








Lucky Strike was a
popular American
Tobacco Company
brand.
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Largest in the Industry
By the mid-1800s Buck Duke felt that a merger of
all large-scale tobacco manufacturers would be a practical way of reducing
selling and advertising costs as well as improving overall
organization. The four most important competitors of the Duke firm
at that time were the Allen and Ginter Company of Richmond, the F. S.
Kinney Company and the Goodwin Company both of New York, and William S.
Kimball and Company of Rochester; these and the Duke company manufactured
90 percent of the nation's cigarettes in the 1880s. After discussing
the merger, and following a period of excessive spending on advertising,
the large rival firms agreed that the Dukes' plan of merger was the most
sensible proposal. In 1890, the five principal companies united to
form the American Tobacco Company. This combination quickly became
known as the "tobacco trust" because of its almost complete
monopoly of the tobacco trade.
James B. Duke in 1890 controlled the largest
tobacco industry in the world; the combined firms continued to grow in the
next two decades. However, by the turn of the century, anti-trust
sentiment was increasing rapidly in the United States. The
prevailing feeling of the public that monopolies were harmful
concentrations of power resulted in the dissolution of the American
Tobacco Company by a ruling of the United States Supreme Court in
1911. Four major tobacco corporations were among those companies
which emerged from the separation of the trust: a new American Tobacco
Company, Liggett and Myers, P. Lorillard, and R. J. Reynolds.
Following the court action, Buck Duke carried on
his tobacco business abroad and invested money in the development of
hydroelectric power. Later, Duke was to follow in the footsteps of
his father and brother in distributing his fortune for the benefit of
religious, educational, and medical institutions. Washington and
Benjamin had established a pattern of giving money to support the
Methodist school, Trinity College, in Durham; James B. continued the
tradition when, in 1924, the Duke Endowment was created for the benefit of
his native region. In addition to the establishment of Duke
University, formerly Trinity College, the multi-million dollar indenture
provided funds for educational institutions, orphanages, hospitals, and
the Methodist church in the Carolinas. As a result of the family's
generous gifts, millions of people throughout the region have enjoyed a
better quality of life.
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