Kid Carolina

by Heidi Schnakenberg

  Though R.J. agreed to this arrangement, he realized how easily he could be devoured by Duke. Publicly, he portrayed himself as a rebellious underdog to Duke’s ATC, and once said, “If Buck Duke tries to swallow me he’ll have a bellyache the balance of his life.” Privately, R.J. knew he needed to be clever in his efforts to retain control of his company. He quietly bought out other small North Carolina–based tobacco companies and offered stock options to former and present employees to gradually regain his independence. He used the added capital from ATC to maintain his plug and other chewing tobacco brands, upgrade his facilities, and continue the expansion of his business.

  In 1904, President Teddy Roosevelt’s administration began investigating the ATC’s activities using the 1890 Sherman Antitrust Act. The government filed suit in 1907. R.J. was saved by a 1908 Supreme Court antitrust ruling against Duke and subsequent 1911 appeal in a U.S. Circuit Court that upheld the ruling. Duke was forced to break up his companies, much to Roosevelt’s delight. Because of the success of R.J.’s Prince Albert, he was able to survive after he was back on his own. On November 16, 1911, RJR Tobacco was once again a free, independent company.

  Just a few years later, the added sales boost from the war and the growing popularity of Reynolds’s Camel cigarettes catapulted RJR Tobacco’s sales into the billions. Ten years after the launch of Camel, the cigarette brand would dominate almost 50 percent of the market, and the company’s stock soared to new heights.

  Dick’s Early Business Ventures

  Meanwhile, R.J. trained Dick to do small chores and to work for a living. Dick was required to feed his own white leghorn chickens and rabbits and clean up after them, and help his father around the yard. R.J. once joked to his wife, “Tell Dick and Mary that their chickens crow so loud that I will have to eat them to keep from being disturbed early in the morning.” Dick said that although many assumed he never saw a day’s work in his life, his father did teach him how to work. R.J. knew his children risked being spoiled by their money and he sought to mitigate that.

  Under his father’s tutelage and attention, it didn’t take long for Dick’s independent personality and stubbornness to take shape. He wasn’t afraid of his father and even kicked him in the shins once when R.J. tried to discipline him. On another occasion, Dick packed a small wagon with ham and biscuits, and ran away from home, determined to start out on his own. He was found almost three miles down the road, headed for the mountains. The little loner had turned into an escape artist.

  Among his closest childhood friends Dick counted Gordon Gray, the son of R.J.’s partner, Bowman Gray, who went on to become a major executive himself at RJR Tobacco; Bill Sharpe; and Bosley Crowther, with whom he started up his first official business venture—the Three Cent Pup. It was a weekly newspaper that the boys founded in the summer of 1917 when Dick was eleven years old, with Sharpe and Crowther as contributing writers. The boys delivered the newspapers to subscribers and charged three cents per copy. One of their last papers, the holiday edition for Christmas of 1917, sold out.

  Although the paper shut down, Dick’s venture kicked off the writing careers of several friends. Sharpe eventually wrote for the city’s main newspaper, The Sentinel, and Crowther became the premier film critic for the New York Times.

  Katharine Builds Reynolda

  When Dick was still nine years old, Katharine had started work on a new country estate that she had been planning for at least two years—again sparing no expense in the process. According to Katharine, her thousand-acre estate would include a modest summer cottage—a “bungalow”—located a few miles outside Winston-Salem. R.J. let Katharine manage the construction of the entire estate and allowed Katharine’s name to be listed on all the property deeds.

  Some sources say R.J. was supportive of all of Katharine’s plans, while others suggest he was annoyed by the grand scale of the home and the use of so much good land for expansive gardens and recreation. Although he was wealthy, R.J. was known to be relatively conservative in his spending, and Katharine had more expensive tastes. While the extent of R.J.’s disapproval is uncertain, Katharine did express concern and worry in some of her letters that she had gone far over budget. Nevertheless, construction went on.

  Apart from the sixty-four-room bungalow, gardens, a church, and numerous farm and utility buildings, the estate included a man-made lake, stocked with black bass and trout, and complete with a dam, arched spillway, and waterfall. Near the lake was an outdoor pool for the children and tennis courts and a nine-hole golf course for the adults. Katharine’s giant bungalow and gardens were developed by some of the country’s best architects, designers, and landscape artists at the time, including Thomas W. Sears and Charles Barton Keen. The centerpiece of the bungalow’s interior was a grand, cantilevered gallery that served as the entrance hall. Flemish tapestries hung from the walls, large Oriental carpets covered the floors, and the home was furnished with custom-made furniture from John Wanamaker. Katharine ordered new silver and china for the Adam Revival dining room and a large Aeolian organ was installed in the living room, with its 590 pipes climbing up through three levels of the house.

  Outside, cedar trees, cherry trees, and daffodils were planted all over the acreage, and behind the house sat a seemingly endless line of buildings as far as the eye could see—a greenhouse, vineyards, food garden, cottages, dairy farm buildings, blacksmith shops, post offices, staff housing, outhouses, stables, garages, and barns. Next to the house was a sunken formal garden that was marked by wisteria-covered, white-columned pergolas and water lily ponds, and symmetrical slate pathways cut through the dozens of exotic species of flowers and plants.

  The farm was almost as romantic—Shropshire sheep, Tamworth swine, and Percheron horses dotted the landscape. The main entrance to the farm village was marked by a stone drinking fountain for workers and animals alike. Artisan wells serviced the fountain and the entire farm—thirty thousand gallons of fresh water a day were pumped throughout the estate. Reynolda—as Katherine dubbed the estate—also had a coal-fired heating system, and its own telephone and electricity lines.

  At the time, the estate was the largest and most extravagant of any private home in Winston-Salem by far. The acreage boasted R.J.’s wealth in a way his lifelong friends and neighbors had never seen before. As the construction came to a close, those who knew R.J. from the time of his first arrival in the Salem markets marveled at what this tobacco-farming Appalachian had produced.

  In 1914, the first building, Reynolda Presbyterian Church, opened. But Katharine was in ill health and unable to completely enjoy it. She had become pregnant again, and in early 1914, she was rushed to Johns Hopkins Hospital in Baltimore. The pregnancy had caused her to have a heart attack and doctors warned her that carrying the child to term could kill her. Katharine made the difficult decision to terminate the pregnancy. The message was clear; no more children for Katharine.

  Over the course of the next few years, construction at Reynolda was delayed due to a shortage of supplies during World War I, but by the time Dick turned eleven, the house was almost complete and ready for move-in day. In the spring of 1917, R.J. Sr. had become so inexplicably sick from a mysterious stomach pain that he could no longer get by on the advice of local country doctors, who were unequipped to diagnose his health problems. Although R.J. was a heavy drinker and had smoked his own brands for decades, no one knew exactly what was wrong with him. R.J. traveled to Johns Hopkins Hospital for a few months in the fall of 1917, and consulted with doctors, who also were unable to give him answers. The best they could do was treat him for his stomach pain. While he rested, doctors asked Katharine to refrain from discussing any business with R.J., because he was very ill and the added stress would disrupt his recovery. Upon hearing this news, executives at RJR Tobacco knew R.J.’s condition was grave. He always had the energy to talk business. In reaction, the company purchased one million bonds—the largest single subscription of bonds ever at the time.

  Fearing there was
nothing more they could do for him except provide him with medicine to ease the pain, doctors sent R.J. home for the following Christmas.

  Dick Learns the Tobacco Trade at His Father’s Bedside

  As construction came to a close that Christmas on the vast acreage on the western edge of Winston-Salem that Katharine would call Reynolda, R.J. knew his days were dangerously numbered. Some say he would have preferred to go back to the Fifth Street house in which he felt comfortable, but he didn’t want to disappoint his wife. His familiar furniture was brought to Reynolda, and the library was reorganized so he could sleep there—he had to remain on the main level because he couldn’t get up the stairs to the master bedroom. Once R.J. was settled in, he quietly languished in the splendid new home.

  R.J. had one brief reprieve from illness in February 1918 and was allowed to ride along in a rabbit hunt with young Dick and other family members. But the reprieve didn’t last long. By spring, he had to be moved to the larger Jefferson Hospital in Philadelphia.

  Dick and his mother joined his father in Philadelphia and stayed in the hospital with him. After an unsuccessful operation, R.J. prepared a new will and talked to his wife about his wishes for the company after he was gone. As R.J. lay sick and weak, Dick stayed by his bedside as much as possible. R.J. used the little strength he had to lecture Dick about the structure and operations of the tobacco business and explain to him what was expected of him when he became a young man. R.J. openly accepted the fact that he was dying, and focused on preserving the legacy he would leave behind. R.J. worried about leaving his children without a father, but he knew he was out of time.

  Dick and Katharine continued to stay at the hospital with R.J. Dick sometimes went out in Philadelphia alone, buying books and going to the movies by himself, while his mother was occupied with R.J. With the looming possibility that he could lose his father soon, Dick felt both insecure and uncertain, and the need to be mature and grown up at the same time.

  Later in his adult life, Dick always revisited those days in Philadelphia whenever he faced a decision. He rarely made a business move without considering what his father would do. In times of crisis, Dick would lie in bed and quietly go over the things his father used to tell him before taking any action.

  Death of a Legend

  In July of 1918, R.J. was released from Jefferson Hospital and sent home on a train. On July 29, the day after his sixty-eighth birthday, he died.

  R.J.’s death was a shock to young Dick. His mother’s sorrow was unbearable, and his little brother and sisters seemed lost. Dick felt immensely lonely, unsure of how to grieve.

  The funeral for R.J. on July 31 shut down the city of Winston-Salem. The town was draped in black bunting, and the streets were lined with people who wished to pay their respects to the “biggest blood” in Winston-Salem.

  R.J. was adored by the city—not just for the jobs he brought to North Carolina, but for his generous treatment of his employees and his philanthropy. Taking his wife’s advice, R.J. was one of the first employers in America to implement a nine-to-five workday and five-day workweek and to offer employees paid benefits, including health care, vacation time, and on-site child care. Dick recalled overhearing his mother persuade R.J. that good food was vital to the health of his employees, and he listened. He was one of the first employers to provide hot lunches and drinking fountains at work, and he built the sixty-room Reynolds Inn for young female employees who had flocked to the city to work in the factory. R.J. joined the City Council in 1884, subsidized the first black hospital in the South, started a savings and loan bank, protected Winston-Salem’s rail lines, built hundreds of sanitary housing units for his employees, and worked hard to uplift women and minorities and to provide opportunities for them—a legacy that continues to this day. Ever since R.J. rode into that town, he earned the respect and friendship of the community and anyone who worked for him. He was a meritocrat—a fortune builder, a genius at his trade, and an ethical industrialist who made his thirty million honestly.

  Twelve-year-old Dick was a pallbearer at his father’s funeral. With his Uncle William Neal by his side, he watched his father’s body be lowered into the ground in the small cemetery of Winston-Salem.

  Dick’s Uncle Will, a quiet man, was clearly suffering from the loss. Having joined R.J. when both brothers were in their twenties, he’d spent his whole life with R.J. in the tobacco factory. But Will also had business on his mind. RJR Tobacco would have to go on seamlessly without its founder, and he and Vice President Bowman Gray wanted to take over RJR Tobacco permanently.

  A pall of sorrow was cast over Reynolda. Dick immediately felt the absence of his father’s attention—his death left a void in Dick’s life that would never be filled.

  CHAPTER 3

  Life after R.J.

  1918–1924

  Katharine dressed in black for a year. When she couldn’t sleep at night, she would go down to the reception hall of Reynolda and softly play the aeolian organ to ease her soul. Nor did she give Dick much time to mourn, but leaned on him for support. Dick was expected to be the man of the house almost immediately. He sometimes felt as if the whole town was looking to him to decide what the Reynolds family would do next.

  All the way out in Reynolda, Dick missed the companionship of boys his own age. The country was lonely and too far away from his neighborhood friends on Fifth Street. Sometimes Dick often wandered off alone in the woods near the sixteen-acre Lake Katharine and played with a toy sailboat his mother bought him. Dick pondered the construction of the boat and dreamed of owning his own one day. He often sought refuge in that little boat—a habit he would nurture over a lifetime.

  Katharine eventually coped with her widowhood by participating in numerous philanthropic projects, throwing herself into her favorite organization—the YWCA—and busily constructing Winston-Salem’s R. J. Reynolds High School and R. J. Reynolds Auditorium in her husband’s memory.

  The fall after R.J.’s death, twelve-year-old Dick wanted to go to boarding school somewhere far away where he could get away from the sadness of Reynolda. Exactly where Dick went to school that fall is uncertain. It appears that he first briefly attended classes at Katharine’s Reynolda school, then went to public school in Winston-Salem. After a semester there, he most likely transferred to Woodbury Forest in Virginia, and then later transferred to the Tome School in Maryland. He appears to have finally finished his studies at the Culver Military Academy in Indiana.

  Dick did, however, have his reasons for school hopping. In Winston-Salem, he often overheard people comparing him to his father, and quietly predicting that Dick would never be the man his father was, no matter how well he turned out. This confused and hurt Dick at a time when his world was already turned upside down. These rumblings stuck with him, and made him want to run from the burden of being a Reynolds.

  To make matters worse, the goings-on at Reynolda were soon to become unbearable to Dick, and he was having a hard time concentrating on his studies.

  Katharine Falls in Love

  Less than a year after R.J.’s death, Dick noticed his mother spending more time with the Reynolda school’s newly hired, twenty-five-year-old headmaster, Edward “Ed” Johnston. Johnston was a World War I veteran from a respectable South Carolina family. He was highly educated and an excellent teacher, but Dick didn’t trust him. Johnston was comparatively poor, and the more Dick caught Katharine and Ed in intimate conversation, the more Dick wondered what his motives were.

  Everyone knew Katharine would eventually remarry. She was still young, and after R.J.’s death she was the most eligible bachelorette in town. Johnston was handsome and much younger than Katharine, but his social status was no match for hers. He was the last person Winston-Salem society imagined for Katharine.

  Katharine fell madly in love with Johnston anyway. Prior to telling Dick, Katharine wrote a letter to a friend, telling her that she was more nervous about telling Dick about her new lover than her own parents. It turned out that she
was right to be nervous. When Katharine finally told Dick, he was mortified. How could his mother do this to him? To his father? He felt personally betrayed. Dick resented his mother’s affection for someone who wasn’t half the man R.J. was. Of all the admirers his mother had among upstanding businessmen about town, she had settled for a common schoolteacher.

  Katharine was tormented by Dick’s reaction. When he realized he was hurting his mother, he tried to be supportive after he got over the initial shock. Dick considered that maybe his father would have wanted Katharine to find someone and not be lonely, and that Dick should be more generous. But Dick still couldn’t stand the young man. To make matters worse, his siblings loved Johnston and showered him with affection. It made Dick sick to his stomach.

  As Johnston spent more time at Reynolda, Dick stayed away as often as he could. He spent the next summer working through the school holiday or going to camp so he wouldn’t have to be at home. At first, he asked to stay with Uncle Will and worked at the tobacco company for seventy cents a day. His job was working in the stemming room, and he later learned how to operate the cigarette machine on his own. Anything, even gritty factory work, was better than putting up with Johnston.

  The following year, Dick had by then transferred to Tome and came home to Reynolda for spring break in March of 1921. He still had no kind words for Johnston and avoided him as much as possible. In June of 1921, Katharine announced that she and Ed Johnston were getting married. Dick refused to attend their wedding ceremony, which was held in the living room of Reynolda. His Uncle Will didn’t go either. When they departed for their two-month honeymoon the next morning, Dick was so upset Miss van den Berg had to spend a lot of time with him, trying to calm his anger. In spite of the fact that Miss van den Berg reported Nancy’s and Mary’s joy at the union, Katharine was deeply disturbed by Dick’s emotional outrage. Again, Dick stayed often with Will and worked in the tobacco factory to take his mind off things. By then he was putting in a forty-five-hour workweek.