“Tobacco Farmers are Happy”: The Federal Tobacco Program

The tobacco program inaugurated by the New Deal’s Agricultural Adjustment Act (AAA) stabilized the price of tobacco by restricting the amount of the crop that a farmer could produce for market.^{Footnote 12} This law had the effect of freezing production patterns in time. From the 1930s until the end of the federal tobacco program in 2004, the production of flue-cured tobacco, the primary tobacco ingredient in the American-style cigarette, was circumscribed by law to certain areas of Virginia, the Carolinas, Georgia, and Florida. In exchange for a farmer limiting his production, the tobacco program put a floor on tobacco prices, assuring farmers a minimum predetermined price per pound at auction. Of course, farmers still hoped that their tobacco would fetch well over the floor price, that the big tobacco companies—R. J. Reynolds, Lorillard, Liggett & Myers, American Tobacco Company—would bid up the price of his lot, the staccato of the auctioneer’s chant ringing like a cash register.^{Footnote 13} If companies failed to offer the minimum price, the unsold tobacco would go into government-supported storage, where it would subsequently be dried, packed, and resold, either in the domestic market or overseas. The program was highly successful in terms of raising farm income and rejuvenating rural areas. The first year of the AAA’s operation, farmers received more than two and a half times their cash total for the previous year, flushing money and taxes into local economies.^{Footnote 14} Between 1935 and 1949, the overall value of flue-cured tobacco production rose more than threefold.^{Footnote 15} During that same period, the average price per pound of flue-cured tobacco soared from 20 cents to over 47 cents per pound.^{Footnote 16}

Once every three years, farmers had an opportunity to render their own verdict on the program. Landlords and tenants, black and white, voted in referenda on the supply control program.^{Footnote 17} If less than two-thirds of voters did not return a favorable verdict on the program, marketing quotas and price supports would not go into force the following year—an outcome that happened just once between 1933 and 2004.^{Footnote 18} The federal tobacco program thus relied on a unique combination of economic coercion and democratic participation. It was administratively bolstered by another institution both hierarchical and representative. The broad overhaul of the surplus-plagued agriculture sector required an army of administrators—an army that the AAA found among farmers themselves. Farmers served on the local and county-level committees that were responsible for measuring and policing constricted supply levels.^{Footnote 19} The farmers who served on these committees had economic and social standing within their communities. Many were members of the Farm Bureau, the private farm lobby that threw its support behind the passage of the AAA. The Farm Bureau’s federated, localistic structure fit easily into the committee-based administrative scheme, suggesting, already, the semiprivate nature of how power operated within the New Deal agriculture.^{Footnote 20} The combination of popular support and efficacy—which translated to little direct cost to taxpayers—led many observers to deem tobacco the most successful of all the government farm programs.^{Footnote 21}

At the helm of the AAA’s tobacco section was John “Jack” Hutson. Born in 1890, Hutson climbed one of the few ladders available to rural white boys who longed for life beyond the small, hilly farms of his native Kentucky.^{Footnote 22} He attended the state’s land-grant college and then joined the agricultural extension service, canvassing Kentucky’s impoverished farming regions to dispense cultivation and farm management advice. By 1920, Hutson had set his sights beyond fieldwork. He landed a job in Washington within the USDA’s newly organized Bureau of Agricultural Economics (BAE), where he focused on international agricultural trade, and in the early 1930s spent several years in Europe studying its tobacco markets.^{Footnote 23} The results of Hutson’s study were published in 1937 as a small book entitled Consumption and Production of Tobacco in Europe. His country-by-country study assumed the mutability of consumer taste for certain cigarette blends. Human habits—“demand”—were always up for grabs, as illustrated by the changing ways that both Europeans and Americans used tobacco after World War I.^{Footnote 24} However, Hutson identified certain national patterns—Germans tended to smoke cigarettes made with oriental tobaccos, French smoked brown leaf, and the British loved cigarettes made purely from American flue-cured. These tastes were not inborn, but resulted from historic relationships among importing and exporting nations. In short, trade made taste—a lesson that Hutson would remember after the war.

The outbreak of World War II tore these trade arrangements asunder, posing major problems for American tobacco growers and program administrators. During the interwar period, about 50 percent of leaf sold at auction was exported, and the vast majority of it was bound for the United Kingdom, where cigarettes filled entirely with flue-cured leaf were particularly popular.^{Footnote 25} Growers knew England to be a special customer and were therefore anxious when the outbreak of war in Europe sent British buyers back home. After a series of meetings between local political leaders, interest-group officials, and tobacco administrators, the government-run Commodity Credit Corporation (CCC) stepped in to mend this substantial marketing breech.^{Footnote 26} The CCC purchased the share of tobacco that British companies usually bought, abating the wave of panic that had rippled across the tobacco belt. Though quickly resolved, this small drama sensitized tobacco leadership to the importance of the foreign marketplace and posed the question of what might happen if American tobacco growers were to lose their single biggest customer, the United Kingdom.^{Footnote 27} At home, demand for cigarettes was stronger than ever, as soldiers’ rations and civilian appetites more than made up for the temporary loss of the export trade. Still, the memory of readjustments after the World War I reminded farmers and administrators alike that the smooth and mild taste of flue-cured tobacco could not alone make a market.

From “Overproduction” to “Underconsumption”: The Genesis of Tobacco Associates

On the ground in North Carolina, tobacco farmers and their leaders were beginning to imagine their postwar world. Just weeks after VJ Day, the North Carolina Grange sponsored a meeting in the stately Sir Walter Raleigh Hotel, a historic venue near the state capitol in downtown Raleigh. Colloquially known as the “third house of government,” the venue suggested this meeting was no barnstorming farm gathering. There, the general topic of “safeguarding the future of tobacco” turned to the more specific question of how to enlarge foreign demand for flue-cured leaf. Memories of the price collapse after World War I were still vivid, and the United Kingdom, the largest importer of flue-cured tobacco, was still economically fragile. To conserve currency and rely on Imperial resources for its reconstruction, the British government had announced that it would begin to encourage cultivation of flue-cured tobacco in India.^{Footnote 28} Of course, tobacco farmers did not anticipate that India would very shortly be outside the scope of the British Empire with its declaration of independence in 1947. The mere suggestion of increased foreign competition for the British market spurred coordinated action among farmers—who were informed of the gravity of the export situation through farm organizations, the Extension Service, and farm publications. The Progressive Farmer, a major publication based in Raleigh, warned farmers that the high prices and brisk sales volume of 1945 was not likely to last. “History repeats itself,” one agricultural official warned leaders. “It looks at the present time as if conditions faced by growers following World War I are upon us again.” In 1919 as in 1945, large shipments of tobacco were exported to tobacco-starved foreign markets. But in 1920, the bubble burst, and the 777 million pounds of tobacco shipped the year previously fell to just 202 million. By drawing an analogy between the 1920 and 1946 sales season, the Progressive Farmer warned farmers that the specter of depression loomed around the corner.^{Footnote 29}

Between 1945 and 1947, tobacco leaders met frequently at the Sir Walter Raleigh to discuss the fate of their crop.^{Footnote 30} The biggest men in the small towns that depended upon tobacco production—representatives of the Grange and Farm Bureau, warehouse owners, bankers, leaf exporters, government officials, and prominent tobacco farmers—vowed to set aside their economic differences in favor of the one issue that united all sectors of the trade: increasing the total volume of tobacco exports.^{Footnote 31} By early 1947, these leaders—some employed by public money, some not—had settled upon a new organization to be the vehicle of postwar prosperity. According to its articles of incorporation, Tobacco Associates would not engage in the purchase or sales of tobacco directly. Rather, the organization would “promote, develop, and expand the export market for flue-cured tobacco.” It would do so by maintaining contact with “public and private agencies in the United States and in foreign countries in which American flue-cured tobacco is being used or might be used.” With this broad mandate to convince more people throughout the world to smoke flue-cured tobacco, Tobacco Associates naturally aspired toward proximity to levers of power. After study and analysis of policies that could affect leaf exports, the organization aimed to “cooperate with all Government departments and agencies charged with any responsibility for developing, handling or promoting the export trade of the United States.” By taking “such action as . . . may be practical in the effort to the exportation of flue-cured tobacco,” Tobacco Associates became the first lobbying association in the world dedicated to the cultivation of cigarette smokers outside U.S. borders.^{Footnote 32}

Tobacco Associates promoted the general virtues of American flue-cured tobacco—“mildness” and “inhalability,” two traits that, in fact, make flue-cured tobacco the most deadly form of the leaf.^{Footnote 33} In so doing, it yoked together several segments of the tobacco economy in an attempt to simply sell more leaf. More sales meant more profits for the dealers, who could help facilitate such transactions, more for the warehouse owners, who received a commission for the use of their facilities, and, of course, more money for farmers, whose production quotas could be raised on the basis of prospective demand. American cigarette manufacturers were the only segment of the tobacco economy left out of the equation. Farmers and agribusinessmen were emphatically not selling manufactured American cigarettes abroad. And with hot demand in the American market, the domestic cigarette makers were not clamoring to sell their products overseas, either. At midcentury, exports of manufactured cigarettes comprised just a fractional portion of the overall business of the big tobacco firms.^{Footnote 34} And so well before the domestic tobacco manufacturers took aim at foreign markets to make up for decreased domestic smoking rates and increased taxation, an important segment of the tobacco economy was already staking its claim to prosperity by looking abroad.^{Footnote 35} Tobacco Associates institutionalized a constituency vitally interested in securing the expansion of foreign tobacco markets.

Tobacco Associates was a nonstock, nonprofit corporation. Inside the private sector, TA was safe from political meddling, budgetary austerity, wrangling over appointees, or even public scrutiny. The initial financing for the group reflected its support among private tobacco organizations. Its $100,000 budget was to be generated from voluntary contributions from farmers, bankers, leaf dealers, and warehouse owners. Leaf dealers were to contribute $15,000; bankers $5,000; merchants, $10,000, and farmers $50,000. The hefty contribution from farmers was subdivided further, reflecting the size of tobacco production among the five tobacco-producing states.^{Footnote 36} Tar Heel farmers would ultimately produce the lion’s share of the budget with a $35,000 contribution. Virginia and South Carolina were to contribute $5,000 each, while Florida and Georgia were responsible for $5,000 together. This rough breakdown of contributions reflected tobacco production’s firm gravitational center in eastern North Carolina. Many of the farmers who funded TA in its first year of operation were members of the Farm Bureau, which conducted a vigorous fund-raising drive through local meetings and direct mailings, and drew most of its support in the eastern coastal plain.

Farm leaders converged on one name to steer their new organization: Jack Hutson. And it just so happened that Hutson was in need of a new appointment. After an extraordinary rise through the agricultural bureaucracy, Hutson found himself pulled again toward international affairs. In 1946, he became undersecretary of agriculture to the United Nations. But he had barely started in this position when a misstep in the delicate dance of Cold War diplomacy ended his stint at the UN. In May 1946, Hutson was invited to speak at a luncheon honoring the Polish general Tadeusz Komorowki at New York’s exclusive Metropolitan Club. Komorowski, known colloquially as General Bor, was a hero to Poles in exile for his role in staging the Warsaw Uprising against Soviet “liberation.” Hutson was castigated in the press for welcoming a man whom Poland’s communist-led government considered a war criminal. Delegations from both Poland and the USSR launched protests with Secretary General Lie. Less than a month later, Secretary General Trygve Lie “reorganized” his cabinet, and Hutson was out of a job.^{Footnote 37}

Members of the North Carolina Farm Bureau approached Hutson in early 1947 with their idea for commodity export promotion. Hutson had “discussed many things before about tobacco” with these men during his helm of the tobacco section in the 1930s. The Farm Bureau, meanwhile, built anticipation for the nascent organization among its own ranks by touting that it had begun negotiations to “obtain the services of perhaps the best qualified man in America to head this organization.”^{Footnote 38} Meanwhile, the chairman of the North Carolina General Assembly’s House Agricultural committee—a man who also happened to be the Farm Bureau representative from a tobacco-producing county in the eastern coastal plain—secured the passage of a bill that secured the long-term financing of Tobacco Associates. The bill enabled tobacco farmers to tax themselves 10 cents per tobacco-producing acre in support of Tobacco Associates.^{Footnote 39}

The Tobacco Associates vote and the federal tobacco program vote looked strikingly similar. As with the tobacco program vote, campaigns to raise voter turnout were waged by various state agencies such as the North Carolina Extension Service and the AAA.^{Footnote 40} The reason for such involvement was clear: grassroots support was essential for Tobacco Associates to function, for two-thirds of voters had to approve the Tobacco Associates assessment for any funds to be collected at all.^{Footnote 41} Again, the parallel with the government program is striking, for price support and crop control also only went into effect once two-thirds of quota holders approved the referendum. In some places, the federal quota referendum and the Tobacco Associates referendum occurred simultaneously, but farmers were instructed to deposit two separate ballots into two different ballot boxes.^{Footnote 42} At other polling locations, the ballot for the federally financed program and Tobacco Associates were one and the same.^{Footnote 43} Either way, it is likely that many of the farmers voting for Tobacco Associates thought they were voting for a government program. After all, government officials encouraged farmers to vote, the balloting procedures were similar to those of the USDA referenda, and farmers voted to authorize TA assessments on the same three-year basis that quotas were authorized.

Though Hutson spoke to tobacco farmers through farm radio shows and the farm press, he had the most direct contact with prosperous farmers.^{Footnote 44} The crowds he addressed were generally members of farm organizations. Hutson’s own philosophy of interest-group representation relied on garnering the support of farm organizations and “leaders in the tobacco-producing areas.”^{Footnote 45} This was a strategy honed by years in the AAA during the Depression; the monumental task of coordinating supply restriction among hundreds of millions of tobacco farmers meant that government agencies were happy to work hand in hand with existing private groups like the Farm Bureau and the Grange.^{Footnote 46}

Tobacco leaves that were cultivated and sold under the rules of the tobacco program reached Tobacco Associates through another institution that blurred the line between private and public. Beginning in 1946, the tobacco program was financed through a Raleigh-based cooperative called the Flue-Cured Tobacco Stabilization Cooperative Corporation. Known to most farmers simply as “Stabilization,” this private farmer-run cooperative was responsible for the physical and financial management of the program. Stabilization bought, dried, stored, and later sold tobacco that failed to reach the support price on the auction market. It did so through nonrecourse loans provided by the government-owned Commodity Credit Corporation. Stabilization’s personnel also embodied the fluidity of official affiliation in the governance of the tobacco economy: the organization’s longtime president was a member of the Farm Bureau and the governor-appointed Tobacco Advisory Committee.

Many farmers may have understood Stabilization as the entity that bought the tobacco nobody else would, but the institution was more than that. If Stabilization accumulated too much tobacco, it would threaten the integrity of the entire tobacco program because of the mounting costs associated with storage and because tobacco farmers would have been further restricted in their assigned quota. Tobacco Associates was made to function as a safety valve for the tobacco program by facilitating the dispersal of these stocks held by Stabilization. By the end of its first year in operation, Tobacco Associates rested on a stable base. Its mission—to “promote, develop, and expand the export market for flue-cured tobacco”—was a desirable goal in itself, and equally a tonic for the even more crucial tobacco program. It was supported by regional leadership within farm organizations, businesses, and among agricultural officials, and its leader, Jack Hutson, had decades of experience studying domestic and global tobacco trends while working with farm organizations, congressmen, and USDA officials. Firmly planted in the local soil, Tobacco Associates turned its attention to Washington and beyond.

Tobacco and the Marshall Plan

In the summer of 1947, Hutson registered as a lobbyist in Washington. With an office on K Street, TA sought to secure the inclusion of flue-cured tobacco in the huge European reconstruction package currently being debated before Congress.^{Footnote 47} The goal was to solve the problem of postwar surpluses by taking advantage of the American-initiated rebuilding of Europe. But what pragmatic arguments could be marshaled in favor of a commodity that was neither food nor fiber?^{Footnote 48} Hutson sought to join consumer desire in Europe—a “desire probably stronger than it has ever been before”—with dollars. The Marshall Plan would be the vehicle for joining supply and demand. The threat of oversupply of leaf, a threat made visible in the rising tobacco stocks held at taxpayer expense by Stabilization, compelled Tobacco Associates to seek market expansion.

Two decades in agricultural politics had familiarized Hutson with many of the congressmen that represented tobacco-growing districts. The most important of these was North Carolina Democrat Harold Dunbar Cooley, who would shortly go on to occupy the chairmanship of the House Committee on Agriculture, a position he held longer than any other man.^{Footnote 49} In the summer of 1947, Cooley was a member of a House Select Committee on Foreign Aid—a nineteen-man contingent that spent part of the summer studying the economic situation in Europe. Cooley was ready to do battle on behalf of the crop. His first opponent was formidable: General Lucius Clay, the military governor of the U.S.-zone of occupied West Germany. The four-star general was at the height of his prestige and popularity, waging peace in West Germany by encouraging industriousness among Germans. “He told the Germans to stop feeling sorry for themselves,” the New York Times reported, “to cease grumbling and to get back to work.”^{Footnote 50} Though Clay himself was as a chain-smoker, he was adamantly opposed to the use of American taxpayer dollars to finance tobacco purchases. Con Lanier, an exporter and Tobacco Associates affiliate, as well as Hutson’s old lieutenant in the tobacco section of the AAA, was present at the negotiations with Clay, Hutson, and Cooley. He recalled the general’s words to the congressman: “You are not going to get a damn cent for tobacco.”^{Footnote 51} European officials, however, had different ideas about their recovery needs. A report of the Committee on European Economic Cooperation (CEEC), which was comprised of representatives of all aid-recipient nations, estimated that total tobacco imports would rise substantially over prewar averages during the years of the Marshall Plan’s operation.^{Footnote 52} The country breakdown of estimated demand aided Tobacco Associates in lobbying for the crop’s inclusion in Marshall Plan designs and later helped officials in engineering European-produced cigarettes made with American-grown leaf.^{Footnote 53}

Cooley, Hutson, and Lanier descended upon Dennis FitzGerald, the ECA’s key agriculture planner, with affirmative arguments about tobacco’s cultural and economic value to Europeans.^{Footnote 54} With FitzGerald, they took the position that “if you give a man either a pipe full of tobacco or a chew of tobacco after a day’s work, he will work better and produce more.”^{Footnote 55} FitzGerald ultimately supported the inclusion of tobacco within the Marshall Plan package. Perhaps the arguments of the tobacco interests had special sway with the administrator since FitzGerald and Hutson had occupied the same professional circles within the New Deal agricultural establishment and at the Bureau of Agricultural Economics. In all likelihood, though, FitzGerald was receptive to tobacco interests because he shared their assumptions: the crop was a humble luxury, a small yet powerful reminder of what capitalism could offer by way of leisure, and what industry leisure could inspire by way of incentive.^{Footnote 56} By early 1948, Secretary of State George Marshall was designating tobacco as one commodity to be shipped overseas. “Even under austere living conditions and rationing it is found advisable to make some concessions to human nature,” Marshall told the National Cotton Council meeting in Atlanta in January 1948. “As a practical matter, it has been found that the availability of tobacco is an effective stimulus to morale and productivity.” Perhaps hoping to appear measured in his endorsement of cigarettes, the secretary subsequently noted that he was a reformed smoker.^{Footnote 57}

Politicians became fast advocates of tobacco diplomacy. Echoing arguments that appear in Hutson’s personal notes on the tobacco situation in Europe, Congressman John Flannagan, a Democrat from Virginia, argued that European reconstruction would succeed only when it inspired Europeans to work toward rebuilding their own economies. And what inspired work, Flannagan insisted, were not only “basic necessities” but also “the things which make life worth the living.” As a “spur to industrial production and sustaining morale,” tobacco fell into the latter category.^{Footnote 58} Tobacco also functioned at the level of the macro-economy, supplying much-needed revenue to European governments. Tobacco taxes, generally thought of as a luxury tax, actually made the crop a necessity during an era in which European governments needed money. Flannagan cited the fact that the French, Austrian, and Italian tobacco monopolies derived over 30 percent of their total government revenues in 1946 from tobacco taxes. But perhaps tobacco’s greatest value was not material but ideological. Neither man nor democracy could live by bread alone. “It is probably difficult for the people of any country to be truly thankful for aid supplied on the basis of austerity” when the bare necessities of life could be provided by “any form of autocracy,” Flannagan argued. War-weary Europeans needed “something that will give a sense of satisfaction, that will add comfort, and will soothe strained nerves and tired bodies.” Tobacco legitimated the American vision of capitalism and democracy. As Flannagan put it, “Tobacco is something they want, and it will instill a desire to strive for the better things in life which can be obtained under freedom of initiative provided by democratic governments.”

On April 3, 1948, the Foreign Assistance Act (PL-472) was passed. The dollar assistance provided to Europe through the Economic Cooperation Administration was used for the purchase of food, fuel, machinery, and tobacco. For the four years of the Marshall Plan’s duration (1948–51), an estimated $13 billion in assistance was provided to sixteen countries. A staggering $1 billion went to the procurement of tobacco, a figure that represented a third of total food aid.^{Footnote 59} Tobacco Associates smoothed the channels of trade by linking Europeans who bought on behalf of national tobacco monopolies to North Carolina growers. In this way, Tobacco Associates underscored Hogan’s interpretation of the Marshall Plan as administered through “public-private power sharing.” On a broad, legislative level, TA was a consistent advocate of aid packages that increased the total amount of dollars available to recipient nations. Hutson saw the availability of currency to purchase tobacco as a more sustainable basis for the flue-cured export economy than simply the temporary infusion of “governmental loans and grants” or dollars earmarked for tobacco purchases.^{Footnote 60} He feared that an impoverished Europe with a crippled manufacturing sector would be unable to generate enough currency through export to buy American agricultural products.^{Footnote 61} “A great deal more is involved [in reconstruction] than stopping the spread of communism or selling goods to Europe,” Hutson told a crowd at the American Farm Bureau Federation’s annual convention. “We have a direct economic interest in these areas for a much longer period than the next four years.”^{Footnote 62}

Events on the ground at tobacco auctions had sharpened Hutson’s focus on dollar exchange, making a convoluted debate about “balance of payments” very clear to tobacco growers. Sales were weak during the fall of 1947, triggering the acquisition of surplus by Stabilization. The growth of tobacco production in Southern Rhodesia (present-day Zimbabwe) and Nayasaland (present-day Malawi) intensified this situation as imports of American flue-cured to Britain fell from 480 million pounds in 1946 to 320 million pounds in 1947.^{Footnote 63} Overall, Southern Rhodesia and Nyasaland were not, at the time, tremendous threats to overall U.S. tobacco markets. Even though Britain was importing less American leaf, the United States was still supplying three times more leaf in 1948 than Southern Rhodesia and Nyasaland combined.^{Footnote 64}

Nevertheless, because the British market was so important to American growers, its diminution frightened growers. The supply-control system allowed growers to see the effects of a constricted foreign market very directly. When flue-cured exports fell by 30 percent in 1947, stocks held by Stabilization rose, meaning that allotments for 1948 were slashed by 27 percent.^{Footnote 65} A European dollar shortage translated fairly directly into a reduction in tobacco quota for American farmers.

Hutson knew that the cultivation of the continental European smoking public would be crucial in offsetting the loss of the British market. Specifically, he focused on the market in Germany, where smokers clamored to get their hands on cigarettes after years of rationing, deprivation, and moral pressures against tobacco consumption. Smoking in occupied Germany was a politically potent act: as historian of science Robert Proctor has argued, it symbolized a backlash against the “popular memory of Nazi tobacco temperance.”^{Footnote 66} Smoking may well have been a sign of liberation for individual Germans, but that does not explain the marked shift toward cigarettes produced with American-grown tobacco. For that we turn to the forces that made the German tobacco market: American growers, the German government, and U.S. dollars. For German officials in the western zones of occupation—and eventually in West Germany—smoking was an exercise in state-building. Combating cigarette smuggling, which siphoned off much-needed tax revenue, was of paramount importance.^{Footnote 67}

At the same time as Marshall Plan aid provided dollars and credits for the purchase of American tobacco, the German cigarette trade association (Verband der Zigarettenindustrie) successfully lobbied for a reduction in the cigarette tax in order to stimulate tobacco consumption, specifically the consumption of cigarettes rather than cigars, which had been popular before the war.^{Footnote 68} German cigarette manufacturers did not succeed in the ambitious goal of creating a “cigarette that American occupation soldiers would prefer over their Lucky Strikes”—as they had set out to do.^{Footnote 69} But they did achieve a resounding success at engineering the smoking preferences of German civilians. By 1949, one informal survey conducted by a German cigarette manufacturer suggested that between 85 and 90 percent of Germans preferred the taste of flue-cured over the oriental tobacco, largely procured from Greece and Turkey, they had long smoked.^{Footnote 70}

Some of these smokers may have enjoyed the $450 million worth of American tobacco shipped to the country under the auspices of the Marshall plan, but not all German commentators were equally grateful. An article in the major magazine Der Spiegel called the American tobacco an “unnecessary thing” that Americans were “quite glad to get rid of”—a succinct synopsis of the U.S. congressional debates in 1947 and 1948 about the incentive value of surplus tobacco. Der Spiegel’s commentator also observed that the influx of flue-cured tobacco had changed what Germans had historically considered a good smoke. These new preferences could not be satisfied through the old trade routes that linked Germany to Greece and Turkey, where darker smoking tobaccos were grown.^{Footnote 71} Other critics objected that American flue-cured imports were undermining the very economies that the Marshall Plan was supposed to reconstruct. Shouldn’t Greece and Turkey, who were recipients of Marshall Plan aid, have been encouraged to redevelop tobacco as an important part of their agriculture sector? In France, for example, SEITA (Société Nationale d’Exploitation Industrielle des Tabacs et Allumettes), the national tobacco monopoly, practiced a kind of cigarette nationalism. SEITA simply refused to purchase large quantities of American flue-cured tobacco and instead focused its branding efforts on its most popular cigarette brand, Gauloises, which contained primarily an indigenously grown brown tobacco. Such was the dominance of Gauloises that, in the words of one historian, they “could be construed as a national symbol next to the beret and the baguette.”^{Footnote 72} The recalcitrance of the French did not go unnoticed by growers in North Carolina, where Tobacco Associates had paid for a delegation of European aid recipients to visit and sample tobacco at warehouses. The French “sons of bitches wanted us to give them some more [tobacco samples]” without any intention to actually buy, Lanier insisted.^{Footnote 73} Yet even in France, where particular consumer tastes had been guarded as symbols of the nation, national brands made with flue-cured tobacco rose slowly but surely in popularity—from just 5.3 percent of market share in 1952 to 14.7 percent in 1976.^{Footnote 74}

The French example underscores a fact that Jack Hutson had identified twenty years earlier: taste was political, not natural. And it was always the result of negotiation. Europe’s turn toward the American-style cigarette was the result of efforts by Americans (organized tobacco growers, congressmen) and Europeans (national trade associations, monopolies, manufacturers, politicians, and officials in charge of import decisions and dollar allocations). As Lanier told a gathering of businessmen in a small town in eastern North Carolina, tobacco farmers’ most pressing need was “to devise some means of supplying countries with some flue-cured tobacco in order to preserve the taste and the desire” for American-style cigarettes “until these nations will become self-supporting”—until, that is, they were no longer reliant on Marshall funds to purchase tobacco.^{Footnote 75} It was crucial that American growers not fall prey to the supply dislocations that followed World War I because the federal tobacco program had unleashed a “golden stream of dollars” from the “golden crop.”^{Footnote 76} That program, which involved a frank redistribution of money from taxpayers to tobacco growers, was itself a political privilege—a fact that farmers recognized. “Manufacturers of automobiles cannot, under existing law, come together and decide the quantity of automobiles to be built in any period,” Lanier explained to his fellow tobacco leaders in 1948. “Nor can the auto group prevent a new plant from engaging in the manufacture of automobiles.” But tobacco growers, by contrast, “are permitted to control the production of tobacco” and can “deny the right to engage in the production of tobacco [to others] except on a very limited scale.”^{Footnote 77} Stewardship of the tobacco economy required, in the first instance, acknowledging the economic privilege bestowed upon growers by the federal tobacco program; and, secondarily, using that privilege—the benefit of government-assisted organization, the referendum financing of a private lobbying organization, close access to policymakers—to further safeguard farmers’ monopoly production rights. Tobacco Associates both rested upon and secured the federal tobacco program. As Lanier framed it, TA maintained market equilibrium by stimulating demand, thereby safeguarding the tobacco farmers’ ability to restrict supply.

Public Law 480: Smokes for Peace

The vocabulary of democratic humanitarianism justified the passage of the Agriculture Trade Development and Assistance Act (Public Law 480 or PL 480) in 1954. Better known as the “Food for Peace” program, the act authorized export sales of surplus American commodities in exchange for foreign currencies, thus circumventing the dollar-shortage problem that had stifled purchases of tobacco in poorer countries. The act’s supporters argued that American commodity assistance would alleviate hunger—and the dangerous ideological tendencies that supposedly festered in times of material deprivation. As a surplus disposal program, meanwhile, PL 480 also underscored the abundance that capitalism and democracy produced.

Initially, the nations eligible for such assistance were primarily in Western Europe and East Asia; but as the 1950s progressed, PL 480 became increasingly associated with Southeast Asia, Latin America, and the Middle East.^{Footnote 78} As European reconstruction had illustrated to tobacco farmers, temporary commodity aid could not only prevent the buildup of dangerous surpluses, but could also change long-term tastes. Food for Peace was especially suited to the task of shifting consumer preferences, enabling private organizations to use local currencies to engage in “market development activities.” The goal of PL 480 was not just temporary commodity disposal; it was permanent market expansion. Ongoing promotional programs were only allowed to operate when private trade groups contributed substantially to their operation. Private grower and agribusiness groups cooperated with the Departments of Agriculture and Commerce and the United States Information Agency in two major types of marketing campaigns: international trade fairs and ongoing, embedded promotional campaigns. Through PL 480, Tobacco Associates used the assessments of tobacco farmers to fund advertising campaigns across Europe, Asia, Latin America, and even the Eastern Bloc countries.

For Tobacco Associates, market development consisted of commodity promotion at trade shows, research into existing smoking habits, collaboration with national officials to domesticate an American-style cigarette, helping foreign officials negotiate aid financing, and, finally, assisting in the manufacture and advertising of new brands. At trade shows, which were held in large metropolitan areas with commercial traditions, growers and U.S. officials staffed festively decorated booths inside cavernous convention and civic spaces. These displays sought to demonstrate how American surplus commodities available through PL 480 offered an upgrade to national consumption traditions. Thus the Spanish were first introduced to potato chips fried in soybean oil (soybeans were in massive surplus during the early 1950s) rather than olive oil.^{Footnote 79} By the same token, at international fairs in Thailand, Japan, Germany, and Spain, Jack Hutson handed out free samples of locally made cigarettes that contained American leaf. As he put it, these events were “excellent opportunit[ies] for us to further develop good will for US tobacco in foreign countries and at the same time call . . . attention to its fine qualities and characteristics.”^{Footnote 80} Trade shows were just the first step in securing a new market. Subsequent activities included consumer-demand surveys in foreign countries; transporting representatives of national monopolies to North Carolina to see, firsthand, the craftsmanship that went to making fine, quality bright leaf; and, most important, working with international personnel to develop cigarettes using American tobacco in their home countries. In 1957, Tobacco Associates helped to finance trips to the United States for Austrian, Finnish, French, and Korean officials.^{Footnote 81}

Foreign technicians and engineers supplemented the efforts of the Americans. For instance, Korean and Thai officials aided in creating an American-style blend under the auspices of their national tobacco monopolies. The Thai Tobacco Monopoly worked particularly closely with Tobacco Associates throughout the 1950s. TA arranged for Thai chemists and packaging experts to attend courses at North Carolina State to learn the techniques that went into designing an American cigarette. TA boasted to growers that “the use of flue-cured leaf in Thailand has increased substantially . . . and the outlook for further increases is favorable.” Between 1955 and 1957, Thailand’s imports of flue-cured rocketed from 8.6 to 13.4 million pounds. By 1968, that figure stood at 24.1 million pounds—an increase of more than 274 percent since the inauguration of the TA-USDA venture in that country, representing a full 5 percent of total flue-cured exports.

Tobacco officials attributed the great rise in Thai tobacco to increased advertising. Of the eleven Thai cigarette brands on the Thai market in 1968, nine contained American flue-cured tobacco. Tobacco Associates contributed to the advertising campaign of those nine brands, whose sales spiked between 1957 and 1968. Sales of unadvertised brands, by contrast, languished.^{Footnote 82} The USDA interpreted this as clear evidence of “the relationship of the promotion program to the dollars received by . . . producers.” In the absence of a brand promotion campaign, agriculture officials estimated that the value of American flue-cured used in Thailand would have reached about $8 million. In actuality, flue-cured tobacco sold to the Thai Tobacco Monopoly was worth approximately $14 million—a fact that Tobacco Associates proudly touted in its 1968 annual report.^{Footnote 83}

Tobacco Associates also vindicated the aspirations of American officials who hoped that Food for Peace would fight communism. Under the program’s auspices, flue-cured tobacco arrived in Poland for the first time in 1960—the first time American cigarette tobacco had reached that country since the 1930s.^{Footnote 84} Hutson died in 1964 en route to Tobacco Associates’ newly opened office in Brussels. But his successor, John Palmer, continued to chip away at the Bloc, which he characterized as “one of the largest untapped markets in the world for our tobacco.”^{Footnote 85} The Leipzig Trade Fair was an ideal venue for TA’s efforts. During the interwar period, Leipzig boasted Europe’s largest trade fair, with thousands of exhibitors flocking to the twice-yearly event.^{Footnote 86} Within the German Democratic Republic (GDR), the Leipzig trade fair diminished in size but became even more important in the development of a consumer market within the Soviet bloc.^{Footnote 87} In the spring and fall of 1966, tobacco Associates staged a two-room exhibit at the fair. One room was replete with samples from the various flue-cured tobacco-producing belts of the United States—demonstrating the link between highly regional production and globally renowned quality. The next room boasted another talisman of eastern North Carolina: a cigar-store Indian that once stood outside an export warehouse in Wilson, North Carolina.^{Footnote 88} In 1966, TA secured visas for two East German tobacconists to visit North Carolina to see production firsthand—and, for more local flair, maybe to take in a football game at the University of North Carolina, a common extracurricular activity during sponsored visits.^{Footnote 89} After that visit, tobacco sales to East Germany expanded steadily, growing to 1,201,000 pounds in 1969 as compared to 135,000 pounds just four years earlier.^{Footnote 90}

Tobacco Associates achieved its most pronounced success in the 1950s and 1960s through its collaboration with the Japan Tobacco Monopoly (JTM). In 1956, the first year of Japan’s participation in Food for Peace, the nation imported 5.6 million pounds of American flue-cured tobacco. By 1968, that figure had skyrocketed to 41.9 million pounds—an increase of more than 722 percent.^{Footnote 91} By the late 1970s, after Japan had ceased participation in the program, it was importing more American flue-cured tobacco than any other nation. The intervening years saw numerous trips by Hutson and his successor to Japan—as well as longer excursions taken in the other direction as the Japan Tobacco Monopoly established a permanent office in Raleigh.

Beginning in 1956, the organization used part of the yen it received from the sale of flue-cured tobacco under Food for Peace to contribute to local magazine, radio, television, and newspaper advertising campaigns for brands that contained American flue-cured leaf.^{Footnote 92} Tobacco Associates focused, in particular, on the “Peace” brand of cigarettes, helping to finance an advertising boot camp for two officials from the Japan Tobacco Monopoly. After two weeks learning the latest principles of advertising from Madison Avenue firms, JTM officials spent time with the sales department of American cigarette manufacturers. Back in Tokyo, these two officials “initiated a new sales training program for Japan Tobacco Monopoly personnel and revamped their entire sales techniques leaning heavily on the knowledge they gathered” while in the United States.^{Footnote 93} Over the next ten years, TA’s work in Japan “evolved from a subordinate position in [the Monopoly’s] advertising activities to one of major importance in its annual planning operations.”^{Footnote 94} This was reflected in the fact that JTM’s marking program was overseen by J. Walter Thompson, the famed advertising agency that handled accounts for Liggett & Myers, Lorillard, and the American Tobacco Company. By working to develop not only specific Japanese brands but also American-style advertising practices within Japan, TA’s efforts reached well beyond the surplus-disposal mandates of PL 480. The goal was always to increase flue-cured use in Japanese brands, which, according to the trade journal Tobacco Reporter, “contained about two-thirds American flue-cured” by 1969.^{Footnote 95}

American cultivation of the Japanese market would have an additional unforeseen ripple through the realm of public health in subsequent years.^{Footnote 96} Japan’s smoking habits were heavily gendered: between the 1950s and the mid-1970s, 70–75 percent of Japanese men smoked regularly, compared to 15–17 percent for women.^{Footnote 97} This made nonsmoking Japanese wives compelling subjects for the first large-scale cohort study that established a link between cancer and secondhand smoke. The study was a landmark for antismoking activists, enabling the quantification of harms to nonsmokers by the presence of cigarette smoke. A powerful discourse of nonsmokers’ rights emerged with the dissemination of the Japanese wives study—one that was ultimately determinative in first cordoning off smokers from nonsmokers in shared public spaces, and, later, prohibiting indoor smoking altogether in many places.^{Footnote 98} Paradoxically, American tobacco promotion had transnational effects toward both the expansion of smoking abroad and the regulation and restriction of cigarette consumption in the United States. Tobacco farmers had a hand in making the postwar world a safe place to grow and sell tobacco, but they could not control the economic, legal, and scientific forces unleashed by their efforts.

Assessing the Assessment: Locating Producers in Cigarette Consumption

Tobacco Associates yoked the emergency-inspired regulatory apparatus of New Deal agriculture policy to an expansive vision of a world made safe for democracy, trade, and American surplus commodities. In exploring the origins and operation of Tobacco Associates, this article illuminates two key features of modern American political economy: the institutional links between private and public power; and the international scope of highly localized economies in the postwar United States. Taken together, these two features suggest that histories of postwar capitalism leave much room to explore the policymaking capacities of seemingly small-time actors and small-scale institutions.

The referendum vote of tobacco growers linked private power to public power, and also linked the tobacco-dependent economies of the Carolinas, Virginia, Georgia, and Florida to far-flung international markets. Since John Rolfe rolled his hogsheads of tobacco onto a ship bound for England, tobacco farmers have produced for an international market. What distinguished tobacco farmers in the twentieth century from growers in centuries past was their coordination and agency in promoting the virtues of their leaf in ever-farther markets—in imagining and then creating a world in which more people were smoking their tobacco. In growing these new markets, American tobacco farmers engaged in a kind of state-building at home (by helping to promote the solvency of the federal tobacco program), while at the same time supplying the raw material with which reconstructing and developing nations could develop national industry and boost tax revenues.

In part because of the very success of the federal tobacco program at raising the cost of a pound of tobacco, global flue-cured production in the postwar era was highly dynamic: new parts of the world began producing tobacco at prices that American farmers could not compete with. And so momentary success in the export market did not ensure that buyers would purchase the same volume in North Carolina rather than upping their reliance on markets in Zimbabwe or Canada. Indeed, despite the growing volume of exports in the postwar era, U.S. growers actually lost a substantial share of the world export market. Gross exports of U.S. tobacco peaked in 1978 even as American farmers provided just 20 percent of the share of total world exports—a stunning testament to the global growth of tobacco production in the postwar era.^{Footnote 99}

By informing farmers of their own investment market developments—including the growing competition in production—Tobacco Associates helped to foment a state of constant vigilance. And, moreover, the cigarette was not a static object, either. This became increasingly true during the 1960s, as manufacturers all over the world began promoting filter-tip cigarettes, which contained less flue-cured tobacco, in an effort to allay consumers’ fears over the link between cigarette smoking and health. Even if farmers did not know the exact mechanics of the cigarette’s transformation or the way in which their tobacco program was pricing them out of world markets, they did understand that tobacco was under siege from many sides. It is easy to imagine how, living within this continual state of crisis, farmers would voice their support in fractional dollar amounts of an organization that promised to fight for their beleaguered livelihoods at home and abroad.^{Footnote 100}

In the era of the cigarette–cancer link, Tobacco Associates began to look less like a state-initiated commodity interest group than an institution in which a multitude of government officials, in the United States and abroad, articulated their stake in cigarette consumption.^{Footnote 101} Tobacco growers understood that cigarettes were not just made by Philip Morris, American Tobacco Company, or R. J. Reynolds. They were made with flue-cured tobacco, made by American tobacco farmers and their organizations. The example of Tobacco Associates makes clear that postwar tobacco markets were forged at every turn by state action: the enabling acts passed by state legislatures in the southeastern United States, the production rights granted by the federal tobacco program, the decisions of USDA officials to work with Tobacco Associates in executing congressional-aid policy, and, crucially, the efforts of foreign officials and politicians to use the crop as a tool of state-building. Tobacco Associates highlights the simultaneous creation of state power and markets, as well as the unintended, even tragic, consequences of their operation.