What is the history of the Duke University Tobacco Company?
History. The Duke business was incorporated as the American Tobacco Company in 1890, and was the largest tobacco company in the world until an antitrust suit broke it up in 1911. In 1931, the farm was purchased by Duke University, and in 1966, the Duke Homestead was designated a National Historic Landmark by the National Park Service.
Who founded the American Tobacco Company in 1890?
The American Tobacco Company, one of the first giant holding companies in American industry, was incorporated in North Carolina on 31 Jan. 1890 by James B. Duke. Duke's father, Washington, had become a successful small manufacturer of tobacco after the Civil War.
What companies are part of American Tobacco?
The five constituent companies of American Tobacco: W. Duke & Sons, Allen & Ginter, W.S. Kimball & Company, Kinney Tobacco, and Goodwin & Company – produced 90% of the cigarettes made in 1890, the first year the American Tobacco Company was listed on the NYSE.
Who was the leading manufacturer of tobacco in Durham?
The leading manufacturer of smoking tobacco in Durham at the time was the William T. Blackwell Company, with its famous Bull Durham label. The sales of W. Duke, Sons and Company's brand Duke of Durham lagged behind that of Bull Durham.
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How did James Buchanan Duke get rich?
James Buchanan Duke built two massive fortunes, the first in tobacco and the second in hydroelectric generation. With his wealth, he became one of the greatest philanthropists in the history of the Carolinas, perhaps best known today as the patron of Duke University.
How did the Duke family take control of the entire tobacco market?
History of Tobacco Money In 1885, James Buchanan Duke acquired a license to use the first automated cigarette making machine. By 1890, Duke consolidated control of his four major competitors under one corporate entity, the American Tobacco Company, which then held the monopoly in the American cigarette market.
What was the significance of the Duke family tobacco business?
Business career In 1885, James Buchanan Duke acquired a license to use the first automated cigarette making machine (invented by James Albert Bonsack), and by 1890, Duke supplied 40 percent of the American cigarette market (then known as pre-rolled tobacco).
How much is the Duke family worth?
The total value of the estate was estimated variously from $60 - $100 million (equivalent to $927 million to $1.545 billion in 2021), the majority derived from J.B. Duke's holdings in the American Tobacco Company and the precursor of the Duke Power Company.
What company makes Marlboro cigarettes?
Philip Morris International Inc.Philip Morris International Inc. (PMI) is an American multinational tobacco company, with products sold in over 180 countries. The most recognized and best selling product of the company is Marlboro. Philip Morris International is often referred to as one of the companies comprising Big Tobacco.
Who is the owner of British American tobacco?
Reynolds Tobacco Company (R. J. Reynolds), under the R. J.
Where did the Duke family come from?
The family lived on a farm in Orange County, North Carolina in what is today Bahama. Born into modest circumstances, Washington Duke would eventually become a pioneering industrialist and prolific philanthropist. In 1842, Washington Duke married Mary Caroline Clinton and moved onto land given to them by her family.
Who is the founder of Duke?
Duke University was created in 1924 by James Buchanan Duke as a memorial to his father, Washington Duke. The Dukes, a Durham family that built a worldwide financial empire in the manufacture of tobacco products and developed electricity production in the Carolinas, long had been interested in Trinity College.
Where does the last name Duke come from?
Dukes is a patronymic form of the surname Duke that originated in medieval England, of Anglo-Norman origin. The meaning is derived from son or descendant of Duke, which was originally recorded le Duc, a term used to mean "leader" before it became associated with a specific rank of the nobility.
How much money did Doris Duke leave her butler?
Lafferty, whose lack of formal education left him semiliterate but did not blunt his taste for the finer things, became a figure of scorn, suspicion and envy when it was revealed that Miss Duke had left him $5 million and made him a co-executor of her estate for $500,000 a year for life.
What happened to the American Tobacco Company?
In 1908, when the Department of Justice filed suit against the company, 65 companies and 29 individuals were named in the suit. The Supreme Court ordered the company to dissolve in 1911 on the same day that it ordered the Standard Oil Trust to dissolve. The ruling in United States v. American Tobacco Co.
How much money does the Duke Endowment have?
With assets of $5. 9 billion in 2021, the Endowment is one of the nation's largest 501(c)(3) private foundations.
Where did the Duke money come from?
Their father inherited three trusts when he turned 21 in the early 1970s, totaling about $65 million (about $350 million in today's dollars). The largest came from his grandmother Nanaline Duke, who was American Tobacco Company chief James Buchanan “Buck” Duke's second wife.
How much did Doris Duke inherit?
Doris inherited nearly $100 million dollars in assets upon her father's death in 1924. Over the course of her lifetime, she grew her inheritance to over 1 billion dollars. Doris was a prudent and responsible businesswoman, and as such put a plan in place for her legacy long before her death.
Who invented the cigarette-rolling machine?
James A. BonsackJames A. Bonsack completed his design with a complicated blade that cut the cylinder into cigarettes of uniform length. He filed for a patent for his cigarette-rolling machine on 4 September 1880 and received patent number 238,640 on 8 March 1881.
Where did the Duke family come from?
The family lived on a farm in Orange County, North Carolina in what is today Bahama. Born into modest circumstances, Washington Duke would eventually become a pioneering industrialist and prolific philanthropist. In 1842, Washington Duke married Mary Caroline Clinton and moved onto land given to them by her family.
What was Duke's goal in the tobacco industry?
Nonetheless, Duke aimed to eliminate inefficiencies and middlemen through vertical consolidation. The American Tobacco Company began to expand to Great Britain, China, and Japan. The company also maintained an interest in producing other tobacco products in case fads shifted; Duke wanted to be sure that he would be prepared with a multitude of tobacco styles. The Tobacco Trust's international expansion in conjunction with its consolidation of all types of tobacco “ultimately made the Trust so vulnerable to regulation and judicial dissolution”.
What was the name of the company that dominated the tobacco industry?
The company was one of the original 12 members of the Dow Jones Industrial Average in 1896. The American Tobacco Company dominated the industry by acquiring the Lucky Strike Company and over 200 other rival firms. Antitrust action begun in 1907 broke the company into several major companies in 1911.
What is the tobacco trust?
The "Tobacco Trust". Child laborers at American Tobacco Company in Wilmington, Delaware, 1910, photo by Lewis Hine. American Tobacco Company quickly became known as the “Tobacco Trust” upon its founding.
What companies made cigarettes in 1890?
The five constituent companies of American Tobacco: W. Duke & Sons, Allen & Ginter, W.S. Kimball & Company, Kinney Tobacco, and Goodwin & Company – produced 90% of the cigarettes made in 1890, the first year the American Tobacco Company was listed on the NYSE.
What is the ATC in Durham?
In 2004, the previously abandoned American Tobacco Campus (ATC) in Durham was reopened as a complex of offices, shops, and restaurants. Developed by Capitol Broadcasting and reopened as the American Tobacco Historic District, phase 1 consisted of the Fowler, Crowe, Strickland, Reed, and Washington Buildings, and included the construction of two new parking garages and a waterfall feature through the center of the campus designed by Smallwood, Reynolds, Stewart, Stewart of Atlanta, Georgia and constructed by W. P. Law, Inc. based in Lexington, South Carolina. Phase 2, consisting of the remaining buildings and expansion of the water feature at the north end of the site, was under construction as of late 2006. Many office spaces in the ATC are now used by Duke University. It was listed on the National Register of Historic Places in 2000 as the American Tobacco Company Manufacturing Plant. The nearby Watts and Yuille Warehouses were listed in 1984 and the Smith Warehouse in 1985.
Where did the cigarette industry originate?
Origins. James Buchanan Duke, founder. James Buchanan Duke 's entrance into the cigarette industry came about in 1879 when he elected to enter a new business rather than face competition in the shredded pouched smoking tobacco business against the Bull Durham brand, also from Durham, North Carolina.
How much did Duke spend on advertising?
Duke spent $800,000 on advertising in 1889 and lowered his prices, accepting net profits of less than $400,000, forcing his major competitors to lower their prices and, in 1890, join his consortium by the name of the American Tobacco Company.
What tobacco companies were absorbed by Duke?
Duke's newly formed American Tobacco Company (or Trust) encompassed practically all of the small smoking tobacco firms and most of the chewing tobacco producers in the nation. Major firms absorbed in North Carolina included R. J. Reynolds of Winston-Salem, W. T. Blackwell of Durham, and F. R. Penn of Reidsville.
Who made tobacco in Durham?
The leading manufacturer of smoking tobacco in Durham at the time was the William T. Blackwell Company , with its famous Bull Durham label. The sales of W. Duke, Sons and Company's brand Duke of Durham lagged behind that of Bull Durham. James B. Duke, always the visionary, realized the cigarette had great potential for the future if a machine ...
How many acres are there in the Durham tobacco district?
The 14 acres of the American Tobacco Historic District was at the heart of Durham's renewal. By 2004 its massive red-brick buildings had undergone a $200 million renovation financed by Capital Broadcasting Company and was serving as attractive office space for a variety of tenants.
What were the three major tobacco companies in 1911?
On 16 Nov. 1911 the Supreme Court issued a decree that the company had to be divided into three major parts: American Tobacco, Liggett and Myers, and P. Lorillard. The control of R. J. Reynolds Tobacco Company of Winston-Salem was also relinquished.
Where is American tobacco made?
After the breakup of American Tobacco in 1911, the restructured company concentrated its tobacco manufacturing in Durham and Reidsville, N.C.; Louisville, Ky.; and Richmond, Va. The Durham facility had been built by the Duke family and included the former William T. Blackwell plant.
What was the monopoly of American tobacco?
In 1907 a federal court ruled that American Tobacco had a monopoly on licorice, a flavoring, and that the company was guilty of violating the Sherman Antitrust Act. After a long trial, the court prohibited the company from enjoying interstate trade until conditions were corrected.
Why did the Dukes form the Dukes?
The Dukes formed the firm of W. Duke, Sons and Company in 1878 to raise needed capital for the growth of their business. Soon substantial profits were pouring in, and the Dukes reinvested the money in the business for continued expansion. During this period, the youngest son, James, emerged as the true leader of the enterprise.
What college did the Duke family contribute to?
The Duke family contributed heavily to Trinity College in Durham, which was later expanded and renamed Duke University under provisions of a fund created by James Duke in 1924. This article was most recently revised and updated by Amy Tikkanen, Corrections Manager. History at your fingertips.
What did Duke do in 1911?
Supreme Court ordered the dissolution of the monopolistic American Tobacco Company, and Duke bore the chief task of breaking the company up into the separate corporations that henceforth became the principal cigarette manufacturers ...
Who is James Buchanan Duke?
American tobacco magnate. Encyclopaedia Britannica's editors oversee subject areas in which they have extensive knowledge, whether from years of experience gained by working on that content or via study for an advanced degree.... James Buchanan Duke, (born Dec. 23, 1856, Durham, N.C., U.S.—died Oct.
When did Duke decide to break up American tobacco?
In 1911, when the Supreme Court ruled that American Tobacco was a monopoly and ordered it broken up, Duke responded like a practical businessman. He drafted the plan by which American would become four companies, each with the assets it needed to compete with all the others in all tobacco markets.
What percentage of the cigarette market was controlled by Duke's trust?
The Grip. By the turn of the century, Duke's trust controlled 93% of the U.S. cigarette market, 80% of the snuff market and 62% of the chew market, Winkler records. By 1906, it had acquired at least 250 companies and exercised a near monopoly over the price of the tobacco crop.
What does Duke Endowment do?
The Duke Endowment supports nonprofit hospitals in the Carolinas and institutions for orphan children. It also supports rural churches and retired ministers.
How did Duke get the inside track on this innovation?
Duke got the inside track on this innovation (and a discount on royalties for using it) by helping Bonsack work out its kinks.
What brands did Duke use in 1887?
By 1887, the Duke brands, including Cameo and Crosscut, were gobbling up the market share of the Big Four cigarette outfits of the day. They responded by copying him — automating production and adopting Duke's modern marketing techniques. None could keep up, especially because Duke was so willing to accept a much lower short-term profit to gain that market share.
What did Duke do in the Energetic Shift?
Energetic Shift. Duke would thereafter merely remain a large shareholder and give up his management role. He turned his attention to investments he had made the previous decade in hydroelectric power. His dams would modernize the Carolinas and double his wealth.
How many stores did American own when the company was broken up?
American even got into the retail business, controlling 500 stores by the time the firm was broken up.
Who is Chloe Sorvino?
Chloe Sorvino leads coverage of food and agriculture at Forbes. Her seven years of reporting at Forbes has brought her to In-N-Out Burger’s secret test
How tall is Doris Duke?
American Tobacco Company heiress Doris Duke jaunted glamorously from Hawaii to Manhattan, constantly followed by paparazzi looking to catch a glimpse of the six-foot-tall postwar socialite.
When did Duke start making cigarettes?
wisdom of the decision, but Duke ultimately persuaded them. In 1881 , the company began the production of cigarettes.'7 For the first two years after the shift into cigarettes, the older partners had good reason to regret their decision, for the move had all the earmarks of a rousing disaster.
How did Dukes work to reduce tobacco taxes?
the cigarette tax reduction, Duke worked hard to drum up sales: "Packing a bag with samples, he made one of his dashing trips through the country, taking orders everywhere.., practically every keeper of a tobacco shop ordered in large quantities." 31 This basic method of distribution to jobbers and retailers through drum- mers continued until the formation of the American Tobacco Co. in 1890. During the 1880's, however, significant organizational advances occurred in the distribution system. Each of the five leading pro- ducers continued to sell its products by having its traveling salesmen take orders for goods, title passing to purchaser on delivery.32 But, with the Dukes again in the forefront, manufacturers organized and maintained a system of independent distributing centers in the principal cities in order to expand the market. Connected with these sales agencies were generally a manager, a city salesman, and one or two traveling agents. This organizational innovation was another indication of vertical integration, this time forward into sales and distribution. The cigarette found no ready market; it was a rela- tively new product of no intrinsic value to the consumer. Producers therefore had to devise a system of sales and distribution to make consumers aware of their products and to see that wholesalers and retailers stocked them. There is a clear contrast with the petroleum industry which, in its early years, utilized established marketing channels for coal oil to meet a ready market.33 In production, as in purchasing and distribution, the major firms followed similar patterns, patterns usually set by the Duke company. Until the 1880's, they produced all cigarettes by hand labor. The factory girls were virtually human machines, but the manufacturers sought a reliable mechanical means of mass producing the cigarettes. Like many another American invention, the cigarette machine was an example of induced innovation, called forth by the needs and rewards for machine production. During the 1870's, a wave of more or less useless contraptions designed to make cigarettes appeared.34 A young Virginian, James Bonsack, invented the earliest practical machine in America. He patented his device in 1881 and improved it during the next two years. The newly-formed Bonsack Machine
What were the major changes in the cigarette industry in the 1880s?
coming of "big business" to the United States. Like many other American industries processing agricultural products for urban, mass consumption, the cigarette business un- derwent great changes during the 1880's. Innovations in produc- tion processes caused supply to outrun demand and drove manu- facturers into severe competition. Packaging and advertising became the major competitive weapons as producers vied to market relatively undifferentiated products that were saleable only within a narrow price range. Despite increased advertising and organiza- tional integration, however, the industry's growth rate declined. Then, the man who had initiated most of the revolutionary innova- tions - James Buchanan Duke - succeeded in leading his industry into combination by founding one of the first great holding com- panies in American history?. When Duke's American Tobacco Co. was listed on the New York Stock Exchange in the summer of 1890, it signaled the combination of the major producers in its industry. Its five constituent companies produced approximately 90 per cent of the cigarettes made that year in the United States, and from this base, the company's growth was phenomenal.2 By 1909, its equity capitalization had increased from $25,000,000 to over $316,000,000. In the two decades after its founding, American Tobacco absorbed approximately 250 separate companies and came to produce about 80 per cent of the cigarettes, plug tobacco, smoking and snuff made in the United States.
What did James Duke do to help the industry?
One of the problems in increasing the mar- ket for cigarettes was that they were sold in loose, fragile paper packages which caused the cigarettes to break readily. Duke intro- duced a stiff, sliding box for cigarettes, and when another inventor produced a better version, Duke immediately ordered 50,000 of them.24 It is hard to avoid the conclusion that James Duke was the leading innovator in the American cigarette business during the 1880's. He made entrepreneurial contributions in marketing, in purchasing, and in production which were the driving forces for change. In other industries supplying either new or established consumer goods for the expanding urban markets, innovation often came through entry of a competitor who had little previous experience in the busi- ness, like Gustavus Swift in meat-packing and John D. Rockefeller in petroleum.25 Duke's fulfillment of the entrepreneurial function fits the same pattern - that of economic change wrought by an inno- vator not thoroughly grounded in the previous competitive methods within an industry.26 Duke's vigorous, imaginative merchandising put his company among the five dominant cigarette producers during 1880's. The others were Allen & Ginter of Richmond, W. S. Kimball & Co. of Rochester, and the Kinney Tobacco Co. and Goodwin & Co., both of New York. These five companies followed the same basic pattern in production, in distribution, and in the means of acquiring their leaf tobacco. In each area, however, the Duke company appeared to achieve greater efficiency and to display more interest in innovation. This was apparent in Duke's handling of his firm's purchasing problems. The major producers obtained most of their leaf tobacco through tobacco brokerage houses in the bright-leaf belts of the South. These brokers purchased the leaf at warehouse auctions, stored and dried it in their own warehouses, and then resold it to the manufacturers.27 This situation made it possible, especially in years
When did Kinney tobacco take up?
1887 they took them up. The Kinney Tobacco Company took up in 1888.
What is Duke's significance?
have significance beyond the history of administration or the isolated story of the tobacco industry.
Why did the Supreme Court dissolve American tobacco?
After lengthy trials and appeals, the Supreme Court, shortly after its ruling against Standard Oil, ordered the dissolution of American Tobacco in 1911 in an effort to restore competition in the tobacco industry.71 After several years the old combination was divided into several separate companies.
Overview
The American Tobacco Company was a tobacco company founded in 1890 by J. B. Duke through a merger between a number of U.S. tobacco manufacturers including Allen and Ginter and Goodwin & Company. The company was one of the original 12 members of the Dow Jones Industrial Average in 1896. The American Tobacco Company dominated the industry by acquiring the Lucky Strike Comp…
History
James Buchanan Duke's entrance into the cigarette industry came about in 1879 when he elected to enter a new business rather than face competition in the shredded pouched smoking tobacco business against the Bull Durham brand, also from Durham, North Carolina.
In 1881, two years after W. Duke, Sons & Company entered into the cigarette b…
More recent history
At the same time as the antitrust action in 1911, the company's share in British American Tobacco (BAT) was sold. In 1994, BAT acquired its former parent, American Tobacco Company (though reorganized after antitrust proceedings). This brought the Lucky Strike and Pall Mall brands into BAT's portfolio as part of BAT's American arm, Brown & Williamson. B&W later merged with R. J. Reynold…
Advertising
Between 1875 and the 1940s, cigarette companies often included collectible trading cards with their packages of cigarettes. Cigarette card sets document popular culture from the turn of the century, often depicting the period's actresses, costumes, and sports, as well as offering insights into mainstream humor and cultural norms.
See also
• Allen & Ginter
• Goodwin & Co.
• Kinney Brothers
Further reading
• Sobel, Robert (1974). "James Buchanan Duke: Opportunism Is the Spur". The Entrepreneurs: Explorations Within the American Business Tradition. New York: Weybright & Talley. ISBN 0-679-40064-8.
• Cox, Reavis (1933). Competition in the American Tobacco Industry, 1911-1932: A Study of the Effects of the Partition of the American Tobacco Company by the United States Supreme Court. New York: Columbia University Press.
External links
• Duke Cigarette Booklets of Civil War Generals A Virtual Exhibit, Special Collections, Marshall University.
• American Tobacco Company, Richmond Stemmery, photograph circa 1905 Through the Lens of Time VCU Libraries.
• Gallery of mid-20th-century advertising featuring American Tobacco Company products.