James B. Duke
James B. Duke
James B. Duke (1856–1925) was a tobacco manufacturer, industrialist, and philanthropist, of Durham, N.C., and New York City.
On April 4, 1864, Washington Duke signs a receipt for a private's uniform at Camp Holmes in Raleigh. In June, Washington reports for duty in Charleston, South Carolina and is soon transferred to Virginia. J.B., his brother Ben, and sister Mary are sent to live with their maternal grandparents. Brodie, a teenager, serves with Major Gee at a Confederate prison at Salisbury. NC.
Washington Duke is captured by Union troops in the retreat of Richmond. He spends a week imprisoned before General Robert E. Lee surrenders on April 9. After he is paroled, Washington is shipped to New Bern, North Carolina. He walks the 137 miles home to Orange County, NC with only 50 cents to his name. (Page 10, Dukes of Durham)
Following his son Brodie's lead, Washington Duke sells the family farm and moves to Durham, NC in hopes of expanding his tobacco business. Washington builds a new tobacco factory on Durham's Main Street. Durham is also home to Blackwell and Company, producers of the popular "Bull Durham" tobacco brand.
The father and sons team officially establish their business with George Washington Watts. Watts provides $14,000 in capital and receives one-fifth interest in the company. In 1880, Washington sells his fifth of the business to Richard Harvey Wright for $23,000. Not even thirty years old, J.B. becomes president of the company.
Having trouble competing with Blackwell and Company's "Bull Durham" brand, James decides that W. Duke, Sons and Company will begin to manufacture cigarettes. Each cigarette has to be hand rolled. In the first year of production, Duke makes 9,800,000 cigarettes. W. Duke, Sons, and Co's brands include"Dukes of Durham," "Pin Head," "Cross Cut," and "Cameo."
In 1884, J.B. discovers the automated Bonsack Cigarette Machine created by James Bonsack of Virginia. The machine is purported to roll as many cigarettes in one day as 48 works could hand roll. Other tobacco firms are hesitant to use the machine because it is prone to malfunction. However, in 1885, J.B. negotiates a competitive rate to get a Bonsack machine in his factory. By 1888, most of the Durham and New York factory's cigarette hand rollers were replaced with Bonsack machines.
Five of the largest U.S. tobacco companies merge under the direction of J.B. Duke, creating the country's largest tobacco manufacturing firm named the American Tobacco Company. J.B. becomes the President of this corporation. It quickly controls the market for plug tobacco, pipe tobacco, and cigarettes. Ironically, also in 1890, Congress passes the Sherman Antitrust Act in order to prevent businesses from creating monopolies and hindering trade. This act would become significant to the American Tobacco Company in the early 1900s.
Trinity College was a Methodist college located in Randolph County, North Carolina. Washington Duke, a devout Methodist, took interest in the college and he ultimately provided the funds needed for the college to move to the more urban and convenient locale in Durham. Julian Carr, another prominent business leader in the area, donates land in Western Durham to the college. Washington and Ben Duke took the greatest initial interest in the college, but J.B. would later become integral to the institution's long-term future.
Mary Duke Lyon, Washington's only daughter and sister to J.B. and Ben, dies after a bout of declining health. She is survived by her husband, Robert E. Lyon, a leaf tobacco dealer, and five children; Mary, Benjamin, George, Bertha, and Edwin Lyon. Mary was an integral part of the Washington Duke and Sons, Co.'s success from the beginning; she made the cloth bags in which the company's first smoking tobacco was packaged.
James purchases 327 acres of farmland in New Jersey, which serves as one of the few hobbies for the tobacco magnate. His love for horticulture led him to expand the estate to over 2,000 acres of farm and woodland. By the time of his death in 1925, James had excavated 9 lakes, constructed more than 40 buildings, and built more than 18 miles of roadway on the property. (according to Duke Farms website)
In order to take control of the plug tobacco market share dubbed the "plug war" of the 1890s, J.B. oversees the merger of several plug tobacco firms including the Lorillard Company. The American Tobacco Company owns stock in this corporation. J.B. is elected Continental's President. Rival companies form their own conglomerate, the Union Tobacco Company, backed by powerful financiers, to compete with Continental Tobacco. Union purchases Blackwell's Durham Bull Tobacco Company. However, in 1899, the American Tobacco Company acquires Union Tobacco and many of Union Tobacco's financiers join the Board of Directors for the American Tobacco Company and the Continental Tobacco Company. When asked about this acquisition in a later legal disposition, James would testify that it was "largely a trade to get people, financiers and moneyed people into our concern."
Investors were confused by the relationship between the American Tobacco Company, Continental Tobacco Company, and other Duke-led tobacco Companies. In 1904, these three separate parts became one consolidated Tobacco Corporation under the American Tobacco Company name. However, this new arrangement would raise eyebrows in the Federal Government, especially with the recent U.S. Department of Justice's dismantling of the railroad industry's Northern Securities Corporation.
During the first several years of the 20th century, J.B. Duke gains land and water rights along the Catawba River. Ben and J.B.'s doctor, Dr. W. Gill Wylie encourages J.B. to invest in hydroelectric power. By 1904, the Duke brothers' help finance Dr. Wylie's company, the Catawba Power Company. J.B. wants to use hydro power to promote industrialization in the Carolinas, especially providing electricity to textile mills.
James marries divorcee Lillian McCredy in Camden, New Jersey. The couple met in New York City in 1893. There is speculation that James does not want to marry Lillian, but is encouraged to do so by his religious father. The couple goes on a honeymoon to Europe but return early due to Washington Duke's failing health.
In late January 1905, Washington Duke falls and breaks his hip. The elder Duke's health continues to deteriorate during the winter and into the spring; and on May 8 he dies. Several months before his death, Washington told Trinity College president, John C. Kilgo that "the only thing that makes me hate to die is I do not want to the leave the boys." (DOD, 162; Mason Crum papers)
James and Ben Duke, along with Dr. W. Gill Wylie and engineer William S. Lee, move forward with their investment in hydroelectric power by establishing the Southern Power Company, the precursor to Duke Power. By August 1905, construction of a power plant begins at the Great Falls located on the Catawba River in South Carolina. Proving once again to have a brilliant business mind, James moves forward decisively in the power business. As Lee noted, "Generally, he had gone into the matter thoroughly, had the points fixed in his mind and was sure of his ground. He merely thought faster, more accurately, and grasped the points of a situation more quickly than most men. And, once he had decided, he acted promptly." (page 183, Dukes of Durham).
James files for divorce from Lillian in September, 1905. The couple began to fight shortly after returning from their honeymoon. James hires private detectives to follow his wife after suspecting that she is engaging in an affair. Evidence suggests that Lillian is indeed having an affair with Frank T. Huntoon. The divorce proceedings prove to be contentious and the media reports heavily on the trial. The court grants James the divorce; and since over the course of their partnership, he has given Lillian over $250,000 in securities and property, he is not required to provide Lillian with any additional financial support. (DOD 165)
Textile firms throughout the Carolinas are wary of using electric power. To help promote energy's industrial expansion, James invests in many textile mills in areas around Charlotte, NC and Greenville, SC.
The U.S. Department of Justice files suit against the American Tobacco Company in the Circuit Court for the Southern District of New York for violation of the Sherman Antitrust Laws. Since the election of Theodore Roosevelt, the Department of Justice was more vigilant about prosecuting corporations under the Antitrust laws passed in 1890. The Tobacco conglomerate is accused of prohibiting trade through monopolizing the market. In a 3-to-1 decision, the court finds all but three companies associated with American Tobacco Company guilty. The three companies exempt from the ruling are the United Cigar Stores, the Imperial Tobacco Company, and the British-American Tobacco Company. The Circuit Court prohibits the remaining companies from participating in interstate trade until conditions of legality under the Sherman laws are restored. Both the Federal Government and the American Tobacco Company appeal the decision.
In July 1907, J.B. exchanges vows for a second time with Nanaline Holt Inman at a quiet ceremony in Brooklyn, New York. The couple was introduced through James's brother, Ben. Nanaline is the widow of a wealthy Atlanta-based cotton merchant, William Inman. J.B. becomes stepfather to Nanaline's twelve-year old son, Walter. The couple honeymoons at James's farm in New Jersey, but settles in their New York City 5th Avenue home.
J.B. Duke and his lawyers work feverishly to dissolve the American Tobacco Company with direction by Attorney General, George W. Wickersham. The courts formally approve J.B.'s plan on November 16, 1911. Ultimately, the American Tobacco Company is divided into three main corporations: The American Tobacco Company; a reorganized Liggett & Myers Tobacco Company; and a reorganized P. Lorillard Company. After the dissolution, J.B. turns his focus to his investments in electric power companies. The only connection J.B. keeps with the tobacco industry is as a chairman for the British-American Tobacco Company.
While returning from a trip to the Pacific Northwest, J.B. is persuaded to stop by a tributary on the Saguenay River about 100 miles from Quebec City. J.B. quickly begins a land grab in the area to expand his hydroelectric power business in the region. By 1922, he partners with Canadian newspaper industrialist Sir William Price, who agrees to use electricity produced by Duke's hydro stations in his newspaper plants. Over the next decade; J.B. would continue to invest in building hydroelectric plants in the area.
When J.B. first invests in the Southern Power Company, he is primarily focused on selling his product to industrial entities. However, many manufacturers request that the Southern Power Company provide service to workers who live near their factories. To respond to the growing demand for residential service, the Southern Power Company creates a new division called the Southern Public Utilities Company. By the 1920s, many homes in the Carolinas are supplied electricity by the Southern Power Company. In 1924, the Southern Power Company is renamed Duke Power.
By the late 1910s, most of J.B.'s business takes place in the Piedmont region of North and South Carolina. In 1919, J.B. purchases a home in Charlotte, NC near other executives of his power company. The Duke family occasionally attends church service at the local Methodist church. However, Mrs. J.B. Duke prefers life in New York City so the family split their time between Charlotte and their New York home. The signing of the Duke indenture takes place at J.B.'s Charlotte home.
J.B. Duke establishes the Duke Endowment fund with an initial gift of $40 million. The Duke family was always active in providing monetary support for philanthropic goals, especially under the leadership of Washington and Ben Duke. In 1924, J.B., the wealthiest of the Duke family members, creates the Duke Endowment and he gives a significant portion of his wealth to the trust fund. The annual income of the fund is to be donated primarily to hospitals, orphanages, the Methodist Church, and several colleges located in North and South Carolina. J.B. Duke gives $19 million of the fund to Trinity College, to build a new campus and update the older campus.
After a private service in New York, J.B.'s body is taken to Durham, NC by train. Another funeral is held at the Duke Memorial Methodist Church and he is buried beside his father in the family mausoleum. Washington, Ben, and J.B. would all later be interred at Duke Chapel located on the Duke University Campus.