[Begin Tape #1, Side #1]
KLEE: . . . by John Klee for the Kentucky Oral History Commission with Mr. Frank
Snodgrass, who is the vice president and managing director of the Burley & Dark Leaf Tobacco Export Association. The interview's being conducted in at the offices of the Burley Tobacco Growers Cooperative Association on . Could we start out, maybe, you just tell me a little bit about your background.SNODGRASS: Well, John I was born in a small community called Smith's Grove,
Kentucky back in 1920, and I completed my high school education there and attended the Bowling Green Business University which was later merged with Western Kentucky University, and while I was going to school, I worked for a leaf tobacco dealer and exporter part-time to pay my way through college. I was drafted into World War II and became an office in the Combat Engineers and survived World War II and then I returned to take up my employment in 1943 at the same organization.KLEE: What was the name of that organization that you worked for?
SNODGRASS: It was J. E. Bohannan Tobacco Company.
KLEE: What kind of tobacco did they handle mostly?
SNODGRASS: Both burley and dark kinds of tobacco for domestic and export
customers. They did processing, stemming, and redrying of tobacco. In 1945, I was asked to join the Burley Tobacco Growers Cooperative Association of Lexington, Kentucky in their processing and sales department, and I worked in that capacity until January 1, 1960, when I assumed the position of vice president and managing director of the Burley & Dark Leaf Tobacco Export Association, with headquarters in Washington, D.C. At that time, the organization also maned [maintained] headquarters in the offices of the Burley Tobacco Growers Association in , who are the principal benefactor and financial supplier for the organization. The Burley & Dark Leaf Tobacco Export Association is composed of thirteen member associations, representing the growers, auction warehousemen, dealers and exporters of the burley and dark kinds of tobacco. It was . . . that organization was formed in 1943 and has been in existence since that time.KLEE: Now you said it's a . . . kind of a combination, amalgamation of different
associations. Is that how it gets its funding? Through the different associations?SNODGRASS: Yes . . .
KLEE: Through sales or . . .
SNODGRASS: Yes. The funding is furnished by the various member associations. In
the case of the Burley Association headquartered in , and the one headquartered in , it's . . . it comes . . . their funds come from the Burley Check-off program that the growers participate in. The purpose of the organization is to . . . is to promote the domestic and export use of burley and dark leaf kinds of tobacco. We are also charged with the liaison at the national level with the executive, legislative branches of the government. We maintain liaison and do the lobbying for the member associations in that capacity.KLEE: I see. Let's . . . let me take one of those at a time. You mentioned that
the association promotes domestic and export use. How do you go about doing that? Do you hire lobbyists? Do you . . .SNODGRASS: No, we . . . are primarily a one man/one girl organization and when
congress is not in session, well I travel extensively abroad. I've been around the world twenty-seven times in the last twenty-five years. I participated in all the trade negotiations since World War II in some official capacity with the government to gain freer access for our tobacco in the foreign markets. We started out . . . when I assumed the position in 1960, we were exporting about 30 million pounds of burley tobacco. In recent years, we surpassed 150 million pounds, but I don't take credit for that. It was . . . the credit should go primarily to the G.I.'s during World War II, and the and Korean conflict that gave away free cigarettes throughout the world, and encouraged a taste for an American type blended cigarette. Of course, our dealers and exporters and manufacturers have all also been participating in promoting the use of American leaf.KLEE: Now, you said you have to work fairly closely, I guess, with government
people because some of these negotiations for sales of tobacco . . . other . . . is that because other nations, their government runs a lot of their economy and . . .SNODGRASS: Well in . . . in a number of nations, the whole tobacco industry is a
monopoly, owned and controlled by the government. But the reason I keep liaison with the federal government is because our program is oriented in the Department of Agriculture. The treasury department, the labor department has much to say about the taxes and the labor regulations for tobacco manufacturing and distribution. And of course we close-, closely align with the members of congress, particularly those from the tobacco producing states to try to encourage the legislation that would be in the best interests of our membership.KLEE: Let me go from kind of an historical look, and then from a regional
viewpoint. When you . . . when you . . . you became in this organization in 1960, who were some of the foreign customers then? Maybe talk a little bit about each one of those.SNODGRASS: Well, back at that time, the countries that later formed the European
community primarily ; ; ; ; and the other Scandinavian countries were the principal purchasers of tobacco, that is burley and dark kinds of tobacco. And the British market has been strictly a straight type or flue-cured type traditionally. Now, it is changing to an American type blended cigarette.KLEE: What . . . you say it's just a matter of taste, then, for these foreign
markets. They just almost have to develop a taste for the American blend that uses our burley tobacco?SNODGRASS: Yes, that's true. And . . . and of course, I give credit to that . .
. the servicemen who gave away cigarettes We now, our largest number one customer is . And there's , , , and a number of countries in the that, in recent years, the last twenty years, have developed strictly an American type blended cigarette.KLEE: That could maybe go back to the Vietnam war when our soldiers were there,
and .SNODGRASS: That's very possible.
KLEE: Now what about . . . can you describe some of your experiences or maybe
talk about these different countries. What kinds of . . . the Germans, what kind of people were they to deal with?SNODGRASS: Well, the Germans are very shrewd businessmen. They are very
intelligent individuals. If you know your subject, they're very easy to deal with. But if you don't know your subject, you're at quite a disadvantage.KLEE: I see.
SNODGRASS: I had the unfortunate position of being an officer in on the opposing
forces and many of the contacts that I made in the last twenty or twenty-five years have been with former people that I was fighting, and I've become very good friends of theirs. And we . . . we often talk about our Army experience and then relate it to our present day business experience.KLEE: So they . . . they . . . is . . . is that market still pretty strong today?
SNODGRASS: Yeah. It has not been the last two years, primarily to do the high
taxation that they put on tobacco products for economical reasons, but I am very much in hopes it will come back. I've just returned from Europe, and indications are that in , there'll be a . . . the demand will be about the same as last year. However, in Scandinavian countries and in southern Europe such as . . . oh, , . . . I look for some increases to occur.KLEE: What accounts for that? Just . . .
SNODGRASS: The economy primarily. I guess cigarettes are more closely attuned to
the economy than any other item because a man's first gonna buy his food and clothing and then the next number one luxury is his cigarettes.KLEE: What about the . . . the Scandinavian countries? What kind of situation
did you . . . now the German . . . before I leave that . . . they . . . they are a monopoly, is that right?SNODGRASS: No, the Germans are . . . is free enterprise.
KLEE: Free enterprise. So you're dealing with a lot of different people.
SNODGRASS: That's right. The primary monopolies, we'll get off of that subject .
. . are in Egypt, Spain, Portugal . . . up until they joined the Common Market, Greece. had a monopoly, and now they're in the Common Market, and there's no place for one. has a monopoly. And then in the Far East, it is , , , and are your principal ones.KLEE: [inaudible] So do you deal directly with . . . I guess you're dealing with
government officials in those situations?SNODGRASS: Well, they're semi-government officials. In most instances, tobacco
is the number one . . . taxable item in each of those countries; therefore, it's a very high priority as to who heads up the monopoly. And they're usually responsible to the finance minister. It might be of interest to you to know that, in Egypt alone, the taxes from tobacco brings in more money into the government than the tolls charged on the Suez Canal, which is a very busy waterway.KLEE: I wanted to go ahead and ask you about some of these countries and some of
the people you dealt with. The Scandinavian countries, are they . . . what kind of people do you deal with there? What kinds of . . .SNODGRASS: Well now, has also broken up any monopoly and it's free enterprise.
Very intelligent people. Most of them have been in the tobacco business for a number of years. They're good businessmen. They have good funding. You have no problem with anyone in . They use both the dark tobacco, dark-fired tobacco for snuff and cigars and . . . and the burley tobacco for cigarettes.KLEE: Now as you said, you're kind of a one, one-person operation, but now you
make contacts with these people and then get back in touch with these various associations and cooperatives . . .SNODGRASS: Yes.
KLEE: . . . and actually make the . . . make the sales?
SNODGRASS: No, I do not make the sales. They're made through the normal channels
of trade with independent businessmen that are dealers and exporters. My job is to promote it, to assist in eliminating trade barriers and to make it more easily accessible to the American businessmen when they call on them.KLEE: So if we have a domestic tobacco company here, and you're just out there
kind of . . . trying to make the path a little easier for them.SNODGRASS: Yes. That's . . . that's probably the best way to describe it.
KLEE: Now, for example, here at the co-op, they have this . . . what's called
pool tobacco. They . . .SNODGRASS: They do not sell direct, so it has to be sold through a . . .
KLEE: Dealer.
SNODGRASS: . . . a dealer.
KLEE: So when a dealer gets an order, he'll come to the co-op and say, "I need
much tobacco to fill this order," . . .SNODGRASS: That's correct.
KLEE: Now you mentioned trade barriers. I'll get back to talk about some of
these countries, but in your twenty-five years of experience, how has that . . . has it been a fairly consistent trade relationship with these countries? Have they changed drastically or . . .SNODGRASS: Well, there's been changes both ways. Some of it the trade barriers
have been eliminated; others have picked up new trade barriers. After the formation of the , they set up a buyer's premium for tobacco whereby a buyer, if he bought from the loan stock tobaccos that had gone under loan at a high level, would be given a rebate. In addition to that, they would also pay the ocean freight to the nearest point of competition. Other words, if the Japanese bought some burley tobacco from the Italian holding . . . loan association, they would get a rebate on purchasing it, and they would pay the ocean freight on it as far as which is the nearest point of competition. So that's something that our tobacco growers have not been able to compete with.KLEE: So you're talking about, within the European Common Market, their own
tobacco which they grow is kind of subsidized through these . . . these relationships?SNODGRASS: That's very definite. And consequently, it's taken over a large
percentage of the content of the cigarettes and tobacco products produced within that community. And they're also competing for trade.KLEE: And they're competing to export also?
SNODGRASS: Yes. On the . . . on the other side, the Japanese are gradually
lowering their barriers to permit freer trade to go in there, so you've got two different situations.KLEE: Well, now, when you came into this position in the early 60's, Europeans
were probably . . . were they the biggest . . .SNODGRASS: Oh, very definitely.
KLEE: . . . [inaudible].
SNODGRASS: Yes, uh-huh.
KLEE: Now that has shifted more now toward what? The ?
SNODGRASS: Far East, and . . . and . Yes.
KLEE: Well, let's talk about the Far East for a minute, then, Japan, Thailand,
Taiwan . . . excuse me . . . Tai-, yeah, Taiwan and South Korea. You say the Japanese have eased their restrictions over there?SNODGRASS: Yes they have. Both on American manufactured products which was the
largest hold up that we had in there, and also they've cut back on the production of competing tobaccos within Japan. They're using their land to produce food, and permitting imports of greater quantities of foreign-produced tobacco.KLEE: Now, the Japanese they . . . is smoking quite a habit over there?
SNODGRASS: Oh yes. It's . . . it's very, very much a habit. It's our largest customer.
KLEE: Currently? Right now?
SNODGRASS: Yes.
KLEE: As far as the foreign market. What about the competition there? What . . .
what other markets do they . . . do they look to? Who's competing with us there?SNODGRASS: On . . . the Japanese, by and large, have the highest quality of raw
product of any nation in the world, including this nation. And they large percentage of their leaf purchases come form the , both flue-cured and burley. Now there's competition being established throughout the world, primarily in burley tobacco and flue-cured tobacco and one of those is that they've got quite a bit lower labor costs than and we can't compete there. And now they're moving into to use the cheap labor there to grow more tobacco. Some associates of mine just returned from Red China and the Chinese had a group of college professors from the Agronomy Department of a university here in the teaching them to grow higher quality tobacco in . So that's something we have to look for all the time.KLEE: Yeah, we . . . we're kind of our worst enemy there. We like to share this
technology, but we . . . we sometimes . . .SNODGRASS: Right.
KLEE: . . . hurt ourselves, I guess, in the end. Is there any possibilities with
Red China, as far as getting a market for us?SNODGRASS: I would say that they're more likely to be an import market . . . the
to be in the import market from them because their average income is about thirty cents a day, and they can't buy much two dollar tobacco from the on that kind of income.KLEE: So they might be importing . . . exporting . . .
SNODGRASS: Exporting to us.
KLEE: . . . to us.
SNODGRASS: Yeah.
KLEE: To us.
SNODGRASS: That's always a serious danger.
KLEE: With you going throughout this . . . throughout this world travel, how
difficult is that for you as an individual? You know, your family life and . . .SNODGRASS: Well, it's been very rewarding. In the early years, it gave me an
opportunity to see a lot of the world that I normally would not have seen, but after you've been to a country once, or at most twice, it's just like going to the office everyday. It becomes drudgery. I've got . . . I've made a number of friends throughout the world in high places, and . . . and I cherish that friendship, but it . . . that I've established.KLEE: Have there . . . have there . . . have you been in the countries where
there've been upheavals and problems, and you've seen those unfold? Particularly in regard to, you know, importing and exporting products?SNODGRASS: Oh yes, very definitely. That's a continuing thing. And of course the
policy of our government is to help emerging nations, underdeveloped nations and that's spread throughout the world, and most of the seed that they're using to compete with us comes from the . Their know-how comes from the , either through the hiring of extension agents or from some cooperation with an American manufacturer.KLEE: . . . Well, what about the . . . the quality of the tobacco over the years
that you . . . you've had to promote us? Has that been a problem? Some . . . some . . .SNODGRASS: Well, we've had problems with our own tobacco. Climatic conditions
will cause problems, such as the `83 crop of burley that we had problems with. But by and large, American-produced burley and dark tobacco is the hallmark of quality and they'll pay more for our tobacco than they will for substitutes because of the aroma that's in the tobacco that is not present in other tobaccos.KLEE: That's the question, I guess, you know . . . there are . . . these
countries can buy from other . . . from other markets and grow some of their own, but there's something special about this tobacco.SNODGRASS: That's true. They . . . they can only substitute so much and most of
them have gotten down to the point now that they're using our tobacco just for salt and pepper to flavor up and make palatable the tobacco from other producing countries. They . . . they really then reduce the amount that they import from us to the . . . to the minimum.SNODGRASS: Well, we've caused it by holding an umbrella over the world markets
with our price support level. However, our economy has been such that the cost of production would not permit us to make drastic cuts. My first obligation is to the producers of American tobacco and to try to get their products used at the highest possible price that I can get them sold.KLEE: The . . . the Middle Eastern market, that's . . . isn't that a relatively
new market too?SNODGRASS: That's a relatively new market. It's . . . it's a very flexible
market, just as their governments are very flexible. You deal today with some fella and you go back three months from now, he may be in some other department somewhere.KLEE: I see.
SNODGRASS: And it's . . . it's nothing . . . no stability in the emerging
nations so far as continuity and . . . and positions.KLEE: I had read in one . . . in one place that the . . . that smoking's become
just a . . . almost obsession with some of the . . . particularly the Middle Eastern men. Did you . . . have you noticed any of that . . .SNODGRASS: That's very definite.
KLEE: . . . on your trips?
SNODGRASS: Yes, very definite. And also to a lesser degree with the women. They
are now taking it up.KLEE: I see. Now most of the countries you've mentioned that, you know, you've
traveled to and so forth, have been I guess what we call free countries. Have . . . has there been any contact at all with Communist nations?SNODGRASS: Yes, I spent quite a bit of time in Poland, Russia, Czechoslovakia
and . . . I spent six weeks in 1959 in Poland and established a cigarette there called . . . a brand named "Common" which did surprisingly well until political difficulties between the United States and . . . and Poland made it impossible for them to get our tobacco to . . . so the brand is still on sale there, but it's . . . it's nothing like it was originally.KLEE: This . . . the brand you introduced then, was an American blend-type cigarette?
SNODGRASS: That is correct.
KLEE: No long-lasting relationships from any of those countries, though, I
guess, as far as buying tobacco on a regular basis?SNODGRASS: No, no. You can't . . . you can't depend on it and a lot of tobacco
is being purchased from , , , through and they're manufacturing cigarettes and furnishing the Iron [Curtain] countries, eastern markets.KLEE: Um, hmm. It's really amazing to think about all the different places you .
. . you've been to. Where you go, what you do. Let's go back to the other part of your responsibility, really, and that's liaison with the government. The . . . each one of these departments as you said . . . now the Department of Agriculture, what kinds of dealings have you . . . do you have with them?SNODGRASS: Well, course the Department of Agriculture has three primary branches
that look at the tobacco program. The Agriculture Stabilization Conservation Service looks after the price support and the quota system. And we maintain very close liaison with them. The Agricultural Marketing Service looks after the grading of tobacco on the warehouse floor, and the certification of tobacco that is entering the and that of tobacco being exported from the . The third department is the Foreign Agriculture Service which has a tobacco division that is charged with the responsibility, through their agriculture attaches and counselors to encourage the exportation of farm products and to make available funding, whether it be government funding or guaranteed funding of a commercial nature, and they've been very helpful to us.KLEE: Now, you mentioned the ASCS, the price and quota branch of that. As that
has changed over the years, and of course some of those changes, most of the changes occur during your tenure, did that affect you very much? For example when you went from acreage to poundage on the control, did that . . . did that hurt or help the exporting business?SNODGRASS: I think it . . . I think it helped the growers and in reality it also
helped the export end of it because we had a closer quantitative control of what was being produced.KLEE: The . . . the way that tobacco is sold and marketed, has . . . does that .
. . has that had any effect? For example, going from the hand-tied tobacco to the baled tobacco? I guess that doesn't have too much to do with . . .SNODGRASS: Well, I happen to be an advocate of staying with the bundle-tied
tobacco. A number of people in , primarily, were very much enthused about going to baled tobacco or sheeted tobacco. My observation, with my contacts abroad, is that it has deteriorated, the quality. And also the desirability of American leaf.KLEE: Course that makes your job harder then . . .
SNODGRASS: That's right.
KLEE: Not that . . . not that desirable quality. Have you . . . you personally,
and the organization . . . been active in some of the recent problems and manipulations of trying to save the tobacco program?SNODGRASS: No, that's been handled by a task force from , primarily. And we were
not involved in it. At the time the meetings started, why I was in and spent six weeks there, and returned about the time that negotiations were completed.KLEE: [inaudible]
SNODGRASS: I do commend those people that were active in it. I think that, thus
far, they've done an admirable job.[End Tape #1, Side #1]
[Begin Tape #1, Side #2]
KLEE: This is side two of a tape with Frank Snodgrass. We were talking about the
different areas of government you have to deal with. Another area you mentioned is the treasury department, and of course they're into the taxation end of it. You had to, I guess, work pretty hard there whenever you can.SNODGRASS: Yes, we . . . we've cooperated with the manufacturing segment to kind
. . . try to hold down taxation on tobacco products because my experience has been, with foreign countries, that you can just tax yourself out of the market. The consumer can only stand so much.KLEE: Can you think of some examples of that, in foreign countries, where they .
. .SNODGRASS: Well the Germans. I gave you that example formerly. The same thing
has happened in . It's happening in at the present time. People get on a boat and go to to get their cigarettes and then return.KLEE: Is that right?
SNODGRASS: That's true.
KLEE: You know, some of the popular thinking has been that, well, people, you
know, that have this habit, they won't restrict it because of the price. But . . .SNODGRASS: Well a man can only pay so much for a luxury and then he . . . he
takes a second guess about continuing that luxury.KLEE: The federal government just doubled the tax a couple years ago.
SNODGRASS: That's correct.
KLEE: And it's supposed to go off. Do you see that happening or . . .
SNODGRASS: Well the only thing I know about it is that the chairman of the Ways
& Means Commission . . . the committee of the House assured the tobacco interests that it would not sunset. Supposed to sunset as of September 30th of this year, and already there's people have bills in the hopper in to continue the taxation, and then some of them . . . instances to double it from sixteen to thirty-two cents a thousand.KLEE: While I'm on that subject, have . . . have you seen a difference in the
perception that people have about the tobacco industry in that twenty-five years you . . .SNODGRASS: Very definitely. Well, it's happened in my personal life. I'm a
smoker, and my wife's a smoker, and most of our friends that we visit are non-smokers. We go into their house and we don't see any ash trays. I think that that is the single most important item that the anti-tobacco forces have developed is the . . . making the smoking of cigarettes a non-social event.KLEE: Almost a stigma.
SNODGRASS: A stigma.
KLEE: Yeah. Is . . . have you seen that happen . . . the European countries you
mentioned that put on this high taxation, did that same kind of thing happen before it happened here? Or is that . . . is it the same attitude?SNODGRASS: Whatever the Americans do, the Europeans react double.
KLEE: Is that right?
SNODGRASS: Yeah. When the health issue came up in this country in `64 about
smoking and health, why the Europeans overreacted tremendously, both in and . And then the . . . when the tar . . . started talking about insecticides and pesticides, they overreacted and put high restrictions of so many parts per million in the mainstream of the smoke that it was prohibited to use of the product.KLEE: That's another thing you've had to deal with as far as . . .
SNODGRASS: Oh, very definitely.
KLEE: . . . as foreign restrictions. The Europeans have the highest limits on
those kinds of things?SNODGRASS: That is correct.
KLEE: [inaudible] What about the Japanese? Have they reacted to this health
issue at all?SNODGRASS: The Japanese play it very cool. It's a big income-producer in and
most of the Japanese smoking a good many cigarettes per day, so you don't hear any . . . any troubles.KLEE: Well, what about . . . going back to that . . . the first part of the
question, the idea of even the industry being kind of stigmatized as bad people or bad guys? That wasn't . . . that wasn't the perception in the early 60's or even throughout the 60's, was it?SNODGRASS: Well it . . . it goes back even further than that. As a young man, I
started out in this tobacco business in 1937. Prior to that time, we had people burning barns to keep them from selling it to the manufacturer. There was a . . . a great stigma on the manufacturers of trying to get the farmer to produce his crop for nothing. Well, that subsided in the 60's and 70's, but I see a reoccurrence of it at the present time.KLEE: The . . . even with the producer being . . . what? Being mad at the manufacturer?
SNODGRASS: That is correct.
KLEE: What about the . . . the organizations for dark leaf too? As you said,
this is an umbrella association, but are you representing tobacco throughout the entire south or . . .SNODGRASS: Well, from an eight-state area, yes. And dark tobacco is produced
primarily in western and western . And course burley is produced in eastern . . . middle and eastern , and throughout , and in western , western , , , and .KLEE: Now, just to make the distinction, there is a difference between
flue-cured tobacco and dark tobacco.SNODGRASS: Oh very definitely.
KLEE: What . . . dark tobacco is . . .
SNODGRASS: Dark tobacco is . . . they have what they call a variety of
One-sucker, a variety of . Both of those are used primarily in chewing tobacco. Dark fire-cured . . . those first two are air-cured varieties: and One-sucker. Dark fire-cured is a . . . is actually fired in the barn under hickory smoke, and it smells very much like a good old country ham when it's . . . when it's cured. And flue-cured, they use flues with heat and fans on it to cure their tobacco. It's a yellow type tobacco. Dark tobaccos are very dark and black, and of course, our burley tobacco turns out a tannish color.KLEE: Now the appeal of both these kinds of tobacco, the dark and the burley for
foreign buyers is the what? The taste, the aroma?SNODGRASS: Taste and the aroma, yes.
KLEE: They just can't get the same thing out of their own?
SNODGRASS: No. But even in the dark types, and are improving their quality of
dark fired tobacco tremendously.KLEE: The Middle Eastern countries that I mentioned before, they are . . . have
you traveled in those too?SNODGRASS: Oh yes. Yes, I . . . I try to travel to every country where we sell
any tobacco on a two-year basis, every other year. And then to our principal manufacturers annually.KLEE: All right, now who would you . . . who would you list as your per-,
principal manufacturers?SNODGRASS: Well, we maintain . . . I haven't told you this yet, John, but we
have promotion programs that we maintain in a number of countries, where we have joint advertising to promote the brands containing a high percentage of American tobacco.KLEE: So you're involved . . . that's with the . . . if . . . if has a
manufacturer there that's using a lot of our tobacco, we will . . . you will advertise jointly with them?SNODGRASS: Well, we . . . we . . .
KLEE: [inaudible]
SNODGRASS: . . . do it primarily with countries that are monopolies so we don't
have competition within the country. At the present time, we have a project going with ; one in ; one in . In former years, we've had them in , , and in the ; , .KLEE: So you could even tell from that the campaigns that are going on now, in
the Middle East and Far East, kind of shifted away from your . . .SNODGRASS: That's . . . that's correct.
KLEE: . . . [inaudible]. The . . . the . . . we didn't mention and talk about
the Arabs, the people in the . Did you find them different than the other people you dealt with?SNODGRASS: Well, everybody's different. I don't delve in religion anywhere I go
and I never get into those questions, so it's not a handicap to go into any country.KLEE: I see. They don't . . . the Moslems don't have any particular religious
prohibition against smoking?SNODGRASS: No. No.
KLEE: Cause, you know, a lot of fundamentalism going on there, they . . . I
guess that could hurt. Where do you see . . . what . . . what's the future look like to you, as far as exporting markets?SNODGRASS: Well it all depends on what we do in this country. As I see it, we're
. . . right now, we're the second-largest producer of tobacco. is number one and has been for a number of years. But they consume most of their tobacco on their domestic market. We have continued to cut back our quotas hoping to keep our price support levels at a high level. There's certain types of tobacco that are necessary for export, other types of tobacco that are necessary for the domestic manufacturers, and in a given year, sometimes we don't produce that quantity. The tobacco that goes under loan, even though it came off the same floor where somebody bought one, bought [inaudible] pile, gets a stigma on it and there sometimes has . . . to purchase it. If we can get our loan stocks eliminated through legislation that's now under consideration, I can foresee us going for a number of years, and possibly increasing our exports again.KLEE: Now you say that . . . that tobacco goes under loan, it does have kind of
a stigma with the foreign buyers or is it just with our own dealers?SNODGRASS: Well, with our own because they had a choice to buy it at one time
and . . . and unless the price is right. Oh, our domestic manufacturers have bought hundreds of millions of pounds of pool tobacco over the years, owing to the change in technology. I can recall back on the `52 crop, which was a green, wet weather crop, everyone said dump it in the ocean, and two years later they developed a filter tipped cigarette. They needed the strong nicotine in that tobacco to get it through the filter tip.KLEE: [inaudible]
SNODGRASS: And it bought like hotcakes. So as things change, as always, some . .
. something will come along that will take you out of the hole.KLEE: Through . . . through your history with the organization, and in the
tobacco business, when did the imports really start to . . . to hurt us?SNODGRASS: They started in the late 70's, yeah. Something you have to understand
that our domestic manufacturers, three of whom are really multi-national corporations now and they operate throughout the world, also do growing in certain areas of the world, and they have elaborate research facilities and they can make a blend and use maybe undesirable tobacco in that blend, simply because they have enough volume to spread it throughout the world.KLEE: Have . . . have those components . . . you just mentioned one example;
when the filter came in, they needed a different kind of tobacco. As this . . . as the health scares become more and more prevalent, are foreign buyers looking for a certain type of tobacco?SNODGRASS: Oh, very definitely. That thing has been up and down. The West
Germans were the first ones wanted a very low nicotine cigarette. They got a low nicotine cigarette on the market and people were smoking it more and enjoying it less, and in about a ten year period, it has reverted back now to where they want a high nicotine cigarette that has some satisfaction. It's an ever-changing situation.KLEE: Now does that have to do . . . course I know that, you know, the dealers
are into actual selling . . . selling in of this, but for example, the nicotine content. Does that have to do with climatic conditions or where you . . . you know, what type of tobacco it is? Whether it's the tips or the . . .SNODGRASS: That is correct, yeah. Where it . . . the stalk position, the
climatic conditions, fertilization, all of them are contributing factors to the nicotine.KLEE: You mentioned before about the quality, and you said that one of the . . .
one of the problems you see with the quality is less care taken in the . . . in the marketing, means of marketing, the baled vs. the hand-tied. What about . . . course another things happened with tobacco farmers. There's a lot more part-time farmers and, you know, they have other jobs. Has that hurt quality too?SNODGRASS: I have not detected that as hurting quality. In other words, a man
that has a small allotment and uses his own labor, his family labor, for it usually takes greater care of it than a man that is in commercial production. In my judgment. The preparation for market is . . . is the difficulty that most of them get in a hurry to get it on the market, hope to get it sold before the prices drop on it, and consequently it hurt . . . deteriorates the quality.KLEE: Course years ago, they used to strip tobacco in what, five grades, and
maybe a throwaway grade which really meant six different kinds.SNODGRASS: That's right. And now, you know, we've even gotten to the point
sometimes where they just all strip it together.KLEE: Is . . . is that another thing that's hurting things?
SNODGRASS: Well it . . . it hurts us in the export market. Now, my good friends
in the domestic market are responsible for that because they were paying just as much for mixed-stripped tobacco as they were paying for well-classed tobacco because they can cut it up and use it. But a small manufacturer abroad, he has to be more careful about what he's buying. He wants his to be strictly to a grade quality.KLEE: There's . . . there are some markets that we haven't mentioned that . . .
that I guess you haven't . . . for example, South American. But now , I guess, they're producing so much of their own that . . .SNODGRASS: South America is one of our greatest competitors at the present time,
both and , are producing excellent flue-cured tobacco and are moving now into the burley tobacco.KLEE: So that's not gonna be a potential market . . .
SNODGRASS: No.
KLEE: . . . at all?
SNODGRASS: The same thing is true in . The market is . . . is improving in
quality. The old Rhodesian market there is improving. . is improving. The northern Africa . . . we're attempting now to move into that area because it had been strictly a dark cigarette, as was for a number of years. They had nothing but dark cigarettes. Now, ninety percent of the French market is American type filter tips, and so we're now operating in and and we are ho-, hoping to get some American tobacco in there very shortly.KLEE: What about the Australia/New Zealand . . . that kind of . . . is there any
market there?SNODGRASS: has been a market for a number of years for American leaf, but they
went into production of tobacco themselves, and . . . and brought the know-how from abroad and while their . . . quality of their burley tobacco is not up to American standards, it still meets the requirements of that market.KLEE: If . . . course price is . . . is a big thing here. They . . . you're
talking about that the European manufacturers want our tobacco for that aroma and the quality and so forth. And perhaps they'd use more of it if it didn't cost so much.SNODGRASS: Well the price of the American dollar on world exchange is the
biggest problem we've got.KLEE: I see.
SNODGRASS: And of course, most foreign-produced tobacco is quoted in U.S.
dollars, but they're . . . the exchange is a lot better between, say, a German mark in Rhodesia than it would be in U.S. dollars. So that's been some of our problem.KLEE: So it's . . . it's not only just the amount that farmers are getting here,
but how that translates into foreign dollars.SNODGRASS: That's right.
KLEE: Now has that . . . I guess that's gone up and down since . . .
SNODGRASS: No, it's been up for the last ten years. The dollar has been very
high. Back in the 70's the Dutch, who are very shrewd businessmen were buying dollars much . . . about half of what they're paying for them today, and you never heard complaints about the price of American tobacco, but today they're complaining about it. Might be interesting to . . . I spent some time in Indonesia last year, where they're going into production of American tobacco, primarily burley and there again, they're . . . have the cheapest labor anywhere outside of China I guess, and it's gonna be difficult to compete with them.KLEE: Um, hmm. So that story is repeated throughout the world . . .
SNODGRASS: That's right . . .
KLEE: . . . [inaudible] their own . . .
SNODGRASS: They . . . their native leaf there is so inferior that the cigarettes
they produce with it they mix with clove, what they call a craytex cigarette. And you smoke one of them and it pokes out on your necktie or your shirt and burns a hole, but the . . . they hand produce them. I saw thirty-nine thousand women in one factory rolling cigarettes and packaging them.KLEE: Gee.
SNODGRASS: So it . . . it's amazing.
KLEE: You . . . you use that example of Indonesian cigarettes. I guess you've
seen a lot of tobacco grown in a lot of different countries . . .SNODGRASS: Yes.
KLEE: . . . does it really vary a whole lot?
SNODGRASS: Oh yes, very definitely. But as we keep exporting our technology,
it's not going to.KLEE: Yeah, they're getting better and better all the time.
SNODGRASS: That's right.
KLEE: Do they use auction systems and so forth?
SNODGRASS: No, only in . . . in are . . . do they have auction system. Most of
tobacco is sold through receiving stations. They'll have a government grader there and then the buyers [inaudible] whatever comes across; if they don't take it, it automatically goes under loan.KLEE: Now, most of the organizations under your umbrella really owe their
existence to the producer, don't they? To the farmer?SNODGRASS: Oh yes. Well, of course, the dealers and exporters that are under it,
they've been very cooperative.KLEE: You know, there's . . . I guess there's some dubious feeling among some
people that they might just let this program go, and that way, the dealers and the manufacturers could deal directly and . . . and, you know, do whatever they wanted to. Tell . . . grow large amounts and tell them how they want it stripped, produced, and so forth.SNODGRASS: I've heard that theory espoused, but I am doubtful most of them would
like to go anywhere else in the world and set up their headquarters and operate from there. They have huge investment in both processing and manufacturing equipment in this country. So I don't think that the negotiations would have gotten this far if they had any intention of trying to eliminate the American producer.KLEE: And you think it's even . . . it's even in their interest to keep this
program . . .SNODGRASS: Until they can come up with something better, I think that's true.
KLEE: What about the people . . . we talked about how, among society, there's
this stigmatization of cigarette . . . smokers of cigarettes and tobacco. What about people in the government that you've worked with? Are they less receptive now, do you think?SNODGRASS: I don't detect much difference. I've been through, I guess, eight or
ten administrations and I don't see much difference in it. I would say this, that the farmer is not as strong politically within the congress as he was twenty-five years ago when I went there. At that time, someone from a farming area headed . . . headed up every committee of any note, and that's no longer true now.KLEE: Yeah.
SNODGRASS: And it has become popular for a number of them to take on a status of
anti-tobacco, so that's why it's very difficult to get any constructive legislation through for the farmer and more so for tobacco.KLEE: You dealt with a lot of individuals through the years. Do . . . are there
people that stand out, either internationally or nationally, that kind of stand out in your mind?SNODGRASS: Oh, there's a number of people, but I would hesitate from naming them
because I . . . as it would leave out someone that probably deserved recognition. I've had a wonderful spirit of cooperation from everyone I've dealt with, both in this country and abroad. And I'm highly indebted to them for it.KLEE: Now as . . . as vice president of this organization, you kind of headed it up?
SNODGRASS: For the last twenty-five years. I'm stepping down from that position
as of September 30th. I'm now serving in the capacity as consultant. My replacement is a gentleman by the name of Ben Reeves who had long service in Washington with Congressman Carl Perkins from . . . from Kentucky and he's just returned from China and is now in Washington looking after [inaudible] there.KLEE: I see. Is that . . . I guess that's the kind of people that the
organization really needs right now.SNODGRASS: Well, you need someone with a farm background, with a love for his
constituency and with a knowledge of legislation and diplomacy.KLEE: [chuckle] Yeah. When you're lobbying in congress, do you use the argument
very much that the tobacco program is . . . is kind of the lifeblood of the small farmers?SNODGRASS: Once you lose that, you haven't got anything to stand on. If you . .
. if you're dealing only with the big commercial farmer, he doesn't need any help in the eyes of most people.KLEE: I see, so that's really the main argument?
SNODGRASS: That's right.
KLEE: To keep the program [inaudible].
SNODGRASS: That's right.
KLEE: The . . .
SNODGRASS: I guess it was best put by a congressman from one time, when they
were arguing about eliminating the tobacco program and he suggested to them that most of our tobacco growers, if the program were elim-, eliminated would go on welfare, and would become a burden on the states wherever they might migrate to.KLEE: So that . . . that carried some weight?
SNODGRASS: That's right.
KLEE: What about the future of this organization? The . . . the Dealers
Association? Does it, you know, will it continue to exist, do you think?SNODGRASS: I think it will, as long as the tobacco producers have a program, it
will continue to produce. Once a program is eliminated, I wouldn't see that there would be any lifeblood or financial backing for such an activity.KLEE: I appreciate you talking to me.
SNODGRASS: Thank you for very much.
[End Tape #1, Side #2]
[End of Interview]
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