Tobacco Merchant

Tobacco Merchant: The Story of Universal Leaf Tobacco Company

Maurice Duke
Daniel P. Jordan
Copyright Date: 1995
Pages: 240
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  • Book Info
    Tobacco Merchant
    Book Description:

    Maurice Duke and Daniel P. Jordan vividly describe the colorful life and times of one of the South's -- and America's -- most important businesses and provide insight into how luck, management practices, and personalities helped the company rise to international prominence.

    Universal Leaf Tobacco Company, the world's largest independent leaf tobacco dealer, is one of the major buying arms for tobacco manufacturers worldwide, selecting, purchasing, processing, and storing leaf tobacco. The story opens during the aftermath of the Civil War when Southerners realized once again the worldwide potential of their native crop.

    The authors follow the company from its incorporation 1918 through one of the first hostile takeover attempts in American business, to its evolution in 1993 into Universal Corporation, a worldwide conglomerate with a number of products including tobacco.

    Based on scholarly research and over two hundred interviews with past and present Universal employees, this objective saga reveals much about American business and economic history.

    eISBN: 978-0-8131-6268-3
    Subjects: Business

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Preface
    (pp. ix-x)
  4. Acknowledgments
    (pp. xi-xii)
  5. 1 The Heritage
    (pp. 1-12)

    From the bloodshed and destruction of the American Civil War, the United States rose in one generation to become the world’s industrial leader. The American people were quick to recognize and celebrate what they perceived to be the rags-to-riches ascension of the nation’s new economic elite, the Armours, the Carnegies, the Rockefellers, the Swifts, and others. Horatio Alger wrote over a hundred novels revolving around the theme of “pluck-makes-luck,” and almost everybody accepted the proposition that society’s leaders were those who deserved all they got by force of will and strength of character.

    Often overshadowed by the attention given the...

  6. 2 Founding and Early Years
    (pp. 13-31)

    Universal Leaf was typical in many ways of corporations that came into being during World War I. At first, demand virtually guaranteed success and encouraged sudden and at times reckless growth, but a postwar depression brought disaster. The organizers of Universal aimed high and fell hard before they adjusted to a moderate course and finally achieved success. Along the way corporate leadership changed dramatically; virtually all Universal’s founders retired, left the company, or assumed passive roles as younger men assumed control.

    Although the exact date is unknown, at some point during the war years Jaquelin P. Taylor set upon a...

  7. 3 The China Company Strikes Gold
    (pp. 32-45)

    While Fred Harrison and the new management team set about to revitalize Universal in the mid-1920s, his cousin Pinckney was organizing a new and important subsidiary nearly half a globe away. Although its legal name would change more than once and although it would have more than one subsidiary itself, “the China Company,” as it was called, proved immediately successful and contributed markedly to Universal’s profits up to World War II and for a brief period afterward. It also provided some of the company’s most colorful characters and dramatic moments.

    The story might be apocryphal but is nevertheless revealing, and...

  8. 4 A New Profit Center to the North
    (pp. 46-52)

    As Pinckney Harrison and James Covington were developing Universal’s China business, other company officials were pioneering in Canada and in various cigar-leaf districts of the United States. These three profit centers had much in common. In each case, a younger generation of entrepreneurs took over an enterprise of modest proportions and turned it into an impressive operation. Each company operated on a relatively autonomous basis, and each featured an essentially self-made man whose individual drive and acumen led him to a dominant position not only with a key subsidiary but within the geographic region. In the 1920s and 1930s, China...

  9. Illustrations
    (pp. None)
  10. 5 Cigar Leaf Tobacco
    (pp. 53-59)

    At the turn of the twentieth century, America’s favorite tobacco product was unquestionably the cigar, and consumers spent more money for cigars than for cigarettes, snuff, chewing and smoking leaf combined. Cigars were made coast to coast, usually by small manufacturers who numbered in the tens of thousands, with strong concentrations in New York and Pennsylvania. Production hit four billion in 1890 and rose to seven billion in 1906. Significantly, when the giant American Cigar came into being in 190 I, it controlled only one-sixth of the market.

    There were cigar brands for every pocketbook, and retail outlets often made...

  11. 6 The Depression and the Great War Years
    (pp. 60-76)

    Despite the excellent comeback from near disaster that Universal made during the 1920s, it was anyone’s guess what fate lay ahead after the stock market crash on Black Friday, October 29, 1929.

    As mentioned earlier, the tobacco world was experiencing a depression of its own as early as 1921. In that year the burley market almost collapsed, and Europe—Great Britain in particular—was also suffering from a glut of bright tobacco. But what was unfolding in the winter of 1929-30 was different. Problems suffered earlier in the decade were ones the tobacco industry could correct. But now the nation...

  12. 7 Postwar Growth at Home
    (pp. 77-97)

    When Herbert W. Jackson Jr. assumed the presidency of Universal Leaf Tobacco Company in 1946, the country was moving from war to the uncertainties of demobilization. Having conquered the combined forces of Germany and Japan, the United States emerged from combat with strong feelings of solidarity and pride. Demand for tobacco soared to record heights, and Jackson, who always considered tobacco to be one of life’s harmless but pleasant diversions, was to have a major influence in helping meet this unprecedented demand.

    A heavy-set man with a ruddy complexion, Jackson drove to work each morning in his Cadillac, which he...

  13. 8 Postwar Growth Abroad
    (pp. 98-111)

    From its inception in 1918, Universal Leaf Tobacco Company had as one of its goals the development of a worldwide operation, an aspiration that first began bearing fruit in the Chinese and Canadian ventures. The Canadian one, the smaller of the two, grew smoothly from the beginning, but the one in China was fraught with problems brought on by World War II and the Japanese occupation of China. Further difficulties came with the 1949 Communist takeover. Halfway around the world, the war also brought a halt to operations in Rhodesia.

    The Japanese surrender on board the USSMissouriin Tokyo...

  14. 9 A Worldwide Company
    (pp. 112-126)

    Under the leadership of Gordon L. Crenshaw, Universal became a worldwide organization. Expansions were made into all parts of the globe, most notably in South America, the Far East, and Southeast Asia. To see the growth of the company during Crenshaw’s tenure, one need only look at yearly revenues. In 1966, for example, Crenshaw’s first year as company leader, annual revenues were $348 million. Two decades later, in 1987, it had reached the $2 billion mark. Figures reflected in the company’s annual reports are not startlingly large for any particular fiscal year; rather, they reflect solid growth: in 1966, $348...

  15. 10 Modern Foreign Operations
    (pp. 127-139)

    When Gordon Crenshaw assumed the presidency, the company’s Canadian and Rhodesian branches were solidly based, moves had been made into Malawi, Uganda, and Zambia, and another was planned for Angola. Greek tobacco interests had been developed, but Germany, briefly the site of the Microflake venture, would become a casualty of the business climate of the 1970s. Universal had for years been steadily growing, but greater enterprises were yet to come.

    By 1966, most if not all of Universal’s top executives had had experience in foreign countries. One man in particular, however, was to be of major importance in the years...

  16. 11 A Changing Industry
    (pp. 140-157)

    By 1966 Universal had gained the level of technical proficiency with which it continues to operate today. Its partner companies were fading, some having been dissolved, others disappearing by attrition. Complete with all the technology that modern science could provide, the era of the super plant had arrived. Sales had become international in scope, and the change from selling with samples to servicing preexisting accounts was firmly established.

    In earlier times, life on the markets was often a hectic catch-as-catch-can existence. Transportation was by train and automobile, and amenities such as air-conditioning and rooms with private bathrooms were usually little...

  17. Illustrations
    (pp. None)
  18. 12 Diversification and Litigation
    (pp. 158-173)

    From its founding to the 1960s, Universal dealt exclusively in the purchase and sale of leaf tobacco. In the middle of that decade, however, a report emanating from the United States surgeon general changed the complexion of the tobacco world. The government’s 1964 report on the adverse effects of using tobacco products posed a much more serious challenge for the business than had critics of the past. Formerly, criticism had been focused on arguments based on moralistic grounds. This time, however, concern centered on health, with the surgeon general arguing that tobacco use caused or exacerbated illnesses such as cancer,...

  19. Epilogue: The 1990s and Beyond
    (pp. 174-181)

    The most recent major change to take place at Universal centers on the appointment of Henry H. Harrell as the company’s president in 1987. A native Richmonder, Harrell graduated from the city’s St. Christopher’s school and later from Washington and Lee University, where he was a Phi Beta Kappa English major. He joined Universal in 1966 and, as all newcomers, was sent off to the factories. His introduction to the company was through a lifelong friendship with Jan La verge, who at first had serious reservations about the young man’s ability to fit into the tobacco world.

    When Harrell was...

  20. APPENDIX 1: A Short History of Tobacco Consumption
    (pp. 182-185)
  21. APPENDIX 2: Universal Corporation Historical Data on Annual Earnings
    (pp. 186-188)
  22. APPENDIX 3: Tobacco Grades
    (pp. 189-192)
  23. APPENDIX 4: Company Officers and Directors
    (pp. 193-198)
  24. Bibliographical Note
    (pp. 199-201)
  25. Index
    (pp. 202-212)