American Tobacco Company

After the Civil War, Washington Duke became a successful small manufacturer of tobacco in North CarolinaNorth CarolinaNorth Carolina is a state in the South Atlantic region of the United States; its capital is Raleigh and its largest city is Charlotte. One of the original 13 states, it ratified the U.S. Constitution on November 21, 1789, becoming the 12th state, and its population in the 2020 census was 10,439,388.Open the full entry. In April 1874 he bought two acres near the railroad in Durham, where he and his sons Benjamin N. Duke and James BuchananJames BuchananJames Buchanan (1791–1868) was an American Democratic politician and diplomat who served as secretary of state (1845–1849) and as the 15th president of the United States from 1857 to 1861.Open the full entry Duke built a new factory; in 1878 George W. Watts of Baltimore joined as a partner, the firm became W. Duke, Sons and Company, and it began making cigarettes in 1881.⁠[1][2][3]

In 1884 the company leased and installed two cigarette-making machines invented by James Bonsack in Durham; when working properly, one machine could do the work of 48 hand rollers, and the company cut its cigarette production costs in half. In the spring of that year James B. Duke went to New York City to open a branch office.⁠[1]

The American Tobacco Company, organized by James B. Duke, was incorporated on January 31, 1890, with Duke as president. It combined the country’s five leading cigarette manufacturers, centered in Richmond, VirginiaVirginiaVirginia, officially the Commonwealth of Virginia, is a U.S. state whose capital is Richmond. It entered the Union on June 25, 1788, as the 10th state, and had a population of 8,631,393 in the 2020 census (April 1, 2020).Open the full entry, and New York City.⁠[3][2][1]

Through mergers and purchases the Duke brothers gained control of virtually the entire U.S. tobacco industry, some 150 factories; the company absorbed firms including R. J. Reynolds of Winston-Salem, W. T. Blackwell of Durham and F. R. PennUniversity of PennsylvaniaThe University of Pennsylvania, commonly called Penn, is a private research university and Ivy League member in Philadelphia. It traces its origins to a 1740 charity-school project; Benjamin Franklin proposed his academy in 1749, classes began in 1751, and a 1791 merger established the institution under its present name. Penn has 12 schools, with undergraduate education concentrated in arts and sciences, engineering, nursing and Wharton. Enrollment totaled 29,384 in fall 2025, and the fiscal 2025 endowment was $24.81 billion. As of October 2026, J. Larry Jameson was president, with his term scheduled to end on June 30, 2027.Open the full entry of Reidsville, and in 1904 reorganized its many firms into one corporation. By 1906 it controlled about four-fifths of the domestic tobacco industry, excluding cigars.⁠[2][3]

In 1907 a federal court ruled that the American Tobacco Company held a monopoly on licorice, a flavoring, and was in violation of the Sherman Antitrust Act; the ruling was appealed to the Supreme Court of the United States.⁠[3]

On May 29, 1911, the Supreme Court of the United States decided United States v. American Tobacco Co. (221 U.S. 106), holding that the company had to be dissolved. On November 16, 1911, it issued a decree dividing the company into three major parts, American Tobacco, Liggett and Myers and P. Lorillard, and control of the R. J. Reynolds Tobacco Company was relinquished.⁠[4][3]

The Duke Homestead State Historic Site lists a new American Tobacco Company, Liggett and Myers, P. Lorillard and R. J. Reynolds as the four major successor companies. After the dissolution James B. Duke continued his tobacco business abroad and invested in hydroelectric power.⁠[1]

In 1916 American Tobacco introduced Lucky Strike, its most popular brand, whose blend was perfected by Charles A. Penn, and in 1939 it introduced Pall Mall, one of the first king-size cigarettes. With these brands it was the most successful cigarette manufacturer of the 1940s.⁠[2][3]

In the 1950s the company failed to build equally strong filter-cigarette brands, and by the 1970s it had slipped to a minor position among U.S. tobacco makers. NCpedia records that its components were reorganized into a new corporation, American Brands, Inc., in 1968; BritannicaEncyclopædia BritannicaEncyclopædia Britannica is a general English-language encyclopedia first published in Edinburgh, Scotland, in 1768; the name also refers to its publisher, Chicago-based Encyclopædia Britannica, Inc. (which presents itself as The Britannica Group). The print edition ended in 2012, and the company’s main businesses since then have been the online encyclopedia Britannica.com, digital education products for schools and libraries, and Merriam-Webster dictionaries.Open the full entry dates the renaming as American Brands to 1969.⁠[2][3]

The company closed its Louisville plants in 1971, its Richmond plants in 1981 and its Durham plants in 1987, while expanding its Reidsville plant. In 1986 the American Tobacco Company became a subsidiary of American Brands.⁠[3]

Under an agreement dated April 26, 1994, B.A.T Industries p.l.c. agreed to buy substantially all of the outstanding stock of The American Tobacco Company, a wholly owned subsidiary of American Brands. The Federal Trade Commission, noting that B.A.T’s Brown & Williamson Tobacco Corporation and American Tobacco were the third- and fifth-largest U.S. cigarette manufacturers, had reason to believe the deal would lessen competition; a proposed consent agreement published in January 1995 required the companies to divest six former American Tobacco discount brands, Montclair, Riviera, Malibu, Bull Durham, Crowns and Special Tens, within 12 months, potentially together with the Reidsville, North Carolina, plant and the Tareyton, Silva Thins and Tall brands.⁠[5]

American Brands diversified further and by the end of the 20th century was known as Fortune Brands, having formally left the tobacco industry.⁠[2]

Duke Homestead State Historic Site: Official website: https://historicsites.nc.gov/all-sites/duke-homestead (opens in a new window).⁠[1]