As always, some of the images can be viewed at larger size by clicking on them
August 12-14 I was in New York for food and art and jazz, so missed the official Salem 250 celebration on the square. While I was receiving reports on that, one person said “Wow, Salem has a lot of old stuff. What old stuff do we have in the Winston part of town?”
Well, yes, Salem does have a lot of “old stuff”, including a number of restored 18th century buildings, and they do a great job of using those resources to give us a sense of where we came from. And outside the Old Salem district, but still in the Salem part of town, are the two oldest factory buildings in Forsyth County, the 1836 Salem Cotton Manufacturing Company, now operating as the Brookstown Inn, and the 1880 Arista Mill, which houses the Winston-Salem Vistor Center and other offices, both on Brookstown Avenue.
But “old” does not necessarily equate to “more important”. Without the “less old” fortunes created by the 19th and 20th century tobacco and textile industries, neither Old Salem, the past, nor the Innovation Quarter, the present and future, would exist.
While trying to illustrate that point, I stumbled upon an extraordinary story that has been missing from our history for over a century. The Innovation Quarter is building itself upon a goodly collection of early 20th century tobacco buildings. I currently work in the Forsyth County Government Center, which was originally buildings 12A and 12B (1916-17) of the R.J. Reynolds Plant 256. In the late 19th century, there were dozens upon dozens of such buildings concentrated along the railroad between Main Street and the present US 52. Where have they gone? Are any of them left?
Well, yes. Right at the center of the IQ, there are three, the only three still standing. One is the 1894 S.J. Nissen wagon repository, facing on the old Depot Street at Third, which sold, repaired and painted wagons and buggies. Another is the grand six story building with a mansard roof with hip roofed gables that bears the “Piedmont Leaf Lofts” logo, facing on Vine Street at the corner of Fourth, built in 1893 at a cost of $11,000 as a leaf storage warehouse by the Brown Brothers tobacco company. It plays a role in our story, but the heart of the matter is the somewhat mousy gray five story step gable building across Fourth Street, also a part of the current Piedmont Leaf Lofts, but originally built as yet another leaf storage warehouse by Colonel W.F. Smith in 1889.
Considering the times, when Washington Duke of Durham had just begun his American Tobacco trust in an attempt to gain control of the world tobacco market, we might suspect Colonel Smith of engaging in a bit of deception.
In those days, virtually all tobacco production in Winston and elsewhere in North Carolina was focused on chewing tobacco, with a bit of smoking…that is pipe…tobacco thrown in, with a smidgin of snuff. But Duke and his cohorts had already begun to focus on the more profitable cigarette business. The local story has always gone that in 1912, after the American tobacco trust had safely been busted, R.J. Reynolds introduced four test brands of cigarette…Reyno, Red Kamel, Osman and Camel…and in late 1912 had introduced Camel as the first national cigarette brand. Camel quickly became the number one selling cigarette in the world and so the city of Winston-Salem, already branded the Twin City, acquired a second nickname, the Camel City.
But what if that nickname should have been the Magnolia City? William Forbes Smith was born in Milton, Caswell County, NC in 1837. He married a local girl and followed his father into the tobacco leaf business. In 1882, he was appointed as an officer of the U.S. Revenue Service and moved to Winston. The following year, with his sons Henry and Sterling, he founded W.F. Smith & Sons, tobacco leaf dealers. They were originally located on Chesrnut Street, near Fourth. When the new building was completed in October, 1889, Colonel Smith quietly ran his business as a leaf storage warehouse for three years. But in late 1892, twenty years before Camel, he let slip that he would soon begin making cigarettes on the fourth floor of his building. At first, the cigarettes would be handmade by “expert cigarette girls”, meaning girls between the ages of twelve and sixteen. But soon, the girls would be replaced by a revolutionary new machine.
At the time, Duke’s American Tobacco trust controlled the best and most efficient cigarette making machine, manufactured by the Bonsack Company. But as events unfolded in the spring of 1893, we discovered that a young man named W.C. Briggs had invented a new machine, and that he and other local folks were forming the Winston Cigarette Machine Company to manufacture them.
In April, the first handmade Smith cigarettes began rolling out at 150,000 smokes per day, under the name Magnolia. The “expert girls” turned out the same number every day and Smith sold all they could make. In June, there were some problems…Smith was unable for several days to ship any cigarettes because the required government tax stamps were not available. We don’t know whether Smith suspected that someone was tampering with the stamp supply, but it wasn’t long before he found out. It was the American tobacco trust. If you cannot win fairly, cheat. It’s as American as apple brandy.
In late summer the first Winston cigarette machines came online, and shipments jumped to 400,000 cigarettes per day. Smith used several local wholesalers to distribute his product. Suddenly, in a period of a few days, all of them were visited by a man representing the American Tobacco trust, who threatened to take away their quantity discounts or even cut off their access to American Tobacco trust products if they continued to distribute Smith’s Magnolia brand. But since they were all selling far more of Smith’s product than they were of the American brands, they all told him to take a hike.
Early in 1894, Smith introduced a second cigarette, City Talk. By the end of the year, they were selling as well as Magnolias, with both brands sold as far west as Wisconsin. By then, other local firms, both using the new Winston cigarette machine, had joined the cigarette manufacturing community. Brown Brothers were making Kettle Drum, Long Horn, Top, Horn and Virgin brands. And a new outfit, the Liberty Tobacco Works, had been formed by L.W. Pegram & Company in August 1894. They began with three cigarette brands: Center Rush, Ten Strike and Zephyr Puffs.
So in 1895, the American Tobacco trust and their puppet Bonsack sued the Winston Cigarette Machine Company, W.F. Smith & Son, Brown Brothers, who had a significant investment in the Winston machine company, the Liberty Works and J.A. Vance for patent infringement in regard to the cigarette making machines.
That triggered a brief period of anxiety and bluster. The local defendants put together a crisis fund and hired three of the best lawyers in North Carolina, all Twin City residents…John Cameron Buxton, Cyrus B. Watson and Clement Manly…along with W.D. Baldwin of Washington, D.C.
Meanwhile, Richard Olney, the Attorney General of the United States, was drawn into the case. He suggested, since the American Tobacco trust was an illegal combination under both federal and North Carolina law, that an indictment be sought against Washington Duke and his minions. Robert B. Glenn, the US attorney for the Western District of North Carolina responded by convening a grand jury. Nothing much ever came of that effort.
But after several delays, in the summer of 1895 the infringement case proceeded in Asheville under Federal judge C. H. Simonton, of the U.S. Circuit Court. The local companies offered two defenses:
1. Since the American Tobacco trust is an illegal entity, it has no right to protection.
2. The Winston Cigarette Machine Company’s product is not an infringement on any patent.
A three day trial ensued. On Tuesday, October 1, all of the principals received a telegram from Judge Simonton. He did not mention the American trust’s right to sue. But he found that no infringement had occurred. In addition, he held the American Tobacco trust and the Bonsack company responsible for court costs estimated to be in the range of $30-40,000. A crushing defeat for the bad guys.
The Twin Citians celebrated, but perhaps a bit too soon. Other events were already overtaking matters. A year before, the son of one of the Brown Brothers partners had joined his brother-in-law T.F. Williamson in founding a new tobacco firm, Brown & Williamson. Much of the Brown family energy became directed to that company, which would become a major player in the tobacco industry. Then, one of the founding brothers died. A year later, his son, the most active partner, W.T. Brown, left the company to operate a new venture, the Southern Chemical Company, a fertilizer manufacturer, that was the brainchild of R.J. Reynolds and Jacob Lott Ludlow.
Colonel Smith was in declining health, suffering from a heart condition. He died in 1900. His son, Sterling, was more interested in fraternal organizations and public service, soon becoming the head of the local Tobacco Board of Trade. The W.F. Smith & Son company reverted to its origin as a tobacco leaf dealer. Magnolia and City Talk cigarettes disappeared from the scene.
Around the same time, the Dukes decided to get serious about creating a monopoly in the tobacco business. To that end, the Continental Tobacco Company was organized in December, 1898, a simple holding company under the control of American. They began swallowing up dozens of other companies at an amazing rate. This was not about expansion. It was about eliminating competition, so almost all of the companies were immediately closed. In need of capital, R.J. Reynolds was forced to turn to Buck Duke, so in March, 1899, Reynolds fell under control of Continental. Because of widespread hostility to the trust, the principals attempted to keep the transaction secret, but those paying attention knew what was happening. Reynolds was allowed to continue operating independently, but became the designated hitman with orders to buy up what was left of the independents.
Bailey Brothers, Brown & Williamson and Taylor Brothers made it clear that they would never sell to Duke or Reynolds or anyone else. But in 1900, Reynolds bought out the four other larger companies, first the T.L. Vaughn Company (April 10, for $90,506), then Brown Brothers (December 17 for $60,615), and finally the Benjamin Franklin Hanes and P.H. Hanes companies (later in December for $671,950). All of those companies were immediately shut down. By the new year of 1901, the American Tobacco Company had what it wanted. All of the transactions went smoothly, but many years later a long retired Reynolds executive told historian Nanny Tilly that at some point Vaughn had second thoughts and threatened to kill R.J. That was taken seriously enough that two Reynolds employees, one of them the future company treasurer D. Rich, who lived right across the street, guarded the Reynolds house at 666 West Fifth Street at night for some time.
In early 1907, the trust acquired a controlling interest in the last of the big Winston independents, the Lippfert-Scales Company. They were allowed to continue operating independently, manufacturing several chewing brands and their two cigarettes, School Boy and School Girl, which were also offered as cheroots.
That same year, the American Tobacco Company was indicted for violation of the Sherman Anti-trust Act. The following year, the U.S. Justice department filed charges…65 companies and 29 individuals were named in the suit. After conviction and appeals, in 1911, the U.S. Supreme Court upheld the order of dissolution against American. Four mini-monopolies emerged, one of them being the R.J. Reynolds Tobacco Company. Among other things, it still controlled the Liipfert-Scales Company. On January 1, 1912, Liipfert-Scales was absorbed by RJR. That left only three significant independent tobacco manufacturers in the Twin City…Bailey Brothers, Brown & Williamson and Taylor Brothers. To find out what happened to Bailey Brothers when they defied the new “Big Four”, go here: Who Killed (Bill) Bailey Brothers?
But the Winston Tobacco Machine Company flourished. In 1897, William Cyrus Briggs and William Francis Shaffner formed the Briggs-Shaffner Company. For over half a century they continued to produce machinery for the tobacco manufacturing industry. In 1915, they branched out into textile machinery. During World War II they made bazookas, mortar shell fins, high altitude bomb fuses, and tank and land mine parts. The company is still in operation, with headquarters in Yadkinville, NC.
So Smith & Sons beat Reynolds to the punch in cigarette manufacturing by twenty years. Anyone for adding the Magnolia City to Winston-Salem’s list of nicknames?
This story has never been told before, except in bits and pieces in the newspapers and court records as it unfolded, with no connections made between the parts. I stumbled on it while trying to find precise dates for the three remaining 19th century industrial buildings in the old Winston factory district. So the sources are mostly local newspapers online at Newspapers.com and court documents. The prices paid for the local tobacco manufacturers in 1900 by R.J. Reynolds on behalf of the Continental Tobacco Company come from a reprint of the court documents filed by the U.S. Department of Justice in the American Tobacco anti-trust case in the journal Tobacco Leaf, July 3, 1907.
Normally, thanks to our own archives, local collectors and other collectors posting on eBay, it is easy to find logos for chewing tobacco products, but I could not find a single image for any of the cigarettes, other than Reynolds later products, mentioned in this article. In fact, only a few of the brands are even mentioned in the newspapers. Fortunately, my friend Jim Laughrun, a retired editor at both the Winston-Salem Journal and the Twin City Sentinel, has been working away for years at all kinds of lists. A few months ago he delivered to me his 51 page spiral bound monograph Early Tobacco Brands: A Guide to Manufacturing in Northwest North Carolina, which lists hundreds of brands of chewing and smoking tobacco, the cigars made by Isidor Leopold in Winston, and the few cigarettes, made in Winston and Salem and Walkertown and Mocksville and Mt. Airy and even Virginia, Tennessee and Kentucky, between the mid-19th century and about 1915. That, and nowhere else, is where I found the brand names for Brown Brothers and Liipfert-Scales. Many thanks to Jim for all his work…