WHEN WILLIAM C. MACDONALD and his older brother Augustine began importing tobacco from Kentucky and manufacturing chewing and smoking tobacco plugs under the name McDonald Bros and Co. at Montreal in 1858, they paid for their imports in pounds, shillings and pence. But by the time they changed the company name to W.C. McDonald Tobacco Merchants and Manufacturers in 1865, they paid their bills in Canadian decimal currency.

The decision to change to decimal currency was announced late in the year the Macdonald brothers launched their tobacco business and six years after they had moved to the city as oil commission merchants in Montreal.

The idea of being an entrepreneur was not new to William. The youngest of three sons born in a family of seven in Prince Edward Island in 183 1, he left home at 16 and later learned much about finance and business while serving as a clerk in an accounting house in Boston and carrying on an exporting business with Halifax as a sideline.

In 1852, at the age of 21, he joined his brother Augustine in Montreal, and the business prospered. It underwent a name change to W.C. McDonald Tobacco Merchants and Manufacturers in 1865, the same year they initiated a heart-shaped stamp on their plugs of tobacco and coined the phrase "tobacco with a heart," a trademark that lasted more than a century.

Many changes, however, took place in the business itself. Augustine eventually left the company and Montreal, giving William full control. By 1876 expansion was necessary, and the company moved its manufacturing facilities to Ontario Street East in Montreal, where the original quarters still remain. The present buildings house both research and manufacturing facilities under the name of RJR-Macdonald Inc.

With the growing financial success of the business, William became an integral part of the financial establishment of Montreal and the nation. Named a director of the Bank of Montreal, he also established himself as a leading philanthropist, ultimately pouring millions of dollars into health and educational causes, particularly McGill University. Besides funding both a student and science building, he quietly provided numerous scholarships and endowed a number of chairs, one of them filled by Ernest Rutherford, famed pioneer of atomic research, whose laboratory he also funded.
 

1. RJR-Macdonald Inc. Leaf Processing Plant, Tillsonburg, Ontario. 2. The Macdonald Lassie has been a symbol of quality for more than half a century.

Made a member of McGill's board of governors in 1883, he received a knighthood from Queen Victoria in 1898 for his generous support of various causes in the health and educational fields, at which time he changed the spelling of both his own name and his expanding and thriving tobacco company from McDonald to Macdonald. As Sir William, he continued his support of McGill, donating funds for a new engineering building when the old one was destroyed by fire and funding Macdonald College as McGill's agricultural faculty in 1909. In 1914 he was named McGill's chairman of the board of governors and chancellor, a position he held until his death, at 86, three years later.

A bachelor, Macdonald left the company to the Stewart brothers who had started their careers with the company as clerks. Walter became president and, under his management, the company extended production to cut pipe tobacco and the first "roll your own" fine cuts. In 1922, cigarette production was added, cigarettes being sold in packages of 10s, 20s and 50s. In 1928, Export cigarettes were introduced. First known as British Consol Export, the cigarette package became distinctive in March 1935 when a new symbol created by Canadian artist Rex Woods was added to the package. It was a Scotch lassie wearing a Macdonald of Sleat tartan kilt, and she has remained a company symbol ever since.

During World War 11 the company embarked on a major program of sending cigarettes to Canadian troops overseas. By 1943 more than 600,000 cigarettes had been sent; by 1945 this increased to four out of every ten units made. As a result, 50 percent of the Canadian forces smoked Macdonald products while overseas; this helped the company maintain well over one-third of the domestic market in the sale of its products in the first postwar decade. Under the presidency in the 1960s, of Walters son, David M. Stewart, a further diversification took place with' the manufacture of cigars.
 
 

1. Line out conveyors where cases are strapped and rotated after packing. 2. The redryer dries tobacco Lamina to a uniform packing mositure content.

The Stewarts retained ownership of the Macdonald Tobacco Company until 1974 when it was bought by R.J. Reynolds Industries of WinstonSalem, North Carolina. Four years later the name was changed to RJR-Macdonald to take advantage of the growing recognition of R.J. Reynolds as a major multinational corporation that was made even more so with the merger of R.J. Reynolds and the Nabisco Corporation of New York in 1985.

As a subsidiary of R.J. Reynolds Tobacco International, RJR-Macdonald, now headquartered in Toronto, has the capability of drawing on the financial and technological resources of its international parent while it continues producing a full range of Canadian cigarette brands, fine-cut tobaccos, cigars, cigarette papers and other tobacco sundries. Most of its products are manufactured from Virginia flue-cured tobaccos grown in southwestern Ontario where it operates a leaf-processing facility in the heart of the area at Tillsonburg.

Operating as a company in Canada for 133 years, RJR-Macdonald has for decades been associated with many special causes and sports events. For years it sponsored numerous skiing, cutting, windsurfing, fishing and hockey events, as well as car and horse racing. It has also made major financial commitments to many cultural, recreational, educational, medical and humanitarian institutions. It is also proud of its role as an equal opportunity employer, its long-standing record of good management-employee relations and its identity as a successful company with its roots clearly and firmly established in Canada.