Chapter One
Esse Quam Videri (To Be Rather Than to Seem)
âNorth Carolina state motto
Southerners are exposed the most when they boast.
âROBERT PARRIS MOSES
In the beginningâin 1864âDurham, North Carolina, was a scruffy cluster of shacks with under a hundred residents, surrounded by impoverished farms and linked by rutted dirt lanes that kicked up plumes of choking dust in the summer and became nearly impassable with mud in the winter. But in the span of just a few decades straddling the turn of the twentieth century, in a region still reeling from a bloody civil war and its calamitous aftermath, the town rose from obscurity to become the Jewel of the New South.
Durham transformed itself into a bustling, modern city: Electric trolley cars clattered down broad, tree-lined avenues. Newly successful businessmen erected mansions, filled them with imported objets dâart, hung costly crystal chandeliers in every room, and encircled their properties with groves of graceful maple trees and fragrant magnolias.
On warm summer evenings, entire families rode the open-air trolley out to the Lakewood amusement park, dubbed the âConey Island of the Southâ by promoters. It was only a slight exaggeration. At Lakewood, teenagers joined in the new national fad of roller-skating on an indoor wooden rink. Couples danced to the latest hits while fireworks exploded overhead, or they enjoyed light comedies performed by a local stock company, in a theater that served as a casino between productions. For youngsters, there was a merry-go-round. For older children and stouthearted adults, Lakewood boasted a large roller coaster that filled the air with the clacking of metal on wood and the delighted shrieks of its riders. The truly daring, however, gamely climbed into a rattan gondola, felt hats or straw bowlers grasped tightly in hand as a hot-air balloon lofted them skyward. They rose with surprising speed into the clear North Carolina air until the din of Lakewood was a distant murmur and the entire city of Durham lay beneath them. From that altitude the streets and lanes of the city were mere lines on a page, the houses and factories a childâs collection of boxes. Hills flattened into nothingness, lowlands rose until they merged with promontories, and every part of Durham was revealed and intelligible in the gelid light.
âJust like a toy village,â they reported, breathlessly, to their admiring families upon returning to earth.
By 1900, Durham claimed 7,000 citizens; a decade later, nearly 20,000. The city was home to a large laboring class, a small middle class, and even a few millionaires who regularly packed up their wives and children for the Grand Tour of European capitals. âEverything here is push,â wrote a local newspaper editorialist in 1906, âeverything is on the move, every citizen is looking out for everything that will make Durham great.â
Isolated, torpid, tattered little Durham had become the envy of the South. It was hailed as the âCity of Opportunity,â the âChicago of the South,â âForemost City of the New South,â and âType-Town of the Future South.â
The townâs new status may have struck many Southerners as ironic, for in the years immediately following the Civil War, Durham was known chiefly as the site of one of the Confederacyâs final humiliations. On April 26, 1865, General Joseph Eggleston Johnston surrendered the Southern troops to Union general William Tecumseh Sherman at a farmhouse just outside of town. Most Americans date the end of the Civil War with the rendezvous, two weeks earlier, of Generals Robert E. Lee and Ulysses S. Grant at Appomattox Courthouse. Lee had surrendered only the Army of the Potomac. Tens of thousands of rebel soldiers remained in the field all across the South. True, they were ill fed and ill equipped, suffering from low morale and yearning to return home to their families and farms in time for spring planting. But they were still an army. Although no one considered them capable of winning the war, they could at least draw out the bloody conflict for weeks or months and inflict heavy casualties on Union troops.
After earlier negotiations had broken down, Confederate President Jefferson Davis had ordered Johnston to retreat while the politicians held out for more favorable terms of surrender. Johnston, however, would not wait. He shared the sentiment that his adversary Sherman would later so famously proclaim: that âwar is hell.â Physically, the Southern general resembled the owner of a dry-goods store more than a career warrior. He was a dozen years older than Sherman, with sparse gray hair and sad brown eyes. Morose by nature, there was little in his present circumstance to give Johnston any cheer. His men were starving. Much of the South already lay in ruins. The dream of an independent Confederate States of America had long since died.
âMy men are daily deserting in large numbers,â he informed Davis. âMy small force is melting away like snow before the sun . . .â Privately, Johnston was even more forceful, telling friends that to continue fighting under such circumstances would be âcriminal.â
Johnston simply ignored his Presidentâs instructions (a courageous act for which Davis branded him a traitor). Seated beside Sherman at a small wooden table inside the farmhouse, he signed articles of surrender and then walked out of the dark room and into the brilliant sunlight of the North Carolina spring. Standing amidst blazing cherry blossoms, he ordered the men under his commandâsome 88,000 troops in North Carolina, Georgia, and Floridaâto lay down their weapons. The Southâs defeat was official.
Durhamâs fortunes were about to change, however, and in an unlikely fashion. The seeds of its future magnificence were riding in the pockets and packs of Shermanâs exhausted Federal troops. The returning soldiers carried the only booty available in the squalid town: the pale golden leaves of âbrightâ tobacco. They had looted a small tobacco factory not far from the farmhouse where the two generals thrashed out the terms of surrender. The owner, one John Ruffin Green, was ruined when his inventory of âBest Flavored Spanish Smoking Tobaccoâ disappeared.
It was the best thing that had ever happened to Green. After four years of eating bug-infested rations, sleeping in cold and damp tents, and slogging night and day through thickets and mud, American men had had enough of rough pursuits. They eagerly traded harsh burley tobaccos then popular for the mild and sweet-tasting bright tobacco they found in Durham. The former soldiers couldnât get enough of it; orders for Greenâs tobacco soon began pouring in from around the country. Green went from bust to boom in weeks, buying up whatever tobacco was available from his neighbors and shipping it off to New York, Kansas, Ohio, Iowa, Pennsylvania, Maine, California. Casting around for a company symbol, Green chose the profile of a bull. A similar image appeared to work well for another product: a popular brand of mustard. It also seemed like a good omen to Green that the condiment was made in Durham, England. Just four years after the end of the war, his company was shipping 60,000 pounds of âGenuine Bull Durham Smoking Tobaccoâ annually. In 1883, it sold over five million pounds.
Green started Durham down the tobacco-lined path of prosperity, but another family, of even humbler origins, was responsible for parlaying his good luck into a business empire rivaling the railroad and oil trusts of the North. This was the family of Washington Duke: the elder Duke, his three sonsâBrodie, Benjamin, and Jamesâand daughter, Mary. Together, they amassed one of the great American fortunes of their era.
For the first five decades of his life, there was nothing remarkable about Washington Duke. A small farmer before the war, and twice a widower, Duke was always on the edge of ruin, scratching a living from the lean soil of the northern Piedmont. An ardent Methodist, he was an abstemious, plain-spoken man, tall and muscular, with a dry sense of humor. Like many citizens of the upper South, Duke opposed secession. Although he briefly owned one slave, Duke was not known as a supporter of slavery, but in late 1863, when Duke was in his forties, the Confederacy began drafting men his age. Leaving his children with relatives, he went off to do his duty.
Duke was captured after the battle of Richmond and spent a few months as a prisoner before being released at warâs end. With just fifty cents in his pocket, he walked 134 miles home to his farm to start life over again, growing and processing tobacco, selling it in bags labeled âPro Bono Publicoâ (For the Public Good) from the back of a wagon pulled by a pair of blind mules. The W. Duke and Sons company grew steadily, thanks to the Dukesâ hard work and frugality (âWashâ Duke and his sons slept in a single bed set up inside their factory). All the Dukes were involved in the family business in varying degrees, but the real force behind the company was clearly the youngest son, James Buchanan Duke, known to intimates as âBuck.â Buck Duke was a man seemingly created for his rough, freewheeling times. As severe as his father, but lacking the older manâs sense of humor, the brilliant young industrialist was guided by a near-religious faith in Progress, Business, and Machinery that allowed him to speak without blushing of âbusiness templesâ when discussing factories.
In 1881, the innovative Buck added a new product to the Duke line: cigarettes, already popular in Europe, but still relatively untried in America. He hired scores of skilled Jewish cigarette rollers from Poland (by way of New York) and began manufacturing and selling âDuke of Durhamâ cigarettes. His rivals at Bull Durhamâby this time reorganized as the Black-well Durham Tobacco Companyâalso made cigarettes and, as the more established company, managed to outsell him. Buck Duke was reminded of that fact several times each day when he heard his rivalâs huge steam whistle, designed to sound like a bellowing bull. The frustrated Buck likened the task of outselling the âBullâ to running into a stone wall.
Buckâs envy of his competitor couldnât be explained in traditional business terms. There was, after all, plenty of money to be made by the two growing tobacco firms, not to mention the several smaller companies in and around Durham at the time. But there was only one thing that could satisfy Buck Duke and the other leading businessmen of his dayâMellon, Morgan, and Rockefeller: crushing their competition. Absolute control through a monopoly was the goal, not merely building a successful business. This was the new American way of doing business: energetic and ruthless, marked by ingenious new methods of production and technologies, driven by insatiable appetitesâand always on a scale as large as the new continent where it was practiced.
Buck Duke helped to shape his times. In 1884, at the age of twenty-seven, he moved to New York City, to be closer to the financial markets that pumped the lifeblood of the new industrial age. A yuppie a century ahead of the herd, Buck read only business reports, wrote almost no letters (even to his family), and for entertainment would walk the streets of New York at night, head down, counting empty cigarette packages to see if there were more of his brands or his hated competitorsâ. This way of businessâand of lifeâpuzzled and distressed Washington Duke.
âThere are three things I never could understand,â the aging patriarch once confessed. âElectricity, the Holy Ghost, and my son Buck.â
It is fitting of both the man and his times that what allowed Buck Duke finally to beat the Bull and to create a true empire was his decision to gamble everything on a new and untried technology: the cigarette-rolling machine. Although the Bon-sack cigarette machine could do the work of forty-eight hand rollers when it was operating correctly, in the spring of 1884, when Buck first placed a rolling machine in his Durham factory, its performance was unreliable. Other manufacturers had largely steered clear of the machines because, in addition to questions about the machineryâs dependability, it was felt that the public wouldnât accept machine-rolled cigarettes. As always, Duke went his own way. He leased several of the machines, replacing all hand rollers by 1888. Once the bugs were worked out of the Bonsack machines, Duke churned cigarettes out of his factories at an unprecedented rateâ823 million in 1889âand at a price his competition couldnât match.
But mechanization wasnât Dukeâs only weapon in the struggle for market dominance. He was also âan aggressive advertiser,â observed a magazine profile of the era, âdevising new and startling methods which dismayed his competitors; and always willing to spend a proportion of his profits which seemed appalling to more conservative manufacturers.â Duke funneled millions of dollars into promoting his brands through newspaper and magazine advertising, sponsoring athletic teams, giving away free merchandise sporting his brand names, and including with packs of cigarettes small photographs of scantily clad women. The last technique moved his prudish father to fire off a letter complaining about the âlascivious photographs.â The elder Duke informed his son that he âalways looked upon the distribution of this character of advertisement as wrong in its pernicious effects upon young man- and womanhood, and therefore [it] has not jingled with my religious impulses.â The photographs continued, however, as did Buckâs faith in the power of advertising. Although some Americans still werenât smoking or chewing his products, âif there is enough [advertising] work put back of them,â he declared flatly, âwe will make them all consumers.â
Even with his machines humming and advertisements for his products insinuating themselves into all aspects of American life, Duke wasnât satisfied with his market share. His competitors soon had their own rolling machinesâalthough Duke had worked out a special arrangement with the machineâs makers guaranteeing him a rate 25 percent under the best price charged any other manufacturer. His competitors also advertised heavily. (The makers of Bull Durham had, in fact, blazed the marketing path ahead of Duke, even slapping their emblematic animal on the side of the Great Pyramid in Egypt.)
On April 23, 1889, Buck Duke took the single most important action in his dynamic career. At precisely 3:30 P.M., at the posh Fifth Avenue Hotel in New York City, he convened a meeting with his four largest competitors. There, Duke announced his stunning plan: the men would weld their five companies into a single mammoth holding company. As far back as 1885, Duke had discussed less ambitious joint ventures with some of the individuals in the room, but what he now suggested was on a different scale altogether. Their company would do with tobacco what John D. Rockefeller had done with oil and J. P. Morgan with steel: it would dominate the market and absorb or wipe out virtually all other manu...