James Duke

James Buchanan Duke built two massive fortunes, the first in tobacco and the second in hydroelectric generation. With his wealth, he became one of the greatest philanthropists in the history of the Carolinas, perhaps best known today as the patron of Duke University.

Born in December 1856 near Durham, North Carolina, Duke grew up on a small farm with a widowed father. After the Civil War devastated the Carolina countryside, the Duke family began growing, curing, and selling tobacco. In 1874, the Dukes opened a tobacco factory in Durham, where they were among the first cigarette manufacturers in the South. The family was—at J. B.’s recommendation—among the very first to adopt machine production on a large scale. The Dukes were able to produce much faster than manufacturers using older methods, and to sell their growing surplus inventory they built consumer demand for the Duke brands by pioneering national cigarette advertising, including tradable “cigarette pictures” and billboards. J. B.’s devout Methodist father was concerned about the suggestive pictures, and his competitors sniffed at “this damned picture business” that “degraded” the cigarette industry, but smokers across the country increasingly asked their local tobacconists for Duke brands by name.

Like many of his era’s industry titans, Duke sought to limit competition. His firm joined four others in 1890 to form the American Tobacco Company, which accounted for upwards of 90 percent of the domestic cigarette business. Duke, who had orchestrated the merger, was at the helm of the new monopoly. In 1901, he bought a major British tobacco company. He again joined forces with competitors and formed the British-American Tobacco Company. “[Duke’s] keenest satisfaction from this international triumph,” said business partner William Whitney, “came to him in the knowledge that he had gotten an almost unlimited and more lasting market for the tobacco made by his own people on their small farms.”

The first decade of the twentieth century brought an interlude between Duke’s entrepreneurial achievements. His father died in 1905. He divorced and was remarried. His only child, Doris, was born in 1912. In 1911, the federal government dissolved his conglomerate under the Sherman Antitrust Act.

During these years, Duke was planning his next enterprise: hydroelectric development of the western Carolinas. Lasting growth and prosperity in the South would require cheap, abundant electricity, he believed, especially in the textile-producing regions of the Carolinas. (Duke’s foresight put him a generation ahead of government efforts to electrify the Tennessee River valley during the Great Depression.) He bought land and built dams; he persuaded risk-averse mill owners to use the new source of energy. By the 1920s, Duke’s Southern Power Company was the leading electric utility in the western Carolinas. Today, the firm is known as Duke Energy.

Duke’s brother, Ben, handled most of the family’s giving. (“I am going to give a good part of what I make to the Lord,” J. B. Duke was fond of saying, “but I can make better interest for Him by keeping it while I live.”) But in 1924, Duke gave $40 million to create the Duke Endowment. Unlike many of his peers who created foundations with sweepingly broad mandates, Duke’s indenture gave his trustees very specific instructions: they were to support hospitals, orphan care, rural Methodist churches, and four Carolina colleges. The men and women who have run the Duke Endowment since have hewed very closely to Duke’s designs.

These philanthropic interests grew out of Duke’s life. He always attributed his family’s success to its Methodist faith. (“If I amount to anything in this world,” he would say, “I owe it to my daddy and the Methodist church.”) His interest in orphans came from his own experience without a mother. And the Duke family had for many decades generously supported Trinity College, which Duke had designated to receive the gifts that would transform it into Duke University, a memorial to his father and brother. “I have selected Duke University as one of the principal objects of this trust because I recognize that education, when conducted along sane and practical, as opposed to dogmatic and theoretical, lines, is, next to religion, the greatest civilizing influence,” he wrote. He intended that Duke University attain “a place of real leadership in the educational world.”

Duke even allocated specific percentages of his endowment’s payout to go to each category: 46 percent to higher education, 32 percent for hospitals, 10 percent devoted to orphan care, and 12 percent for Methodist causes. He also limited his endowment’s giving to the Carolinas—to give elsewhere, he thought, “would be productive of less good by reason of attempting too much.” In addition to his strict percentages, Duke produced a statement of principles to guide his trustees, with many details, urging, for instance, that they “see to it that adequate and convenient hospitals are assured in their respective communities, with especial reference to those who are unable to defray such expenses of their own.” As for orphans, he wrote, while “nothing can take the place of a home and its influences, every effort should be made to safeguard and develop these wards of society.”

Per Duke’s instructions, the Duke Endowment’s trustees are paid for their service. Every year, they read aloud the full text of Duke’s indenture. “After the reading, there is always a time of reflection and comment about Mr. Duke, his ideas, and our mission,” said the late Mary D. B. T. Semans, a long-time board member and grand-niece of Duke. “This closeness to the founder renews us and gives us a sense of new energy.” Duke’s successors have continued the program he laid out, with some adjustments for changes in how health care and orphan care are delivered.

In its early years, the endowment helped North Carolina’s hospitals to grow at twice the rate of other Southern states. It also helped to make Duke University one of the world’s highest-ranked institutions. “Trinity was a small Methodist college,” endowment president Eugene Cochrane said, “and Mr. Duke said, ‘I want it to become a great university’—and it has.”

James Duke is memorialized in a statue in front of Duke University’s monumental chapel. In the years before his death in 1925, he took a special pleasure in the design of Duke’s Gothic campus. “Don’t disturb me now; I am laying out the university grounds,” he said to his nurse days before he died. “I am looking to the future, how they will stand and appear a hundred years from now.”

~ Evan Sparks

 

Further reading:

  • Robert Durden, Bold Entrepreneur: A Life of James B. Duke (Carolina Academic, 2003).
  • Lasting Legacy to the Carolinas: The Duke Endowment, 1924–1994 (Duke University Press, 1998)
  • John Wilber Jenkins, James B. Duke: Master Builder (George Doran Co., 1927)


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