Kid Carolina Page 2

  In R.J.’s early selling days, the Moravians had also established a rare women’s college in Salem, which two of R.J.’s sisters later attended. The female students lived on campus and kept their own horses, which was unheard of in those days. The college was a testament to the progressiveness of Salem—a trait that R.J. admired and further attracted him to the region. The shared values of R.J. and the Moravians would soon turn into a lifelong business and civic partnership. In years to come, the Moravians would not only buy Reynolds tobacco products, they would eventually work directly for R.J. The Reynoldses considered the Moravians responsible for their early success and later worked to preserve as many of the original Moravian buildings in Salem as possible, as well as the museums and the old Salem town square where they got their start. And by the time R.J. was middle-aged, he served as host to numerous receptions for the female graduates of the progressive Salem Female Academy he had admired for so many years.

  While still a teenager, R.J. Sr. hauled overflowing wagons of tobacco to town all over the country and became one of the best bargainers at market. Sometimes selling could be tough in the Reconstruction era, and on at least one occasion R.J. returned to Critz after a sale with wagonloads of textiles, animal skins, furniture, and other household goods—anything he could barter—but no cash. The family was livid. In response, R.J. sold some of the bartered supplies for a bigger profit than he would have earned from selling tobacco. He was never questioned again.

  By age twenty-five, R.J. had gained extensive experience as a tobacco seller and he was hungry to venture out on his own. He became convinced tobacco would flourish in a town with a rail line and accessible labor. He talked to his father about selling his interest in Rock Spring Plantation early and moving to Salem to build his own tobacco factory. Hardin was supportive and gave him $10,000 in exchange for his forfeited interest in the family farm. With that, R.J. left Rock Spring for good in 1874.

  Young R.J. eagerly set out for Salem on horseback to start his business. Out of respect for the wishes of the townspeople of Salem, R.J. opened up his first tobacco factory about a mile away on Depot Street in Winston, and invested $7,500 on his first purchase of flat plug (pressed cake) chewing tobacco. To make the plug, the tobacco was sweetened and pressed into sheets, then cut into thick strips and rolls that resembled beef jerky. The strips and rolls were sold directly to consumers and chewers would bite off the tobacco directly from the roll.

  R.J. came to love the smell and sound of his factory at work, and he lived and worked in his personal office above his factories for most of his life. Today, one of R.J.’s old factories still stands, along with the rail line that trailed through it.

  R.J. at Work

  Young R.J. was a tall and handsome man—six foot, four inches—and although he spoke with a stammer, he was thoughtful, confident, and intriguing to the town’s ladies. In spite of the attention he received from women in Winston, R.J. stayed intensely focused on his work—a trend that would keep him from settling down for decades to come.

  As an employer, R.J. was known for his fairness, his self-control, and his industrialist attitude. He felt that any man could make a million dollars honestly. R.J. was a hard worker and expected the same of his employees; he was always at his office early and worked alongside his employees all day, six days a week. He kept to this schedule even after he became a millionaire.

  For years, R.J. had distinguished himself through the use of bright leaf twist and flat plug chewing tobacco with saccharin flavoring. After decades of success, R.J. eventually made the departure to burley smoking tobacco. One of R.J.’s most popular twentieth-century products was the burley-based, light-air-cured-leaf pipe and smoking tobacco—a brand he called Prince Albert. He launched the brand in 1907 with an aggressive advertising campaign and it quickly became a hit.

  By the turn of the century, R.J. was rumored to have single-handedly created thirty to fifty millionaires in North Carolina, and he employed three hundred people in his factories and another two hundred in his administrative offices. As his products soared in popularity, the tobacco company became a stockholder’s dream. R.J. was excellent at keeping many of his self-made millionaires involved in reinvesting, and he was kind to and generous with everyone who worked for him. One of R.J.’s most ingenious moves was to offer his labor force stock options as well, which created an unmatched sense of employee and investor allegiance to RJR Tobacco.

  R.J. was equally generous with his own family. Not only did he take his two younger brothers, Walter and Will, in under his wing at the tobacco factory in Winston, he took in his ailing mother, Nancy Jane, in 1893 and extended his bachelor years even longer so he could care for her until her death in 1903. When four of his young nieces lost their mother in 1900, he brought the girls and his brother-in-law to his large Victorian house on Fifth Street in Winston-Salem. R.J. had lived in the Merchant Hotel for years before he moved into the new home in 1893. The towering, turreted Queen Anne home with the welcoming wraparound porch was the largest in town. Soon, Fifth Street was lined with homes of the city’s wealthy, self-made men and was regarded as “Millionaire’s Row.” R.J. also co-founded the country estates of Roaring Gap with his brother Will so he and his family could have a mountain retreat.

  More family members, in-laws, and nieces and nephews followed. Across the street lived one of his favorite nephews, Richard S. Reynolds, who was the son of R.J.’s brother Abram. He had worked at RJR since 1902 when R.J. persuaded him to quit law school and come work in the tobacco factory. From then onward, they were more like father and son than uncle and nephew. Richard S. was a bright entrepreneur, and because of his intimacy with R.J., he believed he’d eventually inherit a stake in the tobacco company he helped build.

  R.J. Finds Love

  When R.J. was in his fifties, he was still a bachelor, and was still caring for his elderly mother on Fifth Street. When he was fifty-three years old, she passed away, and R.J. began to consider, for the first time, settling down and marrying. At the same time, his cousin from his mother’s side of the family, Zachary Taylor Smith of Mount Airy, North Carolina, wrote a letter to R.J. discussing his daughter, Katharine, who had returned from college with an independent spirit and wanted to work for a living instead of being married off, at least for a few years. At the time, she was teaching painting classes in Mount Airy after graduating from North Carolina’s Normal School and Sullins College in Virginia.

  R.J. agreed to hire her as a secretary, and invited her on a trip to New York to transcribe his dictations. In Winston-Salem, his nieces oriented Katharine and trained her for her new position. Katharine worked at the factory for nearly six months when R.J. held a contest and offered a thousand dollars to anyone in his staff who could produce the best advertising design for the next marketing campaign. R.J. was most impressed by Katharine’s design and awarded her the prize. He famously joked that he’d have to marry Katharine to get his money back.

  Maybe it wasn’t much of a joke, because shortly after, R.J. began courting her. R.J. had spent dozens of years on his own, and he already felt that it was time to finally find a partner. While he dearly loved his company and the life he led, it had not been without its loneliness. Just a year later, R.J. proposed to his twenty-five-year-old cousin, who was thirty years his junior. She accepted, and they set a date to marry.

  After their morning wedding on February 27, 1905, in her father’s rose-filled parlor, they traveled to Europe on a four-month honeymoon, and conceived their first child shortly after their return. In Winston-Salem, Katharine rushed to prepare the Fifth Avenue townhouse for the baby’s arrival. In fact, Katharine had plans to completely remodel the home and garden over the next few years with the help of Philadelphia designers Hunt, Wilkinson, & Company. No expense would be spared for their growing family.

  On April 4, 1906, exactly nine months after Katharine and R.J. Sr.’s return from Europe, a beautiful, nine-pound baby boy was born. R.J. Sr. was elated by his firstborn son’s arriv
al and Katharine showered him with attention and affection. He would be named Richard Joshua Reynolds Jr. That also meant he would one day inherit his father’s ancestral Joshua Coin.

  While little R.J. Jr., nicknamed “Dick” like his father, was still a newborn, R.J. and Katharine took him on vacations and signed their holiday postcards in their son’s name. The charming jest was also symbolic—after decades of hard work and bach-elordom, the tobacco visionary finally had an heir who would one day represent him. As R.J. Sr.’s boundless energy turned toward fatherhood, the future of his legacy lay in the form of this little boy. RJR Tobacco finally had its first blood successor. R.J.’s years of fortune building had come full circle.

  CHAPTER 2

  Favorite Son

  1906–1918

  In five short years, three more siblings came along—Mary in 1908, Nancy in 1910, and Smith in 1911—but Dick was clearly his father’s favorite. Dick was a bright, well-behaved child, most of the time. R.J. Sr. had expectations for Dick and could be strict, but he also treated him with an unconditional, grandfatherly love as well.

  By the time Nancy was born, R.J. and Katharine had enlisted the help of a German nurse, Miss Henrietta van den Berg, to take care of both Nancy and Katharine, who had a long struggle with heart problems. Katharine’s mysterious heart problems were later thought to be caused by undiagnosed rheumatic fever. Because of her weak circulatory system, Katharine was advised to have no more children after Nancy’s birth in 1910. When she had Zachary Smith just a year later, doctors told her this had to be her last child—her heart would fail if she had any more.

  Between Katharine’s health and R.J.’s schedule, the children were usually with Miss van den Berg most of the time. Dick said that the nurse spoiled and favored Nancy, whom she had taken care of since her birth, and treated the rest of them more harshly. The older he got, the more Dick and Miss van den Berg, whom they called “Bum,” didn’t get along. Dick often left his siblings in the nursery and went off to play by himself in his own room—a turret bedroom that he’d moved into when he was five. He later told his wife Muriel that he was terrified the first night he slept there alone in a huge double bed. But he eventually learned to love the big bed, which was so high that he could crawl under it and play with his toys for hours alone whenever Bum got on his nerves. It was the first sign of Dick’s loner spirit.

  One of Dick’s fondest early memories of his own personal hideaway was of the time the morning angels sang to him. In the dark just before dawn one day, little Dick was startled awake by a chorus singing outside his window. He thought he’d gone to heaven and was hearing angels. In reality, it was early Easter Sunday, and a crowd of Moravians were walking up the street, singing in praise of Jesus’ resurrection. The Moravians made the pilgrimage down Winston-Salem’s streets every year, singing on their way to Easter Sunday services, which were always held before the sun came up and had been a tradition since 1773. Dick loved the beautiful music and chanting, and he watched them out his window, his little, wide-eyed face cupped in his hands.

  Dick’s Idyllic Early Childhood

  When Dick got a little older, old R.J. took him down to the tobacco factory every morning in a horse-drawn carriage. Of course, the horses were named Prince and Albert. On the way, R.J. talked to Dick about the tobacco company and explained to him what he would do that day. Father would take the time to explain to son how things worked, which inspired Dick’s interest in engineering. When Dick was just four years old, he was genuinely delighted when his father described to him the mundane details of how the water pumps on their estates functioned.

  Dick loved these precious moments with his father. When they reached the factory, R.J. plopped Dick in the front seat with the driver and ordered him to take the boy home to his mother. Dick loved “taking Dad to work” each day. And every night, R.J. spent time with the children, no matter how tired he was.

  The Reynoldses often spent the summers going to Mount Airy to visit Katharine’s side of the family, as well as Atlantic City, Florida, and the Thousand Islands near the Canadian border. Often, the family traveled in a caravan of children, luggage, and nurses, and the journeys would take several days and nights, but that was part of the fun. Dick and his siblings enjoyed the ride the most.

  Richard S. Reynolds

  As R.J.’s growing family expanded, his nephew, Richard S., had become increasingly restless at the tobacco company. Richard was admittedly wary of R.J.’s shifting priorities, and he had his own growing family on his mind. He had a son, Richard S. Reynolds II, born right after Dick, and Richard considered the idea that it might not be in his or his family’s best interest to stay in Winston-Salem with his uncle. R.J. was close to his nephew and couldn’t understand his change of heart. R.J. felt the company would only grow and expand, and Richard would have plenty of opportunity to fulfill his own ambitions. R.J. appreciated that Richard had devoted his life to the tobacco company, and he would be handsomely rewarded for it.

  But Richard S. insisted that he wanted to start his own company. R.J. knew how hard it could be to start a new business, so he offered to loan him several thousand dollars and advised him to go into tinfoil. R.J. would guarantee to purchase his packaging paper from Richard for RJR Tobacco’s production needs. Richard S. didn’t take him up on the offer right away, uncertain if he was interested in tinfoil. According to local legend, R.J. sent him to Europe to learn more about the trade as a preliminary step. Richard S. stuck with R.J. a while longer, but Winston-Salem seemed too small for two barons, or at least too small for Richard S.’s ego.

  In February of 1912, Richard S. made the decision to leave Winston-Salem for good. He packed up his family and moved to Bristol, Tennessee, to start an entirely new business with his father, Abram Reynolds, who had recently discovered industrial sand and gravel mines on one of his properties. Richard S. had plans to process the “silica sand” and mix it with household cleaners, which would be much easier and cheaper to produce than tinfoil. Richard S. formed the Reynolds Company after his arrival. Both R.J. and Dick were very sad when Richard’s family left—R.J. still thought of Richard as a son and protégé, and Dick cherished his neighbor and cousin, Richard S. Reynolds II.

  RJR Tobacco Flourishes

  By the time the country was in the middle of World War I, R.J.’s famous Camel cigarettes were selling in the hundreds of thousands to soldiers and civilians at home and abroad, and R.J. was the largest employer in all of North Carolina. The decision to place the unique Turkish cigarettes on the market in 1913 was a risky and expensive one. They were the first prepackaged and prerolled cigarettes, and the bright and flue-cured (dried indoors with the heat of a furnace) burley leaf blend had a mild taste and palatable, dark scent. R.J.’s brother Walter came up with the innovative idea of creating prepackaged cigarettes. R.J. launched a full-scale marketing scheme, now considered the birth of modern cigarette advertising, and solicited the town’s wealthiest investors to take the risk with him, to great effect. R.J.’s Prince Alberts were already the most popular pipe and cigarette tobacco in the country and now, because of the avalanche of Camels being shipped all over the world, Camel would outsell its own brands. Soon Camel was a household name.

  The plan was a great triumph for RJR Tobacco, which continued to thrive. R.J.’s success was not without long battles, though. At the turn of the century, he stood to lose his company to another North Carolina man, David Duke, the dominant seller of smokable, roll-your-own cigarettes. Duke was one of the first tobacco manufacturers to buy an automatic cigarette roller, called the Bonsack machine, which helped to launch the first prerolled cigarette. But smokers preferred to roll their own, and the idea didn’t catch on until RJR’s well-advertised pre-packaged Camel phenomenon. Although RJR was always one of the country’s most competitive tobacco companies, R.J. had gone deeply into debt after rapidly expanding his factories and acquiring his brother Abram’s tobacco company. Abram had become a born-again Christian and renounced tobacco, alcohol, a
nd other vices, and wanted out of the industry. By the 1880s R.J. faced stiff competition from David Duke’s newly formed tobacco trust, the American Tobacco Company (ATC). It was a conglomerate of five merged, publicly traded tobacco companies that soon bought out most of the country’s smaller tobacco companies, including manufacturers of both smoking tobacco and plug chewing tobacco. After the formation of ATC, R.J. went from making massive profits to barely breaking even. The trust was extremely unpopular—religious groups used it as an example of the evils of tobacco and pushed to outlaw its use. Doctors began reporting health problems associated with tobacco, and lawmakers and farmers alike fought Duke. In fact, RJR Tobacco was vulnerable to the same groups, and before the launch of Camel, the North Carolina legislature was considering a bill that would outlaw all manufacturing of cigarettes in the state. The bill didn’t pass. R.J. escaped much of the community’s scrutiny because few realized how closely tied he was to Duke. R.J. had maintained the perception that he was a smaller player in the controversial tobacco industry.

  In the 1890s, R.J. met Duke in New York City at his Fifth Avenue offices to discuss a possible trade agreement. R.J. was in need of extra capital and Duke was his only hope. Duke agreed to buy up large portions of Reynolds stock—$3 million worth—under one of ATC’s 1898 subsidiaries in New Jersey, the Continental Tobacco Company. Duke would then own two thirds of RJR, and he agreed to stay out of R.J.’s plug market. But the collaborative agreement ran the risk of becoming another one of Duke’s monopolizing schemes.