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This article is from the Encyclopedia of North Carolina edited by William S. Powell. Copyright © 2006 by the University of North Carolina Press. Used by permission of the publisher. For personal use and not for further distribution. Please submit permission requests for other use directly to the publisher.

American Tobacco Company

by Robert W. Carter Jr., 2006

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. His son Brodie, seeing little opportunity in a small rural tobacco factory, moved to Durham in 1869. There he began to produce smoking tobacco; five years later, Washington and his two other sons, James B. and Benjamin N., moved to Durham and combined forces with Brodie to build a factory for their joint use. 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.

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 for mass production could be perfected. In the early 1880s, James Bonsack of Virginia invented such a machine. Before the end of the decade, James B. Duke had gained exclusive control of the Bonsack machine and soon had a monopoly on the American cigarette industry. He took over the nation's five major cigarette manufacturers, which were centered in Richmond, Va., and New York City. 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. In 1904 Duke reorganized his many tobacco firms into a single corporation. By 1906 American Tobacco controlled four-fifths of the entire domestic tobacco industry other than cigars.

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. The ruling was appealed to the U.S. Supreme Court, which decided on 29 May 1911 that the company had to be dissolved. 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. James B. Duke, a multimillionaire by then, retired from active management of the American companies and turned his attention to other interests, including the generation of hydroelectric power and the creation of Duke University in Durham.

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. The Reidsville plant was the former F. R. Penn Tobacco Company, which the American Tobacco Company had purchased shortly before the dissolution of the American Tobacco Trust in 1911.

American Tobacco purchased the Penn plant in 1911, and Penn's sons, Charles and T. Jeff, continued to work for the corporation. Charles A. Penn became a director of American Tobacco in 1911 and the vice president of manufacturing in 1916. He perfected the blend for a new cigarette known as Lucky Strike, which was later to become one of the leading brands in the history of the industry. Mainly through Charles Penn's efforts, the former Penn plant was enlarged for the production of Lucky Strike, and Reidsville soon became one of American Tobacco's four major production centers.

American Tobacco Company began to diversify in the 1960s and moved into other fields, including distilled spirits, life insurance, office supplies, cosmetics, and hardware. In 1968 the various components of the company were reorganized into a new corporation, American Brands, Inc. As its older tobacco manufacturing plants became outmoded, the company began to concentrate its cigarette production in Reidsville. It closed its Louisville plants in 1971, its Richmond plants in 1981, and its Durham plants in 1987. The manufacturing complex in Reidsville was expanded to accommodate the increased production. In 1986 the American Tobacco Company became a subsidiary of American Brands, making it one of the largest cigarette producers in the United States. As Gallaher, Ltd., it also became the leading cigarette producer in the United Kingdom.

Through the work of the Historic Preservation Society of Durham and various developers in the 1980s, the tobacco district of downtown Durham began to be restored and transformed into a thriving urban center featuring apartment complexes, restaurants, and unique retail stores. 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.

References:

American Tobacco Company, The American Tobacco Story (1962).

Robert F. Durden, The Dukes of Durham, 1865-1929 (1975).

Durden, Bold Entrepreneur: A Life of James B. Duke (2003).

Michael Orey, Assuming the Risk: The Mavericks, the Lawyers, and the Whistleblowers Who Beat Big Tobacco (1999).

Image Credit:

American Tobacco Company factory, circa 1926. Image courtesy of Preservation Durham, UNC Libraries. Available from http://mainstreet.lib.unc.edu/projects/tobacco_durham/index.php/markers/view/8 (accessed June 27, 2012).

 

Origin - location: 

Comments

Comment: 

Hello Sir, My Name is Pintu Srivastav i am from India (West Bengal) I am very happy to work Your Company please give me Chance , How to Procece Apply for the job.

Thank You!

Comment: 

I have a picture from the American Tobacco Company honoring Fallen Soldiers who were employees of the company who left to serve in the war. If possible I would like to get any information that is available. I believe it was WWI. Thank you.

Comment: 

I always buy American club tobacco and I been buying it for about 20 years if not longer .this time it tastes like black and mild the reason I know is my boyfriend smokes that kind of cigar's once in a while . I like the smell of them but trying to smoke the tobacco with it mixed in it is hard because I have ashma and we buy the blue bag witch is light I was wondering if you might be able to send us a coupon or something to help us buy another bag or something don't worry this isn't going to deturre us from buying your product I love your product and I buy 2 big bags and a little one each month thanks for taking the time to read my gripping and for being the company that I have grown to love and I would appreciate a note back if you have the time thanks again

Comment: 

Hello,

This is an article about the American Tobacco Company, which came from the Duke Family in Durham and the company no longer exists. American Club is from the J.R. Reynolds corporation and their website is at https://www.jrcigars.com/brand/domestic-pipe-tobacco/american-club.

Erin Bradford, Government and Heritage Library

Comment: 

Today is 1/17/2019 and I just purchased my last can of smokeless tobacco. I am 48 years old and have been chewing and dipping tobacco since I was 7 years old. I remember when I switched from Redman chewing todacco to Copenhagen snuff in 1979 or 1980 and I paid $0.70 per can. Back then there was only three or four kinds on the shelf and Copenhagen was the top of the line. In 1991 or 1992 I went to buy a can of Copenhagen and the price had grown from $0.70 a can to $4.00 a can. On the day the store clerk told me my total was $4.03 I slid the can back to her and I quit using tobacco that day. I did not use tobacco for a year. After about a year I saw a friend of mine with a can of grizzly and he told me it was the closest thing to Copenhagen he had ever dipped. I tried it and I agreed it was as good a Copenhagen. I started back using because it was at that time like $0.80 a can. Up intil today I have been able to buy grizzly for under $4.00 a can. Today I bought a can and the price was $4.15 a can. There is no good reason that a tobacco products can go from $0.80 a can to just over $4 a can in 15 to 20 years. At that rate of increase Copenhagen has not went up a dollar yet grizzly went up over 4 times the original amount. Well I will not, I refuse to pay that for a can so I guess that means I am done. That's a 550 can a year purchase I will not be spending money on

Comment: 

Today 12-31-2018 between 12:16 PM -12-20 PM on radio 99.9 country Boca Raton Florida
there was an advertisement on JUUL Vapor to purchase with nicotine.
I thought all nicotine advertisements were band from commercials.
Please check this out.

Thank you

Comment: 

I believe what is actually banned is tobacco, rather than just nicotine. Take a look at this smithsonian magazine article that references different laws. https://truthinitiative.org/news/what-do-tobacco-advertising-restriction...

Erin Bradford, Government and Heritage Library

Comment: 

I have an applicant for an apartment that is receiving a pension from her husband from the American Tobacco Company. Could you give me a phone number or address that she could get information and confirm her pension? Thank you for your assistance.

Comment: 

Dear Margaret,

Thank you for visiting NCpedia and for taking time to share your question.

NCpedia is the online encyclopedia of North Carolina and unfortunately, we do not have any additional corporate information for you. I do see from an internet search that it appears that American is now part of the parent company Fortune Brands, Inc.  This appears to be the company’s website: https://www.fbhs.com/

I hope this helps.

Best wishes,

Kelly Agan, Government & Heritage Library

Comment: 

Hi, i would like to know if you have any information about the american tobacco company profit-sharing plan.i have a piece of paper dated 2/10/61 from your charleston Branch.this document belongs to my grandmother.any information concerning this document, please email it to me.

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