easy access to the packaged cigarettes. The overwrapped packs pass directly 

 into a cartoning machine where ten packs each are placed into a cardboard 

 carton. The completed cartons, sealed on all four sides, then travel via a 

 conveyor belt to another machine which places them into suitable shipping 

 containers for domestic distribution or for export. 



Cigarette paper used in manufacturing cigarettes was, prior to 1940, al- 

 most entirely imported. At the present time, however, most of the paper is 

 manufactured in this country from domestically grown flax straw. The flax 

 straw fiber is repeatedly bleached and refined during the manufacturing proc- 

 ess. The paper must be very thin, and at the same time durable enough to 

 prevent tearing or breaking on high speed machinery; it must burn slowly and 

 evenly at the same rate as the tobacco; it must contain tiny air passages, or 

 pores, to control the amount of dilution of the smoke by air (and consequent 

 flavor and nicotine content per puff); and it must be completely tasteless. 

 The paper is first rolled in wide sheets on large bobbins, and later it is 

 slit into widths proper for the circumference of the cigarettes. 



The cigarette industry currently employs about 33.0 thousand production 

 workers. Additional thousands are employed in management, accounting, sales, 

 etc. Around 576 billion cigarettes were manufactured in 1971, mostly for do- 

 mestic consumption. However, about 32 billion were exported to over 100 for- 

 eign countries throughout the world and another 17.5 billion went to the Armed 

 Forces overseas, to ship stores, as shipments to Puerto Rico, etc. Consumers 

 spent about 11.5 billion dollars for the 555 billion cigarettes consumed in 

 the United States in 1971. Per capita consumption (18 years and over) is 

 about 200 packs annually. The Federal Government receives over 2.1 billion 

 dollars annually from the eight-cents-per-pack excise tax rate, and nearly 3 

 billion dollars is collected yearly among the 50 States, the District of 

 Columbia, and local governments. The State tax rates range from 2 cents to 

 21 cents per pack (as of April 1, 1972). 



The Cigar Industry 



The cigar industry in this country began in homes on tobacco-growing 

 farms.—' Shops employing skilled cigarmakers began to appear after 1800, and 

 larger factories gradually evolved from these. The making of cigars on 

 farms eventually disappeared, but the practice of making them by hand in the 

 small shops persisted as an important phase of the industry throughout most of 

 the 19th century. 



With the perfection of cigar-making machinery during this century, the 

 industry rapidly evolved into fewer and larger establishments. In the last 

 25 years alone, the number of factories producing cigars has dwindled from 

 1,800 to about 300, and production has increased from 5 to over 8 billion. 

 All cigars, except the most expensive, are now made by machines. 



2/ The first cigars known here were imported from the Spanish West Indies 

 and were called "segars." 



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