When travelling to other cities eventually many people go to the University of the place. Some of them we have heard about and want to see to the lands or the people – the last visit to Boston included a walk around Harvard (for example of all the law schools  in the United States the Supreme Court Justices went to either Yale or Harvard). A number of years ago, when in Montreal went through McGill University and saw the name Macdonald. It turns out there is an interesting legacy as outlined in the book Sir William C Macdonald – A Biography by William Fong published by The Macdonald-Stewart Foundation, McGill-Queens University Press, Montreal, 2007.

Macdonald was in the chewing tobacco business and similar to all businesses sometimes there are problems with suppliers. In this case the problem was a war – the Civil War. Macdonald had been at his business for a few years and the start of the civil war was a surprise to many people. However the problems did not start over night and it was possible to see the bubbles begin to break. Prior to the start of the Civil War, tobacco production was concentrated in Virginia with 90% of production coming from slave states and 56% of that coming from Virginia. Likely, Macdonald was doing business with one or more of the 50 odd plants in the state. When the North began to block the exports of the South the choices of tobacco was Maryland, Kentucky and Missouri. Although similar to all wars, the borders were porous. On the North side, Kentucky replaced Virginia as the chief tobacco producing state. From the manufacturer’s side, Macdonald was worried about receiving product for tobacco could not be stored indefinitely, and the quality as well as the quantity of the harvest of each year was crucial for profits.

No doubt there was much running around, but new supply routes for tobacco from outside the Confederacy were found. One of the reasons was a wonderful discovery. During the war, farmers discovered the traditional dark or black tobacco that everyone favored, had turned yellow due a lack of water. The farmers cured the leaf in the normal matter and found the tobacco yielded a sweeter product. This product help create a distinct tobacco which tended to favor Macdonald’s chewing tobacco line. After the war, Macdonald was buying tobacco from Kentucky and Missouri as well as Richmond, Virginia.

Linking to dividend paying stocks, similar to all manufacturer or merchants of goods, supply side of need goods plays a role in the company. Having alternatives is always a worthwhile and a needed part of the company. How does your company deal with its suppliers? When was the last time it looked at its major supplier and how did it deal with a crisis in supplying goods?

There are more questions than answers, till  the next time – to raising questions.