MANUFACTURING INDUSTRY 
Cigarettes currently account for about 82 to 83 percent of the tobacco 
consumed in the United States. The remainder is about equally divided between 
cigars and the manufactured tobacco products (smoking, chewing,and snuff). The 
trend towards cigarettes has been rapid. As late as the early 1920's, ciga- 
rettes accounted for only one-fourth of our tobacco consumption, while manu- 
factured tobacco products made up 50 percent of the total. However, the manu- 
factured products have now declined to less than 10 percent of the total as 
consumers have turned to lighter, milder forms of tobacco consumption. In 
terms of volume, per capita consumption has risen about 30 percent since the 
early 1920's. 
In tobacco manufacture, the main purpose is to convert the cured leaf in- 
to a form convenient for use by the consumer, and for dispensing by the mer- 
chant. Manufacturing firms buy the cured "green" leaf from the farmer, store 
and age it, and manufacture it into products, which they distribute through 
wholesale and retail dealers to the ultimate consumer. 
In the colonial period the export trade was the only commercial outlet 
for tobacco leaf, but after the Revolutionary War, small manufacturing plants 
began 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 
areas, these were combined with the Cuban imports in cigar manufacture. By 
1860, 45 cigar factories were in operation. 
By this time, also, the manufacture of plug chewing had become establish- 
ed, and leaf used in this product was a new type being grown in Virginia and 
North Carolina, which was the forerunner of the modern flue-cured types. Dur- 
ing 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 Burley, was used. 
An outstanding feature in tobacco manufacture in the last quarter of the 
19th century was the development of the cigarette 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 557 billion (1965). 
Today, about 2.2 billion pounds of domestic and 260 million pounds of im 
ported leaf are used in tobacco manufacture in this country. 
Taxes. Tobacco in most all countries in the world has always been a pop 
ular item for taxation. In the United States a Federal tax on manufactured 
tobacco products has been in effect for nearly a century, and revenue derived 
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