Tobacco in the form of leaf, snuff, chew, smoking tobacco, cigars, and factory-made cigarettes has often been called the United States’ oldest industry. Since its introduction to Europeans by American Indians, no other agricultural crop has been more thoroughly entwined with the history of the United States than the growing, processing, and manufacturing of tobacco. In addition, no one product has enjoyed deeper ties to the colonization of the New World and to the expansion of international trade between the New World and Europe, Asia, and the Middle East over the last four centuries. The prospect of farming tobacco and selling it to England brought the earliest British colonists to Virginia and Maryland, and at the end of the twentieth century U.S. companies such as Philip Morris and RJR Nabisco continued to dominate the international cigarette market and stood among the most profitable transnational corporations. U.S. tobacco growing, manufacturing, distribution, marketing, and sales contributed $15 billion in wages to some 660,000 American workers. For many centuries tobacco has been identified with the New World, especially the United States. In the form of the mass-produced cigarette, U.S. tobacco became the virtual international symbol of American modernity. Indeed, students of the industry have argued that the advent of machine-made cigarettes in the 1880s helped inaugurate in the United States the modern era of mass consumer products, mass advertising and promotion, and the professionally managed modern corporation.
However, the last half of the twentieth century saw the U.S. tobacco industry come under pressure from the demonstrated health hazards of smoking and the subsequent steady decline in smoking in the United States and other highly industrialized nations. In response, the industry aggressively pursued expanding into markets in Asia, Eastern Europe, and Africa, prompting the World Health Organization to accuse tobacco manufacturers of fomenting a tobacco epidemic. Equally worrisome for the industry, at century’s end the growth of class-action lawsuits, the publication of documents revealing corporate manipulation of the political and legal process and the willful distortion and suppression of scientific findings, and the rise of government antitobacco measures further clouded the future of the domestic tobacco market. Cigarette makers faced the prospect of being demoted to the status of a rogue industry in the eyes of U.S. citizenry.
Industrializing Tobacco and the Rise of the Cigarette
Until 1800 tobacco manufacturing proper was largely carried out in Europe. Initially, U.S. factories were dispersed in the tobacco-growing regions of Virginia, North Carolina, Tennessee, Kentucky, and Missouri, which used slave labor. New York, a center of snuff production, was the exception. Manufacturing of tobacco also thrived among planters who prepared tobacco for chew. After the Civil War, the introduction of steam-powered shredding and cigarette machines and pressures stemming from the rise of national markets led to the concentration of tobacco manufacturing in that sector. Cigar manufacturing underwent a similar evolution somewhat later. Cigars first became popular in the United States after the Mexican-American War, and their manufacture was fairly dispersed in cigar leaf-growing regions. However, by 1905 the greatest centers of cigar manufacturing were Philadelphia, New York, Boston, Cincinnati, Chicago, Baltimore, Richmond, Tampa, and Key West.
In the United States, the convenience and simplicity of smoking cigarettes made from the bright variety of tobacco was discovered by Union and Confederate troops alike during the Civil War. Ready-made cigarettes using mixtures of bright and burley tobacco allowed U.S. manufacturers to develop cheaper brands. U.S. cigarette production boomed between 1870 and 1880, rising from 16 million cigarettes (compared to 1.2 billion cigars) annually to over 533 million, reaching 26 billion by 1916. The growth of the U.S. population between 1880 and 1910 and the decline of chewing tobacco due to anti-spitting ordinances further expanded the market for cigarettes. With this growth arose new aggressive methods of packaging (striking colors, designs, logos, brand names), promoting (gifts, picture cards, free samples, discounts and rebates to jobbers, retailers, etc.), and advertising (newspapers, billboards, posters, handbills, endorsements) cigarettes to an emerging national market.
In 1881 James Bonsack patented a new cigarette-making machine that turned out over 120,000 cigarettes per day. Until then, factory workers rolled up to 3,000 cigarettes a day. The Bonsack machines made the fortune of James B. Duke, who adopted them in 1884. By securing exclusive rights over Bonsack machines and devoting 20% of his sales revenues to advertising, Duke helped create a mass national market, which he soon dominated. By 1889 W. Duke and Sons had become the world’s leading manufacturer of cigarettes, with 40% of the U.S. market. That same year Duke pressured his rivals into forming the American Tobacco Company with Duke as president. The trust did not own any tobacco farms, and employed its considerable leverage to depress the price of tobacco leaf. This unequal relationship to the detriment of growers reached a crisis point forty years later during the Great Depression, necessitating the tobacco price support program of 1933