James Buchanan Duke - Business Career

Business Career

Washington Duke (1820–1905), had owned a tobacco company which his sons James Buchanan Duke and Benjamin Newton Duke (1855–1929) took over in the 1880s. In 1885, James Buchanan Duke acquired a license to use the first automated cigarette making machine (invented by James Albert Bonsack), and by 1890, Duke supplied 40% of the American cigarette market (then known as pre-rolled tobacco). In that year, Duke consolidated control of his four major competitors under one corporate entity, the American Tobacco Company, which was a monopoly in the American cigarette market.

At the start of the 1900s, Duke tried to conquer the British market as he had done America, eventually forcing the then divided British manufacturers to merge into the Imperial Tobacco Company of Great Britain and Ireland, Ltd (Imperial Tobacco). After two years of intense competition in Great Britain, Imperial Tobacco took the fight to the U.S. market, forcing American Tobacco to look for a settlement. This resulted in an agreement whereby American Tobacco controlled the American trade, Imperial Tobacco controlled the trade in the British territories, and a third, cooperative venture named the British-American Tobacco Company was set up between the two to control the sale of tobacco in the rest of the world. During this time, Duke was repeatedly sued by business partners and shareholders. In 1906, the American Tobacco Company was found guilty of antitrust violations, and was ordered to be split into three separate companies: American Tobacco Company, Liggett and Myers, and the P. Lorillard Company.

In 1892, the Dukes opened their first textile firm in Durham, North Carolina, that was run by Benjamin Duke. At the turn of the century, Buck Duke organized the American Development Company to acquire land and water rights on the Catawba River. In 1904, he established the Catawba Power Company and the following year he and his brother founded the Southern Power Company which became known as Duke Power, the precursor to the Duke Energy conglomerate. The company supplied electrical power to the Duke's textile factory and within two decades, their power facilities had been greatly expanded and they were supplying electricity to more than 300 cotton mills and other industrial companies. Duke Power established an electrical grid that supplied cities and towns in the Piedmont Region of North and South Carolina. Lake James, a power-generating reservoir in Western North Carolina, was created by the company in 1928 and named in Duke's honor.

In 1911, the U.S. Supreme Court upheld an order breaking up the American Tobacco Company's monopoly. The company was then divided into several smaller enterprises, of which only the British-American Tobacco Company remained in Duke's control. After his death in 1925, there was a great deal of controversy, and some historians suspect that some resentful Imperial Tobacco executives were feeling some anger at Duke for having lost the Tobacco War between Duke's company and Imperial Tobacco.