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  1. #1
    Join Date
    Feb 2007
    Location
    Acworth, GA

    Patrick Irving - SI Article

    OK - the "old south tobacco" remark was out of line, but overall the article is tongue-in-cheek and actually complimentary to Duke; they hate us mostly for winning!

    And, if nothing else, the Paris Hilton joke made me snarf my coffee!!!

  2. #2
    Join Date
    Feb 2007
    Location
    Norfolk, VA

    Someone set me straight

    Okay, not to be too serious but...

    It is my understanding that the majority of the Duke family wealth was acquired via their investments in energy not tobacco. Once again, I cannot cite a source, but I distinctly remember reading this as fact somewhere. My problem (actually just one of many problems) is that I read so much I can't possibly remember when or where I read something.

    If I'm wrong, I would appreciate someone setting me straight (that's one sentence I would never type on the PPB).

    Bob Green
    Yokosuka, Japan

  3. #3
    I've read several places that Washington Duke, while conscripted into the Confederate navy, was opposed to slavery.

  4. #4
    Join Date
    Mar 2007
    Location
    Western North Carolina

    Tobacco Money. Big Time

    Quote Originally Posted by Bob Green View Post
    Okay, not to be too serious but...

    It is my understanding that the majority of the Duke family wealth was acquired via their investments in energy not tobacco. Once again, I cannot cite a source, but I distinctly remember reading this as fact somewhere. My problem (actually just one of many problems) is that I read so much I can't possibly remember when or where I read something.

    If I'm wrong, I would appreciate someone setting me straight (that's one sentence I would never type on the PPB).

    Bob Green
    Yokosuka, Japan

    Some of what we know about the modern Duke fortune is an effort at whitewashing the family history.

    Keep in mind that the following comes from a kid born in NC on a tobacco farm, so I know a little about the industry.

    At the end of the Civil War Soldiers returning to their homes needed a more efficient way to smoke a pipe. Pipe smoking is something that you need be largely immoble to accomplish. You can walk arround your house, or den, and smoke a pipe, but the ash gets everywhere and as you walk there is a real chance that the entire contents will spill out.

    Cigarettes came about as the answer to this, of course. Immediately after the War, virtually all cigarettes were hand rolled. The Dukes got in on tobacco early, and started providing tobacco in idividual packets so that smokers could buy the tobacco easily, and then roll their own. Many farmers did this, and it was a way to have a nice little upper middle class existance, especially in the decimated south.

    Duke really got rolling when he bought the patent from a guy who invented a cigarette rolling machine. Duke then begin to churn out automatically rolled cigs, and made a fortune. His company went on to become the American Tobacco Company. It was, for all intents and purposes, a monopoly, or Trust. In fact, this was one of the many companies that the Sherman Anti-Trust Act targeted, and, ultimately broke up. Today, its remnants are known as RJR and others.

    He applied the horizontal integration, with little of the vertical integration. ATC owned many tobacco fields, warehouses, and tobacco markets (kid of like a futures market, only for tobacco) throughtout the South, but primarily in NC. However, he owned little to no distribution mechanisims like railroads or stores. But he was hugely successful, using his monopoly power to keep the price of Cigs high, while driving down the cost of the supply. Sadly, one of the backbones of the tobacco production infrastructure was the concept of sharecropping. This is when a land owner allows an independant farmer to live on and work his land. The owner supplied the land, tools, and seed. The Sharecropper supplied the labor. In return, the owner got a percentage of the crop output. Sadly, the vast majority of these sharecroppers were former slaves. Their circumstances did not change much from slavery. It was a very fine distinction. They simply ceased to be property. Sharecropping operated much like the Factory Towns of the north, with the farmers unable to work their way out of Debt to the landowners. This sorry state continued in NC, and the rest of the south, up until the civil rights movement.

    Yes, the Duke's later used some of their tobacco money to buy up utilities to become Duke Power that we know and love today. But, Duke was founded by the money from Tobacco, not Duke power. Numbers wise, Duke Power made up the bulk of their fortune, but if you adjust for inflation, the peak of their wealth was in the heyday of the American Tobacco Company.

    Patrick Yates

  5. #5
    Controlling the American public's access to tobacco (and setting prices!) can be quite profitable.

  6. #6
    bob green is right, the duke money did mostly come from duke power, not tobacco. i also don't have a source but i distinctly remember learning this at some point during my time at duke, maybe on that trip to the "homestead" my freshman year.

    on the other hand, if i were in charge of duke pr i'd probably latch on to anything that diverted attention away from tobacco money... plantations and the cigarette industry, that's quite the double whammy. kinda doubt we'd have duke power without duke tobacco first. maybe i should revisit what i was once learned

    well i got curious. there are no monetary figures here but it's a link discussing some of this: http://www.ah.dcr.state.nc.us/sectio...uke/empire.htm

  7. #7
    http://www.lib.duke.edu/archives/his...vehistory.html

    According to this, it seems tobacco played a large role. There is no mention of energy money.

  8. #8

    PC vs. Duke

    In today's political correctness terms, "tobacco" money is almost as dirty as "slave" money.

    BTW, the crack in Patrick's article about everything about Duke applying to Vanderbilt ... correct me if I'm wrong, but doesn't most of Vandy's endowment come from a trust from the Vanderbilt family -- which was/is based in New York and built its fortune on shipping and New York real estate ...

    If that's right, then Vandy is not old-South money (and you know what that means) money either.

  9. #9
    I thought the Duke fortune came from, and I quote from Professor Jennings here,

    "Making their way the only way they knew how, and that was a just a little bit more than the law would allow".

  10. #10
    Join Date
    Jul 2007
    Location
    Washington, DC
    As a student at Duke, I've done a lot of community work in and around Durham over the past couple years. In my experiences, I have always been baffled by how many people truly resent Duke precisely because of the tobacco money issue. Some people, I have found, can only view Duke as a legacy of sharecropping exlploitation and white riches.

    I believe that people have every right to be upset with with the Duke family's past. And I also believe that we should not try to paint a rosy picture of what actually happened. But I will not tolerate people who try to cast all those affiliated with Duke University as being somehow guilty of a crime.

    My peers and I had to deal with this very issue a lot last year during the lacrosse saga and it was extremely hurtful. Though we as Duke students hailed from all over the world and came from very different economic and social backgrounds, some people from all over the country chose only to see us as continuers of a history of economic exploitation and defenders of the "Old South".

    That history was completely unknown to 90% of us and had no bearing on our decision to attend Duke. Rather, we chose Duke University because it was an opportunity to get the best education, make life-long friends, root for the basketball team, and to discover what to do with our lives. So you can imagine the tremendous pain we students feel when someone accuses us of being guilty of something we had nothing to do with, simply because we seized the greatest opportunity we have ever had in our lives. If thats a crime, then I guess I'm living in the wrong country.

  11. #11

    A Brief History of the Dukes and Tobacco

    http://www.ibiblio.org/dukehome/family.html

    It is clear that the Dukes made their fortune in Tobacco but at the time Duke was founded, they had moved into other ventures- mostly power.
    dukelifer

  12. #12
    Join Date
    Mar 2007
    Location
    Philly
    Quote Originally Posted by Olympic Fan View Post
    In today's political correctness terms, "tobacco" money is almost as dirty as "slave" money.

    BTW, the crack in Patrick's article about everything about Duke applying to Vanderbilt ... correct me if I'm wrong, but doesn't most of Vandy's endowment come from a trust from the Vanderbilt family -- which was/is based in New York and built its fortune on shipping and New York real estate ...

    If that's right, then Vandy is not old-South money (and you know what that means) money either.
    His comparison to Vandy was related to a different criticism of Duke: that the Crazies look like they should be on the cover of "Screw You Quarterly" (meaning we look like elitists, or something). He is saying Vandy kids have that same look/attitude or whatever

  13. #13
    I'm sorry, but this is just stupid. Yes, Duke's fortune started with tobacco, and yes, tobacco farming was exploitative. Show me an industry that WASN'T. Cotton farming? Check. Coal mining? Check. Meat packing? Absolutely. Railroads? Yes. Ship building? Coffee farming? Textile mills? Who are we kidding here.

    Northern factory owners specifically chose the poorest women they knew were married with families, as they knew women with mouths to feed would put up with more mistreatment than single women.

    Cotton farmers in Texas brought in Latino migrant labor long before pickle companies in North Carolina were doing it. They paid them in "credits", currency that had no value outside of the farm, to keep them from remitting wages back home to their families.

    Developing markets across the world are built on the exploitation of cheap labor. Cotton farmers in Africa today are no better off than sharecroppers in the Old South. They receive a pittance for their crop, and 30% of the actual market price of their cotton goes to the French, with the rest going to the African governments. Let's not get into Asian sweatshops..

    Indeed, the Dukes were likely far better than most. Certainly they did a far greater service to their community with their fortune than have done 99% of labor exploiters across the earth...

  14. #14

    A little history

    The a "scholarly" history of the Duke family during the post Civil War to 1929 is set forth in the book: The Dukes of Durham, 1865-1929 (Hardcover) by Prof. Robert Franklin Durden. For the full Indenture creating The Duke Endowmentsee http://www.dukeendowment.org/resources/indenture .

    (I am setting forth a little history and a portion of The Duke Endowment Indenture for those interested.)

    The Duke's (Primarily James Buchanan (Buck) Duke) built the American Tobacco Trust. It was dissolved by the Trust Busters in the early 20th Century. (Buck Duke was hired by the Federal Court to supervise the division of American Tobacco so that the resulting companies would be economically viable.) This Trust Busting resulted in American Tobacco, Liggett & Meyers, Brown & Williamson, P. Lorrilard, British-American and many other companies to become independent companies. All of these companies exist today in one form or another.

    Duke was living in New York and New Jersey by this time but still had a home in Durham located on Chapel Hill Street where the North Carolina Mutual Life Insurance Company is located (across from Duke Memorial Methodist Church.) The Duke family was also heavily in the textiles business and in Durham worked closely with W. A. Erwin (Erwin Mills on 9th Street and the source of the land for the Central Campus Housing, Carr Mills in Carrboro) and others and had an interest in the large Textile Factory that is now the Senior Housing on Angier Avenue off East Main Street as well as Golden Belt Manufacturing. Their textile interests were throughout North and South Carolina.

    Buck also moved into the electric power field - creating Duke Power Company. Duke Power built the system of lakes on the Catawba River, starting with Lake James in the mountains and continuing on down the river through a series of dams & lakes in NC to include Lake Norman which began filling in 1962. He also built coal fired facilities on the Yadkin River and down into South Carolina.

    In 1924 at Buck Duke's direction, his Attorney, William R. Perkins (ever seen that name?) created "The Duke Endowment, Indenture of Trust". This Endowment paid the funds for the creation of Duke University. The University is named in honor of Washington Duke, Buck's father.

    Read the Endowment Indenture to get an idea of the breadth of the giving of Buck Duke. Duke only gets a percentage (32%) of the income of The Duke Endowment.

    The endowment's initial Corpus was the following Stock deposits:

    122,647 Shares of Stock of Duke Power Company, a corporation organized
    and existing under the laws of the State of New Jersey.

    100,000 Ordinary Shares of the Stock of British-American Tobacco
    Company, Limited, a corporation organized and existing under the
    laws of Great Britain.

    75,000 Shares of the Common “B” Stock of R.J. Reynolds Tobacco
    Company, a corporation organized and existing under the laws of
    said State of New Jersey.

    5,000 Shares of the Common Stock of George W. Helme Company,
    a corporation organized and existing under the laws of said State
    of New Jersey.

    12,325 Shares of the Stock of Republic Cotton Mills, a corporation organized
    and existing under the laws of the State of South Carolina.

    7,935-3/10 Shares of the Common Stock of Judson Mills, a corporation
    organized and existing under the laws of said State of South Carolina.

    The Indenture provides:

    "Fourth.
    The trustees hereunder are hereby authorized and directed to expend as
    soon as reasonably may be not exceeding Six Million Dollars of the corpus
    of this trust in establishing at a location to be selected by them within
    the State of North Carolina an institution of learning to be known as
    Duke University....
    ...Duke University may eventually include Trinity College as its undergraduate
    department for men, a School of Religious Training, a School for
    Training Teachers, a School of Chemistry, a Law School, a Co-ordinate
    College for Women, a School of Business Administration, a Graduate School
    of Arts and Sciences, a Medical School and an Engineering School, as and
    when funds are available."

    The Indenture, in Paragraph 5, provides for the distribution of Income of the Endowment:

    "Fifth.
    The trustees hereof shall pay, apply, divide and distribute the net amount
    of said incomes, revenues and profits each calendar year as follows, to wit:
    Twenty per cent of said net amount shall be retained by said trustees
    and added to the corpus of this trust as a part thereof for the purpose
    of increasing the principal of the trust estate until the total aggregate
    of such additions to the corpus of the trust shall be as much as Forty
    Million Dollars.
    Thirty-two per cent of said net amount not retained as aforesaid for
    addition to the corpus of this trust shall be paid to that Duke University
    for which expenditures of the corpus of the trust shall have been made by
    the trustees under the “FOURTH” division of this Indenture so long as its
    name shall be Duke University and it shall not be operated for private
    gain, to be utilized by its Board of Trustees in defraying its administration
    and operating expenses, increasing and improving its facilities and equipment,
    the erection and enlargement of buildings and the acquisition of
    additional acreage for it, adding to its endowment, or in such other manner
    for it as the Board of Trustees of said institution may from time to time
    deem to be to its best interests, provided that in case such institution shall
    incur any expense or liability beyond provision already in sight to
    meet same, or in the judgment of the trustees under this Indenture be not
    operated in a manner calculated to achieve the results intended hereby,
    the trustees under this Indenture may withhold the whole or any part of
    such percentage from said institution so long as such character of expense
    or liabilities or operations shall continue, such amounts so withheld to be
    in whole or in part either accumulated and applied to the purposes
    of such University in any future year or years, or utilized for the other
    objects of this Indenture, or added to the corpus of this trust for the
    purpose of increasing the principal of the trust estate, as the trustees
    may determine.
    Thirty-two per cent of said net amount not retained as aforesaid for
    addition to the corpus of this trust shall be utilized for maintaining and
    securing such hospitals, not operated for private gain, as the said trustees,
    in their uncontrolled discretion, may from time to time select for the
    purpose and are located within the States of North Carolina and/or South
    Carolina....
    Five per cent of said net amount not retained as aforesaid for addition
    to the corpus of the trust shall be paid to Davidson College....
    Five per cent of said net amount not retained as aforesaid for addition
    to the corpus of the trust shall be paid to Furman University....
    Four per cent of said net amount not retained as aforesaid for addition
    to the corpus of the trust shall be paid to the Johnson C. Smith University
    ....
    Ten per cent of said net amount not retained as aforesaid for addition
    to the corpus of this trust shall be paid and distributed to and among such
    of those organizations, institutions, agencies and/or societies, whether
    public or private, by whatsoever name they may be known, not operated
    for private gain, which during such year in the judgment of said trustees
    have been properly operated as organizations, institutions, agencies and/
    or societies for the benefit of white or colored whole or half orphans within
    the States of North Carolina and/or South Carolina....
    Two per cent of said net amount not retained as aforesaid for addition
    to the corpus of the trust shall be paid and expended by the trustees for the
    care and maintenance of needy and deserving superannuated preachers
    and needy and deserving widows and orphans of deceased preachers who
    shall have served in a Conference of the Methodist Episcopal Church, South
    (by whatever name it may be known) located in the State of North Carolina.
    Six per cent of said net amount not retained as aforesaid for addition
    to the corpus of the trust shall be paid and expended by the trustees in
    assisting (that is, in giving or lending in no case more than fifty per cent of
    what may be required for the purpose) to build Methodist churches under
    and connected with a Conference of the Methodist Episcopal Church, South
    (by whatever name it may be known) located in the State of North Carolina,
    but only those churches located in the sparsely settled rural districts of
    the State of North Carolina, and not in any city, town or hamlet, incorporated
    or unincorporated, having a population in excess of fifteen hundred
    people according to the then last Federal census.
    Four per cent of said net amount not retained as aforesaid for addition
    to the corpus of the trust shall be paid and expended by the trustees in
    assisting (that is, in giving or lending in no case more than fifty per cent of
    what may be required for the purpose) to maintain and operate the Methodist
    churches of such a Conference which are located within the sparsely
    settled rural districts of the State of North Carolina, and not in any city,
    town or hamlet, incorporated or unincorporated, having a population in
    excess of fifteen hundred people according to the then last Federal census."

  15. #15
    Join Date
    Feb 2007
    Location
    New York, NY
    As a senior in 1981, a friend and I filled up the glass cabinets in the entrance to Perkins with drugs. I was in charge of the tobacco and so read up on the Duke history. My friend made use of his anthro professor's collection and filled multiple cases with coca leaves, marijuana cigs from multiple continents, peyote, mushrooms, etc. We kept waiting to get busted, but it stayed for a month with no problem. It did get a lot of attention from our fellow students, and not because of my contribution.

    Anyway, my understanding is that the Duke's went from hardscrabble to rich in a generation, and that was partly fueled by the Civil War ending. There were apparently two treaties to be signed, and, after the first was completed, thousands of soldiers were loitering around Durham. Bored, they broke into and stole Bright Leaf tobacco that was drying in warehouses. It was an unusually smooth type of tobacco and--I think--can be more easily used in cigarettes than the kind that was more widely available. When they returned home, all over the country, they wrote back asking for more, and the Duke family began the national campaign that led to complete domination of the industry.

    I'm not sure what's bad about the way that they minted money. Tobacco is now seen as somewhat evil because it kills people, but no one knew that then. I have not heard that the Duke family was especially egregious when it came to dealing with workers (for egregious, check out railroads, mining, etc), and so I don't think they have much to apologize for.

  16. #16
    Join Date
    Feb 2007
    Location
    Rougemont Nebulae
    Quote Originally Posted by Bob Green View Post

    If I'm wrong, I would appreciate someone setting me straight (that's one sentence I would never type on the PPB).

    Bob Green
    Yokosuka, Japan
    On the PPB, you don't have to ask. People will "set you straight" out of generosity of spirit. It's one of the PPB's little perks.

  17. #17
    Join Date
    Feb 2007
    Location
    Durham
    Quote Originally Posted by Olympic Fan View Post
    In today's political correctness terms, "tobacco" money is almost as dirty as "slave" money.

    BTW, the crack in Patrick's article about everything about Duke applying to Vanderbilt ... correct me if I'm wrong, but doesn't most of Vandy's endowment come from a trust from the Vanderbilt family -- which was/is based in New York and built its fortune on shipping and New York real estate ...

    If that's right, then Vandy is not old-South money (and you know what that means) money either.
    Yes, Cornelis Vanderbilt's company was big into shipping in the early days of New York City and that's how they built his fortune. But, company-owned slave labor built much of the foundation of New Amsterdam (now New York City) through the clearing of forests, the laying of roads, the construction of houses and public buildings, etc. Most early businesses in NYC depended heavily on slaves and Vanderbilt's company was no different. So while Vandy still built his empire in the North, slaves were an integral part of the labor necessary to build that wealth. My History of New York City class back in '04 is actually coming to use. Wow....
    Last edited by Classof06; 07-18-2007 at 06:30 PM.

  18. #18

    Most Duke money came from investments

    According to the guy that runs the Rare Book Room in Perkins Library, the Duke family actually made most of their fortune in the stock market. Obviously, the family had to make money initially to invest and that came from tobacco. But, if James B. Duke waited until after the market crashed in 1929 (well, he died in 1925, I think, so it would have been hard to wait until then), Duke would not have ever existed at all, according to the Rare Book guy. Or, it would exist as Trinity College and wouldn't be near where it is today.

  19. #19
    Join Date
    Feb 2007
    Location
    Inman, SC & Melbourne Beach, FL
    I think we need to remember that any judgment about good and bad about Duke (or any other family) should be made in terms of what was legit in the day, rather than what is considered PC now. The point was made that the Vanderbilts were every bit as exploitative as the Dukes, but I think that all of the empire-builders were. It was the times.
    Basically those families, some of whom are now reviled, built much of this country.

  20. #20

    Wink a bit of history but longish

    Great to see some interest in Duke, family and university, history on the board. However, having spent thirty years as University Archivist, I know how confusing it can be.
    Here are a few thoughts. On the initial reference to Washington Duke and slavery. He did own one slave. On the eve of the Civil War he found himself widowed for the second time and with four young children when his second wife and a young boy died at the same time from “the fever.” He had a young slave girl to help him raise the children and cook and run the house. However, as the prospect of war approached Washington did not favor secession, and he opposed slavery. When the Confederate Congress raised the draft age to 45 he was conscripted to a cause he did not support. At a sophomore picnic at the family homestead, the historic site in Durham, I heard a student say “So this is the Duke plantation.” It was a modest farmhouse for a struggling farm Duke left as soon as he was comfortable doing so. He clearly was not part of the Southern plantation life or ideal. He fact later in life he said he felt really poor twice in his life—once when he started out on his own and again when he had to start all over again at the end of the war.
    As outlined W. Duke & Sons became successful competitors in the manufacture of tobacco products and, went really big time when James B. left Durham for NYC and organized the American Tobacco Company. That is the basis for the family fortune but there were other reasons for wealth as well. JB began helping friends invest in electric power production and when the Sherman Anti-Trust Act was enforced breaking up the tobacco trust in 1912, JB Duke did not slow down moving over to the building up and organizing another industry. Also a significant corollary was investment in textiles which used the power being produced. Benjamin Duke was at one time the largest textile manufacturer in NC. He was president of Erwin Cotton Mills on 9th street, only one of his mills. All the family members held stock in all of their enterprises including the multiple tobacco companies after the break up. And the British American Tobacco Company was not touched by US gov’t action.
    In reality when he set up the family philanthropic organization, The Duke Endowment, in 1924, it was based primarily on electric power and not tobacco. Hence, the University in reality was built and supported with power company wealth. However, one can not escape noticing JB’s big cigar in his hand on the statue in the main quad. (He did not smoke cigarettes!)
    There have been critics of the family and university and always will be but the best reply is a little knowledge and a positive argument. Historical assessments change with the times, think robber barons vs. industrial entrepreneurs. In perhaps my biased opinion I would argue that James B. Duke is the most significant single man in the history of NC. He organized two major industries that formed the basis of the developing economy of the state and he established a philanthropic agency that is still playing a significant role in the state and will for many years to come. And that is only one of the philanthropies of the family. Check out the Mary Duke Biddle Foundation and Doris Duke Charitable Trust as the most visible of others. The Dukes are one of America’s most significant and consistent philanthropic families.
    Plus he helped found one of the major research universities in the world in transitioning Trinity from a college to a university. And uniquely this major benefaction was in his hometown. Why did you end up spending four plus years of your life in Durham, NC? In all my research I think I can say that only Duke and Brown are major universities founded my philanthropists that benefit and continue to benefit their hometowns. (Vandy has been mentioned and the Vanderbilt that endowed it never set foot in the state of TN.) If this reads like a commercial, IT IS. Go Duke

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