Note: This entry continues the story of tobacco in North Carolina, beginning in the late 1800s. Part I tells the story of North Carolina tobacco from the time of its discovery by Europeans.
Cigarette consumption in the U.S. reached 2.19 billion cigarettes in 1889. That was five times what it was before James Duke introduced the Bonsack machine, which automated cigarette rolling in 1883. During World War I (1914–1918) cigarette usage grew, as soldiers found that smoking cigarettes provided some comfort and energy, even when they were stuck in miserable trenches.
Cigarettes became “manly.” In the past, only cigars and pipes had that reputation.
But not just men were smokers—smoking gradually became a pastime of women. As women ventured out of the home, smoking cigarettes became a sign of their liberation. For the first time ever, a first lady of the United States, Eleanor Roosevelt, smoked in public in 1934. And in 1968, the Philip Morris Co. came out with “Virginia Slims,” a narrower cigarette. The company marketed it to women with the slogan, “You’ve come a long way, baby.”
Where World War I had left off, the movies took over. Hollywood glamorized smoking. “Movies changed smoking forever,” writes Iain Gately in a popular history of tobacco use.[1] “People began to smoke because their favorite film star did.” In addition, slim, beautiful models smoked, underscoring the idea that tobacco was a way to avoid eating too much and gaining weight.
The Tobacco Deal of the 1930s
When the Great Depression hit in the 1930s, President Franklin D. Roosevelt’s administration began to create programs to help farmers, including tobacco farmers. The idea behind most of these plans was to raise prices of farm products by limiting their supply. (With less supply, people who really wanted tobacco would pay more.) So, farmers had to be persuaded to produce less. If they did, prices would be higher than they would otherwise be. That, of course, would harm tobacco consumers, but help farmers.
Congress took a variety of steps to limit production and prop up the prices of farm crops. In 1936, the Supreme Court decided that one approach—the Agricultural Adjustment Act (AAA)—was unconstitutional. It had regulated intrastate commerce (that is, trade within a state), but the U.S. Constitution allows the federal government only to regulate interstate commerce (trade between states).
So Congress passed a new AAA law in 1938, using a different tack. This law passed muster with the Supreme Court partly because its language emphasized interstate and foreign trade in tobacco. The law also tied the AAA programs to soil conservation. The law gave the government strong powers over tobacco farming.
Under the 1938 law, each farmer was given a right to produce a certain amount of tobacco, called a quota. The quota was set in 1938 at the amount of tobacco the farmer had been producing for the past few years. It was illegal to grow and sell more tobacco than the quota. By strictly limiting the amount of tobacco that could be produced, the government kept prices high for farmers.
For individual farmers, the quota became quite valuable, because the only way to grow tobacco was through the quotas. The quotas could be bought and sold—and inherited. For the next 67 years the federal government limited production and helped keep tobacco prices high using the quota system.
Tobacco Falls
Throughout the 20th century, there had always some opposition to tobacco. Some doctors worried that it was stunting the growth of young people; it was known to be addictive; and traditionalists considered it inappropriate for women. But beginning in the 1950s, scientific evidence began to accumulate showing that carbon in the smoke people inhaled led to lung cancer. That research gained momentum and a link between smoking and lung cancer became difficult to deny. This fueled a decades-long campaign against smoking.
Milestones of this campaign in the United States include a 1957 statement by the U.S. Surgeon General (a federal official) that cigarettes might be harmful. In 1965 a law was passed requiring cigarette packages to say, “Caution: Cigarette Smoking May Be Hazardous to Your Health.” Then in 1971 cigarette advertising was banned on television. The next year, all printed advertising of cigarettes had to have a warning. Smoking gradually disappeared from the movies, and consumption began to fall. At the same time, more tobacco from other countries came to the U.S. Even so, tobacco still remained lucrative, and the rights to tobacco quotas remained valuable.
In the 1990s, a large group of states sued the major tobacco companies on the grounds that they were harming young people, especially by luring them into becoming smokers.
The case was settled in 1998 for a remarkable $206 billion in 1998. That is, the tobacco companies would have to pay, over time, that amount of money to the states that had sued (in the end, nearly all states participated).
Presumably the money would be used for smoking prevention and cessation (programs that help people stop smoking). However, there was—and is—plenty of leeway in how the states can use the quite sizable amounts of money. Although the agreement was signed in 1998, as recently as in 2024 the state of North Carolina received $139.6 million from the settlement. In announcing the state’s receipt of the funds, Josh Stein, attorney general of North Carolina, said that $17.5 million would be used for economic growth in rural counties.[2]
Another big change took place in 2005. That year, the federal government initiated a “buyout” of tobacco farmers’ quotas. All tobacco farmers in the country who had been part of the price-protecting quota program would give those programs up—in return for a total of $10.1 billion![3] North Carolina farmers received a total of about $3.9 billion from the buyout [4] and many tobacco farmers retired However, those who stayed in the business could produce as much as they wanted under the buyout plan. And others could start farming if they wished.
Indeed, tobacco continues to be produced, even after the end of the quota program. While demand has declined in the United States, smoking globally has increased, and the United States produces much of the tobacco consumed. In 2024, North Carolina led the country in the amount of acreage devoted to tobacco farming.[5]