MANUFACTURING INDUSTRY 



Cigarettes currently account for about 80 percent of the tobacco consumed 

 in the United States. The remainder is about equally divided between cigars 

 and manufactured tobacco (smoking, chewing, and snuff). The trend towards 

 cigarettes developed rapidly. In the early 1920' s, cigarettes accounted for 

 only one-fourth of U.S. tobacco consumption, while manufactured tobacco made 

 up 50 percent of the total. Manufactured tobacco has now declined to less 

 than 10 percent of total consumption as consumers have turned to lighter , mild- 

 er forms of tobacco. 



In the colonial period the export trade was the only commercial outlet 

 for tobacco leaf. After the Revolutionary War, small manufacturing plants be- 

 gan to appear, and in 1790, 29 million pounds were used in manufacture. The 

 product was a roll or twist form, from which portions were cut for chewing or 

 smoking, or grated for snuff. Early in the 1800' s, the manufacture of cigars 

 began to assume importance. Imported Cuban leaf was principally used in their 

 production. However, as the domestic cigar leaf types were developed, first 

 in Connecticut and Massachusetts, and later in the Wisconsin and Pennsylvania 

 area, these were combined with the Cuban imports in cigar manufacture. By 

 1860, 45 cigar factories were in operation. 



At the outbreak of the Civil War, the manufacture of chewing tobacco had 

 reached its peak. The leaf used in this product was a new type being grown 

 in Virginia and North Carolina, and was the forerunner of modern flue-cured 

 types. During the last quarter of the century, the manufacture of fine-cut 

 chewing and smoking (mostly granulated) came into prominence in which leaf of 

 another new type, White Bur ley, was used. 



An outstanding feature in tobacco manufacture in the last quarter of the 

 19th century was the development of the cigarette-making machine, which first 

 came into use in the early 1870' s. Flue-cured was the principal leaf used at 

 first and toward the end of the century, imported Turkish assumed importance 

 in the development of the blended cigarette. Fifteen years after cigarettes 

 were first made by machines, annual production passed the billion mark and by 

 1895, 4 billion were manufactured. Current production is around 600 billion. 



Today, about 1.3 billion pounds of domestic and 275 million pounds of im- 

 ported leaf are used in the manufacture of tobacco products in this country. 



Taxes . In almost every country in the world tobacco has been a popular 

 item for taxation. In the United States a Federal tax on manufactured tobacco 

 products was established in 1862, but the tax on manufactured tobacco (smok- 

 ing, chewing, and snuff) was repealed effective January 1, 1966. The revenue 

 derived from cigars and cigarettes now amounts to over 2.1 billion dollars an- 

 nually. 



In addition to the Federal tax, all 50 States and the District of Colum- 

 bia impose taxes on one or more tobacco products, and revenue from such taxes 

 now totals nearly three billion dollars yearly. Further taxes are levied on 

 tobacco products by some citv and county governments. 



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