Charles Price:

We’d better get started on the second session this afternoon. Our speaker will be Professor Orman E. Street. A native of South Dakota, he received his bachelor’s degree at South Dakota State College, his master’s and PhD degree at Michigan State University. He was plant physiologist with the Connecticut Agricultural Experiment Station and then worked with the United States Department of Agriculture. In 1945 he was appointed professor of agronomy at Penn State and from there went to the University of Maryland where he was a specialist in agronomy until retiring in 1969. He’s been a specialist in tobacco throughout his professional life, contributing a number of articles in the field to scholarly journals and experimental station bulletins. He has completed a book on far eastern tobacco production, which is to be published by Tobacco International. His present topic will be “The Far Eastern Tobacco Trade and Leaf Production.” It gives me pleasure in introducing Dr. Street to you.

Orman Street:

I think it’s particularly merciful mine is the last presentation of the afternoon. I really expected that Bill Humphries would tell this story but then I realized that he was too young to be cognizant of that type of story. But the story was about the

man who knocked on the door of a house in a mining town and said, “Is this the home of the Widow Jones?” and she said, “This is the home of Mrs. Jones,” and he said, “Just wait for the black wagon that’s coming down the road.” Well I think we’ve heard all the black wagon stories that we need. I’m not a pessimist about the future of the American tobacco industry and particularly about the future of the flue-cured industry at least, and I think the reason probably is that what has been told you so well by Mr. Andrews especially this noon at the luncheon, that there is a unique quality about this tobacco. Now the use of the word good or bad, there’s sort of a moral issue involved in that in some cases. I think if we had to hear in this state and in the rest of the flue-cured states if we grew tobacco the way we did back in 1935 then we wouldn’t have the demand in the world market that we have today, because our tobacco techniques have been improved so very greatly. Whether you use the word good or better or whatever it is the tobacco has more taste and more punch to it, and the other tobaccos with which it’s blended, the other tobaccos produced in these other countries that seek our tobacco so eagerly, is mostly flat and tasteless. So it’s a matter of balancing the two types of tobacco in the cigarette and the proof of the pudding is the fact that the higher percentage of U.S. flue-cured they can afford to put into a cigarette the better sales they have for that particular cigarette in that particular country. Japan, for instance, I think Peace is the name of the cigarette, or Joy, I’ve forgotten which one, has about fifty percent U.S. flue-cured, and this is the nonpareil for all other cigarettes. As you go on down the scale you get to some that just have a [04:21] if you look at the wrapper, and that’s all there is, and they might sell for a third of the price of the superior cigarettes.

Well I’m digressing a little from my topic. I’m going to give somewhat of a historical sketch of Oriental production because I think this has quite a little bearing on what we have to do. Actually there was a time when belief was current that tobacco had been grown before Columbus discovered America, that it was grown in the Orient. Now the people who are in the Near East--and more often than not this particular statement is made by Turkish scientists. They say, ha, ha, we grew tobacco in 1367 or something like that. Well, those of you who know the leaf types and the leaf shapes of the Turkish tobaccos might be interested to know that these same heart-shaped leaves with long slender stems are found in the Japanese and the Chinese tobacco, but this doesn’t prevent the same Portuguese sailors from having dropped off seed in all these ports, which they probably did. This hypothesis that tobacco was a native plant to the Far East or the Middle East is completely disproven. There’s nothing there whatever to prove it. But the fact remains that the Portuguese and the Spaniards were seagoing people and they were journeying to the Far East and going around the [Cape of Good Hope] and sailing into these areas long before Columbus sailed to the Western world, and they were in search of the spices and the drugs and these other items.

There is a record of introduction of tobacco to Nagasaki, Japan in 1605, which pretty much corresponds with some of the other dates. The Portuguese often would send a landing party into a country, and they did this in Taiwan, which of course was then a part of mainland China, somewhere in that neighborhood, the early 1600s. They conquered and ruled the city of Tainan, which is about halfway down the island and is a good size city, and finally a man who was to become a hero to the Chinese chased out these Portuguese privateers, or whatever they were, and they no longer ruled that area.

Of course you know they seized areas of land in India and elsewhere and one small piece of land the Indian government seized from the Portuguese just a few years ago.

In 1505 they reached Ceylon, which now of course is Sri Lanka, and in 1508 Sumatra and the state of Malacca in Malaysia, which is across the Straits of Malacca. Then very near that time they reached an island called Maluku, which has later become known as the Spice Island, and it lies between in Indonesia between the Celebes and the island of New Guinea, and I guess as far as I know is still a source of spices. And in Zanzibar, of course, to this day it’s a source of cloves which are used in some of the cigarettes made in the Far East.

Now how tobacco got into Thailand, Laos, Cambodia and those areas, it could have been the Portuguese making landings in the Gulf of Siam or something like that, but there is another possibility that the movement was from the other direction. In other words from Japan you’ll find the same types of leaf grown in that part of China which lies from Peking north up into Manchuria. You have these very similar types and there’s good reason to think it moved into Korea, China, and that there was a southern-ward movement of population which finally took the Chinese to the south of what is now China, to Yunnan Province and Kunming and Sichuan and all those areas off toward Tibet. What we now hear of as the hill tribes, the Red Nails and these others, who never were completely subjugated by any ruler, emperor, of China, they moved freely across the borders into Laos, across the Mekong River, for instance, and moved down into Burma and they apparently moved the length of Khmer Republic, Thailand, and down through the Malayan Peninsula into Singapore and then onto the islands. So I have that

hypothesis at least based on the similarity in practices, which I will mention a little bit later.

In the Philippines, of course, Magellan got into an argument there shortly after he landed and got into a tribal war. He lost and so there was no more Magellan but his crew and his second-in-command sailed the ship the rest of the way around the world, and this of course occurred in 1521. In 1565 Spaniards from Mexico, mainly missionaries, went to the Philippines, found a very friendly reception on the island of Luzon, and of course converted the natives of Luzon to Christianity, and they did a much better job than anybody else has ever done in the whole Orient. In fact there isn’t any place else where you find very many Christians, the efforts elsewhere were failures, but there they did have their schools and their missions. They also introduced up into the northeast corner of the country, up into the valleys of the Isabella River and the Cagayan River, these areas where every spring there is an annual overflow of water that goes over the banks during the end of the wet monsoon, and the land on which they grow those famous Philippine cigar filler never receives any fertilizer except the fertilizer that’s brought down in the silt carried by these rivers, and it’s very justly famed. It’s a very interesting development.

Another way in which, more or less accidentally probably, the tobacco trade was carried to different parts of the world was in connection with the slave trade. Perhaps 1471, I believe, was the earliest date of the settlement of the Portuguese on the Gold Coast, now Ghana, and the Ivory Coast about the same time, and of course the Portuguese were not the only ones engaged in the slave trade, anymore than the Spaniards were the only ones that were pirates. But Spain, Portugal, England, France,

Sweden together, and perhaps a few others, carried an estimated fifteen million Africans from the west coast into slavery, and at the same time they introduced the use of tobacco and the natives were terrifically delighted by this. They might not have enjoyed any other part of the operation but they did like the tobacco and it over the years has given rise to the kind of tobacco known in the trade as “black fat.” This isn’t the only one but each individual tribe of West Africa has their own preference as to the shape of the hand and the size of it, and this thing, and to me black fat is a fascinating material. You start with dark fire-cured and you spread Vaseline on the leaves and then you put it in a pack, into a case, until that fully permeates through the leaves and it turns pitch black and then it’s ready for sale. I think about three million pounds a year of Kentucky and Tennessee dark-fired and dark air-cured is sold to the West African countries and also in the Caribbean, those countries which have African backgrounds, you might say, like Jamaica and the Bahamas. The people that were brought there brought that habit with them so you have a roundtrip in that case.

Now I mentioned this Japanese--. This incidentally is some of the coffee. There isn’t any tobacco in it yet. Japan grows fourteen varieties of “medium” tobacco, and it’s pretty much unlike any other tobacco in the world in that most of them have these heart-shaped leaves. Even those that don’t, the leaf is broader than it’s long and it’s not much longer than that, so that it’s sort of a very delicate heart shape and then it comes down, and a naked stem, naked petiole. These tobaccos are used--. You can pass that around. This is an Oriental water pipe. You can’t hurt it, you can do anything you want with it, but you do put a little water in the bottom and then stuff the tobacco in there. The tobacco smoke is drawn through the layer of water just like the Indian hookah would be,

but this is what the Chinese and Japanese call the--. This would be called the Chinese wet pipe and the Chinese dry pipe is something like the ones that they used to have in the old taverns in the Carolinas and Virginia where it’s made out of clay. In both these countries these so-called native tobaccos are used for hand-rolled cigarettes, for the dry pipes, for the wet pipes, and for chewing or miscellaneous use, anything except what you would call factory-made cigarettes. So there is actually in the system of classification, which is used in the farm agricultural, this is normally called light sun-cured, and the People’s Republic of China had a production in--perhaps 1973 figures--. No, it’s an average of ’64 to ’69. They produced four hundred and thirty-three million pounds of light sun-cured while Japan produced ninety-eight million five hundred and fifty thousand pounds of this same type of tobacco, so you see you had well over five hundred million pounds of this type grown.

Now there’s another type that I’m going to discuss rather briefly, I hope, and this is what is known as kerf, k-e-r-f, and I thought, what a weird name that was, so I inquired and the word you can find in any English dictionary. It has Middle English origin. It means to cut, to slice, and the Dutch gave this name to the operation which was carried on by the inhabitants of Indonesia to produce a fine-cut tobacco, and instead of going through a whole lot of trouble to cure this tobacco as you would in a barn, air-cure barn, they merely roll it up in twenty-five, thirty leaves and they would pack them along the floor here. After three or four days they would be [18:34] yellow, and I’m sure some of you fellows know what happens if you accidentally leave a pack of leaves together for three or four days; you get the disappearance of the chlorophyll and very marked changes in the chemical composition. This tobacco then is cut very finely in a homemade

guillotine with a big sharp knife--it’s really just a hole in the wall and they just sit there and chop that off rapidly--taken and put on bamboo racks out in the bright sun in the tropics and in an hour’s time or so it’s cured into this yellow-green color. Then all you have to do is remoisten it and it’s ready to smoke in cigarettes or anything you want to do.

I’m sure that this must have been carried from the southernmost provinces of China, and I base this on the fact that after the tobacco has been dried and remoistened, in Thailand at least they will take and wrap it up with a rough manila paper around it, tie a string around it, and spray the exposed ends with red vegetable dye and it’s sold as Red Chinese tobacco. From that they repackage it and make cigarettes using the leaf of the nipa palm or using a leaf of maize or whatever else they happen to--anything but white paper. They disdain the paper that we use on cigarettes because they say it doesn’t have enough taste to it. If you can give them good brown manila wrapping paper they’ll roll a cigarette in that, and if you ever try that yourself you’ll know you do get an added ingredient out of the manila wrapping paper, which they enjoy. But this is not a small consequence in the trade of these countries because Thailand produces about forty-five million pounds of this tobacco, Burma some seventy million pounds annually, and there are a great many others.

Now in Indonesia you’ll find one or two more additions to the routine. The Indonesians have two types of native cigarettes. One is a Kretek, it’s called, and this contains little bits of clove buds in there for an aromatic effect and also the word indicates the crackling sound that you get when you smoke these because they explode, so you can’t make them in a machine, you have to do it by hand, and women who work at

that--. I was told by the former agricultural attaché at Jakarta that the women work in teams of three, one maker and then two women that hand her the material, and she rolls these almost faster than the eye can see. This is a very much sought after product there. Now occasionally they’ll put in perfumes, they’ll put in, oh, I don’t know. One place I went I really think that they took me to an opium den but I haven’t any proof of it. But they--. [Laughs] A terribly sweet smell to the stuff they were smoking. [Laughs] It delighted me. [Laughs] I didn’t offer to try it out but it had all the earmarks of it. You would think you were back in the--seeing Sadie Thompson [22:35], or something like that, as you went through the place. It was really fantastic.

Now a newer country that proved very fascinating to me in their ways in which they use tobacco was India. India produces about three hundred million pounds a year of flue-cured, which is produced in the southeast part of the country. It’s about a hundred miles north of Madras and two hundred miles south of Calcutta. It’s on the Indian Ocean. It’s in a very hot--oh, hot. You just couldn’t live. In the cool part of the year it was around ninety-five during the middle of the day and then in May and June it got up around a hundred and fifteen to a hundred and twenty. Very few Europeans or non-Indians could live there any length of time because they just couldn’t acclimate themselves. But this is where they grow the tobacco and if anyone seriously considers that Indian flue-cured is a competitor of U.S. flue-cured they can disillusion themselves. It is probably one of the poorest tobaccos. The lower part of the plant has some decent leaves but then it runs out of water and from then on it’s like that big and dark green. They use it as filler. The UK uses some, I guess they sell some to Russia, probably, but as compared to about three hundred million pounds they produce some six hundred

million pounds of various kinds of dark tobacco, and I’ll sketch through those very rapidly, not the kinds of tobacco but the products as much as anything, the beedies. I’m sure some of you have seen pictures of them or know what they are. They’re a little bit of conical cigarettes about that long, wrapped in the leaf of the Indian ebony, Diospyros, and tied with a red string and they come in packets of ten. Ten of them will sell for about one U.S. cent. They don’t have much tobacco, most of the time you’re smoking this ebony leaf, but the total consumption of beedies--and they’re all hand-made, incidentally. There’s no way you can make a beedi on a machine. The total consumption is about two hundred billion a year, and this is something: There are five to ten times as many beedies as there are conventional cigarettes sold.

Then of course you have the tobacco which is used in the water pipes, the hookahs, and the water pipe as it was originally conceived I’m told was a--. They would take--. And you could do this, you could take a coconut and punch a couple of holes, two of the three eyes out, and pour the juice out and pour water in there and then put what they call a [25:50] which is a piece of metal pipe with a ceramic top. In this you would place your tobacco and a live coal and this tube would run down to the bottom of the water. Then in one of the other openings in the coconut you could have like a straw, a soft drink straw you might say, so that when you drew on the straw you bubbled the smoke through the water before it reached your lips. Now you perhaps have seen pictures of these hookahs which are very fancy, made out of silver or brass or something like that. They are fitted with a long rubber tube with a mouthpiece and smokers, especially in Persia and that part of the world, they’ll sit around in a big circle with the hookah in the center and then they’ll have this long pipe and purely for sanitary reasons

they put the mouthpiece between their hands like this, and [Sound effect] and of course then no one can say well I wet the mouthpiece with my lips. I’m sure this [26:59 is sanitary.] Now you can form your own conclusions about whether that’s a sanitary practice or not, but that is the way in which it’s done.

The other types of native leaf, which I will mostly omit, are those called Natu and Lanka. Natu is a dark sun-cured tobacco, which in many respects resembles our dark-fired or dark air-cured tobacco. It’s allowed to get very ripe and then when they harvest the plants they cut them off in sections with a sharp knife so that each leaf has a section of stalk, and you see in that way if you reverse that you have a little hook there and you hang that over a heavy cord and tie the cord either to one side of the house or one side of the barn or whatever means you happen to have, a framework, and you leave that out in the hot sun for two to four months maybe, or even a shorter time. Finally it is put in piles to ferment. Sometimes instead of just piling it on top of the ground they will dig a pit or two pits and they will put the stuff in one pit and pack it in rather moistly, throw in some salt water, and this causes it to heat up and then they’ll pile it over in the other pile for awhile and then bring it back. When they get through they have something which is really villainous and [Laughs] Lanka is just about the same way. That’s grown on islands in the river that are subject to annual overflow and that adds a high salt content so that a very little of this will go a long way in the whole economy, but then there’s a lot of Indians too, between four hundred and five hundred million of them.

Now, as far as the production of flue-cured in the Far East is concerned I have had the help of Mr. J.W. Drummond of the home office in the BAT in London and also Mr. John Campbell of the Imperial Group Ltd. at Wilson, and among the things which John

Campbell loaned me was a little book called The African Pastique. It’s a description of Imperial’s activities in Malawi, and they practically run that country. This was the point where they first went there rather than--. It was Nyasaland then, part of the Rhodesian Federation, about 1900. In the back of the book are some of the comments of the readers, and this is one, the daughter of a member of Imperial Tobacco Co. staff: “What a dreary little book.” So that any quotations [Laughs] that you hear from that, please don’t think I’m the only one that’s dreary. The fellow that wrote the book was.

In India flue-cured production started in 1927, where I mentioned in the state Andhra Pradesh there, north of Madras. Now they have moved across the main ridge into the west side in the State of Mysore with headquarters in Bangalore, and this is a much better soil, it produces much better tobacco, and they have water for irrigation so they are doing very well.

In Indonesia flue-cured production was started in 1926 and I was there in 1963 in February and you could hardly get anyone in the embassy to go out on the streets at that time because Sukarno was getting increasingly fractious, you might say, and very shortly after that he incited riots in which the British embassy and the U.S. embassy were stoned and the British compound and the U.S. compound was attacked. Late in December of that year he seized all the companies including the tobacco industry. Well in February I was able to make a trip down through the mid portion of Java so I saw a lot of their production and it was a very interesting trip, you can be sure, although it was not very easy.

Malaya is another place where commercial flue-cured production has started in about 1958 up in the northeastern corner of the country, a place called [32:01], rather

inaccessible. Again the BAT was a prime mover. Rothmans had also moved in that territory and was producing it. From that start--I saw it of course in ’63 and they probably were growing four or five hundred pounds--I think the latest figures show that they grow seventeen million pounds in Malaysia. It was a classic example of the method of operation. To me this was the most amazing thing. They picked three or four men out of the organization who were acquainted with tobacco growing in the tropics, maybe they’d been in India, Indonesia, or any one of a dozen countries, they sent them into this area which had been picked out for reasons of rainfall and soil, and they selected the native Malayan farmers. They grew the plants for them, they showed them how to put them in the soil, they told them how many teaspoons full of fertilizer to put around each hill, and then when the bugs got bad they gave them the stuff to put on for the bugs. They told them when to, as they say, reap the leaves. They brought back the green leaves for which the farmer was paid and then they did the curing themselves in brick barns using mostly old died-out rubber trees as a source of fuel. You can burn a rubber tree if it gets old enough but in the meantime it’s pretty aromatic, but they of course using flues it wouldn’t affect it. Even today they are not able to produce, nor will they be able to produce, their requirements. They are a good import market for our tobacco. In proportion to the size of the country Malaya has always been a large user of U.S. flue-cured.

Japan started early in this century, I think entirely on their own, both flue-cured and burley, and of course they had grown native tobacco for a long time. Now they have begun to cut back and the labor shortages and so on--. You heard Mr. Andrews say that in 1974 they were our leading customer for flue-cured. This is the first year that they

passed West Germany and the United Kingdom, and I think they rather surprised themselves. But they were growing somewhere in the neighborhood of two hundred million pounds and are now importing at least half that much of U.S. flue-cured.

The Philippines tried to grow flue-cured with rather poor success. I never saw worse tobacco in my life. If it was any bigger than that it was amazing, a coincidence, and only the sand leaves were any good. I think we have a classic example of too much control, let’s say. This year there are only three provinces in which they’re allowed to grow flue-cured, Ilocos Norte, Ilocos Sur, and La Union, the three provinces in the northwest corner of the country. For years they bought the Philippine--. They formed a corporation, the Philippine-Virginia Tobacco Co., which paid the farmer in scrip but they never paid him any cash for his crop so he was left holding this useless piece of paper. Finally they went bankrupt and the government said well they were a very sinful group of men. We’ll replace them with another corporation which had a different combination of letters. But if the farmer wanted money for his crop he sold it to what he called the Chinese capitalists, an independent buyer, who would pay him perhaps fifty percent as much as the government said they were paying him but at least he’d get the money or he’d get credit at the store. So the Philippines are not an important competitor in any way.

Now Thailand is a very interesting one, and then I think I’ll perhaps leave them where they are, so to speak. Thailand started about forty years ago up in the area about three hundred miles north of Bangkok. Has anyone here been to Chiang Mai? If you were with Universal Leaf or any of the big companies that buy tobacco you might--. I think Universal has--. I know they have a packing plant up there and so does

Transcontinental. They were taught the techniques by the British, the BAT, on contract and then they took it over themselves, and they grow a very beautiful tobacco. Every single leaf of it would bear an “L” letter on the grading. It’s pure yellow, just as pure as can be. It has one half of one percent alkaloids, nicotine. That’s all you can get out of it. I saw Coker 139 growing there, beautiful looking, but when it was cured up because of the combination of shortage of water and the heavy clay soil and one thing and another, it was very uncommon that they got anything but this very glossy, super thin, bright yellow leaf almost devoid of alkaloids. You could smoke it until you’re blue in the face and you wouldn’t even know that you were smoking it as far as getting any nicotine out of it. Now this is a wonderful filler tobacco to counteract say some of the Indian tobacco or something like that. It goes into the West German trade. Where else it goes I don’t know. But within the last few years they have raised their production to I think sixty-eight million. At the same time in 1972 they bought twenty-five point four million pounds of U.S. flue-cured. They were the second only to Japan. Japan in that year bought--in ’73, rather--bought fifty-five million. Now they’ve jumped to about a hundred million.

The third buyer in terms of imports is Taiwan and they in turn--. Now all these countries are monopoly countries, so called. You can’t even--. You’re told how many plants you can grow--you can’t do anything that they don’t tell you that you can do--and the amount of fertilizer and this sort of thing, and the variety of seed, and every single--. And if they don’t want you in the organization they just tell you so. You haven’t any future. But Taiwan recognizes again, just as Japan does, that the U.S. flue-cured is the basis for quality in their cigarette, so where they produce--. Taiwan produces about

thirty-five million pounds and they import about sixteen and a half million pounds, so that’s about a two to one ratio.

South Vietnam did import about eleven and a half million pounds, Malaysia about six point four million pounds. Well if you realize that Malaysia hasn’t got very many people over there either, and that’s a pretty high rate of consumption. It nearly represents the maximum amount that they can afford to buy and put in there. The Philippines--again this is a very complicated situation--in order to import U.S. flue-cured, only this, applies [to the] so-called Laurel-Langley Act, which I think is about due to expire. The cigarette manufacture over there had to export, or there had to be exported, four pounds of Philippine flue-cured for every pound of U.S. flue-cured that is brought in to use in cigarettes, and this is supposed to help their own industry, and yet they imported about five million pounds a year, so they had to sell in the world market twenty million pounds of flue-cured, and they would sell it for about three cents a pound or give it away if you can carry it away off the docks and put it in your ship and cart it away, but nevertheless they did sell it.

Now in the manufactured products, and [I have] one paragraph on that, our best market in the world for manufactured cigarettes is Hong Kong. It exceeds any other place. In 1973 they bought four point eight billion cigarettes. Well they don’t have much any place--. They can’t grow tobacco, of course, on the little bit of land there, and they apparently would rather have our cigarettes in the form of finished product than they would to manufacture it themselves. Also Hong Kong bought over a million cigars and Japan bought forty-four and a half million cigars in 1973. Hong Kong bought forty-eight thousand pounds of packaged smoking tobacco and a thousand pounds of chewing

tobacco and snuff, so they’re very indiscriminant [Laughs] in what they buy but they do buy it in large amounts.

I have certainly enjoyed being here. It’s a pleasure. I might say in passing that I have been now in twenty-five countries in Asia and Africa and spent one entire year in Taiwan working with the Taiwan tobacco and wine monopoly bureau. Their wine is horrible. [Laughter] The beer is--it depends on the time of year. Sometimes you get good beer, but you can’t buy any other kind of beer. The same way if you’re--. Unless you want to pay exorbitant prices you can’t buy any other kind of cigarettes except the kind that they sell. So, for heaven’s sakes, if you’re going to move someplace to live don’t move to a place where the cigarettes are made by a monopoly corporation because if you do you’ll just ask for trouble. I will leave with Dr. Ellen a list of the data which was kindly supplied to me by the BAT Tobacco Co. as to the dates in which they entered the different countries, but that’s worse than this book that the little girl said was so dreary. Thank you again. [Applause]

[From this point to the end not transcribed]

END OF RECORDING

Transcriber: Deborah Mitchum

Date: October 20, 2010