Cigarettes Are Central to the History of Corporate Power

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In 1916, Lee Parker left his father’s tobacco farm in Ahoskie, North Carolina, for Shanghai, China. He wrote sixty years later in his memoir, “I was fresh from the United States, sent by BAT, the British American Tobacco Company to ‘put a cigarette between the lips of every man and woman in China.’” Parker’s father had sent him to Wake Forest College in hopes he would, upon graduation, join the small white professional class. But even with a college degree, “jobs was hard to come by for a country fellow,” Parker recalled. He had heard that a buyer at the tobacco market in Wilson, North Carolina, hired young men for jobs in China, so he borrowed five dollars from his brother and made the journey to Wilson. After an interview on the tobacco warehouse floor that lasted “between thirty seconds and two minutes,” Parker’s life path veered sharply east, and he headed to China to work as a cigarette salesman for one of the world’s first multinational corporations.

Parker was one of hundreds of young white men who journeyed from the bright leaf tobacco–growing states of Virginia and North Carolina to work for BAT-China from 1905 to 1937, the very years that cigarette consumption skyrocketed worldwide. Southerners filled positions in every department. Richard Henry Gregory from Granville County, North Carolina, ran the agricultural department, where US Southerners introduced bright leaf tobacco and the flue curing system to Chinese farmers. Ivy Riddick, from Raleigh, North Carolina, managed Shanghai’s massive cigarette factories during the 1920s, a decade of dramatic strikes and anti-imperialist protest. James N. Joyner, born in Goldsboro, North Carolina, worked in sales in China from 1912 to 1935, including heading two large sales divisions. And James A. Thomas of Reidsville, North Carolina, was at the helm, steering the China branch of BAT during its years of rapid expansion. For every career man, there were dozens of other, mostly rural white Southerners who worked for BAT-China for one or more four-year terms; hundreds of Southerners went to China over the course of BAT-China’s tenure there.

These men were part of a network that selected and sorted white men from the Upper South’s bright leaf tobacco region into emerging corporate opportunities in the United States and China. The men who went to China left behind fathers, brothers, and cousins who performed similar work in the cigarette corporations that were emerging simultaneously in the United States. To be part of the transnational network, one had to be white and male and to have some connection to farming, curing, auctioning, or manufacturing bright leaf tobacco. What mattered was not so much what one knew, but who one knew, as those who had a father or brother in the tobacco trade found entrance even without any particular training or experience. This network, then, functioned as a managerial system, coordinating the hire and placement of white-collar managers in both the US and China; it was as foundational to the transnational tobacco corporate structure as the board of directors, and more significant for shaping daily decision-making and corporate culture.

We have not heard the stories of the men who went to China on the bright leaf network before now partly because, as rural Southerners, they seem unlikely global capitalists. Most had never left their home states before they embarked on the long voyage to China. The majority came from farm backgrounds; Shanghai was by far the most modern and cosmopolitan place they had ever seen. They were not, as a group, highly educated. While some, like Parker, had college degrees from Wake Forest College in Winston-Salem or Trinity College in Durham, others traded schoolbooks for full-time employment while still children, as James A. Thomas did at age ten. They certainly were not cigarette smokers. Especially before the 1920s, cigarettes were for city slickers; Southern men chewed their tobacco. A pipe was relaxing in the evening; a cigar was crucial for business meetings; but cigarettes — not so much. In China, men of the bright leaf network became their own first converts to cigarettes, an easy “sell” because they got the cigarettes for free from the company. For contemporary readers who may be accustomed to seeing rural life, especially in the Jim Crow South, as isolated and parochial, the globe-trotting of the men on the bright leaf network might seem incongruous. And yet despite their geographic and cultural distance from the financial metropole of New York City, these men became the domestic and foreign representatives of one of the world’s first multinational corporations, pushing a commodity that became associated with modernity itself.

Only when considering the operations of this network, including its dealings with a host of employees at all levels, can we understand the simultaneous and meteoric rise of cigarette brands containing bright leaf tobacco in the US and China. In the 1920s, Chinese consumers catapulted Ruby Queen cigarettes, made of 100 percent bright leaf, to unprecedented sales; in the US, Camel cigarettes, made of a tobacco blend including bright leaf, soared far beyond its competitors. By capturing these two huge markets, Camels and Ruby Queens became the two most popular cigarette brands in the world, and it is not too much to say that they also changed the world. With their success, cigarette corporations moved to the cutting edge of the science of branding, experimenting with new ways to capture consumers’ imaginations and cash. Cigarettes became especially visible parts of urban, “modern” life around the globe while their capacity for personal and shared associations made them potent symbols in diverse disputes. Corporations did not achieve this feat simply by exporting a US cigarette to China. Rather, this story of the cigarette is one of cross-cultural encounter in both countries, as innovation and production occurred on the ground through the daily life of business.

The bright leaf cigarette is a big story in itself but it is also the flash accompanying the even more profound ignition of corporate empowerment. The US cigarette industry began as business partnerships, not corporations, but it incorporated and expanded just as a larger transformation of corporate power made new kinds of business practices possible. Lax new incorporation laws, the Fourteenth Amendment, the rising importance of the stock market, and avenues for expansion paved by imperial ventures all created fresh potentials; cigarette companies jostled to turn those potentials into profits and prestige. The industry had reached international markets from its inception, long before incorporation. Lewis Ginter of Richmond, Virginia, achieved the first big success with bright leaf cigarettes in London. The owners of the five major native-born cigarette companies, all partnerships, understood that the future of the industry depended on continued access to foreign markets. They incorporated as the American Tobacco Company (ATC) in New Jersey in order to maintain overseas control of the most efficient cigarette-making machine, the Bonsack.

After incorporation, however, James B. Duke, the owner of one of the ATC’s original companies, wrested control of the ATC from Ginter and implemented an aggressive plan for expansion. In a dramatic and highly contested process, the ATC soon took over hundreds of chewing and pipe tobacco companies, giving the corporation nearly complete control over the supply of bright leaf tobacco. Though its business practices faced court challenges, the ATC evaded government regulation by drawing on new entitlements granted by New Jersey’s incorporation laws and the Fourteenth Amendment’s protections of private property and due process.

The ATC also immediately pursued an ambitious plan for foreign expansion. Partly using capital raised in the stock market, it took over cigarette companies in Germany, Australia, and Japan, and in 1902, it merged with the Imperial Tobacco Company of Britain to form the British American Tobacco Company (BAT). The ATC and Imperial agreed to stay out of each other’s domestic markets but merged their foreign holdings, casting BAT as a multinational company wholly dedicated to foreign expansion. The ATC owned 60 percent of BAT’s stock, and James B. Duke served as chairman of the board of both corporations. The ATC’s, and later BAT’s, foreign expansion became part of the story of British and US imperialism, both by drawing on the privileges that imperial powers won for foreign companies and by becoming mechanisms for the extraction of profits and the imposition of foreign control. BAT soon spread over much of the world, and China became its largest outpost. The bright leaf network was integral to corporate expansion because it directed and managed the actual creation of large and geographically disparate farming and factory systems on the ground in both China and the United States. Along with selecting for the hire of certain white-collar corporate employees by race, gender, and region, this transnational network served as a conduit for bright leaf tobacco, cigarettes, bright leaf tobacco seeds, and managerial knowledge — knowledge that was entangled with racial understandings forged in the Jim Crow South. In addition, even as the network functioned as part of the corporate structure, it also played a critical role in materializing US and British empire overseas. Empires are best understood not solely as occupying or governing forces but as “hierarchical networks of migration, information, force and rule making that carried and connected laborers, settlers and administrators moving across global space.” By this definition, we could say that the bright leaf network was a manifestation of corporate imperialism, one with dramatic effects on both China and “home.”

Corporate empowerment occurred through daily innovations and transactions among myriad people; cigarettes’ transnational success, in turn, emerged from those efforts. In the process of daily business practice, corporate power waxed in inextricable relationship with the emergence of Jim Crow segregation and imperialism — a relationship that would define the United States’ place in the twentieth-century global order. The bright leaf network serves as the ballast for this book’s inquiry as it tacks between the US and China. As members of a managerial class, the men of this network depended utterly on a host of people who also built the corporation, including Chinese entrepreneurs, managers, salesmen, factory workers, farmers, and servants, as well as African American and white farmers and factory workers and African American servants. As social organizations, the cigarette corporations in the US and China were profoundly diverse entities involving daily contacts across racial differences, contacts without which no cigarettes would be made or sold.

This history has remained buried until now because we are mired in fables of capitalism. There are two linked stories about the cigarette industry that have been repeated for so many decades and across so many platforms that they have come to seem like common sense. The first arises from the cult of the entrepreneur. This story holds that James B. Duke gained control over the industry from the outset because of his entrepreneurial innovation. While his competitors turned out the hand-rolled cigarette, the story goes, Duke forged ahead by introducing the more efficiently produced machine-made variety, driving down costs, capturing profits, and forcing his competitors to merge with him in the American Tobacco Company. The story attributes much of this success to Duke’s personality: brash and risk-taking, he refused to play by the established rules of the game and followed instead his exceptional business foresight.

The second story is the related mythos of modernity that posits that superior technology, like the cigarette machine, led to a uniform pattern of West-to-East spread of modern business forms and commodities, such as the corporation and the cigarette. The value placed on this process varied: it was the benevolent spread of progress; it was the violent spread of empire. Whether celebratory or critical, proponents of this story agree that Western cigarette corporate representatives developed new technologies, business forms, and commodities at home and then scaled them up and exported them whole cloth around the world, where they transformed more “passive” and “primitive” (or “undeveloped”) societies.

I call these two stories fables because they are heroic tales of mastery that are not borne out by the historical evidence. They are, instead, theories of capitalism that have been laid over cigarette history by patently disregarding the facts. James B. Duke and the cigarette corporations were indeed powerful, but how we render that power makes a world of difference. Telling a new story about cigarette corporations necessarily also means developing new ways of understanding capitalist innovation and expansion.