History of Tobacco

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History of Tobacco
2
Origin

• 1st encounter
• Christopher Columbus
• Oct 14, 1492
• Native to Americas
• Desert Southwest
• Slopes of Continental Pacific side of mountains
• Central and South America
• Andean slopes
• Old world pipes for Cannabis not tobacco

• Named from Y shaped tube
• Tabago used for Inhalation of tobacco powder

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Native Wild Tobacco Species
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Native Wild Tobacco Species
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Botanical

• Rustica
• Small leaves
• Harsh smoking tobacco
• Historical movement
• Mexico
• Pacific area
• Across US

• Genus Nicotiana
• 66 species
• Named for Jean Nicot
• Physician Scientist
• Origin of Nicotine
• Introduced rustica to France in 1560
• Use
• Great Lakes Indians
• Smoked in Calumets
• Stems of Peace Pipes

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Tabacum

• Large leaf
• Milder, richer taste
• Historical movement
• Eastern Andean Piedmont
• Ecuador
• Peru
• Cuba
• Venezuela
• Panama

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Tabacum

• Foundation for modern tobacco
• Not found in nature
• Introduced to France
• From Brazil
• By Jean Andre Themet
• Physician Scientist

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Uses

• Medicinal
• Purgative
• Worms
• Toothaches
• Disinfectant
• Cuts
• Bruises
• Bites
• Snake
• Spiders
• Insects
• Lice

• Religion
• Fasting
• Mystical Prophetic
• Smoking
• Rolled like modern cigar
• Looked like large cricket, cigarra
• Cigarette is French

• Poultices
• Chest colds
• Boils
• Internal infections
• Inflammations
• Toothpaste
• Painkiller
• Appetite Suppressant

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Tobacco in the United States

• Pipes
• Suggest use 4-5000 years ago
• Large bird pipe found near Newtown Pike
• Disk pipes
• Calumet
• Peace Pipe
• From Calumeau meaning reed
• Sacred stem
• Unimportant bowl

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Tobacco in the United States

• Cultivation
• Prior to arrival of Europeans
• Cave and Cliff Dwellers of Central Eastern
  Kentucky
• Mound builders
• Cherokee, Shawnee, Choctaw Chickasaw
• Rituals
• Pouches or gourds around neck
• Mixed with other things
• Narcotics
• Hallucinogens
• Psychoactives

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Tobacco in the United States

• Modern use
• Proliferation in 16th 17th Century
• Maryland
• Burley
• Widely established in little more than a century
• 1600s
• Ravenous appetite for N. tabacum in England
• English settlers established Jamestown in 1607
• Spain held monopoly
• Natives using rustica
• John Rolfe illegally acquires seeds of tabacum
  from Cuba
• Tobacco flourishes and becomes foundation of
  economy

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Tobacco in the United States

• Export to England
• 20,000 lbs in 1618
• 24 million by 1664
• Production spread
• Maryland
• Pennsylvania
• The Carolinas
• Tobacco attacks
• Sensual indulgence
• Dirty habit
• Doctors tried to restrict to medicinal uses only
• King James I
• Vocal critic
• Counterblaste to Tobacco
• Vile, obnoxious weed

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Economic Benefits

• Revenues
• Price reached 1974 equivalent of 500/lb
• Taxes
• Per hogshead tax
• Increase weight per hogshead from 600 lb to 1000
  to 1300 range
• Customs
• Excise duties

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Tobacco in Kentucky

• Earliest report
• John Finley
• Shawnee near Spring Station (near Midway,
  Woodford Co)
• 1752
• Subsistence level during early settlement
• Excesses by 1780s
• Exports
• Isolation
• By river
• Indians
• Pirates
• Changing river channels
• Water levels
• Spanish customs

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James Wilkinson

• Arrived in Lexington 1784
• Highly ambitious
• Not overly scrupulous
• Founded Frankfort
• 1786
• Used Kentucky River to ship tobacco

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Established Flotilla for tobacco other goods

• Flat Boats
• Left Frankfort April 1787 bound for New Orleans
• Good seized at Natchez
• Had cargo released through secret meeting
• Paid entry duty at New Orleans
• Sold crop

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Monopoly Established

• 1788 Ports opened to any who paid entry fee
• 1790
• 250,000 lb sold
• Price
• 9.50 to 10 /100 wt in New Orleans
• 2.50 in Kentucky
• Farmers organize own convoy
• Spanish limit western leaf to 40,000 lb
• Excess reaches New Orleans illegally

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Early History 1700s

• 1795
• Port declared duty free through treaty with Spain
• Reached totals of 100 million pound
• Decline
• By late 1790s

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Early 1800s

• Decline continues
• Low of 4 million by 1814
• Bright Leaf Tobacco
• Discovered in 1839
• Slave named Stephen
• Fell asleep due to heat of wood fire in barn
• Awoke to find fire almost out
• Placed charred logs to revive fire
• Dry heated turned tobacco bright yellow
• Philip Morris, Esq.
• Tobacconist and importer of fine cigars
• Opens shop on Bond St. in London - 1847

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Burley

• Prior to 1864
• Dark air-cured tobacco
• Stand Up
• Rainbow White
• Red Twist Bud
• Little Burley
• Red Burley

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White Burley

• Spring of 1864
• George Webb Joseph Fore
• Tenant on Captain Fred Kautz Farm
• Brown Co., Ohio
• Near Higginsport
• Ran low of seeds for sewing beds
• Bought extra seeds from George Barkley
• Bracken Co., KY
• Transplants looked unusual
• Destroyed plants
• 1865
• Sewed unused seeds from previous year
• Grew to harvest cured leaf

• Plant characteristics
• Pale green
• Creamy stalk
• White veins
• Cured leaf
• Fine, light texture
• Smoked bitter
• No heavy load of sugars
• Saved seed from 1865 crop
• Produced 20,000 lbs
• High price at Cincinnati market
• Attracted attention

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1866

• St. Louis Fair Exposition
• First and second prize for fine cutter leaves
• 58/ 100wt

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White Burley Advantages

• Did not have to be primed
• Stalk cut air cured quickly
• Well suited to uptake of flavoring
• Found its may into cigarettes
• Improvement in quality
• Kentucky becomes No. 1
• Surpassing Virginia
• Maintained No. 1 Ranking till 1929
• Surpassed by North Carolina

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Tobacco Companies

• The American Tobacco Co.
• Formed By J.B. Duke
• President of W. Duke Sons
• From five companies
• Called the Trust
• Over 250 companies swallowed by Trust by Late
  1800s
• Ruthless price wars
• Reduced prices to farmer
• 1-3 cents per pound
• 8-12 cents per pound previous

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Philip Morris Co.

• 1901
• Appointed by royal warrant as tobacconist for
  King Edward VII

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Formation of The Association

• Formed in 1904
• To force better prices
• Black Patch Area of Kentucky Tennessee
• 70 of growers joined
• Guerrilla-like tactics used from 1906-1908
• Nightriders
• Spread to burley region
• Targeted the Trust
• Change in sentiment against Nightriders
• Federal lawsuits

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Trust Holdings by 1910

• 86 of cigarettes
• 85 of plugs
• 76 of smoking tobacco
• 80 fine cut chew
• 96 snuff
• 91 little cigars
• 14 of cigars

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Sherman Antitrust Act

• Trust in violation 1911
• Broken into big four
• American Tobacco Co.
• Liggett and Myers
• Lorillard
• R.J. Reynolds

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R.J. Reynolds

• Introduced new type of cigarette containing all
  types used in other brands in 1913
• Turkish
• Virginia North Carolina Bright Leaf
• White Burley
• Camel
• Marketed in 20 cigarette packs like expensive
  brands
• Sold for 10 cents
• Market share
• 20 by 1915
• 45 by 1922

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The Burley Tobacco Growers Association

• Formed in 1920
• Poor crop
• Low prices
• Lasted only 5 years
• Members failed to renew pledge

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Philip Morris

• 1929
• Purchases factory in Richmond, Virginia
• Begins manufacturing its own cigarettes

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Agricultural Adjustment Act

• Began 1933
• Set acreage loan rates
• Amended in 1938
• With further restriction

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The Burley Tobacco Growers Cooperative Association

• Began in 1941
• Called New Pool
• New allotments formed to control production

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Referendums to control production

• 1955, 25 cut due to surplus
• 1960
• Price support levels frozen at 1959 level
• Subsequent years with adjustment for increased
  expense

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1963

• Bumper crop
• 755 million pounds
• Reduced allotment
• 10 in 1964
• 10 in 1965
• 15 in 1966
• 1966 1967
• Failed to shift control from acreage to poundage
• 1970
• Allotments cut by 10

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1971

• New program
• Limits
• Acreage
• Poundage
• 1975
• Acreage dropped

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US Government Action

• 1964
• Surgeon Generals Report
• 1981
• Companies told farmer that they could not grow
  enough to supply demand
• 1982
• Farmer overproduced
• No-Net-Cost Tobacco Program Act
• Not cost to general public

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1983

• Severe drought
• Record low yields
• Poor quality

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1985

• Tobacco Improvement Act
• Reduced Prices
• Established new formulas for production control
• Company release buying intentions by Jan 15
• 5 year average of exports
• Pool stocks
• Set prices increase
• 2/3 based previous 5 years
• Throw of highest lowest
• 1/3 based on increased in production costs
• Established a buy-out of pool stocks by companies

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1986-1994

• 1986-1989
• Short supply
• One price market
• No distinction for quality
• Producer strip in fewer grades
• 1992
• Surplus supply
• 1994
• Surplus buy down by Companies
• One of best crops grown in Kentucky fields
• Poor curing year

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1995, 1996 1997

• 1995
• American Tobacco Company merges with British
  American Tobacco
• 1996
• 29 increase in quota
• High world demand
• 1997
• Wet start
• Dry finish
• Poor cure
• Green tobacco
• Fat stems
• Would not cure
• Bled onto lamina
• Black tobacco
• Poor quality

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Master Settlement Agreement November 23, 1998

• Signed by representatives of 46 states, Puerto
  Rico, the U.S. Virgin Islands, American Samoa,
  the Northern Mariana Islands, Guam, the District
  of Columbia, the Brown Williamson Tobacco
  Corporation, Lorillard Tobacco Company, Philip
  Morris Incorporated, R.J. Reynolds Tobacco
  Company, Commonwealth Tobacco, and Liggett
  Myers. 

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1998-2000

• 1998
• Average season
• Poor yields
• 1999
• Quota cut 29
• Little effect due to high effective quota
• Japan Tobacco Inc. purchases RJ Reynolds'
  international tobacco operations

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2000 2001

• 2000
• 45.3 quota cut
• Philip Morris announces Partnering Program
• Star Scientific
• Bulk curing
• Low nitrosamines
• 2001
• Reduction in quota
• Change in regulation to allow only 10 carry
  forward
• Vector Tobacco
• grows low nicotine burley crop
• Illinois, Iowa, Mississippi, Louisiana,
  Pennsylvania

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2002 - 2003

• 2002
• Reduction in quota
• 2003
• Reduction in quota
• Wet season
• Low yields
• Production short

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Growers Law Suit -2003

• D. LAMAR DELOACH, et al.
• Companies unlawfully agreed and conspired to
  restrain competition and fix prices for and
  allocate domestic flue-cured and burley tobacco
  sold at tobacco auctions in the United States,
  and engaged in other unlawful conduct to
  stabilize prices of tobacco at levels below those
  that would have existed in a competitive market.
• Defendants caused the quota under the federal
  tobacco program to be depressed.

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2004

• 10 rule applies for the first time
• Farmers loose more than half of quota carry
  forward
• R.J. Reynolds Tobacco Company and Brown
  Williamson merge as Reynolds American, Inc.
• Buyout has best chance of passing
• Heavy blue mold pressure
• Poor root development