February 8, 2007


And the man behind the brand is...
James Duke

The Duke family home outside the tiny hamlet of Durham was stripped bare by marauding Union soldiers as they marched through North Carolina. Family legend has it that a small quantity of bright leaf tobacco was overlooked, providing a tiny lifeline. The family, including 9-year old James Buchanan, gathered the tobacco and sorted it into small packages labeled "Pro Boro Publico."

They hitched their blind mules to a wagon and drove to the southern part of North Carolina where tobacco was scarce. Their small supply sold easily and the money was reinvested into more tobacco. By 1872 the Dukes had sold 125,000 pounds, one of the leading producers in the area. The tobacco was processed in a log house factory in what is now the heart of Duke University.

Adept with numbers as a student James Duke completed a business course at Eastman College in record time and at 14 was put in charge of boys in the family factory. In 1878, at the age of 22, James took charge of W. Duke & Sons and in 1883 he traveled to New York to introduce his firm to the national tobacco business.

When the government passed a law reducing the cigarette tax by 2/3 Duke immediately reduced the price of his cigarettes from 10¢ to 5¢ a pack two months ahead of the law's enactment. This lightning strike, combined with widespread advertising, secured over 59% of the United States cigarette market by 1889.

Tobacco wars broke out and older companies offered to buy Duke's company. He had other ideas and consolidated all his competitors under the banner of American Tobacco, with Duke as its president. He was 34 years old.

In the beginning 90% of the American Tobacco Company's business was in cigarettes but Duke quickly diversified the product line. American Snuff, American Cigar and a plug tobacco company followed. Only the cigar venture failed to return huge profits.

Seventeen years later the Department of Justice broke up the tobacco trust. With the tobacco industry reorganized Duke turned to electricity and providing cheap power to the South. He had become interested in water power in 1904 and now the Southern Power Company occupied his business talents.

In 1924 Duke endowed a small college with $135,000,000, mostly from his holdings in Southern Power, which came to be named after him. It was the fourth largest endowment in history. "I have succeeded in business," Duke noted, "not because I have more natural ability than those who have not succeeded, but because I have applied myself harder and stuck to it longer."

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