THE SUNDAY STAR-BULLETIN ADVERTISER Honolulu, Sunday, December 23, 1973 C-5 cigaret consumption increases FLO'S BEAUTY SHOP Specializing in Hair Cutting 957 Lehua Pearl City Across from Pearl City Tavern Telephone: 455-1685 Monday hru Saturday 8 AM to 5 PM deaths from cancer in the respiratory system have risen relentlessly each year. In 1963, 48,192 persons in the U.S. died of it, representing 25.6 deaths for each 100,000 of population. Last year there were 76,860 deaths, or 36.9 per 100,000. community, which was ready to write off the big cigaret manufacturers 10 years ago, tobacco stocks are suddenly beginning to look good again.
Because the Surgeon General scared off a lot of individual investors, many tobacco stocks are now selling at extremely low price-earnings ratios. IN 1964 the tobacco industry hired its own doctors to try to refute the surgeon general. It was even caught instigating phony letters to the editors of national magazines from people who claimed that they became miserable, obese wrecks after giving up cigarets. Now the industry is content to ignore the whole health subject. It is a sharp contrast with the hysteria that swept the tobacco industry in 1963 when the major manufacturers rushed wildly to diversify into everything including molasses, hardware, candy, toiletries, office supplies, beer, land development, food products, shipping, Scotch whisky and dog food.
One firm, American Tobacco which used to say "Remember, tobacco is our middle name," became American brands. THE STORY of tobacco since 1963 may be an appealing one in that it tends to illustrate a healthy American contrariness, distrust of slick advertising pitches and resistance to government preaching. If that is all that it illustrated, it would be nice. But all of Madison Avenue's hard sell and all of the medical professor's didacticisms don't seem to tell the story as effectively as the simple statistics. Between 1963 and 1972, with some minor setbacks, total annual consumption in the U.S.
has risen from 508 billion cigarets to 554 billion. THE AVERAGE American now smokes 4,040 cigarets a year, only 154 less than he did in 1964 when the public was first reacting to the Surgeon General's report. Moreover, as the report becomes more remote, per capita consumption has risen significantly in every year since 1968. During the same period, By ROBERT RENO Xewtdsy Who's afraid of the surgeon general? Not the American smokers, who last year puffed away 554 billion cigarets, the largest number in history, despite the fact that the government declared them a greater menace than violence, sex and boredom by banning them from television. Not foreign smokers, who are now buying 50 per cent more U.S.
cigarets than they did 10 years ago. NOT THE LOCAL, state and federal tax collectors, who took in a record 5.4 billion dollars in cigaret taxes in 1972. Not the big tobacco companies, who are building vast new plants, including the $200,000,000 Philip Morris facility, which will be the largest cigaret manufacturing complex on earth. Not even the U.S. Agriculture Department, which continues to view tobacco as a vital American crop and an important export commodity, no matter what the Federal Communications Commission and the Department of Health, Education and Welfare say.
IN FACT, the only cloud in the industry seems to be hanging over chewing tobacco and snuff, both of which are doing rather poorly in sales. But nobody has said that snuff and chewing tobacco can give you lung cancer. Considering that the whisky industry also is riding a boom's crest despite warnings about the increasing medical and social threat of drunk driving and liver diseases in the U.S., it may not be long now before someone forms a mutual fund to invest in wild, wild women. Tobacco is probably as important today as it has been at any time since the first boatload from Virginia landed in England. The U.S.
is now the world's largest consumer, producer and exporter of tobacco, and tobacco is still the fourth most valuable crop in the U.S. VIEWED as either a medical, social or economic phenomenon, the tobacco boom has been remarkable. Just 10 years ago, 450 years after the white man discovered and started smoking tobacco, modern medicine finally made it official: The surgeon general determined that filling your lungs up with tobacco smoke isn't good for you. Yet with a few exceptions, the total consumption as well as the per capita consumption of cigarets in the U.S. has continued to increase.
Many states and localities have either increased their cigaret taxes or levied cigaret taxes as a new form of revenue. On average the states now charge 12 cents a pack in cigaret taxes, compared with 10.9 cents two years ago. If most people decided to start taking the surgeon general's advice, some governments would see a major portion of their revenue sources wiped out. And in the case of some states, which allow municipalities to pledge cigaret tax revenues to pay off capital improvement bonds, a lot of bondholders would be bankrupted. THE FEDERAL, state and local governments, in fact, collected more in cigaret taxes last year than tobacco farmers got for their crops.
The governments took in about 5.4 billion dollars, the tobacco farmers 1.4 billion dollars. And while the surgeon general is calling tobacco satan's crop and the tax collectors are viewing it as a revenue angel, another unit of government has still another outlook. To the tobacco division of the Agriculture Department, tobacco is a wonderful thing. From its office just three blocks from the surgeon general's, the tobacco division pays cash to support tobacco prices, although what it spends is a tiny part of total U.S. farm subsidies.
More significantly, the Agriculture Depart- ment in 1966 started paying a nickel a pound to anyone who exports U.S. tobacco. LIKE MOST other U.S. crops, experts from the department inspect and grade tobacco for farmers and wholesalers. But in the case of every other crop, the farmer or wholesaler pays the government for the cost of grading his product.
Tobacco is graded free of charge. And although nobody is known to eat tobacco, the government actually sells U.S. tobacco abroad on special credit terms under public law 480; otherwise known as the food for peace program. Government expenditures last year to promote or encourage tobacco include $27,800,000 in payments to exporters, for inspecting tobacco and providing the industry with a market news service, $4,800,000 for research, $29,600,000 under the food for peace program, $160,000 to develop markets for U.S. tobacco in Thailand and Austria, and $1,400,000 for the tobacco cropland adjustment program.
EVEN ASSUMING that Americans are either bent on harming their health or that they simply don't like the surgeon general telling them what to do, there are other reasons why the increasing cigaret consumption is astounding. In the past five years, when inflation has made people increasingly cost-conscious, the consumer price index has risen about 25 per cent. But the price on cigarets at the retail level has gone up 35 per cent. Not only that, but smoking trends may have something strange to say about the effectiveness of American advertising. AT THE SAME time that cigaret advertising has been banned from television, the government, the advertising industry and medical foundations have treated Americans to a torrent of messages through all the media.
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