid in the conservation of soil
moisture and plant nutrients. Also, weedy and
grassy fields are usually more heavily infested
with insects, The weeds and grass provide pro-
tective cover and breeding spots for them.
HELPS PREVENT EROSION
A sound cultivation program has its beginning
before the crop is planted. The soil should
first be well-prepared by plowing and disking.
The row layout should bc such as to afford
good drainage with a minimum of erosion. If
the rows have too much fall, erosion and ex-
cessive loss of water may occur. On the other
hand~ if the rows do not drain, the plants may
drown during wet periods, or water may
break the rows, causing a wash through the
field.
Flue-cured tobacco ~ planted on a ridge
in which most, if not all, of the fertilizer has
been placed. On land that is well-drained, a
moderate ridge itsdf has very little effect
npun the growth of the plant. Three or four
cultivations should have taken place before
the arrival (in normal years) of heavy sum-
mer rains, so that the channels between the
ridges can provide places deep enough for the
water to run~ preventing sheet erosion, and
stopping water from accumulating in a few
low places, causing gullies. On flat, imper-
fectly drained land. ridging provides channels
for draining the field during rainy periods
and may therefore influence plant growth.
Ridging decreases the chances of the soil
coming water-logged.
Flue-cured tobacco, predominantly, is
planted on the light-textured soils (sands and
Field of tobacco being cultl-
voted witl~ tractor equ.lp-
method
and
the old plow-and-mule
method.
sandy learns). On soils of this nature, the
beneficial effect of cultivation is that of con-
trolling weeds and grasses. On the heavy-
textured soils, the principal effect also seems
to be that of controlling weeds and grasses,
but, in addition, cuhlvation aids in the in-
filtration of water. Shallow cultivation ac-
complishes the purpose in both cases and need
only be performed often enough to enntro
the weeds and grasses.
AVOID INJURY TO ROOTS
The plant nutriants and water which the
plant must get for proper growth are absorbed
by the roots of the plant from the soil. Any-
filing that interferes with root development
will therefore affect the uptake of water and
nutrients by the plant and. in turn, influence
the growth of the plant.
Cuhlvatlon should therefore be performed
in such a manner as to cause the minimum
damage to the root system. Shallow cultiva-
tion performed often enough to control grass
and weeds has invariably given better results
than deep cultlvation. Excessive cultlvatlon
will tend to dry out the soil.
The rotary hoe does a good job of culti-
vatlon when the plants are small. For the
later cultivation there arc several types of
horse-drawn and tractor equipment that will
do a good job.
For more specific information on row lay-
out and cultivation, contact your County
Agent, other Extension Workers, or Voca-
tlmml Agriculture Teachers.
THE AMERICAN TOBACCO COMPAI¢:£ WORKS WITH EXPERIMENT STATIONS TO PRODUCE FINER TOBACCO
117
TI56850123
now expre~ed in the Company's adverth~ing copy,
"made better to taste better."
The first "particular people" in the chain of
cigarette blending are, of course, the farmem them-
selves. Starting with a spoonful of tiny seed-enough
to plant several acres-the American tobacco farmer
nurses his plants iust as does his Cuban counterpart
in Pinar del Rio. His seedbed is hoed, "burned over"
and raked before the seeds are planted, and covered
with cheesecloth to shelter the new sprouts from the
raw weather of spring. After the frost season is past,
the little tobacco plants are set in rows, like corn,
about three or four feet apart.
Although the summer sun makes their growth
rapid, the straight tobacco stalks cannot be left on
their own. When the flower buds first appear at their
tips, the plants are "topped" so that all the vital
nourishment goes into the leaves. The sidewise
sprouts or "suckers" must also be removed, for the
.. ........
All during the growing season, the farmer
watches the sky and ponders the weathermap. Hail
can destroy a field of tobacco completely; heavy rain-
fall can make the leaves too thin, too washed-out; and
excessive drought can do the reverse. Meanwhile, the
hoeing and weeding and spraying must go on
continually.
When the leaves are ripe they are stripped
individually from the stalks, a process known as
"priming." Twined to tobacco sticks, they are hung
in the curing barn to dry. In some parts of the world,
this is not a complicated phase-Burley and Mary-
land leaf is air-cured, simply hung at normal tom-
perature until the tobacco is dry. Turkish tobacco is
spread in the sun. But Bright tobacco, which has
constituted half or more of every big blend ever since
W. Duke of Durham began to roll cigarettes, is a
different matter. The flue-curing needed to drive out
all the moisture while retaining the prized lemon or
orange color is a touchy and exhausting business.
Thomas Hart Benton was among artists comm~sioned to pa~$ tobacco scenes like th~s, "Outside the
Cur~zg Barn."
118
T1568d0124
When the barn is filled with hanging tobacco leaves,
it is not enough simply to light the fires in the
"kilns" outside and let the heat rush through the
flues to do the rest. The inside temperature must be
kept within twenty degrees of the outside reading
anywhere from one and a half to two days. During
all of this time the farmer must be at the barn, using
his thermometer and, if necessary, the ventilators.
As the curing begins to bring out the yellow
color, the heat is increased. For sixteen or eighteen
hours more, the vigil continues until the tobacco is
dry enough to curl. But the end is not yet. Unless
the stems and veins are just as dry as the leaf, the
sap will baekflow and scald it. Accordingly, another
sixteen hours of high temperature follows. Before the
stems are "killed," the farmer will have put in three
or four days and nights without sleep. And even after
the curing is finished, the fires must be banked grad-
ually: inside the barn, the flues are red-hot and still
dangerous.
After this ordeal, grading seems child's play.
There will be some good tobacco in a crop and some
that is not so good. So the farmer and his family will
sort out the best quality leaf from the average run,
tying each grade into bunches or "hands" of a dozen
or two dozen leaves. Five months after the powdery
seed was put to bed under the cheesecloth, the
tobacco is ready to go to market.
The next "particular people" to figure in the
cigarette cycle are the leaf buyers who work under
American Suppliers President James F. Strickland.
They are in the market towns of Georgia and North-
ern Florida when the southernmost Bright crop
"breaks" early in the summer. They move north to
the Carolinas and Virginia as the more northerly
flue-cured leaf comes to market, then west to the
Burley markets of Kentucky and Tennessee which
do not dose until February of the following year.
Striekland makes his headquarters in Durham, while
his Executive Vice President, John Dowd, has his
office in Louisville. Dowd, who not only smokes
cigarettes and cigars but chews a twist of "the strong-
est, blackest One Sucker I can find," specializes in
the Burley markets. Although Bright and Burley
119
T156850125
make up the bulk of mo~t blends, a "seasoning" pro-
portion of Turkish leaf ~s needed. The American
Tobacco Company of the Orient, under the resident
managership of Orpheus D. Baxalys, buys, manipu-
lates* and bales the Turkish leaf where it ~s grown.
Baxalys operates out of Athens, Greece. A fourth
variety of tobacco, Maryland, appears on its own
markets in and around Baltimore; Maryland is a
large brown leaf, much like Burley in appearance. It
is unusually free-burning and contributes a charac-
teristic nutlike flavor.
Sold American
For the farmer, a loose-leaf auction in a market
town is something of a festival. It is the payoff
following a whole year's work and worry; the price
*As used in the trade, the word refers to unstringing,
sorting and cleaning the tobacco.
his leaf brings ~s the measure of his st~l, and the trip
to town ~s a kind of sodal event analogous to the
barn-buildings of colonial tim~.
Between them, farmer and warehouseman
grade the tobacco and lay it out in long rows of
baskets on the selling floor. Much of this is done at
night, so that sales can begin early in the morning.
When they do, the buyer will be very much on the
spot. Alongside him will be rivals from other large
cigarette companies, from the British manufacturers,
from the lea~ brokers who s~pply smaller manufac-
turers with their tobacco. This group-perhaps eight
or ten bidders-will form a line on one side of the
rows of baskets. On the other side facing them are
the warehouseman, his auctioneer, and two or three
record-keepers. Without breaking step, the two files
will move slmvly down the line from basket to basket,
farmers and their families craning their necks to see,
the warehouse hustlers waiting with their dollies to
120
T1568b0126
Steraming is a little-known bus crucial stage in the
manufacture of cigarettes. The late Douglas Brashear,
a director of American Tobacco, oversaw stemmeries.
Rigid hogsheads-giant 1,000-pound barrels-were
outmoded after War II. "'Bull gangs" once handled the
heavy casks, painfully dismantled them to get at leaf.
move the leaf off the floor after the bidding is over.
Contrary to popular impression, the chant of
the auctioneer is not the hardest part of the trans-
actions to understand. He uses a singsong delivery
to save his voice, merely repeating the price over and
over as the bidding takes place-"sixty-eight-sixty-
eight-sixty-eight-eight-eight, sixty-nine-nine-nine,
seventy-seventy-seventy-seventy-one-seventy-one -
sold American!" More difficult to pick out are the
buying and bidding signals themselves. Most buyers
make their bids as unobtrusively as possible, using a
wink, a barely perceptible nod, a twist of the thumb.
Their eyes flick between the auctioneer and the piles
of tobacco: in a glance they must distinguish between
the smooth, silky "cutting leaf" that is suitable for
first-quality cigarette blends and leaf of almost iden-
tical color which is not. Once in a while, a buyer will
confirm his visual judgment by fingering a handful
of tobacco.
When the auctioneer's brief handclap closes a
sale, the initials of the buyer's company- "A" for
American-are crayoned on the ticket. Should the
farmer feel the price is too low, he can "turn his
ticket," void the sale, and try his luck the next day
or even on another market. Or he can sell the leaf
to the government at support prices.
Bringing in the leaves
When leaf is trucked from the warehouses it is
in "farmer's order"-some too wet, some too dry. As
soon as it can be unpacked it is strung on racks, hand
by hand, and put through "reordering" or "redrying"
machines. These first take all the moisture out of the
tobacco, then re-moisten it to the extent needed for
aging. When the treated tobacco comes out of the
long redriers, it is prized into hogsheads and trundled
off to its long sleep in the aging sheds.
American Tobacco now has 249 of these huge
sheds in seven great clusters, each close to a manu-
facturing center. They contain about $600 million.
worth of leaf. More than 200 of them are divided
among the four "cigarette towns"-Durham, Rich-
mond, Louisville and Reidsville, each employing
roughly 3,000 people.* Some tobacco is stemmed
while it is still "green" or fresh from the markets,
*Lucky Strike and Pall Mall are made at all four centers.
Durham is the center for Herbert Tareyton and for the
small-volume brands carried over from the past-Sweet
Caporal, Johnny Walker, Mecca, "111," Lord Salisbury,
Soverefgn and the Turkish Pall Malls, Melachrino,
Natural, Egyptian Prettiest and Straights. Richmond is
the center for smoking tobacco brands, although Bull
Durham is still made in its namesake city.
121
T156850127
Pow~-driven "leaf lifts" now receive stripped leaf,
packed in a hogshead of modern design. Its wired
plywood staves make a single, flezible side wrap.
Tops and bottoms are uniformly sized, also ply~vooa,
can be quickly removed without damage after metal
bands around the hogshead's sides have been chipped.
and put to age in strip form; the greater part is
stemmed after "sweating it out" in the corrugated-
steel storage buildings.
Cigarette tobacco can be readied for blending
in two ways: by stemming, which denotes removal
of the midrib lea~ by lea~, or by thrashing batches of
leaf into bits, the heavier stem fragments being
separated from the whirling mix by gravity. Unlike
some manufacturers, American Tobacco has never
thrashed its cigarette leaf. This method is cheaper,
but it breaks up the tobacco excessively or leaves bits
of woody stem in the mixture-a danger not present
when the midrib is removed whole. In 1946 the Com-
pany developed a new type of stemming machine and
granted the selling rights to American Machine &
Foundry. This is the machine presently used by those
leaf dealers and manufacturers who stem rather than
flail.
Stemming-always preceded by a re-readying
process of vacuum sweating-is the last step per-
formed by American Suppliers. At this point the strip
leaf enters the factories of the parent Company itself,
The merry-go-round
Here begins a long and complicated fusing of
the different types of tobacco into the blend. The
Burley leaf is dipped separately with the flavoring
mixture from the factory's "kitchen"; in the case of
aga~ without making a tr~p to the carpenter shop.
All incoming leaf is spread out on a moving belt,
where cm~t foreign matter is removed. NeweSt-bought
tobacco ~n "farmer's order" requires reconditioning.
' ' ' Ti56850128
After ~s~ect~o~, new tobacco ~s fed into redrying
machines. These remove all moisture from the leaf,
the~ remoieten it to proper deoree prior to aging.
Lucky Strike cigarettes, it is toasted-a four-step
operation involving drying, the application of super-
heated steam, cooling, and remoistening with satu-
rated steam. Then the four kinds of leaf are tumbled
together and piled in huge cubes in the "bulking
room." There it remains for a night and a day while
a subtle intermingling of the various oils and aromas
takes place. Like the mysterious process of "sweat-
ing" in storage, the change effected by bulking has
not been reduced to exact chemical terms. It does,
however, improve the final blend, although not all
tobacco manufacturers bulk.
Following this brief nap, the mixture goes to
the cutting machines where the strip is shredded into
After redrying, some tobacco ~ trucked unstemmed
to the storage sheds, where it undergoes a chemical
change and periodic "sweats" .for two or more years.
the tiny strands that make up a cigarette. The Luc/~y
Strike mixture passes under a battery of ultra-violet
lamps. The tobacco is now parceled into "saratogas"
or trunk-like boxes-green for Luc/~y Strike and red
for Pall Mall. After standing overnight in the sara-
togas, the final blend will have been remixed some
sixty times for the sake of complete uniformity. (For
the same reason the flavoring essence is mixed in
Richmond, then divided among the four making
centers.) The last "change of trains" takes place in
a little ring of wheeled trolleys called a "merry-go-
round." From here the golden, shredded mix is carted
to the making machines.
Remarkable as the cigarette machine is-it
8tez,~s are removed prior to manufacture. When this
is done before aging, tobacco is sa~d to be "green
stemmed." Stems can be pulled (above) or "thrashed."
Although thrashing is cheaper, all Company leaf is
stemmed individually. This insures that the entire
m~drib is removed and the cigarette free of woody bits.
123
TI56850129
prints the brand name, rolls the paper ribbon around
a steady streamof tobacco, seals the continuous tube
with milk paste, and shears off twenty cigarettes per
second-human watchfulness is needed. The operator
must see that the hopper is full, that the flow of
paste, paper and tobacco is synchronized, that the
circumference of the emerging tube is perfect, that
the speed is not too great for precision results. The
catcher gives the finished cigarettes a last look as she
piles them in her tray; she is a pitcher as well, for
the imperfect ones must be picked out and pitched
into the waste box. As a further check, batches of
cigarettes are weighed either by hand or electronic-
ally, to control the final weight within narrow toler-
ances. Automatic packers, so sensitive that they can
detect and throw out a pack containing one defective
cigarette, quickly seal the fresh rolls in foil, paper, tax
stamp, cellophane and tear tape.
During all this, operators have been testing
the feel of the tobacco, checking temperature, adjust-
ing wives to control the moisture. Each floor has its
testing desks, where boxes of tobacco are tested
under the electronic moisture meter developed by
American Tobacco. The factory itself is a giant air-
conditioned humidor-in a typical plant the stair-
wells and auxiliary rooms are outside the main wall
shell, so that no non-tobacco odors or street dust can
intrude on the mixing process.
Manufacture is supervised by two Vice Presidents,
Preston L. Fowler (le]t) and John A. Crowe (center),
124
To get and keep the best people to carD- out
th~s complex production routine, personnel admire-
t-ration is handled at the top management level-Vice
Presidents Fowler and Crowe for manufacturing
people, Vice President Coon for the main office force.
Each regular employee is covered by life insurance
at no cost to him, .the principal amounting to about
twice his yearly salary, with a maximum of $20,000.
Medical insurance for in-hospital doctors' fees is also
provided by the Company. In 1949 a retirement
pension plan was put into effect, and this too involves
no contribution by the employee. To this "loyalty
down" American Tobacco's people respond with
"loyalty up": almost half of the cigarette, smoking
tobacco and leaf department employees have service
records of 10 years, and nearly one in ten are quarter-
century veterans.
Legally, American Tobacco was born in 1890
or in 1904, whichever date of incorporation is chosen.
But the present Company really dates from the last
months of 1911. Before that time the organization
was tied together largely by purse strings. Its various
branches and subsidiaries were still separate com-
panies in every sense but the financial. Each had its
own brands, its own manager, its own traditions, its
own standards of quality. Only after these parts had
been integrated did American Tobacco become an
organic whole as well as a legal entity.
assisted by William H. Ogsbury. Fowler and Crowe
each have o~er forty years manufacturing experience.
TI568b0130
350
sOO
100
5O
~90.~ 1910 19.o0
In 1958 Company sales were $1,088 billion, of which
$570 million was paid to the U. S. Government .for
revenue stamps, income taxes, excess profits taxes
and capital stock taxes. City and state levies on
American's products, income and property brought
1950 19~0 1950
the total tax bill to $630 million. Cash dividends
to stockholders (black bars) have not exceeded
million since 193~, though taxes show a steep rise.
About 90% of Federal tax payments (white bars) are
for cigarette excise stamps, now costing 8e per pack.
To make a whole greater than the sum of its
parts, to develop esprit, to make quality control a
matter of honor as well as regulation-all this took
time. Perhaps the greatest single spur to it was
the Ludcy Strike cigarette. As its volume grew too
great for a single factory to handle, the new product
brought widely-scattered people together in a com-
mon effort. A manufacturing tradition grew up
around the master blenders and leaf men, the Peuns,
the Lipscombs, the Neileys, the Stricklands, the
Fowlers and the Crowes. "Upstage"-i.e., in the
headquarters offices-differences are apparent be-
tween one regime and the next. Down South in the
plants they are not. It is easy to overlook the fact
that George ~Vashington Hill only promoted the word
"toasting," but did not invent the process.
Candor requires the observation that manu-
factm~ng people have always been a little dubious
about promotion and exploitation because it put them
on the spot, and put competitors on notice at the
same time. The manufacturing men felt consumers
could see and taste the difference without being hit
over the head with a slogan. They sought quality for
its o~vn sake, not for the sake of making claims.
Rightly or ~Tongly, they felt the product could sell
itself.
125
T!56850131
In any event, the permanent cadre of Ameri-
can Tobacco, the stabilizing core of the operation, is
still the Department of Manufacture (which includes
the Leaf Department). Advertising agencies can
change; new Presidents may br'mg new policies for
sales, for finance, for public relations. But it would be
unthinkable and, indeed, impossible to replace the
leaf buyers and the seasoned factorymen. They make
the product, and the product makes the Company.
Penalties and payout
Looking at all this from the shady canyons of
Wall Street, the security analysts of a cost-cutting
age sometimes register puzzlement. Why, they ask
From the bulking rooms tobacco goes to shredding
machines. Long, slender strands are necessary1 for
smooth smoking, so laboratory samples are taken.
126
The blend of Burley, Bright, Maryland and T~rlc~sh
tobaccos stands in great cubes :for ~$ hours. This
"bulking" permits essential oils to intermingle.
Treasurer Harry Hilyard, is American's workforce
almost 60% larger than any other in the industry
although its unit cigarette production is only 24%
or 25% greater than the next largest company? The
answer is threefold: first, plant diversification among
four major centers quadruples some of the overhead;
second, the Company is more fully integrated than
most of its rivals, all the way down to its own produc-
tion of tobacco sacks (by Golden Belt Manufacturing
Company, a subsidiary) and the growing of its own
domestic cigar wrapper (by Hatheway-Steane Cor-
poration, another subsidiary). And third, the factory
routine is kept more elaborate: in addition to the
"catcher," who watches the output of each cigarette
Flavored, blended and shredded, the mixture now goes
into "saratogas'" for another intermingling ~er~od.
Electronic meters register leafs moisture content.
T1568b0132
Machines turn out "endless" cigarette which is cut
to length after paper ribbon ~s folded, filled and
printed w~th brand mark. Catcher loads dgarettes.
maker, each machine has its own operator. Some
manufacturers employ only one operator for every
two machines. When a young researcher from the
Richmond lab told Vice President Crowe he had
found a way to save $100,000 a year in manufactur-
ing, he got a level stare and this answer: "Young man,
you stick to quality mad let us worry about the
money."
As recently as 1951, a financial editor de-
scribed this attitude as a "fetish of quality." At first,
recalls Hilyard, the Board of Directors resented the
remark. Later, however, they realized it was a com-
pliment and even used it in TV commercials for
Lucky Strike,
In manufacturing, to be sure, the Company
incurs what business journalists call the "penalty of
leadership." It was the first to make and package
cigarettes on the same floor (in Brooklyn) the better
to preserve freshness in the cigarettes. After years of
trial and error (and expense), the Richmond lab
turned out the automatic smoking machine now used
by researchers in the rest of the industry. In the long
run the quality fetish pays out.
One place where it pays out is in advertising
expense. Madison Avenue's admen are likely to think
in terms of total dollar expenditures. Since War II,
however, the Company's dollar costs in this area have
not been the industry's greatest, although its unit
While catcher picks imperfect tubes from her tray,
inspectress with scales weighs a counted number of
finished cigarettes. Little variation is permitted.
Electric weigh station checks s~ngle cigarettes as
well as counted groups. Packing must be loose for
smooth drawing, tight enough to avoid air pockets.
127
T!56850133
Samples from all production centers go to Richmond
laboratory for quality control tests. Cigarettes
are tumbled in cylinder to ehecI~ on "'loose ends."
Every lot of c~garette paper is sampled before it
enters production stream. This machine spots flaws
and another measures strength or "breaking point."
To doublecheck factory moisture meters, tobacco is
weighed, heated dry ~n this oven and weighed again.
Difference is accurate measure of moisture content.
volume and dollar receipts have been. In other words,
the Company spends far less to advertise each thous-
and cigarettes than any of its four rivals-actually,
the unit ad cost has been only slightly more than
the industry average over the last fifteen years.
Shareholders who raise the question of advertising
millions are surprised to learn that they reduce to
about one-third of a cent per pack (the Federal excise
tax alone being 8c as this is written).
The Hahn school
The particular man who best symbolizes the
Company's particular people is President Paul Hahn,
who also reflects the changed temper of the times.
Unlike Hill, who followed the pattern of one-man rule
established by the early captains of industry, Hahn
is of the committee school of management. His
is a rule of reason, of consultation, of calculated
rather than spur-of-the-moment decision. Remark-
ably enough, the Hahn brand of management
strengthened even while George Hill was alive, for
Hahn was the brain behind the rise of Pall Mall, now
challenging I.~eky Strike and Cared fo~" the No. 1
spot among all brands. Hahn, perhaps, has typified
the Company's basic management longer than his
tenure as President (since early 1950) might suggest:
he conducted stockholder meetings not only for Hill
but for Vincent Riggio. Without any fanfare, Hahn
has come to be the leader of the tobacco industry as
well. In 1951 he broke a long manufacturers' silence-
dating from the 1941 Battle of Lexington-to tell the
National Association of Tobacco Distributors that
"it's not enough to be right-you've also got to/oo/~
right." And late in 1953, when a few scientists were
publicizing skin cancer in mice as having some bear-
ing on lung cancer in humans, Hahn was first to speak
out in defense of smoking. "With all respect to the
sincerity of those who have been working in the field
•.. there has been much loose talk on the subject...
no one has yet proved that lung cancer in any human
being is directly traceable to tobacco or to its product
in any form..." His stand led the press to treat the
sensational announcements as the allegations they
were; scientists whose experiments had given cigar-
ette smoke a clean bill of health began to see their
findings publicized also. The upshot of the science
scare was organization of the Tobacco Industry Re-
128
TI56850134
How to prove to
yourself Luck[es are
made better--to taste
cleaner, fresher, smoother
Str~p thl paper f~o= g Lecky by care.
~ully tearing down the s~a~z frot~ e~d
to end. ~e rote it's from a newly opened
pack, an~t that you don't dig h~to the
tobacco. Then gently llft out the
fler~'s why Luskigs taste clea~er: You
can see that Luckle~ hold to~other with-
out cz~mblbzg-wlthout J~e ~ to ~et
in yv~ mo~th a~d ~il the ~te. L~
S~e r~ a ~ ~I~ of cl~n
~-~un~ ~ and ~lly ~
Here's why Luckies taste fresher:
I~'ote hOW free Luckles are fro~ir
space~-tho~ "hot ~t~" that give y~ a
~, s~le ta~. Lu~i~' long stra~ of
fr~ 8~ng t~o give ~ou a
Here's why Lucldes t~sta zm~tker.
L.SJM.F.T.I.~cky Strike meart~ fine
tobacco-fine, light, natul~lly mild
tobacco. So, for o smoke that's de~ner,
fief-r, ~'noo~'her, for tobacco thaea truly
mil~, for a cigarette that ta~te~ better...
make your next carton Lucky Strike|
FOR A CLEANER, FRESHER, SMOOTHER SMOKE...
Translation of laboratory facts into interesting
copy ie a major advertising problem. Each element
~n this 1958 layout traces to a specific stage ~n
the quality control routine-the tumble test for
loose ends; strand length control to avoid any air
2~ockets; pre-~narket analysis to ~nsure ~urchase of
light, ~nild leaf. Strip test to prove "round, firm
and fully packed" claim is latter-day outgrowth of
George Hill's "selling principle of demonstration,"
~s used by salesmen as a~ aTd ~n direct sampling.
I29
TI56850135
~5
~5
"2,5
I"5
Financial progress, #ore the point of view of the
common stockholder, is traced by chart o] tangible
bool¢ val~s per common share. (Asset valuations o]
trademarlcs and goodwill are deducted throughout.)
Sudden dip in 19~0 came with issuance o] new class
of B Common, diluting equity; 1935 dip was result
of commuting brand lease of Tobacco Products Corp.,
a move involving outright purchase of Melachrino
and Herbert Tareyto~ brands, thereby reducing cash.
Assets are mainly stored lea], plant and capital.
search Committee, the industry's first associative
effort. Significantly, it was Hahn who chairmanned
the first few months' meetings, beginning in Decem-
ber of 1958. Significant, too, was the fact that Hahn's
own move was no last-ditch public-relations gambit:
in previous years, the Company had contributed
heavily to basic research through the Medical Coll-
ege of Virginia, the Damon Runyon Fund, the
University of Chicago, and other leading institutions.
Under Hahn, too, the Company's stockholder
relations took on a new look. During Hill's brusque
regime, complaints about "too much incentive com-
pensation" for executives were frequent. But in 1950
and again in 1951, voluntary cuts in the top-level
rates were made: Hahn himself receives less pay as
President than he did as Vice President.
Except for the leaf and manufacturing men,
Hahn's executives are almost interchangeable. Vice
President Harvey, who as chief of sales is completing
the regeneration of the field forces, was moved to his
present post from Treasurer. Treasurer Har~- Hil-
yard once was sales manager for the west-of-Detroit
area. Purchasing Vice President Richard J. Boylan
has worked in the legal department and as Secr~
¢ary. Director Alfred Bowden, who once worked for
Charlie Perm, has been assistant to three Presidents-
130
T1568~50136
Hill, Riggio and Hahn. And James Coon, Vice
President and Comptroller, has come up through
several departments. As custodian of the Company's
accounting and financial records, Coon has carried
the guiding principle of diversification even into his
department: a ghost office is maintained in Trenton
against the possibility of any inten~ption in Ne~v
York operations. All operations except for final cost
accounting can be transferred to New Jersey in a
single day, so that collections and disbursements need
not stop in an emergency.
The older men are partly teachers, partly
decision-makers. In addition to building a corps of
young salesmen to nurture the Company's growing
volume, E. A. Harvey is training young sales execu-
tives to handle them. The same is true of other
seasoned executives. William Ogsbury, a veteran of
the old Tobacco Products organization, is considered
to be one of the country's best cigarette men. His
work as assistant chief of manufacture takes him
and his know-how to all four cigarette centers. John
Hutchings, an American Suppliers Vice President and
one of the oldest leaf men in point of service, can take
a ra~v recruit who doesn't k-now a B Grade from a
btfll's foot and make a good buyer out of him. In this
respect., the senior executives' nicknames are reveal-
ing-in his day Lipscomb was called "Uncle Jim,"
and Preston Fowler, Vice President in charge of
manufacture, is now referred to as "Daddy Fowler."
Their post~ar efforts to develop young executives
have made the management two or three deep at
every position, perhaps for the first time in the
Company's history.
Under Coon's comptrollership, with A. Leroy
Janson as Auditor, the Company's accounting and
capital structure have been modernized. (Even the
by-laws were re~Titten under him: the originals, for
instance, made no provision for rescheduling a direc-
tors' meeting which falls on a holiday. And they
provided a penalty of $20 for any "violation of ethics"
by a director!) In recent years, the most obvious
change has been elimination of non-voting B common
stock. Such issues were "common" during the great
business expansion before War I, but are undemo-
cratic in the age of the small stockholder. The
practise of charging interest on stored tobacco leaf
to the cost of production was also discontinued. This
practise had the effect of inflating the dollar value
of the finished goods inventory-by $1.2 million the
year before it was eliminated.
The most dramatic change, however, revolved
around the controversial item of "brand goodwill."
Most of the subsidiaries acquired by Duke were
bought for their brands, which were carried at
$101,324,964.07 in the last year of the combination.
After the trust's dissolution, other items were added:
F~nanc~al o~cers include V~ce President James R.
Coon (left), under whom Company account~zg practice
was modernized; A. LeRoy Janson, Auditor; and Harry
L. H{Iyard, Treasurer. Each man is also a d{rector.
131
T!568~0137
Herbert Tareyton cigarettes are eork-tipped by an
attachment to the standard making machine. Unlike
many rivals, Tareyton has always used genuine cork.
Hopper of pact¢aging machine permits last onceover
before packs are sealed. Machine itself, however,
throws out packs containing imperfect cigarettes.
at the end of 1918, the Lucky ~trike and Tuxedo
brands, along with sixteen others acquired from the
Patterson Company, were carried at $594,025.88; the
Butler brands, including Pall Mall, Omar, Lord Salis-
bury, Sovereign, Egyptienne Straigh~ and thirty-four
others, were book-valued at $364,249.67.
In 1918 the U. S. Government, for the purpose
of determining excess profits tax liability, computed
the Company's goodwill at $138,826,000. By 1947
the total appeared on the balance sheet as $54,099,-
430.40, although the market price of common stock
outstanding reflected a $187 million valuation of the
intangibles. The $54 million items, which dated hack
to the brand-buying days before 1911, did not include
the twenty-year investment in building the fame of
Lucky Strike. This was not capitalized hut charged
to current expenses year by year. Since the $54 million
was unrealistic, and since computation of a new
figure would be difficult if not impossible, the only
solution was to list the value of "brands, trademarks,
patents, goodwill, etc." at $1. Hill would never hear
of any such "writing down," and it was not until
June 1950, just after Paul Hahn became president,
that the write-off was effected.
Inside board
Any decision made in the corporation's name,
whether it concerns the marketing of a new cigarette
Each score of smokes is sealed with a layer of .foil
laminated to paper, a printed label, and a sheath
of moisture-proof cellophane. Stamp helps seal top.
Insertion of packages ten to a carton also permits
v~sual inspection. Five cartons containing 1,000
cigarettes comprise the sales unit within the trade.
132
T156850138
Electronic searcher closes perfect cartons, stops
automatically if carton contains less than ten full
packages or if aluminum foil is missing from any.
Packing machine counts fifty cartons, pushes them
into a cardboard case. Operator's only function is
to feed a steady supply of cases into his machine.
or, sometimes, the reply to a stockholder's question,
is likely to represent the considered judgment of the
management group rather than an individual execu-
tive's bright idea. One reason is that American To-
bacco has an "inside board"-all its directors are men
actually engaged in the Company's business. In
effect, these directors meet every day, since they
normally dine together in an uptown room reserved
for them. Like Hahn, they abhor decisions based on
mere expediency. During the "double squeeze" of the
Korean War years, when the rising cost of leaf could
not be recovered in retail prices, the obvious tempta-
tion was to cut the dividend to provide working cash
and keep the bank loans down. But Hilyard recalls
the board was reluctant to cut the cash payments
even if stock dividends were substituted: such a move,
said the Treasurer, "would be cramming financing
down the throats" of the more than 80,000 stock-
holders. Their stand had its reward on March 5, 1952,
when $100 million-half in common stock, half in
debentures-was raised on the securities markets.
Fully 97% of the new common was bought by the
offering time, and the remainder snapped up on the
exchange in a few minutes.
Despite the squeeze, the Company's leaf
mortgage has been whittled steadily. In 1944, with
product prices frozen solid and leaf up 130% from
prewar levels, debt (both funded and short-term)
Before cases are sealed, a machine weighs each one
and records it. Flashing red light indicates a case
of non-standard weight, which is removed from line.
Sealed cases, each containing 10,000 cigarettes, go
literally to the ends of the earth. Cigarettes are
probably the world's most widely distributed goods.
133
TI56850139
Sleeping tobacco, in storage sheds like these near
Reidsville, North Carolina, are American Tobacco's
most valuable assets in more ways than one. Dollar
value of Company's leaf inventory as of December 81,
1958 was about ~600 million. To hold it all, there
were ~$9 storage buildings near the factory cities.
amounted to 72.4% of inventory. In ten years it has
been whittled to 49.9% of inventory, against the
up,yard trend shown by the rest of the industry.
Parh'cular President
The election of Paul Hahn marked off a new
era for the Company if not, indeed, for the industry
as a whole. Unlike his predecessors ~Iahn had not
begun as a salesman; he was one of a new breed, the
whole man of management, qualified to tie the work
of many specialists into a single corporate effort.
Unlike Buck Duke, he had more than sales volume
to worry about; unlike George Hill, he could not con-
cent-rate almost wholly on the advertising program.
Like the chief executives of other billion-dollar cor-
porations (a category the Company reached in 1952),
Hahn performs a balancing act, mediating the inter-
ests of the public, the employees, the stockholders.
The corporation of Duke's day had heeu a private
enterprise in the narrow sense of that term; today's
corporation is a public institution in every one of its
aspects-except, naturally, for the "trade secrets" of
blending and selling techniques.
Hahn's first year-end letter, appearing in
the annual report for 1950, announced new policies
in sales and advertising. The sales force was to be
expanded further. The "Be Happy-Go Lucky"
theme, used previously by the Company, was again
introduced into the advertising. To oversee the sales
recruitment Edmund Harvey, the veteran trouble
shooter, was moved from Treasurer to ¥ice President
for sales.
The new pipeline to the public was not simply
a new slogan or a new pitch, although that was part
of it. It involved a reshuffling of media so as to really
cover the national waterfront. Hill had emphasized
radio as superseding print media-which it did, to
some extent. But it was his custom to run his print
campaigns "in event English-language daily" (except
for trade papers and the like). At one point there
134
T1568b0140
were over lfiO0 of thee on the Luel:g Seril:e list.
This aea'oss-the-board method, however, gave rela-
tively light coverage of mrs1 and semi-rural popula-
tion, which is still reflected in the Company's
sales of certain products. During the Second World
War, Hill pulled out of papem and magazines almost
completely, refusing to compete with war news for
public attention.
After V-3 Day, television loomed ~ the giant
medium of the future. Here Lucky Strike vied
its own running mate; the Company's flint full-
fledged television program* was "The Big Story," a
sales vehicle for Pall MaE cigarettes inaugurated in
1949. In 1950 a permanent Lucky Strike TV show got
under way with "Your L~.cky S~:rike Theatre," pro-
duced by Robe~ Montgomery. (In 1954 this hour was
renamed "The American Tobacco Theatre.")
In the second yea~' of Hahn's presidency, the
overall ad prod'am was "rationalized." The profusion
of "spots" for Ludcy S~rike commercials was dropped;
in their place the advertising department sought to
emphasize progTams appealing to every taste-the
Montgomery show for those partial to serious drama,
the televised Hit Parade for everybody, Clifton Fadi-
mm~'s "This is Show Business" for light listening.
Later the Fadiman show was replaced by Ann
Sothern in "Private Secretary," a situation comedy,
and by Jack Benny, the perennial thirty-nine-year-
old who is, perhaps, broadcasting's most entrenched
comedian. As TV stations sprang up and the FTC's
"freeze" on ultra-high-frequency licenses was thawed
in 1953, these programs approached saturation cover-
age: by the end of 1954, ~ideo stations were expected
to cover more than 90% of the national market.
On the print side of the program (now account-
ing for about a quarter of the ad budget), the former
long list of publications g~ve way to a more selective
schedule designed, like the TV effort, to leave no
gaps in coverage. Farm papem were used to reach the
grassroots; the women's market, reached by the new
food store magazines, got u bigger play than before.
The ~eat mass circulation weeklies, rather than the
*Technically, Lucky Strike got in the first TV lick with
sponsorship of big-time college football telecasts in 1947,
followed by "Barney Blake, Police Reporter" in 1948.
But Barney was never fully fledged, being taken off the
air after only thirteen weeks.
As network television spread, advertising budgets
changed drastically. Mos~ funds now go into ~ideo.
Pall Mall's "'Big Story" is a carryover from radio.
Reaching all kinds of people requires several k.~nds
of program. The America~ Tobacco Theatre, yroduced
by Rober$ Montgomery, str.~kes serious dramatic note.
Jack, Benny (left), the veteran radio comic, performs
currently on television as well. Over the years he
has been very closely associated with Luc~:y Strike.
135
T!56850141
But Your Hit Parade, which presents each week's top
Sunes as gorgeous "production numbers," remains the
program most closely identified with Lucky Strike.
This Hit Parade ~rogram was ~roduced with an eye to
color TV. The "bullseye box" from which Dorothy
Collins sings commercials will a$year much changed
to viewers accustomed to black-and-white (below).
prewar assortment of magazines by the dozen,
formed the core of the new print schedule. Special
attempts were made to reach special groups outside
their audiences: radio messages and placards in
Spanish for the Southwest's border folk, special ads
for other groups.
Era of good feeling
Through all this ran the new "Be Happy-Go
Lucky" motif, intended to replace the old triphammer
blows with a pleasant feeling. Oddly enough, Hahn's
early work for the Company had involved the defense
of its advertising against the Federal Trade Commis-
sion. As late as 1951, Hahn announced that the use
of 'qess nicotine" as an advertising theme for Lucky
Strike had been prohibited although "This fact was
established by laboratory reports of chemical analy-
ses, including one by the chemist for the U. S.
Food and Drug Administration. The Commission did
not deny this fact in its findings but concluded on
the basis of conflicting expert testimony that this fact
was not significant." (Suppression of the advertising
theme did not, however, change the Manufacturing
Department's target for nicotine content, which is
still controlled.)
But it was part of Hahn's job in the new post-
war climate of business-under-Government to recon-
cile sales policy with government relations as well as
public relations. His advertising, keynoted by Dor-
othy Collins' wholesome and happy-go-luck~ smile,
was based on good taste in more ways than one.
Factory facts confirmed the continuing emphasis on
carefully controlled production; "better taste" and
"it's all a matter of taste" were the central appeals,
springing from that emphasis; and Hahn's own good
taste, his refusal to match the extravagant claims of
rivals, made American Tobacco the bellwether of a
general drift away from the themes of the old
campaigners.
And the old campaigners themselves were
going. Riggio, seriousIy ill, could not continue as
board Chairman and retired in January of 1951. In
May of the same year the old prewar Lucky Slrike
triumvirate of Hill, Neiley and Lipscomb lost its last
Emphasis on taste distinguishes recent advertising
for Luc~:y Strike cigarettes (right). Testimonia~
are taken only .from actual smokers of the brand.
136
T156850142
IT'S ALL A MATTER OF TASTE
CORN SILK, CUBEBS and MY
MOST CONSTANT COMPANION
~ H. ALLEN SMITH
zluthor and Humorist
I have changed my brand of cigarettes
~ i twice. I started with fine Illinois corn
• .'i silk wrapped in the most delicate
... newsprint. Before long I switched to
cubebs. I went from cubehs straight
to Lucky Strikes. It was so long ago
that I can't remember the year. I do
know that Luckles have been my
constant companion longer than my
wife, and we've been married 26 years.
"i'~ Since that first day with Luckies,
:.: I have switched jobs, razors, dentists,
f~ automobiles, phone numbers, and my
i" stance on the tee. My taste in books,
ties, food, music and even friends has
... changed, yet my taste for Luckies has
remained constant. To me, they just
taste better.
~. It is foolish to say that a man who
~ . is dedicated to one brand of cigarettes
never gives the other brands a chance.
There are occasions when a Lucky
• . smoker, for reasons of war, financial
embarrassment, pure hunger or the
requirements of etiquette, must smoke
other cigarettes. I have smoked them
all. But not for long. What I like best
is what tastes best. You know what.
Lucky Strike Sums Up
To smokers everywhere, Luckies taste
better.., and two facts explain why.
In the first place, L,S./M.F.T.--Lucky
Strike means fine tobacco. Then, too,
Luckies are made better to taste better
--to draw freely and smoke evenly.
So, Be Happy--Go Lucky. Remem-
ber, Luckies are made by The Amer-
ican Tobacco Company, America's
leading manufacturer of cigarettes.
LUCKIES TASTE
BETTER
~NER,
FRESHER,
SMO OTHER !
137
|
T156850143
Good News for Filter Tip Smokers!
Presentin~
Herbert Tareyton
with the New Selective* Filter
and famous Tareyton quality
for real filtration a~dsr~oki~g satisfactio~
NOW 2 WAYS
ilere, at lust, is everything ~u've been looking for in a fihcr cllzarettc-
the r~l fik~adnn ~'uu warn. and tl~e fiflt, rich m~sc ~d fine t~haccnfl~al m~kt~
sm~,k[oz ~o cnjo)~le.
Tarc~aon~ new ~lectlw* F~Iter Ires unusual p~wcn ot ~ele~i~ty whleh
bold back clem~nts daat t~ detect ftota fl~c pl~ure of sm(}kin~. At the
mine time, the ~mooth. t~y~wing l~rt'ylon F~her l~rm~ dm full-b~dled
flavor of Tare~'mn~ qu~liq" tobacco m c.me fi~rough to you h~r your
pl~c ~mekinff enioynmnr.
Look tor dm red. ~hhe and blue stdp~ on d~e packaffe. They [dendfy
the b~t in filre¢~ smoking- Filter Tip Herbert Tarcyt-n. Ihe ciffaNtte wilh
a dme-hmmrcd relmmdon for quality ll~b~cctl and the only filter
x~'hb a genuine cmk
A SUPERIOR FILTER AT A POPULAR FILTER PRICE
The Herbert Tareyton Selective Filter Tip was wholly new, but tke dgarette itself kep~ to an old
essential-fine tobacco.
138
T1568b0144
Administrators ~nclude Alfred F. Bowden, assistant
to three successive Presidents (left), Charles Ganshow,
long with the A,nerican Cigarette and Cigar Company
(center). Thomas P. Connors is Director of Tra~c.
survivor as Jim Lipscomb died, to be succeeded by
James F. Strickland as President of American
Suppliers.
Matters of taste
During the next two years, the example set by
Pall Mall and Tareyton revolutionized the cigarette
industry. In 1953, standard-length cigarettes retained
only 70% of the market; Lucky Strike, Camel and
Chesterfield now had a 55% combined share and even
the top five standards (with Philip Morris and Old
Gold added) had only 67%. Still, the Company's all-
around position was better than it had ever been.
Lu~#y Strike had a firm grasp on second place, with
Pall Mall threatening to take over the No. 3 spot
and the cork-tipped Tareyton up to seventh place.
Altogether American's three brands combined sold
more cigarettes than the 1940 total of Lucky Strike,
Cain.el, Chesterfi.eld and Philip Morris.
Although cigarettes generally tapered off
slightly from the record 435,000,000,000 of 1952, the
prospects were far from cloudy. In its 1954 Outlook
Issue, the U. S. Department of Agriculture pointed
out that "the number in the age brackets that com-
pose the cigarette market is ... increasing at an
average of about 12 per cent per year." In this
smoking-age group, President Hahn told a special
meeting of stockholders, there were 113,000,000 per-
sons. And, the study estimated, "on the basis of
population projections for 1960, there should be
roughly 125,000,000 potential smokers by then."
Would their taste be significantly different
from 1953 preferences? The filter-tipped cigarette
seemed on the wax, its sales jumping from 1% of the
total in 1952 to 3% the following year. Snorted a
veteran tobaccoman, one of the Company's chief
rivals: "Some folks will spoil good Bourbon with
water, and some folks want filtem." If the popular
taste was there, American Tobacco would satisfy it.
But Hahn and his 19,000 associates were particular
about how they would satisfy it. The public demand,
said the President, would have to be large enough to
justify a venture into the new market; even more
important, American's filter-tip would have to do an
efficient job of filtration and not only that, but would
have to do it without impairing the taste or flavor of
the tobacco. These conditions amounted to a large
order, and the Company refused, as ahvays, to hunt
its preparations at the expense of the final result. (In
other departments, hurry was no worry: before com-
mercial production of color television sets was under
way, Pall Mall had a full commercial filmed in color
-among the first of any national brand in any
industry.)
When the new brand broke, in August of 1954,
it was really something new. As the announcement
139
T!56850145
Reward Yourself
Pall Mall red, a bright scarlet which distinguishes
all its promotion, is fastidiously reproduced in the
brand's advertising. To do this, Pall Mall uses
color magazine art instead of the usual .four-color.
140
l
TI56850146
With lull color television in the o2~ng, Pall Mall
in I958 turned out one of the first commercials on
color film. As tMs is written, color TV technique
does not permit the .faithful transmission o.f filmed
acgon in color. A blacl¢ version o.f the commercial,
however, appeared regularly on network TV in 1958.
explained, the Filter Tip Herberl Tareyton introduced
a new concept in cigarette filtration. Mechanical filters
hitherto on the market removed some of the solid or
liquid particles from the cigarette smoke, but no sig-
nificant proportion of the invisible gaseous elements.
Tareyton's Selective Filter Tip used purified
cellulose to reduce passage of smoke solids to a pre-
determined level, without interfering with the passage
of essential tobacco flavor. But in addition the tip
contained a filtering substance to adsorb the gaseous
constituents. The substance-activated charcoal-has
long been used throughout the world to purify water,
air, sugar, beverages and pharmaceuticals, is now
considered the foremost purifier.
The Filter Tip Tareyton was perhaps the most
dramatic single achievement in the Company's 25-
year research on the composition of tobacco smoke.
Before Amer~n Tobacco's announcement of August
2, the public had scarcely realized that there were two
broad classifications of compounds in cigarette smoke:
the smoke solids-25,000,000,000 particles in a single
puff-containing taste and flavor elements, includ-
ing nicotine and the mixture often inaccurately called
"tars"; and the invisible gases containing little or
none of the taste and flavor elements. The "preferen-
tial removal" of the invisible gases was the unique,
if not the only, feature of the new product.
The filter per se did not change the basic leaf
requirements; if anything, quality became doubly
important. As the press release noted, "The tobacco
in filtered cigarettes must be specially chosen for
quality, flavor and aroma; otherwise the smoke, after
filtration, will be deficient in taste."
At the close of 1953, the corporate structure
14/
TI56850147
was simplified by merging Hahn's old subsidiary,
American Cigarette and Cigar, with the parent Com-
pany. Shortly afterward the cigar end of the business
was streamlined by Charles Ganshow, as the old
HemT Clay and Beck & Co., Ltd. was merged into
Cuban Tobacco, along with The Havana Cigar and
Tobacco Factories, Ltd. Saleswise, too, the cigar line
was being streamlined. A. Gordon Findlay, who
supervised clear Havana sales for American Cigarette
and Cigar, took charge of all dgar sales for American
Tobacco. The year before the Domestic Cigar Sales
Department had started an ex~ Eastern push for
Roi-Tan, ah'eady the nation's No. 1 ]0c cigar: and
Chancellor, in a new green box, began to appear in
test markets.
Publication of the 1953 annual report on
March 1, 1954 proved the wisdom of being particular.
The Company's increase in net income from opera-
tions-S5,368,000 over 1952-was greater than the
combined increases registered by the three rivals
which had been spun off from the combination forty-
two years before. The Korean War price ceiling had
been lifted in February of 1953, and American To-
bacco's price increases had been characteristically
modest. Lucky Strike was up-priced by 38c to $7.94
per thousand, as were all standard-length cigarettes;
but Pall Mall m~d Tareyton were priced only slightly
higher at $8.03 per thousand to jobbers, while most
of their king-size rivals were lifted to $8.25. Adher-
ence to the old formula-high quality plus low prices
BILLION~ OF CISARETTES
I00
5O
Rise t:f th¢ Company's king-sized brands, Pall Mall
and Herbert Tareyton, increased its share of total
cigarette production .from ~3.5% in I939 to nearly
1930 19~# 1950
32% in 1953. lncreasi~.fl cigarette use is traced by
sales o.f American Tobacco units (solid line} and
production by the rest of lhe ~ndustry (dotted line).
142
TI568~0148
For half a century, from James Duke to Paul Hahn,
American Tobacco's New Yort~ o.~ces have been in
the Constable Building, II1 Fi.fth Avenue. The, old
address has even named a brand-"111" cigarettes.
Early ~n the second half-century, headquarters will
move into this new skyscraper at Lexington Avenue
and $~nd Street. On each of the seven floors to be
occupied there will be room]or an expansion of ~5%.
to give maximum volume-would have gladdened the
hea~ of Buck Duke hh-nself.
Things were looking up, too, on the legislative
front. True, excise taxes on cigarettes did not share
in the reductions of April 1, 1954; at 8c per pack,
they represented $4.00 of the $7.94 price to jobbers.
But the U. S. Treasury encouraged hopes for an end
to the prepayment system under which tax stamps
had to be paid in advance. Financing these stamps
involved tying up $60 million in cash throughout the
year. Under the postpayment procedure used in vir-
tually all other industries, the Company would save
the interest cost on tied-up funds, approximately
$1.8 million a year. Enabling legislation was passed
in 1954, permitting weekly or monthly postpayment
to begin the year following.
Before the first half-century was finished,
Hahn had arranged another departure for American
Tobacco. A leasing agreement was signed for seven
floors in New York's newest skyscraper, to rise at
Lexington Avenue and 42rid Street. Sometime in 1955
or 1956, the old 111 Fifth Avenue address, once the
city's finest, would be left behind. When J. B. Duke
left his office in the building, the Company had sold
102,000,000,000 cigarettes. Seventy years after the
first Bonsacks were installed in the Durham factory
of $~r. Duke Sons & Company, the total had passed
2,300,000,000,000. What figure would the second
half-century of American Tobacco bring?
One clause in the new headquarters lease
revealed Paul Hahn's expectations. The American
Tobacco Company was to occupy more space than
it needed on each floor-enough for a 25% expansion
in every department.
143
T156850149
PICTURE CREDITS
3--'~£obacco,'' Thomas Hart Benin
8-Brown Bros. (2)
9.-Culver (4)
t0--Culver (lower left)
tl -Brown Bros., Culver, Culver
12-Culver
13--Culver (2)
14-Culver
16--Culver
20-Culver (upper lef¢, lower left)
24-Culver
26-Culver
27-..Brown Bros. (upper left, upper right)
C~lver (lower left, lower center, lower right)
33-Culver (upper left)
Brown Bros. (lower left, upper right)
38--Brown Bros. (lower left)
Culver (3)
39--Brown Bros, (3)
40--Brown Bros.
41--Brown Bros. (lower left)
Culver (lower center)
44--Brown Bros. (2)
52--Culver (upper left)
55--Culver (upper right)
Brown Bros. (lower right)
60--Culver (3)
61--Culver (upper right)
Brown Bros. (lower right)
62-Culver (3)
63--American Machine & Foundry (top)
82--Wicle World (lower left)
84--Culver (upper left)
Brown Bros. (lower left)
85MCu~ver
86--Brown B~os.
92-Brown Bros. (2)
95--O1in Industries (upper right~
Culver (lower right)
98--Karsh
102-Culver (3)
103-Brown Bros. (3)
108--Brown Bros. (3)
107--Culver (top, lower left)
Brown Bros. (lower right)
111--Standard Oit Company (New Jersey)
ll6--Brown Bros. (upper left)
118--"Outs~de the Curing Barn," Thomas Hart Benton
119~"Tobacco Talk," James Chapin
T1568b0150
6L9
---
"When I set out my crop and work
al- it and do my part, I feel if the
Lord wants me to have a good
crop, I'm going to have it. That's
the way.l feel about it, and that's
the way t try to farm it and try
to believe'.'
--a 60 year old Carolina farmer
$1Z95
TI56850153
Photographs by Med[ord Taylor
Pamela Barefoot and Bur~
Kornegay are first cousins from
Johnston County, North Carolina.
Their tobacco farming lineage
goes back to a great grandfather
who grew the plant in the nine-
teenth century.
T15685015.'
---
Ti56850156
TOBACCO INSTITUTE LIBRARY
T!58850157
TOBACCO INSTITUTE LIBRARY.
MULES&
MEMORIES
A PHOTO DOCUMENTARY
OF THE TOBACCO FARMER
T!56850158
Ti56850159
J.C Perry, Georgia
"Before I got old enough to raise tobacco on my own, I helped other
people raise it. After that I sharecropped for two or three years. Then
I rented. I bought this farm in 1936.
"Back then I was young and afraid of a debt. So I didn't grow
any more tobacco than I could work myself. I still use the old way.s
mostly, though I'm growing more tobacco than before.
"There ain't no cheap way to farm anymore. A one-horse farm
just cain't take care of you. If you ain't able to expand and have a
big operation, you just cain't make it. But I've got the country in my
blood. I don't want to move in close to people. I love to go to town:
but I want to go to the country to go home.
"1 couldn't have made a living without my tobacco. Oh, I might
have existed~ but I wouldn't have fixed my house up, orsent six of my
ten children to college. I want to credit tobacco with that, and I'm
telling the truth when I say it.
"Believe it or not, when I was growing up, if a child waswormy,
our doctor put him on chewing tobacco! I don't know whether it
helped or not, but that skinny, wobbly-kneed kid would go to fattening
up. And now he's most likely a healthy, grown man, and still chewing!
"1 ain't never knowed that much about pleasure, not even yet.
But having to work hard, now, I know about that'.'
T156850160
TOBACCO INSTITUTE LIBRARY
MULES&
MEMORIES
A PHOTO DOCUMENTARY
OF THE TOBACCO FARMER
PHOTOGRAPHS AND INTERVIEWS BY
PAMELA BAREFOOT
CHAPTER INTRODUCTIONS BY BURT KORNEGAY
Distributed by.John F. Blair, Publisher,
Winston-Salem, North Carolina
TI56850161
Dedicated to the American tobacco farmer
Jacket and Book Design by Bruce W. Smith
Printed by W.M. Brown & Son, Richmond, Virginia
Distributed by John F. Blair, Publisher 1406 Plaza Drive
Wlnston-Salem, North Carolina 27103
Copyright @ 1978 by Barefoot Produdions
First Edition Library of Congress Catalogue Card Number 78-72529
ISBN 0-9602024-0-4
All rights reserved.
No part of this book may be reproduced in any form
w!thout written permission from the publisher.
All quotes in this book come from the farmers, though quotes and
pholographs do no: necessarily coincide.
T156850162
CONTENTS
Acknowledgments 8
Governor, s Letter 9
Tothe Reader 10
Bornh Bred in My Bones 14
The Thirteen Month Crop 38
The Markers No Place fora Woman
Mules&Memories 84
I Likes My Own Ideas 104
TOBACCO TERMINOLOGY 126
66
T156850163
633.7
633.7
B
Mules
and Memories
DATE ISSUED TO
Tobacco Institute Library
T156850164
