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diff --git a/.gitattributes b/.gitattributes new file mode 100644 index 0000000..6833f05 --- /dev/null +++ b/.gitattributes @@ -0,0 +1,3 @@ +* text=auto +*.txt text +*.md text diff --git a/37784-8.txt b/37784-8.txt new file mode 100644 index 0000000..a37c2d1 --- /dev/null +++ b/37784-8.txt @@ -0,0 +1,7506 @@ +The Project Gutenberg EBook of The Rise of Cotton Mills in the South, by +Broadus Mitchell + +This eBook is for the use of anyone anywhere at no cost and with +almost no restrictions whatsoever. You may copy it, give it away or +re-use it under the terms of the Project Gutenberg License included +with this eBook or online at www.gutenberg.org + + +Title: The Rise of Cotton Mills in the South + +Author: Broadus Mitchell + +Release Date: October 18, 2011 [EBook #37784] + +Language: English + +Character set encoding: ISO-8859-1 + +*** START OF THIS PROJECT GUTENBERG EBOOK RISE OF COTTON MILLS IN SOUTH *** + + + + +Produced by The Online Distributed Proofreading Team at +https://www.pgdp.net (This file was produced from images +generously made available by The Internet Archive.) + + + + + + + + + + THE RISE OF COTTON MILLS IN THE SOUTH + + + A DISSERTATION + Submitted to the Board of University Studies of The + Johns Hopkins University in Conformity with + the Requirements for the Degree of + Doctor of Philosophy + + + by + Broadus Mitchell + + + Baltimore, Maryland + 1918 + + + + +CONTENTS + + + Page + + Foreword + + _Chapter I_: The Background 1-45 + + _Chapter II_: The Background, continued 45-94 + + _Chapter III_: Conditions Precedent to the Erection + of the Mills 95-131 + + _Chapter IV_: Capital 132-181 + + _Chapter V_: Financing the Mills 181-225 + + _Chapter VI_: Financing the Mills, continued 226-271 + + Vita 272 + + + + +FOREWORD + + +These pages represent a partial exploitation of materials gathered with a +view to their ultimate use in more extended form. Many phases of the +problem have been left entirely untreated, but the research upon these +subjects has not been without indirect service in the present study. In +the case of two chapters written midway of the investigation, in revision +care has been taken to bring them into consonance with the indications +which developed from subsequent discoveries. It is hoped, therefore, that +their lack is rather as to completeness than as to fidelity of temper. + +Unless this presentation is entirely inadequate, in addition to the more +objective economic forces, in the rise of cotton mills in the South, there +will appear the human elements that lie at the core of the development. + +For assistance, my first thanks are due to Professor Jacob H. Hollander +and Professor George E. Barnett, of The Johns Hopkins University, who have +contributed in a hundred ways over the whole period of study, and to Dr. +Nathaniel R. Whitney, formerly of The Johns Hopkins University and now of +the Iowa State University, who helped form my original conception of the +problem. In the wider aspects of my study I have drawn upon the experience +and judgment of my father continuously. Acknowledgment is due Miss Ellen +Rothe and Miss Ethel Hubbard, of the library staff of The Johns Hopkins +University; to the authorities of the library of the Peabody Institute of +Baltimore, and to the officers of the reading room of the Library of +Congress. + +In two field investigations in the South, many gentlemen connected +directly or indirectly with the cotton manufacturing industry have been +instituting in extending their time and counsel and courtesy. From lack of +space, it is not possible to make individual mention of all of these in +this place; foot-note references to the interviews must be understood each +one as expression of appreciation. For extraordinary assistance, however, +it gives me pleasure here to return thanks to Hon. John Skelton Williams, +Comptroller of the Currency; Mr. George A. Nölting, Jr., of Richmond, +Virginia; Mr. O. D. Davis, of Salisbury; Mr. J. L. Hartsell, of Concord; +Messrs. J. Lee Robinson and S. N. Boyce, of Gastonia; and Miss Anna L. +Twelvetrees, Mr. Sterling Graydon and Mr. Hudson Millar, of Charlotte, +North Carolina; Mr. W. J. Thackston, of Greenville; Mr. August Kohn, +Professor Yates Snowden and Mr. William W. Ball, of Columbia, South +Carolina, and Mr. T. S. Raworth, of Augusta, Ga. Of more intimate sort is +my obligation to Professor K. Roberts Greenfield, of Delaware College, who +by his constructive criticism has helped shape my opinion in a large way +and has at many points improved the text as such. + +I cannot fail to acknowledge, finally, my gratitude to Mrs. Charles +Reuter and the members of her family, under whose roof most of these pages +were written. + +Broadus Mitchell + +Baltimore, February 6, 1918. + + + + +THE RISE OF COTTON MILLS IN THE SOUTH + + + + +CHAPTER I + +_THE BACKGROUND_ + + +This opening chapter undertakes a broad survey in brief compass of the +historical and economic background out of which the cotton manufacturing +industry of the South, as a distinct development, emerged. Thus to begin +the story of the rise of the mills with discussion of a period which +commences a century in advance, is not unlike the production of a play +hopeful in conception, robust in theme and rapid in action, but in which +the curtain first rises on a stage which remains empty throughout an +entire act. + +In viewing the period lying back of the concerted erection of cotton mills +in the South, some observers have said they caught satisfying glimpses of +men and facts not only presaging but causally related to the main action +later. In spite of the present writer's usual disbelieve in the +sufficiency of the evidence in these findings, it is a primary purpose of +this discussion to give their statements, together with the supporting +testimony that they deliberately and others incidentally have brought +forward. + +The total of this study will show that the development, as such, not only +first substantially showed itself, but had its complete genesis, about +the year 1880. It is plain that in order to present, however, the +conclusions of students who have believed they discerned signs of it in +earlier years, it is necessary to include in these preliminary pages much +that will not appear as fact exhibit, but rather as opinion. And not +simply this, but in seeking to make clear the opposite theory, free +recourse is taken to the findings and statements of others than the +writer. + +No apology is made for the incorporation of secondary material. On the +contrary, this is intentioned. Lying, after all, outside of the central +facts to come under view in this essay, exclusively original research in +so extended a period has not seemed justified. In the second place, it has +not appeared necessary for the reason that there has been usually less +dispute as to the facts and the completeness of the data that much study +has uncovered, than as to the right interpretation of material evidences +agreed upon. Besides these considerations, it should be understood that +much which might carelessly be taken as second-hand information, is really +entirely and valuably first-hand. Peculiarly in the case of the economic +history of the South, the statements of those who spoke from intimate +elbow-touch with and active participation in the events of the various +periods are sources in the finest sense. This is particularly true with +respect to the work of the late Mr. D. A. Tompkins, which is repeatedly +made use of. No document giving a photograph of conditions at one point +of time could replace an utterance which sprang from his rich association +with the whole fabric of the South's economic life, and which voiced the +result of his long and sensitive responsiveness to stimuli external and +internal. He absorbed influences as a sponge does water, and when pressed +his books and speeches yield observations quick, living, liquid. There is +considerable reason for belief, too, that Mr. Tompkins' concepts, however +correctly or incorrectly interpretative of the past, stood in a causal +relation to the cotton manufacturing development in his active period and +continuing to a less extent even to the present. + +While there has perhaps been no previous effort to bring the several +beliefs into parallel presentation, concerning the rise of cotton mills in +the South a little body of theory has grown up. Many of the statements are +not well-informed, and in other cases they are almost too studied. Aside +from a preparatory instance, designed to show the limits of divergence +between the various views, the method here chosen is that of relating the +different assertions to all of the periods to which they apply, rather +than attempting to give at once expositions of each in continuity. It is +hoped that in trying to examine the views in detail, the relative weighing +of periods as intended by the writers will not be lost. + +One who made his study with empirical purpose, and may believed to have +been not deeply interested in the historical setting of the cotton mills, +has made the following observation for South Carolina, taken by him as +typical of the Southern States: + +"The story of the development of the cotton manufacturing industry in +South Carolina is not wanting in impressive elements. From the beginning +in 1790 till 1900 it was a struggle of gradually increasing intensity and +extension."[1] This is a very positive statement of what may be called the +continuity theory. Mr. Goldsmith's view is in marked contrast with a +representative expression of Mr. Tompkins, like himself a Southerner for +considerable time a resident of the North: + +"The settlement of mountainous and middle North Carolina was practically +by the same elements,--Scotch-Irish, Germans, Moravians, and Quakers,--as +came to Pennsylvania. Many emigrants landing at Philadelphia and New +Castle, Delaware, settled first in Pennsylvania and moved southward +through the Valley and Piedmont of Virginia to the Carolinas. Others +landed at Charleston and moved northwestward. In South Carolina even the +names of several of the northern counties are identical with those of +Pennsylvania, as Lancaster, Chester, and York counties. + +"These settlers brought with them a large degree of knowledge and skill in +manufacturing. All along the Piedmont and even in the mountains from +Pennsylvania to Georgia, they not only followed agriculture, but developed +varied household manufactures in the period between 1750 and 1800.... In +1800 many charcoal blast furnaces making pig iron and many catlin forges +and rolling mills making wrought iron bars, and other products of iron, +indicate that a manufacturing development throughout the Piedmont region +of the South might have continued parallel with that which has taken place +in Pennsylvania, except for the circumstances of the combined influence of +the invention of the cotton gin, the institution of slavery, and the +checking of this immigration. As late as 1810 the manufactured products of +Virginia, the Carolinas and Georgia exceeded in variety and value those of +the entire New England States. By Whitney's invention, and its improvement +by Holmes, cotton planting became so profitable, that for a period of +forty years the price remained above twenty-five cents a pound. Factories +were abandoned, the owners going into the production of cotton with slave +labor. Some of the factory workers ... went into a precarious agriculture. +The factory workers and small farmers were largely ... located on the +mountain sides, and the development of cotton production with slave labor +tended further to separate this democracy from the white race aristocracy +of the low country. As cotton and slavery advanced, the population of free +white work people were driven farther and farther into the mountain +country, and thus many of the white industrial workers of 1800 became the +poor mountain farmers of 1850.... the owners of factories who operated +with free white labor in 1800 had become in 1850 the cotton planters +operating with black slave labor.... when the abolition of slavery removed +one great difficulty of industries and the white people who had formerly +deserted manufacturers for agriculture went back to the pursuits of their +fathers, these mountaineers formed the labor supply.... it was found that +the descendants of the industrial workers of 1800 could, with a little +training, do as good work as their forbears did."[2] + +This opinion is not so categorical as that of a close observer of the +South who believes that "from 1810 to 1880 the section was industrially a +desert of Sahara", but it makes clear the view that from a point early in +the century until a date subsequent to the Civil War absorption in cotton +culture threw manufacturing of all sorts into the discard. This conception +may be held to be so generally accepted as to be commonplace and not +requiring of proof; to examine in detail, however, the varying statements +that would cast doubt upon this, so far from being a tilting at windmills, +will serve to fix with some conclusiveness the date most nearly according +with the commencement of the industry, and so accomplish the chief object +of this introductory discussion. + +And now to begin. + +In declaring in 1908 that Spartanburg was regaining the position of a +central point in one of the most forward manufacturing developments in +America, such as the place had been a century earlier, Mr. Tompkins said: +"When I left South Carolina to go North to learn the trade of machinist +and to study engineering I thought I was leaving a country which had never +had any important manufactures. Later, when I was in the middle of +industrial life in the North, I conceived the idea of writing an +industrial history of the United States. To my amazement I found that the +agricultural South, from which I had come in a spirit of industrial +despair, was the cradle of manufactures in the United States."[3] + +Mr. Thompson has developed carefully the industrial character of what may +roughly be called the Revolutionary period, particularly with reference +to North Carolina: "The domestic industries ... flourished. Though there +were no towns of any size, the number and the skill of the artisans was +such that, in 1800, it seemed probable that the logical development would +be into a frugal manufacturing community, rather than into an agricultural +state."[4] Records in the office of the Secretary of State of South +Carolina show the early encouragement given to the manufacture of cotton +specifically. In a list of inventions, copyrights and patents, it appears +that March 13, 1789, Hugh Templeton deposited in the office two plans, "a +complete draft of a carding machine that will card eighty pounds of cotton +per day", and "a complete draft of a spinning machine, with eighty-four +spindles, that will spin with one man's attendance ten pounds of good +cotton yarn per day."[5] In 1795 the legislature of this State passed an +act authorizing commissioners to project a lottery for the benefit of +William McClure in his effort to establish a cotton manufactory to make +"Manchester wares."[6] The purchase by Southern States of the patent +rights of Whitney's cotton gin is to be interpreted not as a design to +leave off cotton manufacturing, but rather as an evidence of a prevalent +spirit for mechanical improvement. A South Carolina appropriation bill for +1809 has a paragraph advancing to Ephraim McBride $1000. "to enable him to +construct a spinning machine on the principles mentioned in a patent he +holds from the United States."[7] + +Much of this may be believed to have been directly in consequence of the +necessity for economic self-sufficiency during the Revolution when the +colonial commerce with England was stopped. Proceedings of the Safety +Committee in Chowan county, North Carolina, for March 4, 1775, show that +"the committee met at the house of Captain James Sumner and the gentlemen +appointed at a former meeting of directors to promote subscriptions for +the encouragement of manufactures, informed the committee that the sum of +eighty pounds sterling was subscribed by the inhabitants of this county +for that laudable purpose." Prizes were offered to encourage the +manufacture of woolen and cotton cards and of steel, and proclamation +money to the amount of ten pounds would be given by the chairman of the +committee to the first producer in a certain time of fulled woolen cloth. +The provincial congress the same year took steps to stimulate, by +bounties, the manufacture of gunpowder, rolling and slitting mill +products, cotton cards of wire, merchantable steel, paper, woolen cloth +and pig iron.[8] + +Although it is said that their objects were possibly political as well as +industrial, mechanics' societies existed at Charleston and Augusta before +and about the year 1810; in Augusta were made some of the earliest +attempts in this country to improve the steam engine.[9] As early as 1770 +there was formed in South Carolina a committee to establish and promote +manufactures, with Henry Laurens as chairman.[10] + +Before making an estimate of the character of the textile industry in the +South in this Revolutionary period, it is well to take a glimpse at some +of the individual establishments. The facts brought out by Mr. Kohn's +painstaking research as to South Carolina serve well. Governor Glen's +"Answers to the Lords of Trade", believed to have been written in 1748, in +attributing some manufacture of stuffs like Irish linen to the inhabitants +of the Irish township of Williamsburgh, can have no point except to +indicate domestic industry.[11] Remarking the considerable manufacture of +cloth in the province prior to and during the Revolutionary period, it is +pointed out that "In those days it does not appear to have been popular to +organize corporations and the manufacturing was done by individuals--most +of the planters being amply able to conduct such operations."[12] Daniel +Heyward, a planter, in a letter in 1777, declared with reference to his +"manufactory" that if cards were to be had "there is not the least doubt +but that we could make six thousand yards of good cloth in the year from +the time we began." And Mr. Kohn comments, "This certainly shows that the +Heywards conducted a considerable plant for the manufacture of cotton +goods", and allows that "no doubt other individual planters made their own +cotton clothes in the same way."[13] + +Domestic production is clearly seen in a statement in the same year that a +planter to the northward in three months trained thirty negroes to make +one hundred and twenty yards of cotton and woolen cloth per week, +employing a white woman to instruct in spinning and a white man in +weaving. "He expects to have it in his power not only to cloathe his own +negroes, but soon to supply his neighbors."[14] + +This student has satisfied himself, in spite of the admitted fact that no +traces of the plant survive, that "in 1778 Mrs. Ramage, a widow, living on +James Island, Charleston District, established a regular cotton mill, +which was operated by mule power."[15] Another plant which would seem to +have approached a commercial character is seen in the assertion in 1790 +that "A gentleman of great mechanical knowledge and instructed in most of +the branches of cotton manufactures in Europe, has already fixed, +completed and now at work on the high hills of the Santee, near Stateburg, +and which go by water, ginning (?) carding and slubbing machines; also +spinning machines, with 84 spindles each, and several other useful +implements for manufacturing every necessary article in cotton."[16] +Detail description shows, however, that while some long staple cotton for +this establishment was imported from the West Indies, and while a variety +of goods were made, it was conducted as an adjunct to a plantation, parts +of the equipment were later removed to and set up on another plantation, +and much yarn was spun for persons in the vicinity. It is, however, +notable that the machinery was made in North Carolina.[17] + +It has been said probably very justly that "It was not until far in the +nineteenth century that manufactured cloth could be bought because of its +scarcity and because of its price, and a vast majority of our +grand-mothers were thus forced to make their own cloth, and many of them +preferred the domestic article to the manufactured,"[18] and Mr. Clark +says that "prior to the war of 1812 the advance of Southern manufactures +was principally in what were then household arts--those that produced for +the subsistence of the family rather than for an outside market. These +manufactures continued generalized and dispersed rather than specialized +and integrated."[19] + +This author is to be accepted in his general dictum that "The official +return of cotton manufactures in 1810 is too inaccurate either to measure +the extent of the industry or to describe its location. Probably many +census agents did not know what a textile mill was; and they classed as +factories, plantation loom houses and the cottages or shops of village +jenny-spinners. This explains the large number of establishments reported +from the South and West. Advertising then to the mills just noticed and to +water-driven spindles near Fayetteville, he continues: "Less study had +been given to the industrial records of the South than to those of the +North, and during the subsequent period of indifference or hostility to +manufacturing in that section some annals of the earlier interest in those +pursuits were doubtless lost. Small mills may have been started in the +Carolinas and Georgia, and after a brief infancy have vanished and left no +name; but, if so, the fact is curious rather than significant for it had +no relation to the subsequent history of the industry."[20] + +While it is thus seen that the textile industry in the South in the latter +part of the eighteenth and earlier part of the nineteenth centuries was +stamped with every hall-mark of domestic production, and while they were +ephemeral in their operation, it is to be remembered that a century and a +half ago the industry in England as well as in America bore more or less +of the domestic character;[21] and Southern States showed instances of +power-driven machinery before Samuel Slater built the first Arkwright mill +in Rhode Island. The South had planter-manufacturers it is true, but this +striking link with agriculture as contrasted with New England is easily +explained in the more general fertility of the soil and the effect this of +course had upon the occupation of the people. Furthermore, the very fact +of this coupling indicates the inclination towards economic balance and +the promise in these years of a rational development.[22] Bearing these +things in mind and viewing the wastage which he conceived to have been +wrought by slavery, Helper was probably within justified bounds when he +declared: + +"Had the Southern States, in accordance with the principles enunciated in +the Declaration of Independence, abolished slavery at the same time the +Northern States abolished it, there would have been, long since, and most +assuredly at this moment, a larger, wealthier, wiser, and more powerful +population, south of Mason and Dixon's line, than there now is north of +it."[23] + +Sentiment as to the right description of the mills of the Revolutionary +years is clear. Coming now to those of the period later than 1810, a +subject is entered in which some controversy is involved. These plants may +be denominated in general the "old mills". While the two ideas are closely +related, a distinction must be held in mind between the influence of these +factories upon the later great development and the proper character which +is to be ascribed to them as of themselves. Only the latter object is +primary in the present chapter. + +A North Carolinian, who, while of post-bellum experience only, has been +closely identified with one of the foremost industrial communities of the +South, told the writer that in his opinion it had been "a clear case of +arrested development; it would have all come sooner, but for the war. It +might be said that had slavery continued, manufacturing would never have +come in the South; but it is also true that slavery was doomed. There is +no use in talking about what might not have happened had slavery +continued."[24] To uphold this view that the Civil War interrupted a +course which was clearly laid down in the years previous, it ought to be +capable of demonstration that the old mills had essentially the same +character as those of the great period, with only those lacks which were +inherent in the industry of the formative stage. A manufacture which is +forerunner in time is not necessarily antecedent in effect.[25] The South +had small cotton farmers of a prevalent sort before ever Knapp taught +efficient production. If the old mills were of a substantially different +stripe from those of the period of fifteen years after the war, the +genesis of the industry, economically speaking, vests in the later date. + +Another North Carolinian asserted that "In the older mills before the war, +the seed had been planted, and cultivation was renewed after the war. The +ante-bellum mills were pretty well known throughout the country. The +woolen mills at Salem, and the cotton mills in Alamance and a few in +Gastonia were known. The fact that such goods as 'Alamance' had a name +already was an advantage."[26] But the mere fact that the old mills were +known is not enough; it is further interesting that he continued to speak +of them in close conjunction with the names of the families and +manufacturers who owned them--the personal factor stood out in his mind. +It is easy to find a number of undescriminating statements, as that the +mills of Concord were the natural outgrowth of the old McDonald Mill, that +there was a manufacturing tradition in the place.[27] + +Not a few plants in the South have been in continuous operation since an +early date. Mr. Kohn believes that the one with the longest record is that +founded at Autun, near Pendleton, South Carolina, in 1838, by F. B. Sloan, +Thomas Sloan and Berry Benson.[28] But this does not mean that many of +these, so far from inspiring the later development, were not themselves by +its stimulus so greatly changed as to be radically different from their +former character. In addition to the general neglect accorded the old +mills by public estimation, there is evidence that positive local dislike +fell to one long-established enterprise at a date even as late as the +seventies.[29] + +It seems hardly necessary to controvert, in the light of the spirit with +which mills were built about 1880 and the demonstrated total newness of +the hands to the processes and even the idea of textile manufacture, an +opinion that not only did the ante-bellum mills serve as a starting point +for the later great development, but domestic weaving had accustomed the +people of the industry.[30] + +A clear distinction, and one too often lacking, was made by Carroll D. +Wright between first establishments and genuine factory development in +reference to the industry of Philadelphia and New England. Using English +spinning inventions, "During the war (Revolution) the manufacturers of +Philadelphia extended their enterprises, and even built and run (ran) +mills which writers often call factories, but they can hardly be classed +under that term. Similar efforts, all preliminary to the establishment of +the factory system, were made in Worcester, Massachusetts, in 1780."[31] +While it is not pretended that the Southern mills of a later period were +of quite as limited a character as is here meant, it is wholesome to bear +this point in mind. + +The history of the Southern cotton mills of the period embracing the +thirty years following 1810 is rather hazy.[32] Facts important to this +discussion, however, stand out. In the first place, there seems to have +been a good deal of moving about from this water-power to that, the +machinery being hauled from place to place with apparent convenience.[33] +A founder would sell an enterprise, build another and sell it and build a +third.[34] It was difficult to convey machinery to the factory when +purchased at a distance. That for the Mount Hecla Mills about 1830 was +shipped from Philadelphia to Wilmington, North Carolina, up the Cape Fear +river to Fayetteville, and then across country by wagon to Greensboro. +Machinery for the Hill factory in Spartanburg county, consisting in 1816 +or 1817 of seven hundred spindles, had to be brought by wagon from +Charleston.[35] Some of the machinery for the Michael Schenck mill, built +near Lincolnton, North Carolina, in 1813, was bought in Providence and +hauled by wagon from Philadelphia.[36] For this mill a portion of the +machinery was built by a brother-in-law of Schenck, and when the dam broke +and it became necessary to rebuild further down the creek, a contract was +made with Michael Blom, a local workman, for additional machinery.[37] +Other mills had locally manufactured equipment. Spindles for the original +Bivingsville mill are said to have been made in a blacksmith shop.[38] +"Much machinery for the early cotton mills was made by the local +blacksmiths. They were important men in the community and often grew +prosperous."[39] In those days the blacksmith was a more skillful mechanic +than in these, but the machinery they produced must have been crude even +for that period. + +While elaboration of the point falls elsewhere in this study, it is worth +notice here that there is a difference between the old and the later mills +in the character of their promoters and managers. In the earlier period +men came to cotton manufacturing, it would seem, by more normal channels +than at the outset of the subsequent development. Like Michael Schenck +they had foreign industrial habits and traditions back of them, and they +set up mills in communities populated by Swiss, Scotch-Irish and Germans. +Or like William Bates and probably the Hills, Shenden, Clark, Henry and +the Weavers they came from the industrial atmosphere of New England, then +particularly stimulated by the encouragements lent to textile +manufacturing by the embargo laid on English goods in the War of 1812.[40] +Or through collateral business collections or marriage they were drawn +into the business. Simply private investment enlisted participation of men +in various callings. A manufacturer would be such as incidental to other +and perhaps diverse interests. It is of course true that these same forces +operated afterwards, but in the earlier time there was no response to a +public enthusiasm or a social demand creating a magnet that drew into the +industry men who otherwise would never have entered it, certainly not as +entrepreneurs. + +In connection with the Schenck mill there was operated a plant turning out +iron products.[41] Cotton factories conjoined with gins and saw mills are +not unknown in the South even today, but in whatever instance this occurs +there is indicated a lack of specialization. + +The marketing and consumption of the output of the old mills is a matter +of broad interest. The statement which serves, perhaps, to indicate most +nearly a genuinely commercial character in this regard, is that of Mr. +Clark growing out of his reference to the establishment of General David +R. Williams, near Society Hill, Darlington County, South Carolina. It was +on his plantation, and was water-driven. "... in 1828 he was turning his +cotton crop, of 200 bales annually, into what was said to be the best yarn +in the United States. He marketed part of his output in New York and wove +part of it into negro cloth for home use.... Twenty years later the +factory was still shipping yarn to New York, and also making cotton +bagging for the neighboring plantations.... By the middle of the century +their (small Southern mills such as this) product is said to have +controlled the Northern yarn market. This market they were able to enter +because they had been supported through infancy by the local demand for +yarn for homespun weaving--a support they did not entirely dispense with +until after the war. Yarn was traded by the mills for homespun linen warp, +and woven with that warp into strong cloth for country use. The family +weavers who did this work were paid for their labor in cotton yarn."[42] +Other evidence hardly supports a belief that the Southern mills of this +period took so large a part in supplying the yarn market of the country; +on the other hand, local consumption and the link with domestic industry, +which even in the quotation above goes side by side with the wider sales, +was prevalent. How closely these old mills were joined with the +countryside is seen in the fact that into their coarse, homely fabrics +went hand-spun linen warp. The domestic character was ingrained. Of the +Rocky Mount Mill in North Carolina it is said that "For some years prior +to and during the Civil War, the mill was a general supply station for +warps which the women of the South wove into cloth on the old hand looms. +A few of the braver women who were left at home with only the feminine +portion of their families or the sons too young to fight, sometimes made +trips alone many miles through the country to get warps for themselves and +neighboring families." So beneficial did this old habit prove during the +war that a cavalry troop of six hundred federals was sent up from New Bern +in 1863 and burned the mill.[43] Mr. Thompson says of this same mill that +until 1851 slaves and a few free negroes were worked in it. This +distinguishing difference of the old mills from those of the great period, +when the labor of negroes was far from the thoughts of the builders and +managers, will be dwelt upon in another place. Here again is noted the +fact that the mill supplied coarse yarns for neighborhood consumption, and +it is said moreover that making only twelve to fifteen hundred pounds of +4s to 12s daily, the mill could not get a steady market for its +wares.[44] + +It is reported of the first independent venture of Francis Fries, at +Salem, North Carolina, in woolen manufacture, that it "was but a small +one, consisting of a set of cards for making rolls from the wool raised by +neighboring farmers. This mill also contained a small dyeing and fulling +plant for coloring and finishing the cloth woven by the farmers' wives and +daughters."[45] A large cotton manufacturer says that he recalls only +three mills operating in Spartanburg county before the war; there were +Bivingsville and two very small plants, one of them on the Tyger River +spinning yarns on half a dozen frames, people driving from twenty to +twenty-five miles to the door of the mill to get the product, although it +was sold too in the stores.[46] + +The Batesville factory was built with about 1000 spindles. Before the +Columbia and Greenville railroad came to Greenville about 1852, the +product of the mill was 8s to 12s in ten-pound "bunches" covered with blue +paper. The yarn in this form passed current almost like money. The mill +marketed it over the mountains in North Carolina and in Tennessee, as far +as Russellville, "mountain schooners" with six-mile teams being used for +the purpose. The wagons used to bring back whatever they could to +constitute a return load; usually it was meat, all of that article +consumed about Greenville coming, it is said, from North Carolina. +Sometimes rags were brought back. In this way yarns were sometimes taken +as far as a hundred and fifty miles.[47] + +A banker who is intimately connected with the textile industry in one of +the oldest industrial communities in the South and who is a member of a +family to which many writers are quick to point as founders of cotton +manufacture in the South through agency of conspicuous participation in +the business since the early thirties, said: "The mills built after the +war were not the result of pre-bellum mills. This is trying to ascribe one +cause for a condition which probably had many causes. The industrial +awakening in the South was a natural reaction from the war and +reconstruction. Before the war there was first the domestic industry +proper. Then came such small mills about Winston-Salem as Cedar Falls and +Franklinsville. These little mills were themselves, however, hardly more +than domestic manufactures. When, after the war, competition came from the +North and from the larger Southern mills, the little mills which had +operated before and had survived the war lost their advantage, which +consisted in the possession of the local field. They had been able to +barter for the small quantities of local raw cotton which they used. The +standard of exchange, the par, was one yard of three-yard sheeting for a +pound of raw cotton, which was a third of a pound, made into cloth, for a +pound in the raw state. But this was a retail and not strictly a +manufacturing profit.... The old Winston mill, established in 1840, +finished the wool product spun by the country housewives. This mill also +supplied carded wool for domestic manufacture. The ante-bellum +domestic-factory system did not produce the post-bellum mills."[48] + +So strongly was he impressed with the essentially local character of the +old mills, that he was inclined to look with pessimism upon the prospect +of success for the present plants which have transcended the small sphere +that in its very restriction protected them in privileged enjoyments. + +It must be obvious from the foregoing considerations that a census +enumeration of mills of the period cannot show internal characteristics +which are all-important. But even the census returns, counting one plant +like another, display the Southern industry at this stage in a feeble +light. Some primary descriptive factors are lacking in the earliest +reports of the census which are at all useful, but taking the four +Southern States which were farthest advanced in the years 1840 and +1850--Virginia, North Carolina, South Carolina and Georgia--the showing +may be summed up thus: + +In 1840 Virginia had 22 establishments, $1,299,020 invested, 1816 +operatives, 42,262 spindles and the plants consumed 17,785 bales of +cotton. In 1850 the same State had twenty-seven mills, with a capital of +$1,908,900 and 2,963 operatives. + +In 1840 North Carolina had 25 establishments, $995,300 invested in these, +1219 operatives and 47,934 spindles.[49] Ten years later this State showed +three more establishments, an investment of $1,058,800, 1619 operatives +employed, 531,903 spindles and the number of bales consumed was 13,617. + +South Carolina in 1840 had 15 plants, representing an investment of +$617,450; there were 570 operatives and 16,353 spindles. By the next +decade there were 18 establishments, the investment in them was $857,200, +the operatives numbered 1,119 and the bales of cotton consumed 9,929. + +Georgia at the earlier date contained 19 mills with an invested capital of +$573,835,779 operatives and 42,589 spindles. In 1850 the number of plants +had increased by sixteen, making 35; the investment had risen to +$1,736,156; the operatives totalled 2,272; unfortunately the number of +spindles is not contained in the census returns, but the consumption was +20,230 bales. + +The Southern States as a whole in 1840 were able to report 248 +establishments with a capital of $4,331,078; operatives were 6,642; +spindles (an obviously incomplete summary) were 180,927. The same year the +New England States as a whole showed 674 mills, with investment of +$34,931,399, operatives numbering 46,834, and 1,497,394 spindles. The +Southern States again, in 1850 had 166 plants, $1,256,056 invested, 10,043 +operatives; the consumption was reported at 78,140 bales. At the same date +the New England development was measured by 564 plants, capital of +$53,832,430, 61,893 and a consumption of 430,603 bales.[50] + +Many single mills in the South today represent more than the extent of +the whole industry in the most forward Southern State in 1850.[51] +Comparison of facts for all the Southern mills with those for the industry +of New England perhaps serves to reflect back some light upon the status +of the former plants specifically, which has been dwelt upon. + +Of the plants in the South in this period it has been well observed that +"The number of small carding and fulling mills and of little water-driven +yarn factories, in this section before 1850, may have approached the +number of textile factories in the same region today; ... but few of these +establishments became commercial producers."[52] + +Some evidences of industrial activity in the period to 1840, partly +conscious and partly not so, which may be held to presage the later +development are to be noticed. A localizing tendency of the textile +industry in the decade from 1830 to 1840, held to have been guided by the +conjunction of raw cotton, waterwheel and steamboat along the fall line of +rivers--at such points as Richmond, Petersburg, Augusta, Columbus, +Huntsville, Florence and the vicinity of Montgomery, Mr. Clark holds to be +a "slow and unconscious development", during which William Gregg, "a +single pioneer of large industry", made a systematic effort to "awaken the +South to the peculiar advantages it enjoyed for cotton manufacturing."[53] + +George Tucker, in his "Progress of the United States in Population and +Wealth in Fifty Years", published in 1843, was the first to show that at +1840 in the older South slavery was displaying signs of decay from +economic causes and that as a system it would finally lapse of its own +accord.[54] Niles' Register, May 2, 1840, declared: "The South is rapidly +becoming independent in almost every branch of manufacture. There are in +North Carolina alone, at this day, a greater number of different kinds +than ten years ago there were in the whole of the Southern States", and +two weeks later the same paper took from the Raleigh, N.C., Register the +assertion that "The enterprise of the citizens of this state is rapidly +enabling it to become independent of the North in almost every branch of +manufacture."[55] + +Mr. Pleasants believes that agitation by press and public for a charge in +industrial activities resulted in awakening North Carolina in the early +thirties from the lethargy that had prevailed since 1810, so that "The +people of the state became interested and soon a class of small +manufacturers such as makers of carriages, wagons, and farm implements, +coopers, wheelwrights, distillers, tanners, hatters and makers of boots +and shoes, cabinets and chairs came into prominence and continued to +thrive down to 1860. In addition to this class were the cotton, wool, and +iron manufacturers who now began to appear and who became quite prominent +after the building of railroads began."[56] It is, however, questionable +whether it may be said truly that "the people of the state became +interested"; certainly there was nothing like the sweep of public +sentiment that appeared in 1880. Several years earlier the Tarboro, N.C. +Free Press had carried this item: "A few days since twenty bales of cotton +yarn were shipped from this place to the New York markets. They were from +a manufactory of Joel Battle at the falls of Tar River.... Should the +tariff bill meet with equal success with that of internal improvements, +necessity will compel the people of the South and of North Carolina to +join in the scuffle for the benefits anticipated from this new American +system, and they will have to bear a portion of its burdens and buffet the +Northern manufacturer with his own weapons."[57] + +Influenced by the pre-emption of land into large estates with the +consequent need of the people to find other means of livelihood than small +farming, by the discovery of gold and establishment of the mint, by the +agitation for and construction of railroads and by the improvements in +cotton manufacturing machinery, the people of Mecklenburg county, N.C., +"Many years before the war", said Mr. Tompkins, "were beginning to realize +the importance of diversified industries.... An industrial crisis was +imminent, and the problem would have solved itself by natural agencies +within a few more years, had not section differences brought on the +war."[58] In connection with this statement, which approaches as nearly to +the ascription of an industrial impulse to the ante-bellum South as any +other by this writer, it is to be noticed that the fact that the war did +come to render it impossible of effects shows the relative weakness of the +spirit at this time. The pre-occupation with intersectional differences +was of greater potency than the intra-sectional change of mind, if such +there were. + +A South Carolina newspaper in 1847 reckoned up with pride eleven cotton +factories in the State, with others building on the water powers of the +back-country.[59] + +The foregoing paragraphs have been designed to lead up to a very +interesting view expressed by an author often quoted in these pages. +Speaking of the years 1840-1860, Mr. Clark has said: "In the South the +most striking feature of this period was the gradual breaking down of a +traditional antipathy of manufactures. This hostility was opposed to the +obvious interests of a region where idle white labor, abundant raw +materials, and ever-present water-power seemed to unite conditions so +favorable to textile industries. Cotton planting engaged the labor of the +negro and the thought and capital of a directing white class, but the +natural operatives of the South remained unemployed, and the capital of +the North and of Europe was mobile enough to flow to the point of maximum +profit without regard to sectional or national lines, were such a profit +known to be assured by Southern factories. Slavery as a system probably +had less direct influence upon manufactures than is commonly supposed, but +the presence of the negro through slavery was important." It is noticed +that white immigration from Europe, which at this time supplied the most +considerable mechanical skill, avoided districts heavily populated with +negroes; that plantation self-sufficiency meant isolation with small need +for good communicating roads; that the market for middle-grade goods was +restricted by the servile character of the colored population; that the +credit system, by which factors controlled the directioning of productive +capital, rested upon cotton culture by negro labor; that while the corn +laws held in England, reciprocity between the Southern States and the +mother country tended to discourage manufactures in this section while the +conditions of commerce favored manufacture in the North. "These business +interests, supported by social traditions and political sectionalism, were +strengthened in their opposition to new industries by a wide-spread +popular prejudice against organized manufactures.... Nevertheless the +South chafed continually under the discomfort of an ill-balanced system of +production...." He speaks of the canal at Augusta and of cotton mills at +Charleston, Mobile, Columbus, New Orleans and Memphis directly following +the writings and object lesson of William Gregg in his Graniteville +factory and declares: "Though some large undertakings were wrecked by the +financial crisis of 1857, more from weak banking support than from faults +of operation, modern cotton manufacturing in the South dates from the +founding of Graniteville rather than from the post-bellum period.... +However, viewed in comparison with the cotton manufactures of the North, +those of the South were still insignificant.... Nevertheless, the present +attainment of the industry assured its definite future growth, and +ultimate national importance."[60] + +And Mr. Kohn has said that "The real and the lasting development of cotton +mills in South Carolina might be started with the Graniteville Cotton +Mill...."[61] + +It is difficult for the present writer to see the distinction which Mr. +Clark desires to draw between the effect of the presence of the negro and +the presence of slavery. Well enough to assert that the capital of the +North and of Europe was mobile enough to flow across the Atlantic and +across Mason and Dixon's line were a profit in manufacture in the South +known to be assured, but the fact is that capital did not flow in for +industrial purposes because bright manufacturing prospects had not been +proved out, and this largely because home enterprise was a laggard while +slavery claimed the section's capital resources for cotton cultivation. +The absence of immigration was as certainly the effect of slavery.[62] +While it is true that for long years after emancipation, and continuing to +this day, the influence of the presence of the negro in restraining inflow +of immigrants, particularly of artizans, it is evident the lessening of +this deterrent and the removal of other nearly equal drawbacks could not +proceed or commence while slavery existed. It should be clear to anyone +that from the point of view of the independent white workman the presence +of the negro in slavery held as a far more forcible objection than the +presence of the negro in freedom. His killing economic competition and his +radiated social poison were beyond any dispute and beyond prospect of +remedy until he was made at least a free producer. There could not, in +the second place, be development of schools and roads, and there could not +be fraternization of work-people, while slavery continued. And the +prospect for immigration for the South has taken its rise from the Civil +War. + +It was slavery that made plantation self-sufficiency in primitive needs +universal, that made isolation and physical barriers to intercourse. The +credit system in its hey-day rested in large degree upon supply by the +factor of all industrial products, which needs must be sustained so long +as every local energy was foredoomed for absorption into cotton growing. + +It can not rightly be said that the traditional antipathy to manufactures +in the South was "opposed to the obvious interests of a region where idle +white labor, abundant raw materials, and ever-present water-power seemed +to unite conditions so favorable to textile industries", if Southern +consciousness and purpose is meant. This applies particularly to the labor +factor. It will be shown later in this study that in the period before the +war the mills often employed slaves as the exclusive operatives in the +factory, either when belonging to the management or hired from their +owners; in some cases slaves or free negroes were employed as operatives +in the same mills with whites; and finally, and more importantly, through +the reconstruction years and at the very outset of the cotton mill era the +thought of the establishers of mills nor infrequently groped out in the +inclination again to engage negro hands and to induce white operatives to +come from the North and even from England and the Continent--overlooking +the native Anglo-Saxon population as a useful supply of workers as though +it had not been there. Before the war the presence of raw cotton was +certainly looked upon more usually rather as a guarantee of economic +independence than as a stimulus to produce within the section those +products of manufacturing which the staple was potent to purchase. + +It is not implied that conspicuous promulgators and exemplars of the need +for a change in economic activity, such as William Gregg and others, and +more still of lesser consequence of whom we have fewer evidences, were not +products of a reaction that showed itself from the long continuance of +slavery, but they stand out, impotent as they are striking, against a dull +and motionless background of prevalent system. + +Materials and viewpoint are both too well understood to require here +demonstration of the preventive influence which slavery and cotton had +upon industry in the South. And yet some observations may be brought out +for the special purposes of this study, looking especially through the +eyes of Southern men. Henry Watterson has said: "The South! The South! It +is no problem at all. The story of the South may be summed up in a +sentence; she was rich, she lost her riches; she was poor and in bondage; +she was set free, and she had to go to work; she went to work, and she is +richer than ever before. You see it was a ground-hog case. The soil was +here, the climate was here, but along with them was a curse, the curse of +slavery."[63] Probably not over-induced by bitter animus is Helper's +direct charge: "And now to the point. In our opinion, an opinion which has +been formed from data obtained by assiduous researches, and comparisons, +from laborious investigation, logical reasoning, and earnest reflection, +the causes which have impeded the progress and prosperity of the South, +which have dwindled our commerce, and other similar pursuits, into the +most contemptible insignificance; sunk a large majority of our people in +galling poverty and ignorance, rendered a small minority conceited and +tyrannical, and driven the rest away from their homes; entailed upon us a +humiliating dependence on the Free States; disgraced us in the recess of +our own souls, and brought us under reproach in the eyes of all civilized +and enlightened nations--may all be traced to one common source, and there +find solution in the most hateful and horrible word, that was ever +incorporated into the vocabulary of human economy--Slavery!"[64] + +Tompkins saw clearly, and in effect said again and again, that "the result +of the introduction and growth of the system of slavery was +revolutionary; it turned the energies of the people almost wholly to the +cultivation of cotton; it practically destroyed all other +industries...."[65] And again, "By the influence of the negro the South +lost its manufactures and largely its commerce, and became practically a +purely agricultural section of the nation."[66] Speaking of the effect of +the cotton gin and the cultivation of the staple by slave labor, he said: +"The shops which had been productive of trading were closed to the public, +and were utilized only for what was needed on the plantation.... There +were no industries requiring skill or thought, and there was no necessity +for scientific farming or anything else scientific.... Slavery not only +demonstrated that people will not think unless it is necessary, but also +that they will not work unless it is necessary.... Within three decades +after the invention of the cotton gin, slavery had accomplished its +revolution. The people whose minds had been occupied with diversified +industries and industrial expansion, were narrowed down to the development +and growth of cotton.... The mills and shops lay idle, the abundant +natural resources were ignored, and everything staked upon one +occupation...."[67] This writer was fond of linking the economic trend of +the South in 1800 with that which emerged after Reconstruction, as thus, +"In the latter part of the eighteenth century and the early part of the +nineteenth there was a well-developed and extensive manufacturing interest +in the South. White mechanics were numerous, and lived well. The growth of +the institution of slavery had nearly destroyed all manufactures ... by +the middle of the nineteenth century.... After the abolition of slavery, +and after a period of disastrous experiment in trying to legislate on +social and political conditions 'without regard to race, color or previous +condition of servitude,' education, intelligence or moral character ... +manufactures were quickly re-established in the South, and the descendants +of the mechanics of former days ceased at once to be 'poor white trash' +and became with marvelous quickness as good carpenters, machinists, +carders, weavers, etc., as their ancestors were."[68] + +Something of Tompkins' newspaper published and publicist habit comes out +in this conclusion of his advice against the usefulness of negroes in +cotton mills: "Dependence upon the negro as a laborer has done infinite +injury to the South. In the past it brought about a condition which drove +the white laborer from the South or into enforced idleness. It is +important to re-establish as quickly as possible respectability for white +labor."[69] + +Not only is it to be said that "the growth of slavery stifled +manufactures",[70] but it is noteworthy that while this baleful influence +lasted no improvements were made in the methods or appliances for the +preparation of raw cotton for the market. Except in size and superficial +appearance there was no change in the ante-bellum gin, gin-house and screw +from 1820 to 1860. "The cotton was packed by hand, carried into the +gin-house in baskets by laborers, carried to the gin by laborers, pushed +into the lint-rooms, carried to the screw, packed in the box of the screw +and bound with ropes, all by hand." But after the war came a feeder, a +condenser, a hand-press to be used in the lint room, and cotton elevators. +"... the spirit of enterprise, invention and improvement in the people of +the South has not only revived, but the entire method and all the +machinery and appliances for preparing cotton for the market have been +revolutionized."[71] + +A propagandist of the early eighties desiring to organize a development of +small cotton mills in the South quoted with approval a correspondent of +the Morning News of Savannah, setting forth that before the war the +planters saw the advantage for little establishments and were only +deterred from manufacturing because "slavery and the factory were declared +to be incompatible institutions. They could not exist together."[72] + + + + +CHAPTER II + +_THE BACKGROUND (Continued)_ + + +So far from proclaiming cotton as king, there is evidence that some of the +wisest Southerners saw that it was in many respects a curse. Said William +Gregg in 1845: "Since the discovery that cotton would mature in South +Carolina, she has reaped a golden harvest; but it is feared it has proved +a curse rather than a blessing, and I believe that she would at this day +be in a far better condition, had the discovery never been made. Cotton +has been to South Carolina what the mines of Mexico were to Spain...." The +"day is not far distant, yea, is close at hand, when we shall find that we +can no longer _live_ by that, which has heretofore yielded us ... a +bountiful and sumptuous living.... Let us begin at once, before it is too +late, to bring about a change in our industrial pursuits ...--let croakers +against enterprise be silenced--let the working men of our State who have, +by their industry, accumulated capital, turn out and give a practical +lesson to our political leaders, that are opposed to this scheme. Even Mr. +Calhoun, our great oracle ... is against us in this matter; he will tell +you, that no mechanical enterprise can succeed in South Carolina--that +good mechanics will go where their talents are better rewarded--that to +thrive in cotton spinning, one should go to Rhode Island--that to +undertake it here, would not only lead to loss of capital, but +disappointment and ruin to those who engage in it."[73] + +"The invention of the cotton gin", said Tompkins, "... Before 1860 ... was +nearer anything else than a blessing. It was primarily responsible for the +system of slavery.... Cotton ... in its manufacture ... is the life of the +South, but we could probably have done as well without it until we began +to manufacture it."[74] + +Not too dogmatic is the opinion expressed that "It seems as clear as day +that ... cotton made the South a free trade section and the North +protective; cotton lured the South back to slavery;[75] cotton drove the +South to an extreme States-rights position ... and cotton at last drove +the South to translate extreme States-rights into the terms of +Secession...."[76] And with regard to internal policy, "Perhaps the most +striking economic change that the new industry (cotton culture) effected +in the South after the reintroduction of slavery was the speedy +abandonment of manufactures ... what was the use of nerve-racking +investment in elaborate and costly machinery when a land-owner could reap +ten per cent net profit from a few negroes and mules and a bushel or two +of the magical cotton seed? and yet the South had unusual manufacturing +facilities ... manufacture soon fell into decay; the Piedmont region being +still dotted with the moldering ruins of iron works and other mills that +bear witness to the overwhelming power of the new agricultural +absorption."[77] + +It has been observed that the social difference between North and South +before the war, so often looked upon as something existing as of itself +apart, as a matter of fact may be fully accounted for simply by the +institution of slavery, which arrested development on Southern soil of the +industrial type of American civilization.[78] + +Very convincing in his fact findings and often strikingly happy in his +interpretations is Olmsted; his work benefited by being saved from the +passion of Helper and the venom of Sidney Andrews. In accounting in 1856 +for the reason for the stagnation in Virginia as compared with the +industrial activity of New England and old England, he wrote, "It is the +old, fettered, barbarian labor-system, in connection with which they +(Virginians) have been brought up, against which all their enterprise must +struggle, and with the chains of which all their ambition must be bound. +This conviction I find to be universal in the minds of strangers, and it +is forced upon one more strongly than it is possible to make you +comprehend by a mere statement of isolated facts. You could as well convey +an idea of the effect of mist on a landscape by enumerating the number of +particles of vapor that obscure it. Give Virginia blood fair play, remove +it from the atmosphere of slavery, and it shows no lack of energy and good +sense."[79] He took to be an average expression of the views "Not of the +majority of the people (of Virginia)--they are not quite so demented as +yet--but of the majority of those whose monopoly of wealth and knowledge +has a governing influence on a majority of the people", the statement of a +paper of the State that it was glad to find its contemporaries willing to +discuss "the true and great question of the day--_The Existence of slavery +as a permanent issue in the South_. Every moment's reflection but +convinces us of the absolute impregnability of the Southern position on +this subject. Facts, which can not be questioned, come thronging in +support of the true doctrine--that slavery is the best condition of the +black race in this country ..."; and from another newspaper in the year +previous (1854): "African slavery ... is a thing that we can not do +without, that is _righteous_, _profitable_, and permanent, and that +belongs to Southern Society as inherently, intricately, as durably as the +white race itself."[80] + +Olmsted was at pains to show how the people were duped by Charlatan +guidance of their political leaders; this comes out particularly in his +quotation of and comments upon the famous election speech in Virginia in +the fifties, in which the aspirant declared to his audience that "Commerce +has long ago spread her sails, and sailed away from you ... you have set +no tilt-hammer of Vulcan to strike blows worthy of the gods in your iron +foundries; you have not yet spun more than coarse cotton enough, in the +way of manufacture, to clothe your own slaves. You have had no commerce, +no mining, no manufactures. You have relied alone on the single power of +agriculture--and such agriculture! Your sedge-patches outshine the sun.... +Instead of having to feed cattle on a thousand hills, you have had to +chase the stum-tailed steers through the sedge-patches to procure a tough +beef-steak. (Laughter and applause.) ... The landlord has skinned the +tenant, and the tenant has skinned the land, until all have grown poor +together," "and how," asks Olmsted, "does the fiddling Nero propose, it +will be wondered, to remedy this so very amusing stupidity, poverty, and +debility? Very simply and pleasantly. By building railroads and canals, +ships and mills; by establishing manufactories, opening mines, and setting +up smelting-works and foundries. And, 'Hurrah!' shout the tickled +electors; 'that's exactly what we want.'" And then he showed that it was +much like the quack telling the confirmed paralytic to live generously, +take vigorous exercise and grow well; that with the disease of slavery in +its vitals the South could not do else than languish; that in holding out +promise of wholesome measures which contemplated everything but the +attacking of slavery,[81] the politicians were just laughing at the +people.[82] + +A reflection just as sorrowful as the confirmed bias of the people, +however, is one that Olmsted did not see in this and myriad other +episodes, namely, the blindness of the leaders that, with no doubt strong +elements of quackery, showed even stronger signs of being themselves duped +by a situation. Not that the crowd was believing, but that the leaders +were so largely sincere, was most melancholy. As to both considerations, +however, a passage of Sir Horace Plunkett in comment upon Irish politics, +is much to the point: "Deeply as I have felt for the past sufferings of +the Irish people and their heritage of disability and distress, I could +not bring myself to believe that, where mis-government had continued so +long, and in such an immense variety of circumstances and conditions, the +governors could have been alone to blame. I envied those leaders of +popular thought whose confidence in themselves and in their followers was +shaken by no such reflections. But the more I listened to them, the more +the conviction was borne in upon me that they were seeking to build an +impossible future upon an imaginary past."[83] + +As opposed to the brightening signs which some have seen in the years just +preceding the Civil War, it has been said, "yet with the line around +slavery being drawn more closely ... the cotton South lagged in the +industrial race, and the border States were hampered by the institution +that they felt to be a burden, but which they could see no safe way to +abolish. Compassed as it was by political compromises, slavery must +ultimately have topped through its own overweight; but in 1860 it was so +valuable for the plantation that it was not only not readily converted +into the factory, but was an obstacle in the way of the employment of +capital and of other labor in that direction."[84] + +The deterrent effect of slavery upon immigration of white laborers has +been noticed above. In 1860 only 6 per cent of the white population of the +South was foreign-born, but immigrants made up nearly 20 per cent of that +in the North. In the decade from 1850 to 1860 the South's quota of +foreign-born in the whole country dropped from 14 to 13 per cent.[85] The +South was deprived of her share of foreign mechanics, so largely +responsible for the industries in this country in the first half of the +nineteenth century, not only by the fact that independent artizans avoided +competition with slave labor, but because few of them had the means of +acquiring slaves, and disapproved of the institution besides.[86] The +increase in population in North Carolina in the single decade of 1870 to +1880 about equalled that of the four decades preceding. The comprehensive +influence here upon immigration by the abolition of slavery is not greatly +modified by the fact that in the period before 1870 fell the losses from +the Civil War.[87] The tide of immigration to Mecklenburg County in this +State dwindled from the introduction of slavery as a system until 1825, +and thereafter set in the emigration of persons from the county, an even +severer influence and stronger indication of the baleful labor system.[88] + +In the fifties it was declared that the most prosperous community in South +Carolina was a settlement of Germans in the western part of the State. +Here had been founded an educational institution, varied manufactures, +farming was conducted with successful enterprise and capital was found to +be invested in a railroad venture. Slavery was not relied upon.[89] Sidney +Andrews in 1865 found the northwestern counties of Georgia, which were +held to be strongly opposed to secession in 1860-61, and which furnished +a good many soldiers to the federal armies, probably better disposed to +the national government than any other part of the State. Slaves had +constituted less than a fourth of the total population, the people were +industrious and hardy; though cruder than those from the lower parts of +the State, the delegates from this section to the constitutional +convention of 1865 were said to have a well-informed outlook for the +Commonwealth. After the war the industry displayed by the white people of +this region was taken as attesting their better traditions of ante-bellum +years.[90] + +At a time when the average wages of female operatives in the cotton mills +of Georgia was half that of the same workers in the mills of +Massachusetts, factory girls from New England were induced by high pay to +go to the Southern States to enter newly-established plants, but soon +returned North because their position was unpleasant in the midst of "the +general degradation of the laboring class."[91] It was observed very truly +that competition of the slave was not distantly matched in hurtfulness by +the example of the more prosperous white men, with whom acquisition of +the comforts and dignities of life did not proceed from daily toil.[92] + +The dependence of the ante-bellum South upon the North and upon Europe for +the most substantial and the most trivial appurtenances of civilization, +is perhaps less in dispute than any topic here treated. The extent of this +dependence, with the accompanying neglect of provision for production of +the commodities at home, is evidenced by its continuance for years after +the war. It might be said, not only in justification of this practice, but +in apology for the total one-sidedness of the old South, that the section +was animated by a natural and universal law, in responding to and acting +upon the principle of comparative economic advantage. And certainly the +most absolute conception of the territorial division of labor could not +require a more exclusive devotion to the making of cotton and a more +complete reliance upon other less peculiarly favored districts for supply +not only of manufactured goods but of food stuffs and other raw materials, +than the South displayed. But, however, strictly in conformity with the +superficial dictates of this policy from an international and even +national point of view, the program was ruinous to the section, the +country and, in a broad sense, to the deeper economic welfare of the +world. Easy yielding to the principle did not suggest to the great bulk of +the South's statesmanship the reflection that the section after all was in +only partial compliance; that even for the most efficient production of +cotton as such, there needed to be a wholesome admixture of manufacturing +and of other agricultural interests. Accompanying and directly by agency +of the post-bellum activities in industry is seen not a less but a more +economical and larger output of the staple. + +Some of the most humorous passages in the literature of the economic +history of the South were called forth by the need of the section to go to +the North for a thousand and one essentials of daily existence, and in +their very humor they serve to show the seriousness of the situation. + +William Gregg, too lonely in his advocacy of home industry to treat the +subject in other than its fundamental considerations, declared in 1845 to +his own community, than which there was no greater sinner: "It ought to +make every citizen who feels an interest in his country, ashamed to visit +the clothing stores of Charleston, and see the vast exhibition of +ready-made clothing, manufactured mostly by the women of Philadelphia, New +York, Boston and other Northern cities, to the detriment and starvation of +our own countrywomen, hundreds of who may be found in our own good city in +wretched poverty, unable to procure work by which they would be glad to +earn a decent living."[93] And again: "A change in our habits and +industrial pursuits is a far greater desideratum than any change in the +laws of our Government...."[94] His point of view comes out well in this +passage: "if we continue in our present habits, it would not be +unreasonable to predict, that when the Raleigh Rail-Road is extended to +Columbia, our members of the Legislature will be fed on Yankee baker's +bread. Pardon me for repeating the call on South Carolina to go to work. +God speed the day when her politicians will be exhorting the people to +domestic industry, instead of State resistance; when our Clay Clubs and +Democratic Associations will be turned into societies for the advancement +of scientific agriculture and the promotion of mechanic art; when our +capitalists will be found following the example of Boston and other +Northern cities, in making such investments of their capital as will give +employment to the poor, and make them producers, instead of burthensome +consumers; when our City Council may become so enlightened as to see the +propriety of following the example of every other city in the civilized +world, in removing the restrictions on the use of the Steam Engine, now +indispensable in every department of Manufacturing...."[95] + +A decade later Helper reproached a South that had not given heed to Gregg: +"It is a fact well known to every intelligent Southerner that we are +compelled to go to the North for almost every article of utility and +adornment, from matches, shoe-pegs and paintings up to cotton-mills, +steamships and statuary ... this unmanly and unnational dependence, ... is +so glaring that it can not fail to be apparent to even the most careless +and superficial observer. All the world sees, or ought to see, that in a +commercial, mechanical, manufactural, financial, and literary point of +view, we are as helpless as babes...."[96] + +Gregg remarked the supply by the North not only of the articles of major +manufacture, but of articles of those makes which should naturally be the +adjuncts of agriculture--axe, hoe and broom handles, pitch-forks, rakes, +and hand-spikes for rolling logs, shingles and pine boards; and even that +"the Charleston market is supplied with fish and wild game by Northern +men, who come out here, as regularly as the winter comes, for this +purpose, and from our own waters and forests often realize, in the course +of one winter, a sufficiency to purchase a small farm in New England."[97] + +An orator at the Southern Commercial Convention, New Orleans, 1855, +adapted for the occasion, thought Olmsted, a speech made in the British +Parliament on taxes, familiarized in "Child's First Speaker", and +beginning, in the Southern version, "It is time that we should look about +us, and see in what relation we stand to the North. From the rattle with +which the nurse tickles the ear of the child born in the South, to the +shroud that covers the cold form of the dead, everything comes to us from +the North. We rise from between sheets made in Northern looms, and pillows +of Northern feathers, to wash in basins made in the North ..." and +continuing in the strain that was a favorite one with platform and pen, +and many examples of the employment of which may be found.[98] + +A Virginia land-owner wrote to a farm paper regretting the widespread and +intimate dependence upon the North, and stated quite as clearly as was +observed thirty years later that goods which could be bought in the North, +paying a profit to the manufacturer there, then transported to the South +at heavy cost and sold at a profit to the tradesman, might surely be +manufactured in the South in the first place, saving maker's profit to +home industry and obviating charges of carriage altogether.[99] + +A newspaper in Richmond chronicled the sale to Northern interests of a +large coal field in the State, and in unconscious irony placed in +juxtaposition to the notice this confident exhortation: "It is plain that +a new and glorious destiny awaits the South, and beckons us onward to a +career of independence. Shall we train and discipline our energies for the +coming crisis, or _shall we continue the tributary and dependent vassals +of Northern brokers and money-changers_? Now is the time for the South to +begin in earnest the work of self-development! Now is the time to break +asunder the fetters of commercial subjection, and to prepare for that more +complete independence that awaits us."[100] But another and wiser paper in +the same State, urging manufacturing development for Virginia towns and +cities, and particularly the textile industry for Richmond, anticipated +with a different mind the event invited in the excerpt above quoted, and +foretold with prophecy all too good, what later was patent to everybody: +"It must be plain to the South that if our relations with the North should +ever be severed--and how soon they may be, none can know (may God avert +it long!)--we would, in all the South, not be able to clothe ourselves. We +could not fell our forests, plow our fields, nor mow our meadows. In fact, +we would be reduced to a state more abject than we are willing to look at, +even prospectively. And yet, with all these things staring us in the face, +we shut our eyes, and go on blindfold."[101] + +It is thought well, in summary of the decidedly non-industrial character +of the ante-bellum South, to set forth some material and some observations +of a general character. In spite of its length, it is useful to give in +its setting an episode related by Tompkins. It shows more aptly than +almost in anything in spite of its incidental happening, just the point of +preoccupation with politics to which the Southern mind came, the degree of +trifling with which the most sober proposals were met, the hopelessness of +change from this state of affairs by anything short of a fundamental moral +awakening. + +"I heard of an incident, that occurred in a political contest between Mr. +Gregg and Chancellor Carroll, for the place of State Senator from +Edgefield District. It was the habit for candidates to appear together and +speak to the people from the same platform.... On one of these occasions, +Mr. Gregg spoke first. He stated that he solicited votes on the ground +that he had built a factory, which gave work to poor white people. It +enhanced the value of cotton by manufacturing it. He had planted peach +orchards to develop new avenues of profit and advantage to the people, +&c., &c. Whereas, Chancellor Carroll had never made two blades of grass +grow where only one grew before. + +"Mr. Carroll flowed Mr. Gregg. He was an accomplished orator, and praised +in eloquent terms, Mr. Gregg's enterprise in building a factory. He +eulogized his plans for fruit culture. He admitted, with humility, all the +delinquencies Mr. Gregg charged against him excepting only one: 'He says I +never made two blades of grass grow where only one grew before. Having +faith in Mr. Gregg's plans and advice about orchards, I planted one, and +if anybody is disposed to believe I never made grass grow, I simply invite +them to go look at that orchard. It is literally run away with grass.' The +crowd laughed, voted for Mr. Carroll and the cause of slavery went forward +while Mr. Gregg staid at home and the cause of civilization +languished."[102] + +But Gregg preached his doctrine undaunted; his works are to be taken less +as an indication of anything like general ante-bellum awakening to +suicidal policies than as the bright exception that proves the melancholy +rule. + +He showed that even cotton, the great god, drove enterprise from South +Carolina, for, with the returns from its culture under ordinary management +amounting to 3 or 4 and in some instances only 2 per cent., the +inclination for planters to remove with their slave capital to the richer +south-west was strong, thus keeping the population of the State at a +standstill.[103] + +Mr. Ingle has stated the case broadly: "The economic history of the South +from the Revolution to the Civil War is a record of the development of one +natural advantage to the neglect of several others. Fitted by nature to +support a large population engaged in a variety of pursuits based upon +agriculture, it had a small population occupied in the production of raw +material that contributed to the maintenance of a dense population in +regions where artifice contended against harsh climate and a stubborn +soil."[104] An "address to the Farmers of Virginia" read at a convention +for the formation of the Virginia State Agricultural Society in 1852, +adopted, reconsidered and readopted with amendments, and finally +reconsidered again and rejected on the ground that it contained +admissions, however true, which would be useful to abolitionists, +contained the words: "... thus we, who once swayed the councils of the +Union, find our power gone, and our influence on the wane, at a time when +both are of vital importance to our prosperity, if not to our safety. As +other states accumulate the means of material greatness, and glide past us +on the road to wealth and empire, we slight the warnings of dull +statistics, and drive lazily along the field of ancient customs, or stop +the _plow_ to speed the _politician_--should we not, in too many cases, +say with more propriety, the _demagogue_!... With a widespread domain, +with a kindly soil, with a climate whose sun radiates fertility, and whose +very dews distill abundance, we find our inheritance so wasted that the +eye aches to behold the prospect."[105] + +In addition to the barrier to manufactures formed by cotton cultivation +under slave labor, and the silent opposition which the prevalent system +engendered, were not infrequent outspoken declarations against industry. +William Gregg was one of the few in South Carolina or the whole South, for +that matter, to rise superior to Calhoun's sway, and asserting that there +were some who were better able to speak of the propriety of factories +than even that statesman, faced him squarely but tactfully. "The known +zeal with which this distinguished gentleman has always engaged in every +thing relating to the interest of South Carolina, forbids the idea that he +is not a friend to domestic manufactures, fairly brought about, and, +knowing, as he must know, the influence which he exerts, he should be more +guarded in expressing opinions adverse to so good a cause."[106] + +And again, speaking of manufactures, he was regretful of the fact that +"our great men are not to be found in the ranks of those, who are willing +to lend their aid, in promoting this good case. Are we to commence another +ten years' crusade, to prepare the minds of the people of this State for +revolution; thus unhinging every department of industry, and paralyzing +the best efforts to promote the welfare of our country." His footnote to +this passage shows how calmly, in his comprehensive grasp of the whole +situation, Gregg could estimate the bias of his opponents and point out to +them how even their selfish ambitions could only be served by attention to +such reasoning as his: "Those who are disposed to agitate the State and +prepare the minds of the people for resisting the laws of Congress, and +particularly those who look for so direful a calamity as the dissolution +of our Union, should, above all others, be most anxious so to diversify +the industrial pursuits of South Carolina, as to render her independent of +all other countries; for as sure as this greatest of calamities befalls +us, we shall find the same causes that produced it, making enemies of the +nations which are at present, the best customers for our agricultural +productions."[107] + +Gregg felt keenly the opposition to cotton manufactures, which took point, +moreover, from the failure of mills in the South, particularly in his own +State. This he combatted by showing that not lack of natural advantages +but gross mismanagement had been responsible for the fate of these +enterprises.[108] He tried to take heart for the South in the reflection +that those who commenced the textile industry in Rhode Island had the +whole country against them and the experience of England closed to them, +whereas his section had the encouragement of New England and access to the +machinery and mechanical skill of the world, and he added, "It will be +remembered, that the wise men of the day predicted the failure of _steam +navigation_, and also of our own railroad; it was said we were deficient +in mechanical skill, and that we could not manage the complicated +machinery of a steam engine, yet these works have succeeded--we have found +men competent to manage them--they grow up amongst us...."[109] + +Because of the striking reversal of front of the city at a later date, +which will be of central importance in subsequent chapters of this study, +the estimate which Gregg gave in 1856 of Charleston's attitude toward home +industry is interesting. As a delegate from Edgefield District in the +South Carolina house of representatives he spoke against the grant of aid +by the State to the South Carolina Railroad, stoutly declaring, although +he was a stockholder in the venture and the men in control were his +personal friends, that he believed every dollar the State might put into +the scheme would be lost; he observed that the railroad was purely for the +commercial aggrandizement of Charleston, and that, perhaps, not honestly, +its spokesmen being unwilling themselves to take stock. Instead of +commercial policies selfishly followed by "wealthy gentlemen, some of whom +have ships floating in every sea", he declared "That her (Charleston's) +destiny was fixed and indissoluble with the State of South Carolina, and +that mainly her great investment in Internal Improvements should be made +with a view to developing the resources of the immediate country around +her. That certain and cheap modes of transportation from all quarters of +the State could not fail to re-act on the general prosperity of the city. +That the dormant wealth of Charleston might be so directed as to be felt +in the remotest parts of the State, in stimulating agriculture, draining +our great swamps and putting into renewed culture our worn-out and waste +lands; diversified industry, stimulating the mechanic arts and increasing +the population and wealth of the State."[110] Instead of this just ideal +for leadership and helpfulness, he found it to be the unfortunate fact +that, "There is no city in the Union which has accumulated more wealth, to +its size, than Charleston--none that has shown so little inclination to +put forth her wealth in such a way as to develop the resources of the +State. Her millionaires die in New York. There is scarcely a day that +passes that does not send forth Charleston capital to add to the growth +and wealth of that great city. There is a silent and an imperceptible +drain in that direction; the aggregate of which for twenty years would +more than build a railroad from Charleston to Cincinnati."[111] + +The economic thinking of the old South, with its inertia and its +inconsistency, is well illustrated in a statement of Robert N. Gourdin, a +cotton factor of Charleston and representative of the aristocratic type of +its citizenship, made to the correspondent of the New York Herald in +connection with the Atlanta Cotton exposition in 1881. After going over +the old matter of the war, and the South's vanquishment by superior +numbers only, he said: "We (in the South) did not manufacture because +there was no necessity for our doing so. With our wonderfully productive +soil, our marvellous climate, and with plenty of labor to cultivate our +farms, we would accumulate wealth, live comfortably and even luxuriously +without troubling ourselves with diggings for minerals or manufacturing +cloth. We did not object to the inventions and manufactures of the North, +but we did protest against being obliged to pay for them."[112] + +The prohibition by city ordinance of the use of the steam engine in +Charleston is an extreme evidence of a frame of mind that was general in +the South. In order to appreciate how completely deflected from industry +the Southern thought and habit had become, it is interesting to observe +the seriousness with which in 1845 Gregg was forced to argue against this +regulation which now seems so absurd that it could not have existed since +the Middle Ages. Its opponent showed that he was linked in his sympathies +with other sections and with later years, not only by his antagonism but +by the humor which he could not fail to find in the situation.[113] + +The characteristic inclination toward the individual rather than corporate +form of enterprise which was noticed as showing itself in the textile and +other industries in the South of the Revolutionary period, was still +strong up to the Civil War. In 1845 Gregg inveighed against it, +particularly as crystallized in legislative refusal to grant charters of +incorporation, and, as in others of his pamphlets and speeches, he made +analysis of the conditions that would seem to have been plain enough to +convince the most stolid; he was quick to hold up New England as a +business model to the South; in marked contrast to most men of affairs of +the time, he saw economic institutions in their social perspective.[114] +Those who have sought to magnify to the largest proportions the +industrial activities of the old South have frequently failed to take +account of the differences in organization which distinguished the +ventures from those of post-bellum years. The textile industry could not +be a movement in economic society so long as investment participation +sprang from and ended with individual initiative. Until the widespread +emergence of the joint-stock form, the mills could not embrace the +generality of the community's resources. And in a period when this device +was not largely turned to, it is plain that industrial stirrings were +comparatively feeble. + +Not only was there self-satisfaction coupled with dependence upon the +North for manufactured commodities in the low-country of the ante-bellum +South, but the up-country, that frugal population of which was better +disposed for manufacturing development, was so segregated as to be kept +in mean state, or actually dependent itself upon the coastal districts. +Between the Piedmont and the sea was the barrier of plantations; between +the Piedmont and the industrial North were no transportation +facilities.[115] Olmsted was struck with finding at Fayetteville, "the +point of transfer from wagon to boat, being at the head of +navigation",[116] the long wagon trains of highland farmers. He counted +sixty wagons in the main street of the town; this was the method of +bringing produce to market. "Several of the wagons had come from a hundred +miles distant; and one of them from beyond the Blue Ridge, nearly two +hundred miles." The teams made less than a score of miles a day through +the bad roads.[117] This isolation of one district in the South from +another brought lack of concert in political and economic life. "Small +landowners in the highlands could not always sympathize with men of +princely domain in the low country; and misapprehensions were magnified by +separation.... Diffusion of population ... was revealed in the scantiness +of common-school facilities; in the division of capital among several +small factories or mills, instead of its concentration in a few; in +literary, religious, and social life. In 1860, for instance, the South +had proportionately more church buildings than the North; but its 22,655 +buildings had an average seating-capacity of 307, and an average value of +$1,777, while the 31,344 of the North would accommodate 388 persons each, +and were $4,183 on an average.... Isolation gave birth to individualism, +as marked upon the mountain-clearing as upon the plantation; and +beginnings of the co-operative spirit were dwarfed by nature and by human +inclination...."[118] + +Strong as is the proof of the non-industrial character of the old South as +revealed by scrutiny of internal economic facts, evidence afforded by the +reflection of this condition in aspects which may be called external, is +quite as striking. So much is this the case, that it is believed that an +examination of the social, political, educational and moral institutions, +constituting the shell of the South, is satisfying as to the character of +the egg without looking at the vital cell at the center. The fruits of +the tree are conclusive of the sap. + +Of these external phenomena, the political is that which will most readily +occur to everyone. Pervasive economic conditions are shown crystallized in +political pretensions; economic transitions are registered in alterations +of front. The Protective Tariff of 1816 was introduced and defended, +respectively, by two South Carolinians--Lowndes and Calhoun. The signature +of a Virginia president--Madison--made it a law. This tariff was opposed +by New England in the person of Webster. In 1828, in the debate over the +"Tariff of Abominations", the situation was just the reverse--Calhoun +opposed protection, Webster championed it. In spite of Webster's +explanation that New England was acquiescing, against her inclination, in +the expressed will of the country, it is the bottom truth that, as Lodge +declares, "Opinion in New England changed for good and sufficient business +reasons, and Mr. Webster changed with it ... when the weight of interest +in New England shifted from free trade to protection Mr. Webster following +it." And Mr. Scherer has done justice to the underlying forces in saying, +"Calhoun was neither better nor worse. Both of them simply swung true to +the economic interests of their respective constituencies."[119] + +Cotton, nearly exclusively in the South, and to a notable degree in New +England, was responsible underneath for the changes which were displayed +in the superficial play of politics. It was the disintegration of +manufactures brought about by the more and more extensive embracing of +cotton cultivation that turned the South from protection to free trade; it +was the growing absorption in industry, especially cotton manufacture, and +the relative relinquishing of commerce, that made New England +protectionist instead of, as before, the champion of free trade.[120] + +This is not the place to remark at length how economic interests are +changing the South back, in partial measure, to the first position. Cotton +is again central. Cotton factories are largely responsible for the little +leaven that is working in a large loaf, producing in the heart of the +Solid South Republican adherents and voices for protection. "Slavery has +been abolished. The South has re-established manufactures. Its interests +in free trade and protection are changed from what they were in 1860. We +need not only domestic trade, but foreign markets. We need, apparently, +protection and free trade at the same time.... The South is as much +interested in protection to home markets as New England is. New England is +as much interested in export markets as the South is. In this situation we +ought all to get together. We ought to get together for 'Protection and +Reciprocity.'"[121] + +In summary of the ante-bellum years, which have just been under review, +Mr. Clark writes: + +"Between 1810 and 1860 three periods of progress marked the factory +development of the cotton states. During our last war with England ... +mill builders from the North migrated to the Southern highlands, and with +local co-operation established small yarn factories at several places in +the Carolinas, Georgia, Tennessee, and Kentucky.... During the decade +ending with 1833, when hostility to the tariff made the Southern people +bitterly resent economic dependence on the North, there was a second +movement towards manufactures, especially in South Carolina and Georgia, +directed mainly towards the erection of larger and more complete +factories. This agitation bore fruit in some corporate enterprises, most +of which had but qualified success. Finally, in the late forties real +factory development began simultaneously at several points, and had not +two financial crises and a war checked its progress, we should probably +date from this time the beginning of the modern epoch of cotton +manufacturing in the South."[122] + +Two objections against this passage have pertinence. In the first place, +these three periods of comparative interest in manufactures can hardly be +called "movements" in any social or economic sense. That of the twenties +and running into the thirties may claim more color of this than the other +two.[123] The plants set up by the New Englanders earlier were in +response to individual enterprise, and that enterprise born out of the +boundaries of the South. Co-operation with the newcomers was not of the +sort that marks the considerable interest of a community. To the extent +that mills were built in the forties as an effect of agitation, William +Gregg was almost solely responsible. It has been pointed out above that +Gregg was a voice crying in the wilderness--he was a missionary who spoke +an unaccepted faith. He was not a social exponent. Also, while some real +factories were built, it seems that to speak of these as constituting a +"real factory development" is questionable. In the second place, it is +rather gratuitous to count upon what would have been the case had not the +war broken in upon declared industrial beginnings. The Civil War was not a +fortuitous event. It had to come. It was the disastrous evidence of the +dominance in the South of a system which gave no room to widespread +industrial enterprise, and in which no beginnings could grow and become +permanent. Could the war be regarded simply as an occurrence, an +unfortunate happening, there might be ground for assuming that industrial +enterprise might have been built into and finally changed wholesomely the +economic regime of the Southern States, but facts show that it was a case +where mastery between mutually exclusive plans had to be made on the basis +of comparative strength; the spirit for manufactures had not sufficient +force to avert the war, but only enough life to show, in expiring, that it +had begun to be born. + +The foregoing pages have not dwelt, except by chance, upon the decade +1850-1860. These years have been reserved for specific discussion because +of the effort which has been made by two writers to invest them with a +character of industrialism superior to that of the ante-bellum period +generally. Not only is the argument defeated by external evidence, but an +internal examination of Mr. Edmonds' presentation shows his own +consciousness of serious modifications upon the doctrine, and explains in +a very natural light the occasion for the point of view which he sometimes +too dogmatically expresses. The late Mr. Edgar Gardner Murphy, in treating +the subject, was heavily influenced in his opinion by Mr. Edmonds' work; +it will be seen that in his discipleship, while he rid Mr. Edmonds' +statement of one outstanding error, he failed to notice some of the major +allowances made by him, and altogether Murphy's pronouncement is more +positive and absolute than that of the source from which he chiefly drew +his beliefs. + +Mr. Edmonds is practically on all fours which Tompkins and others quoted +in this study, in recognizing that certainly from early in the nineteenth +century until the fifth decade industry was little attended to in the +South. This he attributes to the high prices to be obtained from cotton, +averaging for the years 1800 to 1839 a fraction over seventeen cents a +pound. Then he declares: "Beginning with 1840 there came a period of +extremely low prices and the cotton States suffered very much from this +decline. In that year the average of New York prices dropped to nine +cents, a decline of four cents from the preceding year, and this was +followed by a continuous decline until 1846, when the average was 5.63 +cents.... In 1847 the crop was short and prices advanced sharply, only to +drop back to eight and then to seven and one-fourth cents, making the +average from 1840 to 1849 the lowest ever known in the cotton trade for a +full decade. + +"These excessively low prices brought about a revival of public interest +in other pursuits than cotton cultivation, and the natural tendency of the +people to industrial matters, as evidenced by the history of the colonies +prior to the Revolution, but which had long been dormant, was again +aroused, and for some years there was a very active spirit manifested in +the building of railroads and the development of manufactures. + +"The decade ending with 1860 witnessed a very marked growth in Southern +railroad and manufacturing interests.... In 1850 the South had 2335 miles +of railroad, and the New England and Middle States 4798 miles; by 1860 the +South had increased its mileage to 9897 miles, a quadrupling of that of +1850, while the New England and Middle States had increased to 9510 miles. +The conditions were reversed by 1860, and the South then led by 387 +miles.... While devoting great attention to the building of railroads, the +South also made rapid progress during the decade ending with 1860 in the +development of its diversified manufactures." Flour and meal, sawed and +planed lumber mills are mentioned, with iron founding and the manufacture +of steam engines and machinery. "Cotton manufacturing had commenced to +attract increased attention, and nearly $12,000,000 were invested in +Southern cotton mills. In Georgia especially this industry was thriving, +and between 1850 and 1860 the capital so invested in that State nearly +doubled." Noting that while most of the Southern manufacturing +enterprises were comparatively small, those of New England in the early +stages were of the same character, he says that "In the aggregate, +however, the number of Southern factories swelled to very respectable +proportions, the total number of 1860 having been 24,590, with an +aggregate capital invested of $175,100,000. + +"A study of the facts ... should convince anyone that the South in its +early days gave close attention to manufacturing development,[124] and +that while later on the great profits in cultivation caused a contraction +of the capital and energy of that section in farming operations, yet, +after 1850, there came renewed interest in industrial matters, resulting +in an astonishing advance in railroad construction and in +manufactures."[125] + +Figures are set up to show the favorable economic condition of the South +in 1860 as compared with the North, and these head up naturally in the +observation that, "Blot out of existence in one night every manufacturing +enterprise in the whole country, with all the capital employed, (he was +writing in 1894) and the loss would not equal that sustained by the South +as a result of the war.... New England and the Middle States, having grown +rich by the war, almost trebled their property (from 1860 to 1870) while +the South drops from the first place to the third. In 1860 it outranked +the Northern section by $750,000,000."[126] + +In criticism of these quotations specifically it is to be said that the +early development in industrial pursuits and the thorough lapse before +1840 are properly observed. The present writer believes that Mr. Edmonds +has exaggerated in his own mind both the spirit for manufactures, +particularly in the decade from 1850 to 1860, and the extent of their +establishment. The recital that there were 24,590 plants, with an +investment of $175,100,000, seems at first to be striking, but a simple +division shows that on an average this made the investment in each only +$7,144.37, which is surely not indicative of considerable importance. Many +of the enterprises must have been much smaller than would be represented +by this average, and the few which were a great deal larger were rare +exceptions. The very disparity in size of establishments points away from +any concerted movement toward manufacturing. As to the railroad +construction, much of it was narrow-gauge, and all of the facts tend to +show that railroads were looked upon as facilitating commerce rather than +manufactures; even after the war the pet scheme to build a railroad over +the mountains gathered sentiment in the long-cherished desire to link +Charleston with "the producing interior" typefied in Cincinnati; as rails +were laid, piecemeal, through the Piedmont, advantages afforded by them +for the erection of factories were seldom mentioned, and their utility in +tapping pools of available labor was not considered. The easier transport +of cotton and the development of the South Atlantic ports were the +thoughts uppermost. + +To vaunt property figures of the South of 1860 by including, as Mr. +Edmonds has done, the value of slaves, is an obvious error; and especially +because of the failure to note the inclusion of this factor, the spirit of +the other exhibits is cast in doubt. Though legally they were property, in +the social-economic sense the slaves did not constitute capital any more +than their owners represented capital. The question is rather whether this +part of the population, as productive agents under the system of enforced +labor, did not mean a liability and not an asset at all.[127] + +Mr. Edmonds is guilty sometimes of careless statement, as when he says, +"The Southern people do not lack in energy or enterprise, nor did they +prior to 1860.... From the settlement of the colonies until 1860 the +business record proves this."[128] Or again, "the energy and enterprise +displayed by the South in the extension of its agricultural interests was +fully as great as the energy displayed in the development of New England's +manufactures or that of the pioneers who opened up the West to +civilization."[129] Such expressions, it will presently be shown, proceed +from a loyalty to the South and a just desire to defend her against +assault respecting her part in post-bellum development, but facts brought +out in these pages show the mistaken zeal in seeking to place the old +South abreast in industry or even agriculture. + +Allowing what is perhaps the exciting cause of Mr. Edmonds' argument to +appear from his own context, light is shed in the following sentences: +"... 'The New South', a term which is so popular everywhere except in the +South, is supposed to represent a country of different ideas and different +business methods from those which prevailed in the old ante-bellum +days.... Its use ... as intended to convey the meaning that the South of +late years is something entirely new and foreign to this section, +something which has been brought about by an infusion of outside energy +and money is wholly unjust to the South of the past and present. It needs +but little investigation to show that prior to the war the South was fully +abreast of the times in all business interests, and that the wonderful +industrial growth which has come since 1880 has been due mainly to +Southern men and Southern money. The South heartily welcomes the +investment of outside capital and the immigration of all good people ... +but it insists that it shall receive from the world the measure of credit +to which it is entitled for the accomplishment of its own people." And +then he instances the cotton mills and Birmingham and Atlanta.[130] His +explanation of the inactivity in the South for ten or fifteen years +following the war, in the fact and causes of which he is entirely +correct,[131] bears out the belief, clearly indicated in the passage just +quoted, that it is his real purpose to accord to the ante-bellum South her +deserved praise. However, he overreached in trying to establish anything +like continuity for Southern enterprise over the ante-bellum years. The +interpretation here given of the new South is now a platitude, but it may +not have been a tilting at windmills when he wrote; indeed, its acceptance +now may be due in no small part to Mr. Edmonds. + +Altogether, it is best to rest Mr. Edmonds' theory with the following +passage, in which there is no confusion of his own thought and no +controversy with anyone: "Since 1880, although the South is still (1894) +practically without great accumulated wealth, her people have turned to +manufacturing with a facility that not only shows that they are in no way +lacking in capability to compete in manufacturing pursuits, but, +considering the limited capital, this section has exhibited remarkable +gains in developing its resources under adverse conditions. In a little +more than a decade from the time the work of development may be said to +have begun, it is not a question whether Alabama can compete with +Pennsylvania in iron, but rather whether Pennsylvania can compete with +Alabama. Nobody now doubts that the South can compete with New England in +the manufacture of cotton goods, but many do doubt whether New England can +compete with the South.... Since 1880 the growth of manufactures in the +South and their success has been more than astonishing."[132] + +Edgar Gardner Murphy in his spiritual interpretation of the South showed +himself discerning and gifted beyond almost any other writer. His +conception of the economic history of the South may be held to have been +secondary in his purpose and so in his thought. However, his position as +an expositor of the section and the emphasis which he places upon his +economic opinions regarding its past, make it incumbent upon the student +to examine his views. In the following quotation the turn which he gave to +the influencing argument of Mr. Edmonds and his personal slant in +interpretation of this, are apparent: + +"The present industrial development of the South is not a new creation. It +is chiefly a revival. Because the labor system of the old South was so +largely attended by the economic disadvantages of slavery, and because the +predominant classes of the white population were so largely affected by +social and political interests, it has often been assumed that the old +order was an order without industrial ambitions. + +"The assumption is not well founded. Instead of industrial inaction we +find from the beginnings of Southern history an industrial movement, +characteristic and sometimes even provincial in its methods, but +presenting a consistent and creditable development up to the very hour of +the Civil War. The issue of this war meant no mere economic reversal. It +meant economic catastrophe, drastic, desolate, without respect of persons, +classes or localities.... Thus the later story of the industrial South is +but a story of reemergence."[133] There are then outlined the steps of Mr. +Edmonds' argument, except that Murphy failed to make clear the almost +total lapse of industrial activity by 1840. + +The incentive to discover an industrial past for the section, which Mr. +Edmonds found in the desire to establish the South as the magician of her +ante-bellum awakening, is matched in Murphy's motive by a more subtle +design. In one place he said: "... the most distinctive element in the +economic movement of this period (1880 to 1900) is the increasingly +dominant position of manufactures as contrasted with agriculture. This +industrial revival is but the reemergence of the tendency which we found +so manifest in the statistics of 1860. It is but one reassertion of the +genius of the old South."[134] Here with his absolute conception of the +ante-bellum South is hinted the purpose which really animated it. That in +speaking of the post-bellum development as "one reassertion of the genius +of the old South" he did not mean, as very easily might be supposed, that +through the earlier history of the section had run a genius for +industrialism, is made clear in the following passage, which, though it +refers particularly to social relationships, is pertinent for the +industrial bearings: + +"The old South was the real nucleus of the new nationalism. The old South, +or in a more general sense the South of responsibility, the men of family, +the planter class, the official soldiery, or (if you please) the +aristocracy,--the South that had had power, and to whom power had taught +those truths of life, those dignities and fidelities of temper, which +power always teaches men,--this older South was the true basis of an +enduring peace between the sections and between the races." He regretted +that this old South was not enabled to come into force until after +Reconstruction because "a doubt was put upon its word given at Appomattox. +Its representatives were subjected to disfranchisement. Power was struck +from its hands. Its sense of responsibility was wounded and +confused."[135] + +This is a fine statement of a primary and outstanding truth in the +development of the South that began about the year 1880. The old South +did draw breath with the new. The permanent character of the South, the +forces resident in the South of earlier as of later years, were those +which largely made possible a complete change in viewpoint, which carried +through the measures of, if not indeed giving birth to, the potent +consciousness of a reversal of program. But, as Murphy failed to see +clearly, there is a radical distinction between the continuity of this +quality in the South and any continuity of its evidences in industrial +pursuits. The new South did not receive from the old South a heritage of +industrial tradition; what it received was a traditional and ingrained and +living social morality, not marred in its essential characteristics and +presence, and very likely even assisted, by the institution of slavery. As +again Murphy said: "... this sense of responsibility, deepened rather than +destroyed by the burden of slavery, was the noble and fruitful gift of the +old South to the new, a gift brought out of the conditions of an +aristocracy, but responsive and operative under every challenge in the +changing conditions of the later order."[136] + +In this apology for Murphy's view is splendidly apparent the best resource +with which to turn from the South that was to the South that is. + + + + +CHAPTER III + +_CONDITIONS PRECEDENT TO THE ERECTION OF THE MILLS_ + + +To understand the establishment of cotton mills in the South, it is +necessary to grasp the deeper impulses which actuated every policy +certainly from the year 1880 onward, continuing in only modified degree to +the present. Every phase of the movement for the building of cotton mills +was conditioned by motives at once tender and heroic, universal in their +applicability and too intimate in appeal to admit of more than passing +argument. In a study of the actual erection of factories, the hundreds of +problems that arose and the mass of practical detail attendant upon their +solving constitute, it seems to the writer, a hopeless or at best +profitless puzzle, unless it is clearly understood that these minutiae +point back to something elemental and primal which gave them character. On +the other hand, if this fact is recognized, the circumstances which +accompanied the setting of mills in operation, such as the securing of +capital, the obtaining of adequate labor, the selection of sites for the +location of buildings and the like, from the very coldness of the +subjects, and their unsentimental aspect as commonly thought of, strike +into peculiarly bold relief the purposes that lay behind them. When it +came to money-getting, psychical factors must be crystallized into +something very forceful and admitting of unquestioned faith. It is the aim +of the present paper to be an introduction to the study of the problems +involved in the setting up of cotton mills, by giving the antecedent +action, as it were, and by showing the motive force as it developed, +operated and concentrated. + +This responsible cause, catching the phrase from a writer of the day, may +be termed "real reconstruction". The impulse for it came over the South in +1880 like a great ground swell, translating itself into a thousand +activities and ramifications. "Real reconstruction" was spectacularly the +outcome of the defeat of Hancock by Garfield in the presidential election +immediately, but its roots run deeper and have their hold in the slow but +sure recuperation of the South from the devastation of the Civil War +through the troubles of radical rule, assisted by a brief breathing space +from the termination of carpet bag government in 1876, when the lesson of +fifteen terrible years soaked in thoroughly. It is sufficient here to say +that in 1880[137] the South suffered a change of heart, a revulsion of +conscience that was fundamental. The people turned on their heel, and +faced about to find a new future of the largest promise. + +A newspaper which before had bent every effort towards the election of +Hancock, the Democratic candidate for the presidency, as securing for the +South political independence and revenge for Northern mistreatment, a week +after his defeat printed an editorial headed "Our Refuge and Our +Strength", with these words: + +"... we have been defeated in the national contest. In the administration +of the national government for the next four years we need not concern +ourselves, for as far as possible our councils will be ignored. What, +then, is our duty? It is to go to work earnestly to build up North +Carolina. Nothing is to be gained by regrets and repinings.... It is idle +to talk of home independence so long as we go to the North for everything +from a tooth pick to a President. We may plead in vain for a higher type +of manhood and womanhood among the masses, so long as we allow the +children to grow up in ignorance. We may look in vain for the dawn of an +era of enterprise, progress and development, so long as thousands and +millions of money are deposited in our banks at four per cent. interest +when its judicious investment in manufactures would more than quadruple +that rate, and give profitable employment to thousands of our now idle +women and children. + +"Out of our political defeat we must work a glorious material and +industrial triumph. We must have less politics and more work, fewer stump +speakers and more stump pullers, less tinsel and show and boast, and more +hard, earnest work. We must make money--it is a power in this practical +business age. Teach the boys and girls to work and teach them to be proud +of it.... + +"Demand all legislative encouragement for manufacturing that may be +consistent with free political economy. Work for the material and +educational advancement of North Carolina, and in this and not in +politics, will be found her refuge and her strength."[138] + +The uselessness of attempting a political salvation as contrasted with the +logic of giving all energy to the building up of the South materially, +clearly shown in the passage quoted, occurs time and time again.[139] +President C. C. Baldwin, of the Louisville and Nashville Railroad, born in +Maryland but for many years resident in New York, and competent to take a +comprehensive view of the South and its problems, said in an interview +with the New York Herald in 1881, after the new program had gotten under +way: "The commercial men of the states fully appreciate the situation.... +They now see clearly how very little politics have done for them, and +seriously turn toward the real 'reconstruction' which active trade will +inaugurate. All the war issues are dead and buried except to a few +politicians who misrepresent their constituents and merely use the +language of the past to give them, personally, a passing prominence. True, +we hear a great deal more about the men who stand forth prominently as the +advocates of these dead issues than we do of the thousands of young and +energetic Southern men who are building cotton and woollen mills; who are +opening mines and starting iron, copper and zinc furnaces, or who are +relaying the roads between the Atlantic and the Ohio and the Gulf. These +men don't talk, they don't write books, they don't go to the Legislature +or to Congress. They speak, trumpet toned, in results, however. The people +of the South have suffered--it is not pertinent whether we regard their +sufferings as just or unjust--but they have put aside mourning and are +ready for work."[140] + +The Sumter, S.C., Southern voiced the same idea: "The Southern people, +outside of the professional politicians, care very little about Federal +politics. They are endeavoring to develop the resources of the South and +regain the broken-down fortunes left by the desolation of civil war. + +"So taking the past and the present as indices for the future, it is plain +to see that a dissolution of the Solid South will cut at the very roots of +all these wrangles between the North and the South[141] in which +sectionalism is involved."[142] + +"The people of the South are beginning to learn that the true road to +power is not through the White House, supported by a swarm of federal +officials", said a Tennessee paper in March of 1880. "They are learning +that solid wealth is power, and that wealth is attainable only by working +up their cotton and wool into fabrics and their ores into metals."[143] + +The clear-headedness of the following extract from an editorial which +appeared in the Columbia, S.C. Register, at the time the city was putting +forth every energy to realize a desire for cotton mills, is unsurpassed: + +"But if we lost the victory, in one sense, we have won it in another. We +have been taught what the South can do for itself if it wills to do it. If +we have lost the victory on the field of fight, we can win it back in the +workshop, in the factory, in an improved agriculture and horticulture, in +our mines and in our schoolhouses. + +"There is where our fight lies now, and the only enemies before us are the +prejudices of the past, the instinct of isolation, the brutal indifference +and harmful social infidelity which stands up in our day with the old +slave arguments at its heart and on its lips, 'I object' and 'You can't do +it'."[144] + +In the broken and all but disheartened condition of the South after +enduring the war, radical rule and defeat of political hopes, this +conception of another economic future, once it burst upon the +consciousness of the Southern people, amounted to nothing less than a +religion.[145] Every one of the old pangs added devotion to the new +purpose. The whole pride of the South seemed about to go to disruption, +and the imminent danger of this lent a passionate loyalty to the changed +program which appealed to everything that was best and noblest in the +people. + +The new spirit was strongest in North and South Carolina and in that +portion of Georgia contiguous to South Carolina. Distance from this region +as a center about marks the intensity of feeling and comprehensiveness of +grasp with which the impulse was voiced. Florida and Mississippi felt it +little, due probably to their position so very far South as to be still +submerged in misery; Virginia was only slightly affected and Maryland +hardly at all in the same sense as the middle South, because of proximity +to the North and difference of character, by reason of the absence of +cotton as the staple. North and South Carolina and the region about +Augusta, Georgia, gave the plan its first conception and its most +whole-hearted support because, it appears, North Carolina is by nature +resourceful and hardy above any Southern State, and South Carolina, +despite every discouragement, would have the heart to try again because +she is thoroughbred in a company of thoroughbreds.[146] + +Just as the philosophy varied in intensity territorially, so it varied in +degree within the same region. Some wished salvation through material +advance for the sake of the State; this was natural, as growing out of a +well-known loyalty of the citizens of Southern commonwealths.[147] + +Others with larger view proclaimed the new gospel for the whole South as a +section, rather adopting an attitude of aloofness toward the North, +wishing the Southern people to work out their great problem without +assistance from those who would be predisposed to meddlesome criticism. It +is true that reorganization for the South was the most national thing +Southerners could turn themselves to at that time, and in the judgment of +many still is, but speakers and writers often failed of just the most +fortunate expression of their purpose in that they did not strike the +national note very consciously.[148] + +It is something to have gone through what the South went through and come +out not dispirited utterly, not defiant against fate or enemies, not +forgetful of the past, but, remembering the worst, determined soberly, +quietly, thoroughly to do the fundamental thing and do it nationally. It +was left for Charleston more than all others--noblesse oblige--to speak +this greatest message: + +"The Southern people must be national themselves, in their aspirations and +conduct, if they would have the government truly national in spirit", and +have Garfield "President of the whole country, and not of a section, or +party, to have a government of 'the whole country', to be entitled to it, +we must think of the whole country as our own, and demand no more than we +are ready to give. It must come to this. In the near future the successful +leaders, South and North, will be those whose first thought is for the +Republic, men who are national in feeling and purpose; men who understand +that the political and social strength and safety of each State depend not +on isolation and separation, but on combination and union."[149] + +By the late fall and winter of 1880 the mind of the South was ripe for +progress and accomplishment. Perhaps the first gropings after procedure +struck upon the consideration that manufactures would add another profit +to the profit of agriculture. The big, general conception was first +grasped without refinements or modifications or drawbacks; it was received +with almost childlike simplicity and faith.[150] But it came to be +ingrained. "The cotton which now comes into Charleston and is sold here +pays commissions to the factors and brokers, and when shipped leaves +behind it the price of the drayage, compressing and storage. Cotton which +comes into Charleston and is manufactured here is doubled in value, and an +amount equal, at least, to the value of the raw cotton when it reached the +city boundary is distributed among the people of Charleston. This is the +simple key to the prosperity which invariably attends the development of +manufactures. Manufacturing gives additional value to raw material, and +this additional value goes into the communities where the manufacturing is +done. At present Charleston does nothing to increase the value of the +cotton which comes here for sale. It leaves us as it finds us. The city +lives on the pickings and scrapings.... + +"Cotton mills change all this. A bale of raw cotton worth forty dollars is +spun into yarns or cloth worth eighty dollars.... The stockholders and the +working people get the whole difference between the cost of the cotton and +the value of the yarns or cloth, except what little may be expended for +material that cannot be purchased here."[151] + +President H. P. Hammett, of the Piedmont Factory, in a remarkable address +before the State Agricultural and Mechanical Society and State Grange, of +South Carolina, to which reference will several times be made, after +describing the earlier absorption of the South in a single pursuit, and +the ills that grew from this, said: "A new condition of things and a +changed sentiment amongst the people prevail at present; with the changed +relations of society and institutions a sentiment favorable to a diversity +of pursuits has developed ... a disposition is manifested to develop the +many resources heretofore lying dormant or hidden.[152] Capital when +needed is furnished, and men of energy, enterprise and ability develop ... +the general sentiment of the people is to utilize all the facilities +within their reach.... Under such circumstances it is natural that the +public mind should be directed to the manufacture of their great +staple."[153] + +There were a score of reasons making this course seem plausible.[154] They +were advanced, scrutinized, at the South sometimes accepted with a grain +of salt, at the North not infrequently flatly and stoutly challenged as +absurd; they were patiently explained or difiantly, and not always with +the closest reasoning, flung in the faces of their objectors--but finally +they were proclaimed as gospel, and in this sign the South set out to +conquer. Of these beliefs is to be placed first and foremost the +conviction that, other things aside, manufacturing was most economical and +so logically belonged, at the source of production. Here is the doctrine, +given in all simplicity, and not without the force characteristic of +newspaper correspondences of that day: "Sir, it matters not what anyone +may say to the contrary, common sense tells us that other +things--machinery, skilled labor, motive power and facilities of +shipment--being equal, a cotton factory in the midst of cotton fields must +prove more profitable than the same concern a thousand miles from its base +of supply could possibly be."[155] Other factors there were--cheap labor, +unused water powers, abundance of wood and coal nearby, local market for +the sale of product, longer running time than in the North, a favorable +climate, saving in fuel and light, absence of damage to cotton by +compress, saving in bagging and ties, assistance to be given to women and +children much in need of work--all of them bore their part in focussing +the energies of the South upon that program which was to mean so much in +so many ways--the "cotton mill campaign."[156] + +The current passion for building cotton mills--it was nothing short of +this--was stimulated and guided by press[157] and platform in urging, +chronicling and praising advances. + +The Columbia, Georgia, Enquirer, after recounting the progress of the city +in spinning--it had 60,000 spindles--said: "These are the weapons peace +gave us, and right trusty ones they are.... The story the spindles tell is +one of joy to all, and show (shows) how rapidly we are climbing the hill +of prosperity."[158] The affectionate tone of this item from the Rock +Hill, S.C. correspondence of The News and Courier is unmistakable: "In +conclusion let me say a few words in regard to the 'pet' of the town, the +Rock Hill Cotton Factory. This factory is owned and controlled by the +citizens of the town, (except $15,000 in stock owned in Charleston). It +has a capital of $100,000, has over 6,000 spindles, with 1,500 more to be +added in a few days."[159] The Marion, S.C. correspondent of the same +paper a year earlier contributed this for his town: "Our wants: A bank, an +academy, a cotton factory, a comfortable room for passengers at the depot, +an iron foundery, and last, but not least, work upon our streets."[160] So +much did cotton mills come to be considered the natural signs of progress +that Raleigh made apology for not having a single mill. "There is not a +cotton factory in Raleigh, but there are not less than five large planing +mills, two foundries, two boiler factories ...", and there follows a list +of everything in the corporate limits, including schools and even +newspapers.[161] + +Under its caption, "The Cotton Mill Campaign", the active News and Courier +every few days listed new entries into the field of cotton manufacture. +The issue of February 8, 1881, presented a particularly large number of +items from different towns. The Newberry Herald exhorted the citizens with +reference to Charleston's achievement thus: "Cheer for Charleston--A +Movement all Along the Line. Charleston is in a fair way to have two +large cotton factories in a short while.... Camden is preparing for a +cotton factory. Hodges, Abbeville County, is preparing for a cotton +factory. Rock Hill has a cotton factory. Greenville has several cotton +factories. Newberry, the best location for a cotton factory in the State, +and the place most needing one is not preparing for a cotton factory, and +there is no present likelihood that she ever will." The method followed +here, of citing the advance of other places in mill building as an +incentive, was widely used, and not commonly with the rather complaining +tone of the above from Newberry.[162] + +That the spirit was in the air is clearly discernible in a Winnsboro +contribution: "Why does not Fairfield (the county in which the town of +Winnsboro is located) make the experiment? It is said that $15,000 will +set in motion over five hundred spindles, and continual additions can be +made." While recognizing that water power was difficult of access, steam +might be used, for there was plenty of cheap fuel for years to come, and +the Charlotte railroad offered easy communication with the world for a +mill located along its tracks. The Hampton, S.C. Guardian struck the note: +"Factories are springing up all over the State, and our people must not be +found lagging in the race of progress."[163] + +How the people were reaching out for cotton mills, with their attendant +profits and advantages, may be seen in this advertisement appearing in +the winter of 1881: "We will give to a Cotton Manufacturing Company, that +will organize and locate at Landsford, S.C., with a capital of $300,000 a +site, 20 acres of land and 3000 horse water power. Apply for particulars +to T. C. Robertson, Allen Jones, Rock Hill, S.C.; Wm. R. Landsford; Edward +McCrady, Jr., Charleston."[164] + +A little earlier the cotton mill campaign had extended itself to the point +of interesting class effort, for the most prominent German citizens of +Charleston organized a mill in a short space of time.[165] + +The cotton mill campaign had gotten well under way[166] when its further +progress was greatly facilitated and its successful outcome made plain by +the projection of a plan to display the resources of the Southern States +in an exposition at Atlanta. The scheme was first proposed in October of +1860, and the International Cotton Exposition was opened in Atlanta +October 5, 1881. The exposition, in organization, history and influence, +is inseparably bound up with the name of Edward Atkinson, economist, +publicist and manufacturer of Boston. He gave it its inception; in an +unselfish and magnanimous spirit he guided its beginnings and brought it, +by his advocacy and superintendence, to completion. He was "the father of +the Atlanta exposition."[167] In a sincere desire to see the South +extricated from the disorganization of the war and the years that +followed, he planned this method of showing the people what he considered +to be their true interest, namely, concentration upon better methods of +cultivating and preparing cotton for market and for manufacture. With a +fine comprehension of the most fundamental needs of the section in many +directions, he conceived the care of cotton between the field and the +factory to be properly the first concern of the Southern States, not +temporarily, but for all time. The Atlanta exposition he proposed as the +lens through which to focus attention upon this. + +But Mr. Atkinson, most singularly for a man of his grasp, penetration and +experience, had not reckoned upon the force of the enthusiasm for +manufacturing cotton, which, as has been shown, came over the Southern +people. That cotton mills were being built he could not but see; that they +were making profits he could not deny--but in the economic wholesomeness +and permanency of the factories he would not believe. In the International +Cotton Exposition he created a Frankenstein to amaze and frighten and +torment him. For once the resources, of the South were displayed in +visible, tangible form in reasonable compass, and once the people were +united upon an effort which should gauge their strength and possibilities, +the invitation, or, as some put it, the duty to manufacture the staple in +the fields where it grew leaped out as a fact more patent than ever. The +people had felt the strength that came from union in a common purpose, and +nothing could deter them from following the light that this brought to +them. Mr. Atkinson, who had acted in the best of faith and with great +ability, was surprised and chagrined; when he found that, while following +his lead in showing the necessity of more careful culture and preparation +of the crop for manufacture, the South, by the agency of the exposition, +was fascinated in going beyond his goal, and building mills to make up the +cotton for itself, he protested earnestly, and went to no end of pains to +turn the people from their course. But the horse had taken the bit in his +mouth, had glimpsed a broader highway open ahead, and the reins that had +directed him once were of no avail to arrest his career. + +Conscious of his New England milling and insurance interests, it is likely +that Edward Atkinson felt the South, which he had tried to help, +distrusted him. And though the fact of his connections, coupled with a +manner of addressing himself to the Southern people at times unfortunate +in its seeming superiority, and tendency to become impatient and didactic, +might easily have led the section to regard him with enmity, it is to be +remembered to the credit of the Southerners that they showed as great +charity for his, as they regarded them, short-comings of judgment, as they +held in esteem his friendship and constructive co-operation. The vision +which the South had caught rose superior, in almost all cases, to any +pleasure to be found in taunting those who differed in view, especially +when so much was owing to a man as belonged to Mr. Atkinson. His position +is one of the most important in the whole history of cotton manufacturing, +not only in the South, but in this country, and it is the most dramatic +and pathetic. He stood virtually alone after the exposition had run a few +months, protesting impotently against a new state of things, every +development of which seemed to cry the lie to his objections. His very +antagonism lent impetus to the current setting toward cotton mills for the +cotton estates. And, to make the sting even more poignant, instead of +looking upon his opposition to Southern cotton manufacturing as +representing a class of jealous industrialists at the North--and many +things there were to lend color to such a belief--the South was appealing +over his head to New England capitalists to come down and help erect +factories.[168] + +How Southern sentiment had grown beyond Mr. Atkinson's purposes for the +exposition is to be seen in the words of A. O. Bacon, speaker of the +Georgia House of Representatives, in welcoming a party of South Carolina +legislators and their friends to the Exposition three months after its +opening: "This exposition--marks an important epoch in the industrial +history of the country. It has aroused the South to the value of new +enterprises and of new methods of labor; it has awakened the North to a +realization of the boundless resources and enormous industrial capacities +of the South. It comes at a most propitious moment, for the South, in +sympathy with the quickening energies which excite the continent, is even +now trembling in the initial throes of the mighty industrial revolution +that surely awaits her. A great change is about to come upon us. 'In the +fabric of thought and of habit' which we have woven for a century we are +no longer to dwell, and a new era of progressive enterprise opens before +us."[169] + +The place of the Cotton Exposition in furthering the cotton mill campaign, +already attained to a healthy start, is seen in this from Clifton, S.C.: +"It is to be hoped the Atlanta Exposition will not take all the enthusiasm +out of our capitalists and enterprising men,[170] but that it will only +tend to a greater and more steady development of our resources. There are +new families coming in constantly (to the Clifton Mill) and the cottages +as far as completed are occupied, and still they come."[171] And again: "A +good work has been done, the benefits of which will be felt in every part +of the country. The New South takes a fresh start at the Atlantic +Exposition."[172] Here also is evidence of the very fortunate juncture at +which the exposition happened to fall. The show did much for the South +irrespective of its exhibits; indeed, before a shovelful of earth was +turned, a real service was rendered. It proved to the people that they +could organize and exert a force in common; the South was less individual +from that day. It demonstrated besides that the South had resources and +possibilities worth presenting to the world. Once the exposition was +opened, three distinct influences were brought to bear in carrying forward +the work already begun. The people of the South were shown for the first +time as a whole the implements of cotton manufacture, capitalists in +general were introduced to the opportunities of cotton milling in the +section, and, in visualizing and making more than ever evident the +industrial future, less effective reflex from the ultimate proposals of +Edward Atkinson and others of his belief was afforded once for all. + +The very day of opening, the exposition greeted crowds of visitors with +these words from Daniel W. Vorhees, of Indiana; "There is a far higher +remuneration than has ever been given by cotton yet in store for the +laborer, the manufacturer, the South and the entire country. In the midst +of the cotton plantations themselves there is a career for manufacturing +development such as the world has not yet seen. With coal, iron and timber +in perfection and inexhaustible, and water power everywhere, by what rule +of political economy should the Southern people send their cotton, at an +expense always deducted from its price, to distant sections and foreign +countries to be spun and woven? If the manufacturer in Great Britain, +transporting his cotton from India and the United States, can realize +substantial profits, why may they not be realized here...? We have seen +the manufacturer of New England, at a long distance from a productive base +of supplies, turn a sterile country into the seat of culture, refinement +and wealth. Why shall not the South put forth its energies and reap the +same and a far greater reward? Here the cotton grows up to the doorsteps +of your mills, and supply and demand clasp hands together. The average +exportation during the last ten years, from these wonderful fields to +England and other European ports, has been over 3,000,000 of bales per +annum; while to the mills of New England and other Northern states another +million have (has) been annually carried away from your midst, and from +the best manufacturing region on the globe."[173] + +So, even from the opening of the exposition, matters had taken a decided +turn toward cotton manufacturing for the South. After the fair had been in +progress three weeks, Mr. Atkinson and a committee from the New England +Cotton Manufacturers' Association came down for their initial visit. From +Mr. Hemphill's letter to The News and Courier[174] it is clear that the +New Englanders appreciated most those parts of the exhibit which had to do +with "ginning and preparing." Still considering all cotton manufacturing +to belong to the North, just as all cotton growing belonged to the South, +the verdict of the party on this first inspection was: "Nothing ever +happened in the history of the country to prove so adequately the identity +of the interests of the cotton grower and cotton manufacturer as this +exhibition." Thus were visitors coaxed to examine into the increased +efficiency and profit which lay in sending clean Southern cotton to +Northern manufacturers. + +Soon the situation demanded more drastic handling. Edward Atkinson, in a +set speech on the exposition grounds, stated his position clearly: "You +have depreciated every crop of cotton you have made at least 12 per cent. +by want of care and attention in ginning, baling, pressing and caring for +the cotton between the field and the factory. You can save half your labor +and add 10 per cent. to the value of your crop if you will use the new +tools and machinery here on exhibition and heed the words which I now +speak. + +"The Southern planter and farmer has no knowledge, as yet, outside of the +sea island district, of the merits of a true roller gin. Clark's cleaner +has just been introduced and is only known within narrow limits.... Now, I +am going to touch a tender subject--cotton manufacturing.... I have never +taken the ground that there were any climatic difficulties in many parts +of the South. The real difficulty is that the margin of profit is very +small on a very large capital, and unless you can work, in the long run, +on a very small margin you cannot succeed. These times are no +criterion.... May I say that the true preparation for success in cotton +manufacturing must be in knowing how to save the fraction of a cent.... +You cannot spin cotton when you do not know the difference between a cent +and a nickel."[175] + +The reception with which Mr. Atkinson's theory met is seen in an editorial +comment on his December address: "The future of the South is described +with great power in the ... speech of Mr. Edward Atkinson at the Atlanta +Exposition.... Mr. Atkinson is misleading only when invincible prejudice +keeps him from seeing clearly, and even Northern newspapers admit[176] +that he is wrong in his belief that cotton manufacturing, on a large +scale, will not pay in the South. The speech otherwise is suggestive and +instructive."[177] In a review of an article by Mr. Atkinson on "The Solid +South", appearing in the International Review for March, 1881, William E. +Boggs, of Atlanta, wrote: "If one so sincere as Mr. Atkinson in the desire +that the South shall flourish can so misunderstand the Southern people, +what must be the mental condition of those who have prejudice without +good-will? Mr. Atkinson is the father of the Atlanta Exposition, and is, +in his way, a true friend of the South."[178] + +There was one more condition precedent to the erection of cotton mills in +the South. The people of the section might come to a determination to set +up schools, run telegraph and telephone lines, construct railroads, stop +political quibbling and back-biting, and, above all, institute +manufactures as the surest release from a condition calling for the +strongest action; they might turn themselves wholeheartedly to the +building of cotton mills, calling forth every native resource and +ingenuity, enterprise and sacrifice, and these would avail much. But the +task was so huge in its proportions that sooner or later it must cease to +be a sectional matter, and not only was this necessary, but it was proper +that it should be the case. The North must be called upon for help. If +there are two facts in the building of cotton mills in the South which +stand out head and shoulders above all the rest, they are that the +Southern people, impelled by inner forces, undertook the work, and that +when it became apparent that outside capital and advice were needed and +could be had, these were welcomed gratefully.[179] + +There were certain forces which made for a national mind in the +South--certain external influences aside from the reasonings of the +choicer spirits. These bound the North and South together, and helped to +make possible the augmenting of Southern energy and resources by Northern +capital and experience. + +Just as the International Cotton Exposition at Atlanta lent impetus to the +sectional furtherance of the cotton mill campaign, so the shooting of +President Garfield, his lingering illness through three months, and his +death, occurring at approximately the same stage as the exposition, may be +thought to have done much in preparing the way for receiving Northern, +and, indirectly, European capital into the South. + +"This (the South) is a region where manliness is held in superlative +honor", said the Charleston paper so often quoted, "and assassination is +loathed for its cowardliness even more than it is abhorred as an offence +against law and society.... There could be no doubt then that Guiteau's +dastardly act would be heartily denounced--and there was reason to look +for some special indignation on account of the exalted official position +which Gen. Garfield holds. It could not have been foreseen, however, that +the outburst of sympathy and condemnation would have been universal in its +manifestation, affectionate in tone and National in spirit. South Carolina +does more than reprobate assassination. The people of the State, the whole +people, resent the deed because the victim is the President of the United +States, the Chief Magistrate of our country.... The process of reunion has +gone on with a rapidity which few appreciated. All the elements of cordial +friendship and of national good-will were there. It needed only the threat +of a common misfortune to give shape and voice to the recreate but sturdy +love of the Republic."[180] + +The following appeared with the announcement of President Garfield's +death. "In the history of the United States, President Garfield will be +remembered as he whose nomination by the National Republican Convention +strangled imperialism in its cradle, and as he whose assassination was +quickly followed by an outburst of sorrow and sympathy which manifested to +the North the true nature of the South, and do more than the arguments, +the prayers and the common intercourse of thrice five years to bring +together the peoples whom war had made separate. By the shedding of blood +the North and South were sundered; and through the shedding of blood they +are united.... In his wounding unto death passed away the alienation, the +estrangement which prevented this country from being truly one, although +men and millions had made it in appearance indivisible."[181] + +Railroads, both because they allowed sentiment to become solidified in the +South, and afforded great currents of intercourse with the North, were of +first importance. And in the railroads, with the encouragement they gave +to manufactures, and the stability they lent to trade in furnishing a +strong commercial backbone,[182] appear early hints of the unifying force +of Northern capital itself. A railroad, in which Northern men chiefly were +interested, which proposed running up the James River Valley to Clifton +Forge, was hailed by Richmond as bringing new prosperity. "We welcome the +Northern gentlemen who are to co this invaluable work for Virginia, and we +trust and believe that they may never have cause to regret the investment +of their capital here. Every such investment is a new band around the +States of the Union binding them more closely together."[183] + + + + +CHAPTER IV + +_CAPITAL_ + + +In the chapter on the conditions precedent to the erection of cotton mills +in the South the attempt was made to show how the stage was set for the +actual building of factories. The impulse for manufactures, and especially +cotton mills was traced through its several more or less definite periods +of development. The first of these was the recoil from the +Hancock-Garfield election; the failure of the South's determined hopes for +the success of the Democratic candidate, which would mean, it was thought, +freedom from political insult and economic servitude, and an opportunity +to wreak vengeance for the wrongs of radical rule, virtually marked the +death struggle of the old exclusive social philosophy as the animating +force in the South. This had been bred by the ante-bellum regime, called +into concrete trial by the civil war, and intensified in character through +each year of Reconstruction, and through each year proven more untenable. +The questioned election of 1876, when Tilden was thrown out under +circumstances peculiarly galling to the South, set the section as a unit +and unalterable for the next four years in a passionate and dogged +resolution against all odds to make a Democrat president in 1880. When +Hancock was beaten in a fair fight by Garfield, the South was thrown +prostrate; devastated by the war, pillaged and ridden in Reconstruction, +to gather all her forces for a final defiant stand and have her last poor +hope dashed was tragic. But this very extreme of bitterness was the +South's salvation. + +The leaders, with remarkable accord and almost simultaneously in all +quarters, after recovery from the first inescapable shock, rallied to the +situation like heroes, and called their less valiant brethren after them +in a new resolution to build up another South founded on democracy and a +purpose to employ every material resource for the building of a foundation +which would bear the weight of the different structure that had to be +erected. + +Words unfamiliar in the South were heard on every hand; in this proposal +of "real reconstruction" notions as novel as they were salutary were +involved. Communication between States and parts of the same State, by +railroads, telegraph and telephone; schools, churches, diversification of +crops, deepening of harbors and rivers, municipal pride and civic reform +were urged; it was demanded that politics and political wrangles be +dropped forthwith, and that the section set about the course of material +advancement as the only method of asserting rights against the North, and +the only means of bearing her share of the national burden. + +In the canvas of resources which this impulse brought, cotton mills were +pounced upon as affording the readiest and most permanent instruments of +success. It has been seen how platform and press and people concentrated +their interest and attention upon the "cotton mill campaign", every new +factory being hailed as another banner lifted in the fight. Two great +impelling motives were patriotism--either local, state, sectional or +national--and humanitarian considerations. These were held up in the +plainest view of all, and impressed unceasingly. It was as a means to an +end that cotton mills were argued for; their advocacy was grounded in the +most splendidly fundamental beliefs and aspirations. + +Descending from these lofty ideals, the practical inducements to the +building of cotton mills as they were brought before the South and the +country at large have been pointed out. It was shown that over and above +all others stood out prominent and unquestioned the fact of the presence +of the raw cotton. Proximity to the material of manufacture was felt to +constitute the chief invitation to go into the textile business in a +systematic way. But there were other arguments used, running out to great +length--of these the leading one was an abundance of cheap and intelligent +if untrained labor crying for employment, and this has been dwelt upon in +its phases. A store of unused water powers, favorable freight rates, low +cost of living, suitable climate, the supply of inexpensive fuel, and the +innumerable gains to the community were made the grounds of advocacy of +cotton mills. Estimates of the expenses of erection, maintenance and +operation of hypothetical factories of all sizes were worked out in +elaborate detail, the saving over manufacture of cotton in New England or +in Old England being remarked at every juncture. + +It is a nice problem to determine how far these advantages possessed or +thought to be possessed by the South were aired as a result of deep-lying +motives of patriotism and philanthropy, and to what extent they were +themselves the exciting forces behind the crystallization of these +motives. Did these superiorities of the South come to light mainly because +the South had made up its mind to remake the section, or did the South +enter upon a course of development because it possessed certain +outstanding advantages? To strike a balance here would be an interesting +speculative venture. But, however, this may be, it is reasonably clear, as +has been previously pointed out, that when it came to putting their money +into cotton mills, capitalists, North and South, acted usually upon the +assurance given them in the physical assets obtaining. To the extent that +general impulses placed in public view definite, concrete and tangible +reasons why cotton mills could be made to pay dividends, the undercurrent +was indirectly responsible for the erection of the factories. + +It is not the purpose of the present paper to set out in any detail the +unique resources of the South, either as they constituted the magnet for +capital directly, or reacted through the general cotton mill campaign to +swell the tide making toward a new character for the section. They deserve +separate treatment, especially since they occupy so central a position and +have such sensitive contact with the other forces present. Whether, +however, physical advantages existing at the South crystallized out of an +original philosophical impulse, or operated, more or less unconsciously in +the Southern mind, to induce that impulse, it is perfectly clear that the +movement for the building of cotton mills in the South originated with the +South, and that at least contemporary with the attraction of capital, went +an advocacy of the establishment of cotton factories that was consistent, +permanent and practically universal. + +From the very nature of the movement, Southern and in most cases strictly +local capital was first appealed to, both by the actual projectors of the +mills and the public organs which interested themselves in the +enterprises, and local capital was the first offered. It might be +questioned whether outside capitalists, perceiving in the Southern +manufacture of cotton a favorable field of investment, did not come in as +a result of the publicity of the cotton mill campaign, without waiting for +either solicitation from the South or proof of the success of the new +plants erecting in that section, but it will be shown that, as a matter of +fact, this was not the case. At the time the South felt herself to be +isolated, cut off from the national life, discriminated against by +Congress and the country at large. In the beginning and in essence +continuing to the end, the building of cotton mills was a sectional +matter. It is not to be said that outside capital was an afterthought with +the promoters of the Southern cotton mills, but every circumstance +surrounding the movement, and every instinct of the hour, argued for the +exhaustion of native resources before help should be sought from without. + +The story of how capital was secured for the cotton mills of the South may +be commenced with a sentence from a North Carolina newspaper which strikes +the key-note: "All questions of domestic economy, and especially those +involving the capital of our people, whether in the shape of labor or +dollars, will necessarily be canvassed and scrutinized very closely in +their bearings on our material progress."[184] + +The nature of the appeals made to local capital will best appear by +looking at some of them individually. + +Patriotism, a consciousness of unity, and appreciation of the dynamic +character of manufactures in the South, appear in a solicitation printed +on the editorial page of the Charleston News and Courier for capital for a +scheme for the development of water power and cotton mills at Columbia. +The enterprise had a peculiarly appealing history, which will be +recounted in considering the response of domestic capital. After a summary +of these facts, the article concludes: "The work--is one of great +magnitude and involves expenditure beyond the ability of this community +(Columbia). Nor is the interest merely local, but reaches out to every +part of the State. We call, therefore, upon all, from the mountains to the +seaboard, to take part in this great central development, involving not +only the prosperity of our capital, but, in its ramifications, affecting +the prosperity of the entire State."[185] + +A week earlier, in a Columbia dispatch to the same paper, Charleston was +advised that books of subscription to the stock of the company would soon +be opened there, and the argument for investment was placed on more +practical grounds: "If the recent subscriptions to factories have left any +money in the pockets of the people there (Charleston), it had better be +saved for this purpose--a franchise like this is not obtained every +decade."[186] + +Implying that when the South should make a start in cotton manufacture, +outside capital would flow in, but impressing particularly the need for +the entrance of domestic interests into the field, a statement of H. T. +Inman, capitalist, relative to the plan to purchase Oglethorpe Park, the +site of the Atlanta Exposition, from the city authorities and use the +buildings for cotton factories, is striking: "We must demonstrate what we +have been saying, that there is money in manufacturing in the South. If we +wait for others to come here and do it, it will never be done."[187] The +argument that the South had faith in her ability to manufacture cotton +profitably, as proved by putting her money into the projected mills, was +frequently used in soliciting subscriptions at the North, and more +frequently Southerners were urged, as here, to go into the ventures, with +the specific reason that by so doing Northern capital would be induced to +join in. + +Money accumulating in bank at low rates of interest was often made the +basis of observations on the great gain from manufactures, and was pounced +upon as evidence of lack of sympathy with the spirit of the time, which +was grounded in the deepest needs of the people. In such cases the cotton +mill campaign and the gathering of capital as a matter of practical +concern usually overlap. An instance quoted in another place is typical: +"But with all its (North Carolina's) varied and splendid capabilities it +is idle to talk of home independence so long as we go to the North for +everything from a tooth pick to a President.... We may look in vain for +the dawn of an era of enterprise, progress and development, so long as +thousands and millions of money are deposited in our banks at four per +cent. interest when its judicious investment in manufactures would more +than quadruple that rate...."[188] Several months later the same +paper[189] instanced the success of Edward Richardson, of the firm of +Richardson & May, cotton factors of New Orleans, in running, in addition +to ten or twelve plantations producing 15,000 to 18,000 bales of cotton a +year, a nest of factories with 18,000 spindles, 400 looms and 800 hands in +the town of Cresson, which he built. He was said to be worth more than +$15,000,000--"all accumulated in the South, the poor South." The closing +remark is significant: "His ... accumulations are but the results of +forethought, enterprise and nerve. He has no heavy deposits in bank at +four per cent." + +This same galling fact of bank deposits lying relatively idle when they +might be used to further the plans held so much at heart was lamented in +cases where it hindered the cotton mill campaign, or the taking of initial +steps toward realizing a desire for a mill; but it was made more galling +where a venture, properly launched, stood still because the moneyed people +held themselves aloof. In distinction to the position of Newberry, South +Carolina, where there were "numbers of people ready to aid in the +enterprise, convinced as they are that it will be a profitable investment, +but ... nobody to take the lead,"[190] was Chester another town in the +same State, of about the same size. In February of 1881, after the cotton +mill campaign had gotten a fair start, the Chester Bulletin commented: +"Just now there is a widespread and deep feeling amongst our people +throughout the State to foster the manufacturing interests of the country. +More than a year has elapsed since our people felt beat a pulse of +enthusiasm for the home industries. (Reference was here had to the +chartering by the Legislature of two mill corporations which attracted +almost no subscriptions.) There is money enough in the county to start the +hum of three thousand spindles. The large amount of personal deposits in +bank indicate too truly the lack of confidence in home industrial +enterprises."[191] + +It may be well to consider a typical comprehensive appeal for domestic +capital. For this purpose a leading editorial in The News and Courier +asking support for the Charleston Manufacturing Company is particularly +useful.[192] In the first place, this company marked the entry of +Charleston into the field of regular cotton manufacture, and the +enterprise took firm hold on the interest of the city from this cause. +Also, South Carolina experienced the cotton mill campaign as a movement +more highly conscious than in any other State; Charleston was the center +of the campaign, as spiritual leader no less by reason of her sufferings +than her heroism, and the News and Courier was the mouthpiece of +Charleston. + +To begin with, the editorial, headed "Everybody's Opportunity", sets forth +clearly the division of arguments: "The Charleston Manufacturing Company +addresses itself to the citizens of Charleston in a double capacity: +_First_, as a means of making money for the stockholders. _Second_, as a +means of enlarging the common income, stimulating the growth and +increasing the prosperity of the city." + +Proceeding under the first of these heads, it is pointed out that the mill +will succeed because the management, in the hands of men known for their +business sagacity and activity, will be both economical and progressive. +There is no doubt that, along with other appeals to local resources, +confidence in the projectors of a cotton mill, as personal acquaintances +and men whose whole lives were familiar knowledge in a small community, +had a powerful influence. Next it is shown that the profits of the South +Carolina mills for the year 1879, probably the last available for +citation, warranted a belief that the Charleston mill would succeed, +having at least as good a chance as county plants. These profits had +ranged from 18 to 25-1/2 per cent. It is explained that steam power will +be used, but that it is used in England, and that the trend of the better +opinion is toward steam power rather than water power, as being more +reliable and capable of better control. The approval of steam by the +superintendent of the Camperdown Mills at Greenville in the same State, on +these grounds and also because he knew that the Northern mills using steam +made larger profits than those using water, is instanced. It is evident +that the necessity of employing steam power, instead of being able to use +the water power of the interior, was a hard obstacle to get over, for +recurrence is several times had to it in the course of the argument, and +the great advantages of coastal location are stressed as a +counterbalancing consideration. + +The favorable facts that the Charleston mill will be able to buy cotton +all the year round, and so avoid carrying a heavy stock, that samples and +tops may be utilized, that the rates of insurance will be low and water +freights nominal, and lastly that no cottages or schools or churches will +have to be built, city location avoiding this source of expense to a +provincial establishment are recited, and the prospective stockholders are +reminded that by State law the whole of the capital invested in +manufactures is exempted from taxation for ten years. + +On the second account, of increasing the prosperity and welfare of the +community, it is shown how every $228 invested in cotton manufactures in +South Carolina the year before supported one person, and how when people +earn they have something to spend; house rents will go up as a result of +the new demand. Besides, the State at large benefits from a new means of +support for the people. The very potent argument of the addition to value +which manufacturing brings about is next employed. "At a low estimate the +value of cotton is doubled by the conversion into yarns." If the +Charleston Manufacturing Company uses 10,000 bales of 400 pounds a bale, +at 10 cents per pound, $400,000 will be returned to the growers of the raw +cotton. When made into yarns the cotton will be worth $800,000. Every +dollar of this $400,000 difference, except what will be spent for +materials not to be precured locally, will be disbursed in Charleston in +wages and dividends. "It is evident that the building of half-a-dozen +cotton factories could revolutionize Charleston. Two or three million +dollars additional poured annually into the pockets of the shop-keepers +and tradespeople would make them think that the commercial millenium had +come." The appeal concludes: "In a two-fold sense, then, the Charleston +Manufacturing Company is entitled to support. For the stockholders it will +earn money. To the city it will give the life and vigor which nothing +short of manufactures will assure us."[193] + +An editorial in the same paper the next spring encouraging subscriptions +to the capital stock of the Columbia and Lexington Water Power Company, +the enterprise already mentioned, which was opening books in Charleston, +urged the two benefits already noticed, profit flowing from physical and +economic advantages, and a social gain resulting from the indirect +bearings of the plant.[194] The value of the franchise, the offer by the +State of more than 146,000 days of convict labor at a low wage, the rebate +of taxation on plant and improvements for ten years, and estimated +earnings of 17 per cent, on a total outlay of $431,607, or running as +high as 25 per cent. on an outlay of $725,000, were held up on the side of +material things; in dealing with the gain expected to result to the State +at large, the influx of immigrants and the employment of thousands of idle +women and girls, already present, for whom it was so hard to find +profitable work, were pointed out. + +Not unusually, in place of the larger social sense, local pride as such +furnished the point of departure in the proclamation of an enterpriser to +his fellow-citizens. It is to be feared that sometimes this was made the +means of demegoguery, the appeal to local spirit being linked with a +disparagement of Northern assistance merely for effect. Instances of this +will appear when the attitude toward outside capital is considered. + +The case of Mr. Winn's scheme for Sumter illustrates the personal appeal +to local pride. It is to be noticed that he reduced everything to an +individual and immediate basis. He spoke through the paper of the town, +the Sumter Southron:[195] "I am now engaged in getting up a mill of 2,500 +spindles at this place. I do not expect to seek a dollar of foreign +subscription, but I want our own citizens throughout the county to be +interested in it and to help me build and operate it." There follows a +description of his findings at several nearby mills which he visited. One +is inclined to believe that he paraded the facts to impress his audience +in a general way, rather than to appeal to strict business sense. He cites +the earnings of the mill at Charlotte, North Carolina, owned by the Oates +Brothers. With running expenses of $60, "we have the neat little profit of +$155 per day". The Sumter mill could save haulage, and use one-third of +its cotton not packed, thus saving in bagging and ties. A concluding +sentence indicates his frame of mind: "Will a mill pay in Sumter? Why +not?" + +A statement of the advantages possessed by a mill already in operation as +contrasted with those which would contribute to the success of a proposed +mill was a favorite method of argument. Thus the Kershaw Gazette said: +"Let us realize that what is good for Charleston in this respect is better +for us. (Reference was had to the Charleston Manufacturing Company.) She +has to use steam as a motive power, which, in the form of coal, has to be +brought long distances and at great cost. We have but to harness the +magnificent water-powers which are slipping idly by us, and the thing is +done. In Charleston, it is the investment of capital on hand, seeking +profitable employment. With us, it will be the creation of capital itself; +for we venture the assertion that one hundred thousand dollars invested in +a cotton factory at Camden would develop interests to more than double +that amount." The saving of three-fourths of a cent per pound in the +freight between Camden and Charleston would in itself bring a fair +dividend upon the capital invested, it was said. "And yet Charleston +expects to, and will, make money by what she is about to do. Let the +people of Camden and of Kershaw County be up and doing in this +matter."[196] + +These, then, were the grounds upon which domestic and more strictly local +capital were solicited. It is proper now to notice with what success the +appeals were made. + +In the most respectable trade summary published by any newspaper in the +South, it was stated in September of 1881: "The industrial feature of the +year is the rapid extension of cotton manufacturing in South Carolina in +common with other Southern States (naming the plants and the capital +invested in or subscribed to each.) A most gratifying feature connected +with the establishment of cotton mills in the South is that the great bulk +of the capital employed in their operation has been furnished by Southern +people. Southern capitalists are putting their shoulders to the wheel.... +More than three-fourths of the capital invested in the cotton mills since +the war has been subscribed by our own people...."[197] + +The conclusion of Mr. Thompson after a review of the rise of cotton mills +in North Carolina is interesting: He says that capital for almost 200 +mills that grew up in twenty years "has come chiefly from a multitude of +small investors within the State"; again, "The development of the cotton +industry in North Carolina is a striking instance of the manner by (in) +which a people in poor or moderate circumstances can establish +manufactures." He gives credence to estimates by those he considers best +informed that 90 per cent. of the capital for mills in North Carolina has +come from residents of the State. "The industry is distinctly a home +enterprise, founded and fostered by natives of the State."[198] + +The Rock Hill Cotton Factory was spoken of as the "pet" of the town. Its +$100,000 of capital stock was owned in Rock Hill, with the exception of +$15,000 held in Charleston.[199] + +Most of the stock of the Belmont Manufacturing Company, the enterprise +projected by Mr. Winn in Sumter, already noticed, was taken in the town, +and the few thousand dollars needed to increase the capacity above 2,000 +spindles would come from Charleston, where President Winn was soliciting +support.[200] + +The experience of Yorkville, another little town in South Carolina, is +interesting, especially for the naive way in which it was related.[201] +"... the 'Cotton Mill Campaign' is progressing satisfactorily in +Yorkville. We heard an old citizen remark some days ago that he had never +seen the town so thoroughly aroused and united.... Yorkville to all +appearances is moving forward with a determined purpose to put into +successful operation a cotton mill.... The shares have been placed at $500 +each, and up to this writing about $25,000 have been subscribed. I would +state that this amount has been raised within the limits of the town. A +prospectus will be forthcoming this week and the doors will be thrown open +to citizens generally of the county who may be able and disposed to assist +in carrying forward the project." + +A similar instance is that of Walhalla, South Carolina, a very small place +indeed. The people began to talk about a cotton manufactory, and at an +informal meeting of a few of those interested nearly $10,000 was +subscribed. "It is believed that as much as $25,000 will be subscribed in +that neighborhood, and if the people of the county will join in the +enterprise as much as $50,000 might be made available."[202] + +A typical notice is this one: "The enterprising citizens of the new town +of Gaffney City have subscribed $40,000 towards building a cotton factory +at that place."[203] + +Columbus, Georgia, was held up to praise for her loyal support of the +cotton manufacturing industry. Before the war she was a little Lowell, it +was said. The Federal army captured the place in 1865 and burned 60,000 +bales of cotton and all the mills. "The very heart of the city was burned +out, but nothing could extinguish its indomitable spirit." In fifteen +years the mills had been rebuilt until they were taking annually nearly +17,000 bales of raw cotton, which was almost trebled in value by +manufacture. "But the proudest boast of Columbus is that she rebuilt her +mills by her own aid and money."[204] + +The statement of a railroad man in the New York Herald is valuable: "Mills +for the weaving of the coarser cotton fabrics are now in successful +operation in Tennessee, Georgia, Kentucky and several of the Atlantic +Coast States, all of which have been built by native labor, mostly with +local capital and are managed by Southern men."[205] + +The Clifton Mill near Spartanburg, furnishes a fair example of the +distribution of holdings of the capital stock of a larger enterprise. The +joint stock company owning the mill operated under a special act of +incorporation of the Legislature, exempting the property from taxation for +a period of years, and relieving the stockholders of personal liability. +The shares were of a par value of $100. and aggregated $500,000 of which +$250,000 was paid in. The stock was held mostly in Spartanburg, +Charleston, Boston and Baltimore. Spartanburg capitalists owned $200,000 +worth of the stock, Charlestonians $150,000, and $50,000 was held in +Boston.[206] To make the capital stock $500,000 most of the original +stockholders had doubled their subscriptions.[207] + +For a factory near Gaffneys, South Carolina, which would need $500,000 +capital stock to the amount of $200,000 would be subscribed for in Chester +County, it was thought, and for the remaining $300,000 the North would be +looked to.[208] + +Together with large subscription to the stock of the Atlanta Exposition +from the North and East, went an early subscription of $20,000 in +Atlanta.[209] + +While it might be considered under the heading of the cotton mill +campaign, or denominated "Southern enterprise", I believe it will be most +interesting to relate at this point briefly the facts in the Columbia +canal scheme, as illustrating how domestic capital threw itself into the +situation in which the South found herself in 1880, and the years +immediately following. It is especially instructive to notice how Northern +enterprise, while, so far superior to Southern initiative at all times +before, after 1880 failed where in the South sometimes native energy +succeeded. + +Columbia, the capital of South Carolina, is located at the falls of the +Congaree River. Today there is a canal of about three miles in length, 60 +or 75 feet in breadth, terminating at the lower part of the city. At the +end of the canal is a duck mill. In 1868 the Messrs. Sprague, +manufacturers of Rhode Island, took up a plan of developing this water +power at Columbia, but "in consequence of their misfortunes, failed", and +the whole matter of the canal passed to the hands of the State Canal +Commission. Some prominent Columbians, hoping to revive the project, +contributed money to the employment of one Mr. Holly, a first-rate +hydraulic engineer of Rochester, New York. Mr. Holly was making surveys +and progressing satisfactorily when, after three months, his engagement +was discontinued. The reason for this was that Thompson and Nagle, +engineers of Providence, on a tour of inspection through the South, were +attracted to the water power at Columbia, and Mr. Thompson appealed to the +State for franchises, in which appeal he was supported by the citizens of +Columbia who had helped promote the modest work under Mr. Holly. On +February 10, 1880, the final contract between Thompson and Nagle and the +State Canal Commission was entered into; by its terms the engineers were +to have the use of 200 convicts for three years, and at the expiration of +this time they were to have developed at Gervais Street 15,000 horse power +of water power, and have in operation a cotton mill of at least 16,000 +spindles. + +Thompson and Nagle thought the necessary capital could be had at the +North. They failed to secure it, and attributed their failure to the +turmoil of the presidential campaign which was raging. Though this was +probably a valid basis for the appeal to the Legislature for an extension +of the rights granted them, the application for extension was denied. At +this juncture, modifying the scope of the plans somewhat, the foremost +citizens of Columbia took up the matter themselves, and organized the +Columbia and Lexington Water Power Company to bring about the +development.[210] + +Nightly meetings were held of those interested in the purchase of Mr. +Thompson's charter. In one hour eleven subscribers gave $5,000 +each--$55,000--toward the amount.[211] A few days later the subscriptions +in Columbia had reached $117,600, and the expectation was that the sum set +to be raised in Columbia--$125,000--would be exceeded.[212] + +Mention has been made several times of the Charleston Manufacturing +Company. At the end of the first day $120,000 of its capital stock had +been taken.[213] A little later the subscriptions to the stock had become +$200,000 and more, mostly "for small amounts, which is what is desired. At +the present rate the whole capital required will soon be subscribed." On +July 6, the News and Courier had these two editorial paragraphs, the +justifiable satisfaction pervading which is not to be mistaken: "We are +authorized and requested to say that the whole of the stock of the +Charleston Manufacturing Company, being half a million dollars, has been +subscribed, and that the books are closed. It is useless, therefore, to +continue to send in subscriptions. + +"We believe that more than three-fifths of the whole capital stock are +held in Charleston, so that right here will come the bulk of the direct +profit by the working of the company...." + +But before the Charleston Manufacturing Company had completed its +organization another corporation had come into existence. This was a mill +company promoted and most largely subscribed to by the Germans of +Charleston, headed by Captain Tecklenburg. Not much was said about the +concern in the papers, but of its $100,000 of capital stock, $75,000 were +subscribed between January and May of 1881. This Palmetto Manufacturing +Company, as it was called, was apparently, the most restricted in its +stockholders of any mill that had been projected in the South to this +time. + +Little towns, villages almost, did not fail of local enthusiasm and +capital in small amounts.[214] In January of 1882 Fort Mill, in York +County, was agitating the building of a cotton mill there, and $50,000 was +set as the amount of stock to be secured.[215] Chester, a little earlier +concluded her size would compel her to produce $300,000 for a mill within +her borders.[216] A gentleman of Griffin, Georgia, offered to subscribe +one fourth of the capital necessary to start a mill there.[217] + +Having seen the character of the arguments used in attracting native +capital to the Southern cotton mill projects, and the extent of the +response to these appeals, it is next necessary to turn to the other +source of assistance--outside capital. Practically this may be termed +Northern capital, although Englishmen interested themselves in the +Southern ventures, and much money came from what were strictly termed, the +Eastern States. In the minds of the people of South Carolina, North +Carolina, Georgia, Alabama and those States, capital stock of a Southern +mill held in Baltimore would be classed as appertaining to the North. + +It is proper first to consider the attitude of the South toward Northern +capital; second, the appeals made to Northern capital; and third, the +effect of these appeals or the response of them. + +In many aspects the rise of cotton mills in the South was less an +industrial development than a subtle drama, powerful in its great motives. +As William Garratt Brown has said of the history of the Southern States +in their struggle upward after the war, it is not only to be studied with +diligence of research, but is to be viewed with passion. The story of the +cotton mills is filled with elemental emotions; the moving characters are +splendid, clear-cut dramatic types; there are the villain, the hero, the +schemer, the lover of his fellow men. The vices and virtues take their +part--self-sacrifice, jealousy, hate, charity, revenge, bravery, honor, +patriotism. + +The first act of the drama is constituted in the defeat of Hancock and the +magnificent refusal of the South to be baffled--the oath to rebuild her +shattered fortunes. The actors leave the stage with hope filling the +future. The curtain rises on the second act to discover the chief spirits +of the South setting systematically about "the cotton mill campaign"; +their brethren converted to a belief that manufacturing the staple would +transform the South, they turn in entreaty to their fellows for support, +and the answer is loyal and gallant. + +The third act opens with a situation which tests the greatness of the +players' faith in what they profess. Domestic resources exhausted or +exhausting, or slow in response to the need, should the object for which +they were striving be lessened in its meaning, importance and +desirability? Should the cotton mills which were to mean so much be +restricted to the means of the South, urged to the front by a splendid +pride and devotion? Should the _esprit de corps_ which animated the +Southerners, and the cheerfulness of their co-operation, with all that +inspired these, when they failed of further effect, be considered to set +the natural and proper limits to expansion? + +Was this to close the action? Or was the South, remembering her vows, to +cling to her ambition undiminished? In spite of wounds yet fresh and +burning, which in the name of pity and honor and self-esteem cried out to +be nursed and comforted at home, could the South face again her enemies, +and this time not just to challenge, which was hard, but to entreat, which +was hardest? Would the South rise superior to pride, and be content with +nothing short of the fullest heroism? Would she go to the North for +capital for her young cotton mills? + +It was a silent struggle with herself. Little was uttered, but fundamental +emotions were at play. When she decided to appeal for assistance in a work +which she knew to be right, the climax of the drama had been reached. The +crucial test had been endured, and the South had emerged triumphant. + +As has been said, few lines are there to indicate the feeling. It is +largely dumb show. But we may look at the expressions that did occur to +show the attitude of the South toward the question of Northern capital. + +The following manifesto is significant, involving as it does recognition +of the necessity for a modification of political views if capital to be +invested in the South, in the eyes of the North, was to be made safe: "In +this state (South Carolina) we need capital and less party and +politics.... Such men as Gould, Vanderbilt and Plant have invested +millions of dollars in our railroads, manufactories and other enterprises, +and have been remunerated in the face of a 'Solid South and a Solid +North'. It is useless to say that millions have been driven off from like +investments on account of personal whims and jealousies among prominent +politicians in both parties. _Can the South afford to remain solid?_ This +is the great question of the day, and it can be answered in the +negative.... We want all the capital possible to develop our hidden and +inexhaustible resources...."[218] And again: "So long as we have section +unity in politics in the South its material prosperity will be checked and +an absolute injury will be sustained through its entire commercial and +agricultural dealings by exciting distrust of capital.... So taking the +past and the present as indices for the future, it is plain to see that a +dissolution of the solid South will cut at the very roots of all these +wrangles between the North and the South in which sectionalism is +involved."[219] + +The News and Courier wished to accord to every dollar of Northern capital +invested in the South the same credit as was felt to be due home capital +likewise contributed to the building up of the section. "Outside capital +... is beginning to seek this Southern field to aid in a more rapid and +thorough work of restoration of dead or dormant enterprises. This movement +needs a wise encouragement by public and private approval. Some of that +credit which was accorded to the man who caused an additional blade of +grass to grow should be given to everyone who affords facilities to +manufacture an additional boll of cotton, or to carry it and other produce +to market."[220] + +A gentleman connected with the International Cotton Exposition said: "We +people of the South should embrace every opportunity which, like the +opportunity afforded by this Exposition, will bring among us intelligent +and interested observers of our industrial condition, resources and +aptitudes. We have in the midst of us the raw material, so to speak, of a +magnificent prosperity. We lack knowledge, population and capital. These +may be slowly accumulated in the course of years, or they may be rapidly +by well directed efforts to obtain them from beyond our own borders. We +advocate the latter plan."[221] This is as business-like as anyone could +desire. + +In an interview with the Atlanta Constitution, Francis Cogin reviewed the +cotton manufacturing situation in Augusta, reciting the profits and +asserting that the Southern mills had an advantage over those of the North +such as would allow the former to earn dividends at a time when the latter +would not be making a dollar. He concluded: "The future of cotton +manufacture in the South will be limited simply by the good sense and +courtesy of our own people. If we invite capital, make it safe here, and +welcome those who bring it, we will get all we want."[222] The element of +safety, here remarked, meant frequently safety to be brought about by +political arrangements which would violate the established creed of the +South; but sometimes ordinary business balance was pleaded for, as when a +North Carolina paper quoted with approval from the Financial Chronicle: +"Why cannot the South understand ... that the worst hindrance to her +needed influx of industry and capital is uncertainty?"[223] + +In another chapter the degrees of intensity with which the cotton mill +campaign was urged were seen to vary, roughly, with the distance from +Columbia, South Carolina, say, as a center. There is a casual note in the +little that found its way into the Richmond papers. This is to be +remarked in Richmond's attitude toward Northern capital. It was not a +stirring, vital thing in Virginia. For instance: "When we consider that +the takings of the Continent from Lancashire are not piece goods, but +yarns, why cannot we in the South make these yarns for the Continent +ourselves and save to ourselves the profit of conversion now enjoyed by +the English buyer of the raw material? Why not have a large and successful +cotton manufacturing industry? + +"We are persuaded that once the folks in New England, who have surplus +money awaiting employment, thoroughly investigate the points Richmond +presents for a safe lodgment of that capital in manufacturing, the flow +will start this way."[224] + +The attitude of W. H. Gannon was peculiar, but serves as an introduction +to the mention of a phase of the subject which is important. Mr. Gannon, +referred to in other connections, believed that Northern capital ought to +be welcomed at the South as helping to develop an industry in which the +South could stand without a rival. He favored inducing Northern +manufacturers to set up plants bodily in the South. But, being the agent +of a society which sought to colonize New England consumptive operatives +in co-operative mill villages in the South, the settlement to be +financially backed by a Northern capitalist or manufacturer, Mr. Gannon +wished to place a modification upon the influx of capital to the Southern +States. He asked whether the South should encourage an economic system +with "large stock companies with hundreds of thousands of dollars, in +which the operatives have no pecuniary interest in the plant, and from the +active management of which we ourselves would be virtually excluded? (It +is to be borne in mind that, as at present organized, the treasurer and +selling agents in those great concerns necessarily control their +direction); or is it better that we aid small co-operative concerns +wherein the plant is owned in great part by the operatives, and in which +we might familiarize ourselves with manufacturing in all its +details?"[225] + +To contend for small mills, whether as above for the co-operative features +suitable to them, or as a means of insuring proper caution in the +development of the industry, frequently with entire sincerity, was +nonetheless, I think, one evidence of dislike and distrust of Northern +capital. H. P. Hammett, an old cotton mill man in South Carolina, said: "I +do not share in the opinion commonly expressed that we must procure +capital from the North to manufacture the cotton at the South. I would by +no means exclude it, but gladly welcome it." But he worked around +gradually to this concluding statement, relative to the report that +English and Northern capitalists were seeking to locate mills on the water +powers of the South: "--it would be unfortunate if most of the best powers +should pass from the control of our own people before they knew it."[226] + +One more characteristic quotation, and the point is clear: Objection had +been raised to the legislation forbidding the pooling of railroads, +producing corners in freights with rising rates--the Sherman Act was +probably meant. This was too much for the Winnsboro, South Carolina, News, +the reaction of which resulted in these words: "Well enough is it to talk +about repelling Northern capital by discriminating legislation, but far +better have no Northern capital than have it holding native noses down to +the grindstone. The half-starved wolf refused to change places with the +sleek mastiff that wore a master's collar. Northern capital that brings +Northern collars is not what we wish, and we will not have it as long as +the people send incorruptible legislators to Columbia. We welcome foreign +capital down here, provided it recognizes that the State is +supreme...."[227] + +While it is easily understood how this attitude obtained--the wonder is, +in fact, as already seen, that it was not more nearly universal than +sporadic--the shortsightedness of such a policy for the South is apparent. +For whatever outside capital reaped in dividends, the South reaped a +larger advantage in collateral benefits socially. The gain to the +communities where mills were located, supposing even that Northern capital +was greatly in preponderance, were more than any money earnings, in sums +however large, for it meant building for the future in material +institutions that would prove dynamic. The cotton mills, and all they +brought in their train, presaged a change in social ideals and economic +outlook on which no price was to be set. + +If Mr. Baldwin, the railroad president, was a little early in making the +statement in the middle months of 1881, surely his purpose was good, and +his hopefulness was justified, when he said: "I say on the strength of +recent and extended observation that whatever of antagonism to Northern +capital may have existed in the South has disappeared. I never met it, at +any time, but (I) am willing to grant that it may have existed sometime +and somewhere."[228] + +As a corollary of the fact, recognized at the South, that whatever were +the social gains resultant upon the establishment of cotton factories, +capitalists put their money into these ventures because they believed the +conditions of manufacture assured to them dividend, the South grounded its +appeals to Northern investors in the hard physical advantages possessed by +the South as a field for cotton manufacture, usually stressing +superiorities over the Northern States. Northern capitalists were as eager +to reap profits as were Southern projectors of mills to enlist their aid +and interest, and so the claims of the South were easily investigated +without the medium of propaganda. The widespread publicity given to the +whole matter of Southern manufacturing in the cotton mill campaign, while +no doubt it was registered in all parts of the North and East, was +commenced and carried on as of concern to the South. + +Correspondence of the New York Times from Atlanta well illustrates this. +It is to be noticed how quickly the preliminaries are got +over--considerations and speculations in which Southern papers indulged to +any length: "Manufacturing in the South is the one subject on which +thinking men here speak with entire confidence. They have, most of them, +some qualifying doubts as to agricultural progress, the cheapening of +cotton production, the raising of home supplies, immigration, mining, and +the many other now ambitions and enterprises which have engaged so much +attention since the opening of the new era of industrial development. But +concerning the future of manufactures, particularly of cotton, all men of +intelligence and business experience speak with the assurance of inspired +prophecy. It is, in fact, not easy to see why the mill should not seek the +cotton instead of the cotton seeking the mill." With this introduction, +the plunge is made into the supporting facts, which ought to turn the flow +of capital toward the South. + +The first statement is that it is a dead waste to ship raw cotton to a +mill 1,500 miles away, when it can be made into yarns or fabrics in +factories distant from the field only short half-day's journey for a mule. +The cost of sending the cotton to New England is reckoned, in expenses of +bagging, ties, ginning, baling, storage, insurance, drayage, sampling, +compressing, commissions of brokerage, waste in handling, and freight to +amount to $14.90 per bale, or almost exactly 1-1/2 cents per pound which +the New England manufacturer pays for the cotton above the price received +by the planter. The estimate of $100,000,000 is given as the charge on the +cotton crop of the South of 1879, on Edward Atkinson's figures, for the +items mentioned. + +"... to the anxious capitalist tired of a petty 4 per cent. and seeking +new and more profitable investments such facts are not without interest. +They go to support the claim that the Southern mill has an advantage of +from 10 to 20 per cent. over its New England competitor. But these +advantages are by no means confined to the elimination of unnecessary +charges for baling and transportation." Water power in the South, six +dollars per horse power per annum, or in some instances given away for the +location of a mill, as against a cost of twelve dollars in New England, is +dwelt upon, with the greater utility of the Southern water powers due to +the absence of freezes. The cheapness of labor is given prominent place, +and the suitability of the climate of the South for cotton +manufacture.[229] + +Exemption from taxation was a regular method of inviting outside as well +as encouraging domestic investment. South Carolina exempted from taxation +for a period of ten years all new machinery put in a factory. The +Observer, of Raleigh, said editorially: "... North Carolina might well +learn a lesson from the liberal course pursued in South Carolina and +exempt from taxation for ten years all cotton factories within our +borders. The tax does not net the State more than a thousand dollars or +so, and the counties only double as much. But then there may be a great +deal in it tending to induce Northern capitalists to make investments with +us. Once here, they will be so pleased with our advantages that they will +never think of leaving us."[230] + +As early as 1872 Georgia had passed a statute remitting taxes on cotton +and woolen mills for a decade.[231] + +An indication of the comparative coolness of the States near Northern +influence, already remarked, in a little controversy which took place in +the Richmond papers over exemption of mills from taxation. Said "Hanover": +"It is true that a law exempting capital invested in manufacturing, even +for a limited period, is unconstitutional. But if it is necessary to that +end, the constitution can be amended." The farmers would not object, he +thought, since increased size and prosperity of the cities would mean +increased gains to them in sale of produce. Richmond, he said, in addition +to her natural advantages, needed to offer exemption from taxation to +secure the desired capital. But "King William", in rejoinder, asserted +that the city was more dependent upon the country than was the latter on +the former; that exempting manufactures from taxation would mean +increasing the tax for farmers; and that Richmond was doing well enough as +it was. + +An indirect appeal to outside capital was felt to lie in a direct appeal +to domestic capital, and the fact that foreign interest would be attracted +by evidence of native faith in the mills was used as an argument in +securing capital at home. Thus the Columbia Register, speaking of the plan +of the Columbia and Lexington Water Power Company said editorially: +"Columbia is now resolved to find money for herself, in the City and the +State, for the development of the Canal and the establishment of +factories. This will bring in outside capital later on. Nothing so +attracts investors in other States as the knowledge that people on the +ground have proved their faith in an undertaking by putting money in +it."[232] + +Again it was said: "More than three-fourths of the capital invested in the +cotton mills since the war has been subscribed by our own people, and new +enterprises are opening up the way to a proud and successful future. The +Southern investment encourages Northern capital to come into the same +field, and the rate of progress is far more rapid than if it depended on +either Southern savings or Northern capital alone."[233] + +A county paper told its readers: "We believe there is money enough in the +county, here and there, to make at least a modest beginning so as to +attract outside capital."[234] + +Having sought to define the attitude of the South toward Northern capital, +and to indicate the nature of the appeals made to the outside capitalist, +the last topic of this discussion is reached in an examination of the +response of investors outside of the South to invitations, and the influx +of capital when the opportunities for profit had become apparent. + +It must be plain that as the sections drew together with each year that +removed the "reminders of the Civil War, the South was more welcoming in +her attitude toward Northern capital, and the North more ready to invest +in the South. This is recognized in an editorial of The News and Courier, +headed The North and Europe Building Up the South": "It has been evident +during the past two years that the distrust which had prevented capital +from coming to the Southern States for investment has, in a large measure, +been dissipated, and that the disposition to place money in the South in +undertakings which promise a fair return is rapidly growing strong. +Indeed, the process has gone on much more swiftly than is supposed by +those who have not watched the course of events...." Continuing, the +editorial quotes an estimate appearing in the New York Herald, that in the +eighteen months preceding Northern and European capitalists subscribed to +Southern enterprises located in the section east of the Mississippi and +South of the James, $100,000,000. Of this amount, more than $90,000,000 +was invested in railroads, without the $20,000,000 in the Cincinnati +Southern. "Besides the investments in railroads there are the investments +in cotton manufactures. There is hardly a city in the South in which there +is not a new factory building organizing, and in nearly every case a +considerable part of the capital is raised at the North."[235] + +The Baltimore American said the same thing: "The South is now the focal +point of trade aspirations for the whole country. Capital and industrial +activity are crowding upon it from every point of the compass. Every +railroad system in the land is struggling to reach it...."[236] + +Outside capital invested in Southern cotton mills took two +forms--subscriptions to the stock of mills managed in whole or in part by +Southern men, and the actual setting up of plants in the South owned +throughout by Northern promoters. Of these two, the second was of much the +rarer occurrence. Capital not domestic came from two main sources, the +North and East, and from England. There is no reason to believe that the +English subscriptions, in spite of frequent allusions to England as a +possible investor, were large or many. + +Pawtucket being the pioneer cotton manufacturing place in the North, +Providence, which had come to virtually absorb the smaller city, took a +great interest in the new mills of the South after the Civil War. A +Providence mechanical engineer designed the mills and machinery for some +of the most successful plants, and that its men were thinking of setting +up mills of their own in the South is evidenced by the visit of Mr. Boyd +to Georgia in 1881, when on behalf of New England capitalists he +prospected the State for the best location for a large cotton +factory.[237] + +A little later it was given as common knowledge that several of the +largest manufacturing firms of Manchester, England, had secured sites for +mills in the Southern States.[238] A London correspondent of the New York +World remarked a clear disposition of English capital to seek investment +in Southern manufactures.[239] + +The railroads, both the minor lines connecting individual points, and the +great systems penetrating the South in this period, were influential in +fostering and inaugurating manufactures. The little railroads helped the +mills by affording transportation facilities and by making the inland +water powers accessible, but the big ones could lend money and did of +course make it their business to encourage manufacturing along their +lines. President Baldwin, of the Louisville and Nashville, distinguished +three ways in which the railroads assisted the sections by aiding mills in +reach of their tracks, by uniting the parts of the country, and by +affording a strong commercial backbone.[240] Hon. Gabriel Gannon urged +the claims of railroads upon South Carolina as bringing capital to the +Southern field; he attributed the erection of a mill with $500,000 capital +largely to the railroad connections of Spartanburg.[241] + +An article already referred to said of the railroads in their bearing upon +manufactures: "The railroad syndicates are of necessity interested in the +general growth of the country through which the lines run, and will spare +no pains to bring in immigrants and to encourage the opening of mines and +the establishment of factories." + +In the majority of instances, Northern capitalists subscribed to the stock +of Southern mills after a considerable proportion of the shares had been +taken at the South. Similarly, a very usual juncture for the investment of +Northern capital was a projected enlargement of a plant, machinery +manufacturers taking stock in payment for equipment. Thus the Rock Hill +Cotton Factory, the $100,000 capital stock of which was owned in Rock Hill +and Charleston, South Carolina, in doubling the capital secured a large +part of the additional $100,000 at the North.[242] + +A vigorous solicitor of Northern funds for Southern mills was D. L. Love, +the pioneer cotton manufacturer of Huntsville, Alabama. Before going on +one of his trips to New England "for continuous exertion for the +establishment of factories in the South," he made a statement of his +successes and plans. His project of a cotton mill at Vicksburg, +Mississippi, was "on the high-road to success;" he had secured the +organization of a company with $40,000 then subscribed to manufacture the +staple at Jackson, Tennessee; he had about consummated a contract with New +England capitalists to revive manufacture in a building at Corinth, +Mississippi; a Connecticut manufacturer was looking for an opening at the +South, and would be induced to settle at Huntsville; in all, he expected +to bring about the investment of $1,000,000 in factories in Huntsville in +the three years to come. + +Mr. Verdery, of Augusta, telegraphed from New York news of his success in +seeking capital at the North. He "placed $85,000 of the new stock of the +Enterprise Factory, and expects to book from $25,000 to $50,000 more in +that city. He has had urgent requests from Boston, Philadelphia and other +cities to go to those places, and has no doubt he will be able to obtain +large subscriptions...."[243] + +Much is to be learned from a close study of the founding of the Charleston +Manufacturing Company, which was a representative Southern mill, a child +of the cotton mill campaign and an expression of the patriotism, +statesmanship and farsightedness of the South of the day. It embodied in +its history nearly every element and feature to be noticed in this study. +In an advertisement calling for additional local subscriptions, the +company made the statement: "Arrangements have been made with capitalists +at the North to take such an amount of stock as may be necessary to ensure +the success of this enterprise."[244] This statement is to be interpreted +in connection with the announcement a fortnight later[245] of the complete +organization of the company, with the exception of the election of a +secretary and treasurer, two of the nine directors being W. H. Baldwin, +Jr., and O. H. Sampson. "Maj. Smythe stated that a considerable amount of +the stock was held in Baltimore and Boston, and for that reason Mr. W. H. +Baldwin, Jr., of Baltimore, and Mr. C. H. Sampson, of Boston, had been +nominated." Woodward, Baldwin and Norris were dry goods commission +merchants of Baltimore, and "agents for the goods of several Southern +cotton mills," and C. H. Sampson was the senior partner in the firm of +Sampson & Co., of Boston, "dealers in yarns and also agents for several +Southern cotton mills." Two days earlier Messrs. Sampson and Baldwin +visited the site for the company's mill and expressed themselves as +pleased with it. On the same day a meeting was held at which it was +decided that the mill should manufacture standard sheetings and 3-ply +yarns. + +In this instance the commission merchants in all probability were those +who agreed "to take such an amount of stock as may be necessary to ensure +the success of this enterprise," it being either agreed that in return for +this they should get the brokerage of the mill, or even, perhaps, +receiving their pay as agents in shares of stock, which meant taking +dividends instead of commissions. The practise was a common one, and +machinery manufacturers followed the same plan. It is not at all clear +that it could have been avoided, and the net profits which were earned by +the mills of the South in this period would seem to dispute the statement, +that the commissions charged by firms which had thus gained control over +the product were exorbitant, and left the mills barely enough earnings to +continue to turn out the goods which was the instrument of their own +exploitation. + +A final instance of Northern pecuniary interest in the development of +cotton manufactures at the South may be noticed in the fact that New York +bankers were expected to exceed the subscription of $25,000 to the +International Cotton Exposition at Atlanta, alloted to the city. Among the +large subscribers were Inman, Swan & Co., $2,000; Drexel, Morgan & Co., +$1,000; Brown Bros. & Co., $1,000.[246] + + + + +CHAPTER V + +_FINANCING THE MILLS_ + + +The preceding chapter dealt with the capital of the Southern cotton mills +in the period of their establishment. It was first noticed that local +capital was naturally drawn upon before any other, and the character of +the appeals to local resources and the response to these appeals were +brought out. The second division of the report dealt with the attitude of +the Southern mill promoters toward outside, usually Northern capital, the +nature of the appeals made to Northern capital, and the extent of the +response to these solicitations. + +Altogether, the surface aspects of the securing of capital were dealt with +in a large way; in denominating the present chapter and that following: +"The Financing of the Mills", it is intended to bring out the minutiae of +the process, and to set forth the mechanism of the problem in its detail. + +In seeking to make clear the methods of securing capital in the South, it +is convenient to consider first the soliciting of subscriptions to stock, +and at the outset it will be well to give a notice that appeared in the +financial advertising columns of the Charleston News and Courier at the +beginning of the period of cotton mill growth. This notice is directed by +"The Charleston Manufacturing Company to The Citizens of Charleston", and +carries a contemporary flavor that is of service in an understanding of +the problem. Given almost entire, it reads: + +"The necessity of establishing manufactures in our city, not only as a +profitable means of utilizing capital, but more especially for furnishing +employment to many in our midst, has been long felt. To put this matter +into practical operation, a few gentlemen applied to the last Legislature +and obtained a most favorable charter for 'The Charleston Manufacturing +Company'. + +"The intention is to raise the capital necessary and to proceed forthwith +with energy and activity to erect and put into operation a cotton factory +and yarn mill which will be second to none in the South. The marked and +rapid success of the Charleston Bagging Company shows what can be done +here. + +"The undersigned, therefore, being those named in the charter and their +associates, lay the matter before you, and respectfully urge your +co-operation in carrying the work into effect. + +"For this purpose Books of Subscription to the Capital Stock of 'The +Charleston Manufacturing Company', under the charter granted by the last +Legislature, will be opened on Thursday next, 27th instant, at 10 o'clock +A.M., at Office of the Carolina Savings Bank, corner of East Bay and Broad +Streets, and continue open from day to day until the entire Capital stock +is subscribed. Shares One Hundred Dollars each. Ten per cent. of the +amount subscribed will be called for when all the Capital is taken and the +Company organized. Further instalments will be called for as needed."[247] +There follow the twenty names of those obtaining the charter. + +The dignified yet homely character of this advertisement is made even more +intimate by a dispatch from the capital, Columbia, to the same paper two +months later, in which it is announced that over $90,000 had been +subscribed in amounts of $2,500 and $5,000 to the project of "The Columbia +and Lexington Water-Power Company" (a plan for a large development of +cotton mills). The charter provided for a minimum capital of $500,000 and +a maximum of $1,000,000. "The present object (in opening books of +subscription before calling upon first subscribers for more) is to give +everybody in the State an equal chance.... It is designed to visit each +county of the State, with a view of making it as far as possible a State +institution. It is expected that the $500,000 necessary can be easily +secured in the State, but as much in addition will be welcomed to complete +the capital stock ... nearly every man who is able will contribute to its +(the undertaking's) speedy fruition." There is added the significant +circumstance that "Governor Hagood will accompany the committee when they +go to Charleston (to open books there) and use his influence in behalf of +the enterprise."[248] + +The plant of the Pelzer Manufacturing Company is in the so-called +up-country of South Carolina, but its projectors were Charlestonians, and +Charleston was the financial center of the State and of the South, indeed, +at that time. Consequently books of subscription were opened in +Charleston,[249] rather than in Greenville or Spartanburg, the little +cities they were then, near the water power which should drive the mill. +Ten per cent. of the amount subscribed would be required in cash.[250] + +The time necessary to secure the needed subscriptions may be checked up +by following the optimistic notices that appeared in the paper from day to +day as the capital grew. In this instance books were opened on January +25th, and on the twenty-seventh it was published that "the subscriptions +to the stock ... amounted yesterday to $30,000, leaving but $50,000 to be +subscribed. The books remain open today...." Toward the Trough Shoals +(South Carolina) mill project of Walker, Fleming & Co., $50,000 was +subscribed in capital stock in one week.[251] Subscriptions to the +Charleston Manufacturing Company, pursuant to the advertisement already +quoted, were first received on January 27th; by February 4th, 189 +subscribers had taken stock to the amount of $206,600.[252] Two days later +the amount had reached $220,200 representing 195 shareholders.[253] + +Mr. Converse, one of the proprietors of the Glendale Factory, which had +proved itself successful, bought up the site of the Rolling Mill of Mr. +Boles, at Hurricane Shoals, seven miles from Spartanburg; the first +$200,000 was quickly subscribed for, and books of subscription for +$300,000 additional stock were opened January 1st; February 14th they were +closed, the amount having been taken.[254] + +This suggests a practise which was and still is frequent in the +development of cotton mills in the South, namely, that of increasing the +capital stock over the amount first proposed, as soon as the original sum +had been subscribed, or when subscriptions somewhat in excess of the +intended maximum had been received. In the case above, the additional +stock was larger by $100,000 than the amount first offered. The Cannon +Cotton Mill, Concord, North Carolina, was organized with a capital of +$75,000. Before the building was completed, the capital stock was +increased to $90,000 or so, most of the stockholders adding to the amount +of their subscriptions.[255] The Seminole Mill, now erecting at Gastonia, +was designed to have $175,000 capital. Mr. Armstrong, its projector, saw +that more persons wanted stock, and he increased the capitalization to +$225,000. The plant was intended first to have 10,000 spindles, later +increased to 12,000 or 15,000 spindles.[256] Similarly, some others of the +new mills under construction in Gastonia are capitalized above the amount +named in their charters.[257] + +A very usual occasion for increase in the capital stock of a mill company +has been the enlargement of the plant. Thus the Enterprise Factory, +Augusta, Georgia, declared a 10 per cent. dividend and decided to increase +its capacity by 125 per cent. or more.[258] In this case the entire +$350,000 extra capital stock was being negotiated for by M. J. Verdery & +Co., brokers of Augusta; it was understood that one man and his friends +would take stock to the amount of $140,000.[259] If the statement of a +rather flambuoyant trade review of three years later may be trusted, the +entire stock of this mill after enlargement was $500,000 which would make +the increase in stock $200,000 greater than the original capital.[260] It +is probable that the stock was doubled to bring it up to $500,000;[261] +three months after the decision to increase the stock, it appears, all but +$50,000 had been secured, and this would be placed within the week. The +directors of the Louisville and Nashville Railroad took $95,000 of the +stock--"of course as individuals."[262] Evidently, the plan of the brokers +did not carry through, and the mill corporation put its stock regularly up +for subscription. + +The mill projected by Walker, Fleming & Co., already mentioned, was +intended to have $100,000 capital as a beginning, this later to be +increased to $200,000. + +At a meeting of the organizers of the Salisbury Cotton Mills, held in +November of 1887, "The capital stock was upon motion fixed at not less +than $50,000, and not exceeding $100,000."[263] A month later at a meeting +of the subscribers, it appeared that $66,400 had been subscribed.[264] +Later the stock was increased; those soliciting subscriptions to the +original stock experienced no difficulty in securing increase of these +subscriptions. By March, 1893, the capital stock of the company had +reached $250,000.[265] + +This last instance accords with what was told me by a gentleman of wide +experience in the business, that the plants now having a stock of +$100,000, etc., got their large capitalization by selling additional stock +to the original subscribers at a reduction--say at 75 or 80 when the par +was 100. The ventures were profitable generally, and the stock was +maintained at its par value.[266] + +The character of the promoters of a venture always carries weight, but +this was peculiarly true in the establishment of cotton mills in the +South. Today, truly prominent men are known all over this State, and all +over the section. Thirty-five years ago this was the fact even more than +at present; the signatures to prospectuses were important through personal +qualities as well as through business reputation. When it was said that +those back of the scheme to build a factory in York County, South +Carolina, were "among the most reliable and responsible men" in the +county, the statement probably carried as much earnest of good faith as +the accompanying notice that $25,000 toward $75,000 had already been +taken.[267] + +The size of the plant to be erected was given consideration in financing a +mill, though this did not enter to the extent that one would think. +Opposite views were held as to the practicability of financing small +mills. As far back as 1849 it seems natural to find a plan for financing a +mill, by which fifteen planters would take each $4,000 worth of stock, +select a site near their plantations, each detail three men, making a +building force of forty-five, with teams and an overseer and general +manager, the latter one of the stock-holders; these proceeding to put up a +wooden building of three rooms.[268] A persistence of the economy which +suggested this arrangement is reflected, perhaps, in an editorial of The +Daily Constitution, Atlanta, thirty years later, in which it is pointed +out: "The people of the South who have money to put into manufacturing +enterprises should build spinning mills. The South is not rich enough to +do much weaving, but there is no reason why it should not convert a good +part of the great crop into yarns.... There is plenty of surplus money in +the South with which to establish spinning mills.... We do not refer now +to mammoth mills, but to little neighborhood spinning mills."[269] + +The mills about Greenville are nearly all of considerable size. This is +due perhaps to the effect of the example of the failure of the Huguenot +and Campderdown mills, small ventures, both located within the city +limits, as contrasted with the success of Pelzer, built later, and in the +depths of the country. It is said to be the impression around Greenville +that the small mill is hard to finance; so far from considering the small +project suitable to the financial strength of the community in which the +plant is proposed to be located, the reason for the lack of favor for +small concerns was given the writer in the opinion that they could not +attract outside capital, and that consolidations had recently resulted in +South Carolina from this fact.[270] For different reasons, principally +considerations of managements, there is now a well discerned tendency in +the Carolinas, at least, back to the small mill. + +Mention has been made of the power of reputation in the financing of a +cotton mill. Not only was this stressed in suitable ways by those +concerned in securing funds directly, but it was used in another way. This +may be conveniently illustrated by the history of the great mill at +Albemarle, North Carolina. Some years ago this village was an isolated one +of five or six hundred inhabitants. A family of planters near the place, +the Efirds, wanted to see a cotton mill located at Albemarle. They were +probably as little able to attract capital as the village was uninviting +to the industrialist. In this situation, the Efirds approached J. W. +Cannon, of Concord, a town nearby, who had succeeded in the cotton +manufacturing business and had extended his interests to mills in other +places, and asked him to take the presidency of the mill proposed, and +subscribe to $10,000 of stock. Mr. Cannon was not much inclined to go into +the venture, but the Albemarle family showed determination. The plant +today is a mile long, and represents an investment of some +$3,000,000.[271] It is said that most of Mr. Cannon's mills outside of +Concord had birth in the minds of people of the several communities; for +instance, a merchant named Petterson interested him in a mill at China +Grove.[272] + +One of the most interesting cotton mills in the Southern States is that of +the Gaffney, South Carolina, Manufacturing Company. The mill was conceived +by a building contractor of the place while working upon churchs and +cottages in a nearby mill village, that of Clifton. When he had planted +his idea in the minds of the leading men of Gaffney, spurred them to local +subscription and then to seeking money at the North, and because receiving +small encouragement in New York and Philadelphia, their enthusiasm +subsided, Mr. Baker, considering home enterprise and outside assistance +unavailing, went to Mr. Converse, head of the successful Clifton Mill, and +asked him to take over the Gaffney project at the point at which it had +been dropped. Mr. Converse was aged, and felt himself overburdened with +mill cares, but he encouraged the Gaffney man in his ambition, saying that +mills in the South would pay better dividends than Northern mills, either +large or small. + +Meantime, however, Mr. Baker had come to know H. D. Wheat, the +superintendent at Clifton. The indomitable promoter had hard work to +persuade the practical-minded superintendent to leave his good position at +Clifton for the uncertain fortune of a factory at a town which had failed +to establish the mill itself, and could not interest Northern support; but +finally, Mr. Wheat agreed to raise $20,000 besides his own subscription, +to add to the subscriptions still in force at Gaffney, and to take charge +of the mill as its active president. The $20,000 was invested by friends +of Mr. Wheat at Clifton and at Kings Mountain, nearby. Directors were soon +elected, and the imported president with his contributions to the venture, +was installed.[273] + +At the commencement of the great period of cotton mill building in the +South, every town which could make any pretensions to ability to establish +a mill was engaging the utmost resources of the moneyed men it +had--capital was hardly seeking opportunities for investment. Sometimes, +however, a place with almost no resources and with only a few enterprising +citizens, perhaps, would advertise itself openly as an inviting chance. An +advertisement in the winter of 1881 read: "We will give to a Cotton +Manufacturing Company, that will organize and locate at Landsford, S.C., +with a capital of $300,000 a site, 20 acres of land and 300 horse water +power." Those interested were directed to apply for particulars to three +gentlemen living respectively in Rock Hill, Landsford and Charleston.[274] +These were doubtless promoters who had settled on this particular town as +worth effort, or who were burdened with real estate of no value unless the +town could be built up. + +But these instances were the exception at a time when everybody was too +much concerned with the cotton mill in his own town, to think of the needs +of another place. There is a notable instance of the bidding of one place +against another for a proposed cotton mill, however, in recent years. +Captain Ellison A. Smythe announced that he would put up a fine goods mill +as all of his interests in the Piedmont of South Carolina have prospered, +there was keen rivalry between Greenville and Laurens for the plant. There +were campaigns in both places, much enthusiasm being evidenced; Greenville +was able to offer the best proposition, and got the Dunean Mill.[275] + +In the methods of securing capital at home, two co-operative schemes are +to be considered. The plan that comes first to mind as co-operative is +said by Mr. Holland Thompson book to have been often employed in the +building of cotton mills in North Carolina; shares would be of $100 par +value, made payable in weekly instalments of one dollar, fifty or even +twenty-five cents, thus attracting the very small investor--operatives +took shares under such an arrangement. The last payment plan requires +eight years for completion, as against four or two for the first plans; +those wishing to do so might pay cash, less six per cent. for the aver +payment-time, the discount bringing the share down to $89.60 plus.[276] + +The second mill--the Cabarrus--built by Mr. Cannon at Concord, North +Carolina, was financed in this manner. Its plant was an old wood-working +and iron establishment slightly modified to house cotton machinery; its +capital stock was only $15,000 one-half paid up, and the other half +payable in fifty cents weekly instalments, the whole to be paid in two +years. Mr. Hartsell of Concord, remembers seeing the old +secretary-treasurer of the mill going about the town with his collection +books under his arm.[277] The Spartan Mills, Spartanburg, South Carolina, +were rected under a building and loan scheme which gave the mill +management little ready money.[278] Besides the expense of collecting the +small and frequent payments, serious disadvantages might result from such +a method of financing a mill. For instance, in the case of the Spartan +Mills, John H. Montgomery, the projector, was persuaded to buy the old +machinery of a mill at Newberryport, Massachusetts; he lacked capital to +purchase machinery otherwise, and the Newberryport mill took payment in +stock. The machinery thus installed was worn out, out of date, showed +quick deterioration and proved very expensive.[279] + +The other co-operative plan is said to have been followed in the case of a +good many South Carolina mills. All of those who might contribute to the +erection of the plant--dealers in lumber, paint, tin, brick, etc.,--would +be asked the question: "If you get this contract, how much stock will you +take?"[280] + +Some account has been given of the additional issues of stock on account +of extensions in plant. There is evidence that very often, however, +increases in capacity were made through earnings and credit rather than by +the issue of more stock. Indeed, the latter method has been much more +frequently followed, if the opinion of one of the best informed of the +younger cotton mill men is to be taken.[281] He recited in support of his +contention the typical case of the 5,000 spindle mill at Williamston, +South Carolina, which issued extra stock to $30,000 and increased its +spindleage to 15,000. Since then, the plant has grown to have 32,000 +spindles, its capital standing at $300,000; this was accomplished through +earnings and credit. It is fair to say that the normal capitalization of a +plant of 32,000 spindles would be something in excess of $600,000, +computing the cost at $20 to the spindle. + +The first two-story addition of the Gaffney Manufacturing Company was +rected upon earnings of the original plant in the first three years of its +operation.[282] The finishing plant of the same mill, erected some years +later, had to be dismanteled and given over to looms because the +stockholders in the company would not give the president the required +support, and the debt incurred was pressing.[283] + +The Young-Hartsell Mill, at Concord, North Carolina, has been built up in +plant by putting earnings back into the factory. Considerable enlargement, +on the most approved lines, has recently been completed, the end of the +extension being weatherboarded to allow of easy further addition.[284] + +The capital stock of the Arlington Mill, Gastonia, organized by G. W. +Ragan and some of his friends who had withdrawn their holdings in the +Trenton Mill, at the same town, was over-subscribed in fifteen minutes. At +organization, the stock was fixed at $130,000 for 3,000 spindles; in three +years an additional stock dividend of $45,000 was issued, and the +spindleage increased to 9,500 and later still to 12,000.[285] There +evidently was not here, as it has been intimated there sometimes was, an +impetus toward expansion by reason of over-subscription at the time of +organization, for the additional stock issued, presumably at least, went +automatically to the original subscribers. It was a case of extension from +earnings. + +The mills established at the opening of the era made frequently huge +profits, which made increases in size from earnings to the natural +course.[286] + +Also, just as earnings have in such cases quickened plant extension, so +the investment of profits back into the business has in turn increased +efficiency and earnings. The capital of the Salisbury Mill, as has been +said, has now reached $250,000, but much of the increase in size of the +plant has come by the agency of gains reinvested.[287] + +Having seen some of the ways in which capital was secured from Southern +sources, the paragraphs following deal with the means through which +capital was induced to come to the Southern cotton mills from without the +section. + +From a reading of the preceding chapter, the question might naturally be +asked: By just what methods did a Southerner anxious to establish a cotton +mill secure financial assistance at the North? + +Not a few Southern mills were projected by merchants, frequently small +country store-keepers, as they would be called; but it is to be borne in +mind that the proprietor of a general store in a rural community or in a +small town in the South occupies a position very different from that of +the small merchant elsewhere. The economy of the neighborhood pivots upon +him--he is the agent of the fertilizer manufacturers, and extends, credit +for fertilizers and food until the cotton crop is gathered; he probably +markets the cotton when the bales are hauled. He is the link between the +great sphere of business without and the little world of affairs within. +What the country lawyer is as real estate broker and arbiter of landed +fortunes, that, and a great deal more, is the country merchant in all +other departments of material activity. Holding, as he did, the contacts +of the community with moneyed interests without, it was natural that the +merchant should often be the leader, and also natural that he should turn +to his mercantile connections for assistance. One case will illustrate how +this worked out. + +James W. Cannon was born at or near the little place of Concord, North +Carolina. He early went into a general store as clerk, and through +successive stages, largely aided by his attention to business and his +civility, he came to own a general merchandise business of his own in the +town. He was in the habit of buying brogans from the house of Albert +Stone; cloth he got from Leo Loeb, and he had an arrangement by which he +shipped raw cotton to William Wood and Son. He decided to build a cotton +mill at Concord--really the first at the place belonging to the great +period of establishment--and got some $60,000 in subscriptions to stock +locally. This was not sufficient capital, $75,000 being aimed for. Mr. +Cannon under these conditions went to Stone, to Loeb and to Wood and Son +and explained his plans. The mill would enable the town of Concord to +grow, and he could do a larger business with each of them. Whether moved +by this reasoning, or influenced by the fact, that it was almost worth the +amount of the subscription to keep Cannon's business and good will, each +of the three firms subscribed to $5,000 worth of stock.[288] + +Judging from the statement made by an old gentleman who has seen the whole +development of Mr. Cannon's interests, he has held to these former +merchant-day connections, though he is now as far from country +store-keeping as could well be imagined. After explaining that Mr. Cannon +in the early days was merchandising and could get money from his +mercantile connections at the North, he said that retired wholesale +merchants of Philadelphia, New York and Boston have so much confidence in +him that they give him any amount of capital he needs.[289] + +Out of 1,287 shares of the Young-Hartsell Mill at the same town, 1,250 are +held by North Carolinians. The other 37 shares are owned in Baltimore. Mr. +Hartsell was born on a farm near Concord, and some thirty years ago came +to town and went in business. In this way he knew the Baltimore merchants +who hold 35 of the thirty-seven shares, the other two shares belonging now +to the son of one of these men. + +Of the two sources[290] of outside assistance to Southern Cotton Mills, +cotton goods commission houses and manufacturers of cotton machinery were +more often appealed to for capital in financing a mill than were firms +with which the Southerner had mercantile relations. The influence of the +commission houses and machinery manufacturers upon the rise, development +and degree of success of cotton manufactures in the Southern States is of +the first rank of importance, and not the least interesting phase of their +connection with the industry is the way in which they were approached for +help. + +A South Carolinian, say, wishing Northern capital for a cotton mill which +he was projecting, would usually have associated with him some man who had +experience in manufacturing in the State. The manufacturer would introduce +the projector to the commission merchant in New York who was serving his +mill. The Southern promoter thus put upon the track would make the best +bargain in New York that he could, that is to say, find the commission +house which would take the largest block of stock and lend the most money. +He would, similarly, be introduced to machinery manufacturers, and might +induce several to become parties to his venture.[291] + +Commission houses and cotton machinery manufacturing companies were not, +however, making yarns and cloth. Other things apart, their business was +selling the product and supplying the means of production, rather than +manufacturing goods. They were willing, and sometimes anxious, to lend +their assistance to a proposed mill to get its business, but they were not +ordinarily interested in establishing mills. Consequently, the promoter +had to have his home money first. He would secure, say, for the mill of +ordinary size, $50,000 locally, and would go to the machinery people and +say he had this backing, asking whether they would sell him the machinery, +and what amount of the payment they would be willing to take in +stock.[292] + +The history of the relations of the Gaffney Manufacturing Company with +commission houses is instructive. When Mr. Baker commenced the agitation +in Gaffney for a cotton mill, A. N. Wood was doing a sort of private +banking and investment business in the work. A fund of about $50,000 was +subscribed, Mr. Wood made president of the organization, and a charter +applied for.[293] + +Mr. Wood went North to seek additional capital, going to Baltimore and New +York. In Baltimore he called upon Woodward Baldwin & Co., Mr. Baldwin was +very cordial, and when the plans of the Gaffney people had been explained +to him, took $5,000 of the stock right away, with no strings tied to the +subscription. It was not specifically understood that the firm was to have +the account of the mill, but Mr. Wood supposes Mr. Baldwin expected it, +and that probably it would have been given to his house. + +Mr. Wood introduced himself to the chief member of another firm, of whom +he knew as commission merchant for the Pacolet Manufacturing Company in +South Carolina. In this case, the promise of the account was wanted, but +to this Mr. Wood did not agree. Mr. Wood said that it was attempted from +the outset to take advantage of the position in which he was placed.[294] + +Having noticed to this extent the minutiae of securing assistance from +commission houses and machinery manufacturers, it will be interesting to +observe in general the part played by such firms in the establishment of +mills in the South. First of commission houses. + +It is possible to be deceived as to the wealth of Southern communities +thirty-five years ago by a recital of the capitalization of the mills +they built, coupled with the statement that a large proportion of the +stockholders were local people, and that nearly all of the paid-up capital +was from the neighborhood or State. There might well be a greater number +of small local investors, and one or two Northern firms with quite as +large holdings as all these together; the capital paid in might be of +local origin, but only a small proportion might be paid up,[295] the rest +representing the holdings of commission houses and machinery manufacturers +in one way and another. If it be asked how the mills hoped to succeed with +so little paid-up capital, the answer lies partly in the fact of reliance +upon earnings to take care of debt, and partly in the scarce provision of +working capital. + +The influence of the commission house on the Southern cotton mill is a +subject of the deepest interest, and this might be drawn out in some +detail under a discussion of the marketing of the product of the mills. +Whether the commission houses' participation, as marketing agents, or as +stockholders with a voice in the affairs of the company, was on the whole +helpful or detrimental is of concern where only incidentally as pertaining +to those involved in the launching of the enterprises. For the present +purpose, that the commission merchant was an investor is enough, except +only for the consideration as to whether it were wise to invite his +connection in the first place. + +One practical-minded man declared that the mills could not have existed +without the commission houses, be their influence good or bad, and +dismissed the matter with this.[296] + +A mill president grown old in the business in North Carolina said that the +Southern mills could not have gotten along at all without the commission +houses at first; that not only in their establishment, but in selling +their product, they needed an influential agent.[297] After explaining +that Northern commission houses had supplied much of the capital for the +developing of the cotton manufacturing in his region, another mill +president, and one who has had experience of every phase of the mills' +growth, said: "Their influence (that of the commission houses) was good; +you ought to praise always the bridge that carried you over."[298] + +The editor of one of the chief textile periodicals in North Carolina said +that there were cases where the commission houses hurt the profits of the +mills, but they did start the mills.[299] Another North Carolinian, of +conservative turn of mind and much practical knowledge, gave a parallel +statement, that even as a general rule the commission houses formerly had +a baleful influence, though this is no longer the case; that they have had +the effect of promoting the development of mills in the South.[300] + +A mill treasurer in what is perhaps the most progressive and ambitious +spinning district of the South, gave it as his belief that as a whole, +while there are commission houses and commission houses, their influence +on the Southern textile industry had been bad. Asked whether there were +not many Southern mills that would not have come into existence but for +the aid of the commission houses, he answered yes, but that such mills +were built as feeders for a commission house and not to earn money for the +local stockholders.[301] + +Reference has been made to the effort of Mr. Wood to secure capital from +commission firms for the Gaffney Manufacturing Company. He returned to the +South discouraged, and the mill project for Gaffney was dropped for the +time. When it was later revived, no subscriptions were sought from +commission houses. Mr. Wood said: "We wanted to be free and do as we +pleased. A mill is very unfortunate to be controlled by a commission +house. have not done as well as others."[302] + +The South Carolinian well versed in the financial affairs and history of +cotton mills in the South, computes that in the cases where the mill +projector sought the commission house and machinery manufacturer, from 40 +to 50 per cent. of the total capital was supplied by them. Mr. Separtk, of +Gastonia, already quoted as opposed to the participation of commission +houses in the financial affairs of Southern mills, said that in the two +mills of which he is treasurer and the one of which he is vice-president, +no stock is owned by commission houses, and that "They can't get it." The +way to rid a mill of the influence of a commission house, he said, is to +pay what is owed. If this debt is held by the commission house in the +shape of a majority of the shares, they must be bought at an exorbitant +figure, but nonetheless bought.[303] + +One of the principal bankers of Raleigh asserted with some feeling that +the commission houses have been an incubus on the cotton mills of the +South; it is true, partially, that many mills would not have come into +existance without them, but it is also true that the commission houses put +into the hands of the mill projectors little real money; they would take +bonds or advance working capital after the _capital_ stock of the mill +was exhausted in erecting the plant, but when they advanced money, it was +usually on goods sent them to sell, and then only two-thirds of the value +of the goods would be advanced.[304] + +This statement is rather borne out by information given by a member of a +commission firm which has gone into the South with all its interests, and +would therefore be inclined, one would suppose, to lend sympathetic ear to +Southern mills in their financing problems, namely, that usually the +commission house stands to the mill in the position of creditor rather +than of shareholder, for it must have a liquid and not a fixed capital; +the commission house arranges loans, discounts loans, and lends +direct.[305] + +It would appear from one source that when a commission firm lent money to +a mill, it did not take a mortgage on the plant, for this would have +destroyed its credit. They had, in fact, hardly any security other than +the value of the plant.[306] + +A young lawyer whose firm has had considerable to do with suits over +cotton mill securities, referred to the fact that in the process of +starting a mill capital is often depleted before goods are got on the +market; at this critical juncture, he said, come to the commission men. +Their part has not by any means always been for the good of the people of +the South. They get a breeches hold on the president of a mill. The mill +may in time go up, but they will have cleared on their commissions.[307] + +For a reason which will appear in a moment, the same importance, from a +financing standpoint, does not attach to the machinery manufacturers in +their relation to the Southern cotton mills as immediately applies in the +case of commission firms. There seems to be a strange diversity of opinion +as to the extent of the participation of machinery manufacturers in the +financing of the mills. A mill man of Anderson, South Carolina, said that +the machinery people have played a larger part than the commission houses +in the establishment of Southern mills; that the machinery business was at +a standstill in New England at the time of the great activity in mill +building in the Southern States, and the machinery manufacturers began to +look about for mills to equip.[308] Another informant stated that the +machinery manufacturers are not found to be very heavy stockholders; that +the stock is sometimes not even in the name of the machinery +manufacturing company, but is held by the president and directors of the +company.[309] A third, whose testimony, however, may be questioned very +seriously on this point, went so far as to say that cotton machinery +manufacturers took no stock in the mills of the South to amount to +anything; nobody asked them to take stock; the machinery was bought +outright.[310] + +Whatever the extent of the participation of the manufacturers of the +machinery in the building of the mills in which it was installed, their +arrangement for payment seems to have included three means of +reimbursements--stock, cash and time notes; a mill might have purchased +machinery from several firms under such agreements.[311] It is said that +those mills which bought their machinery for cash, rather than seeking to +make the machinery manufacturers to greater or less degree a party to the +venture, received rebates and many privileges and advantages, though the +mill men were assured, particularly those projecting new plants, that the +time payment method was just as advantageous to them.[312] + +While the fact might better find place in the discussion of the part +played by machinery manufacturers and commission houses in the extension +of plants, it may be mentioned here, and in conclusion of this particular +topic, that Southerners projecting mills were sometimes encouraged, by the +offers of machinery manufacturers to sell machinery for stock and on time, +to make their plants too large.[313] + +The opinion was held by a well-informed man very close to the whole +Southern industry that the influence of the machinery manufacturers has +been good, except that they caused the mills to expand beyond wise limits; +they have not exploited the mills otherwise.[314] + +It has been said above that the same importance did not attach, from a +financing standpoint, to the taking of stock by machinery manufacturers as +applied in the case of commission houses. The reason for this is that, +generally speaking, the machinery manufacturers have not held their shares +for long, while the commission firms have usually been stockholders over a +period of years, their holdings sometimes diminishing and sometimes +decreasing, but their influence in the affairs of the mills being always +felt. A banker's experience was that generally machinery manufacturers +taking stock in a mill sold it almost immediately at a discount; it is +not reasonable to suppose that a machinery manufacturer would wish to take +stock; he did it in order to sell his machinery.[315] An interesting +explanation of the statement that the machinery manufacturers were heavier +stockholders in the Southern mills than the commission houses is implied +in a remark made by Mr. Thackston, of Greenville, a stock broker already +quoted; the machinery men must get their profits quickly; these they +received partly in the cash payment, two-thirds of the price of the +machinery; their shares may have been numerous for either or both of two +reasons--they may have been forced to take considerable stock in +consequence of making the largest possible sale of machinery, which in +turn was made necessary if they were to get a profit out of the proportion +of the price paid in cash, or knowing that they must look forward to a +quick sale at discount, they figured this into their price to the mill +man, and counted upon deriving a profit from as large a number of shares +as they could get in payment.[316] + +The commission men, on the other hand, must expect to get their returns +slowly,[317] either through dividends as shareholders, or through profits +from the handling of the product of the plant, or by both of these means; +in the former case, the necessity of their holding their shares is +obvious; in the latter case, to have a voice in the affairs of the mill, +particularly in the annual elections and in instances where increased +profits from commissions must come through extension of output, active +connection with the affairs of the mill must be maintained.[318] + +The machinery men have in a few cases held the stock they have taken in a +mill.[319] An instance of this is seen in the fact that D. A. Tompkins, +until a few years ago, the representative in Charlotte, North Carolina, of +many Northern machinery manufactures, was obliged to have sold two or +three mills to which he had supplied machinery and taken payment partly in +stock; ordinarily the machinery manufacturers would not stay in long +enough for the first flush of establishment to dwindle to failure, taking +away all possibility of sale with minimum discount losses.[320] + +Another case in which the machinery manufacturers have retained their +stock, and a very notable one, is that of the great Loray, known as the +"Million Dollar Mill," at Gastonia, North Carolina. The mill is +controlled by machinery makers, holding preferred stock, of which there is +an actual majority; they became thus heavily involved when the mill was +reorganized incident to the doubling of its capacity, to which more +detailed reference appears later. The president of the mill is a +representative of a large machinery manufacturing concern, and, in the +affairs of the mill, speaks for another great firm.[321] + +Before concluding this division of the subject, it is proper to say +something of borrowing particularly from banks, in the financing of the +mills. Soon after the outbreak of the war in Europe, the greatest of the +cotton mill mergers in the South came to disruption. A committee +representing New England manufacturers made an investigation into the +affairs of the mills concerned in the combination and found that, in its +opinion, the mills of the South have an advantage over mills in other +parts of the country, particularly New England, amounting to 25 per cent. +in labor, and 50 per cent. in respect to taxes. The statement was made by +the committee that, in spite of these superiorities of situation, the +cotton mills in the South make less than the mills of New England because, +in considerable measure, of poor financing, particularly poor borrowing +facilities; their credit is not good.[322] + +Northern mills can borrow money frequently at 2 or 3 per cent. less than +Southern mills even today, though the credit of the Southern manufacturies +has steadily risen. It is true that New England mill paper will sell +cheaper, almost invariably, than Southern mill paper.[323] + +In spite of this disadvantage, however, if its credit is good, a Southern +mill can borrow money at 4-1/2 or 5 per cent. + +It was formerly, early in the period, frequently the case that a mill +company borrowed money to augment local subscriptions and the assistance +given by commission houses and machinery manufacturers, to put up the +plant.[324] Borrowing for this purpose is not often done today--the time +of very large earnings, due to superior local advantages unmarred by +competition, and to the peculiar conditions of manufacture then, which +made it possible to pay off a plant debt, is passed; money is still +sometimes borrowed for extensions of plant, however. But while it was once +a rule to borrow all the working capital, in addition probably to some of +the fixed capital, working capital has not passed from this category; the +mills still borrow working capital at certain periods.[325] + +Richmond has done more than any Southern city in recent years, not +excepting Baltimore, to assist the cotton mills of the section in their +operation and growth. The mills with which one young official is +connected, centering about Anderson, South Carolina, have at some seasons +of the year owed Richmond as much as $3,000,000 or even $4,000,000. He +said that the First National Bank of Richmond, probably has more Southern +cotton mill paper than all the banks of Atlanta combined.[326] + +The next paragraphs consider the principal channels through which capital +came to the development of the Southern industry from outside sources, +more or less of its own accord, rather than being the subject of +solicitation on the part of the Southern manufacturers. + +Undoubtedly, one of the chief influences contributing to the physical +growth of the cotton manufacturing industry of the South has been the +willingness, perhaps the eagerness, of commission firms and manufacturers +of cotton machinery to encourage enlargements and extensions of plants; +and in the enumeration of counts against these houses, this consideration +figures in the mind of the Southern mill man. When the second and +effective agitation for a cotton mill at Gaffney, already referred to, was +proving successful, it was determined not to seek aid from commission +merchants because they "--want too many enlargements; they want more +goods; the more they sell, the more they get. This does not always suit +the local stockholders."[327] + +An interesting allusion, showing the effect of the desire for enlargment +on the part by commission houses and machinery manufacturers, is contained +in an Augusta dispatch to The News and Courier, Charleston, in April, +1881. "At the meeting of the Sibley Manufacturing Company today (it was +the first annual meeting of the stockholders)[328] it was decided to +increase the capital stock to one million dollars. Stock for the +additional amount will first be offered, and, if this is not promptly +taken, seven per cent. bonds will be issued." The resolution for the +increase was offered by Mr. Samuel Keyser of New York, and seconded by Mr. +David Sinton, of Cincinnati, two of the largest stockholders in the +company.[329] Mr. Keyser and Mr. Sinton were two of the six directors of +the company.[330] The mill was first planned to be three stories high, +with 23,936 spindles and 672 looms; the doubled capitalization was to +allow of an increase of stories to four, in spindleage of 30,000, and in +looms to 1,000; $66,500 was proposed to be spent on the village-tenements, +operatives' homes, boarding house, etc.[331] While there is no specific +evidence to show that these directors represented commission houses or +machinery manufacturers, or that they would take the seven per cent. bonds +in case the community would not absorb the additional stock to be issued +first,[332] indications point to this having been the case. + +It has been seen how the builders of the Gaffney Manufacturing Company's +first plant refrained from including commission merchants in the venture, +and still earlier in this chapter it was said that the two-story addition, +next built, was a product of the earnings of the original plant in its +first three years of operation. When, however, the third addition to the +plant was made, a great mill costing $800,000, the persistence of the +projectors was weakened by the four years since the first mill was +erected, or perhaps success had altered judgment, with some local +subscriptions, the machinery people took a considerable amount of +stock.[333] + +A striking case here is that of the Rock Hill, South Carolina, Cotton +Factory, "the 'Pet' of the town," it was called by the correspondent of a +State newspaper, who continuing said: "This factory is owned and +controlled by the citizens of the town, except $15,000 in stock owned in +Charleston. It has a capital of $100,000 has over 6,000 spindles, with +1,500 more to be added in a few days. The best evidence of its success is +that not one dollar of its stock can be bought." This clearly, was a mill +born of local effort, with about the right capitalization for a plant of +its small size. The conclusion of the notice, coupled with information +taken from the same paper of two days later date, is significant: "It is +the intention of the company, at an early day to run the factory day and +night in order to keep up with its orders. The company, I learn, expect to +increase their stock to $200,000 and build a duplicate factory."[334] A +large part of the stock for this enlargement was subscribed by Northern +capitalists.[335] + +The circumstances attending the enlargment of the Loray Mill, at Gastonia, +have been alluded to in another connection, John F. Love, a Gastonia man, +and the son of R. C. G. Love, who had been very prominent in the Gastonia +development, was the primary projector of the mill, he having a larger +part in the enterprise than G. A. Gray, the greatest of the Gastonia mill +builders. He got the building up, but the factory had not commenced +operation, when the company had to be reorganized. It was intended when +the mill was started to have 25,000 spindles; it was now wished to +increase the spindles to 50,000. The local investors were scared off by +this proposal, but the machinery manufacturers encouraged the enlargement, +supplying the machinery and taking preferred stock in payment. The Whitin +and Draper companies own most of the stock of the mill, and the Whitin +representative in Charlotte is president of the mill. Commission houses +hold some of the stock. The Loray Mill is the largest and the poorest in +Gastonia; it makes coarse cloth from the local short-staple cotton on some +2,000 looms,[336] while the small mills built by local capital for the +most part are making good profits from some of the finest yarns, of +long-staple cotton, spun anywhere in the Southern States. + +It has not always been the machinery manufacturers alone or together with +the commission houses who facilitated the installation of more looms and +spindles. Sometimes the ends aimed at by the commission merchants could be +accomplished only through machinery, and they have been willing to +undertake the financing of the enlargements or alterations in plant +singly. The so-called Plaid Trust was sought to be formed; it was to +handle the plaids of all the Southern mills, and was to be a New Jersey +corporation. The plan did not carry, and the Cone Export and Commission +Company went into the Southern field to handle the products of the mills +generally. The older sheetings and plaids had been sold largely in the +South, or almost so; the commission firm, to supply a larger trade, found +it must re-organize the product of its client mills. It was attempted to +persuade a mill at Durham, North Carolina to increase its denim output, +but this was not done. In order to provide canton flannel, a new goods for +the South, the commission house induced some interests to establish a mill +at Greensboro, North Carolina. This prospered, and the house itself built +a denim mill at the same place. All this time the mills were being urged +to diversify their product, and the commission firm was financing them in +the machinery changes which frequently had to be made. The client mills +served were slow in establishing, as the commission firm urged them to do, +individual finishing plants, and until this growth came about, the +Southern Finishing Mills, founded by the Cones at Greensboro, served them; +it was discontinued as a finishing plant when the mills had their own +finishing works, which they presently built and operated +successfully.[337] + +There is another way in which unsolicited outside capital frequently has +lodged in the Southern mills. The conditions under which this would come +about are well described by a banker now in Richmond and formerly the +president of the Chamber of Commerce in Raleigh, North Carolina; "Usually +the people who made the spirit for cotton mills in this way (through +appeals to town pride and by town rivalry) were those least able to +participate financially. Many mills started without sufficient capital and +never did have enough till they failed in the hands of the original +promoters and were bought up by other people, those who had been +responsible for the enterprise losing out entirely."[338] Thus as far back +as 1882 Colonel Walter S. Gordon, one of the projectors of the Georgia +Pacific Railroad, purchased the Stansbury Cotton Mills, Carrollton, +Mississippi, which cost originally $210,000. "The Georgia Pacific +Railroad", says the notice of the purchase, "will run almost by its doors, +and will give competition in freights."[339] Evidently here was a mill +which was commenced by local effort and had declined until it could be +bought at a lower figure than its cost and held out the prospect of +becoming profitable by the coming of new transportation facilities. + +The Kessler Mill, the third built at Salisbury, North Carolina, offers a +case in point. The first mill built in the place was a produce of the most +whole-hearted local support centering about community pride; the second +mill was an outgrowth of the success of the first, and was advantaged by +the spirit aroused by the first mill, not too far spent. The Kessler Mill +was organized by a faction which split off from the projectors of the +first enterprise; local capital already seriously depleted was not quick +in offering because of lack of interest in the project.[340] Under these +circumstances the mill ran an indifferent course until taken over by a +large manufacturer of a nearby town, who could command outside +capital.[341] + +A mulatto started a cotton mill at Concord in the same State; no white +people of the place took shares; the negroes all over the State who +subscribed were allowed to pay in little instalments. The operatives were +negroes. The promoter was faithful to the enterprise, but came to be +heavily in debt, foreclosure followed on ill success, and the mill passed +to the hands of the same capitalist who took over the Kessler Mill of +Salisbury.[342] + + + + +CHAPTER VI + +_FINANCING THE MILLS (Continued)_ + + +An eminently successful mill president in Augusta was full of pessimism +toward all the problems broached to him, but three characteristic +sentences as to the capacity of Southern cotton manufacturers for +financial administration fit the case of too many mill officials, +undoubtedly: + +"The people of the South have got no business sense; I am a Southern man, +and I say that. Back yonder before the war what money they had was in land +and niggers. They knew nothing about financial management on close +make-or-lose propositions." This judgment is borne out by that of one of +the foremost newspaper editors of the South, who is also a large investor +in cotton factories, who said: "The history of the industry abundantly +vindicated what Edward Atkinson said about the South not knowing the +difference between a penny and a nickel. None of the projectors, with the +exception of H. P. Hammett and a few like him, could carry to the mills +more than a general business and executive capacity." Because of +prosperous conditions, he said, most of them made money in their ventures, +despite their lack of business experience, but he added "... when +depression came, when it was necessary to discriminate between a penny and +a nickel, the mill went to blazes. It was the exceptional man who could +endure the test of the penny rather than the nickel." + +Similarly, a Charlestonian who had just returned to the city after +attending the reorganization of one of the most famous mills in the South, +in which he is a heavy investor, was moved to declare: "Mismanagement and +incompetency (the Southern people are the poorest business men in the +world with a few exceptions) ... are responsible for most failures." + +Mr. August Kohn, in Columbia, who is himself a broker and the historian of +the South Carolina mills, while recognizing the fact of these shortcomings +in Southerners, as obtaining in the past and yet not overcome, held out a +more hopeful view for the future: "Lack of capital and lack of trained +management have been the great difficulties where mills have failed. We +are developing management of the trained sort in experience and in the +improvement in the business tone of our people."[343] + +With this introduction, it is convenient under the general topic of +financial administration, to dispose of several random points at the +outset of the chapter. + +Until the outbreak of the European war, two great cotton mill combinations +in North and South Carolina, were those controlled by Mr. James W. Cannon, +and centering about Concord and Kannapolis, North Carolina, and that of +the late Mr. Lewis W. Parker, with principal offices at Greenville, South +Carolina. The former consists of thirteen plants, and the latter, which is +no longer in existence, once numbered as many as sixteen mills. These +combinations were financed on opposite plans. A gentleman trained by Mr. +Parker, and at one time in a leading position in the management of the +mills in the Parker Merger, so called, explained that "... Lewis Parker in +his merger thought that amalgamation would reduce over-head expense; that +he could get cheaper money and cheaper supplies by buying in quantities." +He "... was offered immense sums of money at 3 per cent. when his merger +went together, although before he had never gotten money at least than 5 +per cent. for the individual mills." + +In distinction from this plan, the Cannon mills have not been constituted +into a merger in the same sense, though they are all under the presidency +of Mr. Cannon, who said: "The management of each of the ... mills is +distinct, though there are practically the same stockholders in all the +mills. Lewis Parker had a merger, and tried to run it all from one office. +my view is that each mill must have its own management and separate +attention to secure success." He admitted that "There is not much saving +on concentration where each corporation is a separate organization. Each +mill has its own directors. Each mill must stand on its own financial +strength. In many instances where the quantity is large, supplies are +purchased for all the mills together, but where the quantity is less, +this is not done."[344] + +These two plans are brought nearer together, however, by Dr. Beattie's +opinion that in practice Dr. Parker's idea of the saving to be derived +from the merger would not work out, from the fact that all officers and +higher employees of the combination would want increased pay for +additional work, and not in proportion to the extra labor and +responsibility imposed.[345] To this is to be added the caution that Mr. +Cannon probably does, in borrowing and in administration generally, +accomplish many economies not indicated in his statement. + +An editor said that there was no "graft" particularly in the promoting of +the mills; that the minutest details of an enterprise were watched by the +people of the community. This tends to be a confirmation of the view the +writer brought to take of the development of the industry in the South, +that it was to a larger extent the child of the public initiative and +concern than most economic movements. + +Mr. Thompson says that "The North Carolina mills have been almost +invariably managed honestly in the interest of all the +stockholders."[347] This is true of the entire South. There have, however, +been two instances of fraud, one chargeable to Northern selling agents, +but the other, unhappily, though also inexplicably, the result of +wrong-doing on the part of a Southern man who had drawn together a number +of mills. The former case was one in which a New York commission firm +which had taken the president of a successful plant under its patronage, +and placed him at the head of a mill in which the firm was sinking large +sums, was angered at his effective attempts to free the second mill from +the influence of the selling agents, and sought vengeance by ruining the +original mill of which he was president. In the second instance, it is +said, the president of the merger, during years in which his associates +and the general public had every confidence in him, had been owing, +unknown to a soul, $400,000 to the holding company and to the constituent +mills. When there was a directors' meeting of the holding company, the +constituent mills would appear to be the ones involved, and when the +several companies met, the sum seemed due to the general company. One of +his intimate co-workers stated that "His failure shook this whole section, +not only in a business way, but in a moral way."[348] And of both +incidents, it was believed by another that to them was attributable a loss +of interest by the Southern communities in mill building. + +The depression following the panic of 1873 gave trouble to most of the +cotton mills established in the years before the period of the industrial +revival. During the hard times, for instance, some of those who had gone +into Colonel Hammett's enterprise for the Piedmont Factory declined to pay +their subscriptions. For the three months during which the machinery was +being installed, the only pay the workmen got was credit for groceries at +a small store in Greenville, two officers of the company giving their +individual note of $500 as guarantee.[349] Colonel Hammett drew upon every +resource of business and personal friendship to tide the venture over from +1873 to 1876.[350] He went so far as to mortgage his horses and carriage +to buy the belting for the plant.[351] + +In some of the mills, the treasurer has the largest part in financial +administration. In such cases he is frequently a younger man, a product of +the newer South, who has pushed his way up in the enterprise to the +position of real power, leaving the president, who is perhaps a man better +equipped in community esteem than in specific training, as nominal head of +the concern. This has happened at Gastonia, North Carolina, a particularly +progressive spinning place. But in most of the companies, especially the +smaller concerns, the president is in chief control of financial affairs. +He often stamps his personality deeply on every department of the business +of the mill and village and region even. A case in point is that of Mr. +Charles Estes, when interviewed 98 years old, and for twenty years before +his retirement in 1901, president of the John P. King Manufacturing +Company, Augusta. With some show of pride, he related how during his +active career the manager of the R. G. Dunn commercial agency in Augusta +one day called him into the office and let him see the report of the King +Mill. It read: "John P. King Mfg. Co. Capital Stock $1,000,000. 3 per +cent. semi-annual dividends. President calls directors together once in +six months and tells them what he has done." "And that was the way I ran +the mill," he declared.[352] + +The Salisbury, N.C., Mill has a singular plan. Financial administration is +concentrated in the hands of a finance committee composed of the +president, treasurer and agent, or manager. The directors do about as the +finance committee indicates; they hold a less important place because of +the ill health of several of their number. Though nominally the whole +finance committee passes on questions, the president does not attend +regularly, and one of the directors not on the committee always agrees in +the action of the smaller group.[353] + +The effect of strong personality in a promoter and of the business +reputation of his enterprise upon impressionable Southern communities has +been mentioned in a previous report. This came out clearly in the ease +with which money could be borrowed. It was said by an old gentleman who +knew Colonel Hammett in South Carolina very well that "The few capitalists +we had then (we didn't have many) just came to his assistance whenever he +asked them."[354] With respect to certain wholesale merchants of New +York, Philadelphia and Boston, the writer was made to believe that they +have so much confidence in a particular North Carolina manufacturer, that +they give him any amount of capital he needs.[355] Mention has already +been made in another connection, of the fact that Mr. Parker was offered +large sums of money at 3 instead of 5 per cent. when he broached his +merger successfully. The recent depression of the famous Graniteville +mill, one of the first in the South, was accounted for by the statement +that everybody was ready to lend money to Graniteville as an old and +reliable mill, and never thought of requiring it back, until all at once +all the lenders wanted their money, and this fortuitous trend made +reorganization necessary.[356] + +During the war the old Augusta Factory was sold into new hands at, +ostensibly, $200,000. The new company capitalized the plant at $600,000, +about what it was worth. It must have been a device to lend financial +prestige to the mill that Governor Jenkins of Georgia was given $100,000 +stock for his influence as a director. He did nothing to earn this, was +the writer's assurance.[357] + +Perhaps it was to facilitate financial management of his mill that William +C. Sibley preferred New York and Cincinnati subscriptions to large blocks +of stock, to local subscriptions in smaller amounts, when soliciting +backing for the Sibley Mill at Augusta.[358] + +Turning now from the subject of financial administration of the mills to +that of profits; it is not clear that gratifying earnings were usually due +to good management; it is, however, true that poor profits or no profits +were due oftener than otherwise to faulty executive control. It is meant +by this to indicate that the industry in the South has shown itself, on +the side of profitableness, singularly responsive to the material +condition of the section, and to the state and trend of public opinion. +The degree of success of the mills has displayed the fundamental fact that +the South has in the past forty years been above all else in a process of +growth, and has given fresh proof of the intimate connection between the +fortunes of the companies and the changes in the whole section--economic, +mental and spiritual. The profits of the mills have constituted a good +barometer to the evolution of the South since Reconstruction. Graphically +represented, the earnings of the plants would exhibit a curve of decided +aspect. It is sought by specific references to make this curve appear, and +afterwards to sum up the results with several reasons therefore. + +Tompkins, by many believed to have been the best authority on cotton +manufacturing in the South, wrote: "It has been abundantly proved by +experience in the Carolinas that cotton mills on every class of goods +manufactured there, can make a profit of 10 to 30 per cent. This has been +done by the smallest as well as the largest mills on the coarsest and the +finest yarns, single as well as twisted; and on the heaviest as well as +the lightest weight cloths; and on dyed and undyed yarns and cloths. The +variation in profit between 10 and 30 per cent. is caused by variation in +prices of cotton and of manufactured goods, and also by variation in +management." + +In another passage he has said: "From the experience of the best mills +that have been running in the South for twenty years and over, and which +have always been kept well up to date, it would appear that about 15 per +cent. is the average annual profit in clear money for the whole +time."[359] + +The writer was given the opinion by Mr. Thackston of Greenville, South +Carolina, in whose knowledge and judgment great reliance is put, that for +the last ten years the average earnings for well-managed Southern mills +have been $2.50 per spindle, which, reckoning the average cost of the +plants at $20 to the spindle (leaving aside other capital invested) is a +profit of 12.25 per cent.[360] + +A banker of Winston-Salem, which is an industrial community, could not +understand how the Southern mills succeeded "as well as they have." When +there were mentioned to him several mills which have been consistently +profitable, he found special advantages accountable for their favorable +showing. In one case it was tidewater freight rates, in another skilful +cotton buying by a manager of long experience. It was his belief that the +average profits of Southern mills from 1880 to 1914 (omitting, that is, +the years since the outbreak of the war) were not as much as 10 per +cent.[361] + +So much for the gains over the whole period. The earnings at several +points in the development of the industry show a wider range. + +A nephew of Mr. Tompkins, quoted above, who has succeeded in considerable +measure to his uncle's manufacturing interests, and who is of too +practical a turn of mind to be affected by the enchantment of distance, +speaking of the success of mills right at the opening of the era, said +that some made from 30 to 70 per cent. profit.[362] In a previous chapter, +it has been seen how many mills at this juncture increased their plants +from earnings. A Utopian tinge may be suspected in an article appearing in +The Daily Constitution, Atlanta, in March of 1880, which, in urging upon +Southern communities the establishment of spinning mills, stated: "At +prevailing prices there is nearly or quite six cents per pound profit over +all expenses in spinning No. 14 yarn, or three cents per spindle per day; +this would give $9 per spindle per year, and as spinning mills can be +built for less than $18 per spindle, no other figures are required to +demonstrate the statement that the spinning mills in the South bid fair to +realize this year fifty per cent. on the capital invested. Nearly all of +these mills are running night and day, and every one of them is realizing +handsome profits. These are facts."[363] The goods of the Wesson Cotton +Mills, Mississippi, took a premium at the Centennial Exhibition in +Philadelphia in 1876. The company started with one mill and a capital of +$300,000. This plant made 30 per cent. profits, so another was built and +the stock increased to $1,000,000.[364] A North Carolina newspaper trying +to encourage cotton manufacturing in that State, stated in 1880 that upon +the $2,288,000 invested in the mills in South Carolina, the profits ranged +from 18 to 25 per cent.[365] The Boston Journal of Commerce in 1881 gave +the opinion of an Englishman visiting the Eagle and Phoenix Mills, +Columbus, Georgia, that the No. 3 Mill, then new, was the best equipped in +the world, and said that "The profit of these mills last year was 20 per +cent. on a capital of $1,250,000 or $5.76 per spindle."[366] + +Saffold Berney, in his Handbook of Alabama, published in 1878, made a +rather elaborate computation of the earning capacity of a 4,000-spindle, +125-loom mill, making 6,000 yards of cloth per day.[367] It may not be +uninteresting to see how he worked out a considerable rate of profit for a +small plant. His calculations are: + + 3,000 yds. 7-8 shirting at 6 cents $ 180.00 + 3,000 yds. 4-4 sheeting " 7 " 210.00 + -------- + Total gross income $ 390.00 + + Cotton on a basis of 10 1-2 cents, + 15 per cent. waste $220.94 + Labor and mill expenses 63.44 + Office and general expenses 9.62 + Coal, gas, oil, starch & supplies 19.00 + Insurance 3.11 + Charges in selling goods, 2 1/2 per + cent 9.75 + Wear and tear machinery 5 per cent 13.69 339.55 + ------ ------- + Leaving a net profit per day of $ 50.45 + + Or for 300 working days or one year of $15,135.00 + +Figuring the cost of this mill at $20 per spindle, and leaving aside, as +before, money otherwise invested about the business, there is a capital of +$80,000, upon which a profit of $15,135.00 is 18.8 per cent. + +"Profits in the past," says Mr. Thompson, "have been so large that often +before the last payment on the stock is due, a sum sufficient to pay all +obligations has been accumulated." He cites as a particularly favorable +instance, that of a mill which required no further instalments on +subscriptions after a little more than one-third of the instalment-payment +period had run out.[368] + +A little incident is interesting as involving two of the most important +and picturesque personalities and one of the chief mills connected with +the rise of cotton manufacturing in the South, and it bears directly on +the topic now being considered. It seems that the founding of the Piedmont +Factory by Colonel H. P. Hammett in South Carolina inspired a notice from +Mr. Edward Atkinson, of Boston, in which he reasoned that cotton +manufacturing in the South could never pay. This came under the eye of +Colonel Hammett. To the article he pinned his annual balance sheet, +showing a profit of 20 per cent., and sent the two to Mr. Atkinson.[369] + +In regard to these first years of the large establishment of cotton mills +in the South, it is common to hear the opinion that the big profits made +attracted the energies of the people to mill building.[370] Going a little +further back, the mills in operation just before the textile era, though +few in number, showed gains that bore a part in the boom about 1880.[371] + +Twelve years after taking charge of the plant, Colonel Hickman had earned +by the old Graniteville mill sufficient surplus to build the Vaucluse Mill +at a cost of $361,513.24 without calling for assessments upon +stockholders, and five years later had accumulated a cash surplus of +$220,831.86. He had doubled the production of the original Graniteville +Mill. The statement of the affairs of the two plants in 1804 showed: + + _Gross Profits:_ + + Graniteville $82,724.69 + Vaucluse 37,131.31 + ----------- + Total profits $120,856.00 + Net profits 80,701.71 + +This net profit amount represented 13.5 per cent. profit on $600,000 +capital.[372] + +Coming down, now, a decade later in the period. There is shown a degree +of success pretty much uniform for the various mills. + +The first plant of the Gaffney Manufacturing Company which was paid for +when operation commenced, in three years earned enough to build an +additional plant of two stories.[373] This mill indicates very well a fact +brought out in the preceding chapter, that many additions to plant, which +were being made after the mills had been a few years in operation, were +accomplished from earnings. The Salisbury Mill is a case in point. Its +inception and that of the Gaffney Mill the two being projected at about +the same time had many things in common (as did the towns in which they +were built). Increases in plant of the Salisbury Mill have been greater +proportionally than the increases in capitalization.[374] + +From manufacturers, from investors, and from persons acquainted with the +public economy, have been had statements, each reflecting an individual +bias, but each showing unmistakably that there was a general and marked +decline in profits in the second decade of the development. A retired mill +president, whose decision to leave the field was perhaps affected by the +condition she described, regretted that the companies are still laboring +under decreased profits as a result of the fact that mills were built +more rapidly than the market for goods expanded to meet the +development.[375] Another mill president thought that no more mills are +likely to be built in his section too many years. "They went it too rank, +you know," he declared with some feeling. "Once in a while you hear of a +new mill starting up, but its not as common as it was ten or fifteen years +ago." He put the date of the fall-off in profits at about 1900.[376] The +son of Colonel Hammett, several times mentioned, who is a successful +manufacturer, deplored the building of too many mills in a short period, +and said that profits fell away abruptly.[377] + +A bank president whose institution has played a leading part in the +textile prominence of Columbia, South Carolina, said that "1890 to 1900 +was the heaviest borrowing period, as this was the greatest period of +development. Profits were poor, especially from 1895 to 1903."[378] + +Though he does not believe selling agents have taken much stock in North +Carolina mills, Mr. Thompson attributes many failures of mills to "slavery +to commission houses through which they sell their product." He implies +that it was the grip which the agents got on the mill by the loan of +running capital that brought the ill effects. At any rate, the commission +houses became more deeply interested in the mills as the plants increased +in numbers, and profits were hurt by this fact, he believes.[379] This +influence continues, thinks a former president of the great Graniteville +Mill, who said: "The commission merchants take the very heart out of the +mills. The commission houses of New York, Philadelphia and Boston get more +out of the mills than the stockholders in the South."[380] + +While it is true that "most of the mills of the South have +succeeded,"[381] there have been, besides some concerns which have stood +still, neither making nor losing, a few notable failures. It is the common +opinion that failures have been due almost entirely to lack of capital and +bad management. Probably these faults and a good many others contributed +to the ill success of the old Charleston Manufacturing Company, which +began life with such high hopes at the outset of the cotton mill era. If +any enterprise was an expression of the motive forces in the South in +1880, this one was. It supplied a potent example to communities all over +the South contemplating cotton factories. The property of the Charleston +Manufacturing Company was sold under the hammer to the Vesta Cotton Mill +Company, which was not more successful with the plant. After standing a +year idle, the attempt was made to operate the mill with colored help, and +a reorganization of the Vesta Company was had for this purpose. A large +proportion of the subscribers to the original company remained in the two +reorganizations that followed.[382] In the experiment of negro operatives +the old factory was again opening up a vista to the South, for, as it was +vainly pointed out to the negro population of Charleston, if the trial of +colored operatives in the Vesta Mill had succeeded, plants all over the +section would offer employment to negroes.[383] When this third effort to +use the plant for a cotton mill came to nought, the machinery was moved to +Gainesville, Georgia, and though the top of the new mill was carried away +by a cyclone almost as soon as completed, the company is now doing well in +its new location.[384] The great, gloomy pile that thrice held so much of +the confidence of the South and the best hopes of Charleston still flanks +the railway tracks and rears itself above the depot, and seems all very +silent in spite of the fact that it is now occupied by tobacco +manufacturers. + +The grandfather mill, as it might be called, of the Southern textile +industry, is that of Graniteville, established by William Gregg in 1846. +The factory nearly failed in 1867, but was saved by the genius of H. H. +Hickman, a merchant of Augusta, who became its president at the critical +juncture. He died in 1898, and his son came in as president. At his +retirement and the reorganization of the mill, a business man of Augusta +has been elected the new president, but it will require, it is said, from +seven to ten years for him to build up the organization again.[385] + +The Royal Mills, the only cotton factory now operating in Charleston, was +built eighteen or twenty years ago, in the period of stress just noticed. +George Wagener, the original manager, left the mill at his death with a +surplus of $90,000. It went into slovenly hands, and failed. It has been +remodelled, however, and is now making money.[386] + +The small mills' success inspired the belief that large plants would +succeed. The Olympia, until recently the largest mill in the world, was +built at Columbia, and the Loray Mill, with more than half as many +spindles, was founded at Gastonia. It is the general opinion, whether +colored too largely by the unsatisfactory history of these two +conspicuous factories or not it cannot be told, that there have been more +failures among the large than among the small mills.[387] It has been said +of the North Carolina manufacturers as opposed to those of South Carolina +that they "are not so ambitious for big places, (at the head of large +companies) and a lot of those little fellows are getting rich." The North +Carolina mind seems to run on smaller things. I am not sure but what the +North Carolina mills have been more successful than the South Carolina +mills. + +A committee representing New England manufacturers has stated in spite of +an advantage over the Eastern mills of 25 per cent. in labor, and 50 per +cent. in respect to taxes, the Southern mills have made less profits than +their older competitors because of poor financing. However this may be, +the total losses on $100,000,000 invested in cotton manufacturing in the +South in thirty years does not represent more than 20 per cent., is the +belief of Mr. Thackston, of Greenville.[388] + +To go to a lyceum lecture on a sultry summer night and be whisked away by +picture and description to the snowy peaks and green glaciers of the +Canadian Rockies is not a more complete or refreshing transition than +that experienced by the traveler who lumbers along the Southern Railway +for weary, slow miles of sodden country and ill-kept settlement, all at +once to alight at the neat station and view the trim town of Gastonia, +North Carolina. It is not attempted here to account for the New England +psychology that animates this nonetheless Southern place, but it is +deserving of better praise than its harsh name gives it. Neither is it +proper in this place to seek to account for the success of its score and a +half of cotton mills. The recital of the profits they have made since the +European War is astounding, but there is every cause to believe in the +accuracy of the information given. + +In the first place, while the big Loray Mill, as has been seen, has not +reflected much credit upon the community of factories at Gastonia, and is +spoken of not very warmly there, no mill in Gastonia has ever had a +receivership.[389] + +The mills at Belmont right near Gastonia are making on the average 25 per +cent profits. The Treanton Mill at Gastonia, paid 100% in cash during the +first five years of its operation. The Majestic Mill, at Belmont, was +expected to make in 1916-1917, 100 per cent., or the price of the plant in +a single year.[390] + +In cataloguing the notes from a summer trip to the mill towns, the writer +feared he had made some mistake in setting down the results of an +interview with the vice-president and cashier of the First National Bank, +Gastonia, which is most largely interested in the mills of the place, as +to the earnings. He therefore wrote for a restatement on doubtful points, +and found himself confirmed. To quote the case of one mill from Mr. +Robinson's reply. "We have a mill here that had $150,000 capital paid in, +and after a short time issued a stock dividend of 20 per cent. which gave +them (it) a capital of $180,000, and this mill made $155,000 net profits +for the year 1915. I am satisfied that this same mill will make 125 per +cent. profit this year (1916) on their (its) $180,000 capital, or around +$225,000 net profit."[391] + +From the interview, there is the instance of a 12,000 spindle mill; not +one of the most successful in Gastonia, which made $2,500 the week +previous. + +While the mill expected to make 125 per cent. net profits for 1916 is said +to be exceptional, a number of mills were, as near the end of the old year +as November 28th, expected to show from 75 to 100 per cent. net profits +for 1916, the writer was told that it would be a pretty poorly managed +plant that did not clear the lower percentages.[392] + +A burly, forceful man in middle life, who has risen from foot pedlar to +mill president, said with frankness: "I am making more money than I know +what to do with. I am ashamed to take it!" He showed me the statements of +the orders for product with which his four mills would be kept busy for +the next four or five months. He expected to clear $60,000 on the output +of each plant for this period.[393] Mr. Robinson, previously quoted, +recognizes that the cotton mills at Gastonia are more prosperous than +those of any other section of which he knows.[394] Not even early in the +period, when mills were first building, did they make such profits as now, +is the opinion of an old manufacturer at Gastonia.[395] + +The foregoing citation of the earnings of various mills at various points +of time in the period since their establishment has served to exhibit the +general movement of profits. At the outset, most conditions were favorable +to large gains--there was little competition, labor was most plentiful and +cheap, the lack of advantageous marketing facilities was to some degree +offset by purely local demand for the product, and the deficiencies of +management tended to be neutralized by the presence of physical advantages +which disappeared when a more advanced development increased the size of +plants, widened the area from which raw cotton was drawn, and extended the +market for product. It is said repeatedly that in those days any fool +could make money in cotton manufacture in the South.[396] + +With the closing years of the second decade of the mill growth, most of +these advantaging circumstances were fading before the increase of +competition. Their very success was proving fatal to the mills. They had +ceased to be local affairs. When outside influences came in--commission +and machinery men--new and difficult problems had to be faced. The +factories were assuming the physical proportions which they were bound to +assume, and which it was right they should assume, but they ran ahead of +the development in the textile industry, and in the South of expertness of +management, business resourcefulness and economic outlook. The spirit +could not keep up with the flesh, and the mind lagged behind the body. + +The prosperity which the mills are now enjoying they very well understand +to be hectic, the result of the European War. They were having a hard time +enough until the war came and put them all on velvet, as someone expressed +it; 25% of the Southern Mills were in bad shape, defaulting an interest, +etc.[397] + +There are in the industrial community of Gastonia, however, and in certain +individual mills and managers, particularly in North Carolina, signs, that +point to a catching up of internal capacities with external maturity. +There is being developed--not yet clearly seen by any means, and in not a +few points apparently contradicted[398]--a manufacturing spirit in the +South, an industrial faculty that is able to cope with difficult +conditions, the results of economic progress. This promises that the South +is learning after forty years what Edward Atkinson said it did not know, +the difference between a penny and a nickel. It indicates that the South +will be meeting narrow margins of profit with close figuring of the costs +of production. + +It is natural to turn from the subject of profits to that of dividends. +There is in the history of the mills a general parallel between the two, +with, however, certain variations arising from the fact that the industry +has been and is now in constant process of growth. With the exception of +perhaps a few years, earnings could always be profitably invested in the +business,[399] particularly in expansions of plant.[400] As will be seen +in more detail later, the peculiar conditions under which the mills took +their rise involved indebtedness for plant and for running capital, and +earnings had to go to pay interest and principal of this. + +The Augusta Factory was founded in 1847,[401] and, with Graniteville +nearby, though in South Carolina, resembled in its earlier years, and to a +diminished extent still does, the English and Continental textile +manufactories.[402] They have both fallen upon evil days more recently. +The Augusta Factory made 5 per cent. quarterly dividends for eight years +and nine months from its founding.[403] In 1858, eleven years after +establishment, the plant was sold to a company with Wm. H. Jackson at its +head, for the sum of $140,000. Though the stockholders in the Jackson +Company paid $60,000 for repairs to the property, the purchase price, +payable in instalments for ten years, was made up from profits. The mill +at the close of the war was the wealthiest in the South. It was said in +1884 that it had had an uninterrupted course of prosperity since the war. +From 1865 to 1880 the company paid average annual dividends of 14 21/32 +per cent.[404] + +In 1880 the stock of the mills at Augusta, Georgia, paid about 8 per cent. +interest per annum, in semi-annual and quarterly dividends.[405] + +Under Col. H. H. Hickman's management of Graniteville there were regular +dividends of 10 per cent.[406] The son of this former president, and until +recently himself president of the mill as his father's successor, said: +"Graniteville was so successful it had a large influence. It never ceased +operation, and to my certain knowledge it had a fifty-year record of +dividends."[407] + +Perhaps some indication of the widespread popularity of cotton mills as an +investment from a purely dividend-seeking point of view is contained in a +newspaper notice of 1881 setting forth that a large mill at Nashville, +Tennessee, had declared a dividend of 14 per cent. and another was built. +In 1881 the Enterprise Factory, in Georgia, declared a 10 per cent. +dividend, and decided to increase its capacity by 125 per cent. or +more--from 13,890 spindles to over 33,000, and from 264 looms to more +than 600.[408] Mills as Pulaski, in the same State, were anxious to double +their capacity; $50,000 was subscribed for a mill at Jackson, West +Tennessee; Dallas, Texas, was starting a $200,000 spindle plant, and the +town of Sherman wanted a $75,000 factory.[409] The following year, the +same paper printed an item showing further that dividends were being paid +to stockholders in factories all over the South: "The cotton mills in +Mississippi have proved bonanzas for the owners. The one at Wesson (it has +been seen that this company made 30 per cent. profit from the plant) pays +26 per cent. dividends...."[410] The mill established by Mayor Courtenay, +of Charleston, at Newry, South Carolina, paid no dividends for the first +seven years of its life; this distinction from the earlier mills in regard +to dividends, bears out what was said of profits in the period in which +this plant was built (1892-3). Over the whole twenty-four years of its +history, however, the company has paid an average of 6 per cent. to its +shareholders.[411] + +The building of the Salisbury Mill was completed December 1, 1888. The +first cloth was turned out February 9, 1889. The first dividend of 5 per +cent. was declared January 11, 1890. The mill has missed only one dividend +payment, a quarterly one, since this time.[412] It is true that for the +first three or four years of its life, the concern was in an uncertain +way, the panic of 1893 proving embarrassing to it, though not as seriously +so as in the case of the Newry Mill, just cited. For a long time the +investment paid 8 per cent. dividends, then for several years of late 10 +per cent. On July 10, 1916, the directors declared an extra dividend of 5 +per cent., paid August 1. A part of the profits has for years and years +gone back into the business, enabling it now to earn good sums.[413] + +In the first ten years of its operation, the Laurens Mills were very +profitable. Borrowing money to bring its spindleage up to thirty thousand, +it expanded to 43,000 spindles on earnings. At the end of the ten-year +period there was the plant worth about $800,000; the company owed no +money, and the only liability against it was $350,000 of common stock. +There was a cash surplus, probably small. For six years it had been paying +12 per cent. annual dividends. The mill was incorporated in 1895.[414] It +is not certain that dividend payments were made by this company while it +was carrying its debt, but the Anderson Mill, Anderson, South Carolina, +paid interest on its indebtedness and 8 per cent. dividends as well.[415] + +Reference has been made to Mr. Thompson's statement that large profits +have frequently enabled mill companies to discharge all obligations before +the last subscription-payment was due. He cites the case of an enterprise +of $100,000 capitalization, with shares payable in weekly instalments of +50 cents, which after 70 weeks, with only $35 on the share paid up, +declared a dividend of 4 per cent. on the capitalization. This plant, +which he says is by no means universal, has, besides building large +additions from profits always paid 4 or 5 per cent. in dividends each +half-year. This is probably the Cabarrus, one of the Cannon mills, at +Concord.[416] + +From Mr. August Kohn was had a valuable estimate of the whole matter of +Southern cotton manufactories as investments, assuming, that is, that the +mills of his State have been typical in this respect of those of the rest +of the section. He said: "If the people of South Carolina had put their +money into farm loans at 7 per cent.--the same people and the same +money--they would have been better off personally than they are after +having invested in cotton mills. There are no failures in real estate +mortgages at 7 per cent., but in cotton mill investments, principal and +interest has frequently been lost."[417] + +If this opinion is to be believed, had Mr. Goldsmith taken all the +factories of the State, and not "the fifty more important cotton mills of +South Carolina," he would have found an annual average dividend for 1905, +1906 and 1907, not of 7.56 per cent., but something below 7 per cent.[418] + +It is well to conclude this random review of the dividends paid by the +textile enterprises of the South with a thoughtful caution from Mr. +Thackston, of Greenville, who has been of chief assistance to the writer +in the financial aspects of the problem: "When it is said that the mills +(have) made such and such dividends, it is to be remembered that in many +cases the plant had cost more than the capitalization would show. Twelve +or 10 per cent. on a $50,000 investment is very different from 12 or 10 +per cent. on $30,000 paid up. The mills made so much money that they could +pay off their indebtedness frequently in a few years, but the returns on +capital paid up were not so great as might appear in some statements. + +"Piedmont is capitalized at $800,000. The plant probably cost $1,500,000. +When they pay 10 per cent. on the investment, it is because they are +neglecting to reduce the debt on the plant. They are really paying about 6 +per cent. on the investment, considering the total liabilities of the +stockholders." + +Tompkins has placed a useful modification upon the nominal showing of +dividends which finds place here, and has application to what was earlier +said of profits as well: "The tables ... showing range of profits, are +made up from exhibits as usually made in annual reports. This is exclusive +of depreciation, or wear and tear. Even in cases where an item of +depreciation is carried in the accounts, it is often simply a matter of +bookkeeping, and not a sum set aside for replacing of machinery.... Where +large profits are reported, and large dividends paid, it is always a +question whether the vitality of the mill is not suffering. There is a +number of cases where mills have paid several large dividends at the +start, but, on account of making no provision for depreciation, have +finally collapsed."[419] + +Some mills to continue Mr. Thackston's statement, cost in plant, he said +four times their total capital. A man would build a 10,000-spindle mill +and add to it greatly, not increasing the capital at all; he trusted to +earnings to care for the debt, and delayed payments on common stock. + +A remark of Mr. Goldsmith, though he unfortunately does not give the +source of his information, confirms this calculation. He says: "The +average South Carolina weaving mill costs about $20 to $21 per spindle; it +is capitalized at about $12 per spindle, and earns from $2 to $4 per annum +per spindle."[420] + +A statement covering five years for average well-managed mill properties +in and around Greenville, South Carolina, shows, he said: + + Average earnings on plant cost 13.47 per cent. + " " per spindle $ 2.94 + " cost " " 21.08 + Capitalized at " " 12.72 + +His conclusion was that "In general, the dividends on the actual cost of +the plants have not been over 12 per cent."[421] + +As to the development, nature and persistence of a market in the South for +cotton mill securities, the principal partner in a firm dealing in stocks, +bonds, real estate loans, and fire insurance, who has besides long been +identified with the cotton manufacturing industry in the Piedmont region, +said: "... as far as I am able to recall, the stock market began to +develop in this section about 1898 to 1901; and referring to some old +records, as of March, 1901, I find such entries as this: + + "5 Monaghan at 95 + 3 Brandon at 90" + +with other entries of the same kind. + +"About this date, in the up-country there were several young men who began +trading in these stocks largely on a brokerage proposition. I recall the +names of: + + A. M. Law & Co Spartanburg, S.C. + W. D. Glenn Spartanburg, S.C. + F. C. Abbott & Co Charlotte, N.C. + George E. Gibbon Charleston, S.C. + +and a few others whose names I do not recall just now. + +"In Greenville, there was Mr. A. G. Furman.... All these men are still in +the same line of business, and from small beginnings, have developed +satisfactory business in the buying and selling of these securities. + +"One element that lends itself to this business was the fact that in a +number of instances builders of machinery would take part of their bill in +stock, and later dispose of these holdings at concessions. I recall in one +year that I disposed of about $2,000,000.00 worth of such stocks."[422] + +An investor with considerable cotton mill holdings, in his replies, threw +a little different light on the matter in some particulars: "A market for +cotton mill securities developed between 1890 and 1900. There is less sale +for them now, but in those ten years they used to go like hot cakes. All +these brokers take a whack at them, but any man would starve that tried to +deal in them exclusively. I had a friend that tried to make his living +from dealing in them, but he didn't make his office rent, I deal in them a +little, more than anything else for accommodation to friends. There is +practically nothing in it for me."[423] + +Mr. Buist has here placed the commencement of this market as far back as +1890. But in the early months of 1881 M. J. Verdery & Co., brokers of +Augusta, were negotiating for the entire issue of $350,000 extra capital +stock to be made in connection with enlargements to the Enterprise +Factory. It was said that one man and his friends would take $140,000 of +the stock.[424] This was, however, an underwriting transaction, such as +those of which the first quotation speaks as being conducted on a +brokerage proposition, rather than the regular marketing of stocks +indicated by Mr. Buist. + +Another said: "Nobody deals exclusively in cotton mill securities, and +they are not quoted on the big exchanges either."[425] There is no doubt +about either of these points, judging from all the information received. +And further: "At the opening of the period, the sale for cotton mill +stocks was very local, and each mill took charge of its own sales."[426] + +A mill president of Augusta said that he frequently has inquiries for +stock; he refers these applicants to brokers in the city.[427] + +It has been seen that the curve of dividends of the mills shows a rough +correspondence to that of profits; it may be observed in the paragraphs +that follow that the third curve of market values of mill stocks follows +more or less the other two curves. There will be mentioned first the cases +in which the securities sold, for one reason and another, at low figures, +and second the instances of more advantageous quotation, with some +comments on the occasion for the high and low prices. + +The cotton manufacturing business in the South has been a precarious one; +it has proved quixotic, and there have been intervals of sterility.[428] +This may be taken as accountable for the fact that "mill stocks usually +sell below their book value."[429] This consideration has not, however, +as will appear more clearly a little later, prevented great variation in +the selling price of securities of mills in different sections of the +South, at the same point of time. + +"Mill shares have been a drug on the market and confidence in them has +been lost to a large degree."[430] In conformity with this, an +ex-manufacturer, now a cotton factor, of Augusta, Georgia, explained that: +"Stocks of mills in Augusta haven't sold at par in twenty years. You can +buy preferred stock of mills in Augusta at less than par. You can buy the +stock of the Augusta and Enterprise mills at 20 or so. The Augusta Factory +hasn't paid a dividend in twenty years." He could not understand why this +was true of the local manufacturing community, which is one of the most +notable in the entire South.[431] + +These considerations are in contrast to the statement of Mr. Goldsmith: +"The market value of the stock is almost always above par, increasing in +proportion to the age of the mill." The writer inclined to doubt this +accuracy of Mr. Goldsmith's information.[432] + +Referring now to the sale of stock at less than its book value, it may be +noticed again that during the war the Augusta Factory was sold into new +hands at, ostensibly, $200,000. The new company capitalized it at $600,000 +about what it was worth.[433] F. W. Wagener and Julius Koester bought in +the property which is now the Royal Mills, at Charleston, at about 20 +cents on the dollar.[434] An indication of the prevalence of this +condition is seen in the fact that the people of Charleston, who +previously had been generous subscribers to cotton mill stock, every +promoter going to Charleston for the placement of a large block, "about +1905 or 6 ... got canny, and quit subscribing to the stock of new mills, +for they found they could wait and buy the stock at less than par. For +twelve or fourteen years Charleston has not contributed to new +mills."[435] The reason for the general drop in the value of mill +securities twelve or fourteen years ago lies in the depression in the +industry caused by the ill-considered boom in mill building, already dwelt +upon; a cause which had its rise earlier, but which no doubt continued to +operate through this later period, was set forth plainly by a banker of +Columbia. He said: + +"Suppose a Southerner was promoting a mill that was to cost $1,000,000. In +contracting for $600,000 worth of machinery, the machinery people would +take half of the amount in stock. Machinery was in great demand, and high +in price. The machinery manufacturers could throw their stock on the +market quickly at 50 cents on the dollar, and make money. But in doing +this they hurt the price of the stock of the mill."[436] + +There seems to be pretty clear cause for the sensational drop that once +occurred in the selling price of the stock of Pacolet, one of the greatest +of the Southern mills. The factory had been making heavy goods for the +Chinese market; this market was so unfavorably affected by the exclusion +act that the goods became unprofitable to the mill. It cost money to +change the machinery. So much preferred stock was issued that the common +stock of the mill fell from 300 to a point below par.[437] + +It has been seen that for the last six years of the first decade of the +operation of the Laurens Mills, 12 per cent. annual dividends were paid. +Within two years after the fight between local shareholders and Northern +selling agents, the dividends got down to 5 per cent. and the stock fell +from 175 to par.[438] A similar decline has been very apparent in the +stock of Pelzer, in the same State, which ten years ago was selling at 175 +or 180, and which now may be bought at a little above par. + +T. C. Duncan built the Union Mills, and these succeeded. The stock went to +$150 a share in 1900 or 1902. Then he built the Buffalo Mills. The +projector of these mills was, however, a cotton speculator, it is said, +and the market went against him. The town of Union, South Carolina, +"busted with Tom Duncan", as it was expressed. + +At the opening of the cotton mill period, it was said of the Rock Bill +Cotton Factory that "The best evidence of its success is that not one +dollar of its stock can be bought."[439] In the same month of the same +year it was published that of the successful Mississippi mills, "The one +at Wesson pays 26 per cent. dividends, and the stock is worth over +300."[440] Pacolet was built in 1880. The architect suggested a certain +firm as selling agents for the mill, and Captain John H. Montgomery, the +projector of the company, was introduced to a member of this firm. In +consideration of receiving the account of the factory, this official +subscribed for the commission firm to fifty or a hundred shares of +Pacolet's stock. He told a friend shortly afterwards that he did not know +why he bought the stock, and offered to sell it at $50 on the share. It +happened that he held the stock, and he afterwards sold the stock at $300 +per share.[441] + +This buoyant success of the early mills, previously remarked with +reference to profits and dividends, and here seen in the advance in the +price of stock, is further illustrated by the history of some plants now +having large capitalization. These sold additional stock to the original +subscribers at a reduction--say at 75 or 80 when the par was 100. The +ventures were so profitable that the stock remained at par value.[442] The +same observation comes out, as applicable to a still earlier time, in the +circumstance of the issue, in 1865, when the Augusta Factory was paying +more than 14 per cent. dividends of three shares for one, bringing up the +capitalization to $600,000.[443] + +Fifteen years later it was said: "Augusta is becoming prominent in the +South as a manufacturing city, there being eight cotton factories running +here successfully.... These factories aggregate about 2,500 looms and +10,000 spindles; they consume about 50,000 bales of cotton annually, +manufacture about 50,000,000 yarns (yards) of cloths, (this besides yarn +mills) and employ 2,000 operatives. The capital stock of nearly all these +factories is at a high premium."[444] + +If the success of the Augusta Factory in 1865 was sufficient to maintain +at par issues of extra stock, as just noted, the reverse was true of +Graniteville two years later, when the elder Hickman took charge. Twenty +years earlier, the plant had cost to build $375,000. By 1867 the stock had +increased to $716,000, and the shares had fallen to $62.50 in value. The +mill was $50,000 in debt. Colonel Hickman cancelled $116,000 capital +shares, bringing the interest-bearing stock of the company down to +$600,000. He restored the depreciated stock to its proper value.[445] +Reference has been made to a stock dividend of 20 per cent. issued by a +mill of Gastonia within the last few years. + +A very present instance of this same quality, reflected this time in the +recuperative power of a mill, is contained in a prediction made by the +gentleman who knows most about the Graniteville Mill, that the stock which +then, at reorganization, sold for $60 the share will in a year, if all +goes well, sell at par.[446] + +It has been said that the stock of the Rock Hill Cotton Factory could not +be bought, and that the stock of several mills sold for $300 per share. +That of the Tucapau Mills, in South Carolina, is not to be had today, or +it can be had only at 3 or 5 for one. This is by some regarded as the +most successful mill in the State. + +It would seem that absolutely no stock of the Salisbury Mills is on the +market. Recently an energetic young man anxious to buy stock of the mill +for principals, went to the treasurer of the company and to shareholders +individually, without success. The treasurer said that by looking long +enough, and waiting for his chance, he might induce some stockholder to +sell at 200.[447] This comparatively low figure in his prognostication is +perhaps accounted for by the conservative character of the company from +the start, and the uniformly satisfactory, though not brilliant dividends +of the enterprise, together with the fact, maybe most potent of all, that +sixty of the one hundred and five shareholders in the Salisbury Mills are +ladies, the majority of whom have received their holdings through +inheritance.[448] + +The Majestic Mill, Gaston County, North Carolina, which in 1916 after nine +months' operation declared a dividend of 10 per cent., sold three shares +of stock which in some way had not been marketed, at 150 each.[449] + +In mentioning the contrast between the market price at this time of the +stock of mills in various localities. Thought was particularly of the +facts as to the Augusta mills' securities and those of the plants in and +about Gastonia. The latter are as optimistic as the former are the +reverse. Mills in Gastonia making in 1916 from 75 to 100 per cent. net +profits, are represented by stock selling at figures ranging from $150 to +$250 the share.[450] + + + + +VITA + + +Broadus Mitchell was born at Georgetown, Kentucky, December 27, 1892; he +attended a primary school in Richmond, Virginia, and then, for four years +until 1908, Richmond Academy; for one session, 1908-1909, attended the +Hope Street High School, Providence, Rhode Island; in 1909 entered the +University of South Carolina; in the summer of 1911 was a member of the +reportorial staff of The Daily Record, Columbia, South Carolina; graduated +from the University of South Carolina with A.B. degree in 1913; from June, +1913, until October, 1914, was a member of the reportorial staff of the +Richmond Evening Journal; entered The Johns Hopkins University in 1914; +was a Hopkins Scholar during this and the succeeding session; was Fellow +in Political Economy, 1916-1917; in July, 1917, became special staff +writer The New Leader, Richmond, Virginia, and was given furlough from +this position to return to the University in the fall of 1917; Fellow by +Courtesy and instructor in Courses in Business Economics, 1917-1918. + + + + +FOOTNOTES: + +[1] P. H. Goldsmith, The Cotton Mill South, p. 4. + +[2] D. A. Tompkins, in The South in the Building of the Nation, Vol. II, +p. 58. A more summary statement by the same author is the following; after +speaking of the prominence in the South of manufactures in the early years +of the nineteenth century: "The profit of cotton raising with slave labor +drew people away from manufactures to cotton planting. On the abolition of +slavery, the capabilities of the people to organize and conduct +manufactures showed itself again.... The re-establishment was not +commenced immediately after the civil war, because of the chaotic disorder +brought about by the abolition of slavery and the enfranchisement of the +negro." But now (1899) "every obstacle to the development of manufactures +has been removed. In many parts of the South the development is already +well advanced and in others it will undoubtedly grow rapidly." (Ibid., +Cotton Mill, Commercial Features, pp. 108-109.) + +[3] The South's Position in American Affairs, p. 1. Cf. "Upon the whole, +the last half of the Eighteenth Century, before the influence of the +cotton gin and Arkwright's inventions were fully felt in the South, was a +period when agriculture yielded some ground in primary manufactures and +household industries." (V. S. Clark, in South in Building of Nation, Vol. +V, p. 308.) + +[4] Holland Thompson, From the Cotton Field to the Cotton Mill, p. 25. +"Except in the East, the feeling against slavery was strong during the +first quarter of the nineteenth century", and there is remarked the +foundation in 1816 of the Manumission Society, which had thirty-six +branches in 1825 and 1600 active members in 1826. (Ibid., pp. 26-27.) + +[5] August Kohn, The Cotton Mills of South Carolina, pp. 10-11. + +[6] Kohn, Cotton Mills of South Carolina, pp. 9-10. + +[7] Kohn, Cotton Mills of South Carolina, pp. 10-11. In 1809 the +legislative committee on incorporations reported unfavorably a request of +John Johnson, Jr., President of the Homespun Company of South Carolina, +for a loan on account of a patent, but it was recommended that he be +allowed until the next meeting of the legislature "to report on the +utility of the machine called the Columbia Spinster, so as to entitle, in +case the same be approved, the inventor of the same to the sum provided by +law for his benefit." (Ibid., pp. 11) Cf. Ibid., pp. 11-13. + +[8] For these facts the writer is indebted to an unpublished manuscript of +M. R. Pleasants, "Manufacturing in North Carolina before 1860", to which +reference will frequently be had. + +[9] Clark, in South in Building of Nation, Vol. V, p. 310. + +[10] Kohn, Cotton Mills of South Carolina, p. 7. + +[11] Kohn, Cotton Mills of South Carolina, p. 7. + +[12] Ibid. + +[13] Ibid. + +[14] Kohn, Cotton Mills of South Carolina, p. 7. His citation is of the +South Carolina and American General Gazette, Jan. 30, 1777. Cf. Ibid., pp. +6-7. + +[15] Ibid., p. 8. Reference is particularly to the City Gazette and Daily +Advertiser, of Charleston, January 24, 1779. + +[16] Kohn, Cotton Mills of South Carolina. Citation is of the American +Museum, VIII, Appendix IV, part II, July 1, 1790. The question mark is Mr. +Kohn's. + +[17] Kohn, Cotton Mills of South Carolina, pp. 8-9. + +[18] W. W. Sellers, A History of Marion County, p. 26. + +[19] Clark, in South in Building of Nation, Vol. V, p. 312. Cf. Ibid., pp. +328-9. Referring to the manufactories near Charleston and Statesburg, and +to carding and spinning machinery set up in eastern Tennessee in 1791, he +concludes, "However the industrial progress of these years was irregular +and local rather than general and permanent." Ibid., p. 310. + +[20] Clark, History of Manufactures in the United States, 1607-1860, p. +537. As indicating further the lack of causation in these earliest +ventures, it is said: "Maryland is hardly typical industrially of the +Southern States. Its factories date from the Revolution...." (Ibid., in +South in Building of Nation, Vol. V, pp. 328-9.) + +[21] "In this country, as well as in England, the germ of the textile +industry existed in the fulling and carding mills; the former, dating +earlier, being the mills for finishing the coarse cloths woven by hand in +the looms of our ancestors; and in the latter, the carding mill, the wool +was prepared for the hand-wheel. At the close of the Revolution the +domestic system of manufactures prevailed throughout the states" (Carroll +D. Wright, "The Factory System of the U.S." p. 6, in U.S. Census of +manufactures, 1880.) + +[22] The Bolton Factory was built in 1811 on Upton Creek, nine miles +southwest of Washington, Wilkes County, Ga., in 1794, on this site had +been erected one of Whitney's first cotton gins, propelled by the water +power that later ran the cotton mill. It is said that here Lyon conceived +important improvements on the Whitney invention, making a saw gin. +(Southern Cotton Spinners' Association proceedings seventh annual +convention, pp. 41 ff.) Here is a rather striking indication of the fact +that the South was on the right road--a gin, so far from diverting +attention entirely to the cultivation of the staple, gave way to a cotton +mill which was located on the same site and operated by the same water +power. + +[23] H. R. Helper, The Impending Crisis of the South, (ed. of 1860) pp. +161-162. + +[24] W. F. Marshall, interview, Raleigh, N.C., September 16, 1916. + +[25] "The first cotton mill built in North Carolina was built at +Lincolnton in 1813 by Michael Schenck.... This mill was the forerunner of +that remarkable industrial development which has taken place in North +Carolina since that time." (Pleasants, ibid.) + +[26] John Nichols, interview, Raleigh, N.C., Sept. 16, 1916. A. A. +Thompson, President of the Raleigh Cotton Mill, expressed about the same +view in an interview at Raleigh on the same day. + +[27] J. L. Hartsell, interview, Concord, N.C., September 2nd 1916. + +[28] Kohn, Cotton Mills of South Carolina, p. 15. Cf. Charlotte News, +(N.C.) Textile Industrial Edition, Feb., 1917, with reference to the Rocky +Mount Mill. + +[29] Though their father had been prominent for his conduct of the mill +and had displayed in his personality a generous disposition toward the +community, the sons were said to be wild and reckless, and when they fell +heir to the plant alienated the sympathies of the people of the vicinity. +Any possible public character for the business was thus destroyed. + +[30] Charles E. Johnson, interview, Raleigh, N.C., Sept. 16, 1916. + +[31] C. D. Wright, "Factory System of the U.S.", p. 6, in U.S. Census of +Manufactures, 1880. Cf. Clark, in South in Building of Nation, Vol. V., p. +319. + +[32] For a careful narrative of the establishments of the settlers who +moved into South Carolina from New England about 1816, with details of the +mills of the Hills, Shelden, Clark, Bates, Hutchings, Stack, the Weavers, +McBee, Bivings, etc., consult Kohn, Cotton Mills of S.C., and The Water +Powers of South Carolina; for those in North Carolina H. Thompson is +useful. Cf. also Southern Cotton Spinners' Association proceedings seventh +annual convention, pp. 41 ff. and Tompkins, Cotton Mill, Commercial +Features, pp. 301-302. + +[33] Wood for the boiler of the Mount Hecla Mills, growing scarce, the +machinery was taken to Mountain Island, and there run by water. (H. +Thompson, pp. 48-9.) + +[34] Cf. Kohn, Cotton Mills of South Carolina, p. 14. + +[35] Kohn, Cotton Mills of South Carolina, p. 14. Cf. Charlotte News, +Ibid., with reference to the Rocky Mount Mill. + +[36] H. Thompson, pp. 45 ff. + +[37] Ibid. + +[38] J. B. Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916. + +[39] H. Thompson, pp. 42-43. Cf. p. 12. + +[40] Theckston, interview, Greenville, S.C., Sept. 12, 1916. + +[41] Theckston, interview, Greenville, S.C., Sept. 12, 1916. + +[42] Clark, in South in Building of Nation, Vol. V., p. 321. Cf. Kohn, +Cotton Mills of South Carolina, giving quotation from Columbia Telescope. + +[43] Charlotte News, Ibid. The McDonald Mill at Concord during the Civil +War dealt in barter. A gentleman in a nearby town told the writer that he +remembered as a boy trading a load of corn for yarn to be woven by the +women at home. (Theodore Klutz, interview, Salisbury, N.C., Sept. 1, +1916.) In 1862 the Confederate government commandered the Batesville +factory in South Carolina, and took nearly all of the product. That +portion which was allowed to private purchasers was always sold by ten +o'clock in the morning. (Thackston, interview, Greenville, S.C., Sept. 12, +1916.) + +[44] Thompson, pp. 48-9. + +[45] Tompkins, Cotton Mill, Commercial Features, pp. 183-4. + +[46] Walter Montgomery, interview, Spartanburg, S.C., Sept. 5th, 1916. + +[47] Thackston, interview, Greenville, S.C., Sept. 12th, 1916. + +[48] John W. Fries, interview, Winston-Salem, N.C., Aug. 31, 1916. + +Another with a broad view of the history of the industry in the South was +willing to include in a similar statement the Graniteville mill about +which a good deal of controversy has clustered: "The cotton mills in the +South before the war were third-rate affairs. I speak of Graniteville and +Batesville and such plants as these. I remember my mother's telling me +that the warp ... used to be supplied by the mills for use in the homes of +the housewives. They were not regular cotton mills as the plants of later +establishment have come to be." (W. W. Ball, interview, Columbia, S.C., +Jan. 1, 1917.) + +[49] Figures of Thompson give 700 ______ and 7000 bales of cotton +consumed. (Thompson, pp. 49 ff.) + +[50] U.S. Census of Manufactures, 1900. Cotton Manufactures, pp. 54 ff. A +map showing the distribution of cotton spindles in 1839 indicates a good +representation for all the Southern States, except Mississippi, Louisiana, +Arkansas and Florida, as to mills of small size, but the localization both +as to plants and spindles in New England is marked. (Clark, History of +Manufactures in the U.S., section on cotton manufactures, pp. 533-560. See +the whole section for a masterful discussion of both historical and +economic phases.) + +[51] Cf. Thompson, pp. 49 ff. + +[52] Clark, in South in Building of Nation, Vol. V, pp. 319-320. "Few +mills south of Virginia had power looms prior to 1840." (Ibid., p. 321.) +Cf. omission of looms for Southern States in the census figures quoted +above. + +[53] Clark, South in Building of Nation, Vol. V. p. 322. + +[54] William E. Dodd, in South in Building of Nation, Vol. V. pp. 566-7. + +[55] Quoted in Pleasants. + +[56] Quoted in Pleasants. + +[57] Quoted from Niles' Register, May 10, 1828, in Pleasants. Mr. +Pleasants remarks that not until the late twenties did the leaders of +thought awaken to the disintegrating process that had set in two decades +before, and he notices the striking fact that in a report to the +legislature in 1828 it was said: "Nothing but a change of system can +restore health and prosperity at large. With all the material and elements +for manufacturing, we annually expend millions for the purchase of +articles manufactured in Europe and in the North out of our own raw +material. At this rate the state is on the road to bankruptcy. There must +be a change. But how is this important revolution to be accomplished? We +unhesitatingly answer--by introducing the manufacturing system into our +own state and fabricating at least to the extent of our wants.... Our +habits and prejudices are against manufacturing, but we must yield to the +force of things and profit by the indications of nature. The policy that +resists the change is unwise and suicidal. Nothing else can restore us." + +[58] Tompkins, History of Mecklenburg County, Vol. I, p. 124. Cf. Ibid., +pp. 126-7. + +[59] Kohn, Cotton Mills of South Carolina, pp. 18-19. + +[60] Clark, History of Manufactures in U.S., pp. 553 ff. Cf. Ibid., in +South in Building of Nation, Vol. V, pp. 213-214, and pp. 316 ff. + +[61] Kohn, Cotton Mills of South Carolina, p. 16. + +[62] "Cheapness of cotton, abundance of water-power, the resources of the +coal-fields, when steam began to supplant the dam, the other mineral +resources, and the wealth of forests of pine, live oak, cypress, and other +woods in which the South abounded, did not even attract from other parts +sufficient capital to develop the section to anything like its full +extent. No artificial expedients were necessary there. But capital did not +come." (Ingle, Southern Sidelights, p. 73.) + +[63] Quoted in A. B. Hart, The Southern South, pp. 231-232. + +[64] Helper, p. 25. + +[65] Tompkins, History of Mecklenburg, Vol. I, p. 100. + +[66] Ibid., Vol. II, pp. 200-201. + +[67] Tompkins, History of Mecklenburg, Vol. I, pp. 98-99. This statement +is strongly influenced by Tench Coxe. Cf. Ibid., Cotton Growing, pp. 3-4. +It has been said of the Irish people by Lord Dufferin that "the entire +nation flung itself back upon the land, with as fatal an impulse as when a +river, whose current is suddenly impeded, rolls back and drowns the valley +which it once fertilized", and Sir Horace Plunkett comments, "The +energies, the hopes, nay, the very existence of the race, became thus +intimately bound up with agriculture." (Sir Horace Plunkett, Ireland in +the New Century, p. 20.) + +[68] Tompkins, Building and Loan Associations, p. 43. Cf. Ibid., The +Cultivation, Picking, Baling and Manufacturing of Cotton from Southern +Handpoint, pp. 5-6. + +[69] Tompkins, Cotton Mill, Commercial Features, pp. 109-110. It is +interesting that this occurs in a book by a practical manufacturer +intended to point the way to technical success in mill management. It is +perhaps an indication of how social the South is in even its most +distinctly industrial aspects. + +[70] Another has used the expression that "the South was throttled by an +out grown Economic System." (F. T. Carlton, History and Problems of +Organized Labor, pp. 19-20.) + +[71] Tompkins, Cultivation, Picking, Baling and Manufacturing of Cotton, +pp. 5-6. "Agricultural Methods were 'stereotyped'." This writer did more +than any other in showing the character of the equipment for cotton +cultivation and the alterations made therein after the war. + +[72] W. H. Gannon, The Landowners of the South, and the Industrial Classes +of the North, pp. 7 ff. + +[73] William Gregg, Essays on Domestic Industry, pp. 18-19. + +[74] Tompkins, History of Mecklenburg, Vol. I, p. 194. "The price which +America paid for the introduction and use of cotton was sectionalism, +slavery, and war." (James A. B. Scherer, Cotton as a World Power, p. 243.) +For a careful description of the circumstances surrounding the invention +of the cotton gin, and the legal documents in the dispute over the rights +to it, cf. ibid., Cotton and Cotton Oil, pp. 19 to 31, inclusive, and +appendix. "We abandoned a once leading factory system; we imported slaves; +we let all public highways become quagmires; we destroyed every +possibility for the farmer except cotton and by cut-throat competition +amongst ourselves we reduced the price to where there was not a living in +it for the cotton producer. We made cotton in a quantity and at a price to +clothe all the world excepting ourselves." (Ibid., Road Building and +Repairs, p. 24.) + +[75] Ingle, Southern Sidelights, p. 49. + +[76] Scherer, p. 253. + +[77] Scherer, pp. 168 ff. Cf. Walter H. Page, The Rebuilding of Old +Commonwealths, p. 139. + +[78] A. D. Mayo, In The Social Economist, Oct., 1893, pp. 203-204. + +[79] F. L. Olmsted, The Seaboard Slave States, pp. 140-141. Cf. Ibid., p. +185, pp. 213-214. + +[80] Olmsted, Seaboard Slave States, pp. 298-299. Cf. "The amount of it, +then, is this: Improvement and progress in South Carolina is forbidden by +its present system." (Ibid., pp. 522-523. And for his general philosophy +on the subject, Ibid., pp. 490-491.) + +[81] Olmsted, Seaboard Slave States, pp. 179-180. + +[82] Ibid., pp. 288 ff. + +[83] Plunkett, p. 147. + +[84] Ingle, Southern Sidelights, pp. 68-69. + +[85] Ingle, Southern Sidelights, p. 11. + +[86] Clark, in South in Building of Nation, Vol. V, pp. 213-214. Not only +did slavery deter from coming to the South immigrants opposed to the +institution, but the Southern whites were indisposed to welcome those who +refused to grow into the system. A Southern Newspaper of the fifties +betrayed this: "A large proportion of the mechanical force that migrate to +the South, are a curse instead of a blessing; they are generally a +worthless, unprincipled class--enemies to our peculiar institutions, and +formidable barriers to the success of our native mechanics. Not so, +however, with another class who migrate southward--we mean that class +known as merchants; they are generally intelligent and trustworthy, and +they seldom fail to discover their true interests. They become +slaveholders and landed proprietors; and, in ninety-nine cases out of a +hundred, they are better qualified to become constituents of our +institution, than even a certain class of our native born.... The +intelligent mercantile class ... are generally valuable acquisitions to +society, and every way qualified to sustain 'our institution'; but the +mechanics, most of them, are pests to society, dangerous among the slave +population, and ever ready to form combinations against the interest of +the slave-holder, against the laws of the country, and against the peace +of the Commonwealth." (Quoted in Olmsted, Seaboard Slave States, p. 511.) + +[87] Tompkins, History of Mecklenburg, Vol. II, p. 204. + +[88] Cf. Ibid., Vol. I, p. 153. + +[89] Olmsted, Seaboard Slave States, p. 511. + +[90] Sidney Andrews, The South Since the War, pp. 342-343. + +[91] Olmsted, Seaboard Slave States, p. 543. + +[92] Olmsted, Seaboard Slave States, p. 210. + +[93] Gregg, Essays on Domestic Industry, p. 10. + +[94] Gregg, Essays on Domestic Industry, pp. 9-10. "He who has possessed +himself of the notion that we have the industry, and are wronged out of +our hard earnings by a lazy set of scheming Yankees, to get rid of this +delusion, needs only seat himself on the Charleston wharves for a few +days, and behold ship after ship arrive laden down with the various +articles produced by Yankee industry." (Ibid.) + +[95] Gregg, Essays on Domestic Industry, pp. 9-10. "He who has possessed +himself of the notion that we have the industry, and are wronged out of +our hard earnings by a lazy set of scheming Yankees, to get rid of this +delusion, needs only seat himself on the Charleston wharves for a few +days, and behold ship after ship arrive laden down with the various +articles produced by Yankee industry." (Ibid., p. 11.) + +[96] Helper, pp. 21 and 23. See these pages also for interesting +illustrations of dependence upon the North, some of which plainly +influenced Henry W. Grady. + +[97] William Gregg, Essays on Domestic Industry, p. 8. Nothing is more +frequently remarked as indicative of the exclusive attention to the +cultivation of cotton than the large reliance of an almost purely +agricultural country upon other sections for many articles of food. And +not only subsistance for the people, but subsistence for the plantation as +such often had to be imported. Missing nothing, Olmsted said, in a +description of a rail journey in North Carolina, "The principal other +freight of the train was one hundred and twenty bales of Northern hay. It +belonged ... to a planter who lived some twenty miles beyond here, and who +had bought it in Wilmington at a dollar and a half a hundred weight, to +feed to his mules. Including the steam-boat and railroad freight, and all +the labor of getting it to his stables, its entire cost to him would not +be much less than two dollars a hundred. This would be at least four times +as much as it would have cost to raise and make it in the interior of New +York or New England.... He had preferred to employ his slaves at other +business." (Olmsted, Seaboard Slave States, pp. 376-379.) + +But Gregg gave encouragement in any brighter aspects that he found, as +when he said, "Limited as our manufactures are in South Carolina, we can +now, more than supply the State with Coarse Cotton Fabrics. Many of the +fabrics now manufactured here are exported to New York, and for aught I +know, find their way to the East Indies." (Ibid., pp. 11) And he held out +to his State the prospect of the results that might reasonably be expected +from adoption of his proposals: "Were all our hopes ... consumated, South +Carolina would present a delightful picture. Every son and daughter would +find healthful and lucrative employment; our roads, which are now a +disgrace to us, would be improved; we would no longer be under the +necessity of sending to the North for half made wagons and carriages, to +break our necks; we would have, if not as handsome, at least as honestly +and faithfully made ones.... Workshops would take the place of the throngs +of clothing, hat, and shoe stores, and the watch-word would be, from the +seaboard to the mountains, success to domestic industry." (Ibid., p. 17.) +When Southern resources were exploited, the total benefit might not come +to the locality; "The great abundance of the best lumber for the purpose, +in the United States, growing in the vicinity of the town, has lately +induced some persons to attempt ship-building at Mobile. The mechanics +employed are mainly from the North." (Olmsted, Seaboard Slave States, p. +567.) + +[98] Olmsted, Seaboard Slave States, p. 544. + +[99] Quoted in Olmsted, Seaboard Slave States, p. 175. + +[100] Olmsted, Seaboard Slave States, p. 363. + +[101] Olmsted, Seaboard Slave States, p. 166. + +[102] Tompkins, Cotton Mill, Commercial Features, preface to appendix. +This is one of a thousand incidents which bring to mind the similarity +between Irish temperament and that of the people of the South--how prone +both have been to obscure to themselves real issues in public affairs for +a joke's sake. And the reflection would be dismal for both peoples but for +the finer discernment of which each, at other times, has shown itself +capable. Cf. Plunkett. + +[103] Gregg, Essays on Domestic Industry, p. 18. + +[104] Ingle, Southern Sidelights, p. 47. Cf. Burkett and Poe, Cotton, pp. +312 and 313, and E. C. Brooks, The Story of Cotton, p. 157. + +[105] Olmsted, Seaboard Slave States, p. 169. + +[106] Gregg, Essays on Domestic Industry, p. 20. "Lamentable, indeed is it +to see so wise and so pure a man as Langdon Cheves, putting forth the +doctrine, to South Carolina, that manufactures should be the last resort +of a country. With the greatest possible respect for the opinions of this +truly great man, and the humblest pretensions on my part, I will venture +the assertion, that a greater error was never committed by a statesman." +(Ibid., p. 14) For a very fine passage, omitted here only because of its +length, showing the fallacy of Cheves' position, and defining what Gregg +meant by "domestic manufactures"--not household industry, but the erection +of steam mills in Charleston, of cotton factories there and throughout the +State; "I mean, that, at every village and cross-road in the State, we +should have a tannery, a shoe-maker, a clothier, a hatter, a blacksmith +... a wagon maker ... this is the kind of manufactures I speak of, as +being necessary to bring forth the energies of a country, and give +healthful and vigorous action to agriculture, commerce and every +department of industry"--See Ibid., pp. 14-15-16. The Southern Quarterly +Review in 1845 quoted Cheves: "'Manufacturing should be the last resort of +industry in every country, for one forced as with us, they serve no +interests but those of the capitalists who set them in motion, and their +immediate localities'." And Mr. Kohn remarks, "This expression was not +peculiar to any one class of leaders in South Carolina at that time," and +he instances other examples. (Kohn, Cotton Mill of S.C., p. 13.) Cf. also +references to Burkett and Poe and to Brooks. + +[107] Gregg, Essays on Domestic Industry, p. 14. See p. 52. + +[108] Gregg, Essays on Domestic Industry, pp. 19-20. + +[109] Ibid., p. 20. + +[110] Gregg, Speech on Blue Ridge Railroad, p. 67. + +[111] Gregg, Speech on Blue Ridge Railroad, p. 29. + +[112] Quoted in The News and Courier, Charleston, March 9, 1881. Said +Olmsted in 1856: "Singularly simple, childlike ideas about commercial +success, you find among the Virginians.... The agency by which commodities +are transferred from the producer to the consumer, they seem to look upon +as a kind of swindling operation: ... They speak angrily of New York, as +if it fattened on the country without any good in return." (Olmsted, +Seaboard Slave States, p. 138.) + +[113] "... the labor of negroes and blind horse can never supply the place +of _steam_, and this power is withheld lest the smoke of an engine should +disturb the delicate nerves of an agriculturist; or the noise of the +mechanic's hammer should break in upon the slumber of a real estate +holder, or importing merchant, while he is indulging in fanciful dreams, +or building on paper, _the Queen City of the South_--the _paragon_ of the +age. No reflections on the members of the City Council are here intended, +they are no doubt fairly representing public opinion on this subject...." +(Gregg, Essays on Domestic Industry, p. 23.) + +[114] "The State of South Carolina has been extremely guarded in extending +grants to banking institutions, and in this she has shown her wisdom, for +it is an extremely dangerous power to exercise." He hoped, however, that +the danger to be apprehended from banking privileged would "not be +confounded with, and brought injudiciously to bear against the charters +which are necessary to develop the resources of our country, and give an +impetus to all industrial pursuits.... The practice of operating by +associated capital gives a wonderful stimulus to enterprise, and where +such investments are fashionable, no undertaking is too great to be +consummated. Why is it that the Bostonians are able in a day, or a week, +to raise millions at one stroke, to purchase the land on both sides of a +river, for miles, to secure a great water power and the erection of a +manufacturing city?... The divine, lawyer, doctor, schoolmaster, guardian, +widow, farmer, merchant, mechanic, common labourer, in fact, the whole +community is made tributary to these great enterprises. The utility and +safety of such institutions is no longer problematical.... If we shut the +door against associated capital and place reliance on individual exertion, +we may talk over the matter and grow poorer for fifty years to come, +without effecting the change in our industrial pursuits, necessary to +renovate the fortunes of our State. Individuals will not be found amongst +us who are willing to embark their 100, 200 or $300,000 in untried +pursuits: ... If liberal charters were granted, one hundred successful +establishments would spring into existence, where one, of feeble order, +could be expected from individual effort.... About three-fourths of the +manufacturing of the United States, is carried on by joint-stock +companies: ... We shall certainly have to look to such companies to +introduce the business with us...." He showed the perpetuity of the +corporate form by instancing one South Carolina cotton factory operated by +a joint stock company; "... there is but one of the original proprietors +living, yet the factory is still going on prosperously, producing as good +results as it ever has done ...", and this mill he contrasted with the +venture of an individual which was prosperous until his death, when the +legatees, not able to carry on the manufacture, forced the sale of the +property at half its value. (Gregg, An Enquiry into the Propriety of +Granting Charters of Incorporation for Manufacturing and Other Purposes, +in South Carolina, pp. 4-11.) + +[115] Clark, in South in Building of Nation, Vol. V, pp. 314-315. + +[116] Olmsted, Seaboard Slave States, p. 361. + +[117] Ibid., pp. 358-359. + +[118] Ingle, Southern Side Lights, p. 32 ff. "There were 101 persons in +the jails of Georgia on June 1, 1860; Virginia had 189; Massachusetts, +1161 and Illinois, 489. In the open life of the South and West, where men +could easily get to the land, there was little crime and jails were often +empty; in the industrial belt the prisons were always occupied. In like +manner and for the same reasons Southern and Western hospitals for the +insane and homes for the poor often showed very small percentages of these +unfortunates." (William E. Dodd, Expansion and Conflict, p. 231.) Cf. the +map on p. 188, showing the industrial belt of 1860 to extend along the +Atlantic Seaboard from New Hampshire to the head of Chesapeake Bay, +covering the coastal States, with scattering development indicated to the +westward. The territory south of Maryland shows a few plants of an output +of $250,000. + +[119] Upon this whole matter, see Scherer, p. 179 ff. "In 1816, when +Webster opposed protection, there was a capital of only about $52,000,000 +invested in textile manufacture, of which much still lay in the South. In +1828, when he reversed his position, this capital had probably doubled, +and had become localized in and about New England." (Ibid., p. 181.) Cf. +Ibid., p. 234. + +[120] Scherer, p. 152. "When the United States of America was formed, +manufacturing interests were as well developed in the South as the North. +Slavery ... existed under protection of law more than a hundred years in +Massachusetts before it was tolerated by law in Georgia. At the beginning +of the nineteenth century the tariff was not a matter which was +exclusively political.... The subject ceased to be an economic one and +became a political one in proportion as slavery grew in the South and +diminished in the North, and in inverse proportion as manufactures dried +up in the South and became of greater importance in the North.... The time +came when the South stood for free trade and the North for protection. +This was because slavery made agriculture more profitable in the South and +protection made manufacturing more profitable in the North with the South +as a protected market." (Tompkins, The Tariff and Reciprocity.) + +[121] Tompkins, Tariff and Protection. + +[122] Clark, in South in Building of Nation, Vol. V, p. 316 ff. See pp. +30-31-32. Contrast Tompkins, History of Mecklenburg, Vol. I, pp. 133-137. + +[123] But some of the agitation in favor of industries in this period, as +in other ante-bellum and indeed post-bellum years, had a flavor not +symptomatic of healthy desire for improvement. One hundred and thirty-one +delegates represented nineteen North Carolina counties at a meeting held +in Salisbury in 1836, at which resolutions were adopted asking the +legislature to give assistance in the building of railroads; another +evidence of this interest was the Knoxville railroad convention of about +the same date. Of the advantages which it was agreed would flow from the +building of the Charleston and Cincinnati Railroad, it was declared that +"it will form a bond of union among the States which will give safety to +our property and security to our institutions." (Tompkins, History of +Mecklenburg, Vol. I, p. 125.) Of more positive character was the utterance +of a Southerner who viewed with deep concern the danger that the North +would crush slavery and place the South under complete submission to +tariff aggressions, congressional representation for the latter section +finding a stop in the limit to slave territory: "Under these +circumstances, the true policy of the south is distinct and clearly +marked. She must resort to the same means by which power is accumulated at +the North, to secure it for herself. She must embark in that system of +manufacturing which has been so successfully employed at the north.... All +civilized nations are now dependent upon our staple to give employment to +their machinery and their labor.... If, then, we manufacture a large +portion of it ourselves, we reduce the quantity for export, and the +competition for that remainder will add greatly to our wealth, while it +will place us in a position to dictate our own terms. The manufactories +will increase our population; increased population and wealth will enable +us to chain the southern States proudly and indissolubly together by +railroads and other internal improvements; and these works by affording a +speedy communication from point to point, will prove our surest defense +against either foreign aggression or domestic revolt." (J. D. B. DeBow, +Industrial Resources of the South and Southwest, Vol. II, p. 127.) J. H. +Taylor, of Charleston, combatted the antipathy toward massing the poor +whites in factories with the reflection that small farming in competition +with slave labor brought discontent that might mean social upheaval, +whereas the factory opened a door of opportunity that allowed of +intelligence and stability; with the chance of coming to own a slave, +"they would increase the demand for that kind of property, and would +become firm and uncompromising supporters of Southern institutions." +(Ingle, Southern Sidelights, pp. 25-26.) + +[124] In earlier pages he has developed with much care the promising +industrial status of the Colonial and Revolutionary South. "In the +Southern colonies iron making became an important industry, even before +the beginning of the eighteenth century." The activity in Maryland, +Virginia, the Carolinas, Tennessee, Alabama and Georgia is shown: +Governor's Spottswood's ventures in Virginia, the passage in 1727 by the +Virginia General Assembly of "an act for encouraging adventures in +iron-works"; South Carolina forges built in 1773 are dwelt upon. His +original investigations reveal valuable facts as to iron-making in North +Carolina and upper South Carolina--details are given of the works of E. +Graham & Company, formed in 1826 and later merged with the King's Mountain +Iron Company; the Magnetic Iron Company, 1837, near the former plant, and +the South Carolina Manufacturing Company. It is to be noticed, however, as +a modification upon the good effect which might have been expected from +these enterprises, that the Graham Company had a considerable part of its +capital invested in slaves, and sixty per cent. of the Magnetic Company's +capital of $250,000 was used for the same purpose. (Richard H. Edmonds, +Facts About the South, Ed. 1894, pp. 3 ff.) + +[125] Ibid., pp. 10 ff. + +[126] Edmonds, p. 18 ff. + +[127] In reference to the false idea of wealth and prosperity in the +ante-bellum South, it has been said, "A delusion of great wealth was +created in the listing as taxable property of slaves to the amount of at +least two thousand millions." (A. B. Hart, The Southern South, p. 218.) + +[128] Edmonds, p. 2. + +[129] Ibid., p. 14. + +[130] Edmonds, pp. 1-2. + +[131] Ibid., pp. 2-8, 19-20. + +[132] Edmonds, p. 21. Cf. Ibid., pp. 19-20. + +[133] E. G. Murphy, The Present South, p. 97. + +[134] Murphy, p. 102. + +[135] Murphy, pp. 10-11. + +[136] Murphy, p. 21. + +[137] There were earlier expressions of the same spirit, some, as if in +foretaste of the South's fate under the old system, before the Civil War, +and others immediately following the war. But the motives were liable to +be selfish and unsound, as for the purpose of retaining slavery, and if +they did not lack, that fire and conviction which marked the full movement +commencing fifteen years later, they were fruitless of large results. "We +are going to work in good earnest, not only to repair the waste places of +the war, but to build up and improve and prosper, and to show the world +that we can be good soldiers in peace as we are in war." (W. J. Barbee, +published 1866) Cf. + +[138] News and Observer, Raleigh, N.C., Nov. 9, 1880. + +[139] "... business is driving sentimental politics to the woods." (News +and Observer, Dec. 31, 1880.) + +[140] Reprinted in News and Courier, Charleston, S.C., July 11, 1881. + +[141] "... they (the New York Times, which carried an editorial +questioning the word of General Wade Hampton, and the 'malignants' of the +Republican party) must realize the difference between a Southern gentleman +and a Northern malignant. They know that the former cannot prevaricate, +while the Northern leaders of the Republican party and the malignants are +usually devoid of personal honor." This is from an editorial in the News +and Observer, Raleigh, N.C., and is too characteristic of most of the +political writing in the South which was an outcome of reconstruction. + +[142] Reprinted in News and Courier, May 14, 1881. + +[143] Reprinted from the Memphis Avalanche, in The Daily Constitution, +Atlanta, Ga., March 30, 1880. + +[144] Reprinted in News and Courier, March 18, 1881. The writer had been a +slave-holder. + +[145] A sentence occurring in an editorial of the News and Courier, in the +issue of March 24, 1881, is indicative of the love with which this city +looked upon the undertaking proposed: "A man who has been in the whirl of +New York or in any of the brand new cities of the great West coming into +Charleston might readily enough come to the conclusion that the old city +was in a sad state of decadence ... but our own people ... if they have +their eyes open (or hearts open would perhaps be the better expression) +could not fail to see manifest improvement." + + "They dub thee idler, smilingly sneeringly, and why?-- + How know they, these good gossips, what to thee + The ocean and its wanderers may have brought? + How know they, in their busy vacancy, + With what far aim thy spirit may be fraught? + Or that thou dost not bow thee silently + Before some great unutterable thought." + + --Henry Timrod + +[146] "The people of South Carolina are nothing if not heroic, and right +or wrong, they are sincere, earnest, and brave ... the same heroic +qualities are now leading in the restoration of the South to prosperity, +and on a basis that must speedily give the reconstructed States a degree +of substantial wealth and power that was never dreamed of before the war." +(A. K. McClure, "The South: Industrial, financial and political", p. 55, +published 1886.) + +[147] The News and Courier, in an editorial on March 19, 1881: "Every true +South Carolinian must rejoice at the prudence and energy exhibited by the +citizens of Columbia in their management of the cotton mill campaign.... +It will be a happy day for the whole State when the hum of myriad spindles +is heard on the banks of the historic canal. Columbia will then grow +rapidly, speedily rivalling Augusta in the number and success of the +cotton mills. Thousands will be added to the population, and from our +political center additional life and energy will flow to every part of the +State.... we confess to having a weakness for Columbia, which suffered so +sorely at the end of the war, and which is the only place of consequence +in South Carolina that has not improved its business and enlarged its +boundaries since the overthrow of Radicalism in 1876. But cotton mills +will soon make amends for the vicissitudes and hopelessness of the past, +and for that reason The News and Courier takes the warmest possible +interest in the cotton mill campaign at Columbia." The Observer, Raleigh, +N.C., July 11, 1800: "... when our people once begin to mingle freely, +having a community of interests and a common purpose, sectional feelings +will be obliterated, and we will forget that there has been an East, a +center, or a West, and remember only that we are all North Carolinians, +sharing the same fortunes, blessed with a common hope and ennobled with +the same proud memories of a glorious past." The News and Courier, January +25, 1881, carried a plea for State aid for Columbia in her enterprise to +build a 16,000-spindle mill, the same as forms the subject of the first +part of this note. The editorial especially advocated the placing of +convicts at work on the construction: "... The capital, _because it was +the capital_, was laid in ashes by Sherman's troops. In the person of +Columbia, all South Carolina was ravaged and laid waste. The city which +suffered so sorely may reasonably expect the just assistance of the State +in the endeavor to repair her losses caused by war, and intensified by +years of contact with political profligacy and misrule." + +[148] "What the South should do is the caption that graces the editorial +effusions of all classes cf papers, and especially those of our own deeply +solicitous and anxious friends of the North. Many of us think we know. The +South should depend upon its own virtue, its own brain, its own energy, +attend to its own business, make money, build up its waste places, and +thus force upon the North that recognition of our worth and dignity of +character to which that people will always be blind unless they can see it +through the medium of material, industrial and intellectual strength. We +may proclaim political theories, but it is the more potent and powerful +argument of the mighty dollar that secures an audience there, and the +sooner we realize it the better for us." (News and Observer, Raleigh, +N.C., Nov. 27, 1880.) + +[149] Editorial in News and Courier, Mar. 9, 1881. + +[150] It is interesting and pathetic to observe how unaccustomed the South +was to the most obvious facts of business. Concentration upon one crop had +precluded from the Southern mind--speaking in the aggregate, of +course--the first reasonings springing from diversification of industry +and from ordinary competition. But once the necessity for a different +attitude became apparent, the statesmanlike manner in which this was +pressed must provoke admiration. The article in J. D. B. DeBow's +"Industrial Resources", etc., pp. 124-125, presents the consideration that +the cotton crop of Tennessee, amounting to 200,000 bales, 90,000,000 +pounds at 6-1/2 cents an average pound, gave the producers 11-1/2 per +cent. profit on their investment, while the manufacturers of the same crop +made 24 per cent. profit--more than twice as great. "Are there any so +blind as not to see the advantages of the system?" Much earlier Southern +statements of the true fact from manufacturing cotton was to be found, but +in the delirium of the latter days of slavery these were lost sight of. +Wm. J. Barbee, in his "The Cotton Question" pp. 138 and following, +commends for the reflection of capitalists in 1866 the "Manufacture of +Cotton by its Producers, suggestions of S. R. Cockrill seventeen years +ago." Cockrill speculated as to the gain to be derived from cotton mills +in the cotton states, and said: "Facts like these should fix the attention +of the cotton planter, teach him his true interest, and stimulate him to +become the manufacturer of the product of his field, instead of permitting +others to reap the entire profit." + +[151] News and Courier, Feb. 2, 1881. The editorial appeared apropos of +the opening of books for subscriptions to the Charleston Manufacturing +Company, which occupies a prominent place in the history of cotton +manufacturing in the South. The editorial concluded: "This is the logic of +the investment of money in cotton mills in Charleston. It will pay the +stockholders their ten or twelve per cent., and the city at large will get +a dollar's profit on every dollar's worth of raw cotton that the mills +consume." + +[152] While the manufacture of cotton was the most prominent manifestation +of the newly quickened spirit in the South, it was by no means the only +one. Every opportunity for productive enterprise was eagerly investigated; +the discovery of one of these was hailed in the papers with an enthusiasm +like the joy of a child in a new-found plaything. Properties of soils, the +use of the telephone, the most profitable employment for State convicts +were some of the topics of interest. There was, of course, a complete +absorption for a time in railroads in the Southern Atlantic coast states, +either for the further building of small independent lines, the merging of +these into systems, or the extension of the coastal lines over the +mountains into Tennessee. + +There was also a phase of the movement distinctly moral in tone, as, e.g., +the wide formation of temperance societies about this time. + +[153] News and Courier, Aug. 1, 1881. + +[154] While it is clear that the purpose to build cotton mills in the +South arose irrespective of the means at the disposal of the people with +which to do so, and would have come about had their financial limitations +been even more discouraging, it is certainly true that a revival of +business at the time of the commencement of the cotton mill campaign was a +spur to the widespread investigation into the profitableness of cotton +manufacturing. That there was coming to be money seeking investment, or at +any rate capable of investment, was good reason for the searching out of +opportunities for productive industry. The following gives an insight into +the better times that had begun: "The year that is just finished will be +to the present generation a red-letter one, for it brought to an end the +long and weary period of enforced economy and restricted business that +followed the panic of 1873, and put every branch of industry at work. +Agriculture was encouraged in the West and South by good crops and +remunerative prices, the factories received more orders than they could +fill, the railroads were blocked with freight, the mines were pushed to a +greater extent than ever, and all other interests were quickened towards +the end of the old year in a way that was full of promise." This summary +of the year 1879 appeared in The Daily Constitution, Atlanta, January 7, +1880. The return to specie payments did much to stimulate trade. A +contribution to the Savannah, Ga. Morning News, quoted by W. H. Gannon in +"The Landowners of the South and the Industrial Classes of the North", pp. +6, 7 and 8. The article was probably written by Mr. Gannon himself. + +[155] Quoted from Savannah Morning News by W. H. Gannon, The Landowners of +the South and the Industrial Classes of the North. "The cotton mill to the +cotton field" was the familiar dogma which crystallized out of the course +events were taking. + +[156] The term is taken from The News and Courier, where it was used +first, perhaps, in the issue of January 31, 1881. Before long it had come +to be a phrase in everybody's mouth, and proved to be apt beyond any +thought, probably, of the editor who first ran the line over a column of +notices of new mills established. + +[157] "The News and Courier busies itself with every enterprise, big and +little, that will turn a dollar's worth of raw material into more than a +dollar's worth of manufactures." (News and Courier, Mar. 19, 1881.) + +[158] Reprinted in Daily Constitution, Mar. 9, 1880. + +[159] News and Courier, Jan. 12, 1882. + +[160] Ibid., Feb. 22, 1881, see p. 11, note 3. + +[161] Ibid., January 26, 1881. + +[162] "While Charleston and other points in the State are discussing and +initiating their cotton manufactories, Spartanburg is pushing ahead with +her grand enterprise. (Spartanburg correspondence of News and Courier, +Feb. 4, 1881.) The same purpose to encourage new mills actuated the News +and Observer, December 24, 1880, in referring to Edward Richardson, of the +firm of Richardson and May, cotton factors, in New Orleans ... the cotton +king of the world. He runs ten to twelve plantations.... Has built a town +(Cresson) ... where he has factories employing 400 looms, 18000 spindles +and 800 hands. He is worth from $15,000,000 to $18,000,000, all +accumulated in the South, the poor South." The encouragement lent by one +mill to others to come into the field was recognized. In working for the +establishment of the Charleston Manufacturing Company, the News and +Courier was starting a force that would grow in power through the years: +"When this pioneer company shall have made a good start, other companies +will speedily follow...." (January 28, 1881). And again (Observer, January +2, 1880): "Another large cotton factory. The Charlotte Observer chronicles +the erection in the immediate future of a cotton factory in that city, and +regards it as the beginning of a prosperous growth of manufactures." An +item in the Barnwell, S.C. Sentinel, reprinted in the News and Courier, +Feb. 8, 1881, declared: "The people of Charleston should have never +hesitated as long as they have about embanking in the manufacture of +cotton goods, and we firmly believe, as the ball is started, that it will +be kept moving...." The Keowee Courier, in an editorial also reprinted in +the Charleston paper, commended Charleston as setting an example to the +entire State. A Georgia note, carried in the News and Courier of February +24, 1881, is especially specific in this connection: "If the organization +of this manufacturing company (the Enterprise Factory, Augusta, Georgia, +which was to be greatly enlarged after making good profits) proves a good +omen--its extension may work as an invaluable stimulus to other +enterprises now. It will hurry up the walls of the stupendous Sibley Mill, +where 25,000 spindles will soon mingle in our industrial acclaim. It will +quicken the shuttles of that giant corporation, the Augusta Factory." "It +will spur on the Globe Factory and the Summerville Mills to renewed +effort, while our South Carolina neighbors cannot but catch the spirit of +improvement." + +[163] Reprinted in the News and Courier, Jan. 31, 1881. + +[164] Reprinted in the News and Courier, Feb. 23, 1881. + +[165] Ibid., Jan. 27, Mar. 20 and May 4, 1881. + +[166] The commencement of the movement was right clearly marked in the +minds of the people. The News and Courier (August 1, 1881) in an editorial +commenting on the address of Major Hammett on cotton manufacturing in the +South, printed in that issue of the paper, had these words: "Major Hammett +was the founder of the Piedmont Factory, which, under his management, is +one of the finest and most profitable cotton mills in the South. The +Piedmont Factory was projected and built before the opening of the cotton +mill campaign in the South, and Maj. Hammett ranks, therefore, as one of +the pioneers in cotton manufacturing in South Carolina." + +[167] News and Courier, Oct. 13, 1881. + +[168] "We people of the South should embrace every opportunity which, like +the opportunity offered by this exposition, will bring among us +intelligent and interested observers of our industrial condition, +resources and aptitudes. We have in the midst of us the raw material, so +to speak, of a magnificent prosperity. We lack knowledge, population and +capital. These may be slowly accumulated in the course of years, or they +may be rapidly by well directed efforts to obtain them from beyond our own +borders. We advocate the latter plan." (Interview with one of the +officials of the exposition, printed in News and Courier, Mar. 14, 1881.) + +[169] News and Courier, Dec. 27, 1881. + +[170] An Atlanta dispatch to the News and Courier, February 25, 1881, said +the executive committee of the exposition was fully organized, with H. I. +Kimball, chairman and J. W. Rickman, secretary. By March 8 (News and +Courier) $20,000 had been subscribed in Atlanta, and General Sherman had +headed the Northern subscription to the capital stock with $2,000. By the +17th (News and Courier) the stock had reached $40,000, four subscriptions +of $1,000 each having been received from private individuals, and eleven +of $500 each from like sources. Railroad subscriptions at this date were: +Western and Atlantic Railroad Company, $10,000; Louisville and Nashville, +$5,000; Richmond and Danville Road, $2,500; East Tennessee, Virginia and +Georgia Road, $2,000. By the first day of April (News and Courier still) +New York bankers seemed likely to increase by $5,000 the amount of +subscriptions sought from them, and make their shares $30,000. Inman, Swan +& Co. subscribed to $2,000 worth of stock Drexel, Morgan & Co. took +$1,000; and Brown Bros. & Co. $1,000. Before the week was out, (News and +Courier, April 5) the Boston Herald had taken $1,000 worth of stock. The +executive committee had sent an agent to Europe and had made a tour of +investigation through the North earlier. + +[171] News and Courier, Oct. 21, 1881. + +[172] Ibid., Oct. 7, 1881. + +[173] News and Courier, Oct. 10, 1881. + +[174] November 1, 1881. This paper maintained Mr. Hemphill as staff +correspondent at the exposition for some time after its opening. + +[175] News and Courier, Dec. 5, 1881. The speech details the number of +miles of railroads that spread like a web over New England. "I have said +that there is no better simple standard than the proportion of railroads +to the square mile of territory of any State, by which to gauge the +condition and prosperity of the people. I ask you, gentlemen of Georgia, +if you will lag behind. I ask you men of the South what you will do in +this matter." "I told you last year you needed the savings bank more than +any other institution; there is a vast unused capital in your Southern +States in the hordes of the working people waiting for us, but there is +one condition precedent to the savings bank--you must set up schools." +This paragraph illustrates Mr. Atkinson's ideas singularly well. His +advocacy here of common schools was a part of his great desire to see the +South rebuilt, and so was his proposal of savings banks. But he could not +understand how the South wished to see money taken out of savings banks +and placed immediately in cotton mills, where it would be more productive +to its owners, and to the country. As far as Mr. Atkinson went, his +reasoning was astonishing sound, but where he stopped, he stopped +irrevocably. + +"Where are your dairies? You farmers of the hills of Georgia, from the +mountains of the Carolinas and Tennessee, aye, from the North Cumberland +valley, from the French Broad River, even from that great blue grass +country of Kentucky. Where are your dairies?" he seemed to think of +everything but what to his hearers seemed most obvious. He suggested stock +raising as profitable in the South, and finally the culture of Pongee, +Tussah or Cheefoo silk worms, though the latter would be, he thought, +perhaps of doubtful success. A week after this speech, Mr. Atkinson had a +talk, reported in the News and Courier of May 8, 1881, with the press +representatives in their pavilion. He discussed first "whether a single +roller gin, operating against a saw gin, will do an equal amount of work +with less motive power and less labor." He had arranged to take to Boston +to lay before the New England Cotton Manufactures' Association samples of +cotton from all the gins on the grounds. "Mr. Atkinson has proposed +another trial of every kind of gin, cleaner, press and picker, to be made +in the building of the New England Mechanics' Institute in Boston, in +December, 1882. Every man in the South who is especially interested in +cotton production and manufacture will be invited to plant a specific acre +for use at this trial, which will be the second step in what has been so +well begun in Atlanta. The picking and saving the cotton wasted on the +ground, the cleaning, ginning and packing of the staple in good condition, +offers to the Southern States a branch of manufacturing the most important +in the whole series of operations which neither the Northern States nor +Europe can share, but in which there is greater opportunity for profit in +ration to the capital invested than in any other department of +manufacture. 'No staple in the world,' said Mr. Atkinson, 'except the +sugar raised by the Maylays, is treated so barbarously as the cotton +produced in the Southern States of the American Union'." Tests, Mr. +Atkinson thought, showed that cotton from the Charlotte steam compress +worked up more smoothly, though the yarn was somewhat weaker, perhaps, +than cotton from the county compresses and loose cotton just as it came +from the field. It may be that this interview was written by Mr. Atkinson +himself, and run into the reports of the day at the exposition as sent out +by the correspondents. + +[176] Examples of this abound. The Manufacturer and Industrial Gazette, +Springfield, Mass., was quoted in the News and Courier, Feb. 3, 1881: +"They (the Southern States) have the advantage of cotton location, and, +when they have secured new and improved machinery, will do any unrivalled +business. They can save freights, buy cheaper and hire cheaper labor. They +save buyers' commission, and warehouse delivery and cartage, sampling, +classing, pressing, shipping, marine risks and freight and cartage to +interior towns, which amounts in all to some seven dollars per bale. The +Northern mills also lose from receiving cotton poorly ginned, containing a +good deal of leaf and sand, which is computed at six per cent. of the +entire crop. The difference between the cost of a bale sent to Fall River, +Mass., and a bale sent to Columbia, Ga., is eight dollars and six cents. +This makes a tax of eighteen per cent. which Fall River pays in +competition with Columbus. It is estimated that, if the planters could +manufacture their cotton near home, they would save $50,000,000 in +transportation.... As yet the South manufactures principally coarser +goods, yarns, ducks, unbleached muslins, sheetings, shirtings, osnaburgs, +jeans, etc., but the time is not distant when it will come to make prints, +cambrics, laces, and all the finer qualities of staple goods." + +[177] News and Courier, Dec. 5, 1881. (In the same issue excerpts from the +address were printed.) + +[178] News and Courier, Oct. 13, 1881. In the following editorial comment +of the Augusta, Ga., Chronicle and Constitutionalist (reprinted in the +News and Courier, Dec. 8, 1881) the contrast between Mr. Atkinson's views +and the facts as the South was finding them is made sharp: "Augusta has an +abiding faith in her manufactories, despite Mr. Edward Atkinson, and +people outside seem to think as well of them, at any rate they are willing +to invest their money in such enterprise.... For such factories as the +Augusta, the Enterprise and Sibley and the King are of immense importance +to a city. There will be when all of them are at work, fully twenty +thousand people dependent upon them, including the operatives and their +families, to say nothing of the stores that will be supported by their +trade. Each factory like the Sibley or the King adds five thousand to the +population." + +[179] "We have found that we cannot stand alone, that our fight must be +made within the Union." (News and Courier, Oct. 24, 1881.) + +[180] News and Courier, Charleston, S.C., July 13, 1881. When Garfield was +shot, July 2, this paper carried an editorial of similar content. Five +days after the appearance of the editorial here quoted, when recovery +seemed assured, the paper said this: "One thing the President's desperate +illness has unquestionably effected. It has done more than years of +ordinary events in bringing the North and South together--vainly will the +politicians flourish the 'bloody flag'. The people will not rally on the +ensanguined colors again. For the Republic, as well as the President, the +danger line is well nigh, passed." + +[181] News and Courier, Sept. 20, 1881. Garfield died at Elberton, N.J., +September 19. That Charleston meant what she said is shown in the +reception which was accorded the First Connecticut Regiment, invited to +visit the city after attending the Centennial Celebration at Yorktown, +Virginia. The New Englanders came six weeks after the death of +Garfield--October 24. On this day the newspaper carried at the head of the +first column the Connecticut and South Carolina flags crossed, above them +the words "Yankee Doodle Came to Town", and below "A Welcome Invasion!" An +editorial headed "Happy Day" had these words: "It does not strain the +probabilities to believe that the visit of the First Connecticut Regiment +to Charleston is the outgrowth and sentiment and interest which found +expression when the President of the United States lay dying, and when +after his long agony he died. Had not President Garfield been slain, and +the South felt differently and, therefore, acted differently, this present +unpremeditated fraternization would have been impossible. There is no +shock now in removing mourning trappings to make room for the wreaths and +garlands of joy. It is the fit succession of events, a consequence of the +murder of the President. The blood of the Chief Magistrate is the seed of +union. Yorktown in itself a reminder of the days when North and South had +felt one aim and purpose, furnished the opportunity or occasion, and the +unselfish sorrow of the Southern people during the President's mortal +illness furnished the motive. The relation of the two events is too plain +to be ignored or misunderstood. This is the significance of the coming of +the Connecticut First from the land of abundance and diversified wealth to +battle-scarred and struggling Charleston." + +[182] Interview with C. C. Baldwin In the New York Herald, reprinted in +News and Courier, July 11, 1881. + +[183] The Daily Dispatch, Richmond, Va., March 5, 1880. + +[184] News and Observer, Dec. 1, 1880. + +[185] News and Observer, Mar. 25, 1881. + +[186] Mar. 18, 1881. In this instance also it is apparent that the State +was looked to as a natural unit upon which the company had claims. The +dispatch says: "The estimates of the subscriptions here has (have) been +raised, in view of the encouragement received already, to at least +$125,000, and it is believed that with this substantial backing the whole +State will be assured of the character of the organization, and join in +the enterprise." + +[187] News and Courier, Jan. 14, 1882. + +[188] News and Observer, Raleigh, Nov. 9, 1880. + +[189] Dec. 24, 1880. + +[190] Newberry Herald, quoted in News and Courier, Feb. 8, 1881. + +[191] Quoted in News and Courier, Feb. 8, 1881. + +[192] January 28, 1881. + +[193] The same dual basis of appeal was recognized in a notice +supplementing an advertisement of the company appearing the day before the +editorial here quoted (Jan. 27, 1881): "The advantages, direct and +incidental, accruing to every citizen of Charleston from this industry +about to be started in our city are so manifest that those who have +inaugurated the enterprise have every reason to feel confident of a ready +response to the call for capital and for abundant success." + +[194] News and Courier, Apr. 13, 1881. + +[195] Quoted in News and Courier, Mar. 31, 1881. + +[196] Quoted in News and Courier, Jan. 31, 1881. + +[197] News and Courier, Sept. 1, 1881. + +[198] Thompson, P. + +[199] Rock Hill Correspondent in News and Courier, Jan. 12, 1882. + +[200] News and Courier, Dec. 17, 1881. + +[201] Yorkville Correspondence, Ibid., March 25, 1881. + +[202] Ibid., Feb. 26, 1881. + +[203] Ibid., Apr., 6, 1881; see p. 19. + +[204] The Observer, Sept. 10, 1880. The Daily Constitution, Atlanta, on +Mch. 9, 1880, carried from the Columbus Enquirer: "... there are 213,157 +spindles to Georgia's credit.... Of this number Columbus has 60,000--near +a third of the whole.... The Eagle and Phenix mills alone operate 44,000 +spindles. All this has been done since 1866 ... with Southern capital and +brains." The editor of The Observer, Raleigh, paid a visit to Durham and +Winston, North Carolina, and went back to his desk glowing with enthusiasm +for what they had accomplished. In an editorial (May 19, 1880) headed +"Manufacturing Towns"; he wrote of Durham: "Literally the town has been +created through the energy and enterprise of its inhabitants. They began +with no capital to speak of, and now they levy contributions on hundreds +of thousands of people who live in distant parts of the Union, and with +their gains have built and beautified a town whose history should be +continually kept in view by all who would have their own homes to +prosper." + +[205] C. C. Baldwin, president Louisville and Nashville Railroad; the +interview was reprinted in News and Courier, July 11, 1881. + +[206] Staff correspondence from Spartanburg to News and Courier, May 21, +1881. + +[207] Ibid., Feb. 4, 1881. + +[208] News and Courier, Oct. 24, 1881. + +[209] News and Courier, Mch. 8, 1881. + +[210] News and Courier, Mar. 19 and 25, 1881. The personnel of committees +appointed from among the early subscribers is significant. The names are +all, or nearly all, old ones in South Carolina, and some of the men are +still among the first citizens of the capit. The committees were made up +of W. A. Clark, Jno. C. Seegers, Nathaniel B. Barnwell, F. W. McMaster, +Preston C. Lorick, T. A. McCreery, Jno. T. Sloan, Jr. + +[211] Ibid., Mar. 17, 1881. + +[212] Columbia Dispatch, Ibid., Mar. 31, 1881. + +[213] News and Courier, Jan. 28, 1881. + +[214] See p. 14. + +[215] News and Courier, Jan. 9, 1882. + +[216] News and Courier, Dec. 14, 1881. + +[217] Ibid., Mch. 25, 1881. + +[218] "Brutus", writing from Barnwell to News and Courier, May 25, 1881. + +[219] Sumter, S.C. Southron, quoted in News and Courier, May 14, 1881. + +[220] News and Courier, June 28, 1881. + +[221] Ibid., Mar. 14, 1881. + +[222] Quoted News and Courier, Aug. 18, 1881. + +[223] Observer, June 27, 1880. + +[224] Dispatch quoted in News and Courier, Mar. 25, 1881. Francis +Fontaine, commissioner of immigration for Georgia, did not represent the +method of appeal of his fellow Georgians, when he said tritely and smugly: +"The truth is only to be made known, when capital will find its own way to +the sunny land." (Observer, Mar. 20, 1880.) + +[225] Gannon, W. H., The Landowners of the South, and the Industrial +Classes of the North, pp. 6, 7 and 8. + +[226] News and Courier, Aug. 9, 1881. + +[227] Quoted in News and Courier, July 7, 1881. The isolation of this +editor and the provincial quality of his utterance are clearly seen in +such phrases as "we welcome foreign capital down here". Even without the +context. + +[228] Quoted from New York Herald, in News and Courier, July 11, 1881. +Hon. Cassius M. Clay, writing in The Industrial South declared: "I am +tired of hearing the deprecating cry of 'We want Yankee brains and +enterprise.' We don't want any such thing; We want Southern brains and +enterprise." (Quoted in Gannon, pp. 18 and 19.) + +[229] Quoted in News and Courier, Nov. 5, 1881. + +[230] Feb. 13, 1880. + +[231] News and Courier, Nov. 5, 1881. + +[232] Quoted in News and Courier, Mar. 8, 1881. + +[233] Quoted in News and Courier, Annual Trade Summary, Sept. 1, 1881. + +[234] Winnsboro (South Carolina) News, quoted in News and Courier, Feb. 8, +1881. + +[235] July 30, 1881. + +[236] Quoted in News and Courier, Apr. 25, 1881. + +[237] Ibid., Apr. 9, 1881. The Batesville Cotton Factory, built by William +Bates forty years before, was bought by G. Putnam, of Massachusetts for +$8,000, and he invested $10,000 additional in the plant. The building was +frame, two and half stories high, all was burned in March of 1881, +catching from sparks from the boiler room. It was believed that Mr. Putnam +would rebuild the plant on better lines. (Ibid., Mar. 2, 1881, et seq.) + +[238] Ibid., July 11, 1881. + +[239] Ibid., Nov. 10, 1881. + +[240] News and Courier, July 11, 1881. + +[241] Ibid., Jan. 14, 1882. + +[242] News and Courier, Jan. 12 and 14, 1882. When the Sibley +Manufacturing Company of Augusta, Georgia, was increasing its capital by +$400,000, President W. C. Sibley received from Boston a telegram ordering +$20,000 of the new stock. (News and Courier May 21, 1881.) Cf. Thompson. + +[243] News and Courier, Apr. 6, 1881. + +[244] Ibid., Mch. 15, 1881. + +[245] Ibid., Mch. 29, 1881. + +[246] News and Courier, Apr. 1, 1881. These subscriptions may have been +partly influenced by the purpose of Mr. Atkinson to have the Exposition +further the cultivation and preparation, and not the manufacture, of the +staple. + +[247] Jan. 27, 1881. + +[248] March 21, 1881. + +[249] News and Courier, Jan. 21, 1881. + +[250] It seems to have been usual to call first for a payment of 10 per +cent. of the stock subscribed, rather than to require a certain proportion +in cash at subscription. Thus the books of subscription of the Charleston +Manufacturing Company were opened January 27th; on March 29th the +directors called for the payment of the first instalment of 10 per cent., +and at 2 o'clock on the morning of April 9th--how closely the progress of +the undertaking was watched by papers and public!--more than half of the +amount was in the hands of the officers of the company. + +[251] Ibid., Feb. 10, 1882. + +[252] Ibid., Feb. 5, 1881. + +[253] Ibid., Feb. 7, 1881. + +[254] News and Courier, Mar. 25, 1881. + +[255] Hartsell, J. L., interview, Concord, N.C., Sept. 2, 1916. + +[256] C. B. Armstrong, interview, Gastonia, N.C., Sept. 14, 1916. + +[257] Joseph Separt, interview, Gastonia, N.C., Sept. 14, 1916. + +[258] S. N. Boyce and J. Lee Robinson, interview, Gastonia, N.C., Sept. +14, 1916. + +[259] Ibid., Feb. 26, 1881. + +[260] News and Courier, S.C., Feb. 24, 1881. + +[261] Augusta Trade Review, Augusta, Ga., Oct., 1884. + +[262] News and Courier, Apr. 9, 1881. This paper in the issue of Feb. 26th +spoke of the additional stock as being $350, but puts the amount at +$100,000 lower in this later notice. + +[263] North Carolina Herald, Salisbury, N.C., Nov. 9, 1887, quoted in +minute book of Salisbury Cotton Mills. + +[264] The meeting was held Dec. 2nd; the minute book record is signed by +F. J. Murdoch, sec. pro tem. + +[265] Klutz, Theodore F., interview, Salisbury, N.C., Sept. 1, 1918. + +[266] J. B. Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916. + +[267] News and Courier, Mar. 31, 1881. + +[268] Barbee, Wm. J., The Cotton Question, pp. 138 ff. + +[269] March 18, 1880. + +[270] Clement F. Haynesworth, interview, Greenville, S.C., Sept. 9, 1916. + +[271] J. L. Hartsell, interview, Concord, N.C., Sept. 2, 1916. + +[272] W. R. Odell, interview, Concord, N.C., Sept. 2, 1916. + +[273] L. Baker, interview, Gaffney, S.C., Sept. 13, 1916. + +[274] News and Courier, Feb. 23, 1881. + +[275] Haynesworth, interview, Greenville, S.C., Sept. 9, 1916. + +[276] From Cotton Field to Cotton Mill, pp. 82 ff. + +[277] Hartsell, interview, Concord, N.C., Sept. 2, 1916. + +[278] L. G. Porter, interview, Gaffney, S.C., Sept. 13, 1916. + +[279] Potter, interview, Gaffney, S.C., Sept. 13, 1916. + +[280] Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916. + +[281] B. B. Gossett, interview, Anderson, S.C., Sept. 11, 1916. + +[282] Baker, interview, Gaffney, S.C., Sept. 13, 1916. + +[283] Ibid. + +[284] Hartsell, interview. Concord, N.C., Sept. 2, 1916. + +[285] Rogan, G. W., interview, Gastonia, N.C., Sept. 14, 1916. + +[286] Sterling Graydon, interview, Charlotte, N.C., Sept. 4, 1916. + +[287] C. S. Morris, interview, Salisbury, N.C., Sept. 1, 1916. + +[288] Hartsell, interview, Concord, N.C., Sept. 2, 1916. + +[289] Charles McDonald, interview, Charlotte, N.C., Sept. 3, 1916. + +[290] Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916. + +[291] J. W. Norwood, interview, Greenville, S.C., Sept. 9, 1916. + +[292] Thackston, interview, Greenville, S.C., Sept. 12, 1916. J. A. +Chapman, interview, Spartanburg, S.C., Sept. 5, 1916. The mills around +Spartanburg had a nucleus of local capital, and the commission houses and +machinery manufacturers took an interest in the development. + +[293] Baker, interview, Gaffney, S.C., Sept. 13, 1916. + +[294] Wood, Interview, Gaffney, S.C., Sept. 13, 1916. + +[295] Gossett, interview, Anderson, S.C., Sept. 11, 1916. + +[296] Chapman, interview, Spartanburg, S.C., Sept. 5, 1916. + +[297] A. A. Thompson, interview, Raleigh, N.C., Sept. 16, 1916. + +[298] Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916. + +[299] Clark, David, interview, Charlotte, N.C., Sept. 4, 1916. + +[300] C. D. Morris, interview, Salisbury, N.C., Sept. 1, 1916. + +[301] Seport, interview, Gastonia, N.C., Sept. 14, 1916. + +[302] Wood, interview, Gaffney, S.C., Sept. 13, 1916. + +[303] Separk, interview, Gastonia, N.C., Sept. 14, 1916. + +[304] Charles E. Johnson, interview, Raleigh, N.C., Sept. 16, 1916. + +[305] Bernard Case, interview, Greensboro, N.C., Aug. 30, 1916. + +[306] Chapman, interview, Spartanburg, S.C., Sept. 5, 1916. + +[307] Haynesworth, interview, Greenville, S.C., Sept. 9, 1916. + +[308] Gossett, interview, Anderson, S.C., Sept. 11, 1916. + +[309] Haynesworth, interview, Greenville, S.C., Sept. 9, 1916. + +[310] Odell, W. R., interview, Concord, N.C., Sept. 1, 1916. + +[311] Norwood, interview, Greenville, S.C., Sept. 9, 1916. + +[312] Ibid. + +[313] Norwood, interview, Greenville, S.C., Sept. 9, 1916. + +[314] Clark, interview, Charlotte, N.C., Sept. 4, 1916. + +[315] Ibid., Also Separk, interview, Gastonia, N.C., Sept. 14, 1916; also +H. D. Wheat, interview, Gaffney, S.C., Sept. 13, 1916. + +[316] Thackston, interview, Greenville, S.C., Sept. 12, 1916. + +[317] Ibid. + +[318] Graydon, interview, Charlotte, N.C., Sept. 4, 1916, also J. A. +Brock, interview, Anderson, S.C., Sept. 11, 1916. + +[319] Separk, interview, Gastonia, N.C., Sept. 14, 1916; also Thackston, +ibid. + +[320] Graydon, interview, Charlotte, N.C., Sept. 4, 1916. + +[321] Boyce, and Robinson, interview, Gastonia, N.C., Sept. 14, 1916; also +Ragan, interview, Gastonia, N.C., Sept. 14th, 1916. + +[322] Thackston, interview, Greenville, S.C., Sept. 12, 1916. + +[323] Gossett, interview, Anderson, S.C., Sept. 14, 1916. + +[324] Chapman, interview, Spartanburg, S.C., Sept. 5, 1916; also Boyce and +Robinson, interview, Gastonia, N.C., Sept. 14, 1916. + +[325] Boyce and Robinson, interview, Gastonia, N.C., Sept. 14, 1916. + +[326] Gossett, interview, Anderson, S.C., Sept. 11, 1916. + +[327] Wood, interview, Gaffney, S.C., Sept. 13, 1916. + +[328] News and Courier, Apr. 29, 1881. + +[329] April 28, 1881. + +[330] News and Courier, Apr. 28, 1881. + +[331] Ibid., Apr. 29, 1881. + +[332] One commission house thirty years ago took all the bonds of a mill. +A. A. Thompson, interview, Raleigh, N.C., Sept. 16, 1916. + +[333] Wheat, interview, Gaffney, S.C., Sept. 13, 1916. + +[334] News and Courier, Jan. 12, 1882. + +[335] Ibid., Jan. 14, 1882. + +[336] Boyce, and Robinson, interview, Gastonia, N.C., Sept. 14, 1916. + +[337] Bernard Cone, interview, Greensboro, N.C., Aug. 30, 1916. + +[338] Henry E. Litchford, interview, Richmond, Va., Aug. 29, 1916. + +[339] News and Courier, Jan. 14, 1882. + +[340] Klutz, interview, Salisbury, N.C., Sept. 1, 1916. + +[341] O. D. Davis, interview, Salisbury, N.C., Sept. 1, 1916. + +[342] McDonald, interview, Charlotte, N.C., Sept. 3, 1916. The Caborrus +Mill, at Concord, previously referred to as having been financed on the +co-operative plan was begun by others and taken over by Mr. Cannon when +its prospects had declined. (Ibid.) + +[343] Interview, Columbia, S.C., Jan. 5, 1917. + +[344] James W. Cannon, interview, Concord, N.C., Jan. 6, 1917. + +[345] J. H. Meaus Beattie, interview, Columbia, S.C., Jan. 3, 1917. + +[346] W. W. Ball, interview, Columbia, S.C., Jan. 3, 1917. + +[347] Thompson, pp. 82 ff. + +[348] W. W. Ball, interview, Columbia, S.C., Jan. 3, 1917. A minor episode +partaking of the character of both of the above may be worth mentioning. +Mrs. M. Putnam Gridley, who, until her retirement from the presidency of +the Batesville, S.C. Mill, was the only woman cotton mill president in +America, said that the Boston commission house which owned and operated +the factory under her father's control, was "about to commit a wrong" when +the enterprise failed of its own accord. (Mrs. M. Putnam Gridley, +interview, Greenville, S.C., Sept. 9, 1916.) + +[349] Thackston, interview, Greenville, S.C., Sept. 12, 1916. + +[350] Jas. D. Hammett, interview, Anderson, S.C., Sept. 11, 1916. + +[351] Marshall Orr, interview, Anderson, S.C., Sept. 10, 1916. + +[352] Charles Estes, interview, Augusta, Ga., Dec. 29, 1916. "When I was +mayor of Augusta and Black was City Attorney, we ran the city on the +commission plan and didn't know it. I used to draft ordinances in my own +handwriting, show them to Black to see whether they were legal, and to +Blum to see if they were grammatical, and that was all there was to it!" + +[353] David, interview, Salisbury, N.C., Sept. 1, 1916. The financial +administration of this mill is attributable in its form to the +conservatism of the company, and to the peculiar conditions of its +inception. One director has nervous prostration, and another is too aged +to attend meetings, but none have been elected in their places. + +[354] Samuel Stradley, interview, Greenville, S.C., Sept. 12, 1916. + +[355] McDonald, interview, Charlotte, N.C., Sept. 3, 1916. + +[356] Thomas W. Loyless, interview, Augusta, Ga. + +[357] Estes, interview, Augusta, Ga., Dec. 29, 1916. + +[358] T. S. Raworth, interview, Augusta, Ga., Dec. 30, 1916. + +[359] D. S. Thompson, Cotton Mill, Commercial Features, p. 51. + +[360] Thackston, interview, Greenville, S.C., Sept. 12, 1916. + +[361] John W. Fries, interview, Winston-Salem, N.C., Aug. 31, 1916. + +[362] Graydon, interview, Charlotte, N.C., Sept. 4, 1916. + +[363] Mar. 18, 1880. + +[364] News and Courier, Aug. 12, 1881. + +[365] Observer, Feb. 13, 1880. + +[366] Quoted in News and Courier, Mar. 22, 1881. + +[367] p. 271. + +[368] Thompson, pp. 82 ff. + +[369] Thackston, interview, Greenville, S.C., Sept. 12, 1916. + +[370] Orr, interview, Anderson, S.C., Sept. 10, 1916. + +[371] Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916. + +[372] Augusta Trade Review, Oct., 1884 + +[373] Baker, interview, Gaffney, S.C., Sept. 13, 1916. + +[374] Morris, interview, Salisbury, N.C., Sept. 1, 1916. + +[375] Mrs. Gridley, interview, Greenville, S.C., Sept. 9, 1916. + +[376] J. A. Brock, interview, Anderson, S.C., Sept. 11, 1916. + +[377] Jas. D. Hammett, interview, Anderson, S.C., Sept. 11, 1916. + +[378] Washington Clark, interview, Columbia, S.C., Jan. 1, 1917. + +[379] Thompson, pp. 89 and 90. + +[380] Tracy I. Hickman, interview, Augusta, Ga., Dec. 29, 1916. + +[381] Thomas Purse, interview, Savannah, Ga., Dec. 26, 1916. + +[382] Geo. W. Williams, interview, Charleston, S.C., Dec. 27, 1916. + +[383] W. P. Carrington, interview, Charleston, S.C., Dec. 27, 1916. + +[384] Geo. Williams, interview, Charleston, S.C., Dec. 27, 1916. + +[385] H. R. Buist, interview, Charleston, S.C., Dec. 28, 1916. + +[386] Julius Koester, interview, Charleston, S.C., Dec. 27, 1916. + +[387] Boyce and Robinson, interview, Gastonia, N.C., Sept. 14, 1916. + +[388] Thackston, interview, Greenville, S.C., Sept. 12, 1916. + +[389] Boyce and Robinson, interview, Gastonia, N.C., Sept. 14, 1916. + +[390] Royan, interview, Gastonia, N.C., Sept. 14, 1916. + +[391] J. Lee Robinson, letter, Gastonia, N.C., Nov. 28, 1916. + +[392] Boyce and Robinson, interview, Gastonia, N.C., Sept. 14, 1916, and +Robinson, letter, Gastonia, N.C., Nov. 28, 1916. + +[393] C. B. Armstrong, interview, Gastonia, N.C., Sept. 14, 1916. + +[394] Robinson, letter, Gastonia, N.C., Nov. 28, 1916. + +[395] Rogan, interview, Gastonia, N.C., Sept. 14, 1916. + +[396] Estes, interview, Augusta, Ga., Dec. 29, 1916. + +[397] Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916. + +[398] The trained men in the industry are in the technical branches, and +that when a leader is wanted at the top, as for the president of a mill, a +man is still chosen who enjoys a general business reputation rather than +specific mill experience. + +[399] Morris, interview, Salisbury, N.C., Sept. 1, 1916. + +[400] Graydon, interview, Charlotte, N.C., Sept. 4, 1916. + +[401] Augusta Trade Review, Oct., 1884. + +[402] G. T. Lynch, interview, Augusta, Ga., Dec. 30, 1916, and Tracey I. +Hickman, interview, Augusta, Ga., Dec. 29, 1916. + +[403] Estes, interview, Augusta, Ga., Dec. 29, 1916. + +[404] Augusta Trade Review, Oct., 1884. + +[405] News and Observer, Nov. 16, 1880. + +[406] Augusta Trade Review, Oct., 1884. + +[407] Hickman, interview, Augusta, Ga., Dec. 29, 1916. + +[408] News and Courier, Feb. 24, 1881. + +[409] Ibid., Aug. 12, 1881. + +[410] Ibid., Aug. 12, 1881. + +[411] Buist, interview, Charleston, S.C., Dec. 28, 1916. + +[412] Keatz, interview, Salisbury, N.C., Sept. 1, 1916. + +[413] Davis, interview, Salisbury, N.C., Sept. 1, 1916. + +[414] Ball, interview, Columbia, S.C., Jan. 3, 1917, and Davison's Textile +Blue Book, 1916. + +[415] Brock, interview, Anderson, S.C., Sept. 11, 1916. See p. + +[416] Thompson, pp. 82 ff. + +[417] Interview, Columbia, S.C., Jan. 5, 1917. + +[418] Goldsmith, p. 6. + +[419] Tompkins, Cotton Mill, Commercial Features, p. 172. + +[420] Goldsmith, p. 6. + +[421] Thackston, interview, Greenville, S.C., Sept. 12, 1916. A mill man +near Greenville said: "The money actually paid in was more or less local +in those days (the early years of the period) but not much paid in." +(Gossett, interview, Anderson, S.C., Sept. 11, 1916.) + +[422] W. J. Thackston, letter, Greenville, S.C., Nov. 28, 1916. + +[423] Buist, interview, Charleston, S.C., Dec. 28, 1916. + +[424] News and Courier, Feb. 24, 1881. + +[425] Raworth, interview, Augusta, Ga., Dec. 30, 1916. He knew of no +Southern mills quoted on any of the exchanges. + +[426] Hickman, interview, Augusta, Ga., Dec. 29, 1916. + +[427] Raworth, interview, Augusta, Ga., Dec. 30, 1916. + +[428] Ball, interview, Columbia, Jan. 3, 1917. + +[429] Ibid. + +[430] Ragan, interview, Gastonia, N.C., Sept. 14, 1916. + +[431] Hickman, interview, Augusta, Ga., Dec. 29, 1916. + +[432] Goldsmith, The Cotton Mill South. + +[433] Estes, interview, Augusta, Ga., Dec. 29, 1916. + +[434] Buist, interview, Charleston, S.C., Dec. 28, 1916. + +[435] Ball, interview, Columbia, S.C., Jan. 3, 1917. + +[436] Washington Clark, interview, Columbia, S.C., Jan. 1, 1917. + +[437] Wool, interview, Gaffney, S.C., Sept. 13, 1916. + +[438] Ball, interview, Columbia, S.C., Jan. 3, 1917. + +[439] A Rock Hill correspondent in News and Courier, Jan. 12, 1882. + +[440] In ibid., A Rock Hill correspondent in News and Courier, Jan. 12, +1882. + +[441] Walter Montgomery, interview, Spartanburg, S.C., Sept. 5, 1916. + +[442] Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916. + +[443] Augusta Trade Review, Oct. 1884. + +[444] News and Observer, Nov. 16, 1880. + +[445] Augusta Trade Review, Oct. 1884. + +[446] Hickman, interview, Augusta, Ga., Dec. 29, 1916. + +[447] Davis, interview, Salisbury, N.C., Sept. 1, 1916. + +[448] Ibid. + +[449] Ragan, interview, Gastonia, N.C., Sept. 14, 1916. + +[450] Robinson, letter, Gastonia, N.C., Nov. 28, 1916. + + + +Transcriber's Notes: + +Underlined passages are indicated by _underline_. + +The original text includes a blank spaces in Footnote 49 which is +represented by ______ in this text version. + +The following typographical and spelling errors have been corrected: + + "evidenes" corrected to "evidences" (page 2) + "be lieved" corrected to "believed" (page 4) + "American" corrected to "America" (page 15) + "powerul" corrected to "powerful" (page 16) + "controservy" corrected to "controversy" (page 16) + "Carolinaian" corrected to "Carolinian" (page 17) + "Id" corrected to "If" (page 18) + "build" corrected to "built" (page 19) + "newsness" corrected to "newness"(page 19) + "propserous" corrected to "prosperous" (page 22) + "mangers" corrected to "managers" (page 22) + "temas" corrected to "teams" (page 26) + "tage" corrected to "stage" (page 29) + "advances" corrected to "advanced" (page 29) + missing "in" added (page 29) + "steambot" corrected to "steamboat" (page 31) + "sucess" corrected to "success" (page 33) + "delcared" corrected to "declared" (page 45) + "Calhoung" corrected to "Calhoun" (page 46) + "feel" corrected to "fell" (page 48) + "quote" corrected to "quite" (page 49) + "imiginary" corrected to "imaginary" (page 52) + "repating" corrected to "repeating" (page 58) + "reproahced" corrected to "reproached" (page 59) + "expression" corrected to "expressing" (page 67) + "tectile" corrected to "textile" (page 69) + "warm" corrected to "war" (page 71) + "seaw" corrected to "sea" (page 75) + "where" corrected to "were" (page 75) + "perosns" corrected to "persons" (page 76) + "charged" corrected to "changed" (page 77) + "an" corrected to "as" (page 82) + "advances" corrected to "advanced" (page 83) + "repvailed" corrected to "prevailed" (page 89) + "understodd" corrected to "understood" (page 95) + "munitiae" corrected to "minutiae" (page 95) + "Herland" corrected to "Herald" (page 98) + "sawrm" corrected to "swarm" (page 100) + "officiaals" corrected to "officials" (page 100) + "Sate" corrected to "State" (page 105) + "and" corrected to "an" (page 112) + "grow" corrected to "grew" (page 117) + "happaned" corrected to "happened" (page 123) + missing "is" added (page 126) + "back-bitting" corrected to "back-biting" (page 127) + "wlecomed" corrected to "welcomed" (page 128) + "bounds" corrected to "bound" (page 128) + "adhorred" corrected to "abhorred" (page 129) + "whol" corrected to "whole" (page 129) + "di" corrected to "do" (page 130) + "pilosophy" corrected to "philosophy" (page 132) + "telehone" corrected to "telephone" (page 133) + "capaign" corrected to "campaign" (page 134) + "loca" corrected to "local" (page 134) + "natice" corrected to "native" (page 137) + "capitalists" corrected to "capitalist" (page 139) + "urges" corrected to "urged" (page 139) + "Souther" corrected to "Southern" (page 148) + "anive" corrected to "naive" (page 150) + "hav" corrected to "have" (page 150) + "struglle" corrected to "struggle" (page 159) + "renumerated" corrected to "remunerated" (page 160) + "Crhonicle" corrected to "Chronicle" (page 162) + "If" corrected to "It" (page 170) + "And" corrected to "An" (page 171) + "Heraldn" corrected to "Herald" (page 173) + "1811" corrected to "1881" (page 174) + "pressent" corrected to "present" (page 181) + "porblem" corrected to "problem" (page 181) + "he" corrected to "the" (page 181) + "ot" corrected to "to" (page 182) + "aided" corrected to "added" (page 184) + "wss" corrected to "was" (page 186) + "neat" corrected to "near" (page 189) + "mil;" corrected to "mill" (page 194) + "sotkc" corrected to "stock" (page 201) + "sone" corrected to "some" (page 202) + "in" corrected to "is" (page 203) + "orgin" corrected to "origin" (page 205) + "yed" corrected to "yes" (page 207) + "ouright" corrected to "outright" (page 211) + "consideraion" corrected to "consideration" (page 218) + "intented" corrected to "intended" (page 221) + "build" corrected to "built" (page 221) + "or" corrected to "of" (page 222) + "propsered" corrected to "prospered" (page 222) + "Unitl" corrected to "Until" (page 227) + "annul" corrected to "annual" (page 232) + "Salsibury" corrected to "Salisbury" (page 233) + "wanters" corrected to "wanted" (page 234) + "deciaion" corrected to "decision" (page 242) + "theys" corrected to "they" (page 251) + "unproftiable" corrected to "unprofitable" (page 266) + "laides" corrected to "ladies" (page 270) + "inheirtance" corrected to "inheritance" (page 270) + "Commerical" corrected to "Commercial" (footnote 2) + "us" corrected to "up" (footnote 19) + "2n" corrected to "2nd" (footnote 17) + "destroyer" corrected to "destroyed" (footnote 29) + "Commerical" corrected to "Commercial" (footnote 45) + "Grenville" corrected to "Greenville" (Footnote 47) + "suidical" corrected to "suicidal" (footnote 57) + "Ibis." corrected to "Ibid." (footnote 82) + "sgainst" corrected to "against" (footnote 86) + "Olmstead" corrected to "Olmsted" (footnote 97) + "Ble" corrected to "Blue" (footnote 110) + "itno" corrected to "into" (footnote 114) + "intenal" corrected to "internal" (footnote 123) + "1811" corrected to "1881" (footnote 144) + missing "to" added (footnote 147) + "solicitious" corrected to "solicitous" (footnote 148) + "to" corrected to "the" (footnote 150) + "ot" corrected to "to" (footnote 162) + "acaclim" corrected to "acclaim" (footnote 162) + "Nasvhile" corrected to "Nashville" (footnote 170) + "unusued" corrected to "unused" (footnote 175) + "you" corrected to "your" (footnote 175) + "rebuilt" corrected to "rebuild" (footnote 237) + "Bid." corrected to "Ibid." (footnote 237) + "Grenville" corrected to "Greenville" (footnote 291) + "Grenville" corrected to "Greenville" (footnote 421) + +Other than the corrections listed above, inconsistencies in spelling and +hyphenation have been retained from the original. + + + + + + +End of the Project Gutenberg EBook of The Rise of Cotton Mills in the South, by +Broadus Mitchell + +*** END OF THIS PROJECT GUTENBERG EBOOK RISE OF COTTON MILLS IN SOUTH *** + +***** This file should be named 37784-8.txt or 37784-8.zip ***** +This and all associated files of various formats will be found in: + https://www.gutenberg.org/3/7/7/8/37784/ + +Produced by The Online Distributed Proofreading Team at +https://www.pgdp.net (This file was produced from images +generously made available by The Internet Archive.) + + +Updated editions will replace the previous one--the old editions +will be renamed. + +Creating the works from public domain print editions means that no +one owns a United States copyright in these works, so the Foundation +(and you!) can copy and distribute it in the United States without +permission and without paying copyright royalties. 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You may copy it, give it away or +re-use it under the terms of the Project Gutenberg License included +with this eBook or online at www.gutenberg.org + + +Title: The Rise of Cotton Mills in the South + +Author: Broadus Mitchell + +Release Date: October 18, 2011 [EBook #37784] + +Language: English + +Character set encoding: ISO-8859-1 + +*** START OF THIS PROJECT GUTENBERG EBOOK RISE OF COTTON MILLS IN SOUTH *** + + + + +Produced by The Online Distributed Proofreading Team at +https://www.pgdp.net (This file was produced from images +generously made available by The Internet Archive.) + + + + + + +</pre> + + + +<p class="center"><span class="large">THE RISE OF COTTON MILLS IN THE SOUTH</span></p> +<p> </p> +<p class="center">A DISSERTATION<br /> +Submitted to the Board of University Studies of The<br /> +Johns Hopkins University in Conformity with<br /> +the Requirements for the Degree of<br /> +Doctor of Philosophy</p> +<p> </p> +<p class="center">by<br /> +<span class="large">Broadus Mitchell</span></p> +<p> </p> +<p class="center">Baltimore, Maryland<br />1918</p> + + +<p> </p><p> </p> +<hr style="width: 50%;" /> +<h2>CONTENTS</h2> + +<table border="0" cellpadding="0" cellspacing="5" summary="table"> +<tr><td> </td><td align="right">Page</td></tr> +<tr><td>Foreword</td></tr> +<tr><td> </td></tr> +<tr><td><a href="#CHAPTER_I"><i>Chapter I:</i></a></td></tr> +<tr><td class="dent">The Background</td><td align="right"><a href="#Page_1">1-45</a></td></tr> +<tr><td> </td></tr> +<tr><td><a href="#CHAPTER_II"><i>Chapter II:</i></a></td></tr> +<tr><td class="dent">The Background, continued</td><td align="right"><a href="#Page_46">45-94</a></td></tr> +<tr><td> </td></tr> +<tr><td><a href="#CHAPTER_III"><i>Chapter III:</i></a></td></tr> +<tr><td class="dent">Conditions Precedent to the Erection of the Mills</td><td align="right"><a href="#Page_95">95-131</a></td></tr> +<tr><td> </td></tr> +<tr><td><a href="#CHAPTER_IV"><i>Chapter IV:</i></a></td></tr> +<tr><td class="dent">Capital</td><td align="right"><a href="#Page_132">132-181</a></td></tr> +<tr><td> </td></tr> +<tr><td><a href="#CHAPTER_V"><i>Chapter V:</i></a></td></tr> +<tr><td class="dent">Financing the Mills</td><td align="right"><a href="#Page_181">181-225</a></td></tr> +<tr><td> </td></tr> +<tr><td><a href="#CHAPTER_VI"><i>Chapter VI:</i></a></td></tr> +<tr><td class="dent">Financing the Mills, continued</td><td align="right"><a href="#Page_226">226-271</a></td></tr> +<tr><td> </td></tr> +<tr><td>Vita</td><td align="right"><a href="#Page_272">272</a></td></tr></table> + + +<p> </p><p> </p> +<hr style="width: 50%;" /> +<h2>FOREWORD</h2> + +<p>These pages represent a partial exploitation of materials gathered with a +view to their ultimate use in more extended form. Many phases of the +problem have been left entirely untreated, but the research upon these +subjects has not been without indirect service in the present study. In +the case of two chapters written midway of the investigation, in revision +care has been taken to bring them into consonance with the indications +which developed from subsequent discoveries. It is hoped, therefore, that +their lack is rather as to completeness than as to fidelity of temper.</p> + +<p>Unless this presentation is entirely inadequate, in addition to the more +objective economic forces, in the rise of cotton mills in the South, there +will appear the human elements that lie at the core of the development.</p> + +<p>For assistance, my first thanks are due to Professor Jacob H. Hollander +and Professor George E. Barnett, of The Johns Hopkins University, who have +contributed in a hundred ways over the whole period of study, and to Dr. +Nathaniel R. Whitney, formerly of The Johns Hopkins University and now of +the Iowa State University, who helped form my original conception of the +problem. In the wider aspects of my study I have drawn upon the experience +and judgment of my father continuously. Acknowledgment is due Miss Ellen +Rothe and Miss Ethel Hubbard, of the library staff of The Johns Hopkins +University; to the authorities of the library of the Peabody Institute of +Baltimore, and to the officers of the reading room of the Library of +Congress.</p> + +<p>In two field investigations in the South, many gentlemen connected +directly or indirectly with the cotton manufacturing industry have been +instituting in extending their time and counsel and courtesy. From lack of +space, it is not possible to make individual mention of all of these in +this place; foot-note references to the interviews must be understood each +one as expression of appreciation. For extraordinary assistance, however, +it gives me pleasure here to return thanks to Hon. John Skelton Williams, +Comptroller of the Currency; Mr. George A. Nölting, Jr., of Richmond, +Virginia; Mr. O. D. Davis, of Salisbury; Mr. J. L. Hartsell, of Concord; +Messrs. J. Lee Robinson and S. N. Boyce, of Gastonia; and Miss Anna L. +Twelvetrees, Mr. Sterling Graydon and Mr. Hudson Millar, of Charlotte, +North Carolina; Mr. W. J. Thackston, of Greenville; Mr. August Kohn, +Professor Yates Snowden and Mr. William W. Ball, of Columbia, South +Carolina, and Mr. T. S. Raworth, of Augusta, Ga. Of more intimate sort is +my obligation to Professor K. Roberts Greenfield, of Delaware College, who +by his constructive criticism has helped shape my opinion in a large way +and has at many points improved the text as such.</p> + +<p>I cannot fail to acknowledge, finally, my gratitude to Mrs. Charles +Reuter and the members of her family, under whose roof most of these pages +were written.</p> + +<p><span style="margin-left: 2em;">Broadus Mitchell</span></p> + +<p>Baltimore, February 6, 1918.</p> + + +<p> </p><p> </p> +<hr style="width: 50%;" /> +<p><span class="pagenum"><a name="Page_1" id="Page_1">[Pg 1]</a></span></p> +<p class="center"><span class="large">THE RISE OF COTTON MILLS IN THE SOUTH</span></p> +<p> </p> +<h2><a name="CHAPTER_I" id="CHAPTER_I"></a>CHAPTER I</h2> +<p class="center"><span class="large"><i>THE BACKGROUND</i></span></p> + +<p>This opening chapter undertakes a broad survey in brief compass of the +historical and economic background out of which the cotton manufacturing +industry of the South, as a distinct development, emerged. Thus to begin +the story of the rise of the mills with discussion of a period which +commences a century in advance, is not unlike the production of a play +hopeful in conception, robust in theme and rapid in action, but in which +the curtain first rises on a stage which remains empty throughout an +entire act.</p> + +<p>In viewing the period lying back of the concerted erection of cotton mills +in the South, some observers have said they caught satisfying glimpses of +men and facts not only presaging but causally related to the main action +later. In spite of the present writer's usual disbelieve in the +sufficiency of the evidence in these findings, it is a primary purpose of +this discussion to give their statements, together with the supporting +testimony that they deliberately and others incidentally have brought +forward.</p> + +<p>The total of this study will show that the development, as such, not only +first substantially showed itself, but had its<span class="pagenum"><a name="Page_2" id="Page_2">[Pg 2]</a></span> complete genesis, about +the year 1880. It is plain that in order to present, however, the +conclusions of students who have believed they discerned signs of it in +earlier years, it is necessary to include in these preliminary pages much +that will not appear as fact exhibit, but rather as opinion. And not +simply this, but in seeking to make clear the opposite theory, free +recourse is taken to the findings and statements of others than the +writer.</p> + +<p>No apology is made for the incorporation of secondary material. On the +contrary, this is intentioned. Lying, after all, outside of the central +facts to come under view in this essay, exclusively original research in +so extended a period has not seemed justified. In the second place, it has +not appeared necessary for the reason that there has been usually less +dispute as to the facts and the completeness of the data that much study +has uncovered, than as to the right interpretation of material evidences +agreed upon. Besides these considerations, it should be understood that +much which might carelessly be taken as second-hand information, is really +entirely and valuably first-hand. Peculiarly in the case of the economic +history of the South, the statements of those who spoke from intimate +elbow-touch with and active participation in the events of the various +periods are sources in the finest sense. This is particularly true with +respect to the work of the late Mr. D. A. Tompkins, which is repeatedly +made use of. No document giving a photograph<span class="pagenum"><a name="Page_3" id="Page_3">[Pg 3]</a></span> of conditions at one point +of time could replace an utterance which sprang from his rich association +with the whole fabric of the South's economic life, and which voiced the +result of his long and sensitive responsiveness to stimuli external and +internal. He absorbed influences as a sponge does water, and when pressed +his books and speeches yield observations quick, living, liquid. There is +considerable reason for belief, too, that Mr. Tompkins' concepts, however +correctly or incorrectly interpretative of the past, stood in a causal +relation to the cotton manufacturing development in his active period and +continuing to a less extent even to the present.</p> + +<p>While there has perhaps been no previous effort to bring the several +beliefs into parallel presentation, concerning the rise of cotton mills in +the South a little body of theory has grown up. Many of the statements are +not well-informed, and in other cases they are almost too studied. Aside +from a preparatory instance, designed to show the limits of divergence +between the various views, the method here chosen is that of relating the +different assertions to all of the periods to which they apply, rather +than attempting to give at once expositions of each in continuity. It is +hoped that in trying to examine the views in detail, the relative weighing +of periods as intended by the writers will not be lost.</p> + +<p>One who made his study with empirical purpose, and may<span class="pagenum"><a name="Page_4" id="Page_4">[Pg 4]</a></span> believed to have +been not deeply interested in the historical setting of the cotton mills, +has made the following observation for South Carolina, taken by him as +typical of the Southern States:</p> + +<p>"The story of the development of the cotton manufacturing industry in +South Carolina is not wanting in impressive elements. From the beginning +in 1790 till 1900 it was a struggle of gradually increasing intensity and +extension."<a name='fna_1' id='fna_1' href='#f_1'><small>[1]</small></a> This is a very positive statement of what may be called the +continuity theory. Mr. Goldsmith's view is in marked contrast with a +representative expression of Mr. Tompkins, like himself a Southerner for +considerable time a resident of the North:</p> + +<p>"The settlement of mountainous and middle North Carolina was practically +by the same elements,—Scotch-Irish, Germans, Moravians, and Quakers,—as +came to Pennsylvania. Many emigrants landing at Philadelphia and New +Castle, Delaware, settled first in Pennsylvania and moved southward +through the Valley and Piedmont of Virginia to the Carolinas. Others +landed at Charleston and moved northwestward. In South Carolina even the +names of several of the northern counties are identical with those of +Pennsylvania, as Lancaster, Chester, and York counties.</p> + +<p>"These settlers brought with them a large degree of knowledge and skill in +manufacturing. All along the Piedmont and even<span class="pagenum"><a name="Page_5" id="Page_5">[Pg 5]</a></span> in the mountains from +Pennsylvania to Georgia, they not only followed agriculture, but developed +varied household manufactures in the period between 1750 and 1800.... In +1800 many charcoal blast furnaces making pig iron and many catlin forges +and rolling mills making wrought iron bars, and other products of iron, +indicate that a manufacturing development throughout the Piedmont region +of the South might have continued parallel with that which has taken place +in Pennsylvania, except for the circumstances of the combined influence of +the invention of the cotton gin, the institution of slavery, and the +checking of this immigration. As late as 1810 the manufactured products of +Virginia, the Carolinas and Georgia exceeded in variety and value those of +the entire New England States. By Whitney's invention, and its improvement +by Holmes, cotton planting became so profitable, that for a period of +forty years the price remained above twenty-five cents a pound. Factories +were abandoned, the owners going into the production of cotton with slave +labor. Some of the factory workers ... went into a precarious agriculture. +The factory workers and small farmers were largely ... located on the +mountain sides, and the development of cotton production with slave labor +tended further to separate this democracy from the white race aristocracy +of the low country. As cotton and slavery advanced, the population of free +white work people were driven farther and farther into the mountain +country, and thus many of the white industrial workers<span class="pagenum"><a name="Page_6" id="Page_6">[Pg 6]</a></span> of 1800 became the +poor mountain farmers of 1850.... the owners of factories who operated +with free white labor in 1800 had become in 1850 the cotton planters +operating with black slave labor.... when the abolition of slavery removed +one great difficulty of industries and the white people who had formerly +deserted manufacturers for agriculture went back to the pursuits of their +fathers, these mountaineers formed the labor supply.... it was found that +the descendants of the industrial workers of 1800 could, with a little +training, do as good work as their forbears did."<a name='fna_2' id='fna_2' href='#f_2'><small>[2]</small></a></p> + +<p>This opinion is not so categorical as that of a close observer of the +South who believes that "from 1810 to 1880 the section was industrially a +desert of Sahara", but it makes clear the view that from a point early in +the century until a date subsequent to the Civil War absorption in cotton +culture threw manufacturing of all sorts into the discard. This conception +may be<span class="pagenum"><a name="Page_7" id="Page_7">[Pg 7]</a></span> held to be so generally accepted as to be commonplace and not +requiring of proof; to examine in detail, however, the varying statements +that would cast doubt upon this, so far from being a tilting at windmills, +will serve to fix with some conclusiveness the date most nearly according +with the commencement of the industry, and so accomplish the chief object +of this introductory discussion.</p> + +<p>And now to begin.</p> + +<p>In declaring in 1908 that Spartanburg was regaining the position of a +central point in one of the most forward manufacturing developments in +America, such as the place had been a century earlier, Mr. Tompkins said: +"When I left South Carolina to go North to learn the trade of machinist +and to study engineering I thought I was leaving a country which had never +had any important manufactures. Later, when I was in the middle of +industrial life in the North, I conceived the idea of writing an +industrial history of the United States. To my amazement I found that the +agricultural South, from which I had come in a spirit of industrial +despair, was the cradle of manufactures in the United States."<a name='fna_3' id='fna_3' href='#f_3'><small>[3]</small></a></p> + +<p>Mr. Thompson has developed carefully the industrial character of what may +roughly be called the Revolutionary period,<span class="pagenum"><a name="Page_8" id="Page_8">[Pg 8]</a></span> particularly with reference +to North Carolina: "The domestic industries ... flourished. Though there +were no towns of any size, the number and the skill of the artisans was +such that, in 1800, it seemed probable that the logical development would +be into a frugal manufacturing community, rather than into an agricultural +state."<a name='fna_4' id='fna_4' href='#f_4'><small>[4]</small></a> Records in the office of the Secretary of State of South +Carolina show the early encouragement given to the manufacture of cotton +specifically. In a list of inventions, copyrights and patents, it appears +that March 13, 1789, Hugh Templeton deposited in the office two plans, "a +complete draft of a carding machine that will card eighty pounds of cotton +per day", and "a complete draft of a spinning machine, with eighty-four +spindles, that will spin with one man's attendance ten pounds of good +cotton yarn per day."<a name='fna_5' id='fna_5' href='#f_5'><small>[5]</small></a> In 1795 the legislature of this State passed an +act authorizing commissioners to project a lottery for the benefit of +William McClure in his effort to establish a cotton manufactory to make +"Manchester wares."<a name='fna_6' id='fna_6' href='#f_6'><small>[6]</small></a> The purchase by Southern States of the patent +rights of Whitney's cotton gin is to be<span class="pagenum"><a name="Page_9" id="Page_9">[Pg 9]</a></span> interpreted not as a design to +leave off cotton manufacturing, but rather as an evidence of a prevalent +spirit for mechanical improvement. A South Carolina appropriation bill for +1809 has a paragraph advancing to Ephraim McBride $1000. "to enable him to +construct a spinning machine on the principles mentioned in a patent he +holds from the United States."<a name='fna_7' id='fna_7' href='#f_7'><small>[7]</small></a></p> + +<p>Much of this may be believed to have been directly in consequence of the +necessity for economic self-sufficiency during the Revolution when the +colonial commerce with England was stopped. Proceedings of the Safety +Committee in Chowan county, North Carolina, for March 4, 1775, show that +"the committee met at the house of Captain James Sumner and the gentlemen +appointed at a former meeting of directors to promote subscriptions for +the encouragement of manufactures, informed the committee that the sum of +eighty pounds sterling was subscribed by the inhabitants of this county +for that laudable purpose." Prizes were offered to encourage the +manufacture of woolen and cotton cards<span class="pagenum"><a name="Page_10" id="Page_10">[Pg 10]</a></span> and of steel, and proclamation +money to the amount of ten pounds would be given by the chairman of the +committee to the first producer in a certain time of fulled woolen cloth. +The provincial congress the same year took steps to stimulate, by +bounties, the manufacture of gunpowder, rolling and slitting mill +products, cotton cards of wire, merchantable steel, paper, woolen cloth +and pig iron.<a name='fna_8' id='fna_8' href='#f_8'><small>[8]</small></a></p> + +<p>Although it is said that their objects were possibly political as well as +industrial, mechanics' societies existed at Charleston and Augusta before +and about the year 1810; in Augusta were made some of the earliest +attempts in this country to improve the steam engine.<a name='fna_9' id='fna_9' href='#f_9'><small>[9]</small></a> As early as 1770 +there was formed in South Carolina a committee to establish and promote +manufactures, with Henry Laurens as chairman.<a name='fna_10' id='fna_10' href='#f_10'><small>[10]</small></a></p> + +<p>Before making an estimate of the character of the textile industry in the +South in this Revolutionary period, it is well to take a glimpse at some +of the individual establishments. The facts brought out by Mr. Kohn's +painstaking research as to South<span class="pagenum"><a name="Page_11" id="Page_11">[Pg 11]</a></span> Carolina serve well. Governor Glen's +"Answers to the Lords of Trade", believed to have been written in 1748, in +attributing some manufacture of stuffs like Irish linen to the inhabitants +of the Irish township of Williamsburgh, can have no point except to +indicate domestic industry.<a name='fna_11' id='fna_11' href='#f_11'><small>[11]</small></a> Remarking the considerable manufacture of +cloth in the province prior to and during the Revolutionary period, it is +pointed out that "In those days it does not appear to have been popular to +organize corporations and the manufacturing was done by individuals—most +of the planters being amply able to conduct such operations."<a name='fna_12' id='fna_12' href='#f_12'><small>[12]</small></a> Daniel +Heyward, a planter, in a letter in 1777, declared with reference to his +"manufactory" that if cards were to be had "there is not the least doubt +but that we could make six thousand yards of good cloth in the year from +the time we began." And Mr. Kohn comments, "This certainly shows that the +Heywards conducted a considerable plant for the manufacture of cotton +goods", and allows that "no doubt other individual planters made their own +cotton clothes in the same way."<a name='fna_13' id='fna_13' href='#f_13'><small>[13]</small></a></p> + +<p><span class="pagenum"><a name="Page_12" id="Page_12">[Pg 12]</a></span>Domestic production is clearly seen in a statement in the same year that a +planter to the northward in three months trained thirty negroes to make +one hundred and twenty yards of cotton and woolen cloth per week, +employing a white woman to instruct in spinning and a white man in +weaving. "He expects to have it in his power not only to cloathe his own +negroes, but soon to supply his neighbors."<a name='fna_14' id='fna_14' href='#f_14'><small>[14]</small></a></p> + +<p>This student has satisfied himself, in spite of the admitted fact that no +traces of the plant survive, that "in 1778 Mrs. Ramage, a widow, living on +James Island, Charleston District, established a regular cotton mill, +which was operated by mule power."<a name='fna_15' id='fna_15' href='#f_15'><small>[15]</small></a> Another plant which would seem to +have approached a commercial character is seen in the assertion in 1790 +that "A gentleman of great mechanical knowledge and instructed in most of +the branches of cotton manufactures in Europe, has already fixed, +completed and now at work on the high hills of the Santee, near Stateburg, +and which go by water, ginning (?) carding and slubbing machines; also +spinning machines, with 84 spindles each, and several other useful +implements for manufacturing every <span class="pagenum"><a name="Page_13" id="Page_13">[Pg 13]</a></span>necessary article in cotton."<a name='fna_16' id='fna_16' href='#f_16'><small>[16]</small></a> +Detail description shows, however, that while some long staple cotton for +this establishment was imported from the West Indies, and while a variety +of goods were made, it was conducted as an adjunct to a plantation, parts +of the equipment were later removed to and set up on another plantation, +and much yarn was spun for persons in the vicinity. It is, however, +notable that the machinery was made in North Carolina.<a name='fna_17' id='fna_17' href='#f_17'><small>[17]</small></a></p> + +<p>It has been said probably very justly that "It was not until far in the +nineteenth century that manufactured cloth could be bought because of its +scarcity and because of its price, and a vast majority of our +grand-mothers were thus forced to make their own cloth, and many of them +preferred the domestic article to the manufactured,"<a name='fna_18' id='fna_18' href='#f_18'><small>[18]</small></a> and Mr. Clark +says that "prior to the war of 1812 the advance of Southern manufactures +was principally in what were then household arts—those that produced for +the subsistence of the family rather than for an outside market. These +manufactures continued generalized and dispersed rather<span class="pagenum"><a name="Page_14" id="Page_14">[Pg 14]</a></span> than specialized +and integrated."<a name='fna_19' id='fna_19' href='#f_19'><small>[19]</small></a></p> + +<p>This author is to be accepted in his general dictum that "The official +return of cotton manufactures in 1810 is too inaccurate either to measure +the extent of the industry or to describe its location. Probably many +census agents did not know what a textile mill was; and they classed as +factories, plantation loom houses and the cottages or shops of village +jenny-spinners. This explains the large number of establishments reported +from the South and West. Advertising then to the mills just noticed and to +water-driven spindles near Fayetteville, he continues: "Less study had +been given to the industrial records of the South than to those of the +North, and during the subsequent period of indifference or hostility to +manufacturing in that section some annals of the earlier interest in those +pursuits were doubtless lost. Small mills may have been started in the +Carolinas and Georgia, and after a brief infancy have vanished and left no +name; but, if so, the fact is curious rather than significant for it had +no relation to the subsequent history of the industry."<a name='fna_20' id='fna_20' href='#f_20'><small>[20]</small></a></p> + +<p><span class="pagenum"><a name="Page_15" id="Page_15">[Pg 15]</a></span>While it is thus seen that the textile industry in the South in the latter +part of the eighteenth and earlier part of the nineteenth centuries was +stamped with every hall-mark of domestic production, and while they were +ephemeral in their operation, it is to be remembered that a century and a +half ago the industry in England as well as in America bore more or less +of the domestic character;<a name='fna_21' id='fna_21' href='#f_21'><small>[21]</small></a> and Southern States showed instances of +power-driven machinery before Samuel Slater built the first Arkwright mill +in Rhode Island. The South had planter-manufacturers it is true, but this +striking link with agriculture as contrasted with New England is easily +explained in the more general fertility of the soil and the effect this of +course had upon the occupation of the people. Furthermore, the very fact +of this coupling indicates the inclination towards economic balance and +the promise in these years of a rational development.<a name='fna_22' id='fna_22' href='#f_22'><small>[22]</small></a> Bearing these +things<span class="pagenum"><a name="Page_16" id="Page_16">[Pg 16]</a></span> in mind and viewing the wastage which he conceived to have been +wrought by slavery, Helper was probably within justified bounds when he +declared:</p> + +<p>"Had the Southern States, in accordance with the principles enunciated in +the Declaration of Independence, abolished slavery at the same time the +Northern States abolished it, there would have been, long since, and most +assuredly at this moment, a larger, wealthier, wiser, and more powerful +population, south of Mason and Dixon's line, than there now is north of +it."<a name='fna_23' id='fna_23' href='#f_23'><small>[23]</small></a></p> + +<p>Sentiment as to the right description of the mills of the Revolutionary +years is clear. Coming now to those of the period later than 1810, a +subject is entered in which some controversy is involved. These plants may +be denominated in general the "old mills". While the two ideas are closely +related, a distinction must be held in mind between the influence of these +factories upon the later great development and the proper character which +is to be ascribed to them as of themselves. Only the latter object is +primary in the present chapter.</p> + +<p><span class="pagenum"><a name="Page_17" id="Page_17">[Pg 17]</a></span>A North Carolinian, who, while of post-bellum experience only, has been +closely identified with one of the foremost industrial communities of the +South, told the writer that in his opinion it had been "a clear case of +arrested development; it would have all come sooner, but for the war. It +might be said that had slavery continued, manufacturing would never have +come in the South; but it is also true that slavery was doomed. There is +no use in talking about what might not have happened had slavery +continued."<a name='fna_24' id='fna_24' href='#f_24'><small>[24]</small></a> To uphold this view that the Civil War interrupted a +course which was clearly laid down in the years previous, it ought to be +capable of demonstration that the old mills had essentially the same +character as those of the great period, with only those lacks which were +inherent in the industry of the formative stage. A manufacture which is +forerunner in time is not necessarily antecedent in effect.<a name='fna_25' id='fna_25' href='#f_25'><small>[25]</small></a> The South +had small cotton farmers of a prevalent sort before ever Knapp taught +efficient<span class="pagenum"><a name="Page_18" id="Page_18">[Pg 18]</a></span> production. If the old mills were of a substantially different +stripe from those of the period of fifteen years after the war, the +genesis of the industry, economically speaking, vests in the later date.</p> + +<p>Another North Carolinian asserted that "In the older mills before the war, +the seed had been planted, and cultivation was renewed after the war. The +ante-bellum mills were pretty well known throughout the country. The +woolen mills at Salem, and the cotton mills in Alamance and a few in +Gastonia were known. The fact that such goods as 'Alamance' had a name +already was an advantage."<a name='fna_26' id='fna_26' href='#f_26'><small>[26]</small></a> But the mere fact that the old mills were +known is not enough; it is further interesting that he continued to speak +of them in close conjunction with the names of the families and +manufacturers who owned them—the personal factor stood out in his mind. +It is easy to find a number of undescriminating statements, as that the +mills of Concord were the natural outgrowth of the old McDonald Mill, that +there was a manufacturing tradition in the place.<a name='fna_27' id='fna_27' href='#f_27'><small>[27]</small></a></p> + +<p><span class="pagenum"><a name="Page_19" id="Page_19">[Pg 19]</a></span>Not a few plants in the South have been in continuous operation since an +early date. Mr. Kohn believes that the one with the longest record is that +founded at Autun, near Pendleton, South Carolina, in 1838, by F. B. Sloan, +Thomas Sloan and Berry Benson.<a name='fna_28' id='fna_28' href='#f_28'><small>[28]</small></a> But this does not mean that many of +these, so far from inspiring the later development, were not themselves by +its stimulus so greatly changed as to be radically different from their +former character. In addition to the general neglect accorded the old +mills by public estimation, there is evidence that positive local dislike +fell to one long-established enterprise at a date even as late as the +seventies.<a name='fna_29' id='fna_29' href='#f_29'><small>[29]</small></a></p> + +<p>It seems hardly necessary to controvert, in the light of the spirit with +which mills were built about 1880 and the demonstrated total newness of +the hands to the processes and even the idea of textile manufacture, an +opinion that not only did the ante-bellum mills serve as a starting point +for the later great development, but domestic weaving had accustomed the +people of the industry.<a name='fna_30' id='fna_30' href='#f_30'><small>[30]</small></a></p> + +<p><span class="pagenum"><a name="Page_20" id="Page_20">[Pg 20]</a></span>A clear distinction, and one too often lacking, was made by Carroll D. +Wright between first establishments and genuine factory development in +reference to the industry of Philadelphia and New England. Using English +spinning inventions, "During the war (Revolution) the manufacturers of +Philadelphia extended their enterprises, and even built and run (ran) +mills which writers often call factories, but they can hardly be classed +under that term. Similar efforts, all preliminary to the establishment of +the factory system, were made in Worcester, Massachusetts, in 1780."<a name='fna_31' id='fna_31' href='#f_31'><small>[31]</small></a> +While it is not pretended that the Southern mills of a later period were +of quite as limited a character as is here meant, it is wholesome to bear +this point in mind.</p> + +<p>The history of the Southern cotton mills of the period embracing the +thirty years following 1810 is rather hazy.<a name='fna_32' id='fna_32' href='#f_32'><small>[32]</small></a> Facts important to this +discussion, however, stand out. In the first place, there seems to have +been a good deal of moving about from<span class="pagenum"><a name="Page_21" id="Page_21">[Pg 21]</a></span> this water-power to that, the +machinery being hauled from place to place with apparent convenience.<a name='fna_33' id='fna_33' href='#f_33'><small>[33]</small></a> +A founder would sell an enterprise, build another and sell it and build a +third.<a name='fna_34' id='fna_34' href='#f_34'><small>[34]</small></a> It was difficult to convey machinery to the factory when +purchased at a distance. That for the Mount Hecla Mills about 1830 was +shipped from Philadelphia to Wilmington, North Carolina, up the Cape Fear +river to Fayetteville, and then across country by wagon to Greensboro. +Machinery for the Hill factory in Spartanburg county, consisting in 1816 +or 1817 of seven hundred spindles, had to be brought by wagon from +Charleston.<a name='fna_35' id='fna_35' href='#f_35'><small>[35]</small></a> Some of the machinery for the Michael Schenck mill, built +near Lincolnton, North Carolina, in 1813, was bought in Providence and +hauled by wagon from Philadelphia.<a name='fna_36' id='fna_36' href='#f_36'><small>[36]</small></a> For this mill a portion of the +machinery was built by a brother-in-law of Schenck, and when the dam broke +and it became necessary to rebuild further down the creek, a contract was +made with Michael Blom, a local workman, for additional machinery.<a name='fna_37' id='fna_37' href='#f_37'><small>[37]</small></a> +Other mills had locally manufactured equipment. Spindles<span class="pagenum"><a name="Page_22" id="Page_22">[Pg 22]</a></span> for the original +Bivingsville mill are said to have been made in a blacksmith shop.<a name='fna_38' id='fna_38' href='#f_38'><small>[38]</small></a> +"Much machinery for the early cotton mills was made by the local +blacksmiths. They were important men in the community and often grew +prosperous."<a name='fna_39' id='fna_39' href='#f_39'><small>[39]</small></a> In those days the blacksmith was a more skillful mechanic +than in these, but the machinery they produced must have been crude even +for that period.</p> + +<p>While elaboration of the point falls elsewhere in this study, it is worth +notice here that there is a difference between the old and the later mills +in the character of their promoters and managers. In the earlier period +men came to cotton manufacturing, it would seem, by more normal channels +than at the outset of the subsequent development. Like Michael Schenck +they had foreign industrial habits and traditions back of them, and they +set up mills in communities populated by Swiss, Scotch-Irish and Germans. +Or like William Bates and probably the Hills, Shenden, Clark, Henry and +the Weavers they came from the industrial atmosphere of New England, then +particularly stimulated by the encouragements lent to textile +manufacturing by the embargo laid on English goods in the War of 1812.<a name='fna_40' id='fna_40' href='#f_40'><small>[40]</small></a> +Or through collateral business<span class="pagenum"><a name="Page_23" id="Page_23">[Pg 23]</a></span> collections or marriage they were drawn +into the business. Simply private investment enlisted participation of men +in various callings. A manufacturer would be such as incidental to other +and perhaps diverse interests. It is of course true that these same forces +operated afterwards, but in the earlier time there was no response to a +public enthusiasm or a social demand creating a magnet that drew into the +industry men who otherwise would never have entered it, certainly not as +entrepreneurs.</p> + +<p>In connection with the Schenck mill there was operated a plant turning out +iron products.<a name='fna_41' id='fna_41' href='#f_41'><small>[41]</small></a> Cotton factories conjoined with gins and saw mills are +not unknown in the South even today, but in whatever instance this occurs +there is indicated a lack of specialization.</p> + +<p>The marketing and consumption of the output of the old mills is a matter +of broad interest. The statement which serves, perhaps, to indicate most +nearly a genuinely commercial character in this regard, is that of Mr. +Clark growing out of his reference to the establishment of General David +R. Williams, near Society Hill, Darlington County, South Carolina. It was +on his plantation, and was water-driven. "... in 1828 he was turning his +cotton crop, of 200 bales annually, into what was said to be the best yarn +in the United States. He marketed part of his output in New York and wove +part of it into negro cloth for home<span class="pagenum"><a name="Page_24" id="Page_24">[Pg 24]</a></span> use.... Twenty years later the +factory was still shipping yarn to New York, and also making cotton +bagging for the neighboring plantations.... By the middle of the century +their (small Southern mills such as this) product is said to have +controlled the Northern yarn market. This market they were able to enter +because they had been supported through infancy by the local demand for +yarn for homespun weaving—a support they did not entirely dispense with +until after the war. Yarn was traded by the mills for homespun linen warp, +and woven with that warp into strong cloth for country use. The family +weavers who did this work were paid for their labor in cotton yarn."<a name='fna_42' id='fna_42' href='#f_42'><small>[42]</small></a> +Other evidence hardly supports a belief that the Southern mills of this +period took so large a part in supplying the yarn market of the country; +on the other hand, local consumption and the link with domestic industry, +which even in the quotation above goes side by side with the wider sales, +was prevalent. How closely these old mills were joined with the +countryside is seen in the fact that into their coarse, homely fabrics +went hand-spun linen warp. The domestic character was ingrained. Of the +Rocky Mount Mill in North Carolina it is said that "For some years prior +to and during the Civil War, the mill was a general supply station for +warps which<span class="pagenum"><a name="Page_25" id="Page_25">[Pg 25]</a></span> the women of the South wove into cloth on the old hand looms. +A few of the braver women who were left at home with only the feminine +portion of their families or the sons too young to fight, sometimes made +trips alone many miles through the country to get warps for themselves and +neighboring families." So beneficial did this old habit prove during the +war that a cavalry troop of six hundred federals was sent up from New Bern +in 1863 and burned the mill.<a name='fna_43' id='fna_43' href='#f_43'><small>[43]</small></a> Mr. Thompson says of this same mill that +until 1851 slaves and a few free negroes were worked in it. This +distinguishing difference of the old mills from those of the great period, +when the labor of negroes was far from the thoughts of the builders and +managers, will be dwelt upon in another place. Here again is noted the +fact that the mill supplied coarse yarns for neighborhood consumption, and +it is said moreover that making only twelve to fifteen hundred pounds of +4s to 12s daily, the mill could not get a steady market for its +wares.<a name='fna_44' id='fna_44' href='#f_44'><small>[44]</small></a></p> + +<p><span class="pagenum"><a name="Page_26" id="Page_26">[Pg 26]</a></span>It is reported of the first independent venture of Francis Fries, at +Salem, North Carolina, in woolen manufacture, that it "was but a small +one, consisting of a set of cards for making rolls from the wool raised by +neighboring farmers. This mill also contained a small dyeing and fulling +plant for coloring and finishing the cloth woven by the farmers' wives and +daughters."<a name='fna_45' id='fna_45' href='#f_45'><small>[45]</small></a> A large cotton manufacturer says that he recalls only +three mills operating in Spartanburg county before the war; there were +Bivingsville and two very small plants, one of them on the Tyger River +spinning yarns on half a dozen frames, people driving from twenty to +twenty-five miles to the door of the mill to get the product, although it +was sold too in the stores.<a name='fna_46' id='fna_46' href='#f_46'><small>[46]</small></a></p> + +<p>The Batesville factory was built with about 1000 spindles. Before the +Columbia and Greenville railroad came to Greenville about 1852, the +product of the mill was 8s to 12s in ten-pound "bunches" covered with blue +paper. The yarn in this form passed current almost like money. The mill +marketed it over the mountains in North Carolina and in Tennessee, as far +as Russellville, "mountain schooners" with six-mile teams being used for<span class="pagenum"><a name="Page_27" id="Page_27">[Pg 27]</a></span> +the purpose. The wagons used to bring back whatever they could to +constitute a return load; usually it was meat, all of that article +consumed about Greenville coming, it is said, from North Carolina. +Sometimes rags were brought back. In this way yarns were sometimes taken +as far as a hundred and fifty miles.<a name='fna_47' id='fna_47' href='#f_47'><small>[47]</small></a></p> + +<p>A banker who is intimately connected with the textile industry in one of +the oldest industrial communities in the South and who is a member of a +family to which many writers are quick to point as founders of cotton +manufacture in the South through agency of conspicuous participation in +the business since the early thirties, said: "The mills built after the +war were not the result of pre-bellum mills. This is trying to ascribe one +cause for a condition which probably had many causes. The industrial +awakening in the South was a natural reaction from the war and +reconstruction. Before the war there was first the domestic industry +proper. Then came such small mills about Winston-Salem as Cedar Falls and +Franklinsville. These little mills were themselves, however, hardly more +than domestic manufactures. When, after the war, competition came from the +North and from the larger Southern mills, the little mills which had<span class="pagenum"><a name="Page_28" id="Page_28">[Pg 28]</a></span> +operated before and had survived the war lost their advantage, which +consisted in the possession of the local field. They had been able to +barter for the small quantities of local raw cotton which they used. The +standard of exchange, the par, was one yard of three-yard sheeting for a +pound of raw cotton, which was a third of a pound, made into cloth, for a +pound in the raw state. But this was a retail and not strictly a +manufacturing profit.... The old Winston mill, established in 1840, +finished the wool product spun by the country housewives. This mill also +supplied carded wool for domestic manufacture. The ante-bellum +domestic-factory system did not produce the post-bellum mills."<a name='fna_48' id='fna_48' href='#f_48'><small>[48]</small></a></p> + +<p>So strongly was he impressed with the essentially local character of the +old mills, that he was inclined to look with pessimism upon the prospect +of success for the present plants which have transcended the small sphere +that in its very restriction protected them in privileged enjoyments.</p> + +<p>It must be obvious from the foregoing considerations that a census +enumeration of mills of the period cannot show <span class="pagenum"><a name="Page_29" id="Page_29">[Pg 29]</a></span>internal characteristics +which are all-important. But even the census returns, counting one plant +like another, display the Southern industry at this stage in a feeble +light. Some primary descriptive factors are lacking in the earliest +reports of the census which are at all useful, but taking the four +Southern States which were farthest advanced in the years 1840 and +1850—Virginia, North Carolina, South Carolina and Georgia—the showing +may be summed up thus:</p> + +<p>In 1840 Virginia had 22 establishments, $1,299,020 invested, 1816 +operatives, 42,262 spindles and the plants consumed 17,785 bales of +cotton. In 1850 the same State had twenty-seven mills, with a capital of +$1,908,900 and 2,963 operatives.</p> + +<p>In 1840 North Carolina had 25 establishments, $995,300 invested in these, +1219 operatives and 47,934 spindles.<a name='fna_49' id='fna_49' href='#f_49'><small>[49]</small></a> Ten years later this State showed +three more establishments, an investment of $1,058,800, 1619 operatives +employed, 531,903 spindles and the number of bales consumed was 13,617.</p> + +<p>South Carolina in 1840 had 15 plants, representing an investment of +$617,450; there were 570 operatives and 16,353 spindles. By the next +decade there were 18 establishments, the investment in them was $857,200, +the operatives numbered 1,119 and the bales of cotton consumed 9,929.</p> + +<p><span class="pagenum"><a name="Page_30" id="Page_30">[Pg 30]</a></span>Georgia at the earlier date contained 19 mills with an invested capital of +$573,835,779 operatives and 42,589 spindles. In 1850 the number of plants +had increased by sixteen, making 35; the investment had risen to +$1,736,156; the operatives totalled 2,272; unfortunately the number of +spindles is not contained in the census returns, but the consumption was +20,230 bales.</p> + +<p>The Southern States as a whole in 1840 were able to report 248 +establishments with a capital of $4,331,078; operatives were 6,642; +spindles (an obviously incomplete summary) were 180,927. The same year the +New England States as a whole showed 674 mills, with investment of +$34,931,399, operatives numbering 46,834, and 1,497,394 spindles. The +Southern States again, in 1850 had 166 plants, $1,256,056 invested, 10,043 +operatives; the consumption was reported at 78,140 bales. At the same date +the New England development was measured by 564 plants, capital of +$53,832,430, 61,893 and a consumption of 430,603 bales.<a name='fna_50' id='fna_50' href='#f_50'><small>[50]</small></a></p> + +<p>Many single mills in the South today represent more than<span class="pagenum"><a name="Page_31" id="Page_31">[Pg 31]</a></span> the extent of +the whole industry in the most forward Southern State in 1850.<a name='fna_51' id='fna_51' href='#f_51'><small>[51]</small></a> +Comparison of facts for all the Southern mills with those for the industry +of New England perhaps serves to reflect back some light upon the status +of the former plants specifically, which has been dwelt upon.</p> + +<p>Of the plants in the South in this period it has been well observed that +"The number of small carding and fulling mills and of little water-driven +yarn factories, in this section before 1850, may have approached the +number of textile factories in the same region today; ... but few of these +establishments became commercial producers."<a name='fna_52' id='fna_52' href='#f_52'><small>[52]</small></a></p> + +<p>Some evidences of industrial activity in the period to 1840, partly +conscious and partly not so, which may be held to presage the later +development are to be noticed. A localizing tendency of the textile +industry in the decade from 1830 to 1840, held to have been guided by the +conjunction of raw cotton, waterwheel and steamboat along the fall line of +rivers—at such points<span class="pagenum"><a name="Page_32" id="Page_32">[Pg 32]</a></span> as Richmond, Petersburg, Augusta, Columbus, +Huntsville, Florence and the vicinity of Montgomery, Mr. Clark holds to be +a "slow and unconscious development", during which William Gregg, "a +single pioneer of large industry", made a systematic effort to "awaken the +South to the peculiar advantages it enjoyed for cotton manufacturing."<a name='fna_53' id='fna_53' href='#f_53'><small>[53]</small></a></p> + +<p>George Tucker, in his "Progress of the United States in Population and +Wealth in Fifty Years", published in 1843, was the first to show that at +1840 in the older South slavery was displaying signs of decay from +economic causes and that as a system it would finally lapse of its own +accord.<a name='fna_54' id='fna_54' href='#f_54'><small>[54]</small></a> Niles' Register, May 2, 1840, declared: "The South is rapidly +becoming independent in almost every branch of manufacture. There are in +North Carolina alone, at this day, a greater number of different kinds +than ten years ago there were in the whole of the Southern States", and +two weeks later the same paper took from the Raleigh, N.C., Register the +assertion that "The enterprise of the citizens of this state is rapidly +enabling it to become independent of the North in almost every branch of +manufacture."<a name='fna_55' id='fna_55' href='#f_55'><small>[55]</small></a></p> + +<p><span class="pagenum"><a name="Page_33" id="Page_33">[Pg 33]</a></span>Mr. Pleasants believes that agitation by press and public for a charge in +industrial activities resulted in awakening North Carolina in the early +thirties from the lethargy that had prevailed since 1810, so that "The +people of the state became interested and soon a class of small +manufacturers such as makers of carriages, wagons, and farm implements, +coopers, wheelwrights, distillers, tanners, hatters and makers of boots +and shoes, cabinets and chairs came into prominence and continued to +thrive down to 1860. In addition to this class were the cotton, wool, and +iron manufacturers who now began to appear and who became quite prominent +after the building of railroads began."<a name='fna_56' id='fna_56' href='#f_56'><small>[56]</small></a> It is, however, questionable +whether it may be said truly that "the people of the state became +interested"; certainly there was nothing like the sweep of public +sentiment that appeared in 1880. Several years earlier the Tarboro, N.C. +Free Press had carried this item: "A few days since twenty bales of cotton +yarn were shipped from this place to the New York markets. They were from +a manufactory of Joel Battle at the falls of Tar River.... Should the +tariff bill meet with equal success with that of internal improvements, +necessity will compel the people of the South and of North Carolina to +join in the scuffle for the benefits anticipated<span class="pagenum"><a name="Page_34" id="Page_34">[Pg 34]</a></span> from this new American +system, and they will have to bear a portion of its burdens and buffet the +Northern manufacturer with his own weapons."<a name='fna_57' id='fna_57' href='#f_57'><small>[57]</small></a></p> + +<p>Influenced by the pre-emption of land into large estates with the +consequent need of the people to find other means of livelihood than small +farming, by the discovery of gold and establishment of the mint, by the +agitation for and construction of railroads and by the improvements in +cotton manufacturing machinery, the people of Mecklenburg county, N.C., +"Many years before the war", said Mr. Tompkins, "were beginning to realize +the importance of diversified industries.... An industrial crisis was +imminent, and the problem would have solved itself by natural agencies +within a few more years, had not section differences<span class="pagenum"><a name="Page_35" id="Page_35">[Pg 35]</a></span> brought on the +war."<a name='fna_58' id='fna_58' href='#f_58'><small>[58]</small></a> In connection with this statement, which approaches as nearly to +the ascription of an industrial impulse to the ante-bellum South as any +other by this writer, it is to be noticed that the fact that the war did +come to render it impossible of effects shows the relative weakness of the +spirit at this time. The pre-occupation with intersectional differences +was of greater potency than the intra-sectional change of mind, if such +there were.</p> + +<p>A South Carolina newspaper in 1847 reckoned up with pride eleven cotton +factories in the State, with others building on the water powers of the +back-country.<a name='fna_59' id='fna_59' href='#f_59'><small>[59]</small></a></p> + +<p>The foregoing paragraphs have been designed to lead up to a very +interesting view expressed by an author often quoted in these pages. +Speaking of the years 1840-1860, Mr. Clark has said: "In the South the +most striking feature of this period was the gradual breaking down of a +traditional antipathy of manufactures. This hostility was opposed to the +obvious interests of a region where idle white labor, abundant raw +materials, and ever-present water-power seemed to unite conditions so +favorable to textile industries. Cotton planting engaged the labor of the<span class="pagenum"><a name="Page_36" id="Page_36">[Pg 36]</a></span> +negro and the thought and capital of a directing white class, but the +natural operatives of the South remained unemployed, and the capital of +the North and of Europe was mobile enough to flow to the point of maximum +profit without regard to sectional or national lines, were such a profit +known to be assured by Southern factories. Slavery as a system probably +had less direct influence upon manufactures than is commonly supposed, but +the presence of the negro through slavery was important." It is noticed +that white immigration from Europe, which at this time supplied the most +considerable mechanical skill, avoided districts heavily populated with +negroes; that plantation self-sufficiency meant isolation with small need +for good communicating roads; that the market for middle-grade goods was +restricted by the servile character of the colored population; that the +credit system, by which factors controlled the directioning of productive +capital, rested upon cotton culture by negro labor; that while the corn +laws held in England, reciprocity between the Southern States and the +mother country tended to discourage manufactures in this section while the +conditions of commerce favored manufacture in the North. "These business +interests, supported by social traditions and political sectionalism, were +strengthened in their opposition to new industries by a wide-spread +popular prejudice against organized manufactures.... Nevertheless the +South chafed continually under the discomfort of an ill-balanced system of +production...." He speaks of the canal at Augusta and of cotton<span class="pagenum"><a name="Page_37" id="Page_37">[Pg 37]</a></span> mills at +Charleston, Mobile, Columbus, New Orleans and Memphis directly following +the writings and object lesson of William Gregg in his Graniteville +factory and declares: "Though some large undertakings were wrecked by the +financial crisis of 1857, more from weak banking support than from faults +of operation, modern cotton manufacturing in the South dates from the +founding of Graniteville rather than from the post-bellum period.... +However, viewed in comparison with the cotton manufactures of the North, +those of the South were still insignificant.... Nevertheless, the present +attainment of the industry assured its definite future growth, and +ultimate national importance."<a name='fna_60' id='fna_60' href='#f_60'><small>[60]</small></a></p> + +<p>And Mr. Kohn has said that "The real and the lasting development of cotton +mills in South Carolina might be started with the Graniteville Cotton +Mill...."<a name='fna_61' id='fna_61' href='#f_61'><small>[61]</small></a></p> + +<p>It is difficult for the present writer to see the distinction which Mr. +Clark desires to draw between the effect of the presence of the negro and +the presence of slavery. Well enough to assert that the capital of the +North and of Europe was mobile enough to flow across the Atlantic and +across Mason and Dixon's line were a profit in manufacture in the South +known to be assured, but the fact is that capital did not flow in for +<span class="pagenum"><a name="Page_38" id="Page_38">[Pg 38]</a></span>industrial purposes because bright manufacturing prospects had not been +proved out, and this largely because home enterprise was a laggard while +slavery claimed the section's capital resources for cotton cultivation. +The absence of immigration was as certainly the effect of slavery.<a name='fna_62' id='fna_62' href='#f_62'><small>[62]</small></a> +While it is true that for long years after emancipation, and continuing to +this day, the influence of the presence of the negro in restraining inflow +of immigrants, particularly of artizans, it is evident the lessening of +this deterrent and the removal of other nearly equal drawbacks could not +proceed or commence while slavery existed. It should be clear to anyone +that from the point of view of the independent white workman the presence +of the negro in slavery held as a far more forcible objection than the +presence of the negro in freedom. His killing economic competition and his +radiated social poison were beyond any dispute and beyond prospect of +remedy until he was made at least a free producer. There could<span class="pagenum"><a name="Page_39" id="Page_39">[Pg 39]</a></span> not, in +the second place, be development of schools and roads, and there could not +be fraternization of work-people, while slavery continued. And the +prospect for immigration for the South has taken its rise from the Civil +War.</p> + +<p>It was slavery that made plantation self-sufficiency in primitive needs +universal, that made isolation and physical barriers to intercourse. The +credit system in its hey-day rested in large degree upon supply by the +factor of all industrial products, which needs must be sustained so long +as every local energy was foredoomed for absorption into cotton growing.</p> + +<p>It can not rightly be said that the traditional antipathy to manufactures +in the South was "opposed to the obvious interests of a region where idle +white labor, abundant raw materials, and ever-present water-power seemed +to unite conditions so favorable to textile industries", if Southern +consciousness and purpose is meant. This applies particularly to the labor +factor. It will be shown later in this study that in the period before the +war the mills often employed slaves as the exclusive operatives in the +factory, either when belonging to the management or hired from their +owners; in some cases slaves or free negroes were employed as operatives +in the same mills with whites; and finally, and more importantly, through +the reconstruction years and at the very outset of the cotton mill era the +thought of the establishers of mills nor infrequently groped out in the +inclination<span class="pagenum"><a name="Page_40" id="Page_40">[Pg 40]</a></span> again to engage negro hands and to induce white operatives to +come from the North and even from England and the Continent—overlooking +the native Anglo-Saxon population as a useful supply of workers as though +it had not been there. Before the war the presence of raw cotton was +certainly looked upon more usually rather as a guarantee of economic +independence than as a stimulus to produce within the section those +products of manufacturing which the staple was potent to purchase.</p> + +<p>It is not implied that conspicuous promulgators and exemplars of the need +for a change in economic activity, such as William Gregg and others, and +more still of lesser consequence of whom we have fewer evidences, were not +products of a reaction that showed itself from the long continuance of +slavery, but they stand out, impotent as they are striking, against a dull +and motionless background of prevalent system.</p> + +<p>Materials and viewpoint are both too well understood to require here +demonstration of the preventive influence which slavery and cotton had +upon industry in the South. And yet some observations may be brought out +for the special purposes of this study, looking especially through the +eyes of Southern men. Henry Watterson has said: "The South! The South! It +is no problem at all. The story of the South may be summed up in a +sentence; she was rich, she lost her riches; she was poor and in bondage; +she was set free, and she had to go to work; she went to work, and<span class="pagenum"><a name="Page_41" id="Page_41">[Pg 41]</a></span> she is +richer than ever before. You see it was a ground-hog case. The soil was +here, the climate was here, but along with them was a curse, the curse of +slavery."<a name='fna_63' id='fna_63' href='#f_63'><small>[63]</small></a> Probably not over-induced by bitter animus is Helper's +direct charge: "And now to the point. In our opinion, an opinion which has +been formed from data obtained by assiduous researches, and comparisons, +from laborious investigation, logical reasoning, and earnest reflection, +the causes which have impeded the progress and prosperity of the South, +which have dwindled our commerce, and other similar pursuits, into the +most contemptible insignificance; sunk a large majority of our people in +galling poverty and ignorance, rendered a small minority conceited and +tyrannical, and driven the rest away from their homes; entailed upon us a +humiliating dependence on the Free States; disgraced us in the recess of +our own souls, and brought us under reproach in the eyes of all civilized +and enlightened nations—may all be traced to one common source, and there +find solution in the most hateful and horrible word, that was ever +incorporated into the vocabulary of human economy—Slavery!"<a name='fna_64' id='fna_64' href='#f_64'><small>[64]</small></a></p> + +<p>Tompkins saw clearly, and in effect said again and again, that "the result +of the introduction and growth of the system of<span class="pagenum"><a name="Page_42" id="Page_42">[Pg 42]</a></span> slavery was +revolutionary; it turned the energies of the people almost wholly to the +cultivation of cotton; it practically destroyed all other +industries...."<a name='fna_65' id='fna_65' href='#f_65'><small>[65]</small></a> And again, "By the influence of the negro the South +lost its manufactures and largely its commerce, and became practically a +purely agricultural section of the nation."<a name='fna_66' id='fna_66' href='#f_66'><small>[66]</small></a> Speaking of the effect of +the cotton gin and the cultivation of the staple by slave labor, he said: +"The shops which had been productive of trading were closed to the public, +and were utilized only for what was needed on the plantation.... There +were no industries requiring skill or thought, and there was no necessity +for scientific farming or anything else scientific.... Slavery not only +demonstrated that people will not think unless it is necessary, but also +that they will not work unless it is necessary.... Within three decades +after the invention of the cotton gin, slavery had accomplished its +revolution. The people whose minds had been occupied with diversified +industries and industrial expansion, were narrowed down to the development +and growth of cotton.... The mills and shops lay idle, the abundant +natural resources were ignored, and everything staked<span class="pagenum"><a name="Page_43" id="Page_43">[Pg 43]</a></span> upon one +occupation...."<a name='fna_67' id='fna_67' href='#f_67'><small>[67]</small></a> This writer was fond of linking the economic trend of +the South in 1800 with that which emerged after Reconstruction, as thus, +"In the latter part of the eighteenth century and the early part of the +nineteenth there was a well-developed and extensive manufacturing interest +in the South. White mechanics were numerous, and lived well. The growth of +the institution of slavery had nearly destroyed all manufactures ... by +the middle of the nineteenth century.... After the abolition of slavery, +and after a period of disastrous experiment in trying to legislate on +social and political conditions 'without regard to race, color or previous +condition of servitude,' education, intelligence or moral character ... +manufactures were quickly re-established in the South, and the descendants +of the mechanics of former days ceased at once to be 'poor white trash' +and became with marvelous quickness as good carpenters, machinists, +carders, weavers, etc., as their ancestors were."<a name='fna_68' id='fna_68' href='#f_68'><small>[68]</small></a></p> + +<p><span class="pagenum"><a name="Page_44" id="Page_44">[Pg 44]</a></span>Something of Tompkins' newspaper published and publicist habit comes out +in this conclusion of his advice against the usefulness of negroes in +cotton mills: "Dependence upon the negro as a laborer has done infinite +injury to the South. In the past it brought about a condition which drove +the white laborer from the South or into enforced idleness. It is +important to re-establish as quickly as possible respectability for white +labor."<a name='fna_69' id='fna_69' href='#f_69'><small>[69]</small></a></p> + +<p>Not only is it to be said that "the growth of slavery stifled +manufactures",<a name='fna_70' id='fna_70' href='#f_70'><small>[70]</small></a> but it is noteworthy that while this baleful influence +lasted no improvements were made in the methods or appliances for the +preparation of raw cotton for the market. Except in size and superficial +appearance there was no change in the ante-bellum gin, gin-house and screw +from 1820 to 1860. "The cotton was packed by hand, carried into the +gin-house in baskets by laborers, carried to the gin by laborers, pushed +into the lint-rooms, carried to the screw, packed in the box of the screw<span class="pagenum"><a name="Page_45" id="Page_45">[Pg 45]</a></span> +and bound with ropes, all by hand." But after the war came a feeder, a +condenser, a hand-press to be used in the lint room, and cotton elevators. +"... the spirit of enterprise, invention and improvement in the people of +the South has not only revived, but the entire method and all the +machinery and appliances for preparing cotton for the market have been +revolutionized."<a name='fna_71' id='fna_71' href='#f_71'><small>[71]</small></a></p> + +<p>A propagandist of the early eighties desiring to organize a development of +small cotton mills in the South quoted with approval a correspondent of +the Morning News of Savannah, setting forth that before the war the +planters saw the advantage for little establishments and were only +deterred from manufacturing because "slavery and the factory were declared +to be incompatible institutions. They could not exist together."<a name='fna_72' id='fna_72' href='#f_72'><small>[72]</small></a></p> + + +<p> </p><p> </p> +<hr style="width: 50%;" /> +<p><span class="pagenum"><a name="Page_46" id="Page_46">[Pg 46]</a></span></p> +<h2><a name="CHAPTER_II" id="CHAPTER_II"></a>CHAPTER II</h2> +<p class="center"><span class="large"><i>THE BACKGROUND (Continued)</i></span></p> + +<p>So far from proclaiming cotton as king, there is evidence that some of the +wisest Southerners saw that it was in many respects a curse. Said William +Gregg in 1845: "Since the discovery that cotton would mature in South +Carolina, she has reaped a golden harvest; but it is feared it has proved +a curse rather than a blessing, and I believe that she would at this day +be in a far better condition, had the discovery never been made. Cotton +has been to South Carolina what the mines of Mexico were to Spain...." The +"day is not far distant, yea, is close at hand, when we shall find that we +can no longer <i>live</i> by that, which has heretofore yielded us ... a +bountiful and sumptuous living.... Let us begin at once, before it is too +late, to bring about a change in our industrial pursuits ...—let croakers +against enterprise be silenced—let the working men of our State who have, +by their industry, accumulated capital, turn out and give a practical +lesson to our political leaders, that are opposed to this scheme. Even Mr. +Calhoun, our great oracle ... is against us in this matter; he will tell +you, that no mechanical enterprise can succeed in South Carolina—that +good mechanics will go where their talents are better rewarded—that to +thrive in cotton spinning, one should go to Rhode Island—that to +undertake it here, would not only lead to loss of capital, but +disappointment and ruin to<span class="pagenum"><a name="Page_47" id="Page_47">[Pg 47]</a></span> those who engage in it."<a name='fna_73' id='fna_73' href='#f_73'><small>[73]</small></a></p> + +<p>"The invention of the cotton gin", said Tompkins, "... Before 1860 ... was +nearer anything else than a blessing. It was primarily responsible for the +system of slavery.... Cotton ... in its manufacture ... is the life of the +South, but we could probably have done as well without it until we began +to manufacture it."<a name='fna_74' id='fna_74' href='#f_74'><small>[74]</small></a></p> + +<p>Not too dogmatic is the opinion expressed that "It seems as clear as day +that ... cotton made the South a free trade section and the North +protective; cotton lured the South back to slavery;<a name='fna_75' id='fna_75' href='#f_75'><small>[75]</small></a> cotton drove the +South to an extreme States-rights position ... and cotton at last drove +the South to translate extreme States-rights into the terms of +Secession...."<a name='fna_76' id='fna_76' href='#f_76'><small>[76]</small></a> And with regard to internal policy, "Perhaps the most +striking economic change that the new<span class="pagenum"><a name="Page_48" id="Page_48">[Pg 48]</a></span> industry (cotton culture) effected +in the South after the reintroduction of slavery was the speedy +abandonment of manufactures ... what was the use of nerve-racking +investment in elaborate and costly machinery when a land-owner could reap +ten per cent net profit from a few negroes and mules and a bushel or two +of the magical cotton seed? and yet the South had unusual manufacturing +facilities ... manufacture soon fell into decay; the Piedmont region being +still dotted with the moldering ruins of iron works and other mills that +bear witness to the overwhelming power of the new agricultural +absorption."<a name='fna_77' id='fna_77' href='#f_77'><small>[77]</small></a></p> + +<p>It has been observed that the social difference between North and South +before the war, so often looked upon as something existing as of itself +apart, as a matter of fact may be fully accounted for simply by the +institution of slavery, which arrested development on Southern soil of the +industrial type of American civilization.<a name='fna_78' id='fna_78' href='#f_78'><small>[78]</small></a></p> + +<p>Very convincing in his fact findings and often strikingly happy in his +interpretations is Olmsted; his work benefited by being saved from the +passion of Helper and the venom of Sidney Andrews. In accounting in 1856 +for the reason for the stagnation in Virginia as compared with the +industrial activity of New England<span class="pagenum"><a name="Page_49" id="Page_49">[Pg 49]</a></span> and old England, he wrote, "It is the +old, fettered, barbarian labor-system, in connection with which they +(Virginians) have been brought up, against which all their enterprise must +struggle, and with the chains of which all their ambition must be bound. +This conviction I find to be universal in the minds of strangers, and it +is forced upon one more strongly than it is possible to make you +comprehend by a mere statement of isolated facts. You could as well convey +an idea of the effect of mist on a landscape by enumerating the number of +particles of vapor that obscure it. Give Virginia blood fair play, remove +it from the atmosphere of slavery, and it shows no lack of energy and good +sense."<a name='fna_79' id='fna_79' href='#f_79'><small>[79]</small></a> He took to be an average expression of the views "Not of the +majority of the people (of Virginia)—they are not quite so demented as +yet—but of the majority of those whose monopoly of wealth and knowledge +has a governing influence on a majority of the people", the statement of a +paper of the State that it was glad to find its contemporaries willing to +discuss "the true and great question of the day—<i>The Existence of slavery +as a permanent issue in the South</i>. Every moment's reflection but +convinces us of the absolute impregnability of the Southern position on +this subject. Facts, which can not be questioned, come thronging in +support of the true doctrine—that slavery is the best<span class="pagenum"><a name="Page_50" id="Page_50">[Pg 50]</a></span> condition of the +black race in this country ..."; and from another newspaper in the year +previous (1854): "African slavery ... is a thing that we can not do +without, that is <i>righteous</i>, <i>profitable</i>, and permanent, and that +belongs to Southern Society as inherently, intricately, as durably as the +white race itself."<a name='fna_80' id='fna_80' href='#f_80'><small>[80]</small></a></p> + +<p>Olmsted was at pains to show how the people were duped by Charlatan +guidance of their political leaders; this comes out particularly in his +quotation of and comments upon the famous election speech in Virginia in +the fifties, in which the aspirant declared to his audience that "Commerce +has long ago spread her sails, and sailed away from you ... you have set +no tilt-hammer of Vulcan to strike blows worthy of the gods in your iron +foundries; you have not yet spun more than coarse cotton enough, in the +way of manufacture, to clothe your own slaves. You have had no commerce, +no mining, no manufactures. You have relied alone on the single power of +agriculture—and such agriculture! Your sedge-patches outshine the sun.... +Instead of having to feed cattle on a thousand hills, you have had to +chase the stum-tailed steers through the sedge-patches to procure a tough +beef-steak. (Laughter and applause.) ... The landlord has skinned the +tenant,<span class="pagenum"><a name="Page_51" id="Page_51">[Pg 51]</a></span> and the tenant has skinned the land, until all have grown poor +together," "and how," asks Olmsted, "does the fiddling Nero propose, it +will be wondered, to remedy this so very amusing stupidity, poverty, and +debility? Very simply and pleasantly. By building railroads and canals, +ships and mills; by establishing manufactories, opening mines, and setting +up smelting-works and foundries. And, 'Hurrah!' shout the tickled +electors; 'that's exactly what we want.'" And then he showed that it was +much like the quack telling the confirmed paralytic to live generously, +take vigorous exercise and grow well; that with the disease of slavery in +its vitals the South could not do else than languish; that in holding out +promise of wholesome measures which contemplated everything but the +attacking of slavery,<a name='fna_81' id='fna_81' href='#f_81'><small>[81]</small></a> the politicians were just laughing at the +people.<a name='fna_82' id='fna_82' href='#f_82'><small>[82]</small></a></p> + +<p>A reflection just as sorrowful as the confirmed bias of the people, +however, is one that Olmsted did not see in this and myriad other +episodes, namely, the blindness of the leaders that, with no doubt strong +elements of quackery, showed even stronger signs of being themselves duped +by a situation. Not that the crowd was believing, but that the leaders +were so largely sincere,<span class="pagenum"><a name="Page_52" id="Page_52">[Pg 52]</a></span> was most melancholy. As to both considerations, +however, a passage of Sir Horace Plunkett in comment upon Irish politics, +is much to the point: "Deeply as I have felt for the past sufferings of +the Irish people and their heritage of disability and distress, I could +not bring myself to believe that, where mis-government had continued so +long, and in such an immense variety of circumstances and conditions, the +governors could have been alone to blame. I envied those leaders of +popular thought whose confidence in themselves and in their followers was +shaken by no such reflections. But the more I listened to them, the more +the conviction was borne in upon me that they were seeking to build an +impossible future upon an imaginary past."<a name='fna_83' id='fna_83' href='#f_83'><small>[83]</small></a></p> + +<p>As opposed to the brightening signs which some have seen in the years just +preceding the Civil War, it has been said, "yet with the line around +slavery being drawn more closely ... the cotton South lagged in the +industrial race, and the border States were hampered by the institution +that they felt to be a burden, but which they could see no safe way to +abolish. Compassed as it was by political compromises, slavery must +ultimately have topped through its own overweight; but in 1860 it was so +valuable for the plantation that it was not only not readily converted +into the factory, but was an obstacle in the way of the employment<span class="pagenum"><a name="Page_53" id="Page_53">[Pg 53]</a></span> of +capital and of other labor in that direction."<a name='fna_84' id='fna_84' href='#f_84'><small>[84]</small></a></p> + +<p>The deterrent effect of slavery upon immigration of white laborers has +been noticed above. In 1860 only 6 per cent of the white population of the +South was foreign-born, but immigrants made up nearly 20 per cent of that +in the North. In the decade from 1850 to 1860 the South's quota of +foreign-born in the whole country dropped from 14 to 13 per cent.<a name='fna_85' id='fna_85' href='#f_85'><small>[85]</small></a> The +South was deprived of her share of foreign mechanics, so largely +responsible for the industries in this country in the first half of the +nineteenth century, not only by the fact that independent artizans avoided +competition with slave labor, but because few of them had the means of +acquiring slaves, and disapproved of the institution besides.<a name='fna_86' id='fna_86' href='#f_86'><small>[86]</small></a> The +increase in population in North Carolina in the<span class="pagenum"><a name="Page_54" id="Page_54">[Pg 54]</a></span> single decade of 1870 to +1880 about equalled that of the four decades preceding. The comprehensive +influence here upon immigration by the abolition of slavery is not greatly +modified by the fact that in the period before 1870 fell the losses from +the Civil War.<a name='fna_87' id='fna_87' href='#f_87'><small>[87]</small></a> The tide of immigration to Mecklenburg County in this +State dwindled from the introduction of slavery as a system until 1825, +and thereafter set in the emigration of persons from the county, an even +severer influence and stronger indication of the baleful labor system.<a name='fna_88' id='fna_88' href='#f_88'><small>[88]</small></a></p> + +<p>In the fifties it was declared that the most prosperous community in South +Carolina was a settlement of Germans in the western part of the State. +Here had been founded an educational institution, varied manufactures, +farming was conducted with successful enterprise and capital was found to +be invested in a railroad venture. Slavery was not relied upon.<a name='fna_89' id='fna_89' href='#f_89'><small>[89]</small></a> Sidney +Andrews in 1865 found the northwestern counties of Georgia, which were +held<span class="pagenum"><a name="Page_55" id="Page_55">[Pg 55]</a></span> to be strongly opposed to secession in 1860-61, and which furnished +a good many soldiers to the federal armies, probably better disposed to +the national government than any other part of the State. Slaves had +constituted less than a fourth of the total population, the people were +industrious and hardy; though cruder than those from the lower parts of +the State, the delegates from this section to the constitutional +convention of 1865 were said to have a well-informed outlook for the +Commonwealth. After the war the industry displayed by the white people of +this region was taken as attesting their better traditions of ante-bellum +years.<a name='fna_90' id='fna_90' href='#f_90'><small>[90]</small></a></p> + +<p>At a time when the average wages of female operatives in the cotton mills +of Georgia was half that of the same workers in the mills of +Massachusetts, factory girls from New England were induced by high pay to +go to the Southern States to enter newly-established plants, but soon +returned North because their position was unpleasant in the midst of "the +general degradation of the laboring class."<a name='fna_91' id='fna_91' href='#f_91'><small>[91]</small></a> It was observed very truly +that competition of the slave was not distantly matched in hurtfulness by +the example of the more prosperous white men, with whom acquisition<span class="pagenum"><a name="Page_56" id="Page_56">[Pg 56]</a></span> of +the comforts and dignities of life did not proceed from daily toil.<a name='fna_92' id='fna_92' href='#f_92'><small>[92]</small></a></p> + +<p>The dependence of the ante-bellum South upon the North and upon Europe for +the most substantial and the most trivial appurtenances of civilization, +is perhaps less in dispute than any topic here treated. The extent of this +dependence, with the accompanying neglect of provision for production of +the commodities at home, is evidenced by its continuance for years after +the war. It might be said, not only in justification of this practice, but +in apology for the total one-sidedness of the old South, that the section +was animated by a natural and universal law, in responding to and acting +upon the principle of comparative economic advantage. And certainly the +most absolute conception of the territorial division of labor could not +require a more exclusive devotion to the making of cotton and a more +complete reliance upon other less peculiarly favored districts for supply +not only of manufactured goods but of food stuffs and other raw materials, +than the South displayed. But, however, strictly in conformity with the +superficial dictates of this policy from an international and even +national point of view, the program was ruinous to the section, the +country and, in a broad sense, to the deeper<span class="pagenum"><a name="Page_57" id="Page_57">[Pg 57]</a></span> economic welfare of the +world. Easy yielding to the principle did not suggest to the great bulk of +the South's statesmanship the reflection that the section after all was in +only partial compliance; that even for the most efficient production of +cotton as such, there needed to be a wholesome admixture of manufacturing +and of other agricultural interests. Accompanying and directly by agency +of the post-bellum activities in industry is seen not a less but a more +economical and larger output of the staple.</p> + +<p>Some of the most humorous passages in the literature of the economic +history of the South were called forth by the need of the section to go to +the North for a thousand and one essentials of daily existence, and in +their very humor they serve to show the seriousness of the situation.</p> + +<p>William Gregg, too lonely in his advocacy of home industry to treat the +subject in other than its fundamental considerations, declared in 1845 to +his own community, than which there was no greater sinner: "It ought to +make every citizen who feels an interest in his country, ashamed to visit +the clothing stores of Charleston, and see the vast exhibition of +ready-made clothing, manufactured mostly by the women of Philadelphia, New +York, Boston and other Northern cities, to the detriment and starvation of +our own countrywomen, hundreds of who may be found in our own good city in +wretched poverty, unable to procure work by which<span class="pagenum"><a name="Page_58" id="Page_58">[Pg 58]</a></span> they would be glad to +earn a decent living."<a name='fna_93' id='fna_93' href='#f_93'><small>[93]</small></a> And again: "A change in our habits and +industrial pursuits is a far greater desideratum than any change in the +laws of our Government...."<a name='fna_94' id='fna_94' href='#f_94'><small>[94]</small></a> His point of view comes out well in this +passage: "if we continue in our present habits, it would not be +unreasonable to predict, that when the Raleigh Rail-Road is extended to +Columbia, our members of the Legislature will be fed on Yankee baker's +bread. Pardon me for repeating the call on South Carolina to go to work. +God speed the day when her politicians will be exhorting the people to +domestic industry, instead of State resistance; when our Clay Clubs and +Democratic Associations will be turned into societies for the advancement +of scientific agriculture and the promotion of mechanic art; when our +capitalists will be found following the example of Boston and other +Northern cities, in making such investments of their capital as will give +employment to the poor, and make them producers, instead of burthensome +consumers; when our City Council may become so enlightened as to see the +propriety of following the example of every other city in the civilized +world, in removing the restrictions on the use of the<span class="pagenum"><a name="Page_59" id="Page_59">[Pg 59]</a></span> Steam Engine, now +indispensable in every department of Manufacturing...."<a name='fna_95' id='fna_95' href='#f_95'><small>[95]</small></a></p> + +<p>A decade later Helper reproached a South that had not given heed to Gregg: +"It is a fact well known to every intelligent Southerner that we are +compelled to go to the North for almost every article of utility and +adornment, from matches, shoe-pegs and paintings up to cotton-mills, +steamships and statuary ... this unmanly and unnational dependence, ... is +so glaring that it can not fail to be apparent to even the most careless +and superficial observer. All the world sees, or ought to see, that in a +commercial, mechanical, manufactural, financial, and literary point of +view, we are as helpless as babes...."<a name='fna_96' id='fna_96' href='#f_96'><small>[96]</small></a></p> + +<p>Gregg remarked the supply by the North not only of the articles of major +manufacture, but of articles of those makes which should naturally be the +adjuncts of agriculture—axe, hoe and broom handles, pitch-forks, rakes, +and hand-spikes for rolling logs, shingles and pine boards; and even that +"the Charleston<span class="pagenum"><a name="Page_60" id="Page_60">[Pg 60]</a></span> market is supplied with fish and wild game by Northern +men, who come out here, as regularly as the winter comes, for this +purpose, and from our own waters and forests often realize, in the course +of one winter, a sufficiency to purchase a small farm in New England."<a name='fna_97' id='fna_97' href='#f_97'><small>[97]</small></a></p> + +<p>An orator at the Southern Commercial Convention, New Orleans, 1855, +adapted for the occasion, thought Olmsted, a speech made in the British +Parliament on taxes, familiarized in "Child's First Speaker", and +beginning, in the Southern version, "It is time that we should look about +us, and see in what relation we stand to the North. From the rattle with +which the nurse tickles the ear of the child born in the South, to the +shroud that covers<span class="pagenum"><a name="Page_61" id="Page_61">[Pg 61]</a></span> the cold form of the dead, everything comes to us from +the North. We rise from between sheets made in Northern looms, and pillows +of Northern feathers, to wash in basins made in the North ..." and +continuing in the strain that was a favorite one with platform and pen, +and many examples of the employment of which may be found.<a name='fna_98' id='fna_98' href='#f_98'><small>[98]</small></a></p> + +<p>A Virginia land-owner wrote to a farm paper regretting the widespread and +intimate dependence upon the North, and stated quite as clearly as was +observed thirty years later that goods which could be bought in the North, +paying a profit to the manufacturer there, then transported to the South +at heavy cost and sold at a profit to the tradesman, might surely be +manufactured<span class="pagenum"><a name="Page_62" id="Page_62">[Pg 62]</a></span> in the South in the first place, saving maker's profit to +home industry and obviating charges of carriage altogether.<a name='fna_99' id='fna_99' href='#f_99'><small>[99]</small></a></p> + +<p>A newspaper in Richmond chronicled the sale to Northern interests of a +large coal field in the State, and in unconscious irony placed in +juxtaposition to the notice this confident exhortation: "It is plain that +a new and glorious destiny awaits the South, and beckons us onward to a +career of independence. Shall we train and discipline our energies for the +coming crisis, or <i>shall we continue the tributary and dependent vassals +of Northern brokers and money-changers</i>? Now is the time for the South to +begin in earnest the work of self-development! Now is the time to break +asunder the fetters of commercial subjection, and to prepare for that more +complete independence that awaits us."<a name='fna_100' id='fna_100' href='#f_100'><small>[100]</small></a> But another and wiser paper in +the same State, urging manufacturing development for Virginia towns and +cities, and particularly the textile industry for Richmond, anticipated +with a different mind the event invited in the excerpt above quoted, and +foretold with prophecy all too good, what later was patent to everybody: +"It must be plain to the South that if our relations with the North should +ever be severed—and how soon they may be, none<span class="pagenum"><a name="Page_63" id="Page_63">[Pg 63]</a></span> can know (may God avert +it long!)—we would, in all the South, not be able to clothe ourselves. We +could not fell our forests, plow our fields, nor mow our meadows. In fact, +we would be reduced to a state more abject than we are willing to look at, +even prospectively. And yet, with all these things staring us in the face, +we shut our eyes, and go on blindfold."<a name='fna_101' id='fna_101' href='#f_101'><small>[101]</small></a></p> + +<p>It is thought well, in summary of the decidedly non-industrial character +of the ante-bellum South, to set forth some material and some observations +of a general character. In spite of its length, it is useful to give in +its setting an episode related by Tompkins. It shows more aptly than +almost in anything in spite of its incidental happening, just the point of +preoccupation with politics to which the Southern mind came, the degree of +trifling with which the most sober proposals were met, the hopelessness of +change from this state of affairs by anything short of a fundamental moral +awakening.</p> + +<p>"I heard of an incident, that occurred in a political contest between Mr. +Gregg and Chancellor Carroll, for the place of State Senator from +Edgefield District. It was the habit for candidates to appear together and +speak to the people from the same platform.... On one of these occasions, +Mr. Gregg spoke<span class="pagenum"><a name="Page_64" id="Page_64">[Pg 64]</a></span> first. He stated that he solicited votes on the ground +that he had built a factory, which gave work to poor white people. It +enhanced the value of cotton by manufacturing it. He had planted peach +orchards to develop new avenues of profit and advantage to the people, +&c., &c. Whereas, Chancellor Carroll had never made two blades of grass +grow where only one grew before.</p> + +<p>"Mr. Carroll flowed Mr. Gregg. He was an accomplished orator, and praised +in eloquent terms, Mr. Gregg's enterprise in building a factory. He +eulogized his plans for fruit culture. He admitted, with humility, all the +delinquencies Mr. Gregg charged against him excepting only one: 'He says I +never made two blades of grass grow where only one grew before. Having +faith in Mr. Gregg's plans and advice about orchards, I planted one, and +if anybody is disposed to believe I never made grass grow, I simply invite +them to go look at that orchard. It is literally run away with grass.' The +crowd laughed, voted for Mr. Carroll and the cause of slavery went forward +while Mr. Gregg staid at home and the cause of civilization +languished."<a name='fna_102' id='fna_102' href='#f_102'><small>[102]</small></a></p> + +<p>But Gregg preached his doctrine undaunted; his works are<span class="pagenum"><a name="Page_65" id="Page_65">[Pg 65]</a></span> to be taken less +as an indication of anything like general ante-bellum awakening to +suicidal policies than as the bright exception that proves the melancholy +rule.</p> + +<p>He showed that even cotton, the great god, drove enterprise from South +Carolina, for, with the returns from its culture under ordinary management +amounting to 3 or 4 and in some instances only 2 per cent., the +inclination for planters to remove with their slave capital to the richer +south-west was strong, thus keeping the population of the State at a +standstill.<a name='fna_103' id='fna_103' href='#f_103'><small>[103]</small></a></p> + +<p>Mr. Ingle has stated the case broadly: "The economic history of the South +from the Revolution to the Civil War is a record of the development of one +natural advantage to the neglect of several others. Fitted by nature to +support a large population engaged in a variety of pursuits based upon +agriculture, it had a small population occupied in the production of raw +material that contributed to the maintenance of a dense population in +regions where artifice contended against harsh climate and a stubborn +soil."<a name='fna_104' id='fna_104' href='#f_104'><small>[104]</small></a> An "address to the Farmers of Virginia" read at a convention +for the formation of the Virginia State Agricultural Society in 1852, +adopted, reconsidered and readopted with <span class="pagenum"><a name="Page_66" id="Page_66">[Pg 66]</a></span>amendments, and finally +reconsidered again and rejected on the ground that it contained +admissions, however true, which would be useful to abolitionists, +contained the words: "... thus we, who once swayed the councils of the +Union, find our power gone, and our influence on the wane, at a time when +both are of vital importance to our prosperity, if not to our safety. As +other states accumulate the means of material greatness, and glide past us +on the road to wealth and empire, we slight the warnings of dull +statistics, and drive lazily along the field of ancient customs, or stop +the <i>plow</i> to speed the <i>politician</i>—should we not, in too many cases, +say with more propriety, the <i>demagogue</i>!... With a widespread domain, +with a kindly soil, with a climate whose sun radiates fertility, and whose +very dews distill abundance, we find our inheritance so wasted that the +eye aches to behold the prospect."<a name='fna_105' id='fna_105' href='#f_105'><small>[105]</small></a></p> + +<p>In addition to the barrier to manufactures formed by cotton cultivation +under slave labor, and the silent opposition which the prevalent system +engendered, were not infrequent outspoken declarations against industry. +William Gregg was one of the few in South Carolina or the whole South, for +that matter, to rise superior to Calhoun's sway, and asserting that there +were some who were better able to speak of the propriety of factories +than<span class="pagenum"><a name="Page_67" id="Page_67">[Pg 67]</a></span> even that statesman, faced him squarely but tactfully. "The known +zeal with which this distinguished gentleman has always engaged in every +thing relating to the interest of South Carolina, forbids the idea that he +is not a friend to domestic manufactures, fairly brought about, and, +knowing, as he must know, the influence which he exerts, he should be more +guarded in expressing opinions adverse to so good a cause."<a name='fna_106' id='fna_106' href='#f_106'><small>[106]</small></a></p> + +<p>And again, speaking of manufactures, he was regretful of the fact that +"our great men are not to be found in the ranks of those, who are willing +to lend their aid, in promoting this good case. Are we to commence another +ten years' crusade, to prepare the minds of the people of this State for +revolution; thus<span class="pagenum"><a name="Page_68" id="Page_68">[Pg 68]</a></span> unhinging every department of industry, and paralyzing +the best efforts to promote the welfare of our country." His footnote to +this passage shows how calmly, in his comprehensive grasp of the whole +situation, Gregg could estimate the bias of his opponents and point out to +them how even their selfish ambitions could only be served by attention to +such reasoning as his: "Those who are disposed to agitate the State and +prepare the minds of the people for resisting the laws of Congress, and +particularly those who look for so direful a calamity as the dissolution +of our Union, should, above all others, be most anxious so to diversify +the industrial pursuits of South Carolina, as to render her independent of +all other countries; for as sure as this greatest of calamities befalls +us, we shall find the same causes that produced it, making enemies of the +nations which are at present, the best customers for our agricultural +productions."<a name='fna_107' id='fna_107' href='#f_107'><small>[107]</small></a></p> + +<p>Gregg felt keenly the opposition to cotton manufactures, which took point, +moreover, from the failure of mills in the South, particularly in his own +State. This he combatted by showing<span class="pagenum"><a name="Page_69" id="Page_69">[Pg 69]</a></span> that not lack of natural advantages +but gross mismanagement had been responsible for the fate of these +enterprises.<a name='fna_108' id='fna_108' href='#f_108'><small>[108]</small></a> He tried to take heart for the South in the reflection +that those who commenced the textile industry in Rhode Island had the +whole country against them and the experience of England closed to them, +whereas his section had the encouragement of New England and access to the +machinery and mechanical skill of the world, and he added, "It will be +remembered, that the wise men of the day predicted the failure of <i>steam +navigation</i>, and also of our own railroad; it was said we were deficient +in mechanical skill, and that we could not manage the complicated +machinery of a steam engine, yet these works have succeeded—we have found +men competent to manage them—they grow up amongst us...."<a name='fna_109' id='fna_109' href='#f_109'><small>[109]</small></a></p> + +<p>Because of the striking reversal of front of the city at a later date, +which will be of central importance in subsequent chapters of this study, +the estimate which Gregg gave in 1856 of Charleston's attitude toward home +industry is interesting. As a delegate from Edgefield District in the +South Carolina house of representatives he spoke against the grant of aid +by the State to the South Carolina Railroad, stoutly declaring, <span class="pagenum"><a name="Page_70" id="Page_70">[Pg 70]</a></span>although +he was a stockholder in the venture and the men in control were his +personal friends, that he believed every dollar the State might put into +the scheme would be lost; he observed that the railroad was purely for the +commercial aggrandizement of Charleston, and that, perhaps, not honestly, +its spokesmen being unwilling themselves to take stock. Instead of +commercial policies selfishly followed by "wealthy gentlemen, some of whom +have ships floating in every sea", he declared "That her (Charleston's) +destiny was fixed and indissoluble with the State of South Carolina, and +that mainly her great investment in Internal Improvements should be made +with a view to developing the resources of the immediate country around +her. That certain and cheap modes of transportation from all quarters of +the State could not fail to re-act on the general prosperity of the city. +That the dormant wealth of Charleston might be so directed as to be felt +in the remotest parts of the State, in stimulating agriculture, draining +our great swamps and putting into renewed culture our worn-out and waste +lands; diversified industry, stimulating the mechanic arts and increasing +the population and wealth of the State."<a name='fna_110' id='fna_110' href='#f_110'><small>[110]</small></a> Instead of this just ideal +for leadership and helpfulness, he found it to be the unfortunate fact +that, "There is no city in the Union which has accumulated more wealth, to +its size, than<span class="pagenum"><a name="Page_71" id="Page_71">[Pg 71]</a></span> Charleston—none that has shown so little inclination to +put forth her wealth in such a way as to develop the resources of the +State. Her millionaires die in New York. There is scarcely a day that +passes that does not send forth Charleston capital to add to the growth +and wealth of that great city. There is a silent and an imperceptible +drain in that direction; the aggregate of which for twenty years would +more than build a railroad from Charleston to Cincinnati."<a name='fna_111' id='fna_111' href='#f_111'><small>[111]</small></a></p> + +<p>The economic thinking of the old South, with its inertia and its +inconsistency, is well illustrated in a statement of Robert N. Gourdin, a +cotton factor of Charleston and representative of the aristocratic type of +its citizenship, made to the correspondent of the New York Herald in +connection with the Atlanta Cotton exposition in 1881. After going over +the old matter of the war, and the South's vanquishment by superior +numbers only, he said: "We (in the South) did not manufacture because +there was no necessity for our doing so. With our wonderfully productive +soil, our marvellous climate, and with plenty of labor to cultivate our +farms, we would accumulate wealth, live comfortably and even luxuriously +without troubling ourselves with diggings for minerals or manufacturing +cloth. We did not object to the inventions and manufactures of the North, +but we did protest<span class="pagenum"><a name="Page_72" id="Page_72">[Pg 72]</a></span> against being obliged to pay for them."<a name='fna_112' id='fna_112' href='#f_112'><small>[112]</small></a></p> + +<p>The prohibition by city ordinance of the use of the steam engine in +Charleston is an extreme evidence of a frame of mind that was general in +the South. In order to appreciate how completely deflected from industry +the Southern thought and habit had become, it is interesting to observe +the seriousness with which in 1845 Gregg was forced to argue against this +regulation which now seems so absurd that it could not have existed since +the Middle Ages. Its opponent showed that he was linked in his sympathies +with other sections and with later years, not only by his antagonism but +by the humor which he could not fail to find in the situation.<a name='fna_113' id='fna_113' href='#f_113'><small>[113]</small></a></p> + +<p><span class="pagenum"><a name="Page_73" id="Page_73">[Pg 73]</a></span>The characteristic inclination toward the individual rather than corporate +form of enterprise which was noticed as showing itself in the textile and +other industries in the South of the Revolutionary period, was still +strong up to the Civil War. In 1845 Gregg inveighed against it, +particularly as crystallized in legislative refusal to grant charters of +incorporation, and, as in others of his pamphlets and speeches, he made +analysis of the conditions that would seem to have been plain enough to +convince the most stolid; he was quick to hold up New England as a +business model to the South; in marked contrast to most men of affairs of +the time, he saw economic institutions in their social perspective.<a name='fna_114' id='fna_114' href='#f_114'><small>[114]</small></a> +Those who have sought to magnify to the largest<span class="pagenum"><a name="Page_74" id="Page_74">[Pg 74]</a></span> proportions the +industrial activities of the old South have frequently failed to take +account of the differences in organization which distinguished the +ventures from those of post-bellum years. The textile industry could not +be a movement in economic society so long as investment participation +sprang from and ended with individual initiative. Until the widespread +emergence of the joint-stock form, the mills could not embrace the +generality of the community's resources. And in a period when this device +was not largely turned to, it is plain that industrial stirrings were +comparatively feeble.</p> + +<p>Not only was there self-satisfaction coupled with dependence upon the +North for manufactured commodities in the low-country of the ante-bellum +South, but the up-country, that frugal population of which was better +disposed for manufacturing development,<span class="pagenum"><a name="Page_75" id="Page_75">[Pg 75]</a></span> was so segregated as to be kept +in mean state, or actually dependent itself upon the coastal districts. +Between the Piedmont and the sea was the barrier of plantations; between +the Piedmont and the industrial North were no transportation +facilities.<a name='fna_115' id='fna_115' href='#f_115'><small>[115]</small></a> Olmsted was struck with finding at Fayetteville, "the +point of transfer from wagon to boat, being at the head of +navigation",<a name='fna_116' id='fna_116' href='#f_116'><small>[116]</small></a> the long wagon trains of highland farmers. He counted +sixty wagons in the main street of the town; this was the method of +bringing produce to market. "Several of the wagons had come from a hundred +miles distant; and one of them from beyond the Blue Ridge, nearly two +hundred miles." The teams made less than a score of miles a day through +the bad roads.<a name='fna_117' id='fna_117' href='#f_117'><small>[117]</small></a> This isolation of one district in the South from +another brought lack of concert in political and economic life. "Small +landowners in the highlands could not always sympathize with men of +princely domain in the low country; and misapprehensions were magnified by +separation.... Diffusion of population ... was revealed in the scantiness +of common-school facilities; in the division of capital among several +small factories or mills, instead of its concentration in a few; in +literary, religious, and social life. In<span class="pagenum"><a name="Page_76" id="Page_76">[Pg 76]</a></span> 1860, for instance, the South +had proportionately more church buildings than the North; but its 22,655 +buildings had an average seating-capacity of 307, and an average value of +$1,777, while the 31,344 of the North would accommodate 388 persons each, +and were $4,183 on an average.... Isolation gave birth to individualism, +as marked upon the mountain-clearing as upon the plantation; and +beginnings of the co-operative spirit were dwarfed by nature and by human +inclination...."<a name='fna_118' id='fna_118' href='#f_118'><small>[118]</small></a></p> + +<p>Strong as is the proof of the non-industrial character of the old South as +revealed by scrutiny of internal economic facts, evidence afforded by the +reflection of this condition in aspects which may be called external, is +quite as striking. So much is this the case, that it is believed that an +examination of the social, political, educational and moral institutions, +constituting the shell of the South, is satisfying as to the character of +the egg without looking at the vital cell at the <span class="pagenum"><a name="Page_77" id="Page_77">[Pg 77]</a></span>center. The fruits of +the tree are conclusive of the sap.</p> + +<p>Of these external phenomena, the political is that which will most readily +occur to everyone. Pervasive economic conditions are shown crystallized in +political pretensions; economic transitions are registered in alterations +of front. The Protective Tariff of 1816 was introduced and defended, +respectively, by two South Carolinians—Lowndes and Calhoun. The signature +of a Virginia president—Madison—made it a law. This tariff was opposed +by New England in the person of Webster. In 1828, in the debate over the +"Tariff of Abominations", the situation was just the reverse—Calhoun +opposed protection, Webster championed it. In spite of Webster's +explanation that New England was acquiescing, against her inclination, in +the expressed will of the country, it is the bottom truth that, as Lodge +declares, "Opinion in New England changed for good and sufficient business +reasons, and Mr. Webster changed with it ... when the weight of interest +in New England shifted from free trade to protection Mr. Webster following +it." And Mr. Scherer has done justice to the underlying forces in saying, +"Calhoun was neither better nor worse. Both of them simply swung true to +the economic interests of their respective constituencies."<a name='fna_119' id='fna_119' href='#f_119'><small>[119]</small></a></p> + +<p><span class="pagenum"><a name="Page_78" id="Page_78">[Pg 78]</a></span>Cotton, nearly exclusively in the South, and to a notable degree in New +England, was responsible underneath for the changes which were displayed +in the superficial play of politics. It was the disintegration of +manufactures brought about by the more and more extensive embracing of +cotton cultivation that turned the South from protection to free trade; it +was the growing absorption in industry, especially cotton manufacture, and +the relative relinquishing of commerce, that made New England +protectionist instead of, as before, the champion of free trade.<a name='fna_120' id='fna_120' href='#f_120'><small>[120]</small></a></p> + +<p>This is not the place to remark at length how economic interests are +changing the South back, in partial measure, to the first position. Cotton +is again central. Cotton factories are largely responsible for the little +leaven that is working in a<span class="pagenum"><a name="Page_79" id="Page_79">[Pg 79]</a></span> large loaf, producing in the heart of the +Solid South Republican adherents and voices for protection. "Slavery has +been abolished. The South has re-established manufactures. Its interests +in free trade and protection are changed from what they were in 1860. We +need not only domestic trade, but foreign markets. We need, apparently, +protection and free trade at the same time.... The South is as much +interested in protection to home markets as New England is. New England is +as much interested in export markets as the South is. In this situation we +ought all to get together. We ought to get together for 'Protection and +Reciprocity.'"<a name='fna_121' id='fna_121' href='#f_121'><small>[121]</small></a></p> + +<p>In summary of the ante-bellum years, which have just been under review, +Mr. Clark writes:</p> + +<p>"Between 1810 and 1860 three periods of progress marked the factory +development of the cotton states. During our last war with England ... +mill builders from the North migrated to the Southern highlands, and with +local co-operation established small yarn factories at several places in +the Carolinas, Georgia, Tennessee, and Kentucky.... During the decade +ending with 1833, when hostility to the tariff made the Southern people +bitterly resent economic dependence on the North, there was a second +movement <span class="pagenum"><a name="Page_80" id="Page_80">[Pg 80]</a></span>towards manufactures, especially in South Carolina and Georgia, +directed mainly towards the erection of larger and more complete +factories. This agitation bore fruit in some corporate enterprises, most +of which had but qualified success. Finally, in the late forties real +factory development began simultaneously at several points, and had not +two financial crises and a war checked its progress, we should probably +date from this time the beginning of the modern epoch of cotton +manufacturing in the South."<a name='fna_122' id='fna_122' href='#f_122'><small>[122]</small></a></p> + +<p>Two objections against this passage have pertinence. In the first place, +these three periods of comparative interest in manufactures can hardly be +called "movements" in any social or economic sense. That of the twenties +and running into the thirties may claim more color of this than the other +two.<a name='fna_123' id='fna_123' href='#f_123'><small>[123]</small></a> The plants<span class="pagenum"><a name="Page_81" id="Page_81">[Pg 81]</a></span> set up by the New Englanders earlier were in +response to individual enterprise, and that enterprise born out of the +boundaries of the South. Co-operation with the newcomers was not of the +sort that marks the considerable interest of a community. To the extent +that mills were built in the forties as an effect of agitation, William +Gregg was almost solely responsible. It has been pointed out above that +Gregg was a voice crying in the wilderness—he was a missionary who spoke +an unaccepted faith. He was not a social exponent. Also, while some real +factories were built, it seems that to speak of these as constituting a +"real factory development" is questionable. In the second place, it is +rather<span class="pagenum"><a name="Page_82" id="Page_82">[Pg 82]</a></span> gratuitous to count upon what would have been the case had not the +war broken in upon declared industrial beginnings. The Civil War was not a +fortuitous event. It had to come. It was the disastrous evidence of the +dominance in the South of a system which gave no room to widespread +industrial enterprise, and in which no beginnings could grow and become +permanent. Could the war be regarded simply as an occurrence, an +unfortunate happening, there might be ground for assuming that industrial +enterprise might have been built into and finally changed wholesomely the +economic regime of the Southern States, but facts show that it was a case +where mastery between mutually exclusive plans had to be made on the basis +of comparative strength; the spirit for manufactures had not sufficient +force to avert the war, but only enough life to show, in expiring, that it +had begun to be born.</p> + +<p>The foregoing pages have not dwelt, except by chance, upon the decade +1850-1860. These years have been reserved for specific discussion because +of the effort which has been made by two writers to invest them with a +character of industrialism superior to that of the ante-bellum period +generally. Not only is the argument defeated by external evidence, but an +internal <span class="pagenum"><a name="Page_83" id="Page_83">[Pg 83]</a></span>examination of Mr. Edmonds' presentation shows his own +consciousness of serious modifications upon the doctrine, and explains in +a very natural light the occasion for the point of view which he sometimes +too dogmatically expresses. The late Mr. Edgar Gardner Murphy, in treating +the subject, was heavily influenced in his opinion by Mr. Edmonds' work; +it will be seen that in his discipleship, while he rid Mr. Edmonds' +statement of one outstanding error, he failed to notice some of the major +allowances made by him, and altogether Murphy's pronouncement is more +positive and absolute than that of the source from which he chiefly drew +his beliefs.</p> + +<p>Mr. Edmonds is practically on all fours which Tompkins and others quoted +in this study, in recognizing that certainly from early in the nineteenth +century until the fifth decade industry was little attended to in the +South. This he attributes to the high prices to be obtained from cotton, +averaging for the years 1800 to 1839 a fraction over seventeen cents a +pound. Then he declares: "Beginning with 1840 there came a period of +extremely low prices and the cotton States suffered very much from this +decline. In that year the average of New York prices dropped to nine +cents, a decline of four cents from the preceding year, and this was +followed by a continuous decline until 1846, when the average was 5.63 +cents.... In 1847 the crop was short and prices advanced sharply, only to +drop back to eight and then to seven and one-fourth cents, making the +average from 1840 to<span class="pagenum"><a name="Page_84" id="Page_84">[Pg 84]</a></span> 1849 the lowest ever known in the cotton trade for a +full decade.</p> + +<p>"These excessively low prices brought about a revival of public interest +in other pursuits than cotton cultivation, and the natural tendency of the +people to industrial matters, as evidenced by the history of the colonies +prior to the Revolution, but which had long been dormant, was again +aroused, and for some years there was a very active spirit manifested in +the building of railroads and the development of manufactures.</p> + +<p>"The decade ending with 1860 witnessed a very marked growth in Southern +railroad and manufacturing interests.... In 1850 the South had 2335 miles +of railroad, and the New England and Middle States 4798 miles; by 1860 the +South had increased its mileage to 9897 miles, a quadrupling of that of +1850, while the New England and Middle States had increased to 9510 miles. +The conditions were reversed by 1860, and the South then led by 387 +miles.... While devoting great attention to the building of railroads, the +South also made rapid progress during the decade ending with 1860 in the +development of its diversified manufactures." Flour and meal, sawed and +planed lumber mills are mentioned, with iron founding and the manufacture +of steam engines and machinery. "Cotton manufacturing had commenced to +attract increased attention, and nearly $12,000,000 were invested in +Southern cotton mills. In Georgia especially this industry was thriving, +and between 1850 and 1860 the capital so invested in that State nearly +doubled." Noting that while most of the<span class="pagenum"><a name="Page_85" id="Page_85">[Pg 85]</a></span> Southern manufacturing +enterprises were comparatively small, those of New England in the early +stages were of the same character, he says that "In the aggregate, +however, the number of Southern factories swelled to very respectable +proportions, the total number of 1860 having been 24,590, with an +aggregate capital invested of $175,100,000.</p> + +<p>"A study of the facts ... should convince anyone that the South in its +early days gave close attention to manufacturing development,<a name='fna_124' id='fna_124' href='#f_124'><small>[124]</small></a> and +that while later on the great profits in cultivation caused a contraction +of the capital and energy of that section in farming operations, yet, +after 1850, there came renewed interest in industrial matters, resulting +in an astonishing advance in railroad construction and in +manufactures."<a name='fna_125' id='fna_125' href='#f_125'><small>[125]</small></a></p> + +<p><span class="pagenum"><a name="Page_86" id="Page_86">[Pg 86]</a></span>Figures are set up to show the favorable economic condition of the South +in 1860 as compared with the North, and these head up naturally in the +observation that, "Blot out of existence in one night every manufacturing +enterprise in the whole country, with all the capital employed, (he was +writing in 1894) and the loss would not equal that sustained by the South +as a result of the war.... New England and the Middle States, having grown +rich by the war, almost trebled their property (from 1860 to 1870) while +the South drops from the first place to the third. In 1860 it outranked +the Northern section by $750,000,000."<a name='fna_126' id='fna_126' href='#f_126'><small>[126]</small></a></p> + +<p>In criticism of these quotations specifically it is to be said that the +early development in industrial pursuits and the thorough lapse before +1840 are properly observed. The present writer believes that Mr. Edmonds +has exaggerated in his own mind both the spirit for manufactures, +particularly in the decade from 1850 to 1860, and the extent of their +establishment. The recital that there were 24,590 plants, with an +investment of $175,100,000, seems at first to be striking, but a simple +division shows that on an average this made the investment in each only +$7,144.37, which is surely not indicative of considerable importance. Many +of the enterprises must have been much smaller<span class="pagenum"><a name="Page_87" id="Page_87">[Pg 87]</a></span> than would be represented +by this average, and the few which were a great deal larger were rare +exceptions. The very disparity in size of establishments points away from +any concerted movement toward manufacturing. As to the railroad +construction, much of it was narrow-gauge, and all of the facts tend to +show that railroads were looked upon as facilitating commerce rather than +manufactures; even after the war the pet scheme to build a railroad over +the mountains gathered sentiment in the long-cherished desire to link +Charleston with "the producing interior" typefied in Cincinnati; as rails +were laid, piecemeal, through the Piedmont, advantages afforded by them +for the erection of factories were seldom mentioned, and their utility in +tapping pools of available labor was not considered. The easier transport +of cotton and the development of the South Atlantic ports were the +thoughts uppermost.</p> + +<p>To vaunt property figures of the South of 1860 by including, as Mr. +Edmonds has done, the value of slaves, is an obvious error; and especially +because of the failure to note the inclusion of this factor, the spirit of +the other exhibits is cast in doubt. Though legally they were property, in +the social-economic sense the slaves did not constitute capital any more +than their owners represented capital. The question is rather whether this +part of the population, as productive agents under the system of enforced +labor, did not mean a liability and not<span class="pagenum"><a name="Page_88" id="Page_88">[Pg 88]</a></span> an asset at all.<a name='fna_127' id='fna_127' href='#f_127'><small>[127]</small></a></p> + +<p>Mr. Edmonds is guilty sometimes of careless statement, as when he says, +"The Southern people do not lack in energy or enterprise, nor did they +prior to 1860.... From the settlement of the colonies until 1860 the +business record proves this."<a name='fna_128' id='fna_128' href='#f_128'><small>[128]</small></a> Or again, "the energy and enterprise +displayed by the South in the extension of its agricultural interests was +fully as great as the energy displayed in the development of New England's +manufactures or that of the pioneers who opened up the West to +civilization."<a name='fna_129' id='fna_129' href='#f_129'><small>[129]</small></a> Such expressions, it will presently be shown, proceed +from a loyalty to the South and a just desire to defend her against +assault respecting her part in post-bellum development, but facts brought +out in these pages show the mistaken zeal in seeking to place the old +South abreast in industry or even agriculture.</p> + +<p>Allowing what is perhaps the exciting cause of Mr. <span class="pagenum"><a name="Page_89" id="Page_89">[Pg 89]</a></span>Edmonds' argument to +appear from his own context, light is shed in the following sentences: +"... 'The New South', a term which is so popular everywhere except in the +South, is supposed to represent a country of different ideas and different +business methods from those which prevailed in the old ante-bellum +days.... Its use ... as intended to convey the meaning that the South of +late years is something entirely new and foreign to this section, +something which has been brought about by an infusion of outside energy +and money is wholly unjust to the South of the past and present. It needs +but little investigation to show that prior to the war the South was fully +abreast of the times in all business interests, and that the wonderful +industrial growth which has come since 1880 has been due mainly to +Southern men and Southern money. The South heartily welcomes the +investment of outside capital and the immigration of all good people ... +but it insists that it shall receive from the world the measure of credit +to which it is entitled for the accomplishment of its own people." And +then he instances the cotton mills and Birmingham and Atlanta.<a name='fna_130' id='fna_130' href='#f_130'><small>[130]</small></a> His +explanation of the inactivity in the South for ten or fifteen years +following the war, in the fact and causes of which he is entirely +correct,<a name='fna_131' id='fna_131' href='#f_131'><small>[131]</small></a> bears out the belief, clearly<span class="pagenum"><a name="Page_90" id="Page_90">[Pg 90]</a></span> indicated in the passage just +quoted, that it is his real purpose to accord to the ante-bellum South her +deserved praise. However, he overreached in trying to establish anything +like continuity for Southern enterprise over the ante-bellum years. The +interpretation here given of the new South is now a platitude, but it may +not have been a tilting at windmills when he wrote; indeed, its acceptance +now may be due in no small part to Mr. Edmonds.</p> + +<p>Altogether, it is best to rest Mr. Edmonds' theory with the following +passage, in which there is no confusion of his own thought and no +controversy with anyone: "Since 1880, although the South is still (1894) +practically without great accumulated wealth, her people have turned to +manufacturing with a facility that not only shows that they are in no way +lacking in capability to compete in manufacturing pursuits, but, +considering the limited capital, this section has exhibited remarkable +gains in developing its resources under adverse conditions. In a little +more than a decade from the time the work of development may be said to +have begun, it is not a question whether Alabama can compete with +Pennsylvania in iron, but rather whether Pennsylvania can compete with +Alabama. Nobody now doubts that the South can compete with New England in +the manufacture of cotton goods, but many do doubt whether New England can +compete with the South.... Since 1880 the growth of manufactures in the +South and their <span class="pagenum"><a name="Page_91" id="Page_91">[Pg 91]</a></span>success has been more than astonishing."<a name='fna_132' id='fna_132' href='#f_132'><small>[132]</small></a></p> + +<p>Edgar Gardner Murphy in his spiritual interpretation of the South showed +himself discerning and gifted beyond almost any other writer. His +conception of the economic history of the South may be held to have been +secondary in his purpose and so in his thought. However, his position as +an expositor of the section and the emphasis which he places upon his +economic opinions regarding its past, make it incumbent upon the student +to examine his views. In the following quotation the turn which he gave to +the influencing argument of Mr. Edmonds and his personal slant in +interpretation of this, are apparent:</p> + +<p>"The present industrial development of the South is not a new creation. It +is chiefly a revival. Because the labor system of the old South was so +largely attended by the economic disadvantages of slavery, and because the +predominant classes of the white population were so largely affected by +social and political interests, it has often been assumed that the old +order was an order without industrial ambitions.</p> + +<p>"The assumption is not well founded. Instead of industrial inaction we +find from the beginnings of Southern history an industrial movement, +characteristic and sometimes even provincial in its methods, but +presenting a consistent and creditable<span class="pagenum"><a name="Page_92" id="Page_92">[Pg 92]</a></span> development up to the very hour of +the Civil War. The issue of this war meant no mere economic reversal. It +meant economic catastrophe, drastic, desolate, without respect of persons, +classes or localities.... Thus the later story of the industrial South is +but a story of reemergence."<a name='fna_133' id='fna_133' href='#f_133'><small>[133]</small></a> There are then outlined the steps of Mr. +Edmonds' argument, except that Murphy failed to make clear the almost +total lapse of industrial activity by 1840.</p> + +<p>The incentive to discover an industrial past for the section, which Mr. +Edmonds found in the desire to establish the South as the magician of her +ante-bellum awakening, is matched in Murphy's motive by a more subtle +design. In one place he said: "... the most distinctive element in the +economic movement of this period (1880 to 1900) is the increasingly +dominant position of manufactures as contrasted with agriculture. This +industrial revival is but the reemergence of the tendency which we found +so manifest in the statistics of 1860. It is but one reassertion of the +genius of the old South."<a name='fna_134' id='fna_134' href='#f_134'><small>[134]</small></a> Here with his absolute conception of the +ante-bellum South is hinted the purpose which really animated it. That in +speaking of the post-bellum development as "one reassertion of the genius +of the old South"<span class="pagenum"><a name="Page_93" id="Page_93">[Pg 93]</a></span> he did not mean, as very easily might be supposed, that +through the earlier history of the section had run a genius for +industrialism, is made clear in the following passage, which, though it +refers particularly to social relationships, is pertinent for the +industrial bearings:</p> + +<p>"The old South was the real nucleus of the new nationalism. The old South, +or in a more general sense the South of responsibility, the men of family, +the planter class, the official soldiery, or (if you please) the +aristocracy,—the South that had had power, and to whom power had taught +those truths of life, those dignities and fidelities of temper, which +power always teaches men,—this older South was the true basis of an +enduring peace between the sections and between the races." He regretted +that this old South was not enabled to come into force until after +Reconstruction because "a doubt was put upon its word given at Appomattox. +Its representatives were subjected to disfranchisement. Power was struck +from its hands. Its sense of responsibility was wounded and +confused."<a name='fna_135' id='fna_135' href='#f_135'><small>[135]</small></a></p> + +<p>This is a fine statement of a primary and outstanding truth in the +development of the South that began about the year<span class="pagenum"><a name="Page_94" id="Page_94">[Pg 94]</a></span> 1880. The old South +did draw breath with the new. The permanent character of the South, the +forces resident in the South of earlier as of later years, were those +which largely made possible a complete change in viewpoint, which carried +through the measures of, if not indeed giving birth to, the potent +consciousness of a reversal of program. But, as Murphy failed to see +clearly, there is a radical distinction between the continuity of this +quality in the South and any continuity of its evidences in industrial +pursuits. The new South did not receive from the old South a heritage of +industrial tradition; what it received was a traditional and ingrained and +living social morality, not marred in its essential characteristics and +presence, and very likely even assisted, by the institution of slavery. As +again Murphy said: "... this sense of responsibility, deepened rather than +destroyed by the burden of slavery, was the noble and fruitful gift of the +old South to the new, a gift brought out of the conditions of an +aristocracy, but responsive and operative under every challenge in the +changing conditions of the later order."<a name='fna_136' id='fna_136' href='#f_136'><small>[136]</small></a></p> + +<p>In this apology for Murphy's view is splendidly apparent the best resource +with which to turn from the South that was to the South that is.</p> + + +<p> </p><p> </p> +<hr style="width: 50%;" /> +<p><span class="pagenum"><a name="Page_95" id="Page_95">[Pg 95]</a></span></p> +<h2><a name="CHAPTER_III" id="CHAPTER_III"></a>CHAPTER III</h2> +<p class="center"><span class="large"><i>CONDITIONS PRECEDENT TO THE ERECTION OF THE MILLS</i></span></p> + +<p>To understand the establishment of cotton mills in the South, it is +necessary to grasp the deeper impulses which actuated every policy +certainly from the year 1880 onward, continuing in only modified degree to +the present. Every phase of the movement for the building of cotton mills +was conditioned by motives at once tender and heroic, universal in their +applicability and too intimate in appeal to admit of more than passing +argument. In a study of the actual erection of factories, the hundreds of +problems that arose and the mass of practical detail attendant upon their +solving constitute, it seems to the writer, a hopeless or at best +profitless puzzle, unless it is clearly understood that these minutiae +point back to something elemental and primal which gave them character. On +the other hand, if this fact is recognized, the circumstances which +accompanied the setting of mills in operation, such as the securing of +capital, the obtaining of adequate labor, the selection of sites for the +location of buildings and the like, from the very coldness of the +subjects, and their unsentimental aspect as commonly thought of, strike +into peculiarly bold relief the purposes that lay behind them. When it +came to money-getting, psychical factors must be crystallized into +something very forceful and admitting of unquestioned faith. It is the aim +of the present paper to be an<span class="pagenum"><a name="Page_96" id="Page_96">[Pg 96]</a></span> introduction to the study of the problems +involved in the setting up of cotton mills, by giving the antecedent +action, as it were, and by showing the motive force as it developed, +operated and concentrated.</p> + +<p>This responsible cause, catching the phrase from a writer of the day, may +be termed "real reconstruction". The impulse for it came over the South in +1880 like a great ground swell, translating itself into a thousand +activities and ramifications. "Real reconstruction" was spectacularly the +outcome of the defeat of Hancock by Garfield in the presidential election +immediately, but its roots run deeper and have their hold in the slow but +sure recuperation of the South from the devastation of the Civil War +through the troubles of radical rule, assisted by a brief breathing space +from the termination of carpet bag government in 1876, when the lesson of +fifteen terrible years soaked in thoroughly. It is sufficient here to say +that in 1880<a name='fna_137' id='fna_137' href='#f_137'><small>[137]</small></a> the South suffered a change of heart, a revulsion of +conscience that was fundamental.<span class="pagenum"><a name="Page_97" id="Page_97">[Pg 97]</a></span> The people turned on their heel, and +faced about to find a new future of the largest promise.</p> + +<p>A newspaper which before had bent every effort towards the election of +Hancock, the Democratic candidate for the presidency, as securing for the +South political independence and revenge for Northern mistreatment, a week +after his defeat printed an editorial headed "Our Refuge and Our +Strength", with these words:</p> + +<p>"... we have been defeated in the national contest. In the administration +of the national government for the next four years we need not concern +ourselves, for as far as possible our councils will be ignored. What, +then, is our duty? It is to go to work earnestly to build up North +Carolina. Nothing is to be gained by regrets and repinings.... It is idle +to talk of home independence so long as we go to the North for everything +from a tooth pick to a President. We may plead in vain for a higher type +of manhood and womanhood among the masses, so long as we allow the +children to grow up in ignorance. We may look in vain for the dawn of an +era of enterprise, progress and development, so long as thousands and +millions of money are deposited in our banks at four per cent. interest +when its judicious investment in manufactures would more than quadruple +that rate, and give profitable employment to thousands of our now idle +women and children.</p> + +<p><span class="pagenum"><a name="Page_98" id="Page_98">[Pg 98]</a></span>"Out of our political defeat we must work a glorious material and +industrial triumph. We must have less politics and more work, fewer stump +speakers and more stump pullers, less tinsel and show and boast, and more +hard, earnest work. We must make money—it is a power in this practical +business age. Teach the boys and girls to work and teach them to be proud +of it....</p> + +<p>"Demand all legislative encouragement for manufacturing that may be +consistent with free political economy. Work for the material and +educational advancement of North Carolina, and in this and not in +politics, will be found her refuge and her strength."<a name='fna_138' id='fna_138' href='#f_138'><small>[138]</small></a></p> + +<p>The uselessness of attempting a political salvation as contrasted with the +logic of giving all energy to the building up of the South materially, +clearly shown in the passage quoted, occurs time and time again.<a name='fna_139' id='fna_139' href='#f_139'><small>[139]</small></a> +President C. C. Baldwin, of the Louisville and Nashville Railroad, born in +Maryland but for many years resident in New York, and competent to take a +comprehensive view of the South and its problems, said in an interview +with the New York Herald in 1881, after the new program had gotten under +way: "The commercial men of the states fully appreciate the <span class="pagenum"><a name="Page_99" id="Page_99">[Pg 99]</a></span>situation.... +They now see clearly how very little politics have done for them, and +seriously turn toward the real 'reconstruction' which active trade will +inaugurate. All the war issues are dead and buried except to a few +politicians who misrepresent their constituents and merely use the +language of the past to give them, personally, a passing prominence. True, +we hear a great deal more about the men who stand forth prominently as the +advocates of these dead issues than we do of the thousands of young and +energetic Southern men who are building cotton and woollen mills; who are +opening mines and starting iron, copper and zinc furnaces, or who are +relaying the roads between the Atlantic and the Ohio and the Gulf. These +men don't talk, they don't write books, they don't go to the Legislature +or to Congress. They speak, trumpet toned, in results, however. The people +of the South have suffered—it is not pertinent whether we regard their +sufferings as just or unjust—but they have put aside mourning and are +ready for work."<a name='fna_140' id='fna_140' href='#f_140'><small>[140]</small></a></p> + +<p>The Sumter, S.C., Southern voiced the same idea: "The Southern people, +outside of the professional politicians, care very little about Federal +politics. They are endeavoring to develop the resources of the South and +regain the broken-down fortunes left by the desolation of civil war.</p> + +<p><span class="pagenum"><a name="Page_100" id="Page_100">[Pg 100]</a></span>"So taking the past and the present as indices for the future, it is plain +to see that a dissolution of the Solid South will cut at the very roots of +all these wrangles between the North and the South<a name='fna_141' id='fna_141' href='#f_141'><small>[141]</small></a> in which +sectionalism is involved."<a name='fna_142' id='fna_142' href='#f_142'><small>[142]</small></a></p> + +<p>"The people of the South are beginning to learn that the true road to +power is not through the White House, supported by a swarm of federal +officials", said a Tennessee paper in March of 1880. "They are learning +that solid wealth is power, and that wealth is attainable only by working +up their cotton and wool into fabrics and their ores into metals."<a name='fna_143' id='fna_143' href='#f_143'><small>[143]</small></a></p> + +<p>The clear-headedness of the following extract from an editorial which +appeared in the Columbia, S.C. Register, at the time the city was putting +forth every energy to realize a desire for cotton mills, is unsurpassed:</p> + +<p><span class="pagenum"><a name="Page_101" id="Page_101">[Pg 101]</a></span>"But if we lost the victory, in one sense, we have won it in another. We +have been taught what the South can do for itself if it wills to do it. If +we have lost the victory on the field of fight, we can win it back in the +workshop, in the factory, in an improved agriculture and horticulture, in +our mines and in our schoolhouses.</p> + +<p>"There is where our fight lies now, and the only enemies before us are the +prejudices of the past, the instinct of isolation, the brutal indifference +and harmful social infidelity which stands up in our day with the old +slave arguments at its heart and on its lips, 'I object' and 'You can't do +it'."<a name='fna_144' id='fna_144' href='#f_144'><small>[144]</small></a></p> + +<p>In the broken and all but disheartened condition of the South after +enduring the war, radical rule and defeat of political hopes, this +conception of another economic future, once it burst upon the +consciousness of the Southern people, amounted to nothing less than a +religion.<a name='fna_145' id='fna_145' href='#f_145'><small>[145]</small></a> Every one of the old pangs added<span class="pagenum"><a name="Page_102" id="Page_102">[Pg 102]</a></span> devotion to the new +purpose. The whole pride of the South seemed about to go to disruption, +and the imminent danger of this lent a passionate loyalty to the changed +program which appealed to everything that was best and noblest in the +people.</p> + +<p>The new spirit was strongest in North and South Carolina and in that +portion of Georgia contiguous to South Carolina. Distance from this region +as a center about marks the intensity of feeling and comprehensiveness of +grasp with which the impulse was voiced. Florida and Mississippi felt it +little, due probably to their position so very far South as to be still +submerged in misery; Virginia was only slightly affected and Maryland +hardly at all in the same sense as the middle South, because of proximity +to the North and difference of character, by reason of the absence of +cotton as the staple. North and South Carolina and the region about +Augusta, Georgia, gave the plan its first conception and its most +whole-hearted support because, it appears, North Carolina is by nature +resourceful and hardy above any Southern State, and South Carolina, +despite every discouragement,<span class="pagenum"><a name="Page_103" id="Page_103">[Pg 103]</a></span> would have the heart to try again because +she is thoroughbred in a company of thoroughbreds.<a name='fna_146' id='fna_146' href='#f_146'><small>[146]</small></a></p> + +<p>Just as the philosophy varied in intensity territorially, so it varied in +degree within the same region. Some wished salvation through material +advance for the sake of the State; this was natural, as growing out of a +well-known loyalty of the citizens of Southern commonwealths.<a name='fna_147' id='fna_147' href='#f_147'><small>[147]</small></a></p> + +<p>Others with larger view proclaimed the new gospel for the whole South as a +section, rather adopting an attitude of aloofness toward the North, +wishing the Southern people to work out<span class="pagenum"><a name="Page_104" id="Page_104">[Pg 104]</a></span> their great problem without +assistance from those who would be predisposed to meddlesome criticism. It +is true that reorganization for the South was the most national thing +Southerners could turn themselves to at that time, and in the judgment of +many still is, but speakers and writers often failed of just the most +fortunate expression of their purpose in that they did not strike the +national note very consciously.<a name='fna_148' id='fna_148' href='#f_148'><small>[148]</small></a></p> + +<p>It is something to have gone through what the South went through and come +out not dispirited utterly, not defiant against fate or enemies, not +forgetful of the past, but, remembering the<span class="pagenum"><a name="Page_105" id="Page_105">[Pg 105]</a></span> worst, determined soberly, +quietly, thoroughly to do the fundamental thing and do it nationally. It +was left for Charleston more than all others—noblesse oblige—to speak +this greatest message:</p> + +<p>"The Southern people must be national themselves, in their aspirations and +conduct, if they would have the government truly national in spirit", and +have Garfield "President of the whole country, and not of a section, or +party, to have a government of 'the whole country', to be entitled to it, +we must think of the whole country as our own, and demand no more than we +are ready to give. It must come to this. In the near future the successful +leaders, South and North, will be those whose first thought is for the +Republic, men who are national in feeling and purpose; men who understand +that the political and social strength and safety of each State depend not +on isolation and separation, but<span class="pagenum"><a name="Page_106" id="Page_106">[Pg 106]</a></span> on combination and union."<a name='fna_149' id='fna_149' href='#f_149'><small>[149]</small></a></p> + +<p>By the late fall and winter of 1880 the mind of the South was ripe for +progress and accomplishment. Perhaps the first gropings after procedure +struck upon the consideration that manufactures would add another profit +to the profit of agriculture. The big, general conception was first +grasped without refinements or modifications or drawbacks; it was received +with almost childlike simplicity and faith.<a name='fna_150' id='fna_150' href='#f_150'><small>[150]</small></a> But it came to be +ingrained. "The cotton which now comes into Charleston and is sold here +pays <span class="pagenum"><a name="Page_107" id="Page_107">[Pg 107]</a></span>commissions to the factors and brokers, and when shipped leaves +behind it the price of the drayage, compressing and storage. Cotton which +comes into Charleston and is manufactured here is doubled in value, and an +amount equal, at least, to the value of the raw cotton when it reached the +city boundary is distributed among the people of Charleston. This is the +simple key to the prosperity which invariably attends the development of +manufactures. Manufacturing gives additional value to raw material, and +this additional value goes into the communities where the manufacturing is +done. At present Charleston does nothing to increase the value of the +cotton which comes here for sale. It leaves us as it finds us. The city +lives on the pickings and scrapings....</p> + +<p>"Cotton mills change all this. A bale of raw cotton worth forty dollars is +spun into yarns or cloth worth eighty dollars.... The stockholders and the +working people get the whole difference between the cost of the cotton and +the value of the yarns or cloth, except what little may be expended for +material that cannot be purchased here."<a name='fna_151' id='fna_151' href='#f_151'><small>[151]</small></a></p> + +<p><span class="pagenum"><a name="Page_108" id="Page_108">[Pg 108]</a></span>President H. P. Hammett, of the Piedmont Factory, in a remarkable address +before the State Agricultural and Mechanical Society and State Grange, of +South Carolina, to which reference will several times be made, after +describing the earlier absorption of the South in a single pursuit, and +the ills that grew from this, said: "A new condition of things and a +changed sentiment amongst the people prevail at present; with the changed +relations of society and institutions a sentiment favorable to a diversity +of pursuits has developed ... a disposition is manifested to develop the +many resources heretofore lying dormant or hidden.<a name='fna_152' id='fna_152' href='#f_152'><small>[152]</small></a> Capital when +needed is furnished, and men of energy, enterprise and ability develop ... +the general sentiment of the people is to utilize all the facilities +within their reach....<span class="pagenum"><a name="Page_109" id="Page_109">[Pg 109]</a></span> Under such circumstances it is natural that the +public mind should be directed to the manufacture of their great +staple."<a name='fna_153' id='fna_153' href='#f_153'><small>[153]</small></a></p> + +<p>There were a score of reasons making this course seem plausible.<a name='fna_154' id='fna_154' href='#f_154'><small>[154]</small></a> They +were advanced, scrutinized, at the South sometimes accepted with a grain +of salt, at the North not infrequently flatly and stoutly challenged as +absurd; they were patiently explained or difiantly, and not always with +the closest reasoning, flung in the faces of their objectors—but finally +they were<span class="pagenum"><a name="Page_110" id="Page_110">[Pg 110]</a></span> proclaimed as gospel, and in this sign the South set out to +conquer. Of these beliefs is to be placed first and foremost the +conviction that, other things aside, manufacturing was most economical and +so logically belonged, at the source of production. Here is the doctrine, +given in all simplicity, and not without the force characteristic of +newspaper correspondences of that day: "Sir, it matters not what anyone +may say to the contrary, common sense tells us that other +things—machinery, skilled labor, motive power and facilities of +shipment—being equal, a cotton factory in the midst of cotton fields must +prove more profitable than the same concern a thousand miles from its base +of supply could possibly be."<a name='fna_155' id='fna_155' href='#f_155'><small>[155]</small></a> Other factors there were—cheap labor, +unused water powers, abundance of wood and coal nearby, local market for +the sale of product, longer running time than in the North, a favorable +climate, saving in fuel and light, absence of damage to cotton by +compress, saving in bagging and ties, assistance to be given to women and +children much in need of work—all of them bore their part in focussing +the energies of the South upon that program which was to mean so much in +so many ways—the<span class="pagenum"><a name="Page_111" id="Page_111">[Pg 111]</a></span> "cotton mill campaign."<a name='fna_156' id='fna_156' href='#f_156'><small>[156]</small></a></p> + +<p>The current passion for building cotton mills—it was nothing short of +this—was stimulated and guided by press<a name='fna_157' id='fna_157' href='#f_157'><small>[157]</small></a> and platform in urging, +chronicling and praising advances.</p> + +<p>The Columbia, Georgia, Enquirer, after recounting the progress of the city +in spinning—it had 60,000 spindles—said: "These are the weapons peace +gave us, and right trusty ones they are.... The story the spindles tell is +one of joy to all, and show (shows) how rapidly we are climbing the hill +of prosperity."<a name='fna_158' id='fna_158' href='#f_158'><small>[158]</small></a> The affectionate tone of this item from the Rock +Hill, S.C. correspondence of The News and Courier is unmistakable: "In +conclusion let me say a few words in regard to the 'pet' of the town, the +Rock Hill Cotton Factory. This factory is owned and controlled by the +citizens of the town, (except $15,000 in stock owned<span class="pagenum"><a name="Page_112" id="Page_112">[Pg 112]</a></span> in Charleston). It +has a capital of $100,000, has over 6,000 spindles, with 1,500 more to be +added in a few days."<a name='fna_159' id='fna_159' href='#f_159'><small>[159]</small></a> The Marion, S.C. correspondent of the same +paper a year earlier contributed this for his town: "Our wants: A bank, an +academy, a cotton factory, a comfortable room for passengers at the depot, +an iron foundery, and last, but not least, work upon our streets."<a name='fna_160' id='fna_160' href='#f_160'><small>[160]</small></a> So +much did cotton mills come to be considered the natural signs of progress +that Raleigh made apology for not having a single mill. "There is not a +cotton factory in Raleigh, but there are not less than five large planing +mills, two foundries, two boiler factories ...", and there follows a list +of everything in the corporate limits, including schools and even +newspapers.<a name='fna_161' id='fna_161' href='#f_161'><small>[161]</small></a></p> + +<p>Under its caption, "The Cotton Mill Campaign", the active News and Courier +every few days listed new entries into the field of cotton manufacture. +The issue of February 8, 1881, presented a particularly large number of +items from different towns. The Newberry Herald exhorted the citizens with +reference to Charleston's achievement thus: "Cheer for Charleston—A +Movement all Along the Line. Charleston is in a fair way to have two +large<span class="pagenum"><a name="Page_113" id="Page_113">[Pg 113]</a></span> cotton factories in a short while.... Camden is preparing for a +cotton factory. Hodges, Abbeville County, is preparing for a cotton +factory. Rock Hill has a cotton factory. Greenville has several cotton +factories. Newberry, the best location for a cotton factory in the State, +and the place most needing one is not preparing for a cotton factory, and +there is no present likelihood that she ever will." The method followed +here, of citing the advance of other places in mill building as an +incentive, was widely used, and not commonly with the rather complaining +tone of the above from Newberry.<a name='fna_162' id='fna_162' href='#f_162'><small>[162]</small></a></p> + +<p><span class="pagenum"><a name="Page_114" id="Page_114">[Pg 114]</a></span>That the spirit was in the air is clearly discernible in a Winnsboro +contribution: "Why does not Fairfield (the county in which the town of +Winnsboro is located) make the experiment? It is said that $15,000 will +set in motion over five hundred spindles, and continual additions can be +made." While recognizing that water power was difficult of access, steam +might be used, for there was plenty of cheap fuel for years to come, and +the Charlotte railroad offered easy communication with the world for a +mill located along its tracks. The Hampton, S.C. Guardian struck the note: +"Factories are springing up all over the State, and our people must not be +found lagging in the race of progress."<a name='fna_163' id='fna_163' href='#f_163'><small>[163]</small></a></p> + +<p>How the people were reaching out for cotton mills, with their attendant +profits and advantages, may be seen in this <span class="pagenum"><a name="Page_115" id="Page_115">[Pg 115]</a></span>advertisement appearing in +the winter of 1881: "We will give to a Cotton Manufacturing Company, that +will organize and locate at Landsford, S.C., with a capital of $300,000 a +site, 20 acres of land and 3000 horse water power. Apply for particulars +to T. C. Robertson, Allen Jones, Rock Hill, S.C.; Wm. R. Landsford; Edward +McCrady, Jr., Charleston."<a name='fna_164' id='fna_164' href='#f_164'><small>[164]</small></a></p> + +<p>A little earlier the cotton mill campaign had extended itself to the point +of interesting class effort, for the most prominent German citizens of +Charleston organized a mill in a short space of time.<a name='fna_165' id='fna_165' href='#f_165'><small>[165]</small></a></p> + +<p>The cotton mill campaign had gotten well under way<a name='fna_166' id='fna_166' href='#f_166'><small>[166]</small></a> when its further +progress was greatly facilitated and its successful outcome made plain by +the projection of a plan to display the resources of the Southern States +in an exposition at Atlanta.<span class="pagenum"><a name="Page_116" id="Page_116">[Pg 116]</a></span> The scheme was first proposed in October of +1860, and the International Cotton Exposition was opened in Atlanta +October 5, 1881. The exposition, in organization, history and influence, +is inseparably bound up with the name of Edward Atkinson, economist, +publicist and manufacturer of Boston. He gave it its inception; in an +unselfish and magnanimous spirit he guided its beginnings and brought it, +by his advocacy and superintendence, to completion. He was "the father of +the Atlanta exposition."<a name='fna_167' id='fna_167' href='#f_167'><small>[167]</small></a> In a sincere desire to see the South +extricated from the disorganization of the war and the years that +followed, he planned this method of showing the people what he considered +to be their true interest, namely, concentration upon better methods of +cultivating and preparing cotton for market and for manufacture. With a +fine comprehension of the most fundamental needs of the section in many +directions, he conceived the care of cotton between the field and the +factory to be properly the first concern of the Southern States, not +temporarily, but for all time. The Atlanta exposition he proposed as the +lens through which to focus attention upon this.</p> + +<p>But Mr. Atkinson, most singularly for a man of his grasp, penetration and +experience, had not reckoned upon the force of the<span class="pagenum"><a name="Page_117" id="Page_117">[Pg 117]</a></span> enthusiasm for +manufacturing cotton, which, as has been shown, came over the Southern +people. That cotton mills were being built he could not but see; that they +were making profits he could not deny—but in the economic wholesomeness +and permanency of the factories he would not believe. In the International +Cotton Exposition he created a Frankenstein to amaze and frighten and +torment him. For once the resources, of the South were displayed in +visible, tangible form in reasonable compass, and once the people were +united upon an effort which should gauge their strength and possibilities, +the invitation, or, as some put it, the duty to manufacture the staple in +the fields where it grew leaped out as a fact more patent than ever. The +people had felt the strength that came from union in a common purpose, and +nothing could deter them from following the light that this brought to +them. Mr. Atkinson, who had acted in the best of faith and with great +ability, was surprised and chagrined; when he found that, while following +his lead in showing the necessity of more careful culture and preparation +of the crop for manufacture, the South, by the agency of the exposition, +was fascinated in going beyond his goal, and building mills to make up the +cotton for itself, he protested earnestly, and went to no end of pains to +turn the people from their course. But the horse had taken the bit in his +mouth, had glimpsed a broader highway open ahead, and the reins that had +directed him once were of no avail to arrest his career.</p> + +<p><span class="pagenum"><a name="Page_118" id="Page_118">[Pg 118]</a></span>Conscious of his New England milling and insurance interests, it is likely +that Edward Atkinson felt the South, which he had tried to help, +distrusted him. And though the fact of his connections, coupled with a +manner of addressing himself to the Southern people at times unfortunate +in its seeming superiority, and tendency to become impatient and didactic, +might easily have led the section to regard him with enmity, it is to be +remembered to the credit of the Southerners that they showed as great +charity for his, as they regarded them, short-comings of judgment, as they +held in esteem his friendship and constructive co-operation. The vision +which the South had caught rose superior, in almost all cases, to any +pleasure to be found in taunting those who differed in view, especially +when so much was owing to a man as belonged to Mr. Atkinson. His position +is one of the most important in the whole history of cotton manufacturing, +not only in the South, but in this country, and it is the most dramatic +and pathetic. He stood virtually alone after the exposition had run a few +months, protesting impotently against a new state of things, every +development of which seemed to cry the lie to his objections. His very +antagonism lent impetus to the current setting toward cotton mills for the +cotton estates. And, to make the sting even more poignant, instead of +looking upon his opposition to Southern cotton manufacturing as +representing a class of jealous industrialists at the North—and many +things<span class="pagenum"><a name="Page_119" id="Page_119">[Pg 119]</a></span> there were to lend color to such a belief—the South was appealing +over his head to New England capitalists to come down and help erect +factories.<a name='fna_168' id='fna_168' href='#f_168'><small>[168]</small></a></p> + +<p>How Southern sentiment had grown beyond Mr. Atkinson's purposes for the +exposition is to be seen in the words of A. O. Bacon, speaker of the +Georgia House of Representatives, in welcoming a party of South Carolina +legislators and their friends to the Exposition three months after its +opening: "This exposition—marks an important epoch in the industrial +history of the country. It has aroused the South to the value of new +enterprises and of new methods of labor; it has awakened the North to a +realization of the boundless resources and enormous industrial capacities +of the South. It comes at a most propitious moment, for the South, in +sympathy with the quickening energies which excite the continent, is even +now trembling in the initial throes of<span class="pagenum"><a name="Page_120" id="Page_120">[Pg 120]</a></span> the mighty industrial revolution +that surely awaits her. A great change is about to come upon us. 'In the +fabric of thought and of habit' which we have woven for a century we are +no longer to dwell, and a new era of progressive enterprise opens before +us."<a name='fna_169' id='fna_169' href='#f_169'><small>[169]</small></a></p> + +<p>The place of the Cotton Exposition in furthering the cotton mill campaign, +already attained to a healthy start, is seen in this from Clifton, S.C.: +"It is to be hoped the Atlanta Exposition will not take all the enthusiasm +out of our capitalists and enterprising men,<a name='fna_170' id='fna_170' href='#f_170'><small>[170]</small></a> but that it will only +tend to a greater and more steady development of our resources. There are +new <span class="pagenum"><a name="Page_121" id="Page_121">[Pg 121]</a></span>families coming in constantly (to the Clifton Mill) and the cottages +as far as completed are occupied, and still they come."<a name='fna_171' id='fna_171' href='#f_171'><small>[171]</small></a> And again: "A +good work has been done, the benefits of which will be felt in every part +of the country. The New South takes a fresh start at the Atlantic +Exposition."<a name='fna_172' id='fna_172' href='#f_172'><small>[172]</small></a> Here also is evidence of the very fortunate juncture at +which the exposition happened to fall. The show did much for the South +irrespective of its exhibits; indeed, before a shovelful of earth was +turned, a real service was rendered. It proved to the people that they +could organize and exert a force in common; the South was less individual +from that day. It demonstrated besides that the South had resources and +possibilities worth presenting to the world. Once the exposition was +opened, three distinct influences were brought to bear in carrying forward +the work already begun. The people of the South were shown for the first +time as a whole the implements of cotton manufacture, capitalists in +general were introduced to the opportunities of cotton milling in the +section, and, in visualizing and making more than ever evident the +industrial future, less effective reflex from the ultimate proposals of +Edward Atkinson and others of his belief was afforded once for<span class="pagenum"><a name="Page_122" id="Page_122">[Pg 122]</a></span> all.</p> + +<p>The very day of opening, the exposition greeted crowds of visitors with +these words from Daniel W. Vorhees, of Indiana; "There is a far higher +remuneration than has ever been given by cotton yet in store for the +laborer, the manufacturer, the South and the entire country. In the midst +of the cotton plantations themselves there is a career for manufacturing +development such as the world has not yet seen. With coal, iron and timber +in perfection and inexhaustible, and water power everywhere, by what rule +of political economy should the Southern people send their cotton, at an +expense always deducted from its price, to distant sections and foreign +countries to be spun and woven? If the manufacturer in Great Britain, +transporting his cotton from India and the United States, can realize +substantial profits, why may they not be realized here...? We have seen +the manufacturer of New England, at a long distance from a productive base +of supplies, turn a sterile country into the seat of culture, refinement +and wealth. Why shall not the South put forth its energies and reap the +same and a far greater reward? Here the cotton grows up to the doorsteps +of your mills, and supply and demand clasp hands together. The average +exportation during the last ten years, from these wonderful fields to +England and other European ports, has been over 3,000,000 of bales per +annum; while to the mills of New England and other Northern states another +million have (has)<span class="pagenum"><a name="Page_123" id="Page_123">[Pg 123]</a></span> been annually carried away from your midst, and from +the best manufacturing region on the globe."<a name='fna_173' id='fna_173' href='#f_173'><small>[173]</small></a></p> + +<p>So, even from the opening of the exposition, matters had taken a decided +turn toward cotton manufacturing for the South. After the fair had been in +progress three weeks, Mr. Atkinson and a committee from the New England +Cotton Manufacturers' Association came down for their initial visit. From +Mr. Hemphill's letter to The News and Courier<a name='fna_174' id='fna_174' href='#f_174'><small>[174]</small></a> it is clear that the +New Englanders appreciated most those parts of the exhibit which had to do +with "ginning and preparing." Still considering all cotton manufacturing +to belong to the North, just as all cotton growing belonged to the South, +the verdict of the party on this first inspection was: "Nothing ever +happened in the history of the country to prove so adequately the identity +of the interests of the cotton grower and cotton manufacturer as this +exhibition." Thus were visitors coaxed to examine into the increased +efficiency and profit which lay in sending clean Southern cotton to +Northern manufacturers.</p> + +<p>Soon the situation demanded more drastic handling. Edward Atkinson, in a +set speech on the exposition grounds, stated his position clearly: "You +have depreciated every crop of cotton you<span class="pagenum"><a name="Page_124" id="Page_124">[Pg 124]</a></span> have made at least 12 per cent. +by want of care and attention in ginning, baling, pressing and caring for +the cotton between the field and the factory. You can save half your labor +and add 10 per cent. to the value of your crop if you will use the new +tools and machinery here on exhibition and heed the words which I now +speak.</p> + +<p>"The Southern planter and farmer has no knowledge, as yet, outside of the +sea island district, of the merits of a true roller gin. Clark's cleaner +has just been introduced and is only known within narrow limits.... Now, I +am going to touch a tender subject—cotton manufacturing.... I have never +taken the ground that there were any climatic difficulties in many parts +of the South. The real difficulty is that the margin of profit is very +small on a very large capital, and unless you can work, in the long run, +on a very small margin you cannot succeed. These times are no +criterion.... May I say that the true preparation for success in cotton +manufacturing must be in knowing how to save the fraction of a cent.... +You cannot spin cotton when you do not know the difference between a cent +and a nickel."<a name='fna_175' id='fna_175' href='#f_175'><small>[175]</small></a></p> + +<p><span class="pagenum"><a name="Page_125" id="Page_125">[Pg 125]</a></span>The reception with which Mr. Atkinson's theory met is seen in an editorial +comment on his December address: "The future of the South is described +with great power in the ... speech of Mr. Edward Atkinson at the Atlanta +Exposition.... Mr. Atkinson is<span class="pagenum"><a name="Page_126" id="Page_126">[Pg 126]</a></span> misleading only when invincible prejudice +keeps him from seeing clearly, and even Northern newspapers admit<a name='fna_176' id='fna_176' href='#f_176'><small>[176]</small></a> +that he is wrong in his belief that cotton manufacturing, on a large +scale, will not pay in the South. The speech otherwise is suggestive and<span class="pagenum"><a name="Page_127" id="Page_127">[Pg 127]</a></span> +instructive."<a name='fna_177' id='fna_177' href='#f_177'><small>[177]</small></a> In a review of an article by Mr. Atkinson on "The Solid +South", appearing in the International Review for March, 1881, William E. +Boggs, of Atlanta, wrote: "If one so sincere as Mr. Atkinson in the desire +that the South shall flourish can so misunderstand the Southern people, +what must be the mental condition of those who have prejudice without +good-will? Mr. Atkinson is the father of the Atlanta Exposition, and is, +in his way, a true friend of the South."<a name='fna_178' id='fna_178' href='#f_178'><small>[178]</small></a></p> + +<p>There was one more condition precedent to the erection of cotton mills in +the South. The people of the section might come to a determination to set +up schools, run telegraph and telephone lines, construct railroads, stop +political quibbling and back-biting, and, above all, institute +manufactures as the surest release from a condition calling for the +strongest action; they might turn themselves wholeheartedly to the +building of cotton mills, calling forth every native resource and +ingenuity, enterprise and sacrifice, and these would avail much. But the +task was so huge in its proportions that sooner or later it must cease to +be a sectional matter, and not only was this necessary, but it was proper +that it should be the case. The North must be<span class="pagenum"><a name="Page_128" id="Page_128">[Pg 128]</a></span> called upon for help. If +there are two facts in the building of cotton mills in the South which +stand out head and shoulders above all the rest, they are that the +Southern people, impelled by inner forces, undertook the work, and that +when it became apparent that outside capital and advice were needed and +could be had, these were welcomed gratefully.<a name='fna_179' id='fna_179' href='#f_179'><small>[179]</small></a></p> + +<p>There were certain forces which made for a national mind in the +South—certain external influences aside from the reasonings of the +choicer spirits. These bound the North and South together, and helped to +make possible the augmenting of Southern energy and resources by Northern +capital and experience.</p> + +<p>Just as the International Cotton Exposition at Atlanta lent impetus to the +sectional furtherance of the cotton mill campaign, so the shooting of +President Garfield, his lingering illness through three months, and his +death, occurring at approximately the same stage as the exposition, may be +thought to have<span class="pagenum"><a name="Page_129" id="Page_129">[Pg 129]</a></span> done much in preparing the way for receiving Northern, +and, indirectly, European capital into the South.</p> + +<p>"This (the South) is a region where manliness is held in superlative +honor", said the Charleston paper so often quoted, "and assassination is +loathed for its cowardliness even more than it is abhorred as an offence +against law and society.... There could be no doubt then that Guiteau's +dastardly act would be heartily denounced—and there was reason to look +for some special indignation on account of the exalted official position +which Gen. Garfield holds. It could not have been foreseen, however, that +the outburst of sympathy and condemnation would have been universal in its +manifestation, affectionate in tone and National in spirit. South Carolina +does more than reprobate assassination. The people of the State, the whole +people, resent the deed because the victim is the President of the United +States, the Chief Magistrate of our country.... The process of reunion has +gone on with a rapidity which few appreciated. All the elements of cordial +friendship and of national good-will were there. It needed only the threat +of a common misfortune to give shape and voice to the recreate but sturdy +love of the Republic."<a name='fna_180' id='fna_180' href='#f_180'><small>[180]</small></a></p> + +<p><span class="pagenum"><a name="Page_130" id="Page_130">[Pg 130]</a></span>The following appeared with the announcement of President Garfield's +death. "In the history of the United States, President Garfield will be +remembered as he whose nomination by the National Republican Convention +strangled imperialism in its cradle, and as he whose assassination was +quickly followed by an outburst of sorrow and sympathy which manifested to +the North the true nature of the South, and do more than the arguments, +the prayers and the common intercourse of thrice five years to bring +together the peoples whom war had made separate. By the shedding of blood +the North and South were sundered; and through the shedding of blood they +are united.... In his wounding unto death passed away the alienation, the +estrangement which prevented this country from being truly one, although +men and millions had made it in appearance indivisible."<a name='fna_181' id='fna_181' href='#f_181'><small>[181]</small></a></p> + +<p><span class="pagenum"><a name="Page_131" id="Page_131">[Pg 131]</a></span>Railroads, both because they allowed sentiment to become solidified in the +South, and afforded great currents of intercourse with the North, were of +first importance. And in the railroads, with the encouragement they gave +to manufactures, and the stability they lent to trade in furnishing a +strong commercial backbone,<a name='fna_182' id='fna_182' href='#f_182'><small>[182]</small></a> appear early hints of the unifying force +of Northern capital itself. A railroad, in which Northern men chiefly were +interested, which proposed running up the James River Valley to Clifton +Forge, was hailed by Richmond as bringing new prosperity. "We welcome the +Northern gentlemen who are to co this invaluable work for Virginia, and we +trust and believe that they may never have cause to regret the investment +of their capital here. Every such investment is a new band around the +States of the Union binding them more closely together."<a name='fna_183' id='fna_183' href='#f_183'><small>[183]</small></a></p> + + +<p> </p><p> </p> +<hr style="width: 50%;" /> +<p><span class="pagenum"><a name="Page_132" id="Page_132">[Pg 132]</a></span></p> +<h2><a name="CHAPTER_IV" id="CHAPTER_IV"></a>CHAPTER IV</h2> +<p class="center"><span class="large"><i>CAPITAL</i></span></p> + +<p>In the chapter on the conditions precedent to the erection of cotton mills +in the South the attempt was made to show how the stage was set for the +actual building of factories. The impulse for manufactures, and especially +cotton mills was traced through its several more or less definite periods +of development. The first of these was the recoil from the +Hancock-Garfield election; the failure of the South's determined hopes for +the success of the Democratic candidate, which would mean, it was thought, +freedom from political insult and economic servitude, and an opportunity +to wreak vengeance for the wrongs of radical rule, virtually marked the +death struggle of the old exclusive social philosophy as the animating +force in the South. This had been bred by the ante-bellum regime, called +into concrete trial by the civil war, and intensified in character through +each year of Reconstruction, and through each year proven more untenable. +The questioned election of 1876, when Tilden was thrown out under +circumstances peculiarly galling to the South, set the section as a unit +and unalterable for the next four years in a passionate and dogged +resolution against all odds to make a Democrat president in 1880. When +Hancock was beaten in a fair fight by Garfield, the South was thrown +prostrate; devastated by the war, pillaged and ridden in Reconstruction, +to gather all her forces<span class="pagenum"><a name="Page_133" id="Page_133">[Pg 133]</a></span> for a final defiant stand and have her last poor +hope dashed was tragic. But this very extreme of bitterness was the +South's salvation.</p> + +<p>The leaders, with remarkable accord and almost simultaneously in all +quarters, after recovery from the first inescapable shock, rallied to the +situation like heroes, and called their less valiant brethren after them +in a new resolution to build up another South founded on democracy and a +purpose to employ every material resource for the building of a foundation +which would bear the weight of the different structure that had to be +erected.</p> + +<p>Words unfamiliar in the South were heard on every hand; in this proposal +of "real reconstruction" notions as novel as they were salutary were +involved. Communication between States and parts of the same State, by +railroads, telegraph and telephone; schools, churches, diversification of +crops, deepening of harbors and rivers, municipal pride and civic reform +were urged; it was demanded that politics and political wrangles be +dropped forthwith, and that the section set about the course of material +advancement as the only method of asserting rights against the North, and +the only means of bearing her share of the national burden.</p> + +<p>In the canvas of resources which this impulse brought, cotton mills were +pounced upon as affording the readiest and most<span class="pagenum"><a name="Page_134" id="Page_134">[Pg 134]</a></span> permanent instruments of +success. It has been seen how platform and press and people concentrated +their interest and attention upon the "cotton mill campaign", every new +factory being hailed as another banner lifted in the fight. Two great +impelling motives were patriotism—either local, state, sectional or +national—and humanitarian considerations. These were held up in the +plainest view of all, and impressed unceasingly. It was as a means to an +end that cotton mills were argued for; their advocacy was grounded in the +most splendidly fundamental beliefs and aspirations.</p> + +<p>Descending from these lofty ideals, the practical inducements to the +building of cotton mills as they were brought before the South and the +country at large have been pointed out. It was shown that over and above +all others stood out prominent and unquestioned the fact of the presence +of the raw cotton. Proximity to the material of manufacture was felt to +constitute the chief invitation to go into the textile business in a +systematic way. But there were other arguments used, running out to great +length—of these the leading one was an abundance of cheap and intelligent +if untrained labor crying for employment, and this has been dwelt upon in +its phases. A store of unused water powers, favorable freight rates, low +cost of living, suitable climate, the supply of inexpensive fuel, and the +innumerable gains to the community were made the grounds of advocacy of +cotton mills. <span class="pagenum"><a name="Page_135" id="Page_135">[Pg 135]</a></span>Estimates of the expenses of erection, maintenance and +operation of hypothetical factories of all sizes were worked out in +elaborate detail, the saving over manufacture of cotton in New England or +in Old England being remarked at every juncture.</p> + +<p>It is a nice problem to determine how far these advantages possessed or +thought to be possessed by the South were aired as a result of deep-lying +motives of patriotism and philanthropy, and to what extent they were +themselves the exciting forces behind the crystallization of these +motives. Did these superiorities of the South come to light mainly because +the South had made up its mind to remake the section, or did the South +enter upon a course of development because it possessed certain +outstanding advantages? To strike a balance here would be an interesting +speculative venture. But, however, this may be, it is reasonably clear, as +has been previously pointed out, that when it came to putting their money +into cotton mills, capitalists, North and South, acted usually upon the +assurance given them in the physical assets obtaining. To the extent that +general impulses placed in public view definite, concrete and tangible +reasons why cotton mills could be made to pay dividends, the undercurrent +was indirectly responsible for the erection of the factories.</p> + +<p>It is not the purpose of the present paper to set out in any detail the +unique resources of the South, either as they constituted the magnet for +capital directly, or reacted through the<span class="pagenum"><a name="Page_136" id="Page_136">[Pg 136]</a></span> general cotton mill campaign to +swell the tide making toward a new character for the section. They deserve +separate treatment, especially since they occupy so central a position and +have such sensitive contact with the other forces present. Whether, +however, physical advantages existing at the South crystallized out of an +original philosophical impulse, or operated, more or less unconsciously in +the Southern mind, to induce that impulse, it is perfectly clear that the +movement for the building of cotton mills in the South originated with the +South, and that at least contemporary with the attraction of capital, went +an advocacy of the establishment of cotton factories that was consistent, +permanent and practically universal.</p> + +<p>From the very nature of the movement, Southern and in most cases strictly +local capital was first appealed to, both by the actual projectors of the +mills and the public organs which interested themselves in the +enterprises, and local capital was the first offered. It might be +questioned whether outside capitalists, perceiving in the Southern +manufacture of cotton a favorable field of investment, did not come in as +a result of the publicity of the cotton mill campaign, without waiting for +either solicitation from the South or proof of the success of the new +plants erecting in that section, but it will be shown that, as a matter of +fact, this was not the case. At the time the South felt herself to be +isolated, cut off from the national life,<span class="pagenum"><a name="Page_137" id="Page_137">[Pg 137]</a></span> discriminated against by +Congress and the country at large. In the beginning and in essence +continuing to the end, the building of cotton mills was a sectional +matter. It is not to be said that outside capital was an afterthought with +the promoters of the Southern cotton mills, but every circumstance +surrounding the movement, and every instinct of the hour, argued for the +exhaustion of native resources before help should be sought from without.</p> + +<p>The story of how capital was secured for the cotton mills of the South may +be commenced with a sentence from a North Carolina newspaper which strikes +the key-note: "All questions of domestic economy, and especially those +involving the capital of our people, whether in the shape of labor or +dollars, will necessarily be canvassed and scrutinized very closely in +their bearings on our material progress."<a name='fna_184' id='fna_184' href='#f_184'><small>[184]</small></a></p> + +<p>The nature of the appeals made to local capital will best appear by +looking at some of them individually.</p> + +<p>Patriotism, a consciousness of unity, and appreciation of the dynamic +character of manufactures in the South, appear in a solicitation printed +on the editorial page of the Charleston News and Courier for capital for a +scheme for the development of water power and cotton mills at Columbia. +The enterprise had a<span class="pagenum"><a name="Page_138" id="Page_138">[Pg 138]</a></span> peculiarly appealing history, which will be +recounted in considering the response of domestic capital. After a summary +of these facts, the article concludes: "The work—is one of great +magnitude and involves expenditure beyond the ability of this community +(Columbia). Nor is the interest merely local, but reaches out to every +part of the State. We call, therefore, upon all, from the mountains to the +seaboard, to take part in this great central development, involving not +only the prosperity of our capital, but, in its ramifications, affecting +the prosperity of the entire State."<a name='fna_185' id='fna_185' href='#f_185'><small>[185]</small></a></p> + +<p>A week earlier, in a Columbia dispatch to the same paper, Charleston was +advised that books of subscription to the stock of the company would soon +be opened there, and the argument for investment was placed on more +practical grounds: "If the recent subscriptions to factories have left any +money in the pockets of the people there (Charleston), it had better be +saved for this purpose—a franchise like this is not obtained every +decade."<a name='fna_186' id='fna_186' href='#f_186'><small>[186]</small></a></p> + +<p><span class="pagenum"><a name="Page_139" id="Page_139">[Pg 139]</a></span>Implying that when the South should make a start in cotton manufacture, +outside capital would flow in, but impressing particularly the need for +the entrance of domestic interests into the field, a statement of H. T. +Inman, capitalist, relative to the plan to purchase Oglethorpe Park, the +site of the Atlanta Exposition, from the city authorities and use the +buildings for cotton factories, is striking: "We must demonstrate what we +have been saying, that there is money in manufacturing in the South. If we +wait for others to come here and do it, it will never be done."<a name='fna_187' id='fna_187' href='#f_187'><small>[187]</small></a> The +argument that the South had faith in her ability to manufacture cotton +profitably, as proved by putting her money into the projected mills, was +frequently used in soliciting subscriptions at the North, and more +frequently Southerners were urged, as here, to go into the ventures, with +the specific reason that by so doing Northern capital would be induced to +join in.</p> + +<p>Money accumulating in bank at low rates of interest was often made the +basis of observations on the great gain from manufactures, and was pounced +upon as evidence of lack of sympathy with the spirit of the time, which +was grounded in the deepest needs of the people. In such cases the cotton +mill campaign and<span class="pagenum"><a name="Page_140" id="Page_140">[Pg 140]</a></span> the gathering of capital as a matter of practical +concern usually overlap. An instance quoted in another place is typical: +"But with all its (North Carolina's) varied and splendid capabilities it +is idle to talk of home independence so long as we go to the North for +everything from a tooth pick to a President.... We may look in vain for +the dawn of an era of enterprise, progress and development, so long as +thousands and millions of money are deposited in our banks at four per +cent. interest when its judicious investment in manufactures would more +than quadruple that rate...."<a name='fna_188' id='fna_188' href='#f_188'><small>[188]</small></a> Several months later the same +paper<a name='fna_189' id='fna_189' href='#f_189'><small>[189]</small></a> instanced the success of Edward Richardson, of the firm of +Richardson & May, cotton factors of New Orleans, in running, in addition +to ten or twelve plantations producing 15,000 to 18,000 bales of cotton a +year, a nest of factories with 18,000 spindles, 400 looms and 800 hands in +the town of Cresson, which he built. He was said to be worth more than +$15,000,000—"all accumulated in the South, the poor South." The closing +remark is significant: "His ... accumulations are but the results of +forethought, enterprise and nerve. He has no heavy deposits in bank at +four per cent."</p> + +<p>This same galling fact of bank deposits lying relatively idle when they +might be used to further the plans held so much<span class="pagenum"><a name="Page_141" id="Page_141">[Pg 141]</a></span> at heart was lamented in +cases where it hindered the cotton mill campaign, or the taking of initial +steps toward realizing a desire for a mill; but it was made more galling +where a venture, properly launched, stood still because the moneyed people +held themselves aloof. In distinction to the position of Newberry, South +Carolina, where there were "numbers of people ready to aid in the +enterprise, convinced as they are that it will be a profitable investment, +but ... nobody to take the lead,"<a name='fna_190' id='fna_190' href='#f_190'><small>[190]</small></a> was Chester another town in the +same State, of about the same size. In February of 1881, after the cotton +mill campaign had gotten a fair start, the Chester Bulletin commented: +"Just now there is a widespread and deep feeling amongst our people +throughout the State to foster the manufacturing interests of the country. +More than a year has elapsed since our people felt beat a pulse of +enthusiasm for the home industries. (Reference was here had to the +chartering by the Legislature of two mill corporations which attracted +almost no subscriptions.) There is money enough in the county to start the +hum of three thousand spindles. The large amount of personal deposits in +bank indicate too truly the lack of confidence in home industrial +enterprises."<a name='fna_191' id='fna_191' href='#f_191'><small>[191]</small></a></p> + +<p><span class="pagenum"><a name="Page_142" id="Page_142">[Pg 142]</a></span>It may be well to consider a typical comprehensive appeal for domestic +capital. For this purpose a leading editorial in The News and Courier +asking support for the Charleston Manufacturing Company is particularly +useful.<a name='fna_192' id='fna_192' href='#f_192'><small>[192]</small></a> In the first place, this company marked the entry of +Charleston into the field of regular cotton manufacture, and the +enterprise took firm hold on the interest of the city from this cause. +Also, South Carolina experienced the cotton mill campaign as a movement +more highly conscious than in any other State; Charleston was the center +of the campaign, as spiritual leader no less by reason of her sufferings +than her heroism, and the News and Courier was the mouthpiece of +Charleston.</p> + +<p>To begin with, the editorial, headed "Everybody's Opportunity", sets forth +clearly the division of arguments: "The Charleston Manufacturing Company +addresses itself to the citizens of Charleston in a double capacity: +<i>First</i>, as a means of making money for the stockholders. <i>Second</i>, as a +means of enlarging the common income, stimulating the growth and +increasing the prosperity of the city."</p> + +<p>Proceeding under the first of these heads, it is pointed out that the mill +will succeed because the management, in the hands of men known for their +business sagacity and activity, will<span class="pagenum"><a name="Page_143" id="Page_143">[Pg 143]</a></span> be both economical and progressive. +There is no doubt that, along with other appeals to local resources, +confidence in the projectors of a cotton mill, as personal acquaintances +and men whose whole lives were familiar knowledge in a small community, +had a powerful influence. Next it is shown that the profits of the South +Carolina mills for the year 1879, probably the last available for +citation, warranted a belief that the Charleston mill would succeed, +having at least as good a chance as county plants. These profits had +ranged from 18 to 25½ per cent. It is explained that steam power will +be used, but that it is used in England, and that the trend of the better +opinion is toward steam power rather than water power, as being more +reliable and capable of better control. The approval of steam by the +superintendent of the Camperdown Mills at Greenville in the same State, on +these grounds and also because he knew that the Northern mills using steam +made larger profits than those using water, is instanced. It is evident +that the necessity of employing steam power, instead of being able to use +the water power of the interior, was a hard obstacle to get over, for +recurrence is several times had to it in the course of the argument, and +the great advantages of coastal location are stressed as a +counterbalancing consideration.</p> + +<p>The favorable facts that the Charleston mill will be able to buy cotton +all the year round, and so avoid carrying a heavy<span class="pagenum"><a name="Page_144" id="Page_144">[Pg 144]</a></span> stock, that samples and +tops may be utilized, that the rates of insurance will be low and water +freights nominal, and lastly that no cottages or schools or churches will +have to be built, city location avoiding this source of expense to a +provincial establishment are recited, and the prospective stockholders are +reminded that by State law the whole of the capital invested in +manufactures is exempted from taxation for ten years.</p> + +<p>On the second account, of increasing the prosperity and welfare of the +community, it is shown how every $228 invested in cotton manufactures in +South Carolina the year before supported one person, and how when people +earn they have something to spend; house rents will go up as a result of +the new demand. Besides, the State at large benefits from a new means of +support for the people. The very potent argument of the addition to value +which manufacturing brings about is next employed. "At a low estimate the +value of cotton is doubled by the conversion into yarns." If the +Charleston Manufacturing Company uses 10,000 bales of 400 pounds a bale, +at 10 cents per pound, $400,000 will be returned to the growers of the raw +cotton. When made into yarns the cotton will be worth $800,000. Every +dollar of this $400,000 difference, except what will be spent for +materials not to be precured locally, will be disbursed in Charleston in +wages and dividends. "It is evident that the building of half-a-dozen +cotton factories could revolutionize Charleston. Two or three million +dollars<span class="pagenum"><a name="Page_145" id="Page_145">[Pg 145]</a></span> additional poured annually into the pockets of the shop-keepers +and tradespeople would make them think that the commercial millenium had +come." The appeal concludes: "In a two-fold sense, then, the Charleston +Manufacturing Company is entitled to support. For the stockholders it will +earn money. To the city it will give the life and vigor which nothing +short of manufactures will assure us."<a name='fna_193' id='fna_193' href='#f_193'><small>[193]</small></a></p> + +<p>An editorial in the same paper the next spring encouraging subscriptions +to the capital stock of the Columbia and Lexington Water Power Company, +the enterprise already mentioned, which was opening books in Charleston, +urged the two benefits already noticed, profit flowing from physical and +economic advantages, and a social gain resulting from the indirect +bearings of the plant.<a name='fna_194' id='fna_194' href='#f_194'><small>[194]</small></a> The value of the franchise, the offer by the +State of more than 146,000 days of convict labor at a low wage, the rebate +of taxation on plant and improvements for ten years, and estimated +earnings of 17 per cent, on a total outlay of<span class="pagenum"><a name="Page_146" id="Page_146">[Pg 146]</a></span> $431,607, or running as +high as 25 per cent. on an outlay of $725,000, were held up on the side of +material things; in dealing with the gain expected to result to the State +at large, the influx of immigrants and the employment of thousands of idle +women and girls, already present, for whom it was so hard to find +profitable work, were pointed out.</p> + +<p>Not unusually, in place of the larger social sense, local pride as such +furnished the point of departure in the proclamation of an enterpriser to +his fellow-citizens. It is to be feared that sometimes this was made the +means of demegoguery, the appeal to local spirit being linked with a +disparagement of Northern assistance merely for effect. Instances of this +will appear when the attitude toward outside capital is considered.</p> + +<p>The case of Mr. Winn's scheme for Sumter illustrates the personal appeal +to local pride. It is to be noticed that he reduced everything to an +individual and immediate basis. He spoke through the paper of the town, +the Sumter Southron:<a name='fna_195' id='fna_195' href='#f_195'><small>[195]</small></a> "I am now engaged in getting up a mill of 2,500 +spindles at this place. I do not expect to seek a dollar of foreign +subscription, but I want our own citizens throughout the county to be +interested in it and to help me build and operate it." There follows a +description of his findings at several nearby mills which he visited.<span class="pagenum"><a name="Page_147" id="Page_147">[Pg 147]</a></span> One +is inclined to believe that he paraded the facts to impress his audience +in a general way, rather than to appeal to strict business sense. He cites +the earnings of the mill at Charlotte, North Carolina, owned by the Oates +Brothers. With running expenses of $60, "we have the neat little profit of +$155 per day". The Sumter mill could save haulage, and use one-third of +its cotton not packed, thus saving in bagging and ties. A concluding +sentence indicates his frame of mind: "Will a mill pay in Sumter? Why +not?"</p> + +<p>A statement of the advantages possessed by a mill already in operation as +contrasted with those which would contribute to the success of a proposed +mill was a favorite method of argument. Thus the Kershaw Gazette said: +"Let us realize that what is good for Charleston in this respect is better +for us. (Reference was had to the Charleston Manufacturing Company.) She +has to use steam as a motive power, which, in the form of coal, has to be +brought long distances and at great cost. We have but to harness the +magnificent water-powers which are slipping idly by us, and the thing is +done. In Charleston, it is the investment of capital on hand, seeking +profitable employment. With us, it will be the creation of capital itself; +for we venture the assertion that one hundred thousand dollars invested in +a cotton factory at Camden would develop interests to more than double +that amount." The saving of three-fourths of a cent per pound in the +freight between<span class="pagenum"><a name="Page_148" id="Page_148">[Pg 148]</a></span> Camden and Charleston would in itself bring a fair +dividend upon the capital invested, it was said. "And yet Charleston +expects to, and will, make money by what she is about to do. Let the +people of Camden and of Kershaw County be up and doing in this +matter."<a name='fna_196' id='fna_196' href='#f_196'><small>[196]</small></a></p> + +<p>These, then, were the grounds upon which domestic and more strictly local +capital were solicited. It is proper now to notice with what success the +appeals were made.</p> + +<p>In the most respectable trade summary published by any newspaper in the +South, it was stated in September of 1881: "The industrial feature of the +year is the rapid extension of cotton manufacturing in South Carolina in +common with other Southern States (naming the plants and the capital +invested in or subscribed to each.) A most gratifying feature connected +with the establishment of cotton mills in the South is that the great bulk +of the capital employed in their operation has been furnished by Southern +people. Southern capitalists are putting their shoulders to the wheel.... + +More than three-fourths of the capital invested in the cotton mills since +the war has been subscribed by our own people...."<a name='fna_197' id='fna_197' href='#f_197'><small>[197]</small></a></p> + +<p><span class="pagenum"><a name="Page_149" id="Page_149">[Pg 149]</a></span>The conclusion of Mr. Thompson after a review of the rise of cotton mills +in North Carolina is interesting: He says that capital for almost 200 +mills that grew up in twenty years "has come chiefly from a multitude of +small investors within the State"; again, "The development of the cotton +industry in North Carolina is a striking instance of the manner by (in) +which a people in poor or moderate circumstances can establish +manufactures." He gives credence to estimates by those he considers best +informed that 90 per cent. of the capital for mills in North Carolina has +come from residents of the State. "The industry is distinctly a home +enterprise, founded and fostered by natives of the State."<a name='fna_198' id='fna_198' href='#f_198'><small>[198]</small></a></p> + +<p>The Rock Hill Cotton Factory was spoken of as the "pet" of the town. Its +$100,000 of capital stock was owned in Rock Hill, with the exception of +$15,000 held in Charleston.<a name='fna_199' id='fna_199' href='#f_199'><small>[199]</small></a></p> + +<p>Most of the stock of the Belmont Manufacturing Company, the enterprise +projected by Mr. Winn in Sumter, already noticed, was taken in the town, +and the few thousand dollars needed to increase the capacity above 2,000 +spindles would come from Charleston, where President Winn was soliciting +support.<a name='fna_200' id='fna_200' href='#f_200'><small>[200]</small></a></p> + +<p>The experience of Yorkville, another little town in South<span class="pagenum"><a name="Page_150" id="Page_150">[Pg 150]</a></span> Carolina, is +interesting, especially for the naive way in which it was related.<a name='fna_201' id='fna_201' href='#f_201'><small>[201]</small></a> +"... the 'Cotton Mill Campaign' is progressing satisfactorily in +Yorkville. We heard an old citizen remark some days ago that he had never +seen the town so thoroughly aroused and united.... Yorkville to all +appearances is moving forward with a determined purpose to put into +successful operation a cotton mill.... The shares have been placed at $500 +each, and up to this writing about $25,000 have been subscribed. I would +state that this amount has been raised within the limits of the town. A +prospectus will be forthcoming this week and the doors will be thrown open +to citizens generally of the county who may be able and disposed to assist +in carrying forward the project."</p> + +<p>A similar instance is that of Walhalla, South Carolina, a very small place +indeed. The people began to talk about a cotton manufactory, and at an +informal meeting of a few of those interested nearly $10,000 was +subscribed. "It is believed that as much as $25,000 will be subscribed in +that neighborhood, and if the people of the county will join in the +enterprise as much as $50,000 might be made available."<a name='fna_202' id='fna_202' href='#f_202'><small>[202]</small></a></p> + +<p>A typical notice is this one: "The enterprising citizens of the new town +of Gaffney City have subscribed $40,000 towards building a cotton factory +at that place."<a name='fna_203' id='fna_203' href='#f_203'><small>[203]</small></a></p> + +<p><span class="pagenum"><a name="Page_151" id="Page_151">[Pg 151]</a></span>Columbus, Georgia, was held up to praise for her loyal support of the +cotton manufacturing industry. Before the war she was a little Lowell, it +was said. The Federal army captured the place in 1865 and burned 60,000 +bales of cotton and all the mills. "The very heart of the city was burned +out, but nothing could extinguish its indomitable spirit." In fifteen +years the mills had been rebuilt until they were taking annually nearly +17,000 bales of raw cotton, which was almost trebled in value by +manufacture. "But the proudest boast of Columbus is that she rebuilt her +mills by her own aid and money."<a name='fna_204' id='fna_204' href='#f_204'><small>[204]</small></a></p> + +<p>The statement of a railroad man in the New York Herald is valuable: "Mills +for the weaving of the coarser cotton fabrics are now in successful +operation in Tennessee, Georgia, Kentucky and several of the Atlantic +Coast States, all of which have been<span class="pagenum"><a name="Page_152" id="Page_152">[Pg 152]</a></span> built by native labor, mostly with +local capital and are managed by Southern men."<a name='fna_205' id='fna_205' href='#f_205'><small>[205]</small></a></p> + + +<p>The Clifton Mill near Spartanburg, furnishes a fair example of the +distribution of holdings of the capital stock of a larger enterprise. The +joint stock company owning the mill operated under a special act of +incorporation of the Legislature, exempting the property from taxation for +a period of years, and relieving the stockholders of personal liability. +The shares were of a par value of $100. and aggregated $500,000 of which +$250,000 was paid in. The stock was held mostly in Spartanburg, +Charleston, Boston and Baltimore. Spartanburg capitalists owned $200,000 +worth of the stock, Charlestonians $150,000, and $50,000 was held in +Boston.<a name='fna_206' id='fna_206' href='#f_206'><small>[206]</small></a> To make the capital stock $500,000 most of the original +stockholders had doubled their subscriptions.<a name='fna_207' id='fna_207' href='#f_207'><small>[207]</small></a></p> + +<p>For a factory near Gaffneys, South Carolina, which would need $500,000 +capital stock to the amount of $200,000 would be subscribed for in Chester +County, it was thought, and for the remaining $300,000 the North would be +looked to.<a name='fna_208' id='fna_208' href='#f_208'><small>[208]</small></a></p> + +<p><span class="pagenum"><a name="Page_153" id="Page_153">[Pg 153]</a></span>Together with large subscription to the stock of the Atlanta Exposition +from the North and East, went an early subscription of $20,000 in +Atlanta.<a name='fna_209' id='fna_209' href='#f_209'><small>[209]</small></a></p> + +<p>While it might be considered under the heading of the cotton mill +campaign, or denominated "Southern enterprise", I believe it will be most +interesting to relate at this point briefly the facts in the Columbia +canal scheme, as illustrating how domestic capital threw itself into the +situation in which the South found herself in 1880, and the years +immediately following. It is especially instructive to notice how Northern +enterprise, while, so far superior to Southern initiative at all times +before, after 1880 failed where in the South sometimes native energy +succeeded.</p> + +<p>Columbia, the capital of South Carolina, is located at the falls of the +Congaree River. Today there is a canal of about three miles in length, 60 +or 75 feet in breadth, terminating at the lower part of the city. At the +end of the canal is a duck mill. In 1868 the Messrs. Sprague, +manufacturers of Rhode Island, took up a plan of developing this water +power at Columbia, but "in consequence of their misfortunes, failed", and +the whole matter of the canal passed to the hands of the State Canal +Commission. Some prominent Columbians, hoping to revive the project,<span class="pagenum"><a name="Page_154" id="Page_154">[Pg 154]</a></span> +contributed money to the employment of one Mr. Holly, a first-rate +hydraulic engineer of Rochester, New York. Mr. Holly was making surveys +and progressing satisfactorily when, after three months, his engagement +was discontinued. The reason for this was that Thompson and Nagle, +engineers of Providence, on a tour of inspection through the South, were +attracted to the water power at Columbia, and Mr. Thompson appealed to the +State for franchises, in which appeal he was supported by the citizens of +Columbia who had helped promote the modest work under Mr. Holly. On +February 10, 1880, the final contract between Thompson and Nagle and the +State Canal Commission was entered into; by its terms the engineers were +to have the use of 200 convicts for three years, and at the expiration of +this time they were to have developed at Gervais Street 15,000 horse power +of water power, and have in operation a cotton mill of at least 16,000 +spindles.</p> + +<p>Thompson and Nagle thought the necessary capital could be had at the +North. They failed to secure it, and attributed their failure to the +turmoil of the presidential campaign which was raging. Though this was +probably a valid basis for the appeal to the Legislature for an extension +of the rights granted them, the application for extension was denied. At +this juncture, modifying the scope of the plans somewhat, the foremost +citizens of Columbia took up the matter themselves, and organized the<span class="pagenum"><a name="Page_155" id="Page_155">[Pg 155]</a></span> +Columbia and Lexington Water Power Company to bring about the +development.<a name='fna_210' id='fna_210' href='#f_210'><small>[210]</small></a></p> + +<p>Nightly meetings were held of those interested in the purchase of Mr. +Thompson's charter. In one hour eleven subscribers gave $5,000 +each—$55,000—toward the amount.<a name='fna_211' id='fna_211' href='#f_211'><small>[211]</small></a> A few days later the subscriptions +in Columbia had reached $117,600, and the expectation was that the sum set +to be raised in Columbia—$125,000—would be exceeded.<a name='fna_212' id='fna_212' href='#f_212'><small>[212]</small></a></p> + +<p>Mention has been made several times of the Charleston Manufacturing +Company. At the end of the first day $120,000 of its capital stock had +been taken.<a name='fna_213' id='fna_213' href='#f_213'><small>[213]</small></a> A little later the subscriptions to the stock had become +$200,000 and more, mostly "for small amounts, which is what is desired. At +the present rate the whole capital required will soon be subscribed." On +July 6, the News and Courier had these two editorial paragraphs, the +justifiable satisfaction pervading which is not to be mistaken: "We are +authorized and requested to say that the whole of the stock<span class="pagenum"><a name="Page_156" id="Page_156">[Pg 156]</a></span> of the +Charleston Manufacturing Company, being half a million dollars, has been +subscribed, and that the books are closed. It is useless, therefore, to +continue to send in subscriptions.</p> + +<p>"We believe that more than three-fifths of the whole capital stock are +held in Charleston, so that right here will come the bulk of the direct +profit by the working of the company...."</p> + +<p>But before the Charleston Manufacturing Company had completed its +organization another corporation had come into existence. This was a mill +company promoted and most largely subscribed to by the Germans of +Charleston, headed by Captain Tecklenburg. Not much was said about the +concern in the papers, but of its $100,000 of capital stock, $75,000 were +subscribed between January and May of 1881. This Palmetto Manufacturing +Company, as it was called, was apparently, the most restricted in its +stockholders of any mill that had been projected in the South to this +time.</p> + +<p>Little towns, villages almost, did not fail of local enthusiasm and +capital in small amounts.<a name='fna_214' id='fna_214' href='#f_214'><small>[214]</small></a> In January of 1882 Fort Mill, in York +County, was agitating the building of a cotton mill there, and $50,000 was +set as the amount of stock to be secured.<a name='fna_215' id='fna_215' href='#f_215'><small>[215]</small></a> Chester, a little earlier +concluded her size would compel<span class="pagenum"><a name="Page_157" id="Page_157">[Pg 157]</a></span> her to produce $300,000 for a mill within +her borders.<a name='fna_216' id='fna_216' href='#f_216'><small>[216]</small></a> A gentleman of Griffin, Georgia, offered to subscribe +one fourth of the capital necessary to start a mill there.<a name='fna_217' id='fna_217' href='#f_217'><small>[217]</small></a></p> + +<p>Having seen the character of the arguments used in attracting native +capital to the Southern cotton mill projects, and the extent of the +response to these appeals, it is next necessary to turn to the other +source of assistance—outside capital. Practically this may be termed +Northern capital, although Englishmen interested themselves in the +Southern ventures, and much money came from what were strictly termed, the +Eastern States. In the minds of the people of South Carolina, North +Carolina, Georgia, Alabama and those States, capital stock of a Southern +mill held in Baltimore would be classed as appertaining to the North.</p> + +<p>It is proper first to consider the attitude of the South toward Northern +capital; second, the appeals made to Northern capital; and third, the +effect of these appeals or the response of them.</p> + +<p>In many aspects the rise of cotton mills in the South was less an +industrial development than a subtle drama, powerful in its great motives. +As William Garratt Brown has said of the <span class="pagenum"><a name="Page_158" id="Page_158">[Pg 158]</a></span>history of the Southern States +in their struggle upward after the war, it is not only to be studied with +diligence of research, but is to be viewed with passion. The story of the +cotton mills is filled with elemental emotions; the moving characters are +splendid, clear-cut dramatic types; there are the villain, the hero, the +schemer, the lover of his fellow men. The vices and virtues take their +part—self-sacrifice, jealousy, hate, charity, revenge, bravery, honor, +patriotism.</p> + +<p>The first act of the drama is constituted in the defeat of Hancock and the +magnificent refusal of the South to be baffled—the oath to rebuild her +shattered fortunes. The actors leave the stage with hope filling the +future. The curtain rises on the second act to discover the chief spirits +of the South setting systematically about "the cotton mill campaign"; +their brethren converted to a belief that manufacturing the staple would +transform the South, they turn in entreaty to their fellows for support, +and the answer is loyal and gallant.</p> + +<p>The third act opens with a situation which tests the greatness of the +players' faith in what they profess. Domestic resources exhausted or +exhausting, or slow in response to the need, should the object for which +they were striving be lessened in its meaning, importance and +desirability? Should the cotton mills which were to mean so much be +restricted to the means of the South, urged to the front by a splendid +pride and devotion?<span class="pagenum"><a name="Page_159" id="Page_159">[Pg 159]</a></span> Should the <i>esprit de corps</i> which animated the +Southerners, and the cheerfulness of their co-operation, with all that +inspired these, when they failed of further effect, be considered to set +the natural and proper limits to expansion?</p> + +<p>Was this to close the action? Or was the South, remembering her vows, to +cling to her ambition undiminished? In spite of wounds yet fresh and +burning, which in the name of pity and honor and self-esteem cried out to +be nursed and comforted at home, could the South face again her enemies, +and this time not just to challenge, which was hard, but to entreat, which +was hardest? Would the South rise superior to pride, and be content with +nothing short of the fullest heroism? Would she go to the North for +capital for her young cotton mills?</p> + +<p>It was a silent struggle with herself. Little was uttered, but fundamental +emotions were at play. When she decided to appeal for assistance in a work +which she knew to be right, the climax of the drama had been reached. The +crucial test had been endured, and the South had emerged triumphant.</p> + +<p>As has been said, few lines are there to indicate the feeling. It is +largely dumb show. But we may look at the expressions that did occur to +show the attitude of the South toward the question of Northern capital.</p> + +<p>The following manifesto is significant, involving as it does recognition +of the necessity for a modification of political views if capital to be +invested in the South, in the eyes of the<span class="pagenum"><a name="Page_160" id="Page_160">[Pg 160]</a></span> North, was to be made safe: "In +this state (South Carolina) we need capital and less party and +politics.... Such men as Gould, Vanderbilt and Plant have invested +millions of dollars in our railroads, manufactories and other enterprises, +and have been remunerated in the face of a 'Solid South and a Solid +North'. It is useless to say that millions have been driven off from like +investments on account of personal whims and jealousies among prominent +politicians in both parties. <i>Can the South afford to remain solid?</i> This +is the great question of the day, and it can be answered in the +negative.... We want all the capital possible to develop our hidden and +inexhaustible resources...."<a name='fna_218' id='fna_218' href='#f_218'><small>[218]</small></a> And again: "So long as we have section +unity in politics in the South its material prosperity will be checked and +an absolute injury will be sustained through its entire commercial and +agricultural dealings by exciting distrust of capital.... So taking the +past and the present as indices for the future, it is plain to see that a +dissolution of the solid South will cut at the very roots of all these +wrangles between the North and the South in which sectionalism is +involved."<a name='fna_219' id='fna_219' href='#f_219'><small>[219]</small></a></p> + +<p>The News and Courier wished to accord to every dollar of Northern capital +invested in the South the same credit as was<span class="pagenum"><a name="Page_161" id="Page_161">[Pg 161]</a></span> felt to be due home capital +likewise contributed to the building up of the section. "Outside capital +... is beginning to seek this Southern field to aid in a more rapid and +thorough work of restoration of dead or dormant enterprises. This movement +needs a wise encouragement by public and private approval. Some of that +credit which was accorded to the man who caused an additional blade of +grass to grow should be given to everyone who affords facilities to +manufacture an additional boll of cotton, or to carry it and other produce +to market."<a name='fna_220' id='fna_220' href='#f_220'><small>[220]</small></a></p> + +<p>A gentleman connected with the International Cotton Exposition said: "We +people of the South should embrace every opportunity which, like the +opportunity afforded by this Exposition, will bring among us intelligent +and interested observers of our industrial condition, resources and +aptitudes. We have in the midst of us the raw material, so to speak, of a +magnificent prosperity. We lack knowledge, population and capital. These +may be slowly accumulated in the course of years, or they may be rapidly +by well directed efforts to obtain them from beyond our own borders. We +advocate the latter plan."<a name='fna_221' id='fna_221' href='#f_221'><small>[221]</small></a> This is as business-like as anyone could +desire.</p> + +<p><span class="pagenum"><a name="Page_162" id="Page_162">[Pg 162]</a></span>In an interview with the Atlanta Constitution, Francis Cogin reviewed the +cotton manufacturing situation in Augusta, reciting the profits and +asserting that the Southern mills had an advantage over those of the North +such as would allow the former to earn dividends at a time when the latter +would not be making a dollar. He concluded: "The future of cotton +manufacture in the South will be limited simply by the good sense and +courtesy of our own people. If we invite capital, make it safe here, and +welcome those who bring it, we will get all we want."<a name='fna_222' id='fna_222' href='#f_222'><small>[222]</small></a> The element of +safety, here remarked, meant frequently safety to be brought about by +political arrangements which would violate the established creed of the +South; but sometimes ordinary business balance was pleaded for, as when a +North Carolina paper quoted with approval from the Financial Chronicle: +"Why cannot the South understand ... that the worst hindrance to her +needed influx of industry and capital is uncertainty?"<a name='fna_223' id='fna_223' href='#f_223'><small>[223]</small></a></p> + +<p>In another chapter the degrees of intensity with which the cotton mill +campaign was urged were seen to vary, roughly, with the distance from +Columbia, South Carolina, say, as a center. There is a casual note in the +little that found its way<span class="pagenum"><a name="Page_163" id="Page_163">[Pg 163]</a></span> into the Richmond papers. This is to be +remarked in Richmond's attitude toward Northern capital. It was not a +stirring, vital thing in Virginia. For instance: "When we consider that +the takings of the Continent from Lancashire are not piece goods, but +yarns, why cannot we in the South make these yarns for the Continent +ourselves and save to ourselves the profit of conversion now enjoyed by +the English buyer of the raw material? Why not have a large and successful +cotton manufacturing industry?</p> + +<p>"We are persuaded that once the folks in New England, who have surplus +money awaiting employment, thoroughly investigate the points Richmond +presents for a safe lodgment of that capital in manufacturing, the flow +will start this way."<a name='fna_224' id='fna_224' href='#f_224'><small>[224]</small></a></p> + +<p>The attitude of W. H. Gannon was peculiar, but serves as an introduction +to the mention of a phase of the subject which is important. Mr. Gannon, +referred to in other connections, believed that Northern capital ought to +be welcomed at the South as helping to develop an industry in which the +South could stand without a rival. He favored inducing Northern +manufacturers to set up plants bodily in the South. But, being the agent +of a<span class="pagenum"><a name="Page_164" id="Page_164">[Pg 164]</a></span> society which sought to colonize New England consumptive operatives +in co-operative mill villages in the South, the settlement to be +financially backed by a Northern capitalist or manufacturer, Mr. Gannon +wished to place a modification upon the influx of capital to the Southern +States. He asked whether the South should encourage an economic system +with "large stock companies with hundreds of thousands of dollars, in +which the operatives have no pecuniary interest in the plant, and from the +active management of which we ourselves would be virtually excluded? (It +is to be borne in mind that, as at present organized, the treasurer and +selling agents in those great concerns necessarily control their +direction); or is it better that we aid small co-operative concerns +wherein the plant is owned in great part by the operatives, and in which +we might familiarize ourselves with manufacturing in all its +details?"<a name='fna_225' id='fna_225' href='#f_225'><small>[225]</small></a></p> + +<p>To contend for small mills, whether as above for the co-operative features +suitable to them, or as a means of insuring proper caution in the +development of the industry, frequently with entire sincerity, was +nonetheless, I think, one evidence of dislike and distrust of Northern +capital. H. P. Hammett, an old cotton mill man in South Carolina, said: "I +do not share in the<span class="pagenum"><a name="Page_165" id="Page_165">[Pg 165]</a></span> opinion commonly expressed that we must procure +capital from the North to manufacture the cotton at the South. I would by +no means exclude it, but gladly welcome it." But he worked around +gradually to this concluding statement, relative to the report that +English and Northern capitalists were seeking to locate mills on the water +powers of the South: "—it would be unfortunate if most of the best powers +should pass from the control of our own people before they knew it."<a name='fna_226' id='fna_226' href='#f_226'><small>[226]</small></a></p> + +<p>One more characteristic quotation, and the point is clear: Objection had +been raised to the legislation forbidding the pooling of railroads, +producing corners in freights with rising rates—the Sherman Act was +probably meant. This was too much for the Winnsboro, South Carolina, News, +the reaction of which resulted in these words: "Well enough is it to talk +about repelling Northern capital by discriminating legislation, but far +better have no Northern capital than have it holding native noses down to +the grindstone. The half-starved wolf refused to change places with the +sleek mastiff that wore a master's collar. Northern capital that brings +Northern collars is not what we wish, and we will not have it as long as +the people send incorruptible <span class="pagenum"><a name="Page_166" id="Page_166">[Pg 166]</a></span>legislators to Columbia. We welcome foreign +capital down here, provided it recognizes that the State is +supreme...."<a name='fna_227' id='fna_227' href='#f_227'><small>[227]</small></a></p> + +<p>While it is easily understood how this attitude obtained—the wonder is, +in fact, as already seen, that it was not more nearly universal than +sporadic—the shortsightedness of such a policy for the South is apparent. +For whatever outside capital reaped in dividends, the South reaped a +larger advantage in collateral benefits socially. The gain to the +communities where mills were located, supposing even that Northern capital +was greatly in preponderance, were more than any money earnings, in sums +however large, for it meant building for the future in material +institutions that would prove dynamic. The cotton mills, and all they +brought in their train, presaged a change in social ideals and economic +outlook on which no price was to be set.</p> + +<p>If Mr. Baldwin, the railroad president, was a little early in making the +statement in the middle months of 1881, surely his purpose was good, and +his hopefulness was justified, when<span class="pagenum"><a name="Page_167" id="Page_167">[Pg 167]</a></span> he said: "I say on the strength of +recent and extended observation that whatever of antagonism to Northern +capital may have existed in the South has disappeared. I never met it, at +any time, but (I) am willing to grant that it may have existed sometime +and somewhere."<a name='fna_228' id='fna_228' href='#f_228'><small>[228]</small></a></p> + +<p>As a corollary of the fact, recognized at the South, that whatever were +the social gains resultant upon the establishment of cotton factories, +capitalists put their money into these ventures because they believed the +conditions of manufacture assured to them dividend, the South grounded its +appeals to Northern investors in the hard physical advantages possessed by +the South as a field for cotton manufacture, usually stressing +superiorities over the Northern States. Northern capitalists were as eager +to reap profits as were Southern projectors of mills to enlist their aid +and interest, and so the claims of the South were easily investigated +without the medium of propaganda. The widespread publicity given to the +whole matter of Southern manufacturing in the cotton mill campaign, while +no doubt it was registered in all parts<span class="pagenum"><a name="Page_168" id="Page_168">[Pg 168]</a></span> of the North and East, was +commenced and carried on as of concern to the South.</p> + +<p>Correspondence of the New York Times from Atlanta well illustrates this. +It is to be noticed how quickly the preliminaries are got +over—considerations and speculations in which Southern papers indulged to +any length: "Manufacturing in the South is the one subject on which +thinking men here speak with entire confidence. They have, most of them, +some qualifying doubts as to agricultural progress, the cheapening of +cotton production, the raising of home supplies, immigration, mining, and +the many other now ambitions and enterprises which have engaged so much +attention since the opening of the new era of industrial development. But +concerning the future of manufactures, particularly of cotton, all men of +intelligence and business experience speak with the assurance of inspired +prophecy. It is, in fact, not easy to see why the mill should not seek the +cotton instead of the cotton seeking the mill." With this introduction, +the plunge is made into the supporting facts, which ought to turn the flow +of capital toward the South.</p> + +<p>The first statement is that it is a dead waste to ship raw cotton to a +mill 1,500 miles away, when it can be made into yarns or fabrics in +factories distant from the field only short half-day's journey for a mule. +The cost of sending the cotton to New England is reckoned, in expenses of +bagging, ties, ginning,<span class="pagenum"><a name="Page_169" id="Page_169">[Pg 169]</a></span> baling, storage, insurance, drayage, sampling, +compressing, commissions of brokerage, waste in handling, and freight to +amount to $14.90 per bale, or almost exactly 1½ cents per pound which +the New England manufacturer pays for the cotton above the price received +by the planter. The estimate of $100,000,000 is given as the charge on the +cotton crop of the South of 1879, on Edward Atkinson's figures, for the +items mentioned.</p> + +<p>"... to the anxious capitalist tired of a petty 4 per cent. and seeking +new and more profitable investments such facts are not without interest. +They go to support the claim that the Southern mill has an advantage of +from 10 to 20 per cent. over its New England competitor. But these +advantages are by no means confined to the elimination of unnecessary +charges for baling and transportation." Water power in the South, six +dollars per horse power per annum, or in some instances given away for the +location of a mill, as against a cost of twelve dollars in New England, is +dwelt upon, with the greater utility of the Southern water powers due to +the absence of freezes. The cheapness of labor is given prominent place, +and the suitability of the climate of the South for cotton +manufacture.<a name='fna_229' id='fna_229' href='#f_229'><small>[229]</small></a></p> + +<p>Exemption from taxation was a regular method of inviting<span class="pagenum"><a name="Page_170" id="Page_170">[Pg 170]</a></span> outside as well +as encouraging domestic investment. South Carolina exempted from taxation +for a period of ten years all new machinery put in a factory. The +Observer, of Raleigh, said editorially: "... North Carolina might well +learn a lesson from the liberal course pursued in South Carolina and +exempt from taxation for ten years all cotton factories within our +borders. The tax does not net the State more than a thousand dollars or +so, and the counties only double as much. But then there may be a great +deal in it tending to induce Northern capitalists to make investments with +us. Once here, they will be so pleased with our advantages that they will +never think of leaving us."<a name='fna_230' id='fna_230' href='#f_230'><small>[230]</small></a></p> + +<p>As early as 1872 Georgia had passed a statute remitting taxes on cotton +and woolen mills for a decade.<a name='fna_231' id='fna_231' href='#f_231'><small>[231]</small></a></p> + +<p>An indication of the comparative coolness of the States near Northern +influence, already remarked, in a little controversy which took place in +the Richmond papers over exemption of mills from taxation. Said "Hanover": +"It is true that a law exempting capital invested in manufacturing, even +for a limited period, is unconstitutional. But if it is necessary to that +end, the constitution can be amended." The farmers would not object,<span class="pagenum"><a name="Page_171" id="Page_171">[Pg 171]</a></span> he +thought, since increased size and prosperity of the cities would mean +increased gains to them in sale of produce. Richmond, he said, in addition +to her natural advantages, needed to offer exemption from taxation to +secure the desired capital. But "King William", in rejoinder, asserted +that the city was more dependent upon the country than was the latter on +the former; that exempting manufactures from taxation would mean +increasing the tax for farmers; and that Richmond was doing well enough as +it was.</p> + +<p>An indirect appeal to outside capital was felt to lie in a direct appeal +to domestic capital, and the fact that foreign interest would be attracted +by evidence of native faith in the mills was used as an argument in +securing capital at home. Thus the Columbia Register, speaking of the plan +of the Columbia and Lexington Water Power Company said editorially: +"Columbia is now resolved to find money for herself, in the City and the +State, for the development of the Canal and the establishment of +factories. This will bring in outside capital later on. Nothing so +attracts investors in other States as the knowledge that people on the +ground have proved their faith in an undertaking by putting money in +it."<a name='fna_232' id='fna_232' href='#f_232'><small>[232]</small></a></p> + +<p><span class="pagenum"><a name="Page_172" id="Page_172">[Pg 172]</a></span>Again it was said: "More than three-fourths of the capital invested in the +cotton mills since the war has been subscribed by our own people, and new +enterprises are opening up the way to a proud and successful future. The +Southern investment encourages Northern capital to come into the same +field, and the rate of progress is far more rapid than if it depended on +either Southern savings or Northern capital alone."<a name='fna_233' id='fna_233' href='#f_233'><small>[233]</small></a></p> + +<p>A county paper told its readers: "We believe there is money enough in the +county, here and there, to make at least a modest beginning so as to +attract outside capital."<a name='fna_234' id='fna_234' href='#f_234'><small>[234]</small></a></p> + +<p>Having sought to define the attitude of the South toward Northern capital, +and to indicate the nature of the appeals made to the outside capitalist, +the last topic of this discussion is reached in an examination of the +response of investors outside of the South to invitations, and the influx +of capital when the opportunities for profit had become apparent.</p> + +<p>It must be plain that as the sections drew together with each year that +removed the "reminders of the Civil War, the South was more welcoming in +her attitude toward Northern capital, and the North more ready to invest +in the South. This is recognized<span class="pagenum"><a name="Page_173" id="Page_173">[Pg 173]</a></span> in an editorial of The News and Courier, +headed The North and Europe Building Up the South": "It has been evident +during the past two years that the distrust which had prevented capital +from coming to the Southern States for investment has, in a large measure, +been dissipated, and that the disposition to place money in the South in +undertakings which promise a fair return is rapidly growing strong. +Indeed, the process has gone on much more swiftly than is supposed by +those who have not watched the course of events...." Continuing, the +editorial quotes an estimate appearing in the New York Herald, that in the +eighteen months preceding Northern and European capitalists subscribed to +Southern enterprises located in the section east of the Mississippi and +South of the James, $100,000,000. Of this amount, more than $90,000,000 +was invested in railroads, without the $20,000,000 in the Cincinnati +Southern. "Besides the investments in railroads there are the investments +in cotton manufactures. There is hardly a city in the South in which there +is not a new factory building organizing, and in nearly every case a +considerable part of the capital is raised at the North."<a name='fna_235' id='fna_235' href='#f_235'><small>[235]</small></a></p> + +<p>The Baltimore American said the same thing: "The South is now the focal +point of trade aspirations for the whole country.<span class="pagenum"><a name="Page_174" id="Page_174">[Pg 174]</a></span> Capital and industrial +activity are crowding upon it from every point of the compass. Every +railroad system in the land is struggling to reach it...."<a name='fna_236' id='fna_236' href='#f_236'><small>[236]</small></a></p> + +<p>Outside capital invested in Southern cotton mills took two +forms—subscriptions to the stock of mills managed in whole or in part by +Southern men, and the actual setting up of plants in the South owned +throughout by Northern promoters. Of these two, the second was of much the +rarer occurrence. Capital not domestic came from two main sources, the +North and East, and from England. There is no reason to believe that the +English subscriptions, in spite of frequent allusions to England as a +possible investor, were large or many.</p> + +<p>Pawtucket being the pioneer cotton manufacturing place in the North, +Providence, which had come to virtually absorb the smaller city, took a +great interest in the new mills of the South after the Civil War. A +Providence mechanical engineer designed the mills and machinery for some +of the most successful plants, and that its men were thinking of setting +up mills of their own in the South is evidenced by the visit of Mr. Boyd +to Georgia in 1881, when on behalf of New England capitalists he +prospected the State for the best location for a large cotton +factory.<a name='fna_237' id='fna_237' href='#f_237'><small>[237]</small></a></p> + +<p><span class="pagenum"><a name="Page_175" id="Page_175">[Pg 175]</a></span>A little later it was given as common knowledge that several of the +largest manufacturing firms of Manchester, England, had secured sites for +mills in the Southern States.<a name='fna_238' id='fna_238' href='#f_238'><small>[238]</small></a> A London correspondent of the New York +World remarked a clear disposition of English capital to seek investment +in Southern manufactures.<a name='fna_239' id='fna_239' href='#f_239'><small>[239]</small></a></p> + +<p>The railroads, both the minor lines connecting individual points, and the +great systems penetrating the South in this period, were influential in +fostering and inaugurating manufactures. The little railroads helped the +mills by affording transportation facilities and by making the inland +water powers accessible, but the big ones could lend money and did of +course make it their business to encourage manufacturing along their +lines. President Baldwin, of the Louisville and Nashville, distinguished +three ways in which the railroads assisted the sections by aiding mills in +reach of their tracks, by uniting the parts of the country, and by +affording a strong commercial <span class="pagenum"><a name="Page_176" id="Page_176">[Pg 176]</a></span>backbone.<a name='fna_240' id='fna_240' href='#f_240'><small>[240]</small></a> Hon. Gabriel Gannon urged +the claims of railroads upon South Carolina as bringing capital to the +Southern field; he attributed the erection of a mill with $500,000 capital +largely to the railroad connections of Spartanburg.<a name='fna_241' id='fna_241' href='#f_241'><small>[241]</small></a></p> + +<p>An article already referred to said of the railroads in their bearing upon +manufactures: "The railroad syndicates are of necessity interested in the +general growth of the country through which the lines run, and will spare +no pains to bring in immigrants and to encourage the opening of mines and +the establishment of factories."</p> + +<p>In the majority of instances, Northern capitalists subscribed to the stock +of Southern mills after a considerable proportion of the shares had been +taken at the South. Similarly, a very usual juncture for the investment of +Northern capital was a projected enlargement of a plant, machinery +manufacturers taking stock in payment for equipment. Thus the Rock Hill +Cotton Factory, the $100,000 capital stock of which was owned in Rock Hill +and Charleston, South Carolina, in doubling the capital secured<span class="pagenum"><a name="Page_177" id="Page_177">[Pg 177]</a></span> a large +part of the additional $100,000 at the North.<a name='fna_242' id='fna_242' href='#f_242'><small>[242]</small></a></p> + +<p>A vigorous solicitor of Northern funds for Southern mills was D. L. Love, +the pioneer cotton manufacturer of Huntsville, Alabama. Before going on +one of his trips to New England "for continuous exertion for the +establishment of factories in the South," he made a statement of his +successes and plans. His project of a cotton mill at Vicksburg, +Mississippi, was "on the high-road to success;" he had secured the +organization of a company with $40,000 then subscribed to manufacture the +staple at Jackson, Tennessee; he had about consummated a contract with New +England capitalists to revive manufacture in a building at Corinth, +Mississippi; a Connecticut manufacturer was looking for an opening at the +South, and would be induced to settle at Huntsville; in all, he expected +to bring about the investment of $1,000,000 in factories in Huntsville in +the three years to come.</p> + +<p>Mr. Verdery, of Augusta, telegraphed from New York news of his success in +seeking capital at the North. He "placed $85,000 of the new stock of the +Enterprise Factory, and expects to book from $25,000 to $50,000 more in +that city. He has had urgent<span class="pagenum"><a name="Page_178" id="Page_178">[Pg 178]</a></span> requests from Boston, Philadelphia and other +cities to go to those places, and has no doubt he will be able to obtain +large subscriptions...."<a name='fna_243' id='fna_243' href='#f_243'><small>[243]</small></a></p> + +<p>Much is to be learned from a close study of the founding of the Charleston +Manufacturing Company, which was a representative Southern mill, a child +of the cotton mill campaign and an expression of the patriotism, +statesmanship and farsightedness of the South of the day. It embodied in +its history nearly every element and feature to be noticed in this study. +In an advertisement calling for additional local subscriptions, the +company made the statement: "Arrangements have been made with capitalists +at the North to take such an amount of stock as may be necessary to ensure +the success of this enterprise."<a name='fna_244' id='fna_244' href='#f_244'><small>[244]</small></a> This statement is to be interpreted +in connection with the announcement a fortnight later<a name='fna_245' id='fna_245' href='#f_245'><small>[245]</small></a> of the complete +organization of the company, with the exception of the election of a +secretary and treasurer, two of the nine directors being W. H. Baldwin, +Jr., and O. H. Sampson. "Maj.<span class="pagenum"><a name="Page_179" id="Page_179">[Pg 179]</a></span> Smythe stated that a considerable amount of +the stock was held in Baltimore and Boston, and for that reason Mr. W. H. +Baldwin, Jr., of Baltimore, and Mr. C. H. Sampson, of Boston, had been +nominated." Woodward, Baldwin and Norris were dry goods commission +merchants of Baltimore, and "agents for the goods of several Southern +cotton mills," and C. H. Sampson was the senior partner in the firm of +Sampson & Co., of Boston, "dealers in yarns and also agents for several +Southern cotton mills." Two days earlier Messrs. Sampson and Baldwin +visited the site for the company's mill and expressed themselves as +pleased with it. On the same day a meeting was held at which it was +decided that the mill should manufacture standard sheetings and 3-ply +yarns.</p> + +<p>In this instance the commission merchants in all probability were those +who agreed "to take such an amount of stock as may be necessary to ensure +the success of this enterprise," it being either agreed that in return for +this they should get the brokerage of the mill, or even, perhaps, +receiving their pay as agents in shares of stock, which meant taking +dividends instead of commissions. The practise was a common one, and +machinery manufacturers followed the same plan. It is not at all clear +that it could have been avoided, and the net profits which were earned by +the mills of the South in this period would seem to dispute the statement, +that the commissions charged by firms which had thus gained control over +the product were exorbitant, and left<span class="pagenum"><a name="Page_180" id="Page_180">[Pg 180]</a></span> the mills barely enough earnings to +continue to turn out the goods which was the instrument of their own +exploitation.</p> + +<p>A final instance of Northern pecuniary interest in the development of +cotton manufactures at the South may be noticed in the fact that New York +bankers were expected to exceed the subscription of $25,000 to the +International Cotton Exposition at Atlanta, alloted to the city. Among the +large subscribers were Inman, Swan & Co., $2,000; Drexel, Morgan & Co., +$1,000; Brown Bros. & Co., $1,000.<a name='fna_246' id='fna_246' href='#f_246'><small>[246]</small></a></p> + + +<p> </p><p> </p> +<hr style="width: 50%;" /> +<p><span class="pagenum"><a name="Page_181" id="Page_181">[Pg 181]</a></span></p> +<h2><a name="CHAPTER_V" id="CHAPTER_V"></a>CHAPTER V</h2> +<p class="center"><span class="large"><i>FINANCING THE MILLS</i></span></p> + +<p>The preceding chapter dealt with the capital of the Southern cotton mills +in the period of their establishment. It was first noticed that local +capital was naturally drawn upon before any other, and the character of +the appeals to local resources and the response to these appeals were +brought out. The second division of the report dealt with the attitude of +the Southern mill promoters toward outside, usually Northern capital, the +nature of the appeals made to Northern capital, and the extent of the +response to these solicitations.</p> + +<p>Altogether, the surface aspects of the securing of capital were dealt with +in a large way; in denominating the present chapter and that following: +"The Financing of the Mills", it is intended to bring out the minutiae of +the process, and to set forth the mechanism of the problem in its detail.</p> + +<p>In seeking to make clear the methods of securing capital in the South, it +is convenient to consider first the soliciting of subscriptions to stock, +and at the outset it will be well to give a notice that appeared in the +financial advertising columns of the Charleston News and Courier at the +beginning of the period of cotton mill growth. This notice is directed by +"The Charleston Manufacturing Company to The Citizens of Charleston",<span class="pagenum"><a name="Page_182" id="Page_182">[Pg 182]</a></span> and +carries a contemporary flavor that is of service in an understanding of +the problem. Given almost entire, it reads:</p> + +<p>"The necessity of establishing manufactures in our city, not only as a +profitable means of utilizing capital, but more especially for furnishing +employment to many in our midst, has been long felt. To put this matter +into practical operation, a few gentlemen applied to the last Legislature +and obtained a most favorable charter for 'The Charleston Manufacturing +Company'.</p> + +<p>"The intention is to raise the capital necessary and to proceed forthwith +with energy and activity to erect and put into operation a cotton factory +and yarn mill which will be second to none in the South. The marked and +rapid success of the Charleston Bagging Company shows what can be done +here.</p> + +<p>"The undersigned, therefore, being those named in the charter and their +associates, lay the matter before you, and respectfully urge your +co-operation in carrying the work into effect.</p> + +<p>"For this purpose Books of Subscription to the Capital Stock of 'The +Charleston Manufacturing Company', under the charter granted by the last +Legislature, will be opened on Thursday next, 27th instant, at 10 o'clock +A.M., at Office of the Carolina Savings Bank, corner of East Bay and Broad +Streets, and continue open from day to day until the entire Capital stock +is <span class="pagenum"><a name="Page_183" id="Page_183">[Pg 183]</a></span>subscribed. Shares One Hundred Dollars each. Ten per cent. of the +amount subscribed will be called for when all the Capital is taken and the +Company organized. Further instalments will be called for as needed."<a name='fna_247' id='fna_247' href='#f_247'><small>[247]</small></a> +There follow the twenty names of those obtaining the charter.</p> + +<p>The dignified yet homely character of this advertisement is made even more +intimate by a dispatch from the capital, Columbia, to the same paper two +months later, in which it is announced that over $90,000 had been +subscribed in amounts of $2,500 and $5,000 to the project of "The Columbia +and Lexington Water-Power Company" (a plan for a large development of +cotton mills). The charter provided for a minimum capital of $500,000 and +a maximum of $1,000,000. "The present object (in opening books of +subscription before calling upon first subscribers for more) is to give +everybody in the State an equal chance.... It is designed to visit each +county of the State, with a view of making it as far as possible a State +institution. It is expected that the $500,000 necessary can be easily +secured in the State, but as much in addition will be welcomed to complete +the capital stock ... nearly every man who is able will contribute to<span class="pagenum"><a name="Page_184" id="Page_184">[Pg 184]</a></span> its +(the undertaking's) speedy fruition." There is added the significant +circumstance that "Governor Hagood will accompany the committee when they +go to Charleston (to open books there) and use his influence in behalf of +the enterprise."<a name='fna_248' id='fna_248' href='#f_248'><small>[248]</small></a></p> + +<p>The plant of the Pelzer Manufacturing Company is in the so-called +up-country of South Carolina, but its projectors were Charlestonians, and +Charleston was the financial center of the State and of the South, indeed, +at that time. Consequently books of subscription were opened in +Charleston,<a name='fna_249' id='fna_249' href='#f_249'><small>[249]</small></a> rather than in Greenville or Spartanburg, the little +cities they were then, near the water power which should drive the mill. +Ten per cent. of the amount subscribed would be required in cash.<a name='fna_250' id='fna_250' href='#f_250'><small>[250]</small></a></p> + +<p>The time necessary to secure the needed subscriptions<span class="pagenum"><a name="Page_185" id="Page_185">[Pg 185]</a></span> may be checked up +by following the optimistic notices that appeared in the paper from day to +day as the capital grew. In this instance books were opened on January +25th, and on the twenty-seventh it was published that "the subscriptions +to the stock ... amounted yesterday to $30,000, leaving but $50,000 to be +subscribed. The books remain open today...." Toward the Trough Shoals +(South Carolina) mill project of Walker, Fleming & Co., $50,000 was +subscribed in capital stock in one week.<a name='fna_251' id='fna_251' href='#f_251'><small>[251]</small></a> Subscriptions to the +Charleston Manufacturing Company, pursuant to the advertisement already +quoted, were first received on January 27th; by February 4th, 189 +subscribers had taken stock to the amount of $206,600.<a name='fna_252' id='fna_252' href='#f_252'><small>[252]</small></a> Two days later +the amount had reached $220,200 representing 195 shareholders.<a name='fna_253' id='fna_253' href='#f_253'><small>[253]</small></a></p> + +<p>Mr. Converse, one of the proprietors of the Glendale Factory, which had +proved itself successful, bought up the site of the Rolling Mill of Mr. +Boles, at Hurricane Shoals, seven miles from Spartanburg; the first +$200,000 was quickly subscribed for, and books of subscription for +$300,000 additional stock were opened January 1st; February 14th they were +closed, the amount having been taken.<a name='fna_254' id='fna_254' href='#f_254'><small>[254]</small></a></p> + +<p><span class="pagenum"><a name="Page_186" id="Page_186">[Pg 186]</a></span>This suggests a practise which was and still is frequent in the +development of cotton mills in the South, namely, that of increasing the +capital stock over the amount first proposed, as soon as the original sum +had been subscribed, or when subscriptions somewhat in excess of the +intended maximum had been received. In the case above, the additional +stock was larger by $100,000 than the amount first offered. The Cannon +Cotton Mill, Concord, North Carolina, was organized with a capital of +$75,000. Before the building was completed, the capital stock was +increased to $90,000 or so, most of the stockholders adding to the amount +of their subscriptions.<a name='fna_255' id='fna_255' href='#f_255'><small>[255]</small></a> The Seminole Mill, now erecting at Gastonia, +was designed to have $175,000 capital. Mr. Armstrong, its projector, saw +that more persons wanted stock, and he increased the capitalization to +$225,000. The plant was intended first to have 10,000 spindles, later +increased to 12,000 or 15,000 spindles.<a name='fna_256' id='fna_256' href='#f_256'><small>[256]</small></a> Similarly, some others of the +new mills under construction in Gastonia are capitalized above the amount +named in their charters.<a name='fna_257' id='fna_257' href='#f_257'><small>[257]</small></a></p> + +<p>A very usual occasion for increase in the capital stock<span class="pagenum"><a name="Page_187" id="Page_187">[Pg 187]</a></span> of a mill company +has been the enlargement of the plant. Thus the Enterprise Factory, +Augusta, Georgia, declared a 10 per cent. dividend and decided to increase +its capacity by 125 per cent. or more.<a name='fna_258' id='fna_258' href='#f_258'><small>[258]</small></a> In this case the entire +$350,000 extra capital stock was being negotiated for by M. J. Verdery & +Co., brokers of Augusta; it was understood that one man and his friends +would take stock to the amount of $140,000.<a name='fna_259' id='fna_259' href='#f_259'><small>[259]</small></a> If the statement of a +rather flambuoyant trade review of three years later may be trusted, the +entire stock of this mill after enlargement was $500,000 which would make +the increase in stock $200,000 greater than the original capital.<a name='fna_260' id='fna_260' href='#f_260'><small>[260]</small></a> It +is probable that the stock was doubled to bring it up to $500,000;<a name='fna_261' id='fna_261' href='#f_261'><small>[261]</small></a> +three months after the decision to increase the stock, it appears, all but +$50,000 had been secured, and this would be placed within the week. The +directors of the Louisville and Nashville Railroad took $95,000 of the +stock—"of course as individuals."<a name='fna_262' id='fna_262' href='#f_262'><small>[262]</small></a> Evidently, the plan of the brokers +did not carry through, and the mill corporation put its stock regularly up +for subscription.</p> + +<p><span class="pagenum"><a name="Page_188" id="Page_188">[Pg 188]</a></span>The mill projected by Walker, Fleming & Co., already mentioned, was +intended to have $100,000 capital as a beginning, this later to be +increased to $200,000.</p> + +<p>At a meeting of the organizers of the Salisbury Cotton Mills, held in +November of 1887, "The capital stock was upon motion fixed at not less +than $50,000, and not exceeding $100,000."<a name='fna_263' id='fna_263' href='#f_263'><small>[263]</small></a> A month later at a meeting +of the subscribers, it appeared that $66,400 had been subscribed.<a name='fna_264' id='fna_264' href='#f_264'><small>[264]</small></a> +Later the stock was increased; those soliciting subscriptions to the +original stock experienced no difficulty in securing increase of these +subscriptions. By March, 1893, the capital stock of the company had +reached $250,000.<a name='fna_265' id='fna_265' href='#f_265'><small>[265]</small></a></p> + +<p>This last instance accords with what was told me by a gentleman of wide +experience in the business, that the plants now having a stock of +$100,000, etc., got their large capitalization by selling additional stock +to the original subscribers at a reduction—say at 75 or 80 when the par +was 100. The ventures were profitable generally, and the stock was +maintained at its par value.<a name='fna_266' id='fna_266' href='#f_266'><small>[266]</small></a></p> + +<p>The character of the promoters of a venture always carries weight, but +this was peculiarly true in the establishment<span class="pagenum"><a name="Page_189" id="Page_189">[Pg 189]</a></span> of cotton mills in the +South. Today, truly prominent men are known all over this State, and all +over the section. Thirty-five years ago this was the fact even more than +at present; the signatures to prospectuses were important through personal +qualities as well as through business reputation. When it was said that +those back of the scheme to build a factory in York County, South +Carolina, were "among the most reliable and responsible men" in the +county, the statement probably carried as much earnest of good faith as +the accompanying notice that $25,000 toward $75,000 had already been +taken.<a name='fna_267' id='fna_267' href='#f_267'><small>[267]</small></a></p> + +<p>The size of the plant to be erected was given consideration in financing a +mill, though this did not enter to the extent that one would think. +Opposite views were held as to the practicability of financing small +mills. As far back as 1849 it seems natural to find a plan for financing a +mill, by which fifteen planters would take each $4,000 worth of stock, +select a site near their plantations, each detail three men, making a +building force of forty-five, with teams and an overseer and general +manager, the latter one of the stock-holders; these proceeding to put up a +wooden building of three rooms.<a name='fna_268' id='fna_268' href='#f_268'><small>[268]</small></a> A <span class="pagenum"><a name="Page_190" id="Page_190">[Pg 190]</a></span>persistence of the economy which +suggested this arrangement is reflected, perhaps, in an editorial of The +Daily Constitution, Atlanta, thirty years later, in which it is pointed +out: "The people of the South who have money to put into manufacturing +enterprises should build spinning mills. The South is not rich enough to +do much weaving, but there is no reason why it should not convert a good +part of the great crop into yarns.... There is plenty of surplus money in +the South with which to establish spinning mills.... We do not refer now +to mammoth mills, but to little neighborhood spinning mills."<a name='fna_269' id='fna_269' href='#f_269'><small>[269]</small></a></p> + +<p>The mills about Greenville are nearly all of considerable size. This is +due perhaps to the effect of the example of the failure of the Huguenot +and Campderdown mills, small ventures, both located within the city +limits, as contrasted with the success of Pelzer, built later, and in the +depths of the country. It is said to be the impression around Greenville +that the small mill is hard to finance; so far from considering the small +project suitable to the financial strength of the community in which the +plant is proposed to be located, the reason for the lack of favor for +small concerns was given the writer in the opinion that they could not +attract outside capital, and that <span class="pagenum"><a name="Page_191" id="Page_191">[Pg 191]</a></span>consolidations had recently resulted in +South Carolina from this fact.<a name='fna_270' id='fna_270' href='#f_270'><small>[270]</small></a> For different reasons, principally +considerations of managements, there is now a well discerned tendency in +the Carolinas, at least, back to the small mill.</p> + +<p>Mention has been made of the power of reputation in the financing of a +cotton mill. Not only was this stressed in suitable ways by those +concerned in securing funds directly, but it was used in another way. This +may be conveniently illustrated by the history of the great mill at +Albemarle, North Carolina. Some years ago this village was an isolated one +of five or six hundred inhabitants. A family of planters near the place, +the Efirds, wanted to see a cotton mill located at Albemarle. They were +probably as little able to attract capital as the village was uninviting +to the industrialist. In this situation, the Efirds approached J. W. +Cannon, of Concord, a town nearby, who had succeeded in the cotton +manufacturing business and had extended his interests to mills in other +places, and asked him to take the presidency of the mill proposed, and +subscribe to $10,000 of stock. Mr. Cannon was not much inclined to go into +the venture, but the Albemarle family showed determination. The plant +today is a mile long, and represents an investment of some<span class="pagenum"><a name="Page_192" id="Page_192">[Pg 192]</a></span> +$3,000,000.<a name='fna_271' id='fna_271' href='#f_271'><small>[271]</small></a> It is said that most of Mr. Cannon's mills outside of +Concord had birth in the minds of people of the several communities; for +instance, a merchant named Petterson interested him in a mill at China +Grove.<a name='fna_272' id='fna_272' href='#f_272'><small>[272]</small></a></p> + +<p>One of the most interesting cotton mills in the Southern States is that of +the Gaffney, South Carolina, Manufacturing Company. The mill was conceived +by a building contractor of the place while working upon churchs and +cottages in a nearby mill village, that of Clifton. When he had planted +his idea in the minds of the leading men of Gaffney, spurred them to local +subscription and then to seeking money at the North, and because receiving +small encouragement in New York and Philadelphia, their enthusiasm +subsided, Mr. Baker, considering home enterprise and outside assistance +unavailing, went to Mr. Converse, head of the successful Clifton Mill, and +asked him to take over the Gaffney project at the point at which it had +been dropped. Mr. Converse was aged, and felt himself overburdened with +mill cares, but he encouraged the Gaffney man in his ambition, saying that +mills in the South would pay better dividends than Northern mills, either +large or small.</p> + +<p><span class="pagenum"><a name="Page_193" id="Page_193">[Pg 193]</a></span>Meantime, however, Mr. Baker had come to know H. D. Wheat, the +superintendent at Clifton. The indomitable promoter had hard work to +persuade the practical-minded superintendent to leave his good position at +Clifton for the uncertain fortune of a factory at a town which had failed +to establish the mill itself, and could not interest Northern support; but +finally, Mr. Wheat agreed to raise $20,000 besides his own subscription, +to add to the subscriptions still in force at Gaffney, and to take charge +of the mill as its active president. The $20,000 was invested by friends +of Mr. Wheat at Clifton and at Kings Mountain, nearby. Directors were soon +elected, and the imported president with his contributions to the venture, +was installed.<a name='fna_273' id='fna_273' href='#f_273'><small>[273]</small></a></p> + +<p>At the commencement of the great period of cotton mill building in the +South, every town which could make any pretensions to ability to establish +a mill was engaging the utmost resources of the moneyed men it +had—capital was hardly seeking opportunities for investment. Sometimes, +however, a place with almost no resources and with only a few enterprising +citizens, perhaps, would advertise itself openly as an inviting chance. An +advertisement in the winter of 1881 read: "We will give to a Cotton +Manufacturing Company, that will organize and locate<span class="pagenum"><a name="Page_194" id="Page_194">[Pg 194]</a></span> at Landsford, S.C., +with a capital of $300,000 a site, 20 acres of land and 300 horse water +power." Those interested were directed to apply for particulars to three +gentlemen living respectively in Rock Hill, Landsford and Charleston.<a name='fna_274' id='fna_274' href='#f_274'><small>[274]</small></a> +These were doubtless promoters who had settled on this particular town as +worth effort, or who were burdened with real estate of no value unless the +town could be built up.</p> + +<p>But these instances were the exception at a time when everybody was too +much concerned with the cotton mill in his own town, to think of the needs +of another place. There is a notable instance of the bidding of one place +against another for a proposed cotton mill, however, in recent years. +Captain Ellison A. Smythe announced that he would put up a fine goods mill +as all of his interests in the Piedmont of South Carolina have prospered, +there was keen rivalry between Greenville and Laurens for the plant. There +were campaigns in both places, much enthusiasm being evidenced; Greenville +was able to offer the best proposition, and got the Dunean Mill.<a name='fna_275' id='fna_275' href='#f_275'><small>[275]</small></a></p> + +<p>In the methods of securing capital at home, two co-operative schemes are +to be considered. The plan that comes<span class="pagenum"><a name="Page_195" id="Page_195">[Pg 195]</a></span> first to mind as co-operative is +said by Mr. Holland Thompson book to have been often employed in the +building of cotton mills in North Carolina; shares would be of $100 par +value, made payable in weekly instalments of one dollar, fifty or even +twenty-five cents, thus attracting the very small investor—operatives +took shares under such an arrangement. The last payment plan requires +eight years for completion, as against four or two for the first plans; +those wishing to do so might pay cash, less six per cent. for the aver +payment-time, the discount bringing the share down to $89.60 plus.<a name='fna_276' id='fna_276' href='#f_276'><small>[276]</small></a></p> + +<p>The second mill—the Cabarrus—built by Mr. Cannon at Concord, North +Carolina, was financed in this manner. Its plant was an old wood-working +and iron establishment slightly modified to house cotton machinery; its +capital stock was only $15,000 one-half paid up, and the other half +payable in fifty cents weekly instalments, the whole to be paid in two +years. Mr. Hartsell of Concord, remembers seeing the old +secretary-treasurer of the mill going about the town with his collection +books under his arm.<a name='fna_277' id='fna_277' href='#f_277'><small>[277]</small></a> The Spartan Mills, Spartanburg, South Carolina, +were rected under a building and loan scheme which<span class="pagenum"><a name="Page_196" id="Page_196">[Pg 196]</a></span> gave the mill +management little ready money.<a name='fna_278' id='fna_278' href='#f_278'><small>[278]</small></a> Besides the expense of collecting the +small and frequent payments, serious disadvantages might result from such +a method of financing a mill. For instance, in the case of the Spartan +Mills, John H. Montgomery, the projector, was persuaded to buy the old +machinery of a mill at Newberryport, Massachusetts; he lacked capital to +purchase machinery otherwise, and the Newberryport mill took payment in +stock. The machinery thus installed was worn out, out of date, showed +quick deterioration and proved very expensive.<a name='fna_279' id='fna_279' href='#f_279'><small>[279]</small></a></p> + +<p>The other co-operative plan is said to have been followed in the case of a +good many South Carolina mills. All of those who might contribute to the +erection of the plant—dealers in lumber, paint, tin, brick, etc.,—would +be asked the question: "If you get this contract, how much stock will you +take?"<a name='fna_280' id='fna_280' href='#f_280'><small>[280]</small></a></p> + +<p>Some account has been given of the additional issues of stock on account +of extensions in plant. There is evidence<span class="pagenum"><a name="Page_197" id="Page_197">[Pg 197]</a></span> that very often, however, +increases in capacity were made through earnings and credit rather than by +the issue of more stock. Indeed, the latter method has been much more +frequently followed, if the opinion of one of the best informed of the +younger cotton mill men is to be taken.<a name='fna_281' id='fna_281' href='#f_281'><small>[281]</small></a> He recited in support of his +contention the typical case of the 5,000 spindle mill at Williamston, +South Carolina, which issued extra stock to $30,000 and increased its +spindleage to 15,000. Since then, the plant has grown to have 32,000 +spindles, its capital standing at $300,000; this was accomplished through +earnings and credit. It is fair to say that the normal capitalization of a +plant of 32,000 spindles would be something in excess of $600,000, +computing the cost at $20 to the spindle.</p> + +<p>The first two-story addition of the Gaffney Manufacturing Company was +rected upon earnings of the original plant in the first three years of its +operation.<a name='fna_282' id='fna_282' href='#f_282'><small>[282]</small></a> The finishing plant of the same mill, erected some years +later, had to be dismanteled and given over to looms because the +stockholders in the company would not give the president the required +support, and the debt incurred was pressing.<a name='fna_283' id='fna_283' href='#f_283'><small>[283]</small></a></p> + +<p><span class="pagenum"><a name="Page_198" id="Page_198">[Pg 198]</a></span>The Young-Hartsell Mill, at Concord, North Carolina, has been built up in +plant by putting earnings back into the factory. Considerable enlargement, +on the most approved lines, has recently been completed, the end of the +extension being weatherboarded to allow of easy further addition.<a name='fna_284' id='fna_284' href='#f_284'><small>[284]</small></a></p> + +<p>The capital stock of the Arlington Mill, Gastonia, organized by G. W. +Ragan and some of his friends who had withdrawn their holdings in the +Trenton Mill, at the same town, was over-subscribed in fifteen minutes. At +organization, the stock was fixed at $130,000 for 3,000 spindles; in three +years an additional stock dividend of $45,000 was issued, and the +spindleage increased to 9,500 and later still to 12,000.<a name='fna_285' id='fna_285' href='#f_285'><small>[285]</small></a> There +evidently was not here, as it has been intimated there sometimes was, an +impetus toward expansion by reason of over-subscription at the time of +organization, for the additional stock issued, presumably at least, went +automatically to the original subscribers. It was a case of extension from +earnings.</p> + +<p>The mills established at the opening of the era made frequently huge +profits, which made increases in size from earnings to the natural +course.<a name='fna_286' id='fna_286' href='#f_286'><small>[286]</small></a></p> + +<p><span class="pagenum"><a name="Page_199" id="Page_199">[Pg 199]</a></span>Also, just as earnings have in such cases quickened plant extension, so +the investment of profits back into the business has in turn increased +efficiency and earnings. The capital of the Salisbury Mill, as has been +said, has now reached $250,000, but much of the increase in size of the +plant has come by the agency of gains reinvested.<a name='fna_287' id='fna_287' href='#f_287'><small>[287]</small></a></p> + +<p>Having seen some of the ways in which capital was secured from Southern +sources, the paragraphs following deal with the means through which +capital was induced to come to the Southern cotton mills from without the +section.</p> + +<p>From a reading of the preceding chapter, the question might naturally be +asked: By just what methods did a Southerner anxious to establish a cotton +mill secure financial assistance at the North?</p> + +<p>Not a few Southern mills were projected by merchants, frequently small +country store-keepers, as they would be called; but it is to be borne in +mind that the proprietor of a general store in a rural community or in a +small town in the South occupies a position very different from that of +the small merchant elsewhere. The economy of the neighborhood pivots upon +him—he is the agent of the fertilizer manufacturers, and extends,<span class="pagenum"><a name="Page_200" id="Page_200">[Pg 200]</a></span> credit +for fertilizers and food until the cotton crop is gathered; he probably +markets the cotton when the bales are hauled. He is the link between the +great sphere of business without and the little world of affairs within. +What the country lawyer is as real estate broker and arbiter of landed +fortunes, that, and a great deal more, is the country merchant in all +other departments of material activity. Holding, as he did, the contacts +of the community with moneyed interests without, it was natural that the +merchant should often be the leader, and also natural that he should turn +to his mercantile connections for assistance. One case will illustrate how +this worked out.</p> + +<p>James W. Cannon was born at or near the little place of Concord, North +Carolina. He early went into a general store as clerk, and through +successive stages, largely aided by his attention to business and his +civility, he came to own a general merchandise business of his own in the +town. He was in the habit of buying brogans from the house of Albert +Stone; cloth he got from Leo Loeb, and he had an arrangement by which he +shipped raw cotton to William Wood and Son. He decided to build a cotton +mill at Concord—really the first at the place belonging to the great +period of establishment—and got some $60,000 in subscriptions to stock +locally. This was not sufficient capital, $75,000 being aimed for. Mr. +Cannon under these conditions went to Stone, to Loeb and to Wood and Son +and explained his plans. The mill would enable the town of Concord to +grow, and he could<span class="pagenum"><a name="Page_201" id="Page_201">[Pg 201]</a></span> do a larger business with each of them. Whether moved +by this reasoning, or influenced by the fact, that it was almost worth the +amount of the subscription to keep Cannon's business and good will, each +of the three firms subscribed to $5,000 worth of stock.<a name='fna_288' id='fna_288' href='#f_288'><small>[288]</small></a></p> + +<p>Judging from the statement made by an old gentleman who has seen the whole +development of Mr. Cannon's interests, he has held to these former +merchant-day connections, though he is now as far from country +store-keeping as could well be imagined. After explaining that Mr. Cannon +in the early days was merchandising and could get money from his +mercantile connections at the North, he said that retired wholesale +merchants of Philadelphia, New York and Boston have so much confidence in +him that they give him any amount of capital he needs.<a name='fna_289' id='fna_289' href='#f_289'><small>[289]</small></a></p> + +<p>Out of 1,287 shares of the Young-Hartsell Mill at the same town, 1,250 are +held by North Carolinians. The other 37 shares are owned in Baltimore. Mr. +Hartsell was born on a farm near Concord, and some thirty years ago came +to town and went in business. In this way he knew the Baltimore merchants +who hold 35 of the thirty-seven shares, the other two shares belonging now +to the son of one of these men.</p> + +<p><span class="pagenum"><a name="Page_202" id="Page_202">[Pg 202]</a></span>Of the two sources<a name='fna_290' id='fna_290' href='#f_290'><small>[290]</small></a> of outside assistance to Southern Cotton Mills, +cotton goods commission houses and manufacturers of cotton machinery were +more often appealed to for capital in financing a mill than were firms +with which the Southerner had mercantile relations. The influence of the +commission houses and machinery manufacturers upon the rise, development +and degree of success of cotton manufactures in the Southern States is of +the first rank of importance, and not the least interesting phase of their +connection with the industry is the way in which they were approached for +help.</p> + +<p>A South Carolinian, say, wishing Northern capital for a cotton mill which +he was projecting, would usually have associated with him some man who had +experience in manufacturing in the State. The manufacturer would introduce +the projector to the commission merchant in New York who was serving his +mill. The Southern promoter thus put upon the track would make the best +bargain in New York that he could, that is to say, find the commission +house which would take the largest block of stock and lend the most money. +He would, similarly, be introduced to machinery manufacturers, and might +induce several to become parties to his venture.<a name='fna_291' id='fna_291' href='#f_291'><small>[291]</small></a></p> + +<p><span class="pagenum"><a name="Page_203" id="Page_203">[Pg 203]</a></span>Commission houses and cotton machinery manufacturing companies were not, +however, making yarns and cloth. Other things apart, their business was +selling the product and supplying the means of production, rather than +manufacturing goods. They were willing, and sometimes anxious, to lend +their assistance to a proposed mill to get its business, but they were not +ordinarily interested in establishing mills. Consequently, the promoter +had to have his home money first. He would secure, say, for the mill of +ordinary size, $50,000 locally, and would go to the machinery people and +say he had this backing, asking whether they would sell him the machinery, +and what amount of the payment they would be willing to take in +stock.<a name='fna_292' id='fna_292' href='#f_292'><small>[292]</small></a></p> + +<p>The history of the relations of the Gaffney Manufacturing Company with +commission houses is instructive. When Mr. Baker commenced the agitation +in Gaffney for a cotton mill, A. N. Wood was doing a sort of private +banking and investment business in the work. A fund of about $50,000 was +subscribed, Mr. Wood made president of the organization, and a charter +applied for.<a name='fna_293' id='fna_293' href='#f_293'><small>[293]</small></a></p> + +<p><span class="pagenum"><a name="Page_204" id="Page_204">[Pg 204]</a></span>Mr. Wood went North to seek additional capital, going to Baltimore and New +York. In Baltimore he called upon Woodward Baldwin & Co., Mr. Baldwin was +very cordial, and when the plans of the Gaffney people had been explained +to him, took $5,000 of the stock right away, with no strings tied to the +subscription. It was not specifically understood that the firm was to have +the account of the mill, but Mr. Wood supposes Mr. Baldwin expected it, +and that probably it would have been given to his house.</p> + +<p>Mr. Wood introduced himself to the chief member of another firm, of whom +he knew as commission merchant for the Pacolet Manufacturing Company in +South Carolina. In this case, the promise of the account was wanted, but +to this Mr. Wood did not agree. Mr. Wood said that it was attempted from +the outset to take advantage of the position in which he was placed.<a name='fna_294' id='fna_294' href='#f_294'><small>[294]</small></a></p> + +<p>Having noticed to this extent the minutiae of securing assistance from +commission houses and machinery manufacturers, it will be interesting to +observe in general the part played by such firms in the establishment of +mills in the South. First of commission houses.</p> + +<p>It is possible to be deceived as to the wealth of Southern communities +thirty-five years ago by a recital of the capitalization<span class="pagenum"><a name="Page_205" id="Page_205">[Pg 205]</a></span> of the mills +they built, coupled with the statement that a large proportion of the +stockholders were local people, and that nearly all of the paid-up capital +was from the neighborhood or State. There might well be a greater number +of small local investors, and one or two Northern firms with quite as +large holdings as all these together; the capital paid in might be of +local origin, but only a small proportion might be paid up,<a name='fna_295' id='fna_295' href='#f_295'><small>[295]</small></a> the rest +representing the holdings of commission houses and machinery manufacturers +in one way and another. If it be asked how the mills hoped to succeed with +so little paid-up capital, the answer lies partly in the fact of reliance +upon earnings to take care of debt, and partly in the scarce provision of +working capital.</p> + +<p>The influence of the commission house on the Southern cotton mill is a +subject of the deepest interest, and this might be drawn out in some +detail under a discussion of the marketing of the product of the mills. +Whether the commission houses' participation, as marketing agents, or as +stockholders with a voice in the affairs of the company, was on the whole +helpful or detrimental is of concern where only incidentally as pertaining +to those involved in the launching of the enterprises. For<span class="pagenum"><a name="Page_206" id="Page_206">[Pg 206]</a></span> the present +purpose, that the commission merchant was an investor is enough, except +only for the consideration as to whether it were wise to invite his +connection in the first place.</p> + +<p>One practical-minded man declared that the mills could not have existed +without the commission houses, be their influence good or bad, and +dismissed the matter with this.<a name='fna_296' id='fna_296' href='#f_296'><small>[296]</small></a></p> + +<p>A mill president grown old in the business in North Carolina said that the +Southern mills could not have gotten along at all without the commission +houses at first; that not only in their establishment, but in selling +their product, they needed an influential agent.<a name='fna_297' id='fna_297' href='#f_297'><small>[297]</small></a> After explaining +that Northern commission houses had supplied much of the capital for the +developing of the cotton manufacturing in his region, another mill +president, and one who has had experience of every phase of the mills' +growth, said: "Their influence (that of the commission houses) was good; +you ought to praise always the bridge that carried you over."<a name='fna_298' id='fna_298' href='#f_298'><small>[298]</small></a></p> + +<p>The editor of one of the chief textile periodicals in North Carolina said +that there were cases where the commission houses hurt the profits of the +mills, but they did start the mills.<a name='fna_299' id='fna_299' href='#f_299'><small>[299]</small></a> Another North Carolinian, of +conservative turn of mind<span class="pagenum"><a name="Page_207" id="Page_207">[Pg 207]</a></span> and much practical knowledge, gave a parallel +statement, that even as a general rule the commission houses formerly had +a baleful influence, though this is no longer the case; that they have had +the effect of promoting the development of mills in the South.<a name='fna_300' id='fna_300' href='#f_300'><small>[300]</small></a></p> + +<p>A mill treasurer in what is perhaps the most progressive and ambitious +spinning district of the South, gave it as his belief that as a whole, +while there are commission houses and commission houses, their influence +on the Southern textile industry had been bad. Asked whether there were +not many Southern mills that would not have come into existence but for +the aid of the commission houses, he answered yes, but that such mills +were built as feeders for a commission house and not to earn money for the +local stockholders.<a name='fna_301' id='fna_301' href='#f_301'><small>[301]</small></a></p> + +<p>Reference has been made to the effort of Mr. Wood to secure capital from +commission firms for the Gaffney Manufacturing Company. He returned to the +South discouraged, and the mill project for Gaffney was dropped for the +time. When it was later revived, no subscriptions were sought from +commission houses. Mr. Wood said: "We wanted to be free and do as we +pleased. A mill is very unfortunate to be controlled by a commission +house.<span class="pagenum"><a name="Page_208" id="Page_208">[Pg 208]</a></span> have not done as well as others."<a name='fna_302' id='fna_302' href='#f_302'><small>[302]</small></a></p> + +<p>The South Carolinian well versed in the financial affairs and history of +cotton mills in the South, computes that in the cases where the mill +projector sought the commission house and machinery manufacturer, from 40 +to 50 per cent. of the total capital was supplied by them. Mr. Separtk, of +Gastonia, already quoted as opposed to the participation of commission +houses in the financial affairs of Southern mills, said that in the two +mills of which he is treasurer and the one of which he is vice-president, +no stock is owned by commission houses, and that "They can't get it." The +way to rid a mill of the influence of a commission house, he said, is to +pay what is owed. If this debt is held by the commission house in the +shape of a majority of the shares, they must be bought at an exorbitant +figure, but nonetheless bought.<a name='fna_303' id='fna_303' href='#f_303'><small>[303]</small></a></p> + +<p>One of the principal bankers of Raleigh asserted with some feeling that +the commission houses have been an incubus on the cotton mills of the +South; it is true, partially, that many mills would not have come into +existance without them, but it is also true that the commission houses put +into the hands of the mill projectors little real money; they would take +bonds or<span class="pagenum"><a name="Page_209" id="Page_209">[Pg 209]</a></span> advance working capital after the <i>capital</i> stock of the mill +was exhausted in erecting the plant, but when they advanced money, it was +usually on goods sent them to sell, and then only two-thirds of the value +of the goods would be advanced.<a name='fna_304' id='fna_304' href='#f_304'><small>[304]</small></a></p> + +<p>This statement is rather borne out by information given by a member of a +commission firm which has gone into the South with all its interests, and +would therefore be inclined, one would suppose, to lend sympathetic ear to +Southern mills in their financing problems, namely, that usually the +commission house stands to the mill in the position of creditor rather +than of shareholder, for it must have a liquid and not a fixed capital; +the commission house arranges loans, discounts loans, and lends +direct.<a name='fna_305' id='fna_305' href='#f_305'><small>[305]</small></a></p> + +<p>It would appear from one source that when a commission firm lent money to +a mill, it did not take a mortgage on the plant, for this would have +destroyed its credit. They had, in fact, hardly any security other than +the value of the plant.<a name='fna_306' id='fna_306' href='#f_306'><small>[306]</small></a></p> + +<p>A young lawyer whose firm has had considerable to do with suits over +cotton mill securities, referred to the fact that in the process of +starting a mill capital is often depleted<span class="pagenum"><a name="Page_210" id="Page_210">[Pg 210]</a></span> before goods are got on the +market; at this critical juncture, he said, come to the commission men. +Their part has not by any means always been for the good of the people of +the South. They get a breeches hold on the president of a mill. The mill +may in time go up, but they will have cleared on their commissions.<a name='fna_307' id='fna_307' href='#f_307'><small>[307]</small></a></p> + +<p>For a reason which will appear in a moment, the same importance, from a +financing standpoint, does not attach to the machinery manufacturers in +their relation to the Southern cotton mills as immediately applies in the +case of commission firms. There seems to be a strange diversity of opinion +as to the extent of the participation of machinery manufacturers in the +financing of the mills. A mill man of Anderson, South Carolina, said that +the machinery people have played a larger part than the commission houses +in the establishment of Southern mills; that the machinery business was at +a standstill in New England at the time of the great activity in mill +building in the Southern States, and the machinery manufacturers began to +look about for mills to equip.<a name='fna_308' id='fna_308' href='#f_308'><small>[308]</small></a> Another informant stated that the +machinery manufacturers are not found to be very heavy stockholders; that +the stock is sometimes not even in the name of the machinery +<span class="pagenum"><a name="Page_211" id="Page_211">[Pg 211]</a></span>manufacturing company, but is held by the president and directors of the +company.<a name='fna_309' id='fna_309' href='#f_309'><small>[309]</small></a> A third, whose testimony, however, may be questioned very +seriously on this point, went so far as to say that cotton machinery +manufacturers took no stock in the mills of the South to amount to +anything; nobody asked them to take stock; the machinery was bought +outright.<a name='fna_310' id='fna_310' href='#f_310'><small>[310]</small></a></p> + +<p>Whatever the extent of the participation of the manufacturers of the +machinery in the building of the mills in which it was installed, their +arrangement for payment seems to have included three means of +reimbursements—stock, cash and time notes; a mill might have purchased +machinery from several firms under such agreements.<a name='fna_311' id='fna_311' href='#f_311'><small>[311]</small></a> It is said that +those mills which bought their machinery for cash, rather than seeking to +make the machinery manufacturers to greater or less degree a party to the +venture, received rebates and many privileges and advantages, though the +mill men were assured, particularly those projecting new plants, that the +time payment method was just as advantageous to them.<a name='fna_312' id='fna_312' href='#f_312'><small>[312]</small></a></p> + +<p>While the fact might better find place in the discussion of the part +played by machinery manufacturers and commission<span class="pagenum"><a name="Page_212" id="Page_212">[Pg 212]</a></span> houses in the extension +of plants, it may be mentioned here, and in conclusion of this particular +topic, that Southerners projecting mills were sometimes encouraged, by the +offers of machinery manufacturers to sell machinery for stock and on time, +to make their plants too large.<a name='fna_313' id='fna_313' href='#f_313'><small>[313]</small></a></p> + +<p>The opinion was held by a well-informed man very close to the whole +Southern industry that the influence of the machinery manufacturers has +been good, except that they caused the mills to expand beyond wise limits; +they have not exploited the mills otherwise.<a name='fna_314' id='fna_314' href='#f_314'><small>[314]</small></a></p> + +<p>It has been said above that the same importance did not attach, from a +financing standpoint, to the taking of stock by machinery manufacturers as +applied in the case of commission houses. The reason for this is that, +generally speaking, the machinery manufacturers have not held their shares +for long, while the commission firms have usually been stockholders over a +period of years, their holdings sometimes diminishing and sometimes +decreasing, but their influence in the affairs of the mills being always +felt. A banker's experience was that generally machinery manufacturers +taking stock in a mill sold it almost <span class="pagenum"><a name="Page_213" id="Page_213">[Pg 213]</a></span>immediately at a discount; it is +not reasonable to suppose that a machinery manufacturer would wish to take +stock; he did it in order to sell his machinery.<a name='fna_315' id='fna_315' href='#f_315'><small>[315]</small></a> An interesting +explanation of the statement that the machinery manufacturers were heavier +stockholders in the Southern mills than the commission houses is implied +in a remark made by Mr. Thackston, of Greenville, a stock broker already +quoted; the machinery men must get their profits quickly; these they +received partly in the cash payment, two-thirds of the price of the +machinery; their shares may have been numerous for either or both of two +reasons—they may have been forced to take considerable stock in +consequence of making the largest possible sale of machinery, which in +turn was made necessary if they were to get a profit out of the proportion +of the price paid in cash, or knowing that they must look forward to a +quick sale at discount, they figured this into their price to the mill +man, and counted upon deriving a profit from as large a number of shares +as they could get in payment.<a name='fna_316' id='fna_316' href='#f_316'><small>[316]</small></a></p> + +<p>The commission men, on the other hand, must expect to get their returns +slowly,<a name='fna_317' id='fna_317' href='#f_317'><small>[317]</small></a> either through dividends as shareholders, or through profits +from the handling of the product of<span class="pagenum"><a name="Page_214" id="Page_214">[Pg 214]</a></span> the plant, or by both of these means; +in the former case, the necessity of their holding their shares is +obvious; in the latter case, to have a voice in the affairs of the mill, +particularly in the annual elections and in instances where increased +profits from commissions must come through extension of output, active +connection with the affairs of the mill must be maintained.<a name='fna_318' id='fna_318' href='#f_318'><small>[318]</small></a></p> + +<p>The machinery men have in a few cases held the stock they have taken in a +mill.<a name='fna_319' id='fna_319' href='#f_319'><small>[319]</small></a> An instance of this is seen in the fact that D. A. Tompkins, +until a few years ago, the representative in Charlotte, North Carolina, of +many Northern machinery manufactures, was obliged to have sold two or +three mills to which he had supplied machinery and taken payment partly in +stock; ordinarily the machinery manufacturers would not stay in long +enough for the first flush of establishment to dwindle to failure, taking +away all possibility of sale with minimum discount losses.<a name='fna_320' id='fna_320' href='#f_320'><small>[320]</small></a></p> + +<p>Another case in which the machinery manufacturers have retained their +stock, and a very notable one, is that of the great Loray, known as the +"Million Dollar Mill," at Gastonia,<span class="pagenum"><a name="Page_215" id="Page_215">[Pg 215]</a></span> North Carolina. The mill is +controlled by machinery makers, holding preferred stock, of which there is +an actual majority; they became thus heavily involved when the mill was +reorganized incident to the doubling of its capacity, to which more +detailed reference appears later. The president of the mill is a +representative of a large machinery manufacturing concern, and, in the +affairs of the mill, speaks for another great firm.<a name='fna_321' id='fna_321' href='#f_321'><small>[321]</small></a></p> + +<p>Before concluding this division of the subject, it is proper to say +something of borrowing particularly from banks, in the financing of the +mills. Soon after the outbreak of the war in Europe, the greatest of the +cotton mill mergers in the South came to disruption. A committee +representing New England manufacturers made an investigation into the +affairs of the mills concerned in the combination and found that, in its +opinion, the mills of the South have an advantage over mills in other +parts of the country, particularly New England, amounting to 25 per cent. +in labor, and 50 per cent. in respect to taxes. The statement was made by +the committee that, in spite of these superiorities of situation, the +cotton mills in the South make less than the mills of New England because, +in considerable measure,<span class="pagenum"><a name="Page_216" id="Page_216">[Pg 216]</a></span> of poor financing, particularly poor borrowing +facilities; their credit is not good.<a name='fna_322' id='fna_322' href='#f_322'><small>[322]</small></a></p> + +<p>Northern mills can borrow money frequently at 2 or 3 per cent. less than +Southern mills even today, though the credit of the Southern manufacturies +has steadily risen. It is true that New England mill paper will sell +cheaper, almost invariably, than Southern mill paper.<a name='fna_323' id='fna_323' href='#f_323'><small>[323]</small></a></p> + +<p>In spite of this disadvantage, however, if its credit is good, a Southern +mill can borrow money at 4½ or 5 per cent.</p> + +<p>It was formerly, early in the period, frequently the case that a mill +company borrowed money to augment local subscriptions and the assistance +given by commission houses and machinery manufacturers, to put up the +plant.<a name='fna_324' id='fna_324' href='#f_324'><small>[324]</small></a> Borrowing for this purpose is not often done today—the time +of very large earnings, due to superior local advantages unmarred by +competition, and to the peculiar conditions of manufacture then, which +made it possible to pay off a plant debt, is passed; money is still +sometimes borrowed for extensions of plant, however. But while it was once +a rule to borrow all the working capital, in addition probably to some of +the fixed capital, working capital<span class="pagenum"><a name="Page_217" id="Page_217">[Pg 217]</a></span> has not passed from this category; the +mills still borrow working capital at certain periods.<a name='fna_325' id='fna_325' href='#f_325'><small>[325]</small></a></p> + +<p>Richmond has done more than any Southern city in recent years, not +excepting Baltimore, to assist the cotton mills of the section in their +operation and growth. The mills with which one young official is +connected, centering about Anderson, South Carolina, have at some seasons +of the year owed Richmond as much as $3,000,000 or even $4,000,000. He +said that the First National Bank of Richmond, probably has more Southern +cotton mill paper than all the banks of Atlanta combined.<a name='fna_326' id='fna_326' href='#f_326'><small>[326]</small></a></p> + +<p>The next paragraphs consider the principal channels through which capital +came to the development of the Southern industry from outside sources, +more or less of its own accord, rather than being the subject of +solicitation on the part of the Southern manufacturers.</p> + +<p>Undoubtedly, one of the chief influences contributing to the physical +growth of the cotton manufacturing industry of the South has been the +willingness, perhaps the eagerness, of commission firms and manufacturers +of cotton machinery to encourage enlargements and extensions of plants; +and in the enumeration<span class="pagenum"><a name="Page_218" id="Page_218">[Pg 218]</a></span> of counts against these houses, this consideration +figures in the mind of the Southern mill man. When the second and +effective agitation for a cotton mill at Gaffney, already referred to, was +proving successful, it was determined not to seek aid from commission +merchants because they "—want too many enlargements; they want more +goods; the more they sell, the more they get. This does not always suit +the local stockholders."<a name='fna_327' id='fna_327' href='#f_327'><small>[327]</small></a></p> + +<p>An interesting allusion, showing the effect of the desire for enlargment +on the part by commission houses and machinery manufacturers, is contained +in an Augusta dispatch to The News and Courier, Charleston, in April, +1881. "At the meeting of the Sibley Manufacturing Company today (it was +the first annual meeting of the stockholders)<a name='fna_328' id='fna_328' href='#f_328'><small>[328]</small></a> it was decided to +increase the capital stock to one million dollars. Stock for the +additional amount will first be offered, and, if this is not promptly +taken, seven per cent. bonds will be issued." The resolution for the +increase was offered by Mr. Samuel Keyser of New York, and seconded by Mr. +David Sinton, of Cincinnati, two of the largest stockholders in the +company.<a name='fna_329' id='fna_329' href='#f_329'><small>[329]</small></a> Mr. Keyser and Mr. Sinton<span class="pagenum"><a name="Page_219" id="Page_219">[Pg 219]</a></span> were two of the six directors of +the company.<a name='fna_330' id='fna_330' href='#f_330'><small>[330]</small></a> The mill was first planned to be three stories high, +with 23,936 spindles and 672 looms; the doubled capitalization was to +allow of an increase of stories to four, in spindleage of 30,000, and in +looms to 1,000; $66,500 was proposed to be spent on the village-tenements, +operatives' homes, boarding house, etc.<a name='fna_331' id='fna_331' href='#f_331'><small>[331]</small></a> While there is no specific +evidence to show that these directors represented commission houses or +machinery manufacturers, or that they would take the seven per cent. bonds +in case the community would not absorb the additional stock to be issued +first,<a name='fna_332' id='fna_332' href='#f_332'><small>[332]</small></a> indications point to this having been the case.</p> + +<p>It has been seen how the builders of the Gaffney Manufacturing Company's +first plant refrained from including commission merchants in the venture, +and still earlier in this chapter it was said that the two-story addition, +next built, was a product of the earnings of the original plant in its +first three years of operation. When, however, the third addition to the +plant was made, a great mill costing $800,000, the persistence of the +projectors was weakened by the four years since the first<span class="pagenum"><a name="Page_220" id="Page_220">[Pg 220]</a></span> mill was +erected, or perhaps success had altered judgment, with some local +subscriptions, the machinery people took a considerable amount of +stock.<a name='fna_333' id='fna_333' href='#f_333'><small>[333]</small></a></p> + +<p>A striking case here is that of the Rock Hill, South Carolina, Cotton +Factory, "the 'Pet' of the town," it was called by the correspondent of a +State newspaper, who continuing said: "This factory is owned and +controlled by the citizens of the town, except $15,000 in stock owned in +Charleston. It has a capital of $100,000 has over 6,000 spindles, with +1,500 more to be added in a few days. The best evidence of its success is +that not one dollar of its stock can be bought." This clearly, was a mill +born of local effort, with about the right capitalization for a plant of +its small size. The conclusion of the notice, coupled with information +taken from the same paper of two days later date, is significant: "It is +the intention of the company, at an early day to run the factory day and +night in order to keep up with its orders. The company, I learn, expect to +increase their stock to $200,000 and build a duplicate factory."<a name='fna_334' id='fna_334' href='#f_334'><small>[334]</small></a> A +large part of the stock for this enlargement was subscribed by Northern +capitalists.<a name='fna_335' id='fna_335' href='#f_335'><small>[335]</small></a></p> + +<p><span class="pagenum"><a name="Page_221" id="Page_221">[Pg 221]</a></span>The circumstances attending the enlargment of the Loray Mill, at Gastonia, +have been alluded to in another connection, John F. Love, a Gastonia man, +and the son of R. C. G. Love, who had been very prominent in the Gastonia +development, was the primary projector of the mill, he having a larger +part in the enterprise than G. A. Gray, the greatest of the Gastonia mill +builders. He got the building up, but the factory had not commenced +operation, when the company had to be reorganized. It was intended when +the mill was started to have 25,000 spindles; it was now wished to +increase the spindles to 50,000. The local investors were scared off by +this proposal, but the machinery manufacturers encouraged the enlargement, +supplying the machinery and taking preferred stock in payment. The Whitin +and Draper companies own most of the stock of the mill, and the Whitin +representative in Charlotte is president of the mill. Commission houses +hold some of the stock. The Loray Mill is the largest and the poorest in +Gastonia; it makes coarse cloth from the local short-staple cotton on some +2,000 looms,<a name='fna_336' id='fna_336' href='#f_336'><small>[336]</small></a> while the small mills built by local capital for the +most part are making good profits from some of the finest yarns, of +long-staple cotton, spun anywhere in the Southern States.</p> + +<p><span class="pagenum"><a name="Page_222" id="Page_222">[Pg 222]</a></span>It has not always been the machinery manufacturers alone or together with +the commission houses who facilitated the installation of more looms and +spindles. Sometimes the ends aimed at by the commission merchants could be +accomplished only through machinery, and they have been willing to +undertake the financing of the enlargements or alterations in plant +singly. The so-called Plaid Trust was sought to be formed; it was to +handle the plaids of all the Southern mills, and was to be a New Jersey +corporation. The plan did not carry, and the Cone Export and Commission +Company went into the Southern field to handle the products of the mills +generally. The older sheetings and plaids had been sold largely in the +South, or almost so; the commission firm, to supply a larger trade, found +it must re-organize the product of its client mills. It was attempted to +persuade a mill at Durham, North Carolina to increase its denim output, +but this was not done. In order to provide canton flannel, a new goods for +the South, the commission house induced some interests to establish a mill +at Greensboro, North Carolina. This prospered, and the house itself built +a denim mill at the same place. All this time the mills were being urged +to diversify their product, and the commission firm was financing them in +the machinery changes which frequently had to be made. The client mills +served were slow in establishing, as the commission firm urged them to do, +individual finishing plants, and until this<span class="pagenum"><a name="Page_223" id="Page_223">[Pg 223]</a></span> growth came about, the +Southern Finishing Mills, founded by the Cones at Greensboro, served them; +it was discontinued as a finishing plant when the mills had their own +finishing works, which they presently built and operated +successfully.<a name='fna_337' id='fna_337' href='#f_337'><small>[337]</small></a></p> + +<p>There is another way in which unsolicited outside capital frequently has +lodged in the Southern mills. The conditions under which this would come +about are well described by a banker now in Richmond and formerly the +president of the Chamber of Commerce in Raleigh, North Carolina; "Usually +the people who made the spirit for cotton mills in this way (through +appeals to town pride and by town rivalry) were those least able to +participate financially. Many mills started without sufficient capital and +never did have enough till they failed in the hands of the original +promoters and were bought up by other people, those who had been +responsible for the enterprise losing out entirely."<a name='fna_338' id='fna_338' href='#f_338'><small>[338]</small></a> Thus as far back +as 1882 Colonel Walter S. Gordon, one of the projectors of the Georgia +Pacific Railroad, purchased the Stansbury Cotton Mills, Carrollton, +Mississippi, which cost originally $210,000. "The Georgia Pacific +Railroad", says the notice of the purchase, "will run almost by its doors, +and will<span class="pagenum"><a name="Page_224" id="Page_224">[Pg 224]</a></span> give competition in freights."<a name='fna_339' id='fna_339' href='#f_339'><small>[339]</small></a> Evidently here was a mill +which was commenced by local effort and had declined until it could be +bought at a lower figure than its cost and held out the prospect of +becoming profitable by the coming of new transportation facilities.</p> + +<p>The Kessler Mill, the third built at Salisbury, North Carolina, offers a +case in point. The first mill built in the place was a produce of the most +whole-hearted local support centering about community pride; the second +mill was an outgrowth of the success of the first, and was advantaged by +the spirit aroused by the first mill, not too far spent. The Kessler Mill +was organized by a faction which split off from the projectors of the +first enterprise; local capital already seriously depleted was not quick +in offering because of lack of interest in the project.<a name='fna_340' id='fna_340' href='#f_340'><small>[340]</small></a> Under these +circumstances the mill ran an indifferent course until taken over by a +large manufacturer of a nearby town, who could command outside +capital.<a name='fna_341' id='fna_341' href='#f_341'><small>[341]</small></a></p> + +<p>A mulatto started a cotton mill at Concord in the same<span class="pagenum"><a name="Page_225" id="Page_225">[Pg 225]</a></span> State; no white +people of the place took shares; the negroes all over the State who +subscribed were allowed to pay in little instalments. The operatives were +negroes. The promoter was faithful to the enterprise, but came to be +heavily in debt, foreclosure followed on ill success, and the mill passed +to the hands of the same capitalist who took over the Kessler Mill of +Salisbury.<a name='fna_342' id='fna_342' href='#f_342'><small>[342]</small></a></p> + + +<p> </p><p> </p> +<hr style="width: 50%;" /> +<p><span class="pagenum"><a name="Page_226" id="Page_226">[Pg 226]</a></span></p> +<h2><a name="CHAPTER_VI" id="CHAPTER_VI"></a>CHAPTER VI</h2> +<p class="center"><span class="large"><i>FINANCING THE MILLS (Continued)</i></span></p> + +<p>An eminently successful mill president in Augusta was full of pessimism +toward all the problems broached to him, but three characteristic +sentences as to the capacity of Southern cotton manufacturers for +financial administration fit the case of too many mill officials, +undoubtedly:</p> + +<p>"The people of the South have got no business sense; I am a Southern man, +and I say that. Back yonder before the war what money they had was in land +and niggers. They knew nothing about financial management on close +make-or-lose propositions." This judgment is borne out by that of one of +the foremost newspaper editors of the South, who is also a large investor +in cotton factories, who said: "The history of the industry abundantly +vindicated what Edward Atkinson said about the South not knowing the +difference between a penny and a nickel. None of the projectors, with the +exception of H. P. Hammett and a few like him, could carry to the mills +more than a general business and executive capacity." Because of +prosperous conditions, he said, most of them made money in their ventures, +despite their lack of business experience, but he added "... when +depression came, when it was necessary to discriminate between a penny and +a nickel, the mill went to blazes. It was the exceptional man who could +endure the test of the penny rather than the nickel."</p> + +<p><span class="pagenum"><a name="Page_227" id="Page_227">[Pg 227]</a></span>Similarly, a Charlestonian who had just returned to the city after +attending the reorganization of one of the most famous mills in the South, +in which he is a heavy investor, was moved to declare: "Mismanagement and +incompetency (the Southern people are the poorest business men in the +world with a few exceptions) ... are responsible for most failures."</p> + +<p>Mr. August Kohn, in Columbia, who is himself a broker and the historian of +the South Carolina mills, while recognizing the fact of these shortcomings +in Southerners, as obtaining in the past and yet not overcome, held out a +more hopeful view for the future: "Lack of capital and lack of trained +management have been the great difficulties where mills have failed. We +are developing management of the trained sort in experience and in the +improvement in the business tone of our people."<a name='fna_343' id='fna_343' href='#f_343'><small>[343]</small></a></p> + +<p>With this introduction, it is convenient under the general topic of +financial administration, to dispose of several random points at the +outset of the chapter.</p> + +<p>Until the outbreak of the European war, two great cotton mill combinations +in North and South Carolina, were those controlled by Mr. James W. Cannon, +and centering about Concord and Kannapolis, North Carolina, and that of +the late Mr. Lewis W.<span class="pagenum"><a name="Page_228" id="Page_228">[Pg 228]</a></span> Parker, with principal offices at Greenville, South +Carolina. The former consists of thirteen plants, and the latter, which is +no longer in existence, once numbered as many as sixteen mills. These +combinations were financed on opposite plans. A gentleman trained by Mr. +Parker, and at one time in a leading position in the management of the +mills in the Parker Merger, so called, explained that "... Lewis Parker in +his merger thought that amalgamation would reduce over-head expense; that +he could get cheaper money and cheaper supplies by buying in quantities." +He "... was offered immense sums of money at 3 per cent. when his merger +went together, although before he had never gotten money at least than 5 +per cent. for the individual mills."</p> + +<p>In distinction from this plan, the Cannon mills have not been constituted +into a merger in the same sense, though they are all under the presidency +of Mr. Cannon, who said: "The management of each of the ... mills is +distinct, though there are practically the same stockholders in all the +mills. Lewis Parker had a merger, and tried to run it all from one office. +my view is that each mill must have its own management and separate +attention to secure success." He admitted that "There is not much saving +on concentration where each corporation is a separate organization. Each +mill has its own directors. Each mill must stand on its own financial +strength. In many instances where the quantity is large, supplies are +purchased for all the mills<span class="pagenum"><a name="Page_229" id="Page_229">[Pg 229]</a></span> together, but where the quantity is less, +this is not done."<a name='fna_344' id='fna_344' href='#f_344'><small>[344]</small></a></p> + +<p>These two plans are brought nearer together, however, by Dr. Beattie's +opinion that in practice Dr. Parker's idea of the saving to be derived +from the merger would not work out, from the fact that all officers and +higher employees of the combination would want increased pay for +additional work, and not in proportion to the extra labor and +responsibility imposed.<a name='fna_345' id='fna_345' href='#f_345'><small>[345]</small></a> To this is to be added the caution that Mr. +Cannon probably does, in borrowing and in administration generally, +accomplish many economies not indicated in his statement.</p> + +<p>An editor said that there was no "graft" particularly in the promoting of +the mills; that the minutest details of an enterprise were watched by the +people of the community. This tends to be a confirmation of the view the +writer brought to take of the development of the industry in the South, +that it was to a larger extent the child of the public initiative and +concern than most economic movements.</p> + +<p>Mr. Thompson says that "The North Carolina mills have been almost +invariably managed honestly in the interest of all<span class="pagenum"><a name="Page_230" id="Page_230">[Pg 230]</a></span> the stockholders."<a name='fna_347' id='fna_347' href='#f_347'><small>[347]</small></a> +This is true of the entire South. There have, however, been two instances +of fraud, one chargeable to Northern selling agents, but the other, +unhappily, though also inexplicably, the result of wrong-doing on the part +of a Southern man who had drawn together a number of mills. The former +case was one in which a New York commission firm which had taken the +president of a successful plant under its patronage, and placed him at the +head of a mill in which the firm was sinking large sums, was angered at +his effective attempts to free the second mill from the influence of the +selling agents, and sought vengeance by ruining the original mill of which +he was president. In the second instance, it is said, the president of the +merger, during years in which his associates and the general public had +every confidence in him, had been owing, unknown to a soul, $400,000 to +the holding company and to the constituent mills. When there was a +directors' meeting of the holding company, the constituent mills would +appear to be the ones involved, and when the several companies met, the +sum seemed due to the general company. One of his intimate co-workers +stated that "His failure shook this whole section, not only in a business<span class="pagenum"><a name="Page_231" id="Page_231">[Pg 231]</a></span> +way, but in a moral way."<a name='fna_348' id='fna_348' href='#f_348'><small>[348]</small></a> And of both incidents, it was believed by +another that to them was attributable a loss of interest by the Southern +communities in mill building.</p> + +<p>The depression following the panic of 1873 gave trouble to most of the +cotton mills established in the years before the period of the industrial +revival. During the hard times, for instance, some of those who had gone +into Colonel Hammett's enterprise for the Piedmont Factory declined to pay +their subscriptions. For the three months during which the machinery was +being installed, the only pay the workmen got was credit for groceries at +a small store in Greenville, two officers of the company giving their +individual note of $500 as guarantee.<a name='fna_349' id='fna_349' href='#f_349'><small>[349]</small></a> Colonel Hammett drew upon every +resource of business and personal friendship to tide the venture over from +1873 to 1876.<a name='fna_350' id='fna_350' href='#f_350'><small>[350]</small></a> He went so far as to mortgage his horses and carriage +to buy the belting for the plant.<a name='fna_351' id='fna_351' href='#f_351'><small>[351]</small></a></p> + +<p>In some of the mills, the treasurer has the largest part<span class="pagenum"><a name="Page_232" id="Page_232">[Pg 232]</a></span> in financial +administration. In such cases he is frequently a younger man, a product of +the newer South, who has pushed his way up in the enterprise to the +position of real power, leaving the president, who is perhaps a man better +equipped in community esteem than in specific training, as nominal head of +the concern. This has happened at Gastonia, North Carolina, a particularly +progressive spinning place. But in most of the companies, especially the +smaller concerns, the president is in chief control of financial affairs. +He often stamps his personality deeply on every department of the business +of the mill and village and region even. A case in point is that of Mr. +Charles Estes, when interviewed 98 years old, and for twenty years before +his retirement in 1901, president of the John P. King Manufacturing +Company, Augusta. With some show of pride, he related how during his +active career the manager of the R. G. Dunn commercial agency in Augusta +one day called him into the office and let him see the report of the King +Mill. It read: "John P. King Mfg. Co. Capital Stock $1,000,000. 3 per +cent. semi-annual dividends. President calls directors together once in +six months and tells them what he has done." "And that was the way I ran +the mill," he declared.<a name='fna_352' id='fna_352' href='#f_352'><small>[352]</small></a></p> + +<p><span class="pagenum"><a name="Page_233" id="Page_233">[Pg 233]</a></span>The Salisbury, N.C., Mill has a singular plan. Financial administration is +concentrated in the hands of a finance committee composed of the +president, treasurer and agent, or manager. The directors do about as the +finance committee indicates; they hold a less important place because of +the ill health of several of their number. Though nominally the whole +finance committee passes on questions, the president does not attend +regularly, and one of the directors not on the committee always agrees in +the action of the smaller group.<a name='fna_353' id='fna_353' href='#f_353'><small>[353]</small></a></p> + +<p>The effect of strong personality in a promoter and of the business +reputation of his enterprise upon impressionable Southern communities has +been mentioned in a previous report. This came out clearly in the ease +with which money could be borrowed. It was said by an old gentleman who +knew Colonel Hammett in South Carolina very well that "The few capitalists +we had then (we didn't have many) just came to his assistance whenever he +asked them."<a name='fna_354' id='fna_354' href='#f_354'><small>[354]</small></a> With respect to certain wholesale merchants of New<span class="pagenum"><a name="Page_234" id="Page_234">[Pg 234]</a></span> +York, Philadelphia and Boston, the writer was made to believe that they +have so much confidence in a particular North Carolina manufacturer, that +they give him any amount of capital he needs.<a name='fna_355' id='fna_355' href='#f_355'><small>[355]</small></a> Mention has already +been made in another connection, of the fact that Mr. Parker was offered +large sums of money at 3 instead of 5 per cent. when he broached his +merger successfully. The recent depression of the famous Graniteville +mill, one of the first in the South, was accounted for by the statement +that everybody was ready to lend money to Graniteville as an old and +reliable mill, and never thought of requiring it back, until all at once +all the lenders wanted their money, and this fortuitous trend made +reorganization necessary.<a name='fna_356' id='fna_356' href='#f_356'><small>[356]</small></a></p> + +<p>During the war the old Augusta Factory was sold into new hands at, +ostensibly, $200,000. The new company capitalized the plant at $600,000, +about what it was worth. It must have been a device to lend financial +prestige to the mill that Governor Jenkins of Georgia was given $100,000 +stock for his influence as a director. He did nothing to earn this, was +the writer's assurance.<a name='fna_357' id='fna_357' href='#f_357'><small>[357]</small></a></p> + +<p><span class="pagenum"><a name="Page_235" id="Page_235">[Pg 235]</a></span>Perhaps it was to facilitate financial management of his mill that William +C. Sibley preferred New York and Cincinnati subscriptions to large blocks +of stock, to local subscriptions in smaller amounts, when soliciting +backing for the Sibley Mill at Augusta.<a name='fna_358' id='fna_358' href='#f_358'><small>[358]</small></a></p> + +<p>Turning now from the subject of financial administration of the mills to +that of profits; it is not clear that gratifying earnings were usually due +to good management; it is, however, true that poor profits or no profits +were due oftener than otherwise to faulty executive control. It is meant +by this to indicate that the industry in the South has shown itself, on +the side of profitableness, singularly responsive to the material +condition of the section, and to the state and trend of public opinion. +The degree of success of the mills has displayed the fundamental fact that +the South has in the past forty years been above all else in a process of +growth, and has given fresh proof of the intimate connection between the +fortunes of the companies and the changes in the whole section—economic, +mental and spiritual. The profits of the mills have constituted a good +barometer to the evolution of the South since Reconstruction. Graphically +represented, the earnings of the plants would exhibit a curve of<span class="pagenum"><a name="Page_236" id="Page_236">[Pg 236]</a></span> decided +aspect. It is sought by specific references to make this curve appear, and +afterwards to sum up the results with several reasons therefore.</p> + +<p>Tompkins, by many believed to have been the best authority on cotton +manufacturing in the South, wrote: "It has been abundantly proved by +experience in the Carolinas that cotton mills on every class of goods +manufactured there, can make a profit of 10 to 30 per cent. This has been +done by the smallest as well as the largest mills on the coarsest and the +finest yarns, single as well as twisted; and on the heaviest as well as +the lightest weight cloths; and on dyed and undyed yarns and cloths. The +variation in profit between 10 and 30 per cent. is caused by variation in +prices of cotton and of manufactured goods, and also by variation in +management."</p> + +<p>In another passage he has said: "From the experience of the best mills +that have been running in the South for twenty years and over, and which +have always been kept well up to date, it would appear that about 15 per +cent. is the average annual profit in clear money for the whole +time."<a name='fna_359' id='fna_359' href='#f_359'><small>[359]</small></a></p> + +<p>The writer was given the opinion by Mr. Thackston of Greenville, South +Carolina, in whose knowledge and judgment great<span class="pagenum"><a name="Page_237" id="Page_237">[Pg 237]</a></span> reliance is put, that for +the last ten years the average earnings for well-managed Southern mills +have been $2.50 per spindle, which, reckoning the average cost of the +plants at $20 to the spindle (leaving aside other capital invested) is a +profit of 12.25 per cent.<a name='fna_360' id='fna_360' href='#f_360'><small>[360]</small></a></p> + +<p>A banker of Winston-Salem, which is an industrial community, could not +understand how the Southern mills succeeded "as well as they have." When +there were mentioned to him several mills which have been consistently +profitable, he found special advantages accountable for their favorable +showing. In one case it was tidewater freight rates, in another skilful +cotton buying by a manager of long experience. It was his belief that the +average profits of Southern mills from 1880 to 1914 (omitting, that is, +the years since the outbreak of the war) were not as much as 10 per +cent.<a name='fna_361' id='fna_361' href='#f_361'><small>[361]</small></a></p> + +<p>So much for the gains over the whole period. The earnings at several +points in the development of the industry show a wider range.</p> + +<p>A nephew of Mr. Tompkins, quoted above, who has succeeded in considerable +measure to his uncle's manufacturing interests, and who is of too +practical a turn of mind to be affected by the<span class="pagenum"><a name="Page_238" id="Page_238">[Pg 238]</a></span> enchantment of distance, +speaking of the success of mills right at the opening of the era, said +that some made from 30 to 70 per cent. profit.<a name='fna_362' id='fna_362' href='#f_362'><small>[362]</small></a> In a previous chapter, +it has been seen how many mills at this juncture increased their plants +from earnings. A Utopian tinge may be suspected in an article appearing in +The Daily Constitution, Atlanta, in March of 1880, which, in urging upon +Southern communities the establishment of spinning mills, stated: "At +prevailing prices there is nearly or quite six cents per pound profit over +all expenses in spinning No. 14 yarn, or three cents per spindle per day; +this would give $9 per spindle per year, and as spinning mills can be +built for less than $18 per spindle, no other figures are required to +demonstrate the statement that the spinning mills in the South bid fair to +realize this year fifty per cent. on the capital invested. Nearly all of +these mills are running night and day, and every one of them is realizing +handsome profits. These are facts."<a name='fna_363' id='fna_363' href='#f_363'><small>[363]</small></a> The goods of the Wesson Cotton +Mills, Mississippi, took a premium at the Centennial Exhibition in +Philadelphia in 1876. The company started with one mill and a capital of +$300,000. This plant made 30 per cent. profits, so another was built and +the stock increased to $1,000,000.<a name='fna_364' id='fna_364' href='#f_364'><small>[364]</small></a> A North Carolina newspaper trying +to<span class="pagenum"><a name="Page_239" id="Page_239">[Pg 239]</a></span> encourage cotton manufacturing in that State, stated in 1880 that upon +the $2,288,000 invested in the mills in South Carolina, the profits ranged +from 18 to 25 per cent.<a name='fna_365' id='fna_365' href='#f_365'><small>[365]</small></a> The Boston Journal of Commerce in 1881 gave +the opinion of an Englishman visiting the Eagle and Phoenix Mills, +Columbus, Georgia, that the No. 3 Mill, then new, was the best equipped in +the world, and said that "The profit of these mills last year was 20 per +cent. on a capital of $1,250,000 or $5.76 per spindle."<a name='fna_366' id='fna_366' href='#f_366'><small>[366]</small></a></p> + +<p>Saffold Berney, in his Handbook of Alabama, published in 1878, made a +rather elaborate computation of the earning capacity of a 4,000-spindle, +125-loom mill, making 6,000 yards of cloth per day.<a name='fna_367' id='fna_367' href='#f_367'><small>[367]</small></a> It may not be +uninteresting to see how he worked out a considerable rate of profit for a +small plant. His calculations are:</p> + +<table border="0" cellpadding="0" cellspacing="0" summary="table"> +<tr><td>3,000 yds. 7-8 shirting at 6 cents</td><td> </td><td><span class="spacer"> </span></td><td align="right">$180.00</td></tr> +<tr><td>3,000 yds. 4-4 sheeting " 7 "</td><td> </td><td> </td><td align="right" class="botbor">210.00</td></tr> +<tr><td><span style="margin-left: 4em;">Total gross income</span></td><td> </td><td> </td><td align="right">$390.00</td></tr> +<tr><td>Cotton on a basis of 10 1-2 cents, 15 per cent. waste</td><td align="right"> $220.94</td></tr> +<tr><td>Labor and mill expenses</td><td align="right">63.44</td></tr> +<tr><td>Office and general expenses</td><td align="right">9.62</td></tr> +<tr><td>Coal, gas, oil, starch & supplies</td><td align="right">19.00</td></tr> +<tr><td>Insurance</td><td align="right">3.11</td></tr> +<tr><td>Charges in selling goods, 2 ½ per cent</td><td align="right">9.75</td></tr> +<tr><td>Wear and tear machinery 5 per cent</td><td align="right" class="botbor">13.69</td><td> </td><td align="right" class="botbor">339.55</td></tr> +<tr><td> </td></tr> +<tr><td>Leaving a net profit per day of</td><td> </td><td> </td><td align="right">$ 50.45</td></tr> +<tr><td>Or for 300 working days or one year of</td><td> </td><td> </td><td align="right">$15,135.00</td></tr></table> + +<p><span class="pagenum"><a name="Page_240" id="Page_240">[Pg 240]</a></span>Figuring the cost of this mill at $20 per spindle, and leaving aside, as +before, money otherwise invested about the business, there is a capital of +$80,000, upon which a profit of $15,135.00 is 18.8 per cent.</p> + +<p>"Profits in the past," says Mr. Thompson, "have been so large that often +before the last payment on the stock is due, a sum sufficient to pay all +obligations has been accumulated." He cites as a particularly favorable +instance, that of a mill which required no further instalments on +subscriptions after a little more than one-third of the instalment-payment +period had run out.<a name='fna_368' id='fna_368' href='#f_368'><small>[368]</small></a></p> + +<p>A little incident is interesting as involving two of the most important +and picturesque personalities and one of the chief mills connected with +the rise of cotton manufacturing in the South, and it bears directly on +the topic now being considered. It seems that the founding of the Piedmont +Factory by Colonel H. P. Hammett in South Carolina inspired a notice from +Mr. Edward Atkinson, of Boston, in which he reasoned that cotton +manufacturing in the South could never pay. This came under the eye of +Colonel Hammett. To the article he pinned his annual balance sheet, +showing a profit of 20 per cent., and sent the two to Mr.<span class="pagenum"><a name="Page_241" id="Page_241">[Pg 241]</a></span> Atkinson.<a name='fna_369' id='fna_369' href='#f_369'><small>[369]</small></a></p> + +<p>In regard to these first years of the large establishment of cotton mills +in the South, it is common to hear the opinion that the big profits made +attracted the energies of the people to mill building.<a name='fna_370' id='fna_370' href='#f_370'><small>[370]</small></a> Going a little +further back, the mills in operation just before the textile era, though +few in number, showed gains that bore a part in the boom about 1880.<a name='fna_371' id='fna_371' href='#f_371'><small>[371]</small></a></p> + +<p>Twelve years after taking charge of the plant, Colonel Hickman had earned +by the old Graniteville mill sufficient surplus to build the Vaucluse Mill +at a cost of $361,513.24 without calling for assessments upon +stockholders, and five years later had accumulated a cash surplus of +$220,831.86. He had doubled the production of the original Graniteville +Mill. The statement of the affairs of the two plants in 1804 showed:</p> + +<p><span style="margin-left: 1em;"><i>Gross Profits:</i></span></p> + +<table border="0" cellpadding="0" cellspacing="0" summary="table"> +<tr><td>Graniteville</td><td><span class="spacer"> </span></td><td align="right">$82,724.69</td></tr> +<tr><td>Vaucluse</td><td> </td><td class="botbor" align="right">37,131.31</td></tr> +<tr><td><span style="margin-left: 1em;">Total profits</span></td><td> </td><td align="right">$120,856.00</td></tr> +<tr><td>Net profits</td><td> </td><td align="right">80,701.71</td></tr></table> + +<p>This net profit amount represented 13.5 per cent. profit on $600,000 +capital.<a name='fna_372' id='fna_372' href='#f_372'><small>[372]</small></a></p> + +<p>Coming down, now, a decade later in the period. There<span class="pagenum"><a name="Page_242" id="Page_242">[Pg 242]</a></span> is shown a degree +of success pretty much uniform for the various mills.</p> + +<p>The first plant of the Gaffney Manufacturing Company which was paid for +when operation commenced, in three years earned enough to build an +additional plant of two stories.<a name='fna_373' id='fna_373' href='#f_373'><small>[373]</small></a> This mill indicates very well a fact +brought out in the preceding chapter, that many additions to plant, which +were being made after the mills had been a few years in operation, were +accomplished from earnings. The Salisbury Mill is a case in point. Its +inception and that of the Gaffney Mill the two being projected at about +the same time had many things in common (as did the towns in which they +were built). Increases in plant of the Salisbury Mill have been greater +proportionally than the increases in capitalization.<a name='fna_374' id='fna_374' href='#f_374'><small>[374]</small></a></p> + +<p>From manufacturers, from investors, and from persons acquainted with the +public economy, have been had statements, each reflecting an individual +bias, but each showing unmistakably that there was a general and marked +decline in profits in the second decade of the development. A retired mill +president, whose decision to leave the field was perhaps affected by the +condition she described, regretted that the companies are still laboring +under decreased profits as a result of the fact that mills were<span class="pagenum"><a name="Page_243" id="Page_243">[Pg 243]</a></span> built +more rapidly than the market for goods expanded to meet the +development.<a name='fna_375' id='fna_375' href='#f_375'><small>[375]</small></a> Another mill president thought that no more mills are +likely to be built in his section too many years. "They went it too rank, +you know," he declared with some feeling. "Once in a while you hear of a +new mill starting up, but its not as common as it was ten or fifteen years +ago." He put the date of the fall-off in profits at about 1900.<a name='fna_376' id='fna_376' href='#f_376'><small>[376]</small></a> The +son of Colonel Hammett, several times mentioned, who is a successful +manufacturer, deplored the building of too many mills in a short period, +and said that profits fell away abruptly.<a name='fna_377' id='fna_377' href='#f_377'><small>[377]</small></a></p> + +<p>A bank president whose institution has played a leading part in the +textile prominence of Columbia, South Carolina, said that "1890 to 1900 +was the heaviest borrowing period, as this was the greatest period of +development. Profits were poor, especially from 1895 to 1903."<a name='fna_378' id='fna_378' href='#f_378'><small>[378]</small></a></p> + +<p>Though he does not believe selling agents have taken much stock in North +Carolina mills, Mr. Thompson attributes many failures of mills to "slavery +to commission houses through which they sell their product." He implies +that it was the grip which the agents got on the mill by the loan of +running capital that<span class="pagenum"><a name="Page_244" id="Page_244">[Pg 244]</a></span> brought the ill effects. At any rate, the commission +houses became more deeply interested in the mills as the plants increased +in numbers, and profits were hurt by this fact, he believes.<a name='fna_379' id='fna_379' href='#f_379'><small>[379]</small></a> This +influence continues, thinks a former president of the great Graniteville +Mill, who said: "The commission merchants take the very heart out of the +mills. The commission houses of New York, Philadelphia and Boston get more +out of the mills than the stockholders in the South."<a name='fna_380' id='fna_380' href='#f_380'><small>[380]</small></a></p> + +<p>While it is true that "most of the mills of the South have +succeeded,"<a name='fna_381' id='fna_381' href='#f_381'><small>[381]</small></a> there have been, besides some concerns which have stood +still, neither making nor losing, a few notable failures. It is the common +opinion that failures have been due almost entirely to lack of capital and +bad management. Probably these faults and a good many others contributed +to the ill success of the old Charleston Manufacturing Company, which +began life with such high hopes at the outset of the cotton mill era. If +any enterprise was an expression of the motive forces in the South in +1880, this one was. It supplied a potent example to communities all over +the South contemplating cotton factories. The property of the Charleston +Manufacturing Company was sold<span class="pagenum"><a name="Page_245" id="Page_245">[Pg 245]</a></span> under the hammer to the Vesta Cotton Mill +Company, which was not more successful with the plant. After standing a +year idle, the attempt was made to operate the mill with colored help, and +a reorganization of the Vesta Company was had for this purpose. A large +proportion of the subscribers to the original company remained in the two +reorganizations that followed.<a name='fna_382' id='fna_382' href='#f_382'><small>[382]</small></a> In the experiment of negro operatives +the old factory was again opening up a vista to the South, for, as it was +vainly pointed out to the negro population of Charleston, if the trial of +colored operatives in the Vesta Mill had succeeded, plants all over the +section would offer employment to negroes.<a name='fna_383' id='fna_383' href='#f_383'><small>[383]</small></a> When this third effort to +use the plant for a cotton mill came to nought, the machinery was moved to +Gainesville, Georgia, and though the top of the new mill was carried away +by a cyclone almost as soon as completed, the company is now doing well in +its new location.<a name='fna_384' id='fna_384' href='#f_384'><small>[384]</small></a> The great, gloomy pile that thrice held so much of +the confidence of the South and the best hopes of Charleston still flanks +the railway tracks and rears itself above the depot, and seems all very +silent in spite of the fact that it is now occupied by tobacco +manufacturers.</p> + +<p><span class="pagenum"><a name="Page_246" id="Page_246">[Pg 246]</a></span>The grandfather mill, as it might be called, of the Southern textile +industry, is that of Graniteville, established by William Gregg in 1846. +The factory nearly failed in 1867, but was saved by the genius of H. H. +Hickman, a merchant of Augusta, who became its president at the critical +juncture. He died in 1898, and his son came in as president. At his +retirement and the reorganization of the mill, a business man of Augusta +has been elected the new president, but it will require, it is said, from +seven to ten years for him to build up the organization again.<a name='fna_385' id='fna_385' href='#f_385'><small>[385]</small></a></p> + +<p>The Royal Mills, the only cotton factory now operating in Charleston, was +built eighteen or twenty years ago, in the period of stress just noticed. +George Wagener, the original manager, left the mill at his death with a +surplus of $90,000. It went into slovenly hands, and failed. It has been +remodelled, however, and is now making money.<a name='fna_386' id='fna_386' href='#f_386'><small>[386]</small></a></p> + +<p>The small mills' success inspired the belief that large plants would +succeed. The Olympia, until recently the largest mill in the world, was +built at Columbia, and the Loray Mill, with more than half as many +spindles, was founded at Gastonia. It is the general opinion, whether +colored too largely by the<span class="pagenum"><a name="Page_247" id="Page_247">[Pg 247]</a></span> unsatisfactory history of these two +conspicuous factories or not it cannot be told, that there have been more +failures among the large than among the small mills.<a name='fna_387' id='fna_387' href='#f_387'><small>[387]</small></a> It has been said +of the North Carolina manufacturers as opposed to those of South Carolina +that they "are not so ambitious for big places, (at the head of large +companies) and a lot of those little fellows are getting rich." The North +Carolina mind seems to run on smaller things. I am not sure but what the +North Carolina mills have been more successful than the South Carolina +mills.</p> + +<p>A committee representing New England manufacturers has stated in spite of +an advantage over the Eastern mills of 25 per cent. in labor, and 50 per +cent. in respect to taxes, the Southern mills have made less profits than +their older competitors because of poor financing. However this may be, +the total losses on $100,000,000 invested in cotton manufacturing in the +South in thirty years does not represent more than 20 per cent., is the +belief of Mr. Thackston, of Greenville.<a name='fna_388' id='fna_388' href='#f_388'><small>[388]</small></a></p> + +<p>To go to a lyceum lecture on a sultry summer night and be whisked away by +picture and description to the snowy peaks and green glaciers of the +Canadian Rockies is not a more complete<span class="pagenum"><a name="Page_248" id="Page_248">[Pg 248]</a></span> or refreshing transition than +that experienced by the traveler who lumbers along the Southern Railway +for weary, slow miles of sodden country and ill-kept settlement, all at +once to alight at the neat station and view the trim town of Gastonia, +North Carolina. It is not attempted here to account for the New England +psychology that animates this nonetheless Southern place, but it is +deserving of better praise than its harsh name gives it. Neither is it +proper in this place to seek to account for the success of its score and a +half of cotton mills. The recital of the profits they have made since the +European War is astounding, but there is every cause to believe in the +accuracy of the information given.</p> + +<p>In the first place, while the big Loray Mill, as has been seen, has not +reflected much credit upon the community of factories at Gastonia, and is +spoken of not very warmly there, no mill in Gastonia has ever had a +receivership.<a name='fna_389' id='fna_389' href='#f_389'><small>[389]</small></a></p> + +<p>The mills at Belmont right near Gastonia are making on the average 25 per +cent profits. The Treanton Mill at Gastonia, paid 100% in cash during the +first five years of its operation. The Majestic Mill, at Belmont, was +expected to make in 1916-1917, 100 per cent., or the price of the plant in +a single year.<a name='fna_390' id='fna_390' href='#f_390'><small>[390]</small></a></p> + +<p><span class="pagenum"><a name="Page_249" id="Page_249">[Pg 249]</a></span>In cataloguing the notes from a summer trip to the mill towns, the writer +feared he had made some mistake in setting down the results of an +interview with the vice-president and cashier of the First National Bank, +Gastonia, which is most largely interested in the mills of the place, as +to the earnings. He therefore wrote for a restatement on doubtful points, +and found himself confirmed. To quote the case of one mill from Mr. +Robinson's reply. "We have a mill here that had $150,000 capital paid in, +and after a short time issued a stock dividend of 20 per cent. which gave +them (it) a capital of $180,000, and this mill made $155,000 net profits +for the year 1915. I am satisfied that this same mill will make 125 per +cent. profit this year (1916) on their (its) $180,000 capital, or around +$225,000 net profit."<a name='fna_391' id='fna_391' href='#f_391'><small>[391]</small></a></p> + +<p>From the interview, there is the instance of a 12,000 spindle mill; not +one of the most successful in Gastonia, which made $2,500 the week +previous.</p> + +<p>While the mill expected to make 125 per cent. net profits for 1916 is said +to be exceptional, a number of mills were, as near the end of the old year +as November 28th, expected to show<span class="pagenum"><a name="Page_250" id="Page_250">[Pg 250]</a></span> from 75 to 100 per cent. net profits +for 1916, the writer was told that it would be a pretty poorly managed +plant that did not clear the lower percentages.<a name='fna_392' id='fna_392' href='#f_392'><small>[392]</small></a></p> + +<p>A burly, forceful man in middle life, who has risen from foot pedlar to +mill president, said with frankness: "I am making more money than I know +what to do with. I am ashamed to take it!" He showed me the statements of +the orders for product with which his four mills would be kept busy for +the next four or five months. He expected to clear $60,000 on the output +of each plant for this period.<a name='fna_393' id='fna_393' href='#f_393'><small>[393]</small></a> Mr. Robinson, previously quoted, +recognizes that the cotton mills at Gastonia are more prosperous than +those of any other section of which he knows.<a name='fna_394' id='fna_394' href='#f_394'><small>[394]</small></a> Not even early in the +period, when mills were first building, did they make such profits as now, +is the opinion of an old manufacturer at Gastonia.<a name='fna_395' id='fna_395' href='#f_395'><small>[395]</small></a></p> + +<p>The foregoing citation of the earnings of various mills at various points +of time in the period since their establishment has served to exhibit the +general movement of profits. At the outset, most conditions were favorable +to large gains—there was little competition, labor was most plentiful and +cheap, the lack<span class="pagenum"><a name="Page_251" id="Page_251">[Pg 251]</a></span> of advantageous marketing facilities was to some degree +offset by purely local demand for the product, and the deficiencies of +management tended to be neutralized by the presence of physical advantages +which disappeared when a more advanced development increased the size of +plants, widened the area from which raw cotton was drawn, and extended the +market for product. It is said repeatedly that in those days any fool +could make money in cotton manufacture in the South.<a name='fna_396' id='fna_396' href='#f_396'><small>[396]</small></a></p> + +<p>With the closing years of the second decade of the mill growth, most of +these advantaging circumstances were fading before the increase of +competition. Their very success was proving fatal to the mills. They had +ceased to be local affairs. When outside influences came in—commission +and machinery men—new and difficult problems had to be faced. The +factories were assuming the physical proportions which they were bound to +assume, and which it was right they should assume, but they ran ahead of +the development in the textile industry, and in the South of expertness of +management, business resourcefulness and economic outlook. The spirit +could not keep up with the flesh, and the mind lagged behind the body.</p> + +<p>The prosperity which the mills are now enjoying they very<span class="pagenum"><a name="Page_252" id="Page_252">[Pg 252]</a></span> well understand +to be hectic, the result of the European War. They were having a hard time +enough until the war came and put them all on velvet, as someone expressed +it; 25% of the Southern Mills were in bad shape, defaulting an interest, +etc.<a name='fna_397' id='fna_397' href='#f_397'><small>[397]</small></a></p> + +<p>There are in the industrial community of Gastonia, however, and in certain +individual mills and managers, particularly in North Carolina, signs, that +point to a catching up of internal capacities with external maturity. +There is being developed—not yet clearly seen by any means, and in not a +few points apparently contradicted<a name='fna_398' id='fna_398' href='#f_398'><small>[398]</small></a>—a manufacturing spirit in the +South, an industrial faculty that is able to cope with difficult +conditions, the results of economic progress. This promises that the South +is learning after forty years what Edward Atkinson said it did not know, +the difference between a penny and a nickel. It indicates that the South +will be meeting narrow margins of profit with close figuring of the costs +of production.</p> + +<p>It is natural to turn from the subject of profits to that of dividends. +There is in the history of the mills a general parallel between the two, +with, however, certain variations arising from the fact that the industry +has been and is now in constant process of growth. With the exception of +perhaps a few<span class="pagenum"><a name="Page_253" id="Page_253">[Pg 253]</a></span> years, earnings could always be profitably invested in the +business,<a name='fna_399' id='fna_399' href='#f_399'><small>[399]</small></a> particularly in expansions of plant.<a name='fna_400' id='fna_400' href='#f_400'><small>[400]</small></a> As will be seen +in more detail later, the peculiar conditions under which the mills took +their rise involved indebtedness for plant and for running capital, and +earnings had to go to pay interest and principal of this.</p> + +<p>The Augusta Factory was founded in 1847,<a name='fna_401' id='fna_401' href='#f_401'><small>[401]</small></a> and, with Graniteville +nearby, though in South Carolina, resembled in its earlier years, and to a +diminished extent still does, the English and Continental textile +manufactories.<a name='fna_402' id='fna_402' href='#f_402'><small>[402]</small></a> They have both fallen upon evil days more recently. +The Augusta Factory made 5 per cent. quarterly dividends for eight years +and nine months from its founding.<a name='fna_403' id='fna_403' href='#f_403'><small>[403]</small></a> In 1858, eleven years after +establishment, the plant was sold to a company with Wm. H. Jackson at its +head, for the sum of $140,000. Though the stockholders in the Jackson +Company paid $60,000 for repairs to the property, the purchase price, +payable in instalments for ten years, was made up from profits. The mill +at the close of the war was the wealthiest in the South. It was said in +1884 that it had had an uninterrupted course of<span class="pagenum"><a name="Page_254" id="Page_254">[Pg 254]</a></span> prosperity since the war. +From 1865 to 1880 the company paid average annual dividends of 14 <span style="font-size: 0.8em;"><sup>21</sup></span>⁄<span style="font-size: 0.6em;">32</span> +per cent.<a name='fna_404' id='fna_404' href='#f_404'><small>[404]</small></a></p> + +<p>In 1880 the stock of the mills at Augusta, Georgia, paid about 8 per cent. +interest per annum, in semi-annual and quarterly dividends.<a name='fna_405' id='fna_405' href='#f_405'><small>[405]</small></a></p> + +<p>Under Col. H. H. Hickman's management of Graniteville there were regular +dividends of 10 per cent.<a name='fna_406' id='fna_406' href='#f_406'><small>[406]</small></a> The son of this former president, and until +recently himself president of the mill as his father's successor, said: +"Graniteville was so successful it had a large influence. It never ceased +operation, and to my certain knowledge it had a fifty-year record of +dividends."<a name='fna_407' id='fna_407' href='#f_407'><small>[407]</small></a></p> + +<p>Perhaps some indication of the widespread popularity of cotton mills as an +investment from a purely dividend-seeking point of view is contained in a +newspaper notice of 1881 setting forth that a large mill at Nashville, +Tennessee, had declared a dividend of 14 per cent. and another was built. +In 1881 the Enterprise Factory, in Georgia, declared a 10 per cent. +dividend, and decided to increase its capacity by 125 per cent. or +<span class="pagenum"><a name="Page_255" id="Page_255">[Pg 255]</a></span>more—from 13,890 spindles to over 33,000, and from 264 looms to more +than 600.<a name='fna_408' id='fna_408' href='#f_408'><small>[408]</small></a> Mills as Pulaski, in the same State, were anxious to double +their capacity; $50,000 was subscribed for a mill at Jackson, West +Tennessee; Dallas, Texas, was starting a $200,000 spindle plant, and the +town of Sherman wanted a $75,000 factory.<a name='fna_409' id='fna_409' href='#f_409'><small>[409]</small></a> The following year, the +same paper printed an item showing further that dividends were being paid +to stockholders in factories all over the South: "The cotton mills in +Mississippi have proved bonanzas for the owners. The one at Wesson (it has +been seen that this company made 30 per cent. profit from the plant) pays +26 per cent. dividends...."<a name='fna_410' id='fna_410' href='#f_410'><small>[410]</small></a> The mill established by Mayor Courtenay, +of Charleston, at Newry, South Carolina, paid no dividends for the first +seven years of its life; this distinction from the earlier mills in regard +to dividends, bears out what was said of profits in the period in which +this plant was built (1892-3). Over the whole twenty-four years of its +history, however, the company has paid an average of 6 per cent. to its +shareholders.<a name='fna_411' id='fna_411' href='#f_411'><small>[411]</small></a></p> + +<p>The building of the Salisbury Mill was completed December 1, 1888. The +first cloth was turned out February 9, 1889. The<span class="pagenum"><a name="Page_256" id="Page_256">[Pg 256]</a></span> first dividend of 5 per +cent. was declared January 11, 1890. The mill has missed only one dividend +payment, a quarterly one, since this time.<a name='fna_412' id='fna_412' href='#f_412'><small>[412]</small></a> It is true that for the +first three or four years of its life, the concern was in an uncertain +way, the panic of 1893 proving embarrassing to it, though not as seriously +so as in the case of the Newry Mill, just cited. For a long time the +investment paid 8 per cent. dividends, then for several years of late 10 +per cent. On July 10, 1916, the directors declared an extra dividend of 5 +per cent., paid August 1. A part of the profits has for years and years +gone back into the business, enabling it now to earn good sums.<a name='fna_413' id='fna_413' href='#f_413'><small>[413]</small></a></p> + +<p>In the first ten years of its operation, the Laurens Mills were very +profitable. Borrowing money to bring its spindleage up to thirty thousand, +it expanded to 43,000 spindles on earnings. At the end of the ten-year +period there was the plant worth about $800,000; the company owed no +money, and the only liability against it was $350,000 of common stock. +There was a cash surplus, probably small. For six years it had been paying +12 per cent. annual dividends. The mill was incorporated in 1895.<a name='fna_414' id='fna_414' href='#f_414'><small>[414]</small></a> It +is not <span class="pagenum"><a name="Page_257" id="Page_257">[Pg 257]</a></span>certain that dividend payments were made by this company while it +was carrying its debt, but the Anderson Mill, Anderson, South Carolina, +paid interest on its indebtedness and 8 per cent. dividends as well.<a name='fna_415' id='fna_415' href='#f_415'><small>[415]</small></a></p> + +<p>Reference has been made to Mr. Thompson's statement that large profits +have frequently enabled mill companies to discharge all obligations before +the last subscription-payment was due. He cites the case of an enterprise +of $100,000 capitalization, with shares payable in weekly instalments of +50 cents, which after 70 weeks, with only $35 on the share paid up, +declared a dividend of 4 per cent. on the capitalization. This plant, +which he says is by no means universal, has, besides building large +additions from profits always paid 4 or 5 per cent. in dividends each +half-year. This is probably the Cabarrus, one of the Cannon mills, at +Concord.<a name='fna_416' id='fna_416' href='#f_416'><small>[416]</small></a></p> + +<p>From Mr. August Kohn was had a valuable estimate of the whole matter of +Southern cotton manufactories as investments, assuming, that is, that the +mills of his State have been typical in this respect of those of the rest +of the section. He said: "If the people of South Carolina had put their +money into farm loans at 7 per cent.—the same people and the same +money—they<span class="pagenum"><a name="Page_258" id="Page_258">[Pg 258]</a></span> would have been better off personally than they are after +having invested in cotton mills. There are no failures in real estate +mortgages at 7 per cent., but in cotton mill investments, principal and +interest has frequently been lost."<a name='fna_417' id='fna_417' href='#f_417'><small>[417]</small></a></p> + +<p>If this opinion is to be believed, had Mr. Goldsmith taken all the +factories of the State, and not "the fifty more important cotton mills of +South Carolina," he would have found an annual average dividend for 1905, +1906 and 1907, not of 7.56 per cent., but something below 7 per cent.<a name='fna_418' id='fna_418' href='#f_418'><small>[418]</small></a></p> + +<p>It is well to conclude this random review of the dividends paid by the +textile enterprises of the South with a thoughtful caution from Mr. +Thackston, of Greenville, who has been of chief assistance to the writer +in the financial aspects of the problem: "When it is said that the mills +(have) made such and such dividends, it is to be remembered that in many +cases the plant had cost more than the capitalization would show. Twelve +or 10 per cent. on a $50,000 investment is very different from 12 or 10 +per cent. on $30,000 paid up. The mills made so much money that they could +pay off their indebtedness frequently in a few years, but the returns on +capital paid up were not so great as might appear in some statements.</p> + +<p><span class="pagenum"><a name="Page_259" id="Page_259">[Pg 259]</a></span>"Piedmont is capitalized at $800,000. The plant probably cost $1,500,000. +When they pay 10 per cent. on the investment, it is because they are +neglecting to reduce the debt on the plant. They are really paying about 6 +per cent. on the investment, considering the total liabilities of the +stockholders."</p> + +<p>Tompkins has placed a useful modification upon the nominal showing of +dividends which finds place here, and has application to what was earlier +said of profits as well: "The tables ... showing range of profits, are +made up from exhibits as usually made in annual reports. This is exclusive +of depreciation, or wear and tear. Even in cases where an item of +depreciation is carried in the accounts, it is often simply a matter of +bookkeeping, and not a sum set aside for replacing of machinery.... Where +large profits are reported, and large dividends paid, it is always a +question whether the vitality of the mill is not suffering. There is a +number of cases where mills have paid several large dividends at the +start, but, on account of making no provision for depreciation, have +finally collapsed."<a name='fna_419' id='fna_419' href='#f_419'><small>[419]</small></a></p> + +<p>Some mills to continue Mr. Thackston's statement, cost in plant, he said +four times their total capital. A man would build a 10,000-spindle mill +and add to it greatly, not increasing the capital at all; he trusted to +earnings to care for the<span class="pagenum"><a name="Page_260" id="Page_260">[Pg 260]</a></span> debt, and delayed payments on common stock.</p> + +<p>A remark of Mr. Goldsmith, though he unfortunately does not give the +source of his information, confirms this calculation. He says: "The +average South Carolina weaving mill costs about $20 to $21 per spindle; it +is capitalized at about $12 per spindle, and earns from $2 to $4 per annum +per spindle."<a name='fna_420' id='fna_420' href='#f_420'><small>[420]</small></a></p> + +<p>A statement covering five years for average well-managed mill properties +in and around Greenville, South Carolina, shows, he said:</p> + +<table border="0" cellpadding="0" cellspacing="0" summary="table"> +<tr><td>Average earnings on plant cost</td><td><span class="spacer"> </span></td> + <td align="right">13.47</td><td> per cent.</td></tr> +<tr><td><span style="margin-left: 1.5em;">"</span><span style="margin-left: 3em;">"</span><span style="margin-left: 1.5em;">per spindle</span></td><td> </td> + <td align="right">$ 2.94</td></tr> +<tr><td><span style="margin-left: 1.5em;">"</span><span style="margin-left: 2.5em;">cost</span><span style="margin-left: 1.25em;">"</span><span style="margin-left: 2em;">"</span></td><td> </td> + <td align="right">21.08</td></tr> +<tr><td>Capitalized at<span style="margin-left: 2em;">"</span><span style="margin-left: 2em;">"</span></td><td> </td> + <td align="right">12.72</td></tr></table> + +<p>His conclusion was that "In general, the dividends on the actual cost of +the plants have not been over 12 per cent."<a name='fna_421' id='fna_421' href='#f_421'><small>[421]</small></a></p> + +<p>As to the development, nature and persistence of a market in the South for +cotton mill securities, the principal partner in a firm dealing in stocks, +bonds, real estate loans, and fire insurance, who has besides long been +identified with the cotton manufacturing industry in the Piedmont region, +said: "... as far as I am able to recall, the stock market began to +develop in this<span class="pagenum"><a name="Page_261" id="Page_261">[Pg 261]</a></span> section about 1898 to 1901; and referring to some old +records, as of March, 1901, I find such entries as this:</p> + +<table border="0" cellpadding="0" cellspacing="0" summary="table"> +<tr><td>"5 Monaghan</td><td> at 95</td></tr> +<tr><td><span style="margin-left: .35em;">3 Brandon</span></td><td> at 90"</td></tr></table> + +<p>with other entries of the same kind.</p> + +<p>"About this date, in the up-country there were several young men who began +trading in these stocks largely on a brokerage proposition. I recall the +names of:</p> + +<table border="0" cellpadding="0" cellspacing="0" summary="table"> +<tr><td>A. M. Law & Co</td><td><span class="spacer"> </span></td> + <td>Spartanburg, S.C.</td></tr> +<tr><td>W. D. Glenn</td><td> </td> + <td>Spartanburg, S.C.</td></tr> +<tr><td>F. C. Abbott & Co</td><td> </td> + <td>Charlotte, N.C.</td></tr> +<tr><td>George E. Gibbon</td><td> </td> + <td>Charleston, S.C.</td></tr></table> + +<p>and a few others whose names I do not recall just now.</p> + +<p>"In Greenville, there was Mr. A. G. Furman.... All these men are still in +the same line of business, and from small beginnings, have developed +satisfactory business in the buying and selling of these securities.</p> + +<p>"One element that lends itself to this business was the fact that in a +number of instances builders of machinery would take part of their bill in +stock, and later dispose of these holdings at concessions. I recall in one +year that I disposed of about $2,000,000.00 worth of such stocks."<a name='fna_422' id='fna_422' href='#f_422'><small>[422]</small></a></p> + +<p>An investor with considerable cotton mill holdings, in<span class="pagenum"><a name="Page_262" id="Page_262">[Pg 262]</a></span> his replies, threw +a little different light on the matter in some particulars: "A market for +cotton mill securities developed between 1890 and 1900. There is less sale +for them now, but in those ten years they used to go like hot cakes. All +these brokers take a whack at them, but any man would starve that tried to +deal in them exclusively. I had a friend that tried to make his living +from dealing in them, but he didn't make his office rent, I deal in them a +little, more than anything else for accommodation to friends. There is +practically nothing in it for me."<a name='fna_423' id='fna_423' href='#f_423'><small>[423]</small></a></p> + +<p>Mr. Buist has here placed the commencement of this market as far back as +1890. But in the early months of 1881 M. J. Verdery & Co., brokers of +Augusta, were negotiating for the entire issue of $350,000 extra capital +stock to be made in connection with enlargements to the Enterprise +Factory. It was said that one man and his friends would take $140,000 of +the stock.<a name='fna_424' id='fna_424' href='#f_424'><small>[424]</small></a> This was, however, an underwriting transaction, such as +those of which the first quotation speaks as being conducted on a +brokerage proposition, rather than the regular marketing of stocks +indicated by Mr. Buist.</p> + +<p>Another said: "Nobody deals exclusively in cotton mill securities, and +they are not quoted on the big exchanges either."<a name='fna_425' id='fna_425' href='#f_425'><small>[425]</small></a><span class="pagenum"><a name="Page_263" id="Page_263">[Pg 263]</a></span> There is no doubt +about either of these points, judging from all the information received. +And further: "At the opening of the period, the sale for cotton mill +stocks was very local, and each mill took charge of its own sales."<a name='fna_426' id='fna_426' href='#f_426'><small>[426]</small></a></p> + +<p>A mill president of Augusta said that he frequently has inquiries for +stock; he refers these applicants to brokers in the city.<a name='fna_427' id='fna_427' href='#f_427'><small>[427]</small></a></p> + +<p>It has been seen that the curve of dividends of the mills shows a rough +correspondence to that of profits; it may be observed in the paragraphs +that follow that the third curve of market values of mill stocks follows +more or less the other two curves. There will be mentioned first the cases +in which the securities sold, for one reason and another, at low figures, +and second the instances of more advantageous quotation, with some +comments on the occasion for the high and low prices.</p> + +<p>The cotton manufacturing business in the South has been a precarious one; +it has proved quixotic, and there have been intervals of sterility.<a name='fna_428' id='fna_428' href='#f_428'><small>[428]</small></a> +This may be taken as accountable for the fact that "mill stocks usually +sell below their book value."<a name='fna_429' id='fna_429' href='#f_429'><small>[429]</small></a><span class="pagenum"><a name="Page_264" id="Page_264">[Pg 264]</a></span> This consideration has not, however, +as will appear more clearly a little later, prevented great variation in +the selling price of securities of mills in different sections of the +South, at the same point of time.</p> + +<p>"Mill shares have been a drug on the market and confidence in them has +been lost to a large degree."<a name='fna_430' id='fna_430' href='#f_430'><small>[430]</small></a> In conformity with this, an +ex-manufacturer, now a cotton factor, of Augusta, Georgia, explained that: +"Stocks of mills in Augusta haven't sold at par in twenty years. You can +buy preferred stock of mills in Augusta at less than par. You can buy the +stock of the Augusta and Enterprise mills at 20 or so. The Augusta Factory +hasn't paid a dividend in twenty years." He could not understand why this +was true of the local manufacturing community, which is one of the most +notable in the entire South.<a name='fna_431' id='fna_431' href='#f_431'><small>[431]</small></a></p> + +<p>These considerations are in contrast to the statement of Mr. Goldsmith: +"The market value of the stock is almost always above par, increasing in +proportion to the age of the mill." The writer inclined to doubt this +accuracy of Mr. Goldsmith's information.<a name='fna_432' id='fna_432' href='#f_432'><small>[432]</small></a></p> + +<p>Referring now to the sale of stock at less than its book value, it may be +noticed again that during the war the Augusta<span class="pagenum"><a name="Page_265" id="Page_265">[Pg 265]</a></span> Factory was sold into new +hands at, ostensibly, $200,000. The new company capitalized it at $600,000 +about what it was worth.<a name='fna_433' id='fna_433' href='#f_433'><small>[433]</small></a> F. W. Wagener and Julius Koester bought in +the property which is now the Royal Mills, at Charleston, at about 20 +cents on the dollar.<a name='fna_434' id='fna_434' href='#f_434'><small>[434]</small></a> An indication of the prevalence of this +condition is seen in the fact that the people of Charleston, who +previously had been generous subscribers to cotton mill stock, every +promoter going to Charleston for the placement of a large block, "about +1905 or 6 ... got canny, and quit subscribing to the stock of new mills, +for they found they could wait and buy the stock at less than par. For +twelve or fourteen years Charleston has not contributed to new +mills."<a name='fna_435' id='fna_435' href='#f_435'><small>[435]</small></a> The reason for the general drop in the value of mill +securities twelve or fourteen years ago lies in the depression in the +industry caused by the ill-considered boom in mill building, already dwelt +upon; a cause which had its rise earlier, but which no doubt continued to +operate through this later period, was set forth plainly by a banker of +Columbia. He said:</p> + +<p>"Suppose a Southerner was promoting a mill that was to cost $1,000,000. In +contracting for $600,000 worth of machinery,<span class="pagenum"><a name="Page_266" id="Page_266">[Pg 266]</a></span> the machinery people would +take half of the amount in stock. Machinery was in great demand, and high +in price. The machinery manufacturers could throw their stock on the +market quickly at 50 cents on the dollar, and make money. But in doing +this they hurt the price of the stock of the mill."<a name='fna_436' id='fna_436' href='#f_436'><small>[436]</small></a></p> + +<p>There seems to be pretty clear cause for the sensational drop that once +occurred in the selling price of the stock of Pacolet, one of the greatest +of the Southern mills. The factory had been making heavy goods for the +Chinese market; this market was so unfavorably affected by the exclusion +act that the goods became unprofitable to the mill. It cost money to +change the machinery. So much preferred stock was issued that the common +stock of the mill fell from 300 to a point below par.<a name='fna_437' id='fna_437' href='#f_437'><small>[437]</small></a></p> + +<p>It has been seen that for the last six years of the first decade of the +operation of the Laurens Mills, 12 per cent. annual dividends were paid. +Within two years after the fight between local shareholders and Northern +selling agents, the dividends got down to 5 per cent. and the stock fell +from 175 to par.<a name='fna_438' id='fna_438' href='#f_438'><small>[438]</small></a> A similar decline has been very apparent in the +stock of Pelzer, in the same State, which ten years ago was selling at 175 +or 180, and<span class="pagenum"><a name="Page_267" id="Page_267">[Pg 267]</a></span> which now may be bought at a little above par.</p> + +<p>T. C. Duncan built the Union Mills, and these succeeded. The stock went to +$150 a share in 1900 or 1902. Then he built the Buffalo Mills. The +projector of these mills was, however, a cotton speculator, it is said, +and the market went against him. The town of Union, South Carolina, +"busted with Tom Duncan", as it was expressed.</p> + +<p>At the opening of the cotton mill period, it was said of the Rock Bill +Cotton Factory that "The best evidence of its success is that not one +dollar of its stock can be bought."<a name='fna_439' id='fna_439' href='#f_439'><small>[439]</small></a> In the same month of the same +year it was published that of the successful Mississippi mills, "The one +at Wesson pays 26 per cent. dividends, and the stock is worth over +300."<a name='fna_440' id='fna_440' href='#f_440'><small>[440]</small></a> Pacolet was built in 1880. The architect suggested a certain +firm as selling agents for the mill, and Captain John H. Montgomery, the +projector of the company, was introduced to a member of this firm. In +consideration of receiving the account of the factory, this official +subscribed for the commission firm to fifty or a hundred shares of +Pacolet's stock. He told a friend shortly afterwards that he did not know +why he bought the stock, and offered to sell it at<span class="pagenum"><a name="Page_268" id="Page_268">[Pg 268]</a></span> $50 on the share. It +happened that he held the stock, and he afterwards sold the stock at $300 +per share.<a name='fna_441' id='fna_441' href='#f_441'><small>[441]</small></a></p> + +<p>This buoyant success of the early mills, previously remarked with +reference to profits and dividends, and here seen in the advance in the +price of stock, is further illustrated by the history of some plants now +having large capitalization. These sold additional stock to the original +subscribers at a reduction—say at 75 or 80 when the par was 100. The +ventures were so profitable that the stock remained at par value.<a name='fna_442' id='fna_442' href='#f_442'><small>[442]</small></a> The +same observation comes out, as applicable to a still earlier time, in the +circumstance of the issue, in 1865, when the Augusta Factory was paying +more than 14 per cent. dividends of three shares for one, bringing up the +capitalization to $600,000.<a name='fna_443' id='fna_443' href='#f_443'><small>[443]</small></a></p> + +<p>Fifteen years later it was said: "Augusta is becoming prominent in the +South as a manufacturing city, there being eight cotton factories running +here successfully.... These factories aggregate about 2,500 looms and +10,000 spindles; they consume about 50,000 bales of cotton annually, +manufacture about 50,000,000 yarns (yards) of cloths, (this besides yarn +mills) and employ 2,000 operatives. The capital stock of nearly all these +factories<span class="pagenum"><a name="Page_269" id="Page_269">[Pg 269]</a></span> is at a high premium."<a name='fna_444' id='fna_444' href='#f_444'><small>[444]</small></a></p> + +<p>If the success of the Augusta Factory in 1865 was sufficient to maintain +at par issues of extra stock, as just noted, the reverse was true of +Graniteville two years later, when the elder Hickman took charge. Twenty +years earlier, the plant had cost to build $375,000. By 1867 the stock had +increased to $716,000, and the shares had fallen to $62.50 in value. The +mill was $50,000 in debt. Colonel Hickman cancelled $116,000 capital +shares, bringing the interest-bearing stock of the company down to +$600,000. He restored the depreciated stock to its proper value.<a name='fna_445' id='fna_445' href='#f_445'><small>[445]</small></a> +Reference has been made to a stock dividend of 20 per cent. issued by a +mill of Gastonia within the last few years.</p> + +<p>A very present instance of this same quality, reflected this time in the +recuperative power of a mill, is contained in a prediction made by the +gentleman who knows most about the Graniteville Mill, that the stock which +then, at reorganization, sold for $60 the share will in a year, if all +goes well, sell at par.<a name='fna_446' id='fna_446' href='#f_446'><small>[446]</small></a></p> + +<p>It has been said that the stock of the Rock Hill Cotton Factory could not +be bought, and that the stock of several mills sold for $300 per share. +That of the Tucapau Mills, in South Carolina, is not to be had today, or +it can be had only at 3 or 5<span class="pagenum"><a name="Page_270" id="Page_270">[Pg 270]</a></span> for one. This is by some regarded as the +most successful mill in the State.</p> + +<p>It would seem that absolutely no stock of the Salisbury Mills is on the +market. Recently an energetic young man anxious to buy stock of the mill +for principals, went to the treasurer of the company and to shareholders +individually, without success. The treasurer said that by looking long +enough, and waiting for his chance, he might induce some stockholder to +sell at 200.<a name='fna_447' id='fna_447' href='#f_447'><small>[447]</small></a> This comparatively low figure in his prognostication is +perhaps accounted for by the conservative character of the company from +the start, and the uniformly satisfactory, though not brilliant dividends +of the enterprise, together with the fact, maybe most potent of all, that +sixty of the one hundred and five shareholders in the Salisbury Mills are +ladies, the majority of whom have received their holdings through +inheritance.<a name='fna_448' id='fna_448' href='#f_448'><small>[448]</small></a></p> + +<p>The Majestic Mill, Gaston County, North Carolina, which in 1916 after nine +months' operation declared a dividend of 10 per cent., sold three shares +of stock which in some way had not been marketed, at 150 each.<a name='fna_449' id='fna_449' href='#f_449'><small>[449]</small></a></p> + +<p><span class="pagenum"><a name="Page_271" id="Page_271">[Pg 271]</a></span>In mentioning the contrast between the market price at this time of the +stock of mills in various localities. Thought was particularly of the +facts as to the Augusta mills' securities and those of the plants in and +about Gastonia. The latter are as optimistic as the former are the +reverse. Mills in Gastonia making in 1916 from 75 to 100 per cent. net +profits, are represented by stock selling at figures ranging from $150 to +$250 the share.<a name='fna_450' id='fna_450' href='#f_450'><small>[450]</small></a></p> + + +<p> </p><p> </p> +<hr style="width: 50%;" /> +<p><span class="pagenum"><a name="Page_272" id="Page_272">[Pg 272]</a></span></p> +<h2>VITA</h2> + +<p>Broadus Mitchell was born at Georgetown, Kentucky, December 27, 1892; he +attended a primary school in Richmond, Virginia, and then, for four years +until 1908, Richmond Academy; for one session, 1908-1909, attended the +Hope Street High School, Providence, Rhode Island; in 1909 entered the +University of South Carolina; in the summer of 1911 was a member of the +reportorial staff of The Daily Record, Columbia, South Carolina; graduated +from the University of South Carolina with A.B. degree in 1913; from June, +1913, until October, 1914, was a member of the reportorial staff of the +Richmond Evening Journal; entered The Johns Hopkins University in 1914; +was a Hopkins Scholar during this and the succeeding session; was Fellow +in Political Economy, 1916-1917; in July, 1917, became special staff +writer The New Leader, Richmond, Virginia, and was given furlough from +this position to return to the University in the fall of 1917; Fellow by +Courtesy and instructor in Courses in Business Economics, 1917-1918.</p> + + +<p> </p><p> </p> +<hr style="width: 50%;" /> +<p><strong>Footnotes:</strong></p> + +<p><a name='f_1' id='f_1' href='#fna_1'>[1]</a> P. H. Goldsmith, The Cotton Mill South, p. 4.</p> + +<p><a name='f_2' id='f_2' href='#fna_2'>[2]</a> D. A. Tompkins, in The South in the Building of the Nation, Vol. II, +p. 58. A more summary statement by the same author is the following; after +speaking of the prominence in the South of manufactures in the early years +of the nineteenth century: "The profit of cotton raising with slave labor +drew people away from manufactures to cotton planting. On the abolition of +slavery, the capabilities of the people to organize and conduct +manufactures showed itself again.... The re-establishment was not +commenced immediately after the civil war, because of the chaotic disorder +brought about by the abolition of slavery and the enfranchisement of the +negro." But now (1899) "every obstacle to the development of manufactures +has been removed. In many parts of the South the development is already +well advanced and in others it will undoubtedly grow rapidly." (Ibid., +Cotton Mill, Commercial Features, pp. 108-109.)</p> + +<p><a name='f_3' id='f_3' href='#fna_3'>[3]</a> The South's Position in American Affairs, p. 1. Cf. "Upon the whole, +the last half of the Eighteenth Century, before the influence of the +cotton gin and Arkwright's inventions were fully felt in the South, was a +period when agriculture yielded some ground in primary manufactures and +household industries." (V. S. Clark, in South in Building of Nation, Vol. +V, p. 308.)</p> + +<p><a name='f_4' id='f_4' href='#fna_4'>[4]</a> Holland Thompson, From the Cotton Field to the Cotton Mill, p. 25. +"Except in the East, the feeling against slavery was strong during the +first quarter of the nineteenth century", and there is remarked the +foundation in 1816 of the Manumission Society, which had thirty-six +branches in 1825 and 1600 active members in 1826. (Ibid., pp. 26-27.)</p> + +<p><a name='f_5' id='f_5' href='#fna_5'>[5]</a> August Kohn, The Cotton Mills of South Carolina, pp. 10-11.</p> + +<p><a name='f_6' id='f_6' href='#fna_6'>[6]</a> Kohn, Cotton Mills of South Carolina, pp. 9-10.</p> + +<p><a name='f_7' id='f_7' href='#fna_7'>[7]</a> Kohn, Cotton Mills of South Carolina, pp. 10-11. In 1809 the +legislative committee on incorporations reported unfavorably a request of +John Johnson, Jr., President of the Homespun Company of South Carolina, +for a loan on account of a patent, but it was recommended that he be +allowed until the next meeting of the legislature "to report on the +utility of the machine called the Columbia Spinster, so as to entitle, in +case the same be approved, the inventor of the same to the sum provided by +law for his benefit." (Ibid., pp. 11) Cf. Ibid., pp. 11-13.</p> + +<p><a name='f_8' id='f_8' href='#fna_8'>[8]</a> For these facts the writer is indebted to an unpublished manuscript of +M. R. Pleasants, "Manufacturing in North Carolina before 1860", to which +reference will frequently be had.</p> + +<p><a name='f_9' id='f_9' href='#fna_9'>[9]</a> Clark, in South in Building of Nation, Vol. V, p. 310.</p> + +<p><a name='f_10' id='f_10' href='#fna_10'>[10]</a> Kohn, Cotton Mills of South Carolina, p. 7.</p> + +<p><a name='f_11' id='f_11' href='#fna_11'>[11]</a> Kohn, Cotton Mills of South Carolina, p. 7.</p> + +<p><a name='f_12' id='f_12' href='#fna_12'>[12]</a> Ibid.</p> + +<p><a name='f_13' id='f_13' href='#fna_13'>[13]</a> Ibid.</p> + +<p><a name='f_14' id='f_14' href='#fna_14'>[14]</a> Kohn, Cotton Mills of South Carolina, p. 7. His citation is of the +South Carolina and American General Gazette, Jan. 30, 1777. Cf. Ibid., pp. +6-7.</p> + +<p><a name='f_15' id='f_15' href='#fna_15'>[15]</a> Ibid., p. 8. Reference is particularly to the City Gazette and Daily +Advertiser, of Charleston, January 24, 1779.</p> + +<p><a name='f_16' id='f_16' href='#fna_16'>[16]</a> Kohn, Cotton Mills of South Carolina. Citation is of the American +Museum, VIII, Appendix IV, part II, July 1, 1790. The question mark is Mr. +Kohn's.</p> + +<p><a name='f_17' id='f_17' href='#fna_17'>[17]</a> Kohn, Cotton Mills of South Carolina, pp. 8-9.</p> + +<p><a name='f_18' id='f_18' href='#fna_18'>[18]</a> W. W. Sellers, A History of Marion County, p. 26.</p> + +<p><a name='f_19' id='f_19' href='#fna_19'>[19]</a> Clark, in South in Building of Nation, Vol. V, p. 312. Cf. Ibid., pp. +328-9. Referring to the manufactories near Charleston and Statesburg, and +to carding and spinning machinery set up in eastern Tennessee in 1791, he +concludes, "However the industrial progress of these years was irregular +and local rather than general and permanent." Ibid., p. 310.</p> + +<p><a name='f_20' id='f_20' href='#fna_20'>[20]</a> Clark, History of Manufactures in the United States, 1607-1860, p. +537. As indicating further the lack of causation in these earliest +ventures, it is said: "Maryland is hardly typical industrially of the +Southern States. Its factories date from the Revolution...." (Ibid., in +South in Building of Nation, Vol. V, pp. 328-9.)</p> + +<p><a name='f_21' id='f_21' href='#fna_21'>[21]</a> "In this country, as well as in England, the germ of the textile +industry existed in the fulling and carding mills; the former, dating +earlier, being the mills for finishing the coarse cloths woven by hand in +the looms of our ancestors; and in the latter, the carding mill, the wool +was prepared for the hand-wheel. At the close of the Revolution the +domestic system of manufactures prevailed throughout the states" (Carroll +D. Wright, "The Factory System of the U.S." p. 6, in U.S. Census of +manufactures, 1880.)</p> + +<p><a name='f_22' id='f_22' href='#fna_22'>[22]</a> The Bolton Factory was built in 1811 on Upton Creek, nine miles +southwest of Washington, Wilkes County, Ga., in 1794, on this site had +been erected one of Whitney's first cotton gins, propelled by the water +power that later ran the cotton mill. It is said that here Lyon conceived +important improvements on the Whitney invention, making a saw gin. +(Southern Cotton Spinners' Association proceedings seventh annual +convention, pp. 41 ff.) Here is a rather striking indication of the fact +that the South was on the right road—a gin, so far from diverting +attention entirely to the cultivation of the staple, gave way to a cotton +mill which was located on the same site and operated by the same water +power.</p> + +<p><a name='f_23' id='f_23' href='#fna_23'>[23]</a> H. R. Helper, The Impending Crisis of the South, (ed. of 1860) pp. +161-162.</p> + +<p><a name='f_24' id='f_24' href='#fna_24'>[24]</a> W. F. Marshall, interview, Raleigh, N.C., September 16, 1916.</p> + +<p><a name='f_25' id='f_25' href='#fna_25'>[25]</a> "The first cotton mill built in North Carolina was built at +Lincolnton in 1813 by Michael Schenck.... This mill was the forerunner of +that remarkable industrial development which has taken place in North +Carolina since that time." (Pleasants, ibid.)</p> + +<p><a name='f_26' id='f_26' href='#fna_26'>[26]</a> John Nichols, interview, Raleigh, N.C., Sept. 16, 1916. A. A. +Thompson, President of the Raleigh Cotton Mill, expressed about the same +view in an interview at Raleigh on the same day.</p> + +<p><a name='f_27' id='f_27' href='#fna_27'>[27]</a> J. L. Hartsell, interview, Concord, N.C., September 2nd 1916.</p> + +<p><a name='f_28' id='f_28' href='#fna_28'>[28]</a> Kohn, Cotton Mills of South Carolina, p. 15. Cf. Charlotte News, +(N.C.) Textile Industrial Edition, Feb., 1917, with reference to the Rocky +Mount Mill.</p> + +<p><a name='f_29' id='f_29' href='#fna_29'>[29]</a> Though their father had been prominent for his conduct of the mill +and had displayed in his personality a generous disposition toward the +community, the sons were said to be wild and reckless, and when they fell +heir to the plant alienated the sympathies of the people of the vicinity. +Any possible public character for the business was thus destroyed.</p> + +<p><a name='f_30' id='f_30' href='#fna_30'>[30]</a> Charles E. Johnson, interview, Raleigh, N.C., Sept. 16, 1916.</p> + +<p><a name='f_31' id='f_31' href='#fna_31'>[31]</a> C. D. Wright, "Factory System of the U.S.", p. 6, in U.S. Census of +Manufactures, 1880. Cf. Clark, in South in Building of Nation, Vol. V., p. +319.</p> + +<p><a name='f_32' id='f_32' href='#fna_32'>[32]</a> For a careful narrative of the establishments of the settlers who +moved into South Carolina from New England about 1816, with details of the +mills of the Hills, Shelden, Clark, Bates, Hutchings, Stack, the Weavers, +McBee, Bivings, etc., consult Kohn, Cotton Mills of S.C., and The Water +Powers of South Carolina; for those in North Carolina H. Thompson is +useful. Cf. also Southern Cotton Spinners' Association proceedings seventh +annual convention, pp. 41 ff. and Tompkins, Cotton Mill, Commercial +Features, pp. 301-302.</p> + +<p><a name='f_33' id='f_33' href='#fna_33'>[33]</a> Wood for the boiler of the Mount Hecla Mills, growing scarce, the +machinery was taken to Mountain Island, and there run by water. (H. +Thompson, pp. 48-9.)</p> + +<p><a name='f_34' id='f_34' href='#fna_34'>[34]</a> Cf. Kohn, Cotton Mills of South Carolina, p. 14.</p> + +<p><a name='f_35' id='f_35' href='#fna_35'>[35]</a> Kohn, Cotton Mills of South Carolina, p. 14. Cf. Charlotte News, +Ibid., with reference to the Rocky Mount Mill.</p> + +<p><a name='f_36' id='f_36' href='#fna_36'>[36]</a> H. Thompson, pp. 45 ff.</p> + +<p><a name='f_37' id='f_37' href='#fna_37'>[37]</a> Ibid.</p> + +<p><a name='f_38' id='f_38' href='#fna_38'>[38]</a> J. B. Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916.</p> + +<p><a name='f_39' id='f_39' href='#fna_39'>[39]</a> H. Thompson, pp. 42-43. Cf. p. 12.</p> + +<p><a name='f_40' id='f_40' href='#fna_40'>[40]</a> Theckston, interview, Greenville, S.C., Sept. 12, 1916.</p> + +<p><a name='f_41' id='f_41' href='#fna_41'>[41]</a> Theckston, interview, Greenville, S.C., Sept. 12, 1916.</p> + +<p><a name='f_42' id='f_42' href='#fna_42'>[42]</a> Clark, in South in Building of Nation, Vol. V., p. 321. Cf. Kohn, +Cotton Mills of South Carolina, giving quotation from Columbia Telescope.</p> + +<p><a name='f_43' id='f_43' href='#fna_43'>[43]</a> Charlotte News, Ibid. The McDonald Mill at Concord during the Civil +War dealt in barter. A gentleman in a nearby town told the writer that he +remembered as a boy trading a load of corn for yarn to be woven by the +women at home. (Theodore Klutz, interview, Salisbury, N.C., Sept. 1, +1916.) In 1862 the Confederate government commandered the Batesville +factory in South Carolina, and took nearly all of the product. That +portion which was allowed to private purchasers was always sold by ten +o'clock in the morning. (Thackston, interview, Greenville, S.C., Sept. 12, +1916.)</p> + +<p><a name='f_44' id='f_44' href='#fna_44'>[44]</a> Thompson, pp. 48-9.</p> + +<p><a name='f_45' id='f_45' href='#fna_45'>[45]</a> Tompkins, Cotton Mill, Commercial Features, pp. 183-4.</p> + +<p><a name='f_46' id='f_46' href='#fna_46'>[46]</a> Walter Montgomery, interview, Spartanburg, S.C., Sept. 5th, 1916.</p> + +<p><a name='f_47' id='f_47' href='#fna_47'>[47]</a> Thackston, interview, Greenville, S.C., Sept. 12th, 1916.</p> + +<p><a name='f_48' id='f_48' href='#fna_48'>[48]</a> John W. Fries, interview, Winston-Salem, N.C., Aug. 31, 1916.</p> + +<p>Another with a broad view of the history of the industry in the South was +willing to include in a similar statement the Graniteville mill about +which a good deal of controversy has clustered: "The cotton mills in the +South before the war were third-rate affairs. I speak of Graniteville and +Batesville and such plants as these. I remember my mother's telling me +that the warp ... used to be supplied by the mills for use in the homes of +the housewives. They were not regular cotton mills as the plants of later +establishment have come to be." (W. W. Ball, interview, Columbia, S.C., +Jan. 1, 1917.)</p> + +<p><a name='f_49' id='f_49' href='#fna_49'>[49]</a> Figures of Thompson give 700 <span class="spacer"> </span> and 7000 bales of cotton +consumed. (Thompson, pp. 49 ff.)</p> + +<p><a name='f_50' id='f_50' href='#fna_50'>[50]</a> U.S. Census of Manufactures, 1900. Cotton Manufactures, pp. 54 ff. A +map showing the distribution of cotton spindles in 1839 indicates a good +representation for all the Southern States, except Mississippi, Louisiana, +Arkansas and Florida, as to mills of small size, but the localization both +as to plants and spindles in New England is marked. (Clark, History of +Manufactures in the U.S., section on cotton manufactures, pp. 533-560. See +the whole section for a masterful discussion of both historical and +economic phases.)</p> + +<p><a name='f_51' id='f_51' href='#fna_51'>[51]</a> Cf. Thompson, pp. 49 ff.</p> + +<p><a name='f_52' id='f_52' href='#fna_52'>[52]</a> Clark, in South in Building of Nation, Vol. V, pp. 319-320. "Few +mills south of Virginia had power looms prior to 1840." (Ibid., p. 321.) +Cf. omission of looms for Southern States in the census figures quoted +above.</p> + +<p><a name='f_53' id='f_53' href='#fna_53'>[53]</a> Clark, South in Building of Nation, Vol. V. p. 322.</p> + +<p><a name='f_54' id='f_54' href='#fna_54'>[54]</a> William E. Dodd, in South in Building of Nation, Vol. V. pp. 566-7.</p> + +<p><a name='f_55' id='f_55' href='#fna_55'>[55]</a> Quoted in Pleasants.</p> + +<p><a name='f_56' id='f_56' href='#fna_56'>[56]</a> Quoted in Pleasants.</p> + +<p><a name='f_57' id='f_57' href='#fna_57'>[57]</a> Quoted from Niles' Register, May 10, 1828, in Pleasants. Mr. +Pleasants remarks that not until the late twenties did the leaders of +thought awaken to the disintegrating process that had set in two decades +before, and he notices the striking fact that in a report to the +legislature in 1828 it was said: "Nothing but a change of system can +restore health and prosperity at large. With all the material and elements +for manufacturing, we annually expend millions for the purchase of +articles manufactured in Europe and in the North out of our own raw +material. At this rate the state is on the road to bankruptcy. There must +be a change. But how is this important revolution to be accomplished? We +unhesitatingly answer—by introducing the manufacturing system into our +own state and fabricating at least to the extent of our wants.... Our +habits and prejudices are against manufacturing, but we must yield to the +force of things and profit by the indications of nature. The policy that +resists the change is unwise and suicidal. Nothing else can restore us."</p> + +<p><a name='f_58' id='f_58' href='#fna_58'>[58]</a> Tompkins, History of Mecklenburg County, Vol. I, p. 124. Cf. Ibid., +pp. 126-7.</p> + +<p><a name='f_59' id='f_59' href='#fna_59'>[59]</a> Kohn, Cotton Mills of South Carolina, pp. 18-19.</p> + +<p><a name='f_60' id='f_60' href='#fna_60'>[60]</a> Clark, History of Manufactures in U.S., pp. 553 ff. Cf. Ibid., in +South in Building of Nation, Vol. V, pp. 213-214, and pp. 316 ff.</p> + +<p><a name='f_61' id='f_61' href='#fna_61'>[61]</a> Kohn, Cotton Mills of South Carolina, p. 16.</p> + +<p><a name='f_62' id='f_62' href='#fna_62'>[62]</a> "Cheapness of cotton, abundance of water-power, the resources of the +coal-fields, when steam began to supplant the dam, the other mineral +resources, and the wealth of forests of pine, live oak, cypress, and other +woods in which the South abounded, did not even attract from other parts +sufficient capital to develop the section to anything like its full +extent. No artificial expedients were necessary there. But capital did not +come." (Ingle, Southern Sidelights, p. 73.)</p> + +<p><a name='f_63' id='f_63' href='#fna_63'>[63]</a> Quoted in A. B. Hart, The Southern South, pp. 231-232.</p> + +<p><a name='f_64' id='f_64' href='#fna_64'>[64]</a> Helper, p. 25.</p> + +<p><a name='f_65' id='f_65' href='#fna_65'>[65]</a> Tompkins, History of Mecklenburg, Vol. I, p. 100.</p> + +<p><a name='f_66' id='f_66' href='#fna_66'>[66]</a> Ibid., Vol. II, pp. 200-201.</p> + +<p><a name='f_67' id='f_67' href='#fna_67'>[67]</a> Tompkins, History of Mecklenburg, Vol. I, pp. 98-99. This statement +is strongly influenced by Tench Coxe. Cf. Ibid., Cotton Growing, pp. 3-4. +It has been said of the Irish people by Lord Dufferin that "the entire +nation flung itself back upon the land, with as fatal an impulse as when a +river, whose current is suddenly impeded, rolls back and drowns the valley +which it once fertilized", and Sir Horace Plunkett comments, "The +energies, the hopes, nay, the very existence of the race, became thus +intimately bound up with agriculture." (Sir Horace Plunkett, Ireland in +the New Century, p. 20.)</p> + +<p><a name='f_68' id='f_68' href='#fna_68'>[68]</a> Tompkins, Building and Loan Associations, p. 43. Cf. Ibid., The +Cultivation, Picking, Baling and Manufacturing of Cotton from Southern +Handpoint, pp. 5-6.</p> + +<p><a name='f_69' id='f_69' href='#fna_69'>[69]</a> Tompkins, Cotton Mill, Commercial Features, pp. 109-110. It is +interesting that this occurs in a book by a practical manufacturer +intended to point the way to technical success in mill management. It is +perhaps an indication of how social the South is in even its most +distinctly industrial aspects.</p> + +<p><a name='f_70' id='f_70' href='#fna_70'>[70]</a> Another has used the expression that "the South was throttled by an +out grown Economic System." (F. T. Carlton, History and Problems of +Organized Labor, pp. 19-20.)</p> + +<p><a name='f_71' id='f_71' href='#fna_71'>[71]</a> Tompkins, Cultivation, Picking, Baling and Manufacturing of Cotton, +pp. 5-6. "Agricultural Methods were 'stereotyped'." This writer did more +than any other in showing the character of the equipment for cotton +cultivation and the alterations made therein after the war.</p> + +<p><a name='f_72' id='f_72' href='#fna_72'>[72]</a> W. H. Gannon, The Landowners of the South, and the Industrial Classes +of the North, pp. 7 ff.</p> + +<p><a name='f_73' id='f_73' href='#fna_73'>[73]</a> William Gregg, Essays on Domestic Industry, pp. 18-19.</p> + +<p><a name='f_74' id='f_74' href='#fna_74'>[74]</a> Tompkins, History of Mecklenburg, Vol. I, p. 194. "The price which +America paid for the introduction and use of cotton was sectionalism, +slavery, and war." (James A. B. Scherer, Cotton as a World Power, p. 243.) +For a careful description of the circumstances surrounding the invention +of the cotton gin, and the legal documents in the dispute over the rights +to it, cf. ibid., Cotton and Cotton Oil, pp. 19 to 31, inclusive, and +appendix. "We abandoned a once leading factory system; we imported slaves; +we let all public highways become quagmires; we destroyed every +possibility for the farmer except cotton and by cut-throat competition +amongst ourselves we reduced the price to where there was not a living in +it for the cotton producer. We made cotton in a quantity and at a price to +clothe all the world excepting ourselves." (Ibid., Road Building and +Repairs, p. 24.)</p> + +<p><a name='f_75' id='f_75' href='#fna_75'>[75]</a> Ingle, Southern Sidelights, p. 49.</p> + +<p><a name='f_76' id='f_76' href='#fna_76'>[76]</a> Scherer, p. 253.</p> + +<p><a name='f_77' id='f_77' href='#fna_77'>[77]</a> Scherer, pp. 168 ff. Cf. Walter H. Page, The Rebuilding of Old +Commonwealths, p. 139.</p> + +<p><a name='f_78' id='f_78' href='#fna_78'>[78]</a> A. D. Mayo, In The Social Economist, Oct., 1893, pp. 203-204.</p> + +<p><a name='f_79' id='f_79' href='#fna_79'>[79]</a> F. L. Olmsted, The Seaboard Slave States, pp. 140-141. Cf. Ibid., p. +185, pp. 213-214.</p> + +<p><a name='f_80' id='f_80' href='#fna_80'>[80]</a> Olmsted, Seaboard Slave States, pp. 298-299. Cf. "The amount of it, +then, is this: Improvement and progress in South Carolina is forbidden by +its present system." (Ibid., pp. 522-523. And for his general philosophy +on the subject, Ibid., pp. 490-491.)</p> + +<p><a name='f_81' id='f_81' href='#fna_81'>[81]</a> Olmsted, Seaboard Slave States, pp. 179-180.</p> + +<p><a name='f_82' id='f_82' href='#fna_82'>[82]</a> Ibid., pp. 288 ff.</p> + +<p><a name='f_83' id='f_83' href='#fna_83'>[83]</a> Plunkett, p. 147.</p> + +<p><a name='f_84' id='f_84' href='#fna_84'>[84]</a> Ingle, Southern Sidelights, pp. 68-69.</p> + +<p><a name='f_85' id='f_85' href='#fna_85'>[85]</a> Ingle, Southern Sidelights, p. 11.</p> + +<p><a name='f_86' id='f_86' href='#fna_86'>[86]</a> Clark, in South in Building of Nation, Vol. V, pp. 213-214. Not only +did slavery deter from coming to the South immigrants opposed to the +institution, but the Southern whites were indisposed to welcome those who +refused to grow into the system. A Southern Newspaper of the fifties +betrayed this: "A large proportion of the mechanical force that migrate to +the South, are a curse instead of a blessing; they are generally a +worthless, unprincipled class—enemies to our peculiar institutions, and +formidable barriers to the success of our native mechanics. Not so, +however, with another class who migrate southward—we mean that class +known as merchants; they are generally intelligent and trustworthy, and +they seldom fail to discover their true interests. They become +slaveholders and landed proprietors; and, in ninety-nine cases out of a +hundred, they are better qualified to become constituents of our +institution, than even a certain class of our native born.... The +intelligent mercantile class ... are generally valuable acquisitions to +society, and every way qualified to sustain 'our institution'; but the +mechanics, most of them, are pests to society, dangerous among the slave +population, and ever ready to form combinations against the interest of +the slave-holder, against the laws of the country, and against the peace +of the Commonwealth." (Quoted in Olmsted, Seaboard Slave States, p. 511.)</p> + +<p><a name='f_87' id='f_87' href='#fna_87'>[87]</a> Tompkins, History of Mecklenburg, Vol. II, p. 204.</p> + +<p><a name='f_88' id='f_88' href='#fna_88'>[88]</a> Cf. Ibid., Vol. I, p. 153.</p> + +<p><a name='f_89' id='f_89' href='#fna_89'>[89]</a> Olmsted, Seaboard Slave States, p. 511.</p> + +<p><a name='f_90' id='f_90' href='#fna_90'>[90]</a> Sidney Andrews, The South Since the War, pp. 342-343.</p> + +<p><a name='f_91' id='f_91' href='#fna_91'>[91]</a> Olmsted, Seaboard Slave States, p. 543.</p> + +<p><a name='f_92' id='f_92' href='#fna_92'>[92]</a> Olmsted, Seaboard Slave States, p. 210.</p> + +<p><a name='f_93' id='f_93' href='#fna_93'>[93]</a> Gregg, Essays on Domestic Industry, p. 10.</p> + +<p><a name='f_94' id='f_94' href='#fna_94'>[94]</a> Gregg, Essays on Domestic Industry, pp. 9-10. "He who has possessed +himself of the notion that we have the industry, and are wronged out of +our hard earnings by a lazy set of scheming Yankees, to get rid of this +delusion, needs only seat himself on the Charleston wharves for a few +days, and behold ship after ship arrive laden down with the various +articles produced by Yankee industry." (Ibid.)</p> + +<p><a name='f_95' id='f_95' href='#fna_95'>[95]</a> Gregg, Essays on Domestic Industry, pp. 9-10. "He who has possessed +himself of the notion that we have the industry, and are wronged out of +our hard earnings by a lazy set of scheming Yankees, to get rid of this +delusion, needs only seat himself on the Charleston wharves for a few +days, and behold ship after ship arrive laden down with the various +articles produced by Yankee industry." (Ibid., p. 11.)</p> + +<p><a name='f_96' id='f_96' href='#fna_96'>[96]</a> Helper, pp. 21 and 23. See these pages also for interesting +illustrations of dependence upon the North, some of which plainly +influenced Henry W. Grady.</p> + +<p><a name='f_97' id='f_97' href='#fna_97'>[97]</a> William Gregg, Essays on Domestic Industry, p. 8. Nothing is more +frequently remarked as indicative of the exclusive attention to the +cultivation of cotton than the large reliance of an almost purely +agricultural country upon other sections for many articles of food. And +not only subsistance for the people, but subsistence for the plantation as +such often had to be imported. Missing nothing, Olmsted said, in a +description of a rail journey in North Carolina, "The principal other +freight of the train was one hundred and twenty bales of Northern hay. It +belonged ... to a planter who lived some twenty miles beyond here, and who +had bought it in Wilmington at a dollar and a half a hundred weight, to +feed to his mules. Including the steam-boat and railroad freight, and all +the labor of getting it to his stables, its entire cost to him would not +be much less than two dollars a hundred. This would be at least four times +as much as it would have cost to raise and make it in the interior of New +York or New England.... He had preferred to employ his slaves at other +business." (Olmsted, Seaboard Slave States, pp. 376-379.)</p> + +<p>But Gregg gave encouragement in any brighter aspects that he found, as +when he said, "Limited as our manufactures are in South Carolina, we can +now, more than supply the State with Coarse Cotton Fabrics. Many of the +fabrics now manufactured here are exported to New York, and for aught I +know, find their way to the East Indies." (Ibid., pp. 11) And he held out +to his State the prospect of the results that might reasonably be expected +from adoption of his proposals: "Were all our hopes ... consumated, South +Carolina would present a delightful picture. Every son and daughter would +find healthful and lucrative employment; our roads, which are now a +disgrace to us, would be improved; we would no longer be under the +necessity of sending to the North for half made wagons and carriages, to +break our necks; we would have, if not as handsome, at least as honestly +and faithfully made ones.... Workshops would take the place of the throngs +of clothing, hat, and shoe stores, and the watch-word would be, from the +seaboard to the mountains, success to domestic industry." (Ibid., p. 17.) +When Southern resources were exploited, the total benefit might not come +to the locality; "The great abundance of the best lumber for the purpose, +in the United States, growing in the vicinity of the town, has lately +induced some persons to attempt ship-building at Mobile. The mechanics +employed are mainly from the North." (Olmsted, Seaboard Slave States, p. +567.)</p> + +<p><a name='f_98' id='f_98' href='#fna_98'>[98]</a> Olmsted, Seaboard Slave States, p. 544.</p> + +<p><a name='f_99' id='f_99' href='#fna_99'>[99]</a> Quoted in Olmsted, Seaboard Slave States, p. 175.</p> + +<p><a name='f_100' id='f_100' href='#fna_100'>[100]</a> Olmsted, Seaboard Slave States, p. 363.</p> + +<p><a name='f_101' id='f_101' href='#fna_101'>[101]</a> Olmsted, Seaboard Slave States, p. 166.</p> + +<p><a name='f_102' id='f_102' href='#fna_102'>[102]</a> Tompkins, Cotton Mill, Commercial Features, preface to appendix. +This is one of a thousand incidents which bring to mind the similarity +between Irish temperament and that of the people of the South—how prone +both have been to obscure to themselves real issues in public affairs for +a joke's sake. And the reflection would be dismal for both peoples but for +the finer discernment of which each, at other times, has shown itself +capable. Cf. Plunkett.</p> + +<p><a name='f_103' id='f_103' href='#fna_103'>[103]</a> Gregg, Essays on Domestic Industry, p. 18.</p> + +<p><a name='f_104' id='f_104' href='#fna_104'>[104]</a> Ingle, Southern Sidelights, p. 47. Cf. Burkett and Poe, Cotton, pp. +312 and 313, and E. C. Brooks, The Story of Cotton, p. 157.</p> + +<p><a name='f_105' id='f_105' href='#fna_105'>[105]</a> Olmsted, Seaboard Slave States, p. 169.</p> + +<p><a name='f_106' id='f_106' href='#fna_106'>[106]</a> Gregg, Essays on Domestic Industry, p. 20. "Lamentable, indeed is it +to see so wise and so pure a man as Langdon Cheves, putting forth the +doctrine, to South Carolina, that manufactures should be the last resort +of a country. With the greatest possible respect for the opinions of this +truly great man, and the humblest pretensions on my part, I will venture +the assertion, that a greater error was never committed by a statesman." +(Ibid., p. 14) For a very fine passage, omitted here only because of its +length, showing the fallacy of Cheves' position, and defining what Gregg +meant by "domestic manufactures"—not household industry, but the erection +of steam mills in Charleston, of cotton factories there and throughout the +State; "I mean, that, at every village and cross-road in the State, we +should have a tannery, a shoe-maker, a clothier, a hatter, a blacksmith +... a wagon maker ... this is the kind of manufactures I speak of, as +being necessary to bring forth the energies of a country, and give +healthful and vigorous action to agriculture, commerce and every +department of industry"—See Ibid., pp. 14-15-16. The Southern Quarterly +Review in 1845 quoted Cheves: "'Manufacturing should be the last resort of +industry in every country, for one forced as with us, they serve no +interests but those of the capitalists who set them in motion, and their +immediate localities'." And Mr. Kohn remarks, "This expression was not +peculiar to any one class of leaders in South Carolina at that time," and +he instances other examples. (Kohn, Cotton Mill of S.C., p. 13.) Cf. also +references to Burkett and Poe and to Brooks.</p> + +<p><a name='f_107' id='f_107' href='#fna_107'>[107]</a> Gregg, Essays on Domestic Industry, p. 14. See p. 52.</p> + +<p><a name='f_108' id='f_108' href='#fna_108'>[108]</a> Gregg, Essays on Domestic Industry, pp. 19-20.</p> + +<p><a name='f_109' id='f_109' href='#fna_109'>[109]</a> Ibid., p. 20.</p> + +<p><a name='f_110' id='f_110' href='#fna_110'>[110]</a> Gregg, Speech on Blue Ridge Railroad, p. 67.</p> + +<p><a name='f_111' id='f_111' href='#fna_111'>[111]</a> Gregg, Speech on Blue Ridge Railroad, p. 29.</p> + +<p><a name='f_112' id='f_112' href='#fna_112'>[112]</a> Quoted in The News and Courier, Charleston, March 9, 1881. Said +Olmsted in 1856: "Singularly simple, childlike ideas about commercial +success, you find among the Virginians.... The agency by which commodities +are transferred from the producer to the consumer, they seem to look upon +as a kind of swindling operation: ... They speak angrily of New York, as +if it fattened on the country without any good in return." (Olmsted, +Seaboard Slave States, p. 138.)</p> + +<p><a name='f_113' id='f_113' href='#fna_113'>[113]</a> "... the labor of negroes and blind horse can never supply the place +of <i>steam</i>, and this power is withheld lest the smoke of an engine should +disturb the delicate nerves of an agriculturist; or the noise of the +mechanic's hammer should break in upon the slumber of a real estate +holder, or importing merchant, while he is indulging in fanciful dreams, +or building on paper, <i>the Queen City of the South</i>—the <i>paragon</i> of the +age. No reflections on the members of the City Council are here intended, +they are no doubt fairly representing public opinion on this subject...." +(Gregg, Essays on Domestic Industry, p. 23.)</p> + +<p><a name='f_114' id='f_114' href='#fna_114'>[114]</a> "The State of South Carolina has been extremely guarded in extending +grants to banking institutions, and in this she has shown her wisdom, for +it is an extremely dangerous power to exercise." He hoped, however, that +the danger to be apprehended from banking privileged would "not be +confounded with, and brought injudiciously to bear against the charters +which are necessary to develop the resources of our country, and give an +impetus to all industrial pursuits.... The practice of operating by +associated capital gives a wonderful stimulus to enterprise, and where +such investments are fashionable, no undertaking is too great to be +consummated. Why is it that the Bostonians are able in a day, or a week, +to raise millions at one stroke, to purchase the land on both sides of a +river, for miles, to secure a great water power and the erection of a +manufacturing city?... The divine, lawyer, doctor, schoolmaster, guardian, +widow, farmer, merchant, mechanic, common labourer, in fact, the whole +community is made tributary to these great enterprises. The utility and +safety of such institutions is no longer problematical.... If we shut the +door against associated capital and place reliance on individual exertion, +we may talk over the matter and grow poorer for fifty years to come, +without effecting the change in our industrial pursuits, necessary to +renovate the fortunes of our State. Individuals will not be found amongst +us who are willing to embark their 100, 200 or $300,000 in untried +pursuits: ... If liberal charters were granted, one hundred successful +establishments would spring into existence, where one, of feeble order, +could be expected from individual effort.... About three-fourths of the +manufacturing of the United States, is carried on by joint-stock +companies: ... We shall certainly have to look to such companies to +introduce the business with us...." He showed the perpetuity of the +corporate form by instancing one South Carolina cotton factory operated by +a joint stock company; "... there is but one of the original proprietors +living, yet the factory is still going on prosperously, producing as good +results as it ever has done ...", and this mill he contrasted with the +venture of an individual which was prosperous until his death, when the +legatees, not able to carry on the manufacture, forced the sale of the +property at half its value. (Gregg, An Enquiry into the Propriety of +Granting Charters of Incorporation for Manufacturing and Other Purposes, +in South Carolina, pp. 4-11.)</p> + +<p><a name='f_115' id='f_115' href='#fna_115'>[115]</a> Clark, in South in Building of Nation, Vol. V, pp. 314-315.</p> + +<p><a name='f_116' id='f_116' href='#fna_116'>[116]</a> Olmsted, Seaboard Slave States, p. 361.</p> + +<p><a name='f_117' id='f_117' href='#fna_117'>[117]</a> Ibid., pp. 358-359.</p> + +<p><a name='f_118' id='f_118' href='#fna_118'>[118]</a> Ingle, Southern Side Lights, p. 32 ff. "There were 101 persons in +the jails of Georgia on June 1, 1860; Virginia had 189; Massachusetts, +1161 and Illinois, 489. In the open life of the South and West, where men +could easily get to the land, there was little crime and jails were often +empty; in the industrial belt the prisons were always occupied. In like +manner and for the same reasons Southern and Western hospitals for the +insane and homes for the poor often showed very small percentages of these +unfortunates." (William E. Dodd, Expansion and Conflict, p. 231.) Cf. the +map on p. 188, showing the industrial belt of 1860 to extend along the +Atlantic Seaboard from New Hampshire to the head of Chesapeake Bay, +covering the coastal States, with scattering development indicated to the +westward. The territory south of Maryland shows a few plants of an output +of $250,000.</p> + +<p><a name='f_119' id='f_119' href='#fna_119'>[119]</a> Upon this whole matter, see Scherer, p. 179 ff. "In 1816, when +Webster opposed protection, there was a capital of only about $52,000,000 +invested in textile manufacture, of which much still lay in the South. In +1828, when he reversed his position, this capital had probably doubled, +and had become localized in and about New England." (Ibid., p. 181.) Cf. +Ibid., p. 234.</p> + +<p><a name='f_120' id='f_120' href='#fna_120'>[120]</a> Scherer, p. 152. "When the United States of America was formed, +manufacturing interests were as well developed in the South as the North. +Slavery ... existed under protection of law more than a hundred years in +Massachusetts before it was tolerated by law in Georgia. At the beginning +of the nineteenth century the tariff was not a matter which was +exclusively political.... The subject ceased to be an economic one and +became a political one in proportion as slavery grew in the South and +diminished in the North, and in inverse proportion as manufactures dried +up in the South and became of greater importance in the North.... The time +came when the South stood for free trade and the North for protection. +This was because slavery made agriculture more profitable in the South and +protection made manufacturing more profitable in the North with the South +as a protected market." (Tompkins, The Tariff and Reciprocity.)</p> + +<p><a name='f_121' id='f_121' href='#fna_121'>[121]</a> Tompkins, Tariff and Protection.</p> + +<p><a name='f_122' id='f_122' href='#fna_122'>[122]</a> Clark, in South in Building of Nation, Vol. V, p. 316 ff. See pp. +30-31-32. Contrast Tompkins, History of Mecklenburg, Vol. I, pp. 133-137.</p> + +<p><a name='f_123' id='f_123' href='#fna_123'>[123]</a> But some of the agitation in favor of industries in this period, as +in other ante-bellum and indeed post-bellum years, had a flavor not +symptomatic of healthy desire for improvement. One hundred and thirty-one +delegates represented nineteen North Carolina counties at a meeting held +in Salisbury in 1836, at which resolutions were adopted asking the +legislature to give assistance in the building of railroads; another +evidence of this interest was the Knoxville railroad convention of about +the same date. Of the advantages which it was agreed would flow from the +building of the Charleston and Cincinnati Railroad, it was declared that +"it will form a bond of union among the States which will give safety to +our property and security to our institutions." (Tompkins, History of +Mecklenburg, Vol. I, p. 125.) Of more positive character was the utterance +of a Southerner who viewed with deep concern the danger that the North +would crush slavery and place the South under complete submission to +tariff aggressions, congressional representation for the latter section +finding a stop in the limit to slave territory: "Under these +circumstances, the true policy of the south is distinct and clearly +marked. She must resort to the same means by which power is accumulated at +the North, to secure it for herself. She must embark in that system of +manufacturing which has been so successfully employed at the north.... All +civilized nations are now dependent upon our staple to give employment to +their machinery and their labor.... If, then, we manufacture a large +portion of it ourselves, we reduce the quantity for export, and the +competition for that remainder will add greatly to our wealth, while it +will place us in a position to dictate our own terms. The manufactories +will increase our population; increased population and wealth will enable +us to chain the southern States proudly and indissolubly together by +railroads and other internal improvements; and these works by affording a +speedy communication from point to point, will prove our surest defense +against either foreign aggression or domestic revolt." (J. D. B. DeBow, +Industrial Resources of the South and Southwest, Vol. II, p. 127.) J. H. +Taylor, of Charleston, combatted the antipathy toward massing the poor +whites in factories with the reflection that small farming in competition +with slave labor brought discontent that might mean social upheaval, +whereas the factory opened a door of opportunity that allowed of +intelligence and stability; with the chance of coming to own a slave, +"they would increase the demand for that kind of property, and would +become firm and uncompromising supporters of Southern institutions." +(Ingle, Southern Sidelights, pp. 25-26.)</p> + +<p><a name='f_124' id='f_124' href='#fna_124'>[124]</a> In earlier pages he has developed with much care the promising +industrial status of the Colonial and Revolutionary South. "In the +Southern colonies iron making became an important industry, even before +the beginning of the eighteenth century." The activity in Maryland, +Virginia, the Carolinas, Tennessee, Alabama and Georgia is shown: +Governor's Spottswood's ventures in Virginia, the passage in 1727 by the +Virginia General Assembly of "an act for encouraging adventures in +iron-works"; South Carolina forges built in 1773 are dwelt upon. His +original investigations reveal valuable facts as to iron-making in North +Carolina and upper South Carolina—details are given of the works of E. +Graham & Company, formed in 1826 and later merged with the King's Mountain +Iron Company; the Magnetic Iron Company, 1837, near the former plant, and +the South Carolina Manufacturing Company. It is to be noticed, however, as +a modification upon the good effect which might have been expected from +these enterprises, that the Graham Company had a considerable part of its +capital invested in slaves, and sixty per cent. of the Magnetic Company's +capital of $250,000 was used for the same purpose. (Richard H. Edmonds, +Facts About the South, Ed. 1894, pp. 3 ff.)</p> + +<p><a name='f_125' id='f_125' href='#fna_125'>[125]</a> Ibid., pp. 10 ff.</p> + +<p><a name='f_126' id='f_126' href='#fna_126'>[126]</a> Edmonds, p. 18 ff.</p> + +<p><a name='f_127' id='f_127' href='#fna_127'>[127]</a> In reference to the false idea of wealth and prosperity in the +ante-bellum South, it has been said, "A delusion of great wealth was +created in the listing as taxable property of slaves to the amount of at +least two thousand millions." (A. B. Hart, The Southern South, p. 218.)</p> + +<p><a name='f_128' id='f_128' href='#fna_128'>[128]</a> Edmonds, p. 2.</p> + +<p><a name='f_129' id='f_129' href='#fna_129'>[129]</a> Ibid., p. 14.</p> + +<p><a name='f_130' id='f_130' href='#fna_130'>[130]</a> Edmonds, pp. 1-2.</p> + +<p><a name='f_131' id='f_131' href='#fna_131'>[131]</a> Ibid., pp. 2-8, 19-20.</p> + +<p><a name='f_132' id='f_132' href='#fna_132'>[132]</a> Edmonds, p. 21. Cf. Ibid., pp. 19-20.</p> + +<p><a name='f_133' id='f_133' href='#fna_133'>[133]</a> E. G. Murphy, The Present South, p. 97.</p> + +<p><a name='f_134' id='f_134' href='#fna_134'>[134]</a> Murphy, p. 102.</p> + +<p><a name='f_135' id='f_135' href='#fna_135'>[135]</a> Murphy, pp. 10-11.</p> + +<p><a name='f_136' id='f_136' href='#fna_136'>[136]</a> Murphy, p. 21.</p> + +<p><a name='f_137' id='f_137' href='#fna_137'>[137]</a> There were earlier expressions of the same spirit, some, as if in +foretaste of the South's fate under the old system, before the Civil War, +and others immediately following the war. But the motives were liable to +be selfish and unsound, as for the purpose of retaining slavery, and if +they did not lack, that fire and conviction which marked the full movement +commencing fifteen years later, they were fruitless of large results. "We +are going to work in good earnest, not only to repair the waste places of +the war, but to build up and improve and prosper, and to show the world +that we can be good soldiers in peace as we are in war." (W. J. Barbee, +published 1866) Cf.</p> + +<p><a name='f_138' id='f_138' href='#fna_138'>[138]</a> News and Observer, Raleigh, N.C., Nov. 9, 1880.</p> + +<p><a name='f_139' id='f_139' href='#fna_139'>[139]</a> "... business is driving sentimental politics to the woods." (News +and Observer, Dec. 31, 1880.)</p> + +<p><a name='f_140' id='f_140' href='#fna_140'>[140]</a> Reprinted in News and Courier, Charleston, S.C., July 11, 1881.</p> + +<p><a name='f_141' id='f_141' href='#fna_141'>[141]</a> "... they (the New York Times, which carried an editorial +questioning the word of General Wade Hampton, and the 'malignants' of the +Republican party) must realize the difference between a Southern gentleman +and a Northern malignant. They know that the former cannot prevaricate, +while the Northern leaders of the Republican party and the malignants are +usually devoid of personal honor." This is from an editorial in the News +and Observer, Raleigh, N.C., and is too characteristic of most of the +political writing in the South which was an outcome of reconstruction.</p> + +<p><a name='f_142' id='f_142' href='#fna_142'>[142]</a> Reprinted in News and Courier, May 14, 1881.</p> + +<p><a name='f_143' id='f_143' href='#fna_143'>[143]</a> Reprinted from the Memphis Avalanche, in The Daily Constitution, +Atlanta, Ga., March 30, 1880.</p> + +<p><a name='f_144' id='f_144' href='#fna_144'>[144]</a> Reprinted in News and Courier, March 18, 1881. The writer had been a +slave-holder.</p> + +<p><a name='f_145' id='f_145' href='#fna_145'>[145]</a> A sentence occurring in an editorial of the News and Courier, in the +issue of March 24, 1881, is indicative of the love with which this city +looked upon the undertaking proposed: "A man who has been in the whirl of +New York or in any of the brand new cities of the great West coming into +Charleston might readily enough come to the conclusion that the old city +was in a sad state of decadence ... but our own people ... if they have +their eyes open (or hearts open would perhaps be the better expression) +could not fail to see manifest improvement."</p> + +<p class="poem">"They dub thee idler, smilingly sneeringly, and why?—<br /> +How know they, these good gossips, what to thee<br /> +The ocean and its wanderers may have brought?<br /> +How know they, in their busy vacancy,<br /> +With what far aim thy spirit may be fraught?<br /> +Or that thou dost not bow thee silently<br /> +Before some great unutterable thought."<br /> +<br /> +—Henry Timrod</p> + +<p><a name='f_146' id='f_146' href='#fna_146'>[146]</a> "The people of South Carolina are nothing if not heroic, and right +or wrong, they are sincere, earnest, and brave ... the same heroic +qualities are now leading in the restoration of the South to prosperity, +and on a basis that must speedily give the reconstructed States a degree +of substantial wealth and power that was never dreamed of before the war." +(A. K. McClure, "The South: Industrial, financial and political", p. 55, +published 1886.)</p> + +<p><a name='f_147' id='f_147' href='#fna_147'>[147]</a> The News and Courier, in an editorial on March 19, 1881: "Every true +South Carolinian must rejoice at the prudence and energy exhibited by the +citizens of Columbia in their management of the cotton mill campaign.... +It will be a happy day for the whole State when the hum of myriad spindles +is heard on the banks of the historic canal. Columbia will then grow +rapidly, speedily rivalling Augusta in the number and success of the +cotton mills. Thousands will be added to the population, and from our +political center additional life and energy will flow to every part of the +State.... we confess to having a weakness for Columbia, which suffered so +sorely at the end of the war, and which is the only place of consequence +in South Carolina that has not improved its business and enlarged its +boundaries since the overthrow of Radicalism in 1876. But cotton mills +will soon make amends for the vicissitudes and hopelessness of the past, +and for that reason The News and Courier takes the warmest possible +interest in the cotton mill campaign at Columbia." The Observer, Raleigh, +N.C., July 11, 1800: "... when our people once begin to mingle freely, +having a community of interests and a common purpose, sectional feelings +will be obliterated, and we will forget that there has been an East, a +center, or a West, and remember only that we are all North Carolinians, +sharing the same fortunes, blessed with a common hope and ennobled with +the same proud memories of a glorious past." The News and Courier, January +25, 1881, carried a plea for State aid for Columbia in her enterprise to +build a 16,000-spindle mill, the same as forms the subject of the first +part of this note. The editorial especially advocated the placing of +convicts at work on the construction: "... The capital, <i>because it was +the capital</i>, was laid in ashes by Sherman's troops. In the person of +Columbia, all South Carolina was ravaged and laid waste. The city which +suffered so sorely may reasonably expect the just assistance of the State +in the endeavor to repair her losses caused by war, and intensified by +years of contact with political profligacy and misrule."</p> + +<p><a name='f_148' id='f_148' href='#fna_148'>[148]</a> "What the South should do is the caption that graces the editorial +effusions of all classes cf papers, and especially those of our own deeply +solicitous and anxious friends of the North. Many of us think we know. The +South should depend upon its own virtue, its own brain, its own energy, +attend to its own business, make money, build up its waste places, and +thus force upon the North that recognition of our worth and dignity of +character to which that people will always be blind unless they can see it +through the medium of material, industrial and intellectual strength. We +may proclaim political theories, but it is the more potent and powerful +argument of the mighty dollar that secures an audience there, and the +sooner we realize it the better for us." (News and Observer, Raleigh, N.C., +Nov. 27, 1880.)</p> + +<p><a name='f_149' id='f_149' href='#fna_149'>[149]</a> Editorial in News and Courier, Mar. 9, 1881.</p> + +<p><a name='f_150' id='f_150' href='#fna_150'>[150]</a> It is interesting and pathetic to observe how unaccustomed the South +was to the most obvious facts of business. Concentration upon one crop had +precluded from the Southern mind—speaking in the aggregate, of +course—the first reasonings springing from diversification of industry +and from ordinary competition. But once the necessity for a different +attitude became apparent, the statesmanlike manner in which this was +pressed must provoke admiration. The article in J. D. B. DeBow's +"Industrial Resources", etc., pp. 124-125, presents the consideration that +the cotton crop of Tennessee, amounting to 200,000 bales, 90,000,000 +pounds at 6½ cents an average pound, gave the producers 11½ per +cent. profit on their investment, while the manufacturers of the same crop +made 24 per cent. profit—more than twice as great. "Are there any so +blind as not to see the advantages of the system?" Much earlier Southern +statements of the true fact from manufacturing cotton was to be found, but +in the delirium of the latter days of slavery these were lost sight of. +Wm. J. Barbee, in his "The Cotton Question" pp. 138 and following, +commends for the reflection of capitalists in 1866 the "Manufacture of +Cotton by its Producers, suggestions of S. R. Cockrill seventeen years +ago." Cockrill speculated as to the gain to be derived from cotton mills +in the cotton states, and said: "Facts like these should fix the attention +of the cotton planter, teach him his true interest, and stimulate him to +become the manufacturer of the product of his field, instead of permitting +others to reap the entire profit."</p> + +<p><a name='f_151' id='f_151' href='#fna_151'>[151]</a> News and Courier, Feb. 2, 1881. The editorial appeared apropos of +the opening of books for subscriptions to the Charleston Manufacturing +Company, which occupies a prominent place in the history of cotton +manufacturing in the South. The editorial concluded: "This is the logic of +the investment of money in cotton mills in Charleston. It will pay the +stockholders their ten or twelve per cent., and the city at large will get +a dollar's profit on every dollar's worth of raw cotton that the mills +consume."</p> + +<p><a name='f_152' id='f_152' href='#fna_152'>[152]</a> While the manufacture of cotton was the most prominent manifestation +of the newly quickened spirit in the South, it was by no means the only +one. Every opportunity for productive enterprise was eagerly investigated; +the discovery of one of these was hailed in the papers with an enthusiasm +like the joy of a child in a new-found plaything. Properties of soils, the +use of the telephone, the most profitable employment for State convicts +were some of the topics of interest. There was, of course, a complete +absorption for a time in railroads in the Southern Atlantic coast states, +either for the further building of small independent lines, the merging of +these into systems, or the extension of the coastal lines over the +mountains into Tennessee.</p> + +<p>There was also a phase of the movement distinctly moral in tone, as, e.g., +the wide formation of temperance societies about this time.</p> + +<p><a name='f_153' id='f_153' href='#fna_153'>[153]</a> News and Courier, Aug. 1, 1881.</p> + +<p><a name='f_154' id='f_154' href='#fna_154'>[154]</a> While it is clear that the purpose to build cotton mills in the +South arose irrespective of the means at the disposal of the people with +which to do so, and would have come about had their financial limitations +been even more discouraging, it is certainly true that a revival of +business at the time of the commencement of the cotton mill campaign was a +spur to the widespread investigation into the profitableness of cotton +manufacturing. That there was coming to be money seeking investment, or at +any rate capable of investment, was good reason for the searching out of +opportunities for productive industry. The following gives an insight into +the better times that had begun: "The year that is just finished will be +to the present generation a red-letter one, for it brought to an end the +long and weary period of enforced economy and restricted business that +followed the panic of 1873, and put every branch of industry at work. +Agriculture was encouraged in the West and South by good crops and +remunerative prices, the factories received more orders than they could +fill, the railroads were blocked with freight, the mines were pushed to a +greater extent than ever, and all other interests were quickened towards +the end of the old year in a way that was full of promise." This summary +of the year 1879 appeared in The Daily Constitution, Atlanta, January 7, +1880. The return to specie payments did much to stimulate trade. A +contribution to the Savannah, Ga. Morning News, quoted by W. H. Gannon in +"The Landowners of the South and the Industrial Classes of the North", pp. +6, 7 and 8. The article was probably written by Mr. Gannon himself.</p> + +<p><a name='f_155' id='f_155' href='#fna_155'>[155]</a> Quoted from Savannah Morning News by W. H. Gannon, The Landowners of +the South and the Industrial Classes of the North. "The cotton mill to the +cotton field" was the familiar dogma which crystallized out of the course +events were taking.</p> + +<p><a name='f_156' id='f_156' href='#fna_156'>[156]</a> The term is taken from The News and Courier, where it was used +first, perhaps, in the issue of January 31, 1881. Before long it had come +to be a phrase in everybody's mouth, and proved to be apt beyond any +thought, probably, of the editor who first ran the line over a column of +notices of new mills established.</p> + +<p><a name='f_157' id='f_157' href='#fna_157'>[157]</a> "The News and Courier busies itself with every enterprise, big and +little, that will turn a dollar's worth of raw material into more than a +dollar's worth of manufactures." (News and Courier, Mar. 19, 1881.)</p> + +<p><a name='f_158' id='f_158' href='#fna_158'>[158]</a> Reprinted in Daily Constitution, Mar. 9, 1880.</p> + +<p><a name='f_159' id='f_159' href='#fna_159'>[159]</a> News and Courier, Jan. 12, 1882.</p> + +<p><a name='f_160' id='f_160' href='#fna_160'>[160]</a> Ibid., Feb. 22, 1881, see p. 11, note 3.</p> + +<p><a name='f_161' id='f_161' href='#fna_161'>[161]</a> Ibid., January 26, 1881.</p> + +<p><a name='f_162' id='f_162' href='#fna_162'>[162]</a> "While Charleston and other points in the State are discussing and +initiating their cotton manufactories, Spartanburg is pushing ahead with +her grand enterprise. (Spartanburg correspondence of News and Courier, +Feb. 4, 1881.) The same purpose to encourage new mills actuated the News +and Observer, December 24, 1880, in referring to Edward Richardson, of the +firm of Richardson and May, cotton factors, in New Orleans ... the cotton +king of the world. He runs ten to twelve plantations.... Has built a town +(Cresson) ... where he has factories employing 400 looms, 18000 spindles +and 800 hands. He is worth from $15,000,000 to $18,000,000, all +accumulated in the South, the poor South." The encouragement lent by one +mill to others to come into the field was recognized. In working for the +establishment of the Charleston Manufacturing Company, the News and +Courier was starting a force that would grow in power through the years: +"When this pioneer company shall have made a good start, other companies +will speedily follow...." (January 28, 1881). And again (Observer, January +2, 1880): "Another large cotton factory. The Charlotte Observer chronicles +the erection in the immediate future of a cotton factory in that city, and +regards it as the beginning of a prosperous growth of manufactures." An +item in the Barnwell, S.C. Sentinel, reprinted in the News and Courier, +Feb. 8, 1881, declared: "The people of Charleston should have never +hesitated as long as they have about embanking in the manufacture of +cotton goods, and we firmly believe, as the ball is started, that it will +be kept moving...." The Keowee Courier, in an editorial also reprinted in +the Charleston paper, commended Charleston as setting an example to the +entire State. A Georgia note, carried in the News and Courier of February +24, 1881, is especially specific in this connection: "If the organization +of this manufacturing company (the Enterprise Factory, Augusta, Georgia, +which was to be greatly enlarged after making good profits) proves a good +omen—its extension may work as an invaluable stimulus to other +enterprises now. It will hurry up the walls of the stupendous Sibley Mill, +where 25,000 spindles will soon mingle in our industrial acclaim. It will +quicken the shuttles of that giant corporation, the Augusta Factory." "It +will spur on the Globe Factory and the Summerville Mills to renewed +effort, while our South Carolina neighbors cannot but catch the spirit of +improvement."</p> + +<p><a name='f_163' id='f_163' href='#fna_163'>[163]</a> Reprinted in the News and Courier, Jan. 31, 1881.</p> + +<p><a name='f_164' id='f_164' href='#fna_164'>[164]</a> Reprinted in the News and Courier, Feb. 23, 1881.</p> + +<p><a name='f_165' id='f_165' href='#fna_165'>[165]</a> Ibid., Jan. 27, Mar. 20 and May 4, 1881.</p> + +<p><a name='f_166' id='f_166' href='#fna_166'>[166]</a> The commencement of the movement was right clearly marked in the +minds of the people. The News and Courier (August 1, 1881) in an editorial +commenting on the address of Major Hammett on cotton manufacturing in the +South, printed in that issue of the paper, had these words: "Major Hammett +was the founder of the Piedmont Factory, which, under his management, is +one of the finest and most profitable cotton mills in the South. The +Piedmont Factory was projected and built before the opening of the cotton +mill campaign in the South, and Maj. Hammett ranks, therefore, as one of +the pioneers in cotton manufacturing in South Carolina."</p> + +<p><a name='f_167' id='f_167' href='#fna_167'>[167]</a> News and Courier, Oct. 13, 1881.</p> + +<p><a name='f_168' id='f_168' href='#fna_168'>[168]</a> "We people of the South should embrace every opportunity which, like +the opportunity offered by this exposition, will bring among us +intelligent and interested observers of our industrial condition, +resources and aptitudes. We have in the midst of us the raw material, so +to speak, of a magnificent prosperity. We lack knowledge, population and +capital. These may be slowly accumulated in the course of years, or they +may be rapidly by well directed efforts to obtain them from beyond our own +borders. We advocate the latter plan." (Interview with one of the +officials of the exposition, printed in News and Courier, Mar. 14, 1881.)</p> + +<p><a name='f_169' id='f_169' href='#fna_169'>[169]</a> News and Courier, Dec. 27, 1881.</p> + +<p><a name='f_170' id='f_170' href='#fna_170'>[170]</a> An Atlanta dispatch to the News and Courier, February 25, 1881, said +the executive committee of the exposition was fully organized, with H. I. +Kimball, chairman and J. W. Rickman, secretary. By March 8 (News and +Courier) $20,000 had been subscribed in Atlanta, and General Sherman had +headed the Northern subscription to the capital stock with $2,000. By the +17th (News and Courier) the stock had reached $40,000, four subscriptions +of $1,000 each having been received from private individuals, and eleven +of $500 each from like sources. Railroad subscriptions at this date were: +Western and Atlantic Railroad Company, $10,000; Louisville and Nashville, +$5,000; Richmond and Danville Road, $2,500; East Tennessee, Virginia and +Georgia Road, $2,000. By the first day of April (News and Courier still) +New York bankers seemed likely to increase by $5,000 the amount of +subscriptions sought from them, and make their shares $30,000. Inman, Swan +& Co. subscribed to $2,000 worth of stock Drexel, Morgan & Co. took +$1,000; and Brown Bros. & Co. $1,000. Before the week was out, (News and +Courier, April 5) the Boston Herald had taken $1,000 worth of stock. The +executive committee had sent an agent to Europe and had made a tour of +investigation through the North earlier.</p> + +<p><a name='f_171' id='f_171' href='#fna_171'>[171]</a> News and Courier, Oct. 21, 1881.</p> + +<p><a name='f_172' id='f_172' href='#fna_172'>[172]</a> Ibid., Oct. 7, 1881.</p> + +<p><a name='f_173' id='f_173' href='#fna_173'>[173]</a> News and Courier, Oct. 10, 1881.</p> + +<p><a name='f_174' id='f_174' href='#fna_174'>[174]</a> November 1, 1881. This paper maintained Mr. Hemphill as staff +correspondent at the exposition for some time after its opening.</p> + +<p><a name='f_175' id='f_175' href='#fna_175'>[175]</a> News and Courier, Dec. 5, 1881. The speech details the number of +miles of railroads that spread like a web over New England. "I have said +that there is no better simple standard than the proportion of railroads +to the square mile of territory of any State, by which to gauge the +condition and prosperity of the people. I ask you, gentlemen of Georgia, +if you will lag behind. I ask you men of the South what you will do in +this matter." "I told you last year you needed the savings bank more than +any other institution; there is a vast unused capital in your Southern +States in the hordes of the working people waiting for us, but there is +one condition precedent to the savings bank—you must set up schools." +This paragraph illustrates Mr. Atkinson's ideas singularly well. His +advocacy here of common schools was a part of his great desire to see the +South rebuilt, and so was his proposal of savings banks. But he could not +understand how the South wished to see money taken out of savings banks +and placed immediately in cotton mills, where it would be more productive +to its owners, and to the country. As far as Mr. Atkinson went, his +reasoning was astonishing sound, but where he stopped, he stopped +irrevocably.</p> + +<p>"Where are your dairies? You farmers of the hills of Georgia, from the +mountains of the Carolinas and Tennessee, aye, from the North Cumberland +valley, from the French Broad River, even from that great blue grass +country of Kentucky. Where are your dairies?" he seemed to think of +everything but what to his hearers seemed most obvious. He suggested stock +raising as profitable in the South, and finally the culture of Pongee, +Tussah or Cheefoo silk worms, though the latter would be, he thought, +perhaps of doubtful success. A week after this speech, Mr. Atkinson had a +talk, reported in the News and Courier of May 8, 1881, with the press +representatives in their pavilion. He discussed first "whether a single +roller gin, operating against a saw gin, will do an equal amount of work +with less motive power and less labor." He had arranged to take to Boston +to lay before the New England Cotton Manufactures' Association samples of +cotton from all the gins on the grounds. "Mr. Atkinson has proposed +another trial of every kind of gin, cleaner, press and picker, to be made +in the building of the New England Mechanics' Institute in Boston, in +December, 1882. Every man in the South who is especially interested in +cotton production and manufacture will be invited to plant a specific acre +for use at this trial, which will be the second step in what has been so +well begun in Atlanta. The picking and saving the cotton wasted on the +ground, the cleaning, ginning and packing of the staple in good condition, +offers to the Southern States a branch of manufacturing the most important +in the whole series of operations which neither the Northern States nor +Europe can share, but in which there is greater opportunity for profit in +ration to the capital invested than in any other department of +manufacture. 'No staple in the world,' said Mr. Atkinson, 'except the +sugar raised by the Maylays, is treated so barbarously as the cotton +produced in the Southern States of the American Union'." Tests, Mr. +Atkinson thought, showed that cotton from the Charlotte steam compress +worked up more smoothly, though the yarn was somewhat weaker, perhaps, +than cotton from the county compresses and loose cotton just as it came +from the field. It may be that this interview was written by Mr. Atkinson +himself, and run into the reports of the day at the exposition as sent out +by the correspondents.</p> + +<p><a name='f_176' id='f_176' href='#fna_176'>[176]</a> Examples of this abound. The Manufacturer and Industrial Gazette, +Springfield, Mass., was quoted in the News and Courier, Feb. 3, 1881: +"They (the Southern States) have the advantage of cotton location, and, +when they have secured new and improved machinery, will do any unrivalled +business. They can save freights, buy cheaper and hire cheaper labor. They +save buyers' commission, and warehouse delivery and cartage, sampling, +classing, pressing, shipping, marine risks and freight and cartage to +interior towns, which amounts in all to some seven dollars per bale. The +Northern mills also lose from receiving cotton poorly ginned, containing a +good deal of leaf and sand, which is computed at six per cent. of the +entire crop. The difference between the cost of a bale sent to Fall River, +Mass., and a bale sent to Columbia, Ga., is eight dollars and six cents. +This makes a tax of eighteen per cent. which Fall River pays in +competition with Columbus. It is estimated that, if the planters could +manufacture their cotton near home, they would save $50,000,000 in +transportation.... As yet the South manufactures principally coarser +goods, yarns, ducks, unbleached muslins, sheetings, shirtings, osnaburgs, +jeans, etc., but the time is not distant when it will come to make prints, +cambrics, laces, and all the finer qualities of staple goods."</p> + +<p><a name='f_177' id='f_177' href='#fna_177'>[177]</a> News and Courier, Dec. 5, 1881. (In the same issue excerpts from the +address were printed.)</p> + +<p><a name='f_178' id='f_178' href='#fna_178'>[178]</a> News and Courier, Oct. 13, 1881. In the following editorial comment +of the Augusta, Ga., Chronicle and Constitutionalist (reprinted in the +News and Courier, Dec. 8, 1881) the contrast between Mr. Atkinson's views +and the facts as the South was finding them is made sharp: "Augusta has an +abiding faith in her manufactories, despite Mr. Edward Atkinson, and +people outside seem to think as well of them, at any rate they are willing +to invest their money in such enterprise.... For such factories as the +Augusta, the Enterprise and Sibley and the King are of immense importance +to a city. There will be when all of them are at work, fully twenty +thousand people dependent upon them, including the operatives and their +families, to say nothing of the stores that will be supported by their +trade. Each factory like the Sibley or the King adds five thousand to the +population."</p> + +<p><a name='f_179' id='f_179' href='#fna_179'>[179]</a> "We have found that we cannot stand alone, that our fight must be +made within the Union." (News and Courier, Oct. 24, 1881.)</p> + +<p><a name='f_180' id='f_180' href='#fna_180'>[180]</a> News and Courier, Charleston, S.C., July 13, 1881. When Garfield was +shot, July 2, this paper carried an editorial of similar content. Five +days after the appearance of the editorial here quoted, when recovery +seemed assured, the paper said this: "One thing the President's desperate +illness has unquestionably effected. It has done more than years of +ordinary events in bringing the North and South together—vainly will the +politicians flourish the 'bloody flag'. The people will not rally on the +ensanguined colors again. For the Republic, as well as the President, the +danger line is well nigh, passed."</p> + +<p><a name='f_181' id='f_181' href='#fna_181'>[181]</a> News and Courier, Sept. 20, 1881. Garfield died at Elberton, N.J., +September 19. That Charleston meant what she said is shown in the +reception which was accorded the First Connecticut Regiment, invited to +visit the city after attending the Centennial Celebration at Yorktown, +Virginia. The New Englanders came six weeks after the death of +Garfield—October 24. On this day the newspaper carried at the head of the +first column the Connecticut and South Carolina flags crossed, above them +the words "Yankee Doodle Came to Town", and below "A Welcome Invasion!" An +editorial headed "Happy Day" had these words: "It does not strain the +probabilities to believe that the visit of the First Connecticut Regiment +to Charleston is the outgrowth and sentiment and interest which found +expression when the President of the United States lay dying, and when +after his long agony he died. Had not President Garfield been slain, and +the South felt differently and, therefore, acted differently, this present +unpremeditated fraternization would have been impossible. There is no +shock now in removing mourning trappings to make room for the wreaths and +garlands of joy. It is the fit succession of events, a consequence of the +murder of the President. The blood of the Chief Magistrate is the seed of +union. Yorktown in itself a reminder of the days when North and South had +felt one aim and purpose, furnished the opportunity or occasion, and the +unselfish sorrow of the Southern people during the President's mortal +illness furnished the motive. The relation of the two events is too plain +to be ignored or misunderstood. This is the significance of the coming of +the Connecticut First from the land of abundance and diversified wealth to +battle-scarred and struggling Charleston."</p> + +<p><a name='f_182' id='f_182' href='#fna_182'>[182]</a> Interview with C. C. Baldwin In the New York Herald, reprinted in +News and Courier, July 11, 1881.</p> + +<p><a name='f_183' id='f_183' href='#fna_183'>[183]</a> The Daily Dispatch, Richmond, Va., March 5, 1880.</p> + +<p><a name='f_184' id='f_184' href='#fna_184'>[184]</a> News and Observer, Dec. 1, 1880.</p> + +<p><a name='f_185' id='f_185' href='#fna_185'>[185]</a> News and Observer, Mar. 25, 1881.</p> + +<p><a name='f_186' id='f_186' href='#fna_186'>[186]</a> Mar. 18, 1881. In this instance also it is apparent that the State +was looked to as a natural unit upon which the company had claims. The +dispatch says: "The estimates of the subscriptions here has (have) been +raised, in view of the encouragement received already, to at least +$125,000, and it is believed that with this substantial backing the whole +State will be assured of the character of the organization, and join in +the enterprise."</p> + +<p><a name='f_187' id='f_187' href='#fna_187'>[187]</a> News and Courier, Jan. 14, 1882.</p> + +<p><a name='f_188' id='f_188' href='#fna_188'>[188]</a> News and Observer, Raleigh, Nov. 9, 1880.</p> + +<p><a name='f_189' id='f_189' href='#fna_189'>[189]</a> Dec. 24, 1880.</p> + +<p><a name='f_190' id='f_190' href='#fna_190'>[190]</a> Newberry Herald, quoted in News and Courier, Feb. 8, 1881.</p> + +<p><a name='f_191' id='f_191' href='#fna_191'>[191]</a> Quoted in News and Courier, Feb. 8, 1881.</p> + +<p><a name='f_192' id='f_192' href='#fna_192'>[192]</a> January 28, 1881.</p> + +<p><a name='f_193' id='f_193' href='#fna_193'>[193]</a> The same dual basis of appeal was recognized in a notice +supplementing an advertisement of the company appearing the day before the +editorial here quoted (Jan. 27, 1881): "The advantages, direct and +incidental, accruing to every citizen of Charleston from this industry +about to be started in our city are so manifest that those who have +inaugurated the enterprise have every reason to feel confident of a ready +response to the call for capital and for abundant success."</p> + +<p><a name='f_194' id='f_194' href='#fna_194'>[194]</a> News and Courier, Apr. 13, 1881.</p> + +<p><a name='f_195' id='f_195' href='#fna_195'>[195]</a> Quoted in News and Courier, Mar. 31, 1881.</p> + +<p><a name='f_196' id='f_196' href='#fna_196'>[196]</a> Quoted in News and Courier, Jan. 31, 1881.</p> + +<p><a name='f_197' id='f_197' href='#fna_197'>[197]</a> News and Courier, Sept. 1, 1881.</p> + +<p><a name='f_198' id='f_198' href='#fna_198'>[198]</a> Thompson, P.</p> + +<p><a name='f_199' id='f_199' href='#fna_199'>[199]</a> Rock Hill Correspondent in News and Courier, Jan. 12, 1882.</p> + +<p><a name='f_200' id='f_200' href='#fna_200'>[200]</a> News and Courier, Dec. 17, 1881.</p> + +<p><a name='f_201' id='f_201' href='#fna_201'>[201]</a> Yorkville Correspondence, Ibid., March 25, 1881.</p> + +<p><a name='f_202' id='f_202' href='#fna_202'>[202]</a> Ibid., Feb. 26, 1881.</p> + +<p><a name='f_203' id='f_203' href='#fna_203'>[203]</a> Ibid., Apr., 6, 1881; see p. 19.</p> + +<p><a name='f_204' id='f_204' href='#fna_204'>[204]</a> The Observer, Sept. 10, 1880. The Daily Constitution, Atlanta, on +Mch. 9, 1880, carried from the Columbus Enquirer: "... there are 213,157 +spindles to Georgia's credit.... Of this number Columbus has 60,000—near +a third of the whole.... The Eagle and Phenix mills alone operate 44,000 +spindles. All this has been done since 1866 ... with Southern capital and +brains." The editor of The Observer, Raleigh, paid a visit to Durham and +Winston, North Carolina, and went back to his desk glowing with enthusiasm +for what they had accomplished. In an editorial (May 19, 1880) headed +"Manufacturing Towns"; he wrote of Durham: "Literally the town has been +created through the energy and enterprise of its inhabitants. They began +with no capital to speak of, and now they levy contributions on hundreds +of thousands of people who live in distant parts of the Union, and with +their gains have built and beautified a town whose history should be +continually kept in view by all who would have their own homes to +prosper."</p> + +<p><a name='f_205' id='f_205' href='#fna_205'>[205]</a> C. C. Baldwin, president Louisville and Nashville Railroad; the +interview was reprinted in News and Courier, July 11, 1881.</p> + +<p><a name='f_206' id='f_206' href='#fna_206'>[206]</a> Staff correspondence from Spartanburg to News and Courier, May 21, +1881.</p> + +<p><a name='f_207' id='f_207' href='#fna_207'>[207]</a> Ibid., Feb. 4, 1881.</p> + +<p><a name='f_208' id='f_208' href='#fna_208'>[208]</a> News and Courier, Oct. 24, 1881.</p> + +<p><a name='f_209' id='f_209' href='#fna_209'>[209]</a> News and Courier, Mch. 8, 1881.</p> + +<p><a name='f_210' id='f_210' href='#fna_210'>[210]</a> News and Courier, Mar. 19 and 25, 1881. The personnel of committees +appointed from among the early subscribers is significant. The names are +all, or nearly all, old ones in South Carolina, and some of the men are +still among the first citizens of the capit. The committees were made up +of W. A. Clark, Jno. C. Seegers, Nathaniel B. Barnwell, F. W. McMaster, +Preston C. Lorick, T. A. McCreery, Jno. T. Sloan, Jr.</p> + +<p><a name='f_211' id='f_211' href='#fna_211'>[211]</a> Ibid., Mar. 17, 1881.</p> + +<p><a name='f_212' id='f_212' href='#fna_212'>[212]</a> Columbia Dispatch, Ibid., Mar. 31, 1881.</p> + +<p><a name='f_213' id='f_213' href='#fna_213'>[213]</a> News and Courier, Jan. 28, 1881.</p> + +<p><a name='f_214' id='f_214' href='#fna_214'>[214]</a> See p. 14.</p> + +<p><a name='f_215' id='f_215' href='#fna_215'>[215]</a> News and Courier, Jan. 9, 1882.</p> + +<p><a name='f_216' id='f_216' href='#fna_216'>[216]</a> News and Courier, Dec. 14, 1881.</p> + +<p><a name='f_217' id='f_217' href='#fna_217'>[217]</a> Ibid., Mch. 25, 1881.</p> + +<p><a name='f_218' id='f_218' href='#fna_218'>[218]</a> "Brutus", writing from Barnwell to News and Courier, May 25, 1881.</p> + +<p><a name='f_219' id='f_219' href='#fna_219'>[219]</a> Sumter, S.C. Southron, quoted in News and Courier, May 14, 1881.</p> + +<p><a name='f_220' id='f_220' href='#fna_220'>[220]</a> News and Courier, June 28, 1881.</p> + +<p><a name='f_221' id='f_221' href='#fna_221'>[221]</a> Ibid., Mar. 14, 1881.</p> + +<p><a name='f_222' id='f_222' href='#fna_222'>[222]</a> Quoted News and Courier, Aug. 18, 1881.</p> + +<p><a name='f_223' id='f_223' href='#fna_223'>[223]</a> Observer, June 27, 1880.</p> + +<p><a name='f_224' id='f_224' href='#fna_224'>[224]</a> Dispatch quoted in News and Courier, Mar. 25, 1881. Francis +Fontaine, commissioner of immigration for Georgia, did not represent the +method of appeal of his fellow Georgians, when he said tritely and smugly: +"The truth is only to be made known, when capital will find its own way to +the sunny land." (Observer, Mar. 20, 1880.)</p> + +<p><a name='f_225' id='f_225' href='#fna_225'>[225]</a> Gannon, W. H., The Landowners of the South, and the Industrial +Classes of the North, pp. 6, 7 and 8.</p> + +<p><a name='f_226' id='f_226' href='#fna_226'>[226]</a> News and Courier, Aug. 9, 1881.</p> + +<p><a name='f_227' id='f_227' href='#fna_227'>[227]</a> Quoted in News and Courier, July 7, 1881. The isolation of this +editor and the provincial quality of his utterance are clearly seen in +such phrases as "we welcome foreign capital down here". Even without the +context.</p> + +<p><a name='f_228' id='f_228' href='#fna_228'>[228]</a> Quoted from New York Herald, in News and Courier, July 11, 1881. +Hon. Cassius M. Clay, writing in The Industrial South declared: "I am +tired of hearing the deprecating cry of 'We want Yankee brains and +enterprise.' We don't want any such thing; We want Southern brains and +enterprise." (Quoted in Gannon, pp. 18 and 19.)</p> + +<p><a name='f_229' id='f_229' href='#fna_229'>[229]</a> Quoted in News and Courier, Nov. 5, 1881.</p> + +<p><a name='f_230' id='f_230' href='#fna_230'>[230]</a> Feb. 13, 1880.</p> + +<p><a name='f_231' id='f_231' href='#fna_231'>[231]</a> News and Courier, Nov. 5, 1881.</p> + +<p><a name='f_232' id='f_232' href='#fna_232'>[232]</a> Quoted in News and Courier, Mar. 8, 1881.</p> + +<p><a name='f_233' id='f_233' href='#fna_233'>[233]</a> Quoted in News and Courier, Annual Trade Summary, Sept. 1, 1881.</p> + +<p><a name='f_234' id='f_234' href='#fna_234'>[234]</a> Winnsboro (South Carolina) News, quoted in News and Courier, Feb. 8, +1881.</p> + +<p><a name='f_235' id='f_235' href='#fna_235'>[235]</a> July 30, 1881.</p> + +<p><a name='f_236' id='f_236' href='#fna_236'>[236]</a> Quoted in News and Courier, Apr. 25, 1881.</p> + +<p><a name='f_237' id='f_237' href='#fna_237'>[237]</a> Ibid., Apr. 9, 1881. The Batesville Cotton Factory, built by William +Bates forty years before, was bought by G. Putnam, of Massachusetts for +$8,000, and he invested $10,000 additional in the plant. The building was +frame, two and half stories high, all was burned in March of 1881, +catching from sparks from the boiler room. It was believed that Mr. Putnam +would rebuild the plant on better lines. (Ibid., Mar. 2, 1881, et seq.)</p> + +<p><a name='f_238' id='f_238' href='#fna_238'>[238]</a> Ibid., July 11, 1881.</p> + +<p><a name='f_239' id='f_239' href='#fna_239'>[239]</a> Ibid., Nov. 10, 1881.</p> + +<p><a name='f_240' id='f_240' href='#fna_240'>[240]</a> News and Courier, July 11, 1881.</p> + +<p><a name='f_241' id='f_241' href='#fna_241'>[241]</a> Ibid., Jan. 14, 1882.</p> + +<p><a name='f_242' id='f_242' href='#fna_242'>[242]</a> News and Courier, Jan. 12 and 14, 1882. When the Sibley +Manufacturing Company of Augusta, Georgia, was increasing its capital by +$400,000, President W. C. Sibley received from Boston a telegram ordering +$20,000 of the new stock. (News and Courier May 21, 1881.) Cf. Thompson.</p> + +<p><a name='f_243' id='f_243' href='#fna_243'>[243]</a> News and Courier, Apr. 6, 1881.</p> + +<p><a name='f_244' id='f_244' href='#fna_244'>[244]</a> Ibid., Mch. 15, 1881.</p> + +<p><a name='f_245' id='f_245' href='#fna_245'>[245]</a> Ibid., Mch. 29, 1881.</p> + +<p><a name='f_246' id='f_246' href='#fna_246'>[246]</a> News and Courier, Apr. 1, 1881. These subscriptions may have been +partly influenced by the purpose of Mr. Atkinson to have the Exposition +further the cultivation and preparation, and not the manufacture, of the +staple.</p> + +<p><a name='f_247' id='f_247' href='#fna_247'>[247]</a> Jan. 27, 1881.</p> + +<p><a name='f_248' id='f_248' href='#fna_248'>[248]</a> March 21, 1881.</p> + +<p><a name='f_249' id='f_249' href='#fna_249'>[249]</a> News and Courier, Jan. 21, 1881.</p> + +<p><a name='f_250' id='f_250' href='#fna_250'>[250]</a> It seems to have been usual to call first for a payment of 10 per +cent. of the stock subscribed, rather than to require a certain proportion +in cash at subscription. Thus the books of subscription of the Charleston +Manufacturing Company were opened January 27th; on March 29th the +directors called for the payment of the first instalment of 10 per cent., +and at 2 o'clock on the morning of April 9th—how closely the progress of +the undertaking was watched by papers and public!—more than half of the +amount was in the hands of the officers of the company.</p> + +<p><a name='f_251' id='f_251' href='#fna_251'>[251]</a> Ibid., Feb. 10, 1882.</p> + +<p><a name='f_252' id='f_252' href='#fna_252'>[252]</a> Ibid., Feb. 5, 1881.</p> + +<p><a name='f_253' id='f_253' href='#fna_253'>[253]</a> Ibid., Feb. 7, 1881.</p> + +<p><a name='f_254' id='f_254' href='#fna_254'>[254]</a> News and Courier, Mar. 25, 1881.</p> + +<p><a name='f_255' id='f_255' href='#fna_255'>[255]</a> Hartsell, J. L., interview, Concord, N.C., Sept. 2, 1916.</p> + +<p><a name='f_256' id='f_256' href='#fna_256'>[256]</a> C. B. Armstrong, interview, Gastonia, N.C., Sept. 14, 1916.</p> + +<p><a name='f_257' id='f_257' href='#fna_257'>[257]</a> Joseph Separt, interview, Gastonia, N.C., Sept. 14, 1916.</p> + +<p><a name='f_258' id='f_258' href='#fna_258'>[258]</a> S. N. Boyce and J. Lee Robinson, interview, Gastonia, N.C., Sept. +14, 1916.</p> + +<p><a name='f_259' id='f_259' href='#fna_259'>[259]</a> Ibid., Feb. 26, 1881.</p> + +<p><a name='f_260' id='f_260' href='#fna_260'>[260]</a> News and Courier, S.C., Feb. 24, 1881.</p> + +<p><a name='f_261' id='f_261' href='#fna_261'>[261]</a> Augusta Trade Review, Augusta, Ga., Oct., 1884.</p> + +<p><a name='f_262' id='f_262' href='#fna_262'>[262]</a> News and Courier, Apr. 9, 1881. This paper in the issue of Feb. 26th +spoke of the additional stock as being $350, but puts the amount at +$100,000 lower in this later notice.</p> + +<p><a name='f_263' id='f_263' href='#fna_263'>[263]</a> North Carolina Herald, Salisbury, N.C., Nov. 9, 1887, quoted in +minute book of Salisbury Cotton Mills.</p> + +<p><a name='f_264' id='f_264' href='#fna_264'>[264]</a> The meeting was held Dec. 2nd; the minute book record is signed by +F. J. Murdoch, sec. pro tem.</p> + +<p><a name='f_265' id='f_265' href='#fna_265'>[265]</a> Klutz, Theodore F., interview, Salisbury, N.C., Sept. 1, 1918.</p> + +<p><a name='f_266' id='f_266' href='#fna_266'>[266]</a> J. B. Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916.</p> + +<p><a name='f_267' id='f_267' href='#fna_267'>[267]</a> News and Courier, Mar. 31, 1881.</p> + +<p><a name='f_268' id='f_268' href='#fna_268'>[268]</a> Barbee, Wm. J., The Cotton Question, pp. 138 ff.</p> + +<p><a name='f_269' id='f_269' href='#fna_269'>[269]</a> March 18, 1880.</p> + +<p><a name='f_270' id='f_270' href='#fna_270'>[270]</a> Clement F. Haynesworth, interview, Greenville, S.C., Sept. 9, 1916.</p> + +<p><a name='f_271' id='f_271' href='#fna_271'>[271]</a> J. L. Hartsell, interview, Concord, N.C., Sept. 2, 1916.</p> + +<p><a name='f_272' id='f_272' href='#fna_272'>[272]</a> W. R. Odell, interview, Concord, N.C., Sept. 2, 1916.</p> + +<p><a name='f_273' id='f_273' href='#fna_273'>[273]</a> L. Baker, interview, Gaffney, S.C., Sept. 13, 1916.</p> + +<p><a name='f_274' id='f_274' href='#fna_274'>[274]</a> News and Courier, Feb. 23, 1881.</p> + +<p><a name='f_275' id='f_275' href='#fna_275'>[275]</a> Haynesworth, interview, Greenville, S.C., Sept. 9, 1916.</p> + +<p><a name='f_276' id='f_276' href='#fna_276'>[276]</a> From Cotton Field to Cotton Mill, pp. 82 ff.</p> + +<p><a name='f_277' id='f_277' href='#fna_277'>[277]</a> Hartsell, interview, Concord, N.C., Sept. 2, 1916.</p> + +<p><a name='f_278' id='f_278' href='#fna_278'>[278]</a> L. G. Porter, interview, Gaffney, S.C., Sept. 13, 1916.</p> + +<p><a name='f_279' id='f_279' href='#fna_279'>[279]</a> Potter, interview, Gaffney, S.C., Sept. 13, 1916.</p> + +<p><a name='f_280' id='f_280' href='#fna_280'>[280]</a> Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916.</p> + +<p><a name='f_281' id='f_281' href='#fna_281'>[281]</a> B. B. Gossett, interview, Anderson, S.C., Sept. 11, 1916.</p> + +<p><a name='f_282' id='f_282' href='#fna_282'>[282]</a> Baker, interview, Gaffney, S.C., Sept. 13, 1916.</p> + +<p><a name='f_283' id='f_283' href='#fna_283'>[283]</a> Ibid.</p> + +<p><a name='f_284' id='f_284' href='#fna_284'>[284]</a> Hartsell, interview. Concord, N.C., Sept. 2, 1916.</p> + +<p><a name='f_285' id='f_285' href='#fna_285'>[285]</a> Rogan, G. W., interview, Gastonia, N.C., Sept. 14, 1916.</p> + +<p><a name='f_286' id='f_286' href='#fna_286'>[286]</a> Sterling Graydon, interview, Charlotte, N.C., Sept. 4, 1916.</p> + +<p><a name='f_287' id='f_287' href='#fna_287'>[287]</a> C. S. Morris, interview, Salisbury, N.C., Sept. 1, 1916.</p> + +<p><a name='f_288' id='f_288' href='#fna_288'>[288]</a> Hartsell, interview, Concord, N.C., Sept. 2, 1916.</p> + +<p><a name='f_289' id='f_289' href='#fna_289'>[289]</a> Charles McDonald, interview, Charlotte, N.C., Sept. 3, 1916.</p> + +<p><a name='f_290' id='f_290' href='#fna_290'>[290]</a> Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916.</p> + +<p><a name='f_291' id='f_291' href='#fna_291'>[291]</a> J. W. Norwood, interview, Greenville, S.C., Sept. 9, 1916.</p> + +<p><a name='f_292' id='f_292' href='#fna_292'>[292]</a> Thackston, interview, Greenville, S.C., Sept. 12, 1916. J. A. +Chapman, interview, Spartanburg, S.C., Sept. 5, 1916. The mills around +Spartanburg had a nucleus of local capital, and the commission houses and +machinery manufacturers took an interest in the development.</p> + +<p><a name='f_293' id='f_293' href='#fna_293'>[293]</a> Baker, interview, Gaffney, S.C., Sept. 13, 1916.</p> + +<p><a name='f_294' id='f_294' href='#fna_294'>[294]</a> Wood, Interview, Gaffney, S.C., Sept. 13, 1916.</p> + +<p><a name='f_295' id='f_295' href='#fna_295'>[295]</a> Gossett, interview, Anderson, S.C., Sept. 11, 1916.</p> + +<p><a name='f_296' id='f_296' href='#fna_296'>[296]</a> Chapman, interview, Spartanburg, S.C., Sept. 5, 1916.</p> + +<p><a name='f_297' id='f_297' href='#fna_297'>[297]</a> A. A. Thompson, interview, Raleigh, N.C., Sept. 16, 1916.</p> + +<p><a name='f_298' id='f_298' href='#fna_298'>[298]</a> Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916.</p> + +<p><a name='f_299' id='f_299' href='#fna_299'>[299]</a> Clark, David, interview, Charlotte, N.C., Sept. 4, 1916.</p> + +<p><a name='f_300' id='f_300' href='#fna_300'>[300]</a> C. D. Morris, interview, Salisbury, N.C., Sept. 1, 1916.</p> + +<p><a name='f_301' id='f_301' href='#fna_301'>[301]</a> Seport, interview, Gastonia, N.C., Sept. 14, 1916.</p> + +<p><a name='f_302' id='f_302' href='#fna_302'>[302]</a> Wood, interview, Gaffney, S.C., Sept. 13, 1916.</p> + +<p><a name='f_303' id='f_303' href='#fna_303'>[303]</a> Separk, interview, Gastonia, N.C., Sept. 14, 1916.</p> + +<p><a name='f_304' id='f_304' href='#fna_304'>[304]</a> Charles E. Johnson, interview, Raleigh, N.C., Sept. 16, 1916.</p> + +<p><a name='f_305' id='f_305' href='#fna_305'>[305]</a> Bernard Case, interview, Greensboro, N.C., Aug. 30, 1916.</p> + +<p><a name='f_306' id='f_306' href='#fna_306'>[306]</a> Chapman, interview, Spartanburg, S.C., Sept. 5, 1916.</p> + +<p><a name='f_307' id='f_307' href='#fna_307'>[307]</a> Haynesworth, interview, Greenville, S.C., Sept. 9, 1916.</p> + +<p><a name='f_308' id='f_308' href='#fna_308'>[308]</a> Gossett, interview, Anderson, S.C., Sept. 11, 1916.</p> + +<p><a name='f_309' id='f_309' href='#fna_309'>[309]</a> Haynesworth, interview, Greenville, S.C., Sept. 9, 1916.</p> + +<p><a name='f_310' id='f_310' href='#fna_310'>[310]</a> Odell, W. R., interview, Concord, N.C., Sept. 1, 1916.</p> + +<p><a name='f_311' id='f_311' href='#fna_311'>[311]</a> Norwood, interview, Greenville, S.C., Sept. 9, 1916.</p> + +<p><a name='f_312' id='f_312' href='#fna_312'>[312]</a> Ibid.</p> + +<p><a name='f_313' id='f_313' href='#fna_313'>[313]</a> Norwood, interview, Greenville, S.C., Sept. 9, 1916.</p> + +<p><a name='f_314' id='f_314' href='#fna_314'>[314]</a> Clark, interview, Charlotte, N.C., Sept. 4, 1916.</p> + +<p><a name='f_315' id='f_315' href='#fna_315'>[315]</a> Ibid., Also Separk, interview, Gastonia, N.C., Sept. 14, 1916; also +H. D. Wheat, interview, Gaffney, S.C., Sept. 13, 1916.</p> + +<p><a name='f_316' id='f_316' href='#fna_316'>[316]</a> Thackston, interview, Greenville, S.C., Sept. 12, 1916.</p> + +<p><a name='f_317' id='f_317' href='#fna_317'>[317]</a> Ibid.</p> + +<p><a name='f_318' id='f_318' href='#fna_318'>[318]</a> Graydon, interview, Charlotte, N.C., Sept. 4, 1916, also J. A. +Brock, interview, Anderson, S.C., Sept. 11, 1916.</p> + +<p><a name='f_319' id='f_319' href='#fna_319'>[319]</a> Separk, interview, Gastonia, N.C., Sept. 14, 1916; also Thackston, +ibid.</p> + +<p><a name='f_320' id='f_320' href='#fna_320'>[320]</a> Graydon, interview, Charlotte, N.C., Sept. 4, 1916.</p> + +<p><a name='f_321' id='f_321' href='#fna_321'>[321]</a> Boyce, and Robinson, interview, Gastonia, N.C., Sept. 14, 1916; also +Ragan, interview, Gastonia, N.C., Sept. 14th, 1916.</p> + +<p><a name='f_322' id='f_322' href='#fna_322'>[322]</a> Thackston, interview, Greenville, S.C., Sept. 12, 1916.</p> + +<p><a name='f_323' id='f_323' href='#fna_323'>[323]</a> Gossett, interview, Anderson, S.C., Sept. 14, 1916.</p> + +<p><a name='f_324' id='f_324' href='#fna_324'>[324]</a> Chapman, interview, Spartanburg, S.C., Sept. 5, 1916; also Boyce and +Robinson, interview, Gastonia, N.C., Sept. 14, 1916.</p> + +<p><a name='f_325' id='f_325' href='#fna_325'>[325]</a> Boyce and Robinson, interview, Gastonia, N.C., Sept. 14, 1916.</p> + +<p><a name='f_326' id='f_326' href='#fna_326'>[326]</a> Gossett, interview, Anderson, S.C., Sept. 11, 1916.</p> + +<p><a name='f_327' id='f_327' href='#fna_327'>[327]</a> Wood, interview, Gaffney, S.C., Sept. 13, 1916.</p> + +<p><a name='f_328' id='f_328' href='#fna_328'>[328]</a> News and Courier, Apr. 29, 1881.</p> + +<p><a name='f_329' id='f_329' href='#fna_329'>[329]</a> April 28, 1881.</p> + +<p><a name='f_330' id='f_330' href='#fna_330'>[330]</a> News and Courier, Apr. 28, 1881.</p> + +<p><a name='f_331' id='f_331' href='#fna_331'>[331]</a> Ibid., Apr. 29, 1881.</p> + +<p><a name='f_332' id='f_332' href='#fna_332'>[332]</a> One commission house thirty years ago took all the bonds of a mill. +A. A. Thompson, interview, Raleigh, N.C., Sept. 16, 1916.</p> + +<p><a name='f_333' id='f_333' href='#fna_333'>[333]</a> Wheat, interview, Gaffney, S.C., Sept. 13, 1916.</p> + +<p><a name='f_334' id='f_334' href='#fna_334'>[334]</a> News and Courier, Jan. 12, 1882.</p> + +<p><a name='f_335' id='f_335' href='#fna_335'>[335]</a> Ibid., Jan. 14, 1882.</p> + +<p><a name='f_336' id='f_336' href='#fna_336'>[336]</a> Boyce, and Robinson, interview, Gastonia, N.C., Sept. 14, 1916.</p> + +<p><a name='f_337' id='f_337' href='#fna_337'>[337]</a> Bernard Cone, interview, Greensboro, N.C., Aug. 30, 1916.</p> + +<p><a name='f_338' id='f_338' href='#fna_338'>[338]</a> Henry E. Litchford, interview, Richmond, Va., Aug. 29, 1916.</p> + +<p><a name='f_339' id='f_339' href='#fna_339'>[339]</a> News and Courier, Jan. 14, 1882.</p> + +<p><a name='f_340' id='f_340' href='#fna_340'>[340]</a> Klutz, interview, Salisbury, N.C., Sept. 1, 1916.</p> + +<p><a name='f_341' id='f_341' href='#fna_341'>[341]</a> O. D. Davis, interview, Salisbury, N.C., Sept. 1, 1916.</p> + +<p><a name='f_342' id='f_342' href='#fna_342'>[342]</a> McDonald, interview, Charlotte, N.C., Sept. 3, 1916. The Caborrus +Mill, at Concord, previously referred to as having been financed on the +co-operative plan was begun by others and taken over by Mr. Cannon when +its prospects had declined. (Ibid.)</p> + +<p><a name='f_343' id='f_343' href='#fna_343'>[343]</a> Interview, Columbia, S.C., Jan. 5, 1917.</p> + +<p><a name='f_344' id='f_344' href='#fna_344'>[344]</a> James W. Cannon, interview, Concord, N.C., Jan. 6, 1917.</p> + +<p><a name='f_345' id='f_345' href='#fna_345'>[345]</a> J. H. Meaus Beattie, interview, Columbia, S.C., Jan. 3, 1917.</p> + +<p>[346] W. W. Ball, interview, Columbia, S.C., Jan. 3, 1917.</p> + +<p><a name='f_347' id='f_347' href='#fna_347'>[347]</a> Thompson, pp. 82 ff.</p> + +<p><a name='f_348' id='f_348' href='#fna_348'>[348]</a> W. W. Ball, interview, Columbia, S.C., Jan. 3, 1917. A minor episode +partaking of the character of both of the above may be worth mentioning. +Mrs. M. Putnam Gridley, who, until her retirement from the presidency of +the Batesville, S.C. Mill, was the only woman cotton mill president in +America, said that the Boston commission house which owned and operated +the factory under her father's control, was "about to commit a wrong" when +the enterprise failed of its own accord. (Mrs. M. Putnam Gridley, +interview, Greenville, S.C., Sept. 9, 1916.)</p> + +<p><a name='f_349' id='f_349' href='#fna_349'>[349]</a> Thackston, interview, Greenville, S.C., Sept. 12, 1916.</p> + +<p><a name='f_350' id='f_350' href='#fna_350'>[350]</a> Jas. D. Hammett, interview, Anderson, S.C., Sept. 11, 1916.</p> + +<p><a name='f_351' id='f_351' href='#fna_351'>[351]</a> Marshall Orr, interview, Anderson, S.C., Sept. 10, 1916.</p> + +<p><a name='f_352' id='f_352' href='#fna_352'>[352]</a> Charles Estes, interview, Augusta, Ga., Dec. 29, 1916. "When I was +mayor of Augusta and Black was City Attorney, we ran the city on the +commission plan and didn't know it. I used to draft ordinances in my own +handwriting, show them to Black to see whether they were legal, and to +Blum to see if they were grammatical, and that was all there was to it!"</p> + +<p><a name='f_353' id='f_353' href='#fna_353'>[353]</a> David, interview, Salisbury, N.C., Sept. 1, 1916. The financial +administration of this mill is attributable in its form to the +conservatism of the company, and to the peculiar conditions of its +inception. One director has nervous prostration, and another is too aged +to attend meetings, but none have been elected in their places.</p> + +<p><a name='f_354' id='f_354' href='#fna_354'>[354]</a> Samuel Stradley, interview, Greenville, S.C., Sept. 12, 1916.</p> + +<p><a name='f_355' id='f_355' href='#fna_355'>[355]</a> McDonald, interview, Charlotte, N.C., Sept. 3, 1916.</p> + +<p><a name='f_356' id='f_356' href='#fna_356'>[356]</a> Thomas W. Loyless, interview, Augusta, Ga.</p> + +<p><a name='f_357' id='f_357' href='#fna_357'>[357]</a> Estes, interview, Augusta, Ga., Dec. 29, 1916.</p> + +<p><a name='f_358' id='f_358' href='#fna_358'>[358]</a> T. S. Raworth, interview, Augusta, Ga., Dec. 30, 1916.</p> + +<p><a name='f_359' id='f_359' href='#fna_359'>[359]</a> D. S. Thompson, Cotton Mill, Commercial Features, p. 51.</p> + +<p><a name='f_360' id='f_360' href='#fna_360'>[360]</a> Thackston, interview, Greenville, S.C., Sept. 12, 1916.</p> + +<p><a name='f_361' id='f_361' href='#fna_361'>[361]</a> John W. Fries, interview, Winston-Salem, N.C., Aug. 31, 1916.</p> + +<p><a name='f_362' id='f_362' href='#fna_362'>[362]</a> Graydon, interview, Charlotte, N.C., Sept. 4, 1916.</p> + +<p><a name='f_363' id='f_363' href='#fna_363'>[363]</a> Mar. 18, 1880.</p> + +<p><a name='f_364' id='f_364' href='#fna_364'>[364]</a> News and Courier, Aug. 12, 1881.</p> + +<p><a name='f_365' id='f_365' href='#fna_365'>[365]</a> Observer, Feb. 13, 1880.</p> + +<p><a name='f_366' id='f_366' href='#fna_366'>[366]</a> Quoted in News and Courier, Mar. 22, 1881.</p> + +<p><a name='f_367' id='f_367' href='#fna_367'>[367]</a> p. 271.</p> + +<p><a name='f_368' id='f_368' href='#fna_368'>[368]</a> Thompson, pp. 82 ff.</p> + +<p><a name='f_369' id='f_369' href='#fna_369'>[369]</a> Thackston, interview, Greenville, S.C., Sept. 12, 1916.</p> + +<p><a name='f_370' id='f_370' href='#fna_370'>[370]</a> Orr, interview, Anderson, S.C., Sept. 10, 1916.</p> + +<p><a name='f_371' id='f_371' href='#fna_371'>[371]</a> Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916.</p> + +<p><a name='f_372' id='f_372' href='#fna_372'>[372]</a> Augusta Trade Review, Oct., 1884</p> + +<p><a name='f_373' id='f_373' href='#fna_373'>[373]</a> Baker, interview, Gaffney, S.C., Sept. 13, 1916.</p> + +<p><a name='f_374' id='f_374' href='#fna_374'>[374]</a> Morris, interview, Salisbury, N.C., Sept. 1, 1916.</p> + +<p><a name='f_375' id='f_375' href='#fna_375'>[375]</a> Mrs. Gridley, interview, Greenville, S.C., Sept. 9, 1916.</p> + +<p><a name='f_376' id='f_376' href='#fna_376'>[376]</a> J. A. Brock, interview, Anderson, S.C., Sept. 11, 1916.</p> + +<p><a name='f_377' id='f_377' href='#fna_377'>[377]</a> Jas. D. Hammett, interview, Anderson, S.C., Sept. 11, 1916.</p> + +<p><a name='f_378' id='f_378' href='#fna_378'>[378]</a> Washington Clark, interview, Columbia, S.C., Jan. 1, 1917.</p> + +<p><a name='f_379' id='f_379' href='#fna_379'>[379]</a> Thompson, pp. 89 and 90.</p> + +<p><a name='f_380' id='f_380' href='#fna_380'>[380]</a> Tracy I. Hickman, interview, Augusta, Ga., Dec. 29, 1916.</p> + +<p><a name='f_381' id='f_381' href='#fna_381'>[381]</a> Thomas Purse, interview, Savannah, Ga., Dec. 26, 1916.</p> + +<p><a name='f_382' id='f_382' href='#fna_382'>[382]</a> Geo. W. Williams, interview, Charleston, S.C., Dec. 27, 1916.</p> + +<p><a name='f_383' id='f_383' href='#fna_383'>[383]</a> W. P. Carrington, interview, Charleston, S.C., Dec. 27, 1916.</p> + +<p><a name='f_384' id='f_384' href='#fna_384'>[384]</a> Geo. Williams, interview, Charleston, S.C., Dec. 27, 1916.</p> + +<p><a name='f_385' id='f_385' href='#fna_385'>[385]</a> H. R. Buist, interview, Charleston, S.C., Dec. 28, 1916.</p> + +<p><a name='f_386' id='f_386' href='#fna_386'>[386]</a> Julius Koester, interview, Charleston, S.C., Dec. 27, 1916.</p> + +<p><a name='f_387' id='f_387' href='#fna_387'>[387]</a> Boyce and Robinson, interview, Gastonia, N.C., Sept. 14, 1916.</p> + +<p><a name='f_388' id='f_388' href='#fna_388'>[388]</a> Thackston, interview, Greenville, S.C., Sept. 12, 1916.</p> + +<p><a name='f_389' id='f_389' href='#fna_389'>[389]</a> Boyce and Robinson, interview, Gastonia, N.C., Sept. 14, 1916.</p> + +<p><a name='f_390' id='f_390' href='#fna_390'>[390]</a> Royan, interview, Gastonia, N.C., Sept. 14, 1916.</p> + +<p><a name='f_391' id='f_391' href='#fna_391'>[391]</a> J. Lee Robinson, letter, Gastonia, N.C., Nov. 28, 1916.</p> + +<p><a name='f_392' id='f_392' href='#fna_392'>[392]</a> Boyce and Robinson, interview, Gastonia, N.C., Sept. 14, 1916, and +Robinson, letter, Gastonia, N.C., Nov. 28, 1916.</p> + +<p><a name='f_393' id='f_393' href='#fna_393'>[393]</a> C. B. Armstrong, interview, Gastonia, N.C., Sept. 14, 1916.</p> + +<p><a name='f_394' id='f_394' href='#fna_394'>[394]</a> Robinson, letter, Gastonia, N.C., Nov. 28, 1916.</p> + +<p><a name='f_395' id='f_395' href='#fna_395'>[395]</a> Rogan, interview, Gastonia, N.C., Sept. 14, 1916.</p> + +<p><a name='f_396' id='f_396' href='#fna_396'>[396]</a> Estes, interview, Augusta, Ga., Dec. 29, 1916.</p> + +<p><a name='f_397' id='f_397' href='#fna_397'>[397]</a> Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916.</p> + +<p><a name='f_398' id='f_398' href='#fna_398'>[398]</a> The trained men in the industry are in the technical branches, and +that when a leader is wanted at the top, as for the president of a mill, a +man is still chosen who enjoys a general business reputation rather than +specific mill experience.</p> + +<p><a name='f_399' id='f_399' href='#fna_399'>[399]</a> Morris, interview, Salisbury, N.C., Sept. 1, 1916.</p> + +<p><a name='f_400' id='f_400' href='#fna_400'>[400]</a> Graydon, interview, Charlotte, N.C., Sept. 4, 1916.</p> + +<p><a name='f_401' id='f_401' href='#fna_401'>[401]</a> Augusta Trade Review, Oct., 1884.</p> + +<p><a name='f_402' id='f_402' href='#fna_402'>[402]</a> G. T. Lynch, interview, Augusta, Ga., Dec. 30, 1916, and Tracey I. +Hickman, interview, Augusta, Ga., Dec. 29, 1916.</p> + +<p><a name='f_403' id='f_403' href='#fna_403'>[403]</a> Estes, interview, Augusta, Ga., Dec. 29, 1916.</p> + +<p><a name='f_404' id='f_404' href='#fna_404'>[404]</a> Augusta Trade Review, Oct., 1884.</p> + +<p><a name='f_405' id='f_405' href='#fna_405'>[405]</a> News and Observer, Nov. 16, 1880.</p> + +<p><a name='f_406' id='f_406' href='#fna_406'>[406]</a> Augusta Trade Review, Oct., 1884.</p> + +<p><a name='f_407' id='f_407' href='#fna_407'>[407]</a> Hickman, interview, Augusta, Ga., Dec. 29, 1916.</p> + +<p><a name='f_408' id='f_408' href='#fna_408'>[408]</a> News and Courier, Feb. 24, 1881.</p> + +<p><a name='f_409' id='f_409' href='#fna_409'>[409]</a> Ibid., Aug. 12, 1881.</p> + +<p><a name='f_410' id='f_410' href='#fna_410'>[410]</a> Ibid., Aug. 12, 1881.</p> + +<p><a name='f_411' id='f_411' href='#fna_411'>[411]</a> Buist, interview, Charleston, S.C., Dec. 28, 1916.</p> + +<p><a name='f_412' id='f_412' href='#fna_412'>[412]</a> Keatz, interview, Salisbury, N.C., Sept. 1, 1916.</p> + +<p><a name='f_413' id='f_413' href='#fna_413'>[413]</a> Davis, interview, Salisbury, N.C., Sept. 1, 1916.</p> + +<p><a name='f_414' id='f_414' href='#fna_414'>[414]</a> Ball, interview, Columbia, S.C., Jan. 3, 1917, and Davison's Textile +Blue Book, 1916.</p> + +<p><a name='f_415' id='f_415' href='#fna_415'>[415]</a> Brock, interview, Anderson, S.C., Sept. 11, 1916. See p.</p> + +<p><a name='f_416' id='f_416' href='#fna_416'>[416]</a> Thompson, pp. 82 ff.</p> + +<p><a name='f_417' id='f_417' href='#fna_417'>[417]</a> Interview, Columbia, S.C., Jan. 5, 1917.</p> + +<p><a name='f_418' id='f_418' href='#fna_418'>[418]</a> Goldsmith, p. 6.</p> + +<p><a name='f_419' id='f_419' href='#fna_419'>[419]</a> Tompkins, Cotton Mill, Commercial Features, p. 172.</p> + +<p><a name='f_420' id='f_420' href='#fna_420'>[420]</a> Goldsmith, p. 6.</p> + +<p><a name='f_421' id='f_421' href='#fna_421'>[421]</a> Thackston, interview, Greenville, S.C., Sept. 12, 1916. A mill man +near Greenville said: "The money actually paid in was more or less local +in those days (the early years of the period) but not much paid in." +(Gossett, interview, Anderson, S.C., Sept. 11, 1916.)</p> + +<p><a name='f_422' id='f_422' href='#fna_422'>[422]</a> W. J. Thackston, letter, Greenville, S.C., Nov. 28, 1916.</p> + +<p><a name='f_423' id='f_423' href='#fna_423'>[423]</a> Buist, interview, Charleston, S.C., Dec. 28, 1916.</p> + +<p><a name='f_424' id='f_424' href='#fna_424'>[424]</a> News and Courier, Feb. 24, 1881.</p> + +<p><a name='f_425' id='f_425' href='#fna_425'>[425]</a> Raworth, interview, Augusta, Ga., Dec. 30, 1916. He knew of no +Southern mills quoted on any of the exchanges.</p> + +<p><a name='f_426' id='f_426' href='#fna_426'>[426]</a> Hickman, interview, Augusta, Ga., Dec. 29, 1916.</p> + +<p><a name='f_427' id='f_427' href='#fna_427'>[427]</a> Raworth, interview, Augusta, Ga., Dec. 30, 1916.</p> + +<p><a name='f_428' id='f_428' href='#fna_428'>[428]</a> Ball, interview, Columbia, Jan. 3, 1917.</p> + +<p><a name='f_429' id='f_429' href='#fna_429'>[429]</a> Ibid.</p> + +<p><a name='f_430' id='f_430' href='#fna_430'>[430]</a> Ragan, interview, Gastonia, N.C., Sept. 14, 1916.</p> + +<p><a name='f_431' id='f_431' href='#fna_431'>[431]</a> Hickman, interview, Augusta, Ga., Dec. 29, 1916.</p> + +<p><a name='f_432' id='f_432' href='#fna_432'>[432]</a> Goldsmith, The Cotton Mill South.</p> + +<p><a name='f_433' id='f_433' href='#fna_433'>[433]</a> Estes, interview, Augusta, Ga., Dec. 29, 1916.</p> + +<p><a name='f_434' id='f_434' href='#fna_434'>[434]</a> Buist, interview, Charleston, S.C., Dec. 28, 1916.</p> + +<p><a name='f_435' id='f_435' href='#fna_435'>[435]</a> Ball, interview, Columbia, S.C., Jan. 3, 1917.</p> + +<p><a name='f_436' id='f_436' href='#fna_436'>[436]</a> Washington Clark, interview, Columbia, S.C., Jan. 1, 1917.</p> + +<p><a name='f_437' id='f_437' href='#fna_437'>[437]</a> Wool, interview, Gaffney, S.C., Sept. 13, 1916.</p> + +<p><a name='f_438' id='f_438' href='#fna_438'>[438]</a> Ball, interview, Columbia, S.C., Jan. 3, 1917.</p> + +<p><a name='f_439' id='f_439' href='#fna_439'>[439]</a> A Rock Hill correspondent in News and Courier, Jan. 12, 1882.</p> + +<p><a name='f_440' id='f_440' href='#fna_440'>[440]</a> In ibid., A Rock Hill correspondent in News and Courier, Jan. 12, +1882.</p> + +<p><a name='f_441' id='f_441' href='#fna_441'>[441]</a> Walter Montgomery, interview, Spartanburg, S.C., Sept. 5, 1916.</p> + +<p><a name='f_442' id='f_442' href='#fna_442'>[442]</a> Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916.</p> + +<p><a name='f_443' id='f_443' href='#fna_443'>[443]</a> Augusta Trade Review, Oct. 1884.</p> + +<p><a name='f_444' id='f_444' href='#fna_444'>[444]</a> News and Observer, Nov. 16, 1880.</p> + +<p><a name='f_445' id='f_445' href='#fna_445'>[445]</a> Augusta Trade Review, Oct. 1884.</p> + +<p><a name='f_446' id='f_446' href='#fna_446'>[446]</a> Hickman, interview, Augusta, Ga., Dec. 29, 1916.</p> + +<p><a name='f_447' id='f_447' href='#fna_447'>[447]</a> Davis, interview, Salisbury, N.C., Sept. 1, 1916.</p> + +<p><a name='f_448' id='f_448' href='#fna_448'>[448]</a> Ibid.</p> + +<p><a name='f_449' id='f_449' href='#fna_449'>[449]</a> Ragan, interview, Gastonia, N.C., Sept. 14, 1916.</p> + +<p><a name='f_450' id='f_450' href='#fna_450'>[450]</a> Robinson, letter, Gastonia, N.C., Nov. 28, 1916.</p> + + +<p> </p><p> </p> +<hr style="width: 50%;" /> +<p><strong>Transcriber’s Notes:</strong></p> + +<p>The following typographical and spelling errors have been corrected:</p> +<p> +<span style="margin-left: 1em;">"evidenes" corrected to "evidences" (page 2)</span><br /> +<span style="margin-left: 1em;">"be lieved" corrected to "believed" (page 4)</span><br /> +<span style="margin-left: 1em;">"American" corrected to "America" (page 15)</span><br /> +<span style="margin-left: 1em;">"powerul" corrected to "powerful" (page 16)</span><br /> +<span style="margin-left: 1em;">"controservy" corrected to "controversy" (page 16)</span><br /> +<span style="margin-left: 1em;">"Carolinaian" corrected to "Carolinian" (page 17)</span><br /> +<span style="margin-left: 1em;">"Id" corrected to "If" (page 18)</span><br /> +<span style="margin-left: 1em;">"build" corrected to "built" (page 19)</span><br /> +<span style="margin-left: 1em;">"newsness" corrected to "newness"(page 19)</span><br /> +<span style="margin-left: 1em;">"propserous" corrected to "prosperous" (page 22)</span><br /> +<span style="margin-left: 1em;">"mangers" corrected to "managers" (page 22)</span><br /> +<span style="margin-left: 1em;">"temas" corrected to "teams" (page 26)</span><br /> +<span style="margin-left: 1em;">"tage" corrected to "stage" (page 29)</span><br /> +<span style="margin-left: 1em;">"advances" corrected to "advanced" (page 29)</span><br /> +<span style="margin-left: 1em;">missing "in" added (page 29)</span><br /> +<span style="margin-left: 1em;">"steambot" corrected to "steamboat" (page 31)</span><br /> +<span style="margin-left: 1em;">"sucess" corrected to "success" (page 33)</span><br /> +<span style="margin-left: 1em;">"delcared" corrected to "declared" (page 45)</span><br /> +<span style="margin-left: 1em;">"Calhoung" corrected to "Calhoun" (page 46)</span><br /> +<span style="margin-left: 1em;">"feel" corrected to "fell" (page 48)</span><br /> +<span style="margin-left: 1em;">"quote" corrected to "quite" (page 49)</span><br /> +<span style="margin-left: 1em;">"imiginary" corrected to "imaginary" (page 52)</span><br /> +<span style="margin-left: 1em;">"repating" corrected to "repeating" (page 58)</span><br /> +<span style="margin-left: 1em;">"reproahced" corrected to "reproached" (page 59)</span><br /> +<span style="margin-left: 1em;">"expression" corrected to "expressing" (page 67)</span><br /> +<span style="margin-left: 1em;">"tectile" corrected to "textile" (page 69)</span><br /> +<span style="margin-left: 1em;">"warm" corrected to "war" (page 71)</span><br /> +<span style="margin-left: 1em;">"seaw" corrected to "sea" (page 75)</span><br /> +<span style="margin-left: 1em;">"where" corrected to "were" (page 75)</span><br /> +<span style="margin-left: 1em;">"perosns" corrected to "persons" (page 76)</span><br /> +<span style="margin-left: 1em;">"charged" corrected to "changed" (page 77)</span><br /> +<span style="margin-left: 1em;">"an" corrected to "as" (page 82)</span><br /> +<span style="margin-left: 1em;">"advances" corrected to "advanced" (page 83)</span><br /> +<span style="margin-left: 1em;">"repvailed" corrected to "prevailed" (page 89)</span><br /> +<span style="margin-left: 1em;">"understodd" corrected to "understood" (page 95)</span><br /> +<span style="margin-left: 1em;">"munitiae" corrected to "minutiae" (page 95)</span><br /> +<span style="margin-left: 1em;">"Herland" corrected to "Herald" (page 98)</span><br /> +<span style="margin-left: 1em;">"sawrm" corrected to "swarm" (page 100)</span><br /> +<span style="margin-left: 1em;">"officiaals" corrected to "officials" (page 100)</span><br /> +<span style="margin-left: 1em;">"Sate" corrected to "State" (page 105)</span><br /> +<span style="margin-left: 1em;">"and" corrected to "an" (page 112)</span><br /> +<span style="margin-left: 1em;">"grow" corrected to "grew" (page 117)</span><br /> +<span style="margin-left: 1em;">"happaned" corrected to "happened" (page 123)</span><br /> +<span style="margin-left: 1em;">missing "is" added (page 126)</span><br /> +<span style="margin-left: 1em;">"back-bitting" corrected to "back-biting" (page 127)</span><br /> +<span style="margin-left: 1em;">"wlecomed" corrected to "welcomed" (page 128)</span><br /> +<span style="margin-left: 1em;">"bounds" corrected to "bound" (page 128)</span><br /> +<span style="margin-left: 1em;">"adhorred" corrected to "abhorred" (page 129)</span><br /> +<span style="margin-left: 1em;">"whol" corrected to "whole" (page 129)</span><br /> +<span style="margin-left: 1em;">"di" corrected to "do" (page 130)</span><br /> +<span style="margin-left: 1em;">"pilosophy" corrected to "philosophy" (page 132)</span><br /> +<span style="margin-left: 1em;">"telehone" corrected to "telephone" (page 133)</span><br /> +<span style="margin-left: 1em;">"capaign" corrected to "campaign" (page 134)</span><br /> +<span style="margin-left: 1em;">"loca" corrected to "local" (page 134)</span><br /> +<span style="margin-left: 1em;">"natice" corrected to "native" (page 137)</span><br /> +<span style="margin-left: 1em;">"capitalists" corrected to "capitalist" (page 139)</span><br /> +<span style="margin-left: 1em;">"urges" corrected to "urged" (page 139)</span><br /> +<span style="margin-left: 1em;">"Souther" corrected to "Southern" (page 148)</span><br /> +<span style="margin-left: 1em;">"anive" corrected to "naive" (page 150)</span><br /> +<span style="margin-left: 1em;">"hav" corrected to "have" (page 150)</span><br /> +<span style="margin-left: 1em;">"struglle" corrected to "struggle" (page 159)</span><br /> +<span style="margin-left: 1em;">"renumerated" corrected to "remunerated" (page 160)</span><br /> +<span style="margin-left: 1em;">"Crhonicle" corrected to "Chronicle" (page 162)</span><br /> +<span style="margin-left: 1em;">"If" corrected to "It" (page 170)</span><br /> +<span style="margin-left: 1em;">"And" corrected to "An" (page 171)</span><br /> +<span style="margin-left: 1em;">"Heraldn" corrected to "Herald" (page 173)</span><br /> +<span style="margin-left: 1em;">"1811" corrected to "1881" (page 174)</span><br /> +<span style="margin-left: 1em;">"pressent" corrected to "present" (page 181)</span><br /> +<span style="margin-left: 1em;">"porblem" corrected to "problem" (page 181)</span><br /> +<span style="margin-left: 1em;">"he" corrected to "the" (page 181)</span><br /> +<span style="margin-left: 1em;">"ot" corrected to "to" (page 182)</span><br /> +<span style="margin-left: 1em;">"aided" corrected to "added" (page 184)</span><br /> +<span style="margin-left: 1em;">"wss" corrected to "was" (page 186)</span><br /> +<span style="margin-left: 1em;">"neat" corrected to "near" (page 189)</span><br /> +<span style="margin-left: 1em;">"mil;" corrected to "mill" (page 194)</span><br /> +<span style="margin-left: 1em;">"sotkc" corrected to "stock" (page 201)</span><br /> +<span style="margin-left: 1em;">"sone" corrected to "some" (page 202)</span><br /> +<span style="margin-left: 1em;">"in" corrected to "is" (page 203)</span><br /> +<span style="margin-left: 1em;">"orgin" corrected to "origin" (page 205)</span><br /> +<span style="margin-left: 1em;">"yed" corrected to "yes" (page 207)</span><br /> +<span style="margin-left: 1em;">"ouright" corrected to "outright" (page 211)</span><br /> +<span style="margin-left: 1em;">"consideraion" corrected to "consideration" (page 218)</span><br /> +<span style="margin-left: 1em;">"intented" corrected to "intended" (page 221)</span><br /> +<span style="margin-left: 1em;">"build" corrected to "built" (page 221)</span><br /> +<span style="margin-left: 1em;">"or" corrected to "of" (page 222)</span><br /> +<span style="margin-left: 1em;">"propsered" corrected to "prospered" (page 222)</span><br /> +<span style="margin-left: 1em;">"Unitl" corrected to "Until" (page 227)</span><br /> +<span style="margin-left: 1em;">"annul" corrected to "annual" (page 232)</span><br /> +<span style="margin-left: 1em;">"Salsibury" corrected to "Salisbury" (page 233)</span><br /> +<span style="margin-left: 1em;">"wanters" corrected to "wanted" (page 234)</span><br /> +<span style="margin-left: 1em;">"deciaion" corrected to "decision" (page 242)</span><br /> +<span style="margin-left: 1em;">"theys" corrected to "they" (page 251)</span><br /> +<span style="margin-left: 1em;">"unproftiable" corrected to "unprofitable" (page 266)</span><br /> +<span style="margin-left: 1em;">"laides" corrected to "ladies" (page 270)</span><br /> +<span style="margin-left: 1em;">"inheirtance" corrected to "inheritance" (page 270)</span><br /> +<span style="margin-left: 1em;">"Commerical" corrected to "Commercial" (footnote 2)</span><br /> +<span style="margin-left: 1em;">"us" corrected to "up" (footnote 19)</span><br /> +<span style="margin-left: 1em;">"2n" corrected to "2nd" (footnote 17)</span><br /> +<span style="margin-left: 1em;">"destroyer" corrected to "destroyed" (footnote 29)</span><br /> +<span style="margin-left: 1em;">"Commerical" corrected to "Commercial" (footnote 45)</span><br /> +<span style="margin-left: 1em;">"Grenville" corrected to "Greenville" (Footnote 47)</span><br /> +<span style="margin-left: 1em;">"suidical" corrected to "suicidal" (footnote 57)</span><br /> +<span style="margin-left: 1em;">"Ibis." corrected to "Ibid." (footnote 82)</span><br /> +<span style="margin-left: 1em;">"sgainst" corrected to "against" (footnote 86)</span><br /> +<span style="margin-left: 1em;">"Olmstead" corrected to "Olmsted" (footnote 97)</span><br /> +<span style="margin-left: 1em;">"Ble" corrected to "Blue" (footnote 110)</span><br /> +<span style="margin-left: 1em;">"itno" corrected to "into" (footnote 114)</span><br /> +<span style="margin-left: 1em;">"intenal" corrected to "internal" (footnote 123)</span><br /> +<span style="margin-left: 1em;">"1811" corrected to "1881" (footnote 144)</span><br /> +<span style="margin-left: 1em;">missing "to" added (footnote 147)</span><br /> +<span style="margin-left: 1em;">"solicitious" corrected to "solicitous" (footnote 148)</span><br /> +<span style="margin-left: 1em;">"to" corrected to "the" (footnote 150)</span><br /> +<span style="margin-left: 1em;">"ot" corrected to "to" (footnote 162)</span><br /> +<span style="margin-left: 1em;">"acaclim" corrected to "acclaim" (footnote 162)</span><br /> +<span style="margin-left: 1em;">"Nasvhile" corrected to "Nashville" (footnote 170)</span><br /> +<span style="margin-left: 1em;">"unusued" corrected to "unused" (footnote 175)</span><br /> +<span style="margin-left: 1em;">"you" corrected to "your" (footnote 175)</span><br /> +<span style="margin-left: 1em;">"rebuilt" corrected to "rebuild" (footnote 237)</span><br /> +<span style="margin-left: 1em;">"Bid." corrected to "Ibid." (footnote 237)</span><br /> +<span style="margin-left: 1em;">"Grenville" corrected to "Greenville" (footnote 291)</span><br /> +<span style="margin-left: 1em;">"Grenville" corrected to "Greenville" (footnote 421)</span></p> + +<p>Other than the corrections listed above, inconsistencies in spelling and +hyphenation have been retained from the original.</p> + + + + + + + + + +<pre> + + + + + +End of the Project Gutenberg EBook of The Rise of Cotton Mills in the South, by +Broadus Mitchell + +*** END OF THIS PROJECT GUTENBERG EBOOK RISE OF COTTON MILLS IN SOUTH *** + +***** This file should be named 37784-h.htm or 37784-h.zip ***** +This and all associated files of various formats will be found in: + https://www.gutenberg.org/3/7/7/8/37784/ + +Produced by The Online Distributed Proofreading Team at +https://www.pgdp.net (This file was produced from images +generously made available by The Internet Archive.) + + +Updated editions will replace the previous one--the old editions +will be renamed. + +Creating the works from public domain print editions means that no +one owns a United States copyright in these works, so the Foundation +(and you!) can copy and distribute it in the United States without +permission and without paying copyright royalties. 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You may copy it, give it away or +re-use it under the terms of the Project Gutenberg License included +with this eBook or online at www.gutenberg.org + + +Title: The Rise of Cotton Mills in the South + +Author: Broadus Mitchell + +Release Date: October 18, 2011 [EBook #37784] + +Language: English + +Character set encoding: ASCII + +*** START OF THIS PROJECT GUTENBERG EBOOK RISE OF COTTON MILLS IN SOUTH *** + + + + +Produced by The Online Distributed Proofreading Team at +https://www.pgdp.net (This file was produced from images +generously made available by The Internet Archive.) + + + + + + + + + + THE RISE OF COTTON MILLS IN THE SOUTH + + + A DISSERTATION + Submitted to the Board of University Studies of The + Johns Hopkins University in Conformity with + the Requirements for the Degree of + Doctor of Philosophy + + + by + Broadus Mitchell + + + Baltimore, Maryland + 1918 + + + + +CONTENTS + + + Page + + Foreword + + _Chapter I_: The Background 1-45 + + _Chapter II_: The Background, continued 45-94 + + _Chapter III_: Conditions Precedent to the Erection + of the Mills 95-131 + + _Chapter IV_: Capital 132-181 + + _Chapter V_: Financing the Mills 181-225 + + _Chapter VI_: Financing the Mills, continued 226-271 + + Vita 272 + + + + +FOREWORD + + +These pages represent a partial exploitation of materials gathered with a +view to their ultimate use in more extended form. Many phases of the +problem have been left entirely untreated, but the research upon these +subjects has not been without indirect service in the present study. In +the case of two chapters written midway of the investigation, in revision +care has been taken to bring them into consonance with the indications +which developed from subsequent discoveries. It is hoped, therefore, that +their lack is rather as to completeness than as to fidelity of temper. + +Unless this presentation is entirely inadequate, in addition to the more +objective economic forces, in the rise of cotton mills in the South, there +will appear the human elements that lie at the core of the development. + +For assistance, my first thanks are due to Professor Jacob H. Hollander +and Professor George E. Barnett, of The Johns Hopkins University, who have +contributed in a hundred ways over the whole period of study, and to Dr. +Nathaniel R. Whitney, formerly of The Johns Hopkins University and now of +the Iowa State University, who helped form my original conception of the +problem. In the wider aspects of my study I have drawn upon the experience +and judgment of my father continuously. Acknowledgment is due Miss Ellen +Rothe and Miss Ethel Hubbard, of the library staff of The Johns Hopkins +University; to the authorities of the library of the Peabody Institute of +Baltimore, and to the officers of the reading room of the Library of +Congress. + +In two field investigations in the South, many gentlemen connected +directly or indirectly with the cotton manufacturing industry have been +instituting in extending their time and counsel and courtesy. From lack of +space, it is not possible to make individual mention of all of these in +this place; foot-note references to the interviews must be understood each +one as expression of appreciation. For extraordinary assistance, however, +it gives me pleasure here to return thanks to Hon. John Skelton Williams, +Comptroller of the Currency; Mr. George A. Noelting, Jr., of Richmond, +Virginia; Mr. O. D. Davis, of Salisbury; Mr. J. L. Hartsell, of Concord; +Messrs. J. Lee Robinson and S. N. Boyce, of Gastonia; and Miss Anna L. +Twelvetrees, Mr. Sterling Graydon and Mr. Hudson Millar, of Charlotte, +North Carolina; Mr. W. J. Thackston, of Greenville; Mr. August Kohn, +Professor Yates Snowden and Mr. William W. Ball, of Columbia, South +Carolina, and Mr. T. S. Raworth, of Augusta, Ga. Of more intimate sort is +my obligation to Professor K. Roberts Greenfield, of Delaware College, who +by his constructive criticism has helped shape my opinion in a large way +and has at many points improved the text as such. + +I cannot fail to acknowledge, finally, my gratitude to Mrs. Charles +Reuter and the members of her family, under whose roof most of these pages +were written. + +Broadus Mitchell + +Baltimore, February 6, 1918. + + + + +THE RISE OF COTTON MILLS IN THE SOUTH + + + + +CHAPTER I + +_THE BACKGROUND_ + + +This opening chapter undertakes a broad survey in brief compass of the +historical and economic background out of which the cotton manufacturing +industry of the South, as a distinct development, emerged. Thus to begin +the story of the rise of the mills with discussion of a period which +commences a century in advance, is not unlike the production of a play +hopeful in conception, robust in theme and rapid in action, but in which +the curtain first rises on a stage which remains empty throughout an +entire act. + +In viewing the period lying back of the concerted erection of cotton mills +in the South, some observers have said they caught satisfying glimpses of +men and facts not only presaging but causally related to the main action +later. In spite of the present writer's usual disbelieve in the +sufficiency of the evidence in these findings, it is a primary purpose of +this discussion to give their statements, together with the supporting +testimony that they deliberately and others incidentally have brought +forward. + +The total of this study will show that the development, as such, not only +first substantially showed itself, but had its complete genesis, about +the year 1880. It is plain that in order to present, however, the +conclusions of students who have believed they discerned signs of it in +earlier years, it is necessary to include in these preliminary pages much +that will not appear as fact exhibit, but rather as opinion. And not +simply this, but in seeking to make clear the opposite theory, free +recourse is taken to the findings and statements of others than the +writer. + +No apology is made for the incorporation of secondary material. On the +contrary, this is intentioned. Lying, after all, outside of the central +facts to come under view in this essay, exclusively original research in +so extended a period has not seemed justified. In the second place, it has +not appeared necessary for the reason that there has been usually less +dispute as to the facts and the completeness of the data that much study +has uncovered, than as to the right interpretation of material evidences +agreed upon. Besides these considerations, it should be understood that +much which might carelessly be taken as second-hand information, is really +entirely and valuably first-hand. Peculiarly in the case of the economic +history of the South, the statements of those who spoke from intimate +elbow-touch with and active participation in the events of the various +periods are sources in the finest sense. This is particularly true with +respect to the work of the late Mr. D. A. Tompkins, which is repeatedly +made use of. No document giving a photograph of conditions at one point +of time could replace an utterance which sprang from his rich association +with the whole fabric of the South's economic life, and which voiced the +result of his long and sensitive responsiveness to stimuli external and +internal. He absorbed influences as a sponge does water, and when pressed +his books and speeches yield observations quick, living, liquid. There is +considerable reason for belief, too, that Mr. Tompkins' concepts, however +correctly or incorrectly interpretative of the past, stood in a causal +relation to the cotton manufacturing development in his active period and +continuing to a less extent even to the present. + +While there has perhaps been no previous effort to bring the several +beliefs into parallel presentation, concerning the rise of cotton mills in +the South a little body of theory has grown up. Many of the statements are +not well-informed, and in other cases they are almost too studied. Aside +from a preparatory instance, designed to show the limits of divergence +between the various views, the method here chosen is that of relating the +different assertions to all of the periods to which they apply, rather +than attempting to give at once expositions of each in continuity. It is +hoped that in trying to examine the views in detail, the relative weighing +of periods as intended by the writers will not be lost. + +One who made his study with empirical purpose, and may believed to have +been not deeply interested in the historical setting of the cotton mills, +has made the following observation for South Carolina, taken by him as +typical of the Southern States: + +"The story of the development of the cotton manufacturing industry in +South Carolina is not wanting in impressive elements. From the beginning +in 1790 till 1900 it was a struggle of gradually increasing intensity and +extension."[1] This is a very positive statement of what may be called the +continuity theory. Mr. Goldsmith's view is in marked contrast with a +representative expression of Mr. Tompkins, like himself a Southerner for +considerable time a resident of the North: + +"The settlement of mountainous and middle North Carolina was practically +by the same elements,--Scotch-Irish, Germans, Moravians, and Quakers,--as +came to Pennsylvania. Many emigrants landing at Philadelphia and New +Castle, Delaware, settled first in Pennsylvania and moved southward +through the Valley and Piedmont of Virginia to the Carolinas. Others +landed at Charleston and moved northwestward. In South Carolina even the +names of several of the northern counties are identical with those of +Pennsylvania, as Lancaster, Chester, and York counties. + +"These settlers brought with them a large degree of knowledge and skill in +manufacturing. All along the Piedmont and even in the mountains from +Pennsylvania to Georgia, they not only followed agriculture, but developed +varied household manufactures in the period between 1750 and 1800.... In +1800 many charcoal blast furnaces making pig iron and many catlin forges +and rolling mills making wrought iron bars, and other products of iron, +indicate that a manufacturing development throughout the Piedmont region +of the South might have continued parallel with that which has taken place +in Pennsylvania, except for the circumstances of the combined influence of +the invention of the cotton gin, the institution of slavery, and the +checking of this immigration. As late as 1810 the manufactured products of +Virginia, the Carolinas and Georgia exceeded in variety and value those of +the entire New England States. By Whitney's invention, and its improvement +by Holmes, cotton planting became so profitable, that for a period of +forty years the price remained above twenty-five cents a pound. Factories +were abandoned, the owners going into the production of cotton with slave +labor. Some of the factory workers ... went into a precarious agriculture. +The factory workers and small farmers were largely ... located on the +mountain sides, and the development of cotton production with slave labor +tended further to separate this democracy from the white race aristocracy +of the low country. As cotton and slavery advanced, the population of free +white work people were driven farther and farther into the mountain +country, and thus many of the white industrial workers of 1800 became the +poor mountain farmers of 1850.... the owners of factories who operated +with free white labor in 1800 had become in 1850 the cotton planters +operating with black slave labor.... when the abolition of slavery removed +one great difficulty of industries and the white people who had formerly +deserted manufacturers for agriculture went back to the pursuits of their +fathers, these mountaineers formed the labor supply.... it was found that +the descendants of the industrial workers of 1800 could, with a little +training, do as good work as their forbears did."[2] + +This opinion is not so categorical as that of a close observer of the +South who believes that "from 1810 to 1880 the section was industrially a +desert of Sahara", but it makes clear the view that from a point early in +the century until a date subsequent to the Civil War absorption in cotton +culture threw manufacturing of all sorts into the discard. This conception +may be held to be so generally accepted as to be commonplace and not +requiring of proof; to examine in detail, however, the varying statements +that would cast doubt upon this, so far from being a tilting at windmills, +will serve to fix with some conclusiveness the date most nearly according +with the commencement of the industry, and so accomplish the chief object +of this introductory discussion. + +And now to begin. + +In declaring in 1908 that Spartanburg was regaining the position of a +central point in one of the most forward manufacturing developments in +America, such as the place had been a century earlier, Mr. Tompkins said: +"When I left South Carolina to go North to learn the trade of machinist +and to study engineering I thought I was leaving a country which had never +had any important manufactures. Later, when I was in the middle of +industrial life in the North, I conceived the idea of writing an +industrial history of the United States. To my amazement I found that the +agricultural South, from which I had come in a spirit of industrial +despair, was the cradle of manufactures in the United States."[3] + +Mr. Thompson has developed carefully the industrial character of what may +roughly be called the Revolutionary period, particularly with reference +to North Carolina: "The domestic industries ... flourished. Though there +were no towns of any size, the number and the skill of the artisans was +such that, in 1800, it seemed probable that the logical development would +be into a frugal manufacturing community, rather than into an agricultural +state."[4] Records in the office of the Secretary of State of South +Carolina show the early encouragement given to the manufacture of cotton +specifically. In a list of inventions, copyrights and patents, it appears +that March 13, 1789, Hugh Templeton deposited in the office two plans, "a +complete draft of a carding machine that will card eighty pounds of cotton +per day", and "a complete draft of a spinning machine, with eighty-four +spindles, that will spin with one man's attendance ten pounds of good +cotton yarn per day."[5] In 1795 the legislature of this State passed an +act authorizing commissioners to project a lottery for the benefit of +William McClure in his effort to establish a cotton manufactory to make +"Manchester wares."[6] The purchase by Southern States of the patent +rights of Whitney's cotton gin is to be interpreted not as a design to +leave off cotton manufacturing, but rather as an evidence of a prevalent +spirit for mechanical improvement. A South Carolina appropriation bill for +1809 has a paragraph advancing to Ephraim McBride $1000. "to enable him to +construct a spinning machine on the principles mentioned in a patent he +holds from the United States."[7] + +Much of this may be believed to have been directly in consequence of the +necessity for economic self-sufficiency during the Revolution when the +colonial commerce with England was stopped. Proceedings of the Safety +Committee in Chowan county, North Carolina, for March 4, 1775, show that +"the committee met at the house of Captain James Sumner and the gentlemen +appointed at a former meeting of directors to promote subscriptions for +the encouragement of manufactures, informed the committee that the sum of +eighty pounds sterling was subscribed by the inhabitants of this county +for that laudable purpose." Prizes were offered to encourage the +manufacture of woolen and cotton cards and of steel, and proclamation +money to the amount of ten pounds would be given by the chairman of the +committee to the first producer in a certain time of fulled woolen cloth. +The provincial congress the same year took steps to stimulate, by +bounties, the manufacture of gunpowder, rolling and slitting mill +products, cotton cards of wire, merchantable steel, paper, woolen cloth +and pig iron.[8] + +Although it is said that their objects were possibly political as well as +industrial, mechanics' societies existed at Charleston and Augusta before +and about the year 1810; in Augusta were made some of the earliest +attempts in this country to improve the steam engine.[9] As early as 1770 +there was formed in South Carolina a committee to establish and promote +manufactures, with Henry Laurens as chairman.[10] + +Before making an estimate of the character of the textile industry in the +South in this Revolutionary period, it is well to take a glimpse at some +of the individual establishments. The facts brought out by Mr. Kohn's +painstaking research as to South Carolina serve well. Governor Glen's +"Answers to the Lords of Trade", believed to have been written in 1748, in +attributing some manufacture of stuffs like Irish linen to the inhabitants +of the Irish township of Williamsburgh, can have no point except to +indicate domestic industry.[11] Remarking the considerable manufacture of +cloth in the province prior to and during the Revolutionary period, it is +pointed out that "In those days it does not appear to have been popular to +organize corporations and the manufacturing was done by individuals--most +of the planters being amply able to conduct such operations."[12] Daniel +Heyward, a planter, in a letter in 1777, declared with reference to his +"manufactory" that if cards were to be had "there is not the least doubt +but that we could make six thousand yards of good cloth in the year from +the time we began." And Mr. Kohn comments, "This certainly shows that the +Heywards conducted a considerable plant for the manufacture of cotton +goods", and allows that "no doubt other individual planters made their own +cotton clothes in the same way."[13] + +Domestic production is clearly seen in a statement in the same year that a +planter to the northward in three months trained thirty negroes to make +one hundred and twenty yards of cotton and woolen cloth per week, +employing a white woman to instruct in spinning and a white man in +weaving. "He expects to have it in his power not only to cloathe his own +negroes, but soon to supply his neighbors."[14] + +This student has satisfied himself, in spite of the admitted fact that no +traces of the plant survive, that "in 1778 Mrs. Ramage, a widow, living on +James Island, Charleston District, established a regular cotton mill, +which was operated by mule power."[15] Another plant which would seem to +have approached a commercial character is seen in the assertion in 1790 +that "A gentleman of great mechanical knowledge and instructed in most of +the branches of cotton manufactures in Europe, has already fixed, +completed and now at work on the high hills of the Santee, near Stateburg, +and which go by water, ginning (?) carding and slubbing machines; also +spinning machines, with 84 spindles each, and several other useful +implements for manufacturing every necessary article in cotton."[16] +Detail description shows, however, that while some long staple cotton for +this establishment was imported from the West Indies, and while a variety +of goods were made, it was conducted as an adjunct to a plantation, parts +of the equipment were later removed to and set up on another plantation, +and much yarn was spun for persons in the vicinity. It is, however, +notable that the machinery was made in North Carolina.[17] + +It has been said probably very justly that "It was not until far in the +nineteenth century that manufactured cloth could be bought because of its +scarcity and because of its price, and a vast majority of our +grand-mothers were thus forced to make their own cloth, and many of them +preferred the domestic article to the manufactured,"[18] and Mr. Clark +says that "prior to the war of 1812 the advance of Southern manufactures +was principally in what were then household arts--those that produced for +the subsistence of the family rather than for an outside market. These +manufactures continued generalized and dispersed rather than specialized +and integrated."[19] + +This author is to be accepted in his general dictum that "The official +return of cotton manufactures in 1810 is too inaccurate either to measure +the extent of the industry or to describe its location. Probably many +census agents did not know what a textile mill was; and they classed as +factories, plantation loom houses and the cottages or shops of village +jenny-spinners. This explains the large number of establishments reported +from the South and West. Advertising then to the mills just noticed and to +water-driven spindles near Fayetteville, he continues: "Less study had +been given to the industrial records of the South than to those of the +North, and during the subsequent period of indifference or hostility to +manufacturing in that section some annals of the earlier interest in those +pursuits were doubtless lost. Small mills may have been started in the +Carolinas and Georgia, and after a brief infancy have vanished and left no +name; but, if so, the fact is curious rather than significant for it had +no relation to the subsequent history of the industry."[20] + +While it is thus seen that the textile industry in the South in the latter +part of the eighteenth and earlier part of the nineteenth centuries was +stamped with every hall-mark of domestic production, and while they were +ephemeral in their operation, it is to be remembered that a century and a +half ago the industry in England as well as in America bore more or less +of the domestic character;[21] and Southern States showed instances of +power-driven machinery before Samuel Slater built the first Arkwright mill +in Rhode Island. The South had planter-manufacturers it is true, but this +striking link with agriculture as contrasted with New England is easily +explained in the more general fertility of the soil and the effect this of +course had upon the occupation of the people. Furthermore, the very fact +of this coupling indicates the inclination towards economic balance and +the promise in these years of a rational development.[22] Bearing these +things in mind and viewing the wastage which he conceived to have been +wrought by slavery, Helper was probably within justified bounds when he +declared: + +"Had the Southern States, in accordance with the principles enunciated in +the Declaration of Independence, abolished slavery at the same time the +Northern States abolished it, there would have been, long since, and most +assuredly at this moment, a larger, wealthier, wiser, and more powerful +population, south of Mason and Dixon's line, than there now is north of +it."[23] + +Sentiment as to the right description of the mills of the Revolutionary +years is clear. Coming now to those of the period later than 1810, a +subject is entered in which some controversy is involved. These plants may +be denominated in general the "old mills". While the two ideas are closely +related, a distinction must be held in mind between the influence of these +factories upon the later great development and the proper character which +is to be ascribed to them as of themselves. Only the latter object is +primary in the present chapter. + +A North Carolinian, who, while of post-bellum experience only, has been +closely identified with one of the foremost industrial communities of the +South, told the writer that in his opinion it had been "a clear case of +arrested development; it would have all come sooner, but for the war. It +might be said that had slavery continued, manufacturing would never have +come in the South; but it is also true that slavery was doomed. There is +no use in talking about what might not have happened had slavery +continued."[24] To uphold this view that the Civil War interrupted a +course which was clearly laid down in the years previous, it ought to be +capable of demonstration that the old mills had essentially the same +character as those of the great period, with only those lacks which were +inherent in the industry of the formative stage. A manufacture which is +forerunner in time is not necessarily antecedent in effect.[25] The South +had small cotton farmers of a prevalent sort before ever Knapp taught +efficient production. If the old mills were of a substantially different +stripe from those of the period of fifteen years after the war, the +genesis of the industry, economically speaking, vests in the later date. + +Another North Carolinian asserted that "In the older mills before the war, +the seed had been planted, and cultivation was renewed after the war. The +ante-bellum mills were pretty well known throughout the country. The +woolen mills at Salem, and the cotton mills in Alamance and a few in +Gastonia were known. The fact that such goods as 'Alamance' had a name +already was an advantage."[26] But the mere fact that the old mills were +known is not enough; it is further interesting that he continued to speak +of them in close conjunction with the names of the families and +manufacturers who owned them--the personal factor stood out in his mind. +It is easy to find a number of undescriminating statements, as that the +mills of Concord were the natural outgrowth of the old McDonald Mill, that +there was a manufacturing tradition in the place.[27] + +Not a few plants in the South have been in continuous operation since an +early date. Mr. Kohn believes that the one with the longest record is that +founded at Autun, near Pendleton, South Carolina, in 1838, by F. B. Sloan, +Thomas Sloan and Berry Benson.[28] But this does not mean that many of +these, so far from inspiring the later development, were not themselves by +its stimulus so greatly changed as to be radically different from their +former character. In addition to the general neglect accorded the old +mills by public estimation, there is evidence that positive local dislike +fell to one long-established enterprise at a date even as late as the +seventies.[29] + +It seems hardly necessary to controvert, in the light of the spirit with +which mills were built about 1880 and the demonstrated total newness of +the hands to the processes and even the idea of textile manufacture, an +opinion that not only did the ante-bellum mills serve as a starting point +for the later great development, but domestic weaving had accustomed the +people of the industry.[30] + +A clear distinction, and one too often lacking, was made by Carroll D. +Wright between first establishments and genuine factory development in +reference to the industry of Philadelphia and New England. Using English +spinning inventions, "During the war (Revolution) the manufacturers of +Philadelphia extended their enterprises, and even built and run (ran) +mills which writers often call factories, but they can hardly be classed +under that term. Similar efforts, all preliminary to the establishment of +the factory system, were made in Worcester, Massachusetts, in 1780."[31] +While it is not pretended that the Southern mills of a later period were +of quite as limited a character as is here meant, it is wholesome to bear +this point in mind. + +The history of the Southern cotton mills of the period embracing the +thirty years following 1810 is rather hazy.[32] Facts important to this +discussion, however, stand out. In the first place, there seems to have +been a good deal of moving about from this water-power to that, the +machinery being hauled from place to place with apparent convenience.[33] +A founder would sell an enterprise, build another and sell it and build a +third.[34] It was difficult to convey machinery to the factory when +purchased at a distance. That for the Mount Hecla Mills about 1830 was +shipped from Philadelphia to Wilmington, North Carolina, up the Cape Fear +river to Fayetteville, and then across country by wagon to Greensboro. +Machinery for the Hill factory in Spartanburg county, consisting in 1816 +or 1817 of seven hundred spindles, had to be brought by wagon from +Charleston.[35] Some of the machinery for the Michael Schenck mill, built +near Lincolnton, North Carolina, in 1813, was bought in Providence and +hauled by wagon from Philadelphia.[36] For this mill a portion of the +machinery was built by a brother-in-law of Schenck, and when the dam broke +and it became necessary to rebuild further down the creek, a contract was +made with Michael Blom, a local workman, for additional machinery.[37] +Other mills had locally manufactured equipment. Spindles for the original +Bivingsville mill are said to have been made in a blacksmith shop.[38] +"Much machinery for the early cotton mills was made by the local +blacksmiths. They were important men in the community and often grew +prosperous."[39] In those days the blacksmith was a more skillful mechanic +than in these, but the machinery they produced must have been crude even +for that period. + +While elaboration of the point falls elsewhere in this study, it is worth +notice here that there is a difference between the old and the later mills +in the character of their promoters and managers. In the earlier period +men came to cotton manufacturing, it would seem, by more normal channels +than at the outset of the subsequent development. Like Michael Schenck +they had foreign industrial habits and traditions back of them, and they +set up mills in communities populated by Swiss, Scotch-Irish and Germans. +Or like William Bates and probably the Hills, Shenden, Clark, Henry and +the Weavers they came from the industrial atmosphere of New England, then +particularly stimulated by the encouragements lent to textile +manufacturing by the embargo laid on English goods in the War of 1812.[40] +Or through collateral business collections or marriage they were drawn +into the business. Simply private investment enlisted participation of men +in various callings. A manufacturer would be such as incidental to other +and perhaps diverse interests. It is of course true that these same forces +operated afterwards, but in the earlier time there was no response to a +public enthusiasm or a social demand creating a magnet that drew into the +industry men who otherwise would never have entered it, certainly not as +entrepreneurs. + +In connection with the Schenck mill there was operated a plant turning out +iron products.[41] Cotton factories conjoined with gins and saw mills are +not unknown in the South even today, but in whatever instance this occurs +there is indicated a lack of specialization. + +The marketing and consumption of the output of the old mills is a matter +of broad interest. The statement which serves, perhaps, to indicate most +nearly a genuinely commercial character in this regard, is that of Mr. +Clark growing out of his reference to the establishment of General David +R. Williams, near Society Hill, Darlington County, South Carolina. It was +on his plantation, and was water-driven. "... in 1828 he was turning his +cotton crop, of 200 bales annually, into what was said to be the best yarn +in the United States. He marketed part of his output in New York and wove +part of it into negro cloth for home use.... Twenty years later the +factory was still shipping yarn to New York, and also making cotton +bagging for the neighboring plantations.... By the middle of the century +their (small Southern mills such as this) product is said to have +controlled the Northern yarn market. This market they were able to enter +because they had been supported through infancy by the local demand for +yarn for homespun weaving--a support they did not entirely dispense with +until after the war. Yarn was traded by the mills for homespun linen warp, +and woven with that warp into strong cloth for country use. The family +weavers who did this work were paid for their labor in cotton yarn."[42] +Other evidence hardly supports a belief that the Southern mills of this +period took so large a part in supplying the yarn market of the country; +on the other hand, local consumption and the link with domestic industry, +which even in the quotation above goes side by side with the wider sales, +was prevalent. How closely these old mills were joined with the +countryside is seen in the fact that into their coarse, homely fabrics +went hand-spun linen warp. The domestic character was ingrained. Of the +Rocky Mount Mill in North Carolina it is said that "For some years prior +to and during the Civil War, the mill was a general supply station for +warps which the women of the South wove into cloth on the old hand looms. +A few of the braver women who were left at home with only the feminine +portion of their families or the sons too young to fight, sometimes made +trips alone many miles through the country to get warps for themselves and +neighboring families." So beneficial did this old habit prove during the +war that a cavalry troop of six hundred federals was sent up from New Bern +in 1863 and burned the mill.[43] Mr. Thompson says of this same mill that +until 1851 slaves and a few free negroes were worked in it. This +distinguishing difference of the old mills from those of the great period, +when the labor of negroes was far from the thoughts of the builders and +managers, will be dwelt upon in another place. Here again is noted the +fact that the mill supplied coarse yarns for neighborhood consumption, and +it is said moreover that making only twelve to fifteen hundred pounds of +4s to 12s daily, the mill could not get a steady market for its +wares.[44] + +It is reported of the first independent venture of Francis Fries, at +Salem, North Carolina, in woolen manufacture, that it "was but a small +one, consisting of a set of cards for making rolls from the wool raised by +neighboring farmers. This mill also contained a small dyeing and fulling +plant for coloring and finishing the cloth woven by the farmers' wives and +daughters."[45] A large cotton manufacturer says that he recalls only +three mills operating in Spartanburg county before the war; there were +Bivingsville and two very small plants, one of them on the Tyger River +spinning yarns on half a dozen frames, people driving from twenty to +twenty-five miles to the door of the mill to get the product, although it +was sold too in the stores.[46] + +The Batesville factory was built with about 1000 spindles. Before the +Columbia and Greenville railroad came to Greenville about 1852, the +product of the mill was 8s to 12s in ten-pound "bunches" covered with blue +paper. The yarn in this form passed current almost like money. The mill +marketed it over the mountains in North Carolina and in Tennessee, as far +as Russellville, "mountain schooners" with six-mile teams being used for +the purpose. The wagons used to bring back whatever they could to +constitute a return load; usually it was meat, all of that article +consumed about Greenville coming, it is said, from North Carolina. +Sometimes rags were brought back. In this way yarns were sometimes taken +as far as a hundred and fifty miles.[47] + +A banker who is intimately connected with the textile industry in one of +the oldest industrial communities in the South and who is a member of a +family to which many writers are quick to point as founders of cotton +manufacture in the South through agency of conspicuous participation in +the business since the early thirties, said: "The mills built after the +war were not the result of pre-bellum mills. This is trying to ascribe one +cause for a condition which probably had many causes. The industrial +awakening in the South was a natural reaction from the war and +reconstruction. Before the war there was first the domestic industry +proper. Then came such small mills about Winston-Salem as Cedar Falls and +Franklinsville. These little mills were themselves, however, hardly more +than domestic manufactures. When, after the war, competition came from the +North and from the larger Southern mills, the little mills which had +operated before and had survived the war lost their advantage, which +consisted in the possession of the local field. They had been able to +barter for the small quantities of local raw cotton which they used. The +standard of exchange, the par, was one yard of three-yard sheeting for a +pound of raw cotton, which was a third of a pound, made into cloth, for a +pound in the raw state. But this was a retail and not strictly a +manufacturing profit.... The old Winston mill, established in 1840, +finished the wool product spun by the country housewives. This mill also +supplied carded wool for domestic manufacture. The ante-bellum +domestic-factory system did not produce the post-bellum mills."[48] + +So strongly was he impressed with the essentially local character of the +old mills, that he was inclined to look with pessimism upon the prospect +of success for the present plants which have transcended the small sphere +that in its very restriction protected them in privileged enjoyments. + +It must be obvious from the foregoing considerations that a census +enumeration of mills of the period cannot show internal characteristics +which are all-important. But even the census returns, counting one plant +like another, display the Southern industry at this stage in a feeble +light. Some primary descriptive factors are lacking in the earliest +reports of the census which are at all useful, but taking the four +Southern States which were farthest advanced in the years 1840 and +1850--Virginia, North Carolina, South Carolina and Georgia--the showing +may be summed up thus: + +In 1840 Virginia had 22 establishments, $1,299,020 invested, 1816 +operatives, 42,262 spindles and the plants consumed 17,785 bales of +cotton. In 1850 the same State had twenty-seven mills, with a capital of +$1,908,900 and 2,963 operatives. + +In 1840 North Carolina had 25 establishments, $995,300 invested in these, +1219 operatives and 47,934 spindles.[49] Ten years later this State showed +three more establishments, an investment of $1,058,800, 1619 operatives +employed, 531,903 spindles and the number of bales consumed was 13,617. + +South Carolina in 1840 had 15 plants, representing an investment of +$617,450; there were 570 operatives and 16,353 spindles. By the next +decade there were 18 establishments, the investment in them was $857,200, +the operatives numbered 1,119 and the bales of cotton consumed 9,929. + +Georgia at the earlier date contained 19 mills with an invested capital of +$573,835,779 operatives and 42,589 spindles. In 1850 the number of plants +had increased by sixteen, making 35; the investment had risen to +$1,736,156; the operatives totalled 2,272; unfortunately the number of +spindles is not contained in the census returns, but the consumption was +20,230 bales. + +The Southern States as a whole in 1840 were able to report 248 +establishments with a capital of $4,331,078; operatives were 6,642; +spindles (an obviously incomplete summary) were 180,927. The same year the +New England States as a whole showed 674 mills, with investment of +$34,931,399, operatives numbering 46,834, and 1,497,394 spindles. The +Southern States again, in 1850 had 166 plants, $1,256,056 invested, 10,043 +operatives; the consumption was reported at 78,140 bales. At the same date +the New England development was measured by 564 plants, capital of +$53,832,430, 61,893 and a consumption of 430,603 bales.[50] + +Many single mills in the South today represent more than the extent of +the whole industry in the most forward Southern State in 1850.[51] +Comparison of facts for all the Southern mills with those for the industry +of New England perhaps serves to reflect back some light upon the status +of the former plants specifically, which has been dwelt upon. + +Of the plants in the South in this period it has been well observed that +"The number of small carding and fulling mills and of little water-driven +yarn factories, in this section before 1850, may have approached the +number of textile factories in the same region today; ... but few of these +establishments became commercial producers."[52] + +Some evidences of industrial activity in the period to 1840, partly +conscious and partly not so, which may be held to presage the later +development are to be noticed. A localizing tendency of the textile +industry in the decade from 1830 to 1840, held to have been guided by the +conjunction of raw cotton, waterwheel and steamboat along the fall line of +rivers--at such points as Richmond, Petersburg, Augusta, Columbus, +Huntsville, Florence and the vicinity of Montgomery, Mr. Clark holds to be +a "slow and unconscious development", during which William Gregg, "a +single pioneer of large industry", made a systematic effort to "awaken the +South to the peculiar advantages it enjoyed for cotton manufacturing."[53] + +George Tucker, in his "Progress of the United States in Population and +Wealth in Fifty Years", published in 1843, was the first to show that at +1840 in the older South slavery was displaying signs of decay from +economic causes and that as a system it would finally lapse of its own +accord.[54] Niles' Register, May 2, 1840, declared: "The South is rapidly +becoming independent in almost every branch of manufacture. There are in +North Carolina alone, at this day, a greater number of different kinds +than ten years ago there were in the whole of the Southern States", and +two weeks later the same paper took from the Raleigh, N.C., Register the +assertion that "The enterprise of the citizens of this state is rapidly +enabling it to become independent of the North in almost every branch of +manufacture."[55] + +Mr. Pleasants believes that agitation by press and public for a charge in +industrial activities resulted in awakening North Carolina in the early +thirties from the lethargy that had prevailed since 1810, so that "The +people of the state became interested and soon a class of small +manufacturers such as makers of carriages, wagons, and farm implements, +coopers, wheelwrights, distillers, tanners, hatters and makers of boots +and shoes, cabinets and chairs came into prominence and continued to +thrive down to 1860. In addition to this class were the cotton, wool, and +iron manufacturers who now began to appear and who became quite prominent +after the building of railroads began."[56] It is, however, questionable +whether it may be said truly that "the people of the state became +interested"; certainly there was nothing like the sweep of public +sentiment that appeared in 1880. Several years earlier the Tarboro, N.C. +Free Press had carried this item: "A few days since twenty bales of cotton +yarn were shipped from this place to the New York markets. They were from +a manufactory of Joel Battle at the falls of Tar River.... Should the +tariff bill meet with equal success with that of internal improvements, +necessity will compel the people of the South and of North Carolina to +join in the scuffle for the benefits anticipated from this new American +system, and they will have to bear a portion of its burdens and buffet the +Northern manufacturer with his own weapons."[57] + +Influenced by the pre-emption of land into large estates with the +consequent need of the people to find other means of livelihood than small +farming, by the discovery of gold and establishment of the mint, by the +agitation for and construction of railroads and by the improvements in +cotton manufacturing machinery, the people of Mecklenburg county, N.C., +"Many years before the war", said Mr. Tompkins, "were beginning to realize +the importance of diversified industries.... An industrial crisis was +imminent, and the problem would have solved itself by natural agencies +within a few more years, had not section differences brought on the +war."[58] In connection with this statement, which approaches as nearly to +the ascription of an industrial impulse to the ante-bellum South as any +other by this writer, it is to be noticed that the fact that the war did +come to render it impossible of effects shows the relative weakness of the +spirit at this time. The pre-occupation with intersectional differences +was of greater potency than the intra-sectional change of mind, if such +there were. + +A South Carolina newspaper in 1847 reckoned up with pride eleven cotton +factories in the State, with others building on the water powers of the +back-country.[59] + +The foregoing paragraphs have been designed to lead up to a very +interesting view expressed by an author often quoted in these pages. +Speaking of the years 1840-1860, Mr. Clark has said: "In the South the +most striking feature of this period was the gradual breaking down of a +traditional antipathy of manufactures. This hostility was opposed to the +obvious interests of a region where idle white labor, abundant raw +materials, and ever-present water-power seemed to unite conditions so +favorable to textile industries. Cotton planting engaged the labor of the +negro and the thought and capital of a directing white class, but the +natural operatives of the South remained unemployed, and the capital of +the North and of Europe was mobile enough to flow to the point of maximum +profit without regard to sectional or national lines, were such a profit +known to be assured by Southern factories. Slavery as a system probably +had less direct influence upon manufactures than is commonly supposed, but +the presence of the negro through slavery was important." It is noticed +that white immigration from Europe, which at this time supplied the most +considerable mechanical skill, avoided districts heavily populated with +negroes; that plantation self-sufficiency meant isolation with small need +for good communicating roads; that the market for middle-grade goods was +restricted by the servile character of the colored population; that the +credit system, by which factors controlled the directioning of productive +capital, rested upon cotton culture by negro labor; that while the corn +laws held in England, reciprocity between the Southern States and the +mother country tended to discourage manufactures in this section while the +conditions of commerce favored manufacture in the North. "These business +interests, supported by social traditions and political sectionalism, were +strengthened in their opposition to new industries by a wide-spread +popular prejudice against organized manufactures.... Nevertheless the +South chafed continually under the discomfort of an ill-balanced system of +production...." He speaks of the canal at Augusta and of cotton mills at +Charleston, Mobile, Columbus, New Orleans and Memphis directly following +the writings and object lesson of William Gregg in his Graniteville +factory and declares: "Though some large undertakings were wrecked by the +financial crisis of 1857, more from weak banking support than from faults +of operation, modern cotton manufacturing in the South dates from the +founding of Graniteville rather than from the post-bellum period.... +However, viewed in comparison with the cotton manufactures of the North, +those of the South were still insignificant.... Nevertheless, the present +attainment of the industry assured its definite future growth, and +ultimate national importance."[60] + +And Mr. Kohn has said that "The real and the lasting development of cotton +mills in South Carolina might be started with the Graniteville Cotton +Mill...."[61] + +It is difficult for the present writer to see the distinction which Mr. +Clark desires to draw between the effect of the presence of the negro and +the presence of slavery. Well enough to assert that the capital of the +North and of Europe was mobile enough to flow across the Atlantic and +across Mason and Dixon's line were a profit in manufacture in the South +known to be assured, but the fact is that capital did not flow in for +industrial purposes because bright manufacturing prospects had not been +proved out, and this largely because home enterprise was a laggard while +slavery claimed the section's capital resources for cotton cultivation. +The absence of immigration was as certainly the effect of slavery.[62] +While it is true that for long years after emancipation, and continuing to +this day, the influence of the presence of the negro in restraining inflow +of immigrants, particularly of artizans, it is evident the lessening of +this deterrent and the removal of other nearly equal drawbacks could not +proceed or commence while slavery existed. It should be clear to anyone +that from the point of view of the independent white workman the presence +of the negro in slavery held as a far more forcible objection than the +presence of the negro in freedom. His killing economic competition and his +radiated social poison were beyond any dispute and beyond prospect of +remedy until he was made at least a free producer. There could not, in +the second place, be development of schools and roads, and there could not +be fraternization of work-people, while slavery continued. And the +prospect for immigration for the South has taken its rise from the Civil +War. + +It was slavery that made plantation self-sufficiency in primitive needs +universal, that made isolation and physical barriers to intercourse. The +credit system in its hey-day rested in large degree upon supply by the +factor of all industrial products, which needs must be sustained so long +as every local energy was foredoomed for absorption into cotton growing. + +It can not rightly be said that the traditional antipathy to manufactures +in the South was "opposed to the obvious interests of a region where idle +white labor, abundant raw materials, and ever-present water-power seemed +to unite conditions so favorable to textile industries", if Southern +consciousness and purpose is meant. This applies particularly to the labor +factor. It will be shown later in this study that in the period before the +war the mills often employed slaves as the exclusive operatives in the +factory, either when belonging to the management or hired from their +owners; in some cases slaves or free negroes were employed as operatives +in the same mills with whites; and finally, and more importantly, through +the reconstruction years and at the very outset of the cotton mill era the +thought of the establishers of mills nor infrequently groped out in the +inclination again to engage negro hands and to induce white operatives to +come from the North and even from England and the Continent--overlooking +the native Anglo-Saxon population as a useful supply of workers as though +it had not been there. Before the war the presence of raw cotton was +certainly looked upon more usually rather as a guarantee of economic +independence than as a stimulus to produce within the section those +products of manufacturing which the staple was potent to purchase. + +It is not implied that conspicuous promulgators and exemplars of the need +for a change in economic activity, such as William Gregg and others, and +more still of lesser consequence of whom we have fewer evidences, were not +products of a reaction that showed itself from the long continuance of +slavery, but they stand out, impotent as they are striking, against a dull +and motionless background of prevalent system. + +Materials and viewpoint are both too well understood to require here +demonstration of the preventive influence which slavery and cotton had +upon industry in the South. And yet some observations may be brought out +for the special purposes of this study, looking especially through the +eyes of Southern men. Henry Watterson has said: "The South! The South! It +is no problem at all. The story of the South may be summed up in a +sentence; she was rich, she lost her riches; she was poor and in bondage; +she was set free, and she had to go to work; she went to work, and she is +richer than ever before. You see it was a ground-hog case. The soil was +here, the climate was here, but along with them was a curse, the curse of +slavery."[63] Probably not over-induced by bitter animus is Helper's +direct charge: "And now to the point. In our opinion, an opinion which has +been formed from data obtained by assiduous researches, and comparisons, +from laborious investigation, logical reasoning, and earnest reflection, +the causes which have impeded the progress and prosperity of the South, +which have dwindled our commerce, and other similar pursuits, into the +most contemptible insignificance; sunk a large majority of our people in +galling poverty and ignorance, rendered a small minority conceited and +tyrannical, and driven the rest away from their homes; entailed upon us a +humiliating dependence on the Free States; disgraced us in the recess of +our own souls, and brought us under reproach in the eyes of all civilized +and enlightened nations--may all be traced to one common source, and there +find solution in the most hateful and horrible word, that was ever +incorporated into the vocabulary of human economy--Slavery!"[64] + +Tompkins saw clearly, and in effect said again and again, that "the result +of the introduction and growth of the system of slavery was +revolutionary; it turned the energies of the people almost wholly to the +cultivation of cotton; it practically destroyed all other +industries...."[65] And again, "By the influence of the negro the South +lost its manufactures and largely its commerce, and became practically a +purely agricultural section of the nation."[66] Speaking of the effect of +the cotton gin and the cultivation of the staple by slave labor, he said: +"The shops which had been productive of trading were closed to the public, +and were utilized only for what was needed on the plantation.... There +were no industries requiring skill or thought, and there was no necessity +for scientific farming or anything else scientific.... Slavery not only +demonstrated that people will not think unless it is necessary, but also +that they will not work unless it is necessary.... Within three decades +after the invention of the cotton gin, slavery had accomplished its +revolution. The people whose minds had been occupied with diversified +industries and industrial expansion, were narrowed down to the development +and growth of cotton.... The mills and shops lay idle, the abundant +natural resources were ignored, and everything staked upon one +occupation...."[67] This writer was fond of linking the economic trend of +the South in 1800 with that which emerged after Reconstruction, as thus, +"In the latter part of the eighteenth century and the early part of the +nineteenth there was a well-developed and extensive manufacturing interest +in the South. White mechanics were numerous, and lived well. The growth of +the institution of slavery had nearly destroyed all manufactures ... by +the middle of the nineteenth century.... After the abolition of slavery, +and after a period of disastrous experiment in trying to legislate on +social and political conditions 'without regard to race, color or previous +condition of servitude,' education, intelligence or moral character ... +manufactures were quickly re-established in the South, and the descendants +of the mechanics of former days ceased at once to be 'poor white trash' +and became with marvelous quickness as good carpenters, machinists, +carders, weavers, etc., as their ancestors were."[68] + +Something of Tompkins' newspaper published and publicist habit comes out +in this conclusion of his advice against the usefulness of negroes in +cotton mills: "Dependence upon the negro as a laborer has done infinite +injury to the South. In the past it brought about a condition which drove +the white laborer from the South or into enforced idleness. It is +important to re-establish as quickly as possible respectability for white +labor."[69] + +Not only is it to be said that "the growth of slavery stifled +manufactures",[70] but it is noteworthy that while this baleful influence +lasted no improvements were made in the methods or appliances for the +preparation of raw cotton for the market. Except in size and superficial +appearance there was no change in the ante-bellum gin, gin-house and screw +from 1820 to 1860. "The cotton was packed by hand, carried into the +gin-house in baskets by laborers, carried to the gin by laborers, pushed +into the lint-rooms, carried to the screw, packed in the box of the screw +and bound with ropes, all by hand." But after the war came a feeder, a +condenser, a hand-press to be used in the lint room, and cotton elevators. +"... the spirit of enterprise, invention and improvement in the people of +the South has not only revived, but the entire method and all the +machinery and appliances for preparing cotton for the market have been +revolutionized."[71] + +A propagandist of the early eighties desiring to organize a development of +small cotton mills in the South quoted with approval a correspondent of +the Morning News of Savannah, setting forth that before the war the +planters saw the advantage for little establishments and were only +deterred from manufacturing because "slavery and the factory were declared +to be incompatible institutions. They could not exist together."[72] + + + + +CHAPTER II + +_THE BACKGROUND (Continued)_ + + +So far from proclaiming cotton as king, there is evidence that some of the +wisest Southerners saw that it was in many respects a curse. Said William +Gregg in 1845: "Since the discovery that cotton would mature in South +Carolina, she has reaped a golden harvest; but it is feared it has proved +a curse rather than a blessing, and I believe that she would at this day +be in a far better condition, had the discovery never been made. Cotton +has been to South Carolina what the mines of Mexico were to Spain...." The +"day is not far distant, yea, is close at hand, when we shall find that we +can no longer _live_ by that, which has heretofore yielded us ... a +bountiful and sumptuous living.... Let us begin at once, before it is too +late, to bring about a change in our industrial pursuits ...--let croakers +against enterprise be silenced--let the working men of our State who have, +by their industry, accumulated capital, turn out and give a practical +lesson to our political leaders, that are opposed to this scheme. Even Mr. +Calhoun, our great oracle ... is against us in this matter; he will tell +you, that no mechanical enterprise can succeed in South Carolina--that +good mechanics will go where their talents are better rewarded--that to +thrive in cotton spinning, one should go to Rhode Island--that to +undertake it here, would not only lead to loss of capital, but +disappointment and ruin to those who engage in it."[73] + +"The invention of the cotton gin", said Tompkins, "... Before 1860 ... was +nearer anything else than a blessing. It was primarily responsible for the +system of slavery.... Cotton ... in its manufacture ... is the life of the +South, but we could probably have done as well without it until we began +to manufacture it."[74] + +Not too dogmatic is the opinion expressed that "It seems as clear as day +that ... cotton made the South a free trade section and the North +protective; cotton lured the South back to slavery;[75] cotton drove the +South to an extreme States-rights position ... and cotton at last drove +the South to translate extreme States-rights into the terms of +Secession...."[76] And with regard to internal policy, "Perhaps the most +striking economic change that the new industry (cotton culture) effected +in the South after the reintroduction of slavery was the speedy +abandonment of manufactures ... what was the use of nerve-racking +investment in elaborate and costly machinery when a land-owner could reap +ten per cent net profit from a few negroes and mules and a bushel or two +of the magical cotton seed? and yet the South had unusual manufacturing +facilities ... manufacture soon fell into decay; the Piedmont region being +still dotted with the moldering ruins of iron works and other mills that +bear witness to the overwhelming power of the new agricultural +absorption."[77] + +It has been observed that the social difference between North and South +before the war, so often looked upon as something existing as of itself +apart, as a matter of fact may be fully accounted for simply by the +institution of slavery, which arrested development on Southern soil of the +industrial type of American civilization.[78] + +Very convincing in his fact findings and often strikingly happy in his +interpretations is Olmsted; his work benefited by being saved from the +passion of Helper and the venom of Sidney Andrews. In accounting in 1856 +for the reason for the stagnation in Virginia as compared with the +industrial activity of New England and old England, he wrote, "It is the +old, fettered, barbarian labor-system, in connection with which they +(Virginians) have been brought up, against which all their enterprise must +struggle, and with the chains of which all their ambition must be bound. +This conviction I find to be universal in the minds of strangers, and it +is forced upon one more strongly than it is possible to make you +comprehend by a mere statement of isolated facts. You could as well convey +an idea of the effect of mist on a landscape by enumerating the number of +particles of vapor that obscure it. Give Virginia blood fair play, remove +it from the atmosphere of slavery, and it shows no lack of energy and good +sense."[79] He took to be an average expression of the views "Not of the +majority of the people (of Virginia)--they are not quite so demented as +yet--but of the majority of those whose monopoly of wealth and knowledge +has a governing influence on a majority of the people", the statement of a +paper of the State that it was glad to find its contemporaries willing to +discuss "the true and great question of the day--_The Existence of slavery +as a permanent issue in the South_. Every moment's reflection but +convinces us of the absolute impregnability of the Southern position on +this subject. Facts, which can not be questioned, come thronging in +support of the true doctrine--that slavery is the best condition of the +black race in this country ..."; and from another newspaper in the year +previous (1854): "African slavery ... is a thing that we can not do +without, that is _righteous_, _profitable_, and permanent, and that +belongs to Southern Society as inherently, intricately, as durably as the +white race itself."[80] + +Olmsted was at pains to show how the people were duped by Charlatan +guidance of their political leaders; this comes out particularly in his +quotation of and comments upon the famous election speech in Virginia in +the fifties, in which the aspirant declared to his audience that "Commerce +has long ago spread her sails, and sailed away from you ... you have set +no tilt-hammer of Vulcan to strike blows worthy of the gods in your iron +foundries; you have not yet spun more than coarse cotton enough, in the +way of manufacture, to clothe your own slaves. You have had no commerce, +no mining, no manufactures. You have relied alone on the single power of +agriculture--and such agriculture! Your sedge-patches outshine the sun.... +Instead of having to feed cattle on a thousand hills, you have had to +chase the stum-tailed steers through the sedge-patches to procure a tough +beef-steak. (Laughter and applause.) ... The landlord has skinned the +tenant, and the tenant has skinned the land, until all have grown poor +together," "and how," asks Olmsted, "does the fiddling Nero propose, it +will be wondered, to remedy this so very amusing stupidity, poverty, and +debility? Very simply and pleasantly. By building railroads and canals, +ships and mills; by establishing manufactories, opening mines, and setting +up smelting-works and foundries. And, 'Hurrah!' shout the tickled +electors; 'that's exactly what we want.'" And then he showed that it was +much like the quack telling the confirmed paralytic to live generously, +take vigorous exercise and grow well; that with the disease of slavery in +its vitals the South could not do else than languish; that in holding out +promise of wholesome measures which contemplated everything but the +attacking of slavery,[81] the politicians were just laughing at the +people.[82] + +A reflection just as sorrowful as the confirmed bias of the people, +however, is one that Olmsted did not see in this and myriad other +episodes, namely, the blindness of the leaders that, with no doubt strong +elements of quackery, showed even stronger signs of being themselves duped +by a situation. Not that the crowd was believing, but that the leaders +were so largely sincere, was most melancholy. As to both considerations, +however, a passage of Sir Horace Plunkett in comment upon Irish politics, +is much to the point: "Deeply as I have felt for the past sufferings of +the Irish people and their heritage of disability and distress, I could +not bring myself to believe that, where mis-government had continued so +long, and in such an immense variety of circumstances and conditions, the +governors could have been alone to blame. I envied those leaders of +popular thought whose confidence in themselves and in their followers was +shaken by no such reflections. But the more I listened to them, the more +the conviction was borne in upon me that they were seeking to build an +impossible future upon an imaginary past."[83] + +As opposed to the brightening signs which some have seen in the years just +preceding the Civil War, it has been said, "yet with the line around +slavery being drawn more closely ... the cotton South lagged in the +industrial race, and the border States were hampered by the institution +that they felt to be a burden, but which they could see no safe way to +abolish. Compassed as it was by political compromises, slavery must +ultimately have topped through its own overweight; but in 1860 it was so +valuable for the plantation that it was not only not readily converted +into the factory, but was an obstacle in the way of the employment of +capital and of other labor in that direction."[84] + +The deterrent effect of slavery upon immigration of white laborers has +been noticed above. In 1860 only 6 per cent of the white population of the +South was foreign-born, but immigrants made up nearly 20 per cent of that +in the North. In the decade from 1850 to 1860 the South's quota of +foreign-born in the whole country dropped from 14 to 13 per cent.[85] The +South was deprived of her share of foreign mechanics, so largely +responsible for the industries in this country in the first half of the +nineteenth century, not only by the fact that independent artizans avoided +competition with slave labor, but because few of them had the means of +acquiring slaves, and disapproved of the institution besides.[86] The +increase in population in North Carolina in the single decade of 1870 to +1880 about equalled that of the four decades preceding. The comprehensive +influence here upon immigration by the abolition of slavery is not greatly +modified by the fact that in the period before 1870 fell the losses from +the Civil War.[87] The tide of immigration to Mecklenburg County in this +State dwindled from the introduction of slavery as a system until 1825, +and thereafter set in the emigration of persons from the county, an even +severer influence and stronger indication of the baleful labor system.[88] + +In the fifties it was declared that the most prosperous community in South +Carolina was a settlement of Germans in the western part of the State. +Here had been founded an educational institution, varied manufactures, +farming was conducted with successful enterprise and capital was found to +be invested in a railroad venture. Slavery was not relied upon.[89] Sidney +Andrews in 1865 found the northwestern counties of Georgia, which were +held to be strongly opposed to secession in 1860-61, and which furnished +a good many soldiers to the federal armies, probably better disposed to +the national government than any other part of the State. Slaves had +constituted less than a fourth of the total population, the people were +industrious and hardy; though cruder than those from the lower parts of +the State, the delegates from this section to the constitutional +convention of 1865 were said to have a well-informed outlook for the +Commonwealth. After the war the industry displayed by the white people of +this region was taken as attesting their better traditions of ante-bellum +years.[90] + +At a time when the average wages of female operatives in the cotton mills +of Georgia was half that of the same workers in the mills of +Massachusetts, factory girls from New England were induced by high pay to +go to the Southern States to enter newly-established plants, but soon +returned North because their position was unpleasant in the midst of "the +general degradation of the laboring class."[91] It was observed very truly +that competition of the slave was not distantly matched in hurtfulness by +the example of the more prosperous white men, with whom acquisition of +the comforts and dignities of life did not proceed from daily toil.[92] + +The dependence of the ante-bellum South upon the North and upon Europe for +the most substantial and the most trivial appurtenances of civilization, +is perhaps less in dispute than any topic here treated. The extent of this +dependence, with the accompanying neglect of provision for production of +the commodities at home, is evidenced by its continuance for years after +the war. It might be said, not only in justification of this practice, but +in apology for the total one-sidedness of the old South, that the section +was animated by a natural and universal law, in responding to and acting +upon the principle of comparative economic advantage. And certainly the +most absolute conception of the territorial division of labor could not +require a more exclusive devotion to the making of cotton and a more +complete reliance upon other less peculiarly favored districts for supply +not only of manufactured goods but of food stuffs and other raw materials, +than the South displayed. But, however, strictly in conformity with the +superficial dictates of this policy from an international and even +national point of view, the program was ruinous to the section, the +country and, in a broad sense, to the deeper economic welfare of the +world. Easy yielding to the principle did not suggest to the great bulk of +the South's statesmanship the reflection that the section after all was in +only partial compliance; that even for the most efficient production of +cotton as such, there needed to be a wholesome admixture of manufacturing +and of other agricultural interests. Accompanying and directly by agency +of the post-bellum activities in industry is seen not a less but a more +economical and larger output of the staple. + +Some of the most humorous passages in the literature of the economic +history of the South were called forth by the need of the section to go to +the North for a thousand and one essentials of daily existence, and in +their very humor they serve to show the seriousness of the situation. + +William Gregg, too lonely in his advocacy of home industry to treat the +subject in other than its fundamental considerations, declared in 1845 to +his own community, than which there was no greater sinner: "It ought to +make every citizen who feels an interest in his country, ashamed to visit +the clothing stores of Charleston, and see the vast exhibition of +ready-made clothing, manufactured mostly by the women of Philadelphia, New +York, Boston and other Northern cities, to the detriment and starvation of +our own countrywomen, hundreds of who may be found in our own good city in +wretched poverty, unable to procure work by which they would be glad to +earn a decent living."[93] And again: "A change in our habits and +industrial pursuits is a far greater desideratum than any change in the +laws of our Government...."[94] His point of view comes out well in this +passage: "if we continue in our present habits, it would not be +unreasonable to predict, that when the Raleigh Rail-Road is extended to +Columbia, our members of the Legislature will be fed on Yankee baker's +bread. Pardon me for repeating the call on South Carolina to go to work. +God speed the day when her politicians will be exhorting the people to +domestic industry, instead of State resistance; when our Clay Clubs and +Democratic Associations will be turned into societies for the advancement +of scientific agriculture and the promotion of mechanic art; when our +capitalists will be found following the example of Boston and other +Northern cities, in making such investments of their capital as will give +employment to the poor, and make them producers, instead of burthensome +consumers; when our City Council may become so enlightened as to see the +propriety of following the example of every other city in the civilized +world, in removing the restrictions on the use of the Steam Engine, now +indispensable in every department of Manufacturing...."[95] + +A decade later Helper reproached a South that had not given heed to Gregg: +"It is a fact well known to every intelligent Southerner that we are +compelled to go to the North for almost every article of utility and +adornment, from matches, shoe-pegs and paintings up to cotton-mills, +steamships and statuary ... this unmanly and unnational dependence, ... is +so glaring that it can not fail to be apparent to even the most careless +and superficial observer. All the world sees, or ought to see, that in a +commercial, mechanical, manufactural, financial, and literary point of +view, we are as helpless as babes...."[96] + +Gregg remarked the supply by the North not only of the articles of major +manufacture, but of articles of those makes which should naturally be the +adjuncts of agriculture--axe, hoe and broom handles, pitch-forks, rakes, +and hand-spikes for rolling logs, shingles and pine boards; and even that +"the Charleston market is supplied with fish and wild game by Northern +men, who come out here, as regularly as the winter comes, for this +purpose, and from our own waters and forests often realize, in the course +of one winter, a sufficiency to purchase a small farm in New England."[97] + +An orator at the Southern Commercial Convention, New Orleans, 1855, +adapted for the occasion, thought Olmsted, a speech made in the British +Parliament on taxes, familiarized in "Child's First Speaker", and +beginning, in the Southern version, "It is time that we should look about +us, and see in what relation we stand to the North. From the rattle with +which the nurse tickles the ear of the child born in the South, to the +shroud that covers the cold form of the dead, everything comes to us from +the North. We rise from between sheets made in Northern looms, and pillows +of Northern feathers, to wash in basins made in the North ..." and +continuing in the strain that was a favorite one with platform and pen, +and many examples of the employment of which may be found.[98] + +A Virginia land-owner wrote to a farm paper regretting the widespread and +intimate dependence upon the North, and stated quite as clearly as was +observed thirty years later that goods which could be bought in the North, +paying a profit to the manufacturer there, then transported to the South +at heavy cost and sold at a profit to the tradesman, might surely be +manufactured in the South in the first place, saving maker's profit to +home industry and obviating charges of carriage altogether.[99] + +A newspaper in Richmond chronicled the sale to Northern interests of a +large coal field in the State, and in unconscious irony placed in +juxtaposition to the notice this confident exhortation: "It is plain that +a new and glorious destiny awaits the South, and beckons us onward to a +career of independence. Shall we train and discipline our energies for the +coming crisis, or _shall we continue the tributary and dependent vassals +of Northern brokers and money-changers_? Now is the time for the South to +begin in earnest the work of self-development! Now is the time to break +asunder the fetters of commercial subjection, and to prepare for that more +complete independence that awaits us."[100] But another and wiser paper in +the same State, urging manufacturing development for Virginia towns and +cities, and particularly the textile industry for Richmond, anticipated +with a different mind the event invited in the excerpt above quoted, and +foretold with prophecy all too good, what later was patent to everybody: +"It must be plain to the South that if our relations with the North should +ever be severed--and how soon they may be, none can know (may God avert +it long!)--we would, in all the South, not be able to clothe ourselves. We +could not fell our forests, plow our fields, nor mow our meadows. In fact, +we would be reduced to a state more abject than we are willing to look at, +even prospectively. And yet, with all these things staring us in the face, +we shut our eyes, and go on blindfold."[101] + +It is thought well, in summary of the decidedly non-industrial character +of the ante-bellum South, to set forth some material and some observations +of a general character. In spite of its length, it is useful to give in +its setting an episode related by Tompkins. It shows more aptly than +almost in anything in spite of its incidental happening, just the point of +preoccupation with politics to which the Southern mind came, the degree of +trifling with which the most sober proposals were met, the hopelessness of +change from this state of affairs by anything short of a fundamental moral +awakening. + +"I heard of an incident, that occurred in a political contest between Mr. +Gregg and Chancellor Carroll, for the place of State Senator from +Edgefield District. It was the habit for candidates to appear together and +speak to the people from the same platform.... On one of these occasions, +Mr. Gregg spoke first. He stated that he solicited votes on the ground +that he had built a factory, which gave work to poor white people. It +enhanced the value of cotton by manufacturing it. He had planted peach +orchards to develop new avenues of profit and advantage to the people, +&c., &c. Whereas, Chancellor Carroll had never made two blades of grass +grow where only one grew before. + +"Mr. Carroll flowed Mr. Gregg. He was an accomplished orator, and praised +in eloquent terms, Mr. Gregg's enterprise in building a factory. He +eulogized his plans for fruit culture. He admitted, with humility, all the +delinquencies Mr. Gregg charged against him excepting only one: 'He says I +never made two blades of grass grow where only one grew before. Having +faith in Mr. Gregg's plans and advice about orchards, I planted one, and +if anybody is disposed to believe I never made grass grow, I simply invite +them to go look at that orchard. It is literally run away with grass.' The +crowd laughed, voted for Mr. Carroll and the cause of slavery went forward +while Mr. Gregg staid at home and the cause of civilization +languished."[102] + +But Gregg preached his doctrine undaunted; his works are to be taken less +as an indication of anything like general ante-bellum awakening to +suicidal policies than as the bright exception that proves the melancholy +rule. + +He showed that even cotton, the great god, drove enterprise from South +Carolina, for, with the returns from its culture under ordinary management +amounting to 3 or 4 and in some instances only 2 per cent., the +inclination for planters to remove with their slave capital to the richer +south-west was strong, thus keeping the population of the State at a +standstill.[103] + +Mr. Ingle has stated the case broadly: "The economic history of the South +from the Revolution to the Civil War is a record of the development of one +natural advantage to the neglect of several others. Fitted by nature to +support a large population engaged in a variety of pursuits based upon +agriculture, it had a small population occupied in the production of raw +material that contributed to the maintenance of a dense population in +regions where artifice contended against harsh climate and a stubborn +soil."[104] An "address to the Farmers of Virginia" read at a convention +for the formation of the Virginia State Agricultural Society in 1852, +adopted, reconsidered and readopted with amendments, and finally +reconsidered again and rejected on the ground that it contained +admissions, however true, which would be useful to abolitionists, +contained the words: "... thus we, who once swayed the councils of the +Union, find our power gone, and our influence on the wane, at a time when +both are of vital importance to our prosperity, if not to our safety. As +other states accumulate the means of material greatness, and glide past us +on the road to wealth and empire, we slight the warnings of dull +statistics, and drive lazily along the field of ancient customs, or stop +the _plow_ to speed the _politician_--should we not, in too many cases, +say with more propriety, the _demagogue_!... With a widespread domain, +with a kindly soil, with a climate whose sun radiates fertility, and whose +very dews distill abundance, we find our inheritance so wasted that the +eye aches to behold the prospect."[105] + +In addition to the barrier to manufactures formed by cotton cultivation +under slave labor, and the silent opposition which the prevalent system +engendered, were not infrequent outspoken declarations against industry. +William Gregg was one of the few in South Carolina or the whole South, for +that matter, to rise superior to Calhoun's sway, and asserting that there +were some who were better able to speak of the propriety of factories +than even that statesman, faced him squarely but tactfully. "The known +zeal with which this distinguished gentleman has always engaged in every +thing relating to the interest of South Carolina, forbids the idea that he +is not a friend to domestic manufactures, fairly brought about, and, +knowing, as he must know, the influence which he exerts, he should be more +guarded in expressing opinions adverse to so good a cause."[106] + +And again, speaking of manufactures, he was regretful of the fact that +"our great men are not to be found in the ranks of those, who are willing +to lend their aid, in promoting this good case. Are we to commence another +ten years' crusade, to prepare the minds of the people of this State for +revolution; thus unhinging every department of industry, and paralyzing +the best efforts to promote the welfare of our country." His footnote to +this passage shows how calmly, in his comprehensive grasp of the whole +situation, Gregg could estimate the bias of his opponents and point out to +them how even their selfish ambitions could only be served by attention to +such reasoning as his: "Those who are disposed to agitate the State and +prepare the minds of the people for resisting the laws of Congress, and +particularly those who look for so direful a calamity as the dissolution +of our Union, should, above all others, be most anxious so to diversify +the industrial pursuits of South Carolina, as to render her independent of +all other countries; for as sure as this greatest of calamities befalls +us, we shall find the same causes that produced it, making enemies of the +nations which are at present, the best customers for our agricultural +productions."[107] + +Gregg felt keenly the opposition to cotton manufactures, which took point, +moreover, from the failure of mills in the South, particularly in his own +State. This he combatted by showing that not lack of natural advantages +but gross mismanagement had been responsible for the fate of these +enterprises.[108] He tried to take heart for the South in the reflection +that those who commenced the textile industry in Rhode Island had the +whole country against them and the experience of England closed to them, +whereas his section had the encouragement of New England and access to the +machinery and mechanical skill of the world, and he added, "It will be +remembered, that the wise men of the day predicted the failure of _steam +navigation_, and also of our own railroad; it was said we were deficient +in mechanical skill, and that we could not manage the complicated +machinery of a steam engine, yet these works have succeeded--we have found +men competent to manage them--they grow up amongst us...."[109] + +Because of the striking reversal of front of the city at a later date, +which will be of central importance in subsequent chapters of this study, +the estimate which Gregg gave in 1856 of Charleston's attitude toward home +industry is interesting. As a delegate from Edgefield District in the +South Carolina house of representatives he spoke against the grant of aid +by the State to the South Carolina Railroad, stoutly declaring, although +he was a stockholder in the venture and the men in control were his +personal friends, that he believed every dollar the State might put into +the scheme would be lost; he observed that the railroad was purely for the +commercial aggrandizement of Charleston, and that, perhaps, not honestly, +its spokesmen being unwilling themselves to take stock. Instead of +commercial policies selfishly followed by "wealthy gentlemen, some of whom +have ships floating in every sea", he declared "That her (Charleston's) +destiny was fixed and indissoluble with the State of South Carolina, and +that mainly her great investment in Internal Improvements should be made +with a view to developing the resources of the immediate country around +her. That certain and cheap modes of transportation from all quarters of +the State could not fail to re-act on the general prosperity of the city. +That the dormant wealth of Charleston might be so directed as to be felt +in the remotest parts of the State, in stimulating agriculture, draining +our great swamps and putting into renewed culture our worn-out and waste +lands; diversified industry, stimulating the mechanic arts and increasing +the population and wealth of the State."[110] Instead of this just ideal +for leadership and helpfulness, he found it to be the unfortunate fact +that, "There is no city in the Union which has accumulated more wealth, to +its size, than Charleston--none that has shown so little inclination to +put forth her wealth in such a way as to develop the resources of the +State. Her millionaires die in New York. There is scarcely a day that +passes that does not send forth Charleston capital to add to the growth +and wealth of that great city. There is a silent and an imperceptible +drain in that direction; the aggregate of which for twenty years would +more than build a railroad from Charleston to Cincinnati."[111] + +The economic thinking of the old South, with its inertia and its +inconsistency, is well illustrated in a statement of Robert N. Gourdin, a +cotton factor of Charleston and representative of the aristocratic type of +its citizenship, made to the correspondent of the New York Herald in +connection with the Atlanta Cotton exposition in 1881. After going over +the old matter of the war, and the South's vanquishment by superior +numbers only, he said: "We (in the South) did not manufacture because +there was no necessity for our doing so. With our wonderfully productive +soil, our marvellous climate, and with plenty of labor to cultivate our +farms, we would accumulate wealth, live comfortably and even luxuriously +without troubling ourselves with diggings for minerals or manufacturing +cloth. We did not object to the inventions and manufactures of the North, +but we did protest against being obliged to pay for them."[112] + +The prohibition by city ordinance of the use of the steam engine in +Charleston is an extreme evidence of a frame of mind that was general in +the South. In order to appreciate how completely deflected from industry +the Southern thought and habit had become, it is interesting to observe +the seriousness with which in 1845 Gregg was forced to argue against this +regulation which now seems so absurd that it could not have existed since +the Middle Ages. Its opponent showed that he was linked in his sympathies +with other sections and with later years, not only by his antagonism but +by the humor which he could not fail to find in the situation.[113] + +The characteristic inclination toward the individual rather than corporate +form of enterprise which was noticed as showing itself in the textile and +other industries in the South of the Revolutionary period, was still +strong up to the Civil War. In 1845 Gregg inveighed against it, +particularly as crystallized in legislative refusal to grant charters of +incorporation, and, as in others of his pamphlets and speeches, he made +analysis of the conditions that would seem to have been plain enough to +convince the most stolid; he was quick to hold up New England as a +business model to the South; in marked contrast to most men of affairs of +the time, he saw economic institutions in their social perspective.[114] +Those who have sought to magnify to the largest proportions the +industrial activities of the old South have frequently failed to take +account of the differences in organization which distinguished the +ventures from those of post-bellum years. The textile industry could not +be a movement in economic society so long as investment participation +sprang from and ended with individual initiative. Until the widespread +emergence of the joint-stock form, the mills could not embrace the +generality of the community's resources. And in a period when this device +was not largely turned to, it is plain that industrial stirrings were +comparatively feeble. + +Not only was there self-satisfaction coupled with dependence upon the +North for manufactured commodities in the low-country of the ante-bellum +South, but the up-country, that frugal population of which was better +disposed for manufacturing development, was so segregated as to be kept +in mean state, or actually dependent itself upon the coastal districts. +Between the Piedmont and the sea was the barrier of plantations; between +the Piedmont and the industrial North were no transportation +facilities.[115] Olmsted was struck with finding at Fayetteville, "the +point of transfer from wagon to boat, being at the head of +navigation",[116] the long wagon trains of highland farmers. He counted +sixty wagons in the main street of the town; this was the method of +bringing produce to market. "Several of the wagons had come from a hundred +miles distant; and one of them from beyond the Blue Ridge, nearly two +hundred miles." The teams made less than a score of miles a day through +the bad roads.[117] This isolation of one district in the South from +another brought lack of concert in political and economic life. "Small +landowners in the highlands could not always sympathize with men of +princely domain in the low country; and misapprehensions were magnified by +separation.... Diffusion of population ... was revealed in the scantiness +of common-school facilities; in the division of capital among several +small factories or mills, instead of its concentration in a few; in +literary, religious, and social life. In 1860, for instance, the South +had proportionately more church buildings than the North; but its 22,655 +buildings had an average seating-capacity of 307, and an average value of +$1,777, while the 31,344 of the North would accommodate 388 persons each, +and were $4,183 on an average.... Isolation gave birth to individualism, +as marked upon the mountain-clearing as upon the plantation; and +beginnings of the co-operative spirit were dwarfed by nature and by human +inclination...."[118] + +Strong as is the proof of the non-industrial character of the old South as +revealed by scrutiny of internal economic facts, evidence afforded by the +reflection of this condition in aspects which may be called external, is +quite as striking. So much is this the case, that it is believed that an +examination of the social, political, educational and moral institutions, +constituting the shell of the South, is satisfying as to the character of +the egg without looking at the vital cell at the center. The fruits of +the tree are conclusive of the sap. + +Of these external phenomena, the political is that which will most readily +occur to everyone. Pervasive economic conditions are shown crystallized in +political pretensions; economic transitions are registered in alterations +of front. The Protective Tariff of 1816 was introduced and defended, +respectively, by two South Carolinians--Lowndes and Calhoun. The signature +of a Virginia president--Madison--made it a law. This tariff was opposed +by New England in the person of Webster. In 1828, in the debate over the +"Tariff of Abominations", the situation was just the reverse--Calhoun +opposed protection, Webster championed it. In spite of Webster's +explanation that New England was acquiescing, against her inclination, in +the expressed will of the country, it is the bottom truth that, as Lodge +declares, "Opinion in New England changed for good and sufficient business +reasons, and Mr. Webster changed with it ... when the weight of interest +in New England shifted from free trade to protection Mr. Webster following +it." And Mr. Scherer has done justice to the underlying forces in saying, +"Calhoun was neither better nor worse. Both of them simply swung true to +the economic interests of their respective constituencies."[119] + +Cotton, nearly exclusively in the South, and to a notable degree in New +England, was responsible underneath for the changes which were displayed +in the superficial play of politics. It was the disintegration of +manufactures brought about by the more and more extensive embracing of +cotton cultivation that turned the South from protection to free trade; it +was the growing absorption in industry, especially cotton manufacture, and +the relative relinquishing of commerce, that made New England +protectionist instead of, as before, the champion of free trade.[120] + +This is not the place to remark at length how economic interests are +changing the South back, in partial measure, to the first position. Cotton +is again central. Cotton factories are largely responsible for the little +leaven that is working in a large loaf, producing in the heart of the +Solid South Republican adherents and voices for protection. "Slavery has +been abolished. The South has re-established manufactures. Its interests +in free trade and protection are changed from what they were in 1860. We +need not only domestic trade, but foreign markets. We need, apparently, +protection and free trade at the same time.... The South is as much +interested in protection to home markets as New England is. New England is +as much interested in export markets as the South is. In this situation we +ought all to get together. We ought to get together for 'Protection and +Reciprocity.'"[121] + +In summary of the ante-bellum years, which have just been under review, +Mr. Clark writes: + +"Between 1810 and 1860 three periods of progress marked the factory +development of the cotton states. During our last war with England ... +mill builders from the North migrated to the Southern highlands, and with +local co-operation established small yarn factories at several places in +the Carolinas, Georgia, Tennessee, and Kentucky.... During the decade +ending with 1833, when hostility to the tariff made the Southern people +bitterly resent economic dependence on the North, there was a second +movement towards manufactures, especially in South Carolina and Georgia, +directed mainly towards the erection of larger and more complete +factories. This agitation bore fruit in some corporate enterprises, most +of which had but qualified success. Finally, in the late forties real +factory development began simultaneously at several points, and had not +two financial crises and a war checked its progress, we should probably +date from this time the beginning of the modern epoch of cotton +manufacturing in the South."[122] + +Two objections against this passage have pertinence. In the first place, +these three periods of comparative interest in manufactures can hardly be +called "movements" in any social or economic sense. That of the twenties +and running into the thirties may claim more color of this than the other +two.[123] The plants set up by the New Englanders earlier were in +response to individual enterprise, and that enterprise born out of the +boundaries of the South. Co-operation with the newcomers was not of the +sort that marks the considerable interest of a community. To the extent +that mills were built in the forties as an effect of agitation, William +Gregg was almost solely responsible. It has been pointed out above that +Gregg was a voice crying in the wilderness--he was a missionary who spoke +an unaccepted faith. He was not a social exponent. Also, while some real +factories were built, it seems that to speak of these as constituting a +"real factory development" is questionable. In the second place, it is +rather gratuitous to count upon what would have been the case had not the +war broken in upon declared industrial beginnings. The Civil War was not a +fortuitous event. It had to come. It was the disastrous evidence of the +dominance in the South of a system which gave no room to widespread +industrial enterprise, and in which no beginnings could grow and become +permanent. Could the war be regarded simply as an occurrence, an +unfortunate happening, there might be ground for assuming that industrial +enterprise might have been built into and finally changed wholesomely the +economic regime of the Southern States, but facts show that it was a case +where mastery between mutually exclusive plans had to be made on the basis +of comparative strength; the spirit for manufactures had not sufficient +force to avert the war, but only enough life to show, in expiring, that it +had begun to be born. + +The foregoing pages have not dwelt, except by chance, upon the decade +1850-1860. These years have been reserved for specific discussion because +of the effort which has been made by two writers to invest them with a +character of industrialism superior to that of the ante-bellum period +generally. Not only is the argument defeated by external evidence, but an +internal examination of Mr. Edmonds' presentation shows his own +consciousness of serious modifications upon the doctrine, and explains in +a very natural light the occasion for the point of view which he sometimes +too dogmatically expresses. The late Mr. Edgar Gardner Murphy, in treating +the subject, was heavily influenced in his opinion by Mr. Edmonds' work; +it will be seen that in his discipleship, while he rid Mr. Edmonds' +statement of one outstanding error, he failed to notice some of the major +allowances made by him, and altogether Murphy's pronouncement is more +positive and absolute than that of the source from which he chiefly drew +his beliefs. + +Mr. Edmonds is practically on all fours which Tompkins and others quoted +in this study, in recognizing that certainly from early in the nineteenth +century until the fifth decade industry was little attended to in the +South. This he attributes to the high prices to be obtained from cotton, +averaging for the years 1800 to 1839 a fraction over seventeen cents a +pound. Then he declares: "Beginning with 1840 there came a period of +extremely low prices and the cotton States suffered very much from this +decline. In that year the average of New York prices dropped to nine +cents, a decline of four cents from the preceding year, and this was +followed by a continuous decline until 1846, when the average was 5.63 +cents.... In 1847 the crop was short and prices advanced sharply, only to +drop back to eight and then to seven and one-fourth cents, making the +average from 1840 to 1849 the lowest ever known in the cotton trade for a +full decade. + +"These excessively low prices brought about a revival of public interest +in other pursuits than cotton cultivation, and the natural tendency of the +people to industrial matters, as evidenced by the history of the colonies +prior to the Revolution, but which had long been dormant, was again +aroused, and for some years there was a very active spirit manifested in +the building of railroads and the development of manufactures. + +"The decade ending with 1860 witnessed a very marked growth in Southern +railroad and manufacturing interests.... In 1850 the South had 2335 miles +of railroad, and the New England and Middle States 4798 miles; by 1860 the +South had increased its mileage to 9897 miles, a quadrupling of that of +1850, while the New England and Middle States had increased to 9510 miles. +The conditions were reversed by 1860, and the South then led by 387 +miles.... While devoting great attention to the building of railroads, the +South also made rapid progress during the decade ending with 1860 in the +development of its diversified manufactures." Flour and meal, sawed and +planed lumber mills are mentioned, with iron founding and the manufacture +of steam engines and machinery. "Cotton manufacturing had commenced to +attract increased attention, and nearly $12,000,000 were invested in +Southern cotton mills. In Georgia especially this industry was thriving, +and between 1850 and 1860 the capital so invested in that State nearly +doubled." Noting that while most of the Southern manufacturing +enterprises were comparatively small, those of New England in the early +stages were of the same character, he says that "In the aggregate, +however, the number of Southern factories swelled to very respectable +proportions, the total number of 1860 having been 24,590, with an +aggregate capital invested of $175,100,000. + +"A study of the facts ... should convince anyone that the South in its +early days gave close attention to manufacturing development,[124] and +that while later on the great profits in cultivation caused a contraction +of the capital and energy of that section in farming operations, yet, +after 1850, there came renewed interest in industrial matters, resulting +in an astonishing advance in railroad construction and in +manufactures."[125] + +Figures are set up to show the favorable economic condition of the South +in 1860 as compared with the North, and these head up naturally in the +observation that, "Blot out of existence in one night every manufacturing +enterprise in the whole country, with all the capital employed, (he was +writing in 1894) and the loss would not equal that sustained by the South +as a result of the war.... New England and the Middle States, having grown +rich by the war, almost trebled their property (from 1860 to 1870) while +the South drops from the first place to the third. In 1860 it outranked +the Northern section by $750,000,000."[126] + +In criticism of these quotations specifically it is to be said that the +early development in industrial pursuits and the thorough lapse before +1840 are properly observed. The present writer believes that Mr. Edmonds +has exaggerated in his own mind both the spirit for manufactures, +particularly in the decade from 1850 to 1860, and the extent of their +establishment. The recital that there were 24,590 plants, with an +investment of $175,100,000, seems at first to be striking, but a simple +division shows that on an average this made the investment in each only +$7,144.37, which is surely not indicative of considerable importance. Many +of the enterprises must have been much smaller than would be represented +by this average, and the few which were a great deal larger were rare +exceptions. The very disparity in size of establishments points away from +any concerted movement toward manufacturing. As to the railroad +construction, much of it was narrow-gauge, and all of the facts tend to +show that railroads were looked upon as facilitating commerce rather than +manufactures; even after the war the pet scheme to build a railroad over +the mountains gathered sentiment in the long-cherished desire to link +Charleston with "the producing interior" typefied in Cincinnati; as rails +were laid, piecemeal, through the Piedmont, advantages afforded by them +for the erection of factories were seldom mentioned, and their utility in +tapping pools of available labor was not considered. The easier transport +of cotton and the development of the South Atlantic ports were the +thoughts uppermost. + +To vaunt property figures of the South of 1860 by including, as Mr. +Edmonds has done, the value of slaves, is an obvious error; and especially +because of the failure to note the inclusion of this factor, the spirit of +the other exhibits is cast in doubt. Though legally they were property, in +the social-economic sense the slaves did not constitute capital any more +than their owners represented capital. The question is rather whether this +part of the population, as productive agents under the system of enforced +labor, did not mean a liability and not an asset at all.[127] + +Mr. Edmonds is guilty sometimes of careless statement, as when he says, +"The Southern people do not lack in energy or enterprise, nor did they +prior to 1860.... From the settlement of the colonies until 1860 the +business record proves this."[128] Or again, "the energy and enterprise +displayed by the South in the extension of its agricultural interests was +fully as great as the energy displayed in the development of New England's +manufactures or that of the pioneers who opened up the West to +civilization."[129] Such expressions, it will presently be shown, proceed +from a loyalty to the South and a just desire to defend her against +assault respecting her part in post-bellum development, but facts brought +out in these pages show the mistaken zeal in seeking to place the old +South abreast in industry or even agriculture. + +Allowing what is perhaps the exciting cause of Mr. Edmonds' argument to +appear from his own context, light is shed in the following sentences: +"... 'The New South', a term which is so popular everywhere except in the +South, is supposed to represent a country of different ideas and different +business methods from those which prevailed in the old ante-bellum +days.... Its use ... as intended to convey the meaning that the South of +late years is something entirely new and foreign to this section, +something which has been brought about by an infusion of outside energy +and money is wholly unjust to the South of the past and present. It needs +but little investigation to show that prior to the war the South was fully +abreast of the times in all business interests, and that the wonderful +industrial growth which has come since 1880 has been due mainly to +Southern men and Southern money. The South heartily welcomes the +investment of outside capital and the immigration of all good people ... +but it insists that it shall receive from the world the measure of credit +to which it is entitled for the accomplishment of its own people." And +then he instances the cotton mills and Birmingham and Atlanta.[130] His +explanation of the inactivity in the South for ten or fifteen years +following the war, in the fact and causes of which he is entirely +correct,[131] bears out the belief, clearly indicated in the passage just +quoted, that it is his real purpose to accord to the ante-bellum South her +deserved praise. However, he overreached in trying to establish anything +like continuity for Southern enterprise over the ante-bellum years. The +interpretation here given of the new South is now a platitude, but it may +not have been a tilting at windmills when he wrote; indeed, its acceptance +now may be due in no small part to Mr. Edmonds. + +Altogether, it is best to rest Mr. Edmonds' theory with the following +passage, in which there is no confusion of his own thought and no +controversy with anyone: "Since 1880, although the South is still (1894) +practically without great accumulated wealth, her people have turned to +manufacturing with a facility that not only shows that they are in no way +lacking in capability to compete in manufacturing pursuits, but, +considering the limited capital, this section has exhibited remarkable +gains in developing its resources under adverse conditions. In a little +more than a decade from the time the work of development may be said to +have begun, it is not a question whether Alabama can compete with +Pennsylvania in iron, but rather whether Pennsylvania can compete with +Alabama. Nobody now doubts that the South can compete with New England in +the manufacture of cotton goods, but many do doubt whether New England can +compete with the South.... Since 1880 the growth of manufactures in the +South and their success has been more than astonishing."[132] + +Edgar Gardner Murphy in his spiritual interpretation of the South showed +himself discerning and gifted beyond almost any other writer. His +conception of the economic history of the South may be held to have been +secondary in his purpose and so in his thought. However, his position as +an expositor of the section and the emphasis which he places upon his +economic opinions regarding its past, make it incumbent upon the student +to examine his views. In the following quotation the turn which he gave to +the influencing argument of Mr. Edmonds and his personal slant in +interpretation of this, are apparent: + +"The present industrial development of the South is not a new creation. It +is chiefly a revival. Because the labor system of the old South was so +largely attended by the economic disadvantages of slavery, and because the +predominant classes of the white population were so largely affected by +social and political interests, it has often been assumed that the old +order was an order without industrial ambitions. + +"The assumption is not well founded. Instead of industrial inaction we +find from the beginnings of Southern history an industrial movement, +characteristic and sometimes even provincial in its methods, but +presenting a consistent and creditable development up to the very hour of +the Civil War. The issue of this war meant no mere economic reversal. It +meant economic catastrophe, drastic, desolate, without respect of persons, +classes or localities.... Thus the later story of the industrial South is +but a story of reemergence."[133] There are then outlined the steps of Mr. +Edmonds' argument, except that Murphy failed to make clear the almost +total lapse of industrial activity by 1840. + +The incentive to discover an industrial past for the section, which Mr. +Edmonds found in the desire to establish the South as the magician of her +ante-bellum awakening, is matched in Murphy's motive by a more subtle +design. In one place he said: "... the most distinctive element in the +economic movement of this period (1880 to 1900) is the increasingly +dominant position of manufactures as contrasted with agriculture. This +industrial revival is but the reemergence of the tendency which we found +so manifest in the statistics of 1860. It is but one reassertion of the +genius of the old South."[134] Here with his absolute conception of the +ante-bellum South is hinted the purpose which really animated it. That in +speaking of the post-bellum development as "one reassertion of the genius +of the old South" he did not mean, as very easily might be supposed, that +through the earlier history of the section had run a genius for +industrialism, is made clear in the following passage, which, though it +refers particularly to social relationships, is pertinent for the +industrial bearings: + +"The old South was the real nucleus of the new nationalism. The old South, +or in a more general sense the South of responsibility, the men of family, +the planter class, the official soldiery, or (if you please) the +aristocracy,--the South that had had power, and to whom power had taught +those truths of life, those dignities and fidelities of temper, which +power always teaches men,--this older South was the true basis of an +enduring peace between the sections and between the races." He regretted +that this old South was not enabled to come into force until after +Reconstruction because "a doubt was put upon its word given at Appomattox. +Its representatives were subjected to disfranchisement. Power was struck +from its hands. Its sense of responsibility was wounded and +confused."[135] + +This is a fine statement of a primary and outstanding truth in the +development of the South that began about the year 1880. The old South +did draw breath with the new. The permanent character of the South, the +forces resident in the South of earlier as of later years, were those +which largely made possible a complete change in viewpoint, which carried +through the measures of, if not indeed giving birth to, the potent +consciousness of a reversal of program. But, as Murphy failed to see +clearly, there is a radical distinction between the continuity of this +quality in the South and any continuity of its evidences in industrial +pursuits. The new South did not receive from the old South a heritage of +industrial tradition; what it received was a traditional and ingrained and +living social morality, not marred in its essential characteristics and +presence, and very likely even assisted, by the institution of slavery. As +again Murphy said: "... this sense of responsibility, deepened rather than +destroyed by the burden of slavery, was the noble and fruitful gift of the +old South to the new, a gift brought out of the conditions of an +aristocracy, but responsive and operative under every challenge in the +changing conditions of the later order."[136] + +In this apology for Murphy's view is splendidly apparent the best resource +with which to turn from the South that was to the South that is. + + + + +CHAPTER III + +_CONDITIONS PRECEDENT TO THE ERECTION OF THE MILLS_ + + +To understand the establishment of cotton mills in the South, it is +necessary to grasp the deeper impulses which actuated every policy +certainly from the year 1880 onward, continuing in only modified degree to +the present. Every phase of the movement for the building of cotton mills +was conditioned by motives at once tender and heroic, universal in their +applicability and too intimate in appeal to admit of more than passing +argument. In a study of the actual erection of factories, the hundreds of +problems that arose and the mass of practical detail attendant upon their +solving constitute, it seems to the writer, a hopeless or at best +profitless puzzle, unless it is clearly understood that these minutiae +point back to something elemental and primal which gave them character. On +the other hand, if this fact is recognized, the circumstances which +accompanied the setting of mills in operation, such as the securing of +capital, the obtaining of adequate labor, the selection of sites for the +location of buildings and the like, from the very coldness of the +subjects, and their unsentimental aspect as commonly thought of, strike +into peculiarly bold relief the purposes that lay behind them. When it +came to money-getting, psychical factors must be crystallized into +something very forceful and admitting of unquestioned faith. It is the aim +of the present paper to be an introduction to the study of the problems +involved in the setting up of cotton mills, by giving the antecedent +action, as it were, and by showing the motive force as it developed, +operated and concentrated. + +This responsible cause, catching the phrase from a writer of the day, may +be termed "real reconstruction". The impulse for it came over the South in +1880 like a great ground swell, translating itself into a thousand +activities and ramifications. "Real reconstruction" was spectacularly the +outcome of the defeat of Hancock by Garfield in the presidential election +immediately, but its roots run deeper and have their hold in the slow but +sure recuperation of the South from the devastation of the Civil War +through the troubles of radical rule, assisted by a brief breathing space +from the termination of carpet bag government in 1876, when the lesson of +fifteen terrible years soaked in thoroughly. It is sufficient here to say +that in 1880[137] the South suffered a change of heart, a revulsion of +conscience that was fundamental. The people turned on their heel, and +faced about to find a new future of the largest promise. + +A newspaper which before had bent every effort towards the election of +Hancock, the Democratic candidate for the presidency, as securing for the +South political independence and revenge for Northern mistreatment, a week +after his defeat printed an editorial headed "Our Refuge and Our +Strength", with these words: + +"... we have been defeated in the national contest. In the administration +of the national government for the next four years we need not concern +ourselves, for as far as possible our councils will be ignored. What, +then, is our duty? It is to go to work earnestly to build up North +Carolina. Nothing is to be gained by regrets and repinings.... It is idle +to talk of home independence so long as we go to the North for everything +from a tooth pick to a President. We may plead in vain for a higher type +of manhood and womanhood among the masses, so long as we allow the +children to grow up in ignorance. We may look in vain for the dawn of an +era of enterprise, progress and development, so long as thousands and +millions of money are deposited in our banks at four per cent. interest +when its judicious investment in manufactures would more than quadruple +that rate, and give profitable employment to thousands of our now idle +women and children. + +"Out of our political defeat we must work a glorious material and +industrial triumph. We must have less politics and more work, fewer stump +speakers and more stump pullers, less tinsel and show and boast, and more +hard, earnest work. We must make money--it is a power in this practical +business age. Teach the boys and girls to work and teach them to be proud +of it.... + +"Demand all legislative encouragement for manufacturing that may be +consistent with free political economy. Work for the material and +educational advancement of North Carolina, and in this and not in +politics, will be found her refuge and her strength."[138] + +The uselessness of attempting a political salvation as contrasted with the +logic of giving all energy to the building up of the South materially, +clearly shown in the passage quoted, occurs time and time again.[139] +President C. C. Baldwin, of the Louisville and Nashville Railroad, born in +Maryland but for many years resident in New York, and competent to take a +comprehensive view of the South and its problems, said in an interview +with the New York Herald in 1881, after the new program had gotten under +way: "The commercial men of the states fully appreciate the situation.... +They now see clearly how very little politics have done for them, and +seriously turn toward the real 'reconstruction' which active trade will +inaugurate. All the war issues are dead and buried except to a few +politicians who misrepresent their constituents and merely use the +language of the past to give them, personally, a passing prominence. True, +we hear a great deal more about the men who stand forth prominently as the +advocates of these dead issues than we do of the thousands of young and +energetic Southern men who are building cotton and woollen mills; who are +opening mines and starting iron, copper and zinc furnaces, or who are +relaying the roads between the Atlantic and the Ohio and the Gulf. These +men don't talk, they don't write books, they don't go to the Legislature +or to Congress. They speak, trumpet toned, in results, however. The people +of the South have suffered--it is not pertinent whether we regard their +sufferings as just or unjust--but they have put aside mourning and are +ready for work."[140] + +The Sumter, S.C., Southern voiced the same idea: "The Southern people, +outside of the professional politicians, care very little about Federal +politics. They are endeavoring to develop the resources of the South and +regain the broken-down fortunes left by the desolation of civil war. + +"So taking the past and the present as indices for the future, it is plain +to see that a dissolution of the Solid South will cut at the very roots of +all these wrangles between the North and the South[141] in which +sectionalism is involved."[142] + +"The people of the South are beginning to learn that the true road to +power is not through the White House, supported by a swarm of federal +officials", said a Tennessee paper in March of 1880. "They are learning +that solid wealth is power, and that wealth is attainable only by working +up their cotton and wool into fabrics and their ores into metals."[143] + +The clear-headedness of the following extract from an editorial which +appeared in the Columbia, S.C. Register, at the time the city was putting +forth every energy to realize a desire for cotton mills, is unsurpassed: + +"But if we lost the victory, in one sense, we have won it in another. We +have been taught what the South can do for itself if it wills to do it. If +we have lost the victory on the field of fight, we can win it back in the +workshop, in the factory, in an improved agriculture and horticulture, in +our mines and in our schoolhouses. + +"There is where our fight lies now, and the only enemies before us are the +prejudices of the past, the instinct of isolation, the brutal indifference +and harmful social infidelity which stands up in our day with the old +slave arguments at its heart and on its lips, 'I object' and 'You can't do +it'."[144] + +In the broken and all but disheartened condition of the South after +enduring the war, radical rule and defeat of political hopes, this +conception of another economic future, once it burst upon the +consciousness of the Southern people, amounted to nothing less than a +religion.[145] Every one of the old pangs added devotion to the new +purpose. The whole pride of the South seemed about to go to disruption, +and the imminent danger of this lent a passionate loyalty to the changed +program which appealed to everything that was best and noblest in the +people. + +The new spirit was strongest in North and South Carolina and in that +portion of Georgia contiguous to South Carolina. Distance from this region +as a center about marks the intensity of feeling and comprehensiveness of +grasp with which the impulse was voiced. Florida and Mississippi felt it +little, due probably to their position so very far South as to be still +submerged in misery; Virginia was only slightly affected and Maryland +hardly at all in the same sense as the middle South, because of proximity +to the North and difference of character, by reason of the absence of +cotton as the staple. North and South Carolina and the region about +Augusta, Georgia, gave the plan its first conception and its most +whole-hearted support because, it appears, North Carolina is by nature +resourceful and hardy above any Southern State, and South Carolina, +despite every discouragement, would have the heart to try again because +she is thoroughbred in a company of thoroughbreds.[146] + +Just as the philosophy varied in intensity territorially, so it varied in +degree within the same region. Some wished salvation through material +advance for the sake of the State; this was natural, as growing out of a +well-known loyalty of the citizens of Southern commonwealths.[147] + +Others with larger view proclaimed the new gospel for the whole South as a +section, rather adopting an attitude of aloofness toward the North, +wishing the Southern people to work out their great problem without +assistance from those who would be predisposed to meddlesome criticism. It +is true that reorganization for the South was the most national thing +Southerners could turn themselves to at that time, and in the judgment of +many still is, but speakers and writers often failed of just the most +fortunate expression of their purpose in that they did not strike the +national note very consciously.[148] + +It is something to have gone through what the South went through and come +out not dispirited utterly, not defiant against fate or enemies, not +forgetful of the past, but, remembering the worst, determined soberly, +quietly, thoroughly to do the fundamental thing and do it nationally. It +was left for Charleston more than all others--noblesse oblige--to speak +this greatest message: + +"The Southern people must be national themselves, in their aspirations and +conduct, if they would have the government truly national in spirit", and +have Garfield "President of the whole country, and not of a section, or +party, to have a government of 'the whole country', to be entitled to it, +we must think of the whole country as our own, and demand no more than we +are ready to give. It must come to this. In the near future the successful +leaders, South and North, will be those whose first thought is for the +Republic, men who are national in feeling and purpose; men who understand +that the political and social strength and safety of each State depend not +on isolation and separation, but on combination and union."[149] + +By the late fall and winter of 1880 the mind of the South was ripe for +progress and accomplishment. Perhaps the first gropings after procedure +struck upon the consideration that manufactures would add another profit +to the profit of agriculture. The big, general conception was first +grasped without refinements or modifications or drawbacks; it was received +with almost childlike simplicity and faith.[150] But it came to be +ingrained. "The cotton which now comes into Charleston and is sold here +pays commissions to the factors and brokers, and when shipped leaves +behind it the price of the drayage, compressing and storage. Cotton which +comes into Charleston and is manufactured here is doubled in value, and an +amount equal, at least, to the value of the raw cotton when it reached the +city boundary is distributed among the people of Charleston. This is the +simple key to the prosperity which invariably attends the development of +manufactures. Manufacturing gives additional value to raw material, and +this additional value goes into the communities where the manufacturing is +done. At present Charleston does nothing to increase the value of the +cotton which comes here for sale. It leaves us as it finds us. The city +lives on the pickings and scrapings.... + +"Cotton mills change all this. A bale of raw cotton worth forty dollars is +spun into yarns or cloth worth eighty dollars.... The stockholders and the +working people get the whole difference between the cost of the cotton and +the value of the yarns or cloth, except what little may be expended for +material that cannot be purchased here."[151] + +President H. P. Hammett, of the Piedmont Factory, in a remarkable address +before the State Agricultural and Mechanical Society and State Grange, of +South Carolina, to which reference will several times be made, after +describing the earlier absorption of the South in a single pursuit, and +the ills that grew from this, said: "A new condition of things and a +changed sentiment amongst the people prevail at present; with the changed +relations of society and institutions a sentiment favorable to a diversity +of pursuits has developed ... a disposition is manifested to develop the +many resources heretofore lying dormant or hidden.[152] Capital when +needed is furnished, and men of energy, enterprise and ability develop ... +the general sentiment of the people is to utilize all the facilities +within their reach.... Under such circumstances it is natural that the +public mind should be directed to the manufacture of their great +staple."[153] + +There were a score of reasons making this course seem plausible.[154] They +were advanced, scrutinized, at the South sometimes accepted with a grain +of salt, at the North not infrequently flatly and stoutly challenged as +absurd; they were patiently explained or difiantly, and not always with +the closest reasoning, flung in the faces of their objectors--but finally +they were proclaimed as gospel, and in this sign the South set out to +conquer. Of these beliefs is to be placed first and foremost the +conviction that, other things aside, manufacturing was most economical and +so logically belonged, at the source of production. Here is the doctrine, +given in all simplicity, and not without the force characteristic of +newspaper correspondences of that day: "Sir, it matters not what anyone +may say to the contrary, common sense tells us that other +things--machinery, skilled labor, motive power and facilities of +shipment--being equal, a cotton factory in the midst of cotton fields must +prove more profitable than the same concern a thousand miles from its base +of supply could possibly be."[155] Other factors there were--cheap labor, +unused water powers, abundance of wood and coal nearby, local market for +the sale of product, longer running time than in the North, a favorable +climate, saving in fuel and light, absence of damage to cotton by +compress, saving in bagging and ties, assistance to be given to women and +children much in need of work--all of them bore their part in focussing +the energies of the South upon that program which was to mean so much in +so many ways--the "cotton mill campaign."[156] + +The current passion for building cotton mills--it was nothing short of +this--was stimulated and guided by press[157] and platform in urging, +chronicling and praising advances. + +The Columbia, Georgia, Enquirer, after recounting the progress of the city +in spinning--it had 60,000 spindles--said: "These are the weapons peace +gave us, and right trusty ones they are.... The story the spindles tell is +one of joy to all, and show (shows) how rapidly we are climbing the hill +of prosperity."[158] The affectionate tone of this item from the Rock +Hill, S.C. correspondence of The News and Courier is unmistakable: "In +conclusion let me say a few words in regard to the 'pet' of the town, the +Rock Hill Cotton Factory. This factory is owned and controlled by the +citizens of the town, (except $15,000 in stock owned in Charleston). It +has a capital of $100,000, has over 6,000 spindles, with 1,500 more to be +added in a few days."[159] The Marion, S.C. correspondent of the same +paper a year earlier contributed this for his town: "Our wants: A bank, an +academy, a cotton factory, a comfortable room for passengers at the depot, +an iron foundery, and last, but not least, work upon our streets."[160] So +much did cotton mills come to be considered the natural signs of progress +that Raleigh made apology for not having a single mill. "There is not a +cotton factory in Raleigh, but there are not less than five large planing +mills, two foundries, two boiler factories ...", and there follows a list +of everything in the corporate limits, including schools and even +newspapers.[161] + +Under its caption, "The Cotton Mill Campaign", the active News and Courier +every few days listed new entries into the field of cotton manufacture. +The issue of February 8, 1881, presented a particularly large number of +items from different towns. The Newberry Herald exhorted the citizens with +reference to Charleston's achievement thus: "Cheer for Charleston--A +Movement all Along the Line. Charleston is in a fair way to have two +large cotton factories in a short while.... Camden is preparing for a +cotton factory. Hodges, Abbeville County, is preparing for a cotton +factory. Rock Hill has a cotton factory. Greenville has several cotton +factories. Newberry, the best location for a cotton factory in the State, +and the place most needing one is not preparing for a cotton factory, and +there is no present likelihood that she ever will." The method followed +here, of citing the advance of other places in mill building as an +incentive, was widely used, and not commonly with the rather complaining +tone of the above from Newberry.[162] + +That the spirit was in the air is clearly discernible in a Winnsboro +contribution: "Why does not Fairfield (the county in which the town of +Winnsboro is located) make the experiment? It is said that $15,000 will +set in motion over five hundred spindles, and continual additions can be +made." While recognizing that water power was difficult of access, steam +might be used, for there was plenty of cheap fuel for years to come, and +the Charlotte railroad offered easy communication with the world for a +mill located along its tracks. The Hampton, S.C. Guardian struck the note: +"Factories are springing up all over the State, and our people must not be +found lagging in the race of progress."[163] + +How the people were reaching out for cotton mills, with their attendant +profits and advantages, may be seen in this advertisement appearing in +the winter of 1881: "We will give to a Cotton Manufacturing Company, that +will organize and locate at Landsford, S.C., with a capital of $300,000 a +site, 20 acres of land and 3000 horse water power. Apply for particulars +to T. C. Robertson, Allen Jones, Rock Hill, S.C.; Wm. R. Landsford; Edward +McCrady, Jr., Charleston."[164] + +A little earlier the cotton mill campaign had extended itself to the point +of interesting class effort, for the most prominent German citizens of +Charleston organized a mill in a short space of time.[165] + +The cotton mill campaign had gotten well under way[166] when its further +progress was greatly facilitated and its successful outcome made plain by +the projection of a plan to display the resources of the Southern States +in an exposition at Atlanta. The scheme was first proposed in October of +1860, and the International Cotton Exposition was opened in Atlanta +October 5, 1881. The exposition, in organization, history and influence, +is inseparably bound up with the name of Edward Atkinson, economist, +publicist and manufacturer of Boston. He gave it its inception; in an +unselfish and magnanimous spirit he guided its beginnings and brought it, +by his advocacy and superintendence, to completion. He was "the father of +the Atlanta exposition."[167] In a sincere desire to see the South +extricated from the disorganization of the war and the years that +followed, he planned this method of showing the people what he considered +to be their true interest, namely, concentration upon better methods of +cultivating and preparing cotton for market and for manufacture. With a +fine comprehension of the most fundamental needs of the section in many +directions, he conceived the care of cotton between the field and the +factory to be properly the first concern of the Southern States, not +temporarily, but for all time. The Atlanta exposition he proposed as the +lens through which to focus attention upon this. + +But Mr. Atkinson, most singularly for a man of his grasp, penetration and +experience, had not reckoned upon the force of the enthusiasm for +manufacturing cotton, which, as has been shown, came over the Southern +people. That cotton mills were being built he could not but see; that they +were making profits he could not deny--but in the economic wholesomeness +and permanency of the factories he would not believe. In the International +Cotton Exposition he created a Frankenstein to amaze and frighten and +torment him. For once the resources, of the South were displayed in +visible, tangible form in reasonable compass, and once the people were +united upon an effort which should gauge their strength and possibilities, +the invitation, or, as some put it, the duty to manufacture the staple in +the fields where it grew leaped out as a fact more patent than ever. The +people had felt the strength that came from union in a common purpose, and +nothing could deter them from following the light that this brought to +them. Mr. Atkinson, who had acted in the best of faith and with great +ability, was surprised and chagrined; when he found that, while following +his lead in showing the necessity of more careful culture and preparation +of the crop for manufacture, the South, by the agency of the exposition, +was fascinated in going beyond his goal, and building mills to make up the +cotton for itself, he protested earnestly, and went to no end of pains to +turn the people from their course. But the horse had taken the bit in his +mouth, had glimpsed a broader highway open ahead, and the reins that had +directed him once were of no avail to arrest his career. + +Conscious of his New England milling and insurance interests, it is likely +that Edward Atkinson felt the South, which he had tried to help, +distrusted him. And though the fact of his connections, coupled with a +manner of addressing himself to the Southern people at times unfortunate +in its seeming superiority, and tendency to become impatient and didactic, +might easily have led the section to regard him with enmity, it is to be +remembered to the credit of the Southerners that they showed as great +charity for his, as they regarded them, short-comings of judgment, as they +held in esteem his friendship and constructive co-operation. The vision +which the South had caught rose superior, in almost all cases, to any +pleasure to be found in taunting those who differed in view, especially +when so much was owing to a man as belonged to Mr. Atkinson. His position +is one of the most important in the whole history of cotton manufacturing, +not only in the South, but in this country, and it is the most dramatic +and pathetic. He stood virtually alone after the exposition had run a few +months, protesting impotently against a new state of things, every +development of which seemed to cry the lie to his objections. His very +antagonism lent impetus to the current setting toward cotton mills for the +cotton estates. And, to make the sting even more poignant, instead of +looking upon his opposition to Southern cotton manufacturing as +representing a class of jealous industrialists at the North--and many +things there were to lend color to such a belief--the South was appealing +over his head to New England capitalists to come down and help erect +factories.[168] + +How Southern sentiment had grown beyond Mr. Atkinson's purposes for the +exposition is to be seen in the words of A. O. Bacon, speaker of the +Georgia House of Representatives, in welcoming a party of South Carolina +legislators and their friends to the Exposition three months after its +opening: "This exposition--marks an important epoch in the industrial +history of the country. It has aroused the South to the value of new +enterprises and of new methods of labor; it has awakened the North to a +realization of the boundless resources and enormous industrial capacities +of the South. It comes at a most propitious moment, for the South, in +sympathy with the quickening energies which excite the continent, is even +now trembling in the initial throes of the mighty industrial revolution +that surely awaits her. A great change is about to come upon us. 'In the +fabric of thought and of habit' which we have woven for a century we are +no longer to dwell, and a new era of progressive enterprise opens before +us."[169] + +The place of the Cotton Exposition in furthering the cotton mill campaign, +already attained to a healthy start, is seen in this from Clifton, S.C.: +"It is to be hoped the Atlanta Exposition will not take all the enthusiasm +out of our capitalists and enterprising men,[170] but that it will only +tend to a greater and more steady development of our resources. There are +new families coming in constantly (to the Clifton Mill) and the cottages +as far as completed are occupied, and still they come."[171] And again: "A +good work has been done, the benefits of which will be felt in every part +of the country. The New South takes a fresh start at the Atlantic +Exposition."[172] Here also is evidence of the very fortunate juncture at +which the exposition happened to fall. The show did much for the South +irrespective of its exhibits; indeed, before a shovelful of earth was +turned, a real service was rendered. It proved to the people that they +could organize and exert a force in common; the South was less individual +from that day. It demonstrated besides that the South had resources and +possibilities worth presenting to the world. Once the exposition was +opened, three distinct influences were brought to bear in carrying forward +the work already begun. The people of the South were shown for the first +time as a whole the implements of cotton manufacture, capitalists in +general were introduced to the opportunities of cotton milling in the +section, and, in visualizing and making more than ever evident the +industrial future, less effective reflex from the ultimate proposals of +Edward Atkinson and others of his belief was afforded once for all. + +The very day of opening, the exposition greeted crowds of visitors with +these words from Daniel W. Vorhees, of Indiana; "There is a far higher +remuneration than has ever been given by cotton yet in store for the +laborer, the manufacturer, the South and the entire country. In the midst +of the cotton plantations themselves there is a career for manufacturing +development such as the world has not yet seen. With coal, iron and timber +in perfection and inexhaustible, and water power everywhere, by what rule +of political economy should the Southern people send their cotton, at an +expense always deducted from its price, to distant sections and foreign +countries to be spun and woven? If the manufacturer in Great Britain, +transporting his cotton from India and the United States, can realize +substantial profits, why may they not be realized here...? We have seen +the manufacturer of New England, at a long distance from a productive base +of supplies, turn a sterile country into the seat of culture, refinement +and wealth. Why shall not the South put forth its energies and reap the +same and a far greater reward? Here the cotton grows up to the doorsteps +of your mills, and supply and demand clasp hands together. The average +exportation during the last ten years, from these wonderful fields to +England and other European ports, has been over 3,000,000 of bales per +annum; while to the mills of New England and other Northern states another +million have (has) been annually carried away from your midst, and from +the best manufacturing region on the globe."[173] + +So, even from the opening of the exposition, matters had taken a decided +turn toward cotton manufacturing for the South. After the fair had been in +progress three weeks, Mr. Atkinson and a committee from the New England +Cotton Manufacturers' Association came down for their initial visit. From +Mr. Hemphill's letter to The News and Courier[174] it is clear that the +New Englanders appreciated most those parts of the exhibit which had to do +with "ginning and preparing." Still considering all cotton manufacturing +to belong to the North, just as all cotton growing belonged to the South, +the verdict of the party on this first inspection was: "Nothing ever +happened in the history of the country to prove so adequately the identity +of the interests of the cotton grower and cotton manufacturer as this +exhibition." Thus were visitors coaxed to examine into the increased +efficiency and profit which lay in sending clean Southern cotton to +Northern manufacturers. + +Soon the situation demanded more drastic handling. Edward Atkinson, in a +set speech on the exposition grounds, stated his position clearly: "You +have depreciated every crop of cotton you have made at least 12 per cent. +by want of care and attention in ginning, baling, pressing and caring for +the cotton between the field and the factory. You can save half your labor +and add 10 per cent. to the value of your crop if you will use the new +tools and machinery here on exhibition and heed the words which I now +speak. + +"The Southern planter and farmer has no knowledge, as yet, outside of the +sea island district, of the merits of a true roller gin. Clark's cleaner +has just been introduced and is only known within narrow limits.... Now, I +am going to touch a tender subject--cotton manufacturing.... I have never +taken the ground that there were any climatic difficulties in many parts +of the South. The real difficulty is that the margin of profit is very +small on a very large capital, and unless you can work, in the long run, +on a very small margin you cannot succeed. These times are no +criterion.... May I say that the true preparation for success in cotton +manufacturing must be in knowing how to save the fraction of a cent.... +You cannot spin cotton when you do not know the difference between a cent +and a nickel."[175] + +The reception with which Mr. Atkinson's theory met is seen in an editorial +comment on his December address: "The future of the South is described +with great power in the ... speech of Mr. Edward Atkinson at the Atlanta +Exposition.... Mr. Atkinson is misleading only when invincible prejudice +keeps him from seeing clearly, and even Northern newspapers admit[176] +that he is wrong in his belief that cotton manufacturing, on a large +scale, will not pay in the South. The speech otherwise is suggestive and +instructive."[177] In a review of an article by Mr. Atkinson on "The Solid +South", appearing in the International Review for March, 1881, William E. +Boggs, of Atlanta, wrote: "If one so sincere as Mr. Atkinson in the desire +that the South shall flourish can so misunderstand the Southern people, +what must be the mental condition of those who have prejudice without +good-will? Mr. Atkinson is the father of the Atlanta Exposition, and is, +in his way, a true friend of the South."[178] + +There was one more condition precedent to the erection of cotton mills in +the South. The people of the section might come to a determination to set +up schools, run telegraph and telephone lines, construct railroads, stop +political quibbling and back-biting, and, above all, institute +manufactures as the surest release from a condition calling for the +strongest action; they might turn themselves wholeheartedly to the +building of cotton mills, calling forth every native resource and +ingenuity, enterprise and sacrifice, and these would avail much. But the +task was so huge in its proportions that sooner or later it must cease to +be a sectional matter, and not only was this necessary, but it was proper +that it should be the case. The North must be called upon for help. If +there are two facts in the building of cotton mills in the South which +stand out head and shoulders above all the rest, they are that the +Southern people, impelled by inner forces, undertook the work, and that +when it became apparent that outside capital and advice were needed and +could be had, these were welcomed gratefully.[179] + +There were certain forces which made for a national mind in the +South--certain external influences aside from the reasonings of the +choicer spirits. These bound the North and South together, and helped to +make possible the augmenting of Southern energy and resources by Northern +capital and experience. + +Just as the International Cotton Exposition at Atlanta lent impetus to the +sectional furtherance of the cotton mill campaign, so the shooting of +President Garfield, his lingering illness through three months, and his +death, occurring at approximately the same stage as the exposition, may be +thought to have done much in preparing the way for receiving Northern, +and, indirectly, European capital into the South. + +"This (the South) is a region where manliness is held in superlative +honor", said the Charleston paper so often quoted, "and assassination is +loathed for its cowardliness even more than it is abhorred as an offence +against law and society.... There could be no doubt then that Guiteau's +dastardly act would be heartily denounced--and there was reason to look +for some special indignation on account of the exalted official position +which Gen. Garfield holds. It could not have been foreseen, however, that +the outburst of sympathy and condemnation would have been universal in its +manifestation, affectionate in tone and National in spirit. South Carolina +does more than reprobate assassination. The people of the State, the whole +people, resent the deed because the victim is the President of the United +States, the Chief Magistrate of our country.... The process of reunion has +gone on with a rapidity which few appreciated. All the elements of cordial +friendship and of national good-will were there. It needed only the threat +of a common misfortune to give shape and voice to the recreate but sturdy +love of the Republic."[180] + +The following appeared with the announcement of President Garfield's +death. "In the history of the United States, President Garfield will be +remembered as he whose nomination by the National Republican Convention +strangled imperialism in its cradle, and as he whose assassination was +quickly followed by an outburst of sorrow and sympathy which manifested to +the North the true nature of the South, and do more than the arguments, +the prayers and the common intercourse of thrice five years to bring +together the peoples whom war had made separate. By the shedding of blood +the North and South were sundered; and through the shedding of blood they +are united.... In his wounding unto death passed away the alienation, the +estrangement which prevented this country from being truly one, although +men and millions had made it in appearance indivisible."[181] + +Railroads, both because they allowed sentiment to become solidified in the +South, and afforded great currents of intercourse with the North, were of +first importance. And in the railroads, with the encouragement they gave +to manufactures, and the stability they lent to trade in furnishing a +strong commercial backbone,[182] appear early hints of the unifying force +of Northern capital itself. A railroad, in which Northern men chiefly were +interested, which proposed running up the James River Valley to Clifton +Forge, was hailed by Richmond as bringing new prosperity. "We welcome the +Northern gentlemen who are to co this invaluable work for Virginia, and we +trust and believe that they may never have cause to regret the investment +of their capital here. Every such investment is a new band around the +States of the Union binding them more closely together."[183] + + + + +CHAPTER IV + +_CAPITAL_ + + +In the chapter on the conditions precedent to the erection of cotton mills +in the South the attempt was made to show how the stage was set for the +actual building of factories. The impulse for manufactures, and especially +cotton mills was traced through its several more or less definite periods +of development. The first of these was the recoil from the +Hancock-Garfield election; the failure of the South's determined hopes for +the success of the Democratic candidate, which would mean, it was thought, +freedom from political insult and economic servitude, and an opportunity +to wreak vengeance for the wrongs of radical rule, virtually marked the +death struggle of the old exclusive social philosophy as the animating +force in the South. This had been bred by the ante-bellum regime, called +into concrete trial by the civil war, and intensified in character through +each year of Reconstruction, and through each year proven more untenable. +The questioned election of 1876, when Tilden was thrown out under +circumstances peculiarly galling to the South, set the section as a unit +and unalterable for the next four years in a passionate and dogged +resolution against all odds to make a Democrat president in 1880. When +Hancock was beaten in a fair fight by Garfield, the South was thrown +prostrate; devastated by the war, pillaged and ridden in Reconstruction, +to gather all her forces for a final defiant stand and have her last poor +hope dashed was tragic. But this very extreme of bitterness was the +South's salvation. + +The leaders, with remarkable accord and almost simultaneously in all +quarters, after recovery from the first inescapable shock, rallied to the +situation like heroes, and called their less valiant brethren after them +in a new resolution to build up another South founded on democracy and a +purpose to employ every material resource for the building of a foundation +which would bear the weight of the different structure that had to be +erected. + +Words unfamiliar in the South were heard on every hand; in this proposal +of "real reconstruction" notions as novel as they were salutary were +involved. Communication between States and parts of the same State, by +railroads, telegraph and telephone; schools, churches, diversification of +crops, deepening of harbors and rivers, municipal pride and civic reform +were urged; it was demanded that politics and political wrangles be +dropped forthwith, and that the section set about the course of material +advancement as the only method of asserting rights against the North, and +the only means of bearing her share of the national burden. + +In the canvas of resources which this impulse brought, cotton mills were +pounced upon as affording the readiest and most permanent instruments of +success. It has been seen how platform and press and people concentrated +their interest and attention upon the "cotton mill campaign", every new +factory being hailed as another banner lifted in the fight. Two great +impelling motives were patriotism--either local, state, sectional or +national--and humanitarian considerations. These were held up in the +plainest view of all, and impressed unceasingly. It was as a means to an +end that cotton mills were argued for; their advocacy was grounded in the +most splendidly fundamental beliefs and aspirations. + +Descending from these lofty ideals, the practical inducements to the +building of cotton mills as they were brought before the South and the +country at large have been pointed out. It was shown that over and above +all others stood out prominent and unquestioned the fact of the presence +of the raw cotton. Proximity to the material of manufacture was felt to +constitute the chief invitation to go into the textile business in a +systematic way. But there were other arguments used, running out to great +length--of these the leading one was an abundance of cheap and intelligent +if untrained labor crying for employment, and this has been dwelt upon in +its phases. A store of unused water powers, favorable freight rates, low +cost of living, suitable climate, the supply of inexpensive fuel, and the +innumerable gains to the community were made the grounds of advocacy of +cotton mills. Estimates of the expenses of erection, maintenance and +operation of hypothetical factories of all sizes were worked out in +elaborate detail, the saving over manufacture of cotton in New England or +in Old England being remarked at every juncture. + +It is a nice problem to determine how far these advantages possessed or +thought to be possessed by the South were aired as a result of deep-lying +motives of patriotism and philanthropy, and to what extent they were +themselves the exciting forces behind the crystallization of these +motives. Did these superiorities of the South come to light mainly because +the South had made up its mind to remake the section, or did the South +enter upon a course of development because it possessed certain +outstanding advantages? To strike a balance here would be an interesting +speculative venture. But, however, this may be, it is reasonably clear, as +has been previously pointed out, that when it came to putting their money +into cotton mills, capitalists, North and South, acted usually upon the +assurance given them in the physical assets obtaining. To the extent that +general impulses placed in public view definite, concrete and tangible +reasons why cotton mills could be made to pay dividends, the undercurrent +was indirectly responsible for the erection of the factories. + +It is not the purpose of the present paper to set out in any detail the +unique resources of the South, either as they constituted the magnet for +capital directly, or reacted through the general cotton mill campaign to +swell the tide making toward a new character for the section. They deserve +separate treatment, especially since they occupy so central a position and +have such sensitive contact with the other forces present. Whether, +however, physical advantages existing at the South crystallized out of an +original philosophical impulse, or operated, more or less unconsciously in +the Southern mind, to induce that impulse, it is perfectly clear that the +movement for the building of cotton mills in the South originated with the +South, and that at least contemporary with the attraction of capital, went +an advocacy of the establishment of cotton factories that was consistent, +permanent and practically universal. + +From the very nature of the movement, Southern and in most cases strictly +local capital was first appealed to, both by the actual projectors of the +mills and the public organs which interested themselves in the +enterprises, and local capital was the first offered. It might be +questioned whether outside capitalists, perceiving in the Southern +manufacture of cotton a favorable field of investment, did not come in as +a result of the publicity of the cotton mill campaign, without waiting for +either solicitation from the South or proof of the success of the new +plants erecting in that section, but it will be shown that, as a matter of +fact, this was not the case. At the time the South felt herself to be +isolated, cut off from the national life, discriminated against by +Congress and the country at large. In the beginning and in essence +continuing to the end, the building of cotton mills was a sectional +matter. It is not to be said that outside capital was an afterthought with +the promoters of the Southern cotton mills, but every circumstance +surrounding the movement, and every instinct of the hour, argued for the +exhaustion of native resources before help should be sought from without. + +The story of how capital was secured for the cotton mills of the South may +be commenced with a sentence from a North Carolina newspaper which strikes +the key-note: "All questions of domestic economy, and especially those +involving the capital of our people, whether in the shape of labor or +dollars, will necessarily be canvassed and scrutinized very closely in +their bearings on our material progress."[184] + +The nature of the appeals made to local capital will best appear by +looking at some of them individually. + +Patriotism, a consciousness of unity, and appreciation of the dynamic +character of manufactures in the South, appear in a solicitation printed +on the editorial page of the Charleston News and Courier for capital for a +scheme for the development of water power and cotton mills at Columbia. +The enterprise had a peculiarly appealing history, which will be +recounted in considering the response of domestic capital. After a summary +of these facts, the article concludes: "The work--is one of great +magnitude and involves expenditure beyond the ability of this community +(Columbia). Nor is the interest merely local, but reaches out to every +part of the State. We call, therefore, upon all, from the mountains to the +seaboard, to take part in this great central development, involving not +only the prosperity of our capital, but, in its ramifications, affecting +the prosperity of the entire State."[185] + +A week earlier, in a Columbia dispatch to the same paper, Charleston was +advised that books of subscription to the stock of the company would soon +be opened there, and the argument for investment was placed on more +practical grounds: "If the recent subscriptions to factories have left any +money in the pockets of the people there (Charleston), it had better be +saved for this purpose--a franchise like this is not obtained every +decade."[186] + +Implying that when the South should make a start in cotton manufacture, +outside capital would flow in, but impressing particularly the need for +the entrance of domestic interests into the field, a statement of H. T. +Inman, capitalist, relative to the plan to purchase Oglethorpe Park, the +site of the Atlanta Exposition, from the city authorities and use the +buildings for cotton factories, is striking: "We must demonstrate what we +have been saying, that there is money in manufacturing in the South. If we +wait for others to come here and do it, it will never be done."[187] The +argument that the South had faith in her ability to manufacture cotton +profitably, as proved by putting her money into the projected mills, was +frequently used in soliciting subscriptions at the North, and more +frequently Southerners were urged, as here, to go into the ventures, with +the specific reason that by so doing Northern capital would be induced to +join in. + +Money accumulating in bank at low rates of interest was often made the +basis of observations on the great gain from manufactures, and was pounced +upon as evidence of lack of sympathy with the spirit of the time, which +was grounded in the deepest needs of the people. In such cases the cotton +mill campaign and the gathering of capital as a matter of practical +concern usually overlap. An instance quoted in another place is typical: +"But with all its (North Carolina's) varied and splendid capabilities it +is idle to talk of home independence so long as we go to the North for +everything from a tooth pick to a President.... We may look in vain for +the dawn of an era of enterprise, progress and development, so long as +thousands and millions of money are deposited in our banks at four per +cent. interest when its judicious investment in manufactures would more +than quadruple that rate...."[188] Several months later the same +paper[189] instanced the success of Edward Richardson, of the firm of +Richardson & May, cotton factors of New Orleans, in running, in addition +to ten or twelve plantations producing 15,000 to 18,000 bales of cotton a +year, a nest of factories with 18,000 spindles, 400 looms and 800 hands in +the town of Cresson, which he built. He was said to be worth more than +$15,000,000--"all accumulated in the South, the poor South." The closing +remark is significant: "His ... accumulations are but the results of +forethought, enterprise and nerve. He has no heavy deposits in bank at +four per cent." + +This same galling fact of bank deposits lying relatively idle when they +might be used to further the plans held so much at heart was lamented in +cases where it hindered the cotton mill campaign, or the taking of initial +steps toward realizing a desire for a mill; but it was made more galling +where a venture, properly launched, stood still because the moneyed people +held themselves aloof. In distinction to the position of Newberry, South +Carolina, where there were "numbers of people ready to aid in the +enterprise, convinced as they are that it will be a profitable investment, +but ... nobody to take the lead,"[190] was Chester another town in the +same State, of about the same size. In February of 1881, after the cotton +mill campaign had gotten a fair start, the Chester Bulletin commented: +"Just now there is a widespread and deep feeling amongst our people +throughout the State to foster the manufacturing interests of the country. +More than a year has elapsed since our people felt beat a pulse of +enthusiasm for the home industries. (Reference was here had to the +chartering by the Legislature of two mill corporations which attracted +almost no subscriptions.) There is money enough in the county to start the +hum of three thousand spindles. The large amount of personal deposits in +bank indicate too truly the lack of confidence in home industrial +enterprises."[191] + +It may be well to consider a typical comprehensive appeal for domestic +capital. For this purpose a leading editorial in The News and Courier +asking support for the Charleston Manufacturing Company is particularly +useful.[192] In the first place, this company marked the entry of +Charleston into the field of regular cotton manufacture, and the +enterprise took firm hold on the interest of the city from this cause. +Also, South Carolina experienced the cotton mill campaign as a movement +more highly conscious than in any other State; Charleston was the center +of the campaign, as spiritual leader no less by reason of her sufferings +than her heroism, and the News and Courier was the mouthpiece of +Charleston. + +To begin with, the editorial, headed "Everybody's Opportunity", sets forth +clearly the division of arguments: "The Charleston Manufacturing Company +addresses itself to the citizens of Charleston in a double capacity: +_First_, as a means of making money for the stockholders. _Second_, as a +means of enlarging the common income, stimulating the growth and +increasing the prosperity of the city." + +Proceeding under the first of these heads, it is pointed out that the mill +will succeed because the management, in the hands of men known for their +business sagacity and activity, will be both economical and progressive. +There is no doubt that, along with other appeals to local resources, +confidence in the projectors of a cotton mill, as personal acquaintances +and men whose whole lives were familiar knowledge in a small community, +had a powerful influence. Next it is shown that the profits of the South +Carolina mills for the year 1879, probably the last available for +citation, warranted a belief that the Charleston mill would succeed, +having at least as good a chance as county plants. These profits had +ranged from 18 to 25-1/2 per cent. It is explained that steam power will +be used, but that it is used in England, and that the trend of the better +opinion is toward steam power rather than water power, as being more +reliable and capable of better control. The approval of steam by the +superintendent of the Camperdown Mills at Greenville in the same State, on +these grounds and also because he knew that the Northern mills using steam +made larger profits than those using water, is instanced. It is evident +that the necessity of employing steam power, instead of being able to use +the water power of the interior, was a hard obstacle to get over, for +recurrence is several times had to it in the course of the argument, and +the great advantages of coastal location are stressed as a +counterbalancing consideration. + +The favorable facts that the Charleston mill will be able to buy cotton +all the year round, and so avoid carrying a heavy stock, that samples and +tops may be utilized, that the rates of insurance will be low and water +freights nominal, and lastly that no cottages or schools or churches will +have to be built, city location avoiding this source of expense to a +provincial establishment are recited, and the prospective stockholders are +reminded that by State law the whole of the capital invested in +manufactures is exempted from taxation for ten years. + +On the second account, of increasing the prosperity and welfare of the +community, it is shown how every $228 invested in cotton manufactures in +South Carolina the year before supported one person, and how when people +earn they have something to spend; house rents will go up as a result of +the new demand. Besides, the State at large benefits from a new means of +support for the people. The very potent argument of the addition to value +which manufacturing brings about is next employed. "At a low estimate the +value of cotton is doubled by the conversion into yarns." If the +Charleston Manufacturing Company uses 10,000 bales of 400 pounds a bale, +at 10 cents per pound, $400,000 will be returned to the growers of the raw +cotton. When made into yarns the cotton will be worth $800,000. Every +dollar of this $400,000 difference, except what will be spent for +materials not to be precured locally, will be disbursed in Charleston in +wages and dividends. "It is evident that the building of half-a-dozen +cotton factories could revolutionize Charleston. Two or three million +dollars additional poured annually into the pockets of the shop-keepers +and tradespeople would make them think that the commercial millenium had +come." The appeal concludes: "In a two-fold sense, then, the Charleston +Manufacturing Company is entitled to support. For the stockholders it will +earn money. To the city it will give the life and vigor which nothing +short of manufactures will assure us."[193] + +An editorial in the same paper the next spring encouraging subscriptions +to the capital stock of the Columbia and Lexington Water Power Company, +the enterprise already mentioned, which was opening books in Charleston, +urged the two benefits already noticed, profit flowing from physical and +economic advantages, and a social gain resulting from the indirect +bearings of the plant.[194] The value of the franchise, the offer by the +State of more than 146,000 days of convict labor at a low wage, the rebate +of taxation on plant and improvements for ten years, and estimated +earnings of 17 per cent, on a total outlay of $431,607, or running as +high as 25 per cent. on an outlay of $725,000, were held up on the side of +material things; in dealing with the gain expected to result to the State +at large, the influx of immigrants and the employment of thousands of idle +women and girls, already present, for whom it was so hard to find +profitable work, were pointed out. + +Not unusually, in place of the larger social sense, local pride as such +furnished the point of departure in the proclamation of an enterpriser to +his fellow-citizens. It is to be feared that sometimes this was made the +means of demegoguery, the appeal to local spirit being linked with a +disparagement of Northern assistance merely for effect. Instances of this +will appear when the attitude toward outside capital is considered. + +The case of Mr. Winn's scheme for Sumter illustrates the personal appeal +to local pride. It is to be noticed that he reduced everything to an +individual and immediate basis. He spoke through the paper of the town, +the Sumter Southron:[195] "I am now engaged in getting up a mill of 2,500 +spindles at this place. I do not expect to seek a dollar of foreign +subscription, but I want our own citizens throughout the county to be +interested in it and to help me build and operate it." There follows a +description of his findings at several nearby mills which he visited. One +is inclined to believe that he paraded the facts to impress his audience +in a general way, rather than to appeal to strict business sense. He cites +the earnings of the mill at Charlotte, North Carolina, owned by the Oates +Brothers. With running expenses of $60, "we have the neat little profit of +$155 per day". The Sumter mill could save haulage, and use one-third of +its cotton not packed, thus saving in bagging and ties. A concluding +sentence indicates his frame of mind: "Will a mill pay in Sumter? Why +not?" + +A statement of the advantages possessed by a mill already in operation as +contrasted with those which would contribute to the success of a proposed +mill was a favorite method of argument. Thus the Kershaw Gazette said: +"Let us realize that what is good for Charleston in this respect is better +for us. (Reference was had to the Charleston Manufacturing Company.) She +has to use steam as a motive power, which, in the form of coal, has to be +brought long distances and at great cost. We have but to harness the +magnificent water-powers which are slipping idly by us, and the thing is +done. In Charleston, it is the investment of capital on hand, seeking +profitable employment. With us, it will be the creation of capital itself; +for we venture the assertion that one hundred thousand dollars invested in +a cotton factory at Camden would develop interests to more than double +that amount." The saving of three-fourths of a cent per pound in the +freight between Camden and Charleston would in itself bring a fair +dividend upon the capital invested, it was said. "And yet Charleston +expects to, and will, make money by what she is about to do. Let the +people of Camden and of Kershaw County be up and doing in this +matter."[196] + +These, then, were the grounds upon which domestic and more strictly local +capital were solicited. It is proper now to notice with what success the +appeals were made. + +In the most respectable trade summary published by any newspaper in the +South, it was stated in September of 1881: "The industrial feature of the +year is the rapid extension of cotton manufacturing in South Carolina in +common with other Southern States (naming the plants and the capital +invested in or subscribed to each.) A most gratifying feature connected +with the establishment of cotton mills in the South is that the great bulk +of the capital employed in their operation has been furnished by Southern +people. Southern capitalists are putting their shoulders to the wheel.... +More than three-fourths of the capital invested in the cotton mills since +the war has been subscribed by our own people...."[197] + +The conclusion of Mr. Thompson after a review of the rise of cotton mills +in North Carolina is interesting: He says that capital for almost 200 +mills that grew up in twenty years "has come chiefly from a multitude of +small investors within the State"; again, "The development of the cotton +industry in North Carolina is a striking instance of the manner by (in) +which a people in poor or moderate circumstances can establish +manufactures." He gives credence to estimates by those he considers best +informed that 90 per cent. of the capital for mills in North Carolina has +come from residents of the State. "The industry is distinctly a home +enterprise, founded and fostered by natives of the State."[198] + +The Rock Hill Cotton Factory was spoken of as the "pet" of the town. Its +$100,000 of capital stock was owned in Rock Hill, with the exception of +$15,000 held in Charleston.[199] + +Most of the stock of the Belmont Manufacturing Company, the enterprise +projected by Mr. Winn in Sumter, already noticed, was taken in the town, +and the few thousand dollars needed to increase the capacity above 2,000 +spindles would come from Charleston, where President Winn was soliciting +support.[200] + +The experience of Yorkville, another little town in South Carolina, is +interesting, especially for the naive way in which it was related.[201] +"... the 'Cotton Mill Campaign' is progressing satisfactorily in +Yorkville. We heard an old citizen remark some days ago that he had never +seen the town so thoroughly aroused and united.... Yorkville to all +appearances is moving forward with a determined purpose to put into +successful operation a cotton mill.... The shares have been placed at $500 +each, and up to this writing about $25,000 have been subscribed. I would +state that this amount has been raised within the limits of the town. A +prospectus will be forthcoming this week and the doors will be thrown open +to citizens generally of the county who may be able and disposed to assist +in carrying forward the project." + +A similar instance is that of Walhalla, South Carolina, a very small place +indeed. The people began to talk about a cotton manufactory, and at an +informal meeting of a few of those interested nearly $10,000 was +subscribed. "It is believed that as much as $25,000 will be subscribed in +that neighborhood, and if the people of the county will join in the +enterprise as much as $50,000 might be made available."[202] + +A typical notice is this one: "The enterprising citizens of the new town +of Gaffney City have subscribed $40,000 towards building a cotton factory +at that place."[203] + +Columbus, Georgia, was held up to praise for her loyal support of the +cotton manufacturing industry. Before the war she was a little Lowell, it +was said. The Federal army captured the place in 1865 and burned 60,000 +bales of cotton and all the mills. "The very heart of the city was burned +out, but nothing could extinguish its indomitable spirit." In fifteen +years the mills had been rebuilt until they were taking annually nearly +17,000 bales of raw cotton, which was almost trebled in value by +manufacture. "But the proudest boast of Columbus is that she rebuilt her +mills by her own aid and money."[204] + +The statement of a railroad man in the New York Herald is valuable: "Mills +for the weaving of the coarser cotton fabrics are now in successful +operation in Tennessee, Georgia, Kentucky and several of the Atlantic +Coast States, all of which have been built by native labor, mostly with +local capital and are managed by Southern men."[205] + +The Clifton Mill near Spartanburg, furnishes a fair example of the +distribution of holdings of the capital stock of a larger enterprise. The +joint stock company owning the mill operated under a special act of +incorporation of the Legislature, exempting the property from taxation for +a period of years, and relieving the stockholders of personal liability. +The shares were of a par value of $100. and aggregated $500,000 of which +$250,000 was paid in. The stock was held mostly in Spartanburg, +Charleston, Boston and Baltimore. Spartanburg capitalists owned $200,000 +worth of the stock, Charlestonians $150,000, and $50,000 was held in +Boston.[206] To make the capital stock $500,000 most of the original +stockholders had doubled their subscriptions.[207] + +For a factory near Gaffneys, South Carolina, which would need $500,000 +capital stock to the amount of $200,000 would be subscribed for in Chester +County, it was thought, and for the remaining $300,000 the North would be +looked to.[208] + +Together with large subscription to the stock of the Atlanta Exposition +from the North and East, went an early subscription of $20,000 in +Atlanta.[209] + +While it might be considered under the heading of the cotton mill +campaign, or denominated "Southern enterprise", I believe it will be most +interesting to relate at this point briefly the facts in the Columbia +canal scheme, as illustrating how domestic capital threw itself into the +situation in which the South found herself in 1880, and the years +immediately following. It is especially instructive to notice how Northern +enterprise, while, so far superior to Southern initiative at all times +before, after 1880 failed where in the South sometimes native energy +succeeded. + +Columbia, the capital of South Carolina, is located at the falls of the +Congaree River. Today there is a canal of about three miles in length, 60 +or 75 feet in breadth, terminating at the lower part of the city. At the +end of the canal is a duck mill. In 1868 the Messrs. Sprague, +manufacturers of Rhode Island, took up a plan of developing this water +power at Columbia, but "in consequence of their misfortunes, failed", and +the whole matter of the canal passed to the hands of the State Canal +Commission. Some prominent Columbians, hoping to revive the project, +contributed money to the employment of one Mr. Holly, a first-rate +hydraulic engineer of Rochester, New York. Mr. Holly was making surveys +and progressing satisfactorily when, after three months, his engagement +was discontinued. The reason for this was that Thompson and Nagle, +engineers of Providence, on a tour of inspection through the South, were +attracted to the water power at Columbia, and Mr. Thompson appealed to the +State for franchises, in which appeal he was supported by the citizens of +Columbia who had helped promote the modest work under Mr. Holly. On +February 10, 1880, the final contract between Thompson and Nagle and the +State Canal Commission was entered into; by its terms the engineers were +to have the use of 200 convicts for three years, and at the expiration of +this time they were to have developed at Gervais Street 15,000 horse power +of water power, and have in operation a cotton mill of at least 16,000 +spindles. + +Thompson and Nagle thought the necessary capital could be had at the +North. They failed to secure it, and attributed their failure to the +turmoil of the presidential campaign which was raging. Though this was +probably a valid basis for the appeal to the Legislature for an extension +of the rights granted them, the application for extension was denied. At +this juncture, modifying the scope of the plans somewhat, the foremost +citizens of Columbia took up the matter themselves, and organized the +Columbia and Lexington Water Power Company to bring about the +development.[210] + +Nightly meetings were held of those interested in the purchase of Mr. +Thompson's charter. In one hour eleven subscribers gave $5,000 +each--$55,000--toward the amount.[211] A few days later the subscriptions +in Columbia had reached $117,600, and the expectation was that the sum set +to be raised in Columbia--$125,000--would be exceeded.[212] + +Mention has been made several times of the Charleston Manufacturing +Company. At the end of the first day $120,000 of its capital stock had +been taken.[213] A little later the subscriptions to the stock had become +$200,000 and more, mostly "for small amounts, which is what is desired. At +the present rate the whole capital required will soon be subscribed." On +July 6, the News and Courier had these two editorial paragraphs, the +justifiable satisfaction pervading which is not to be mistaken: "We are +authorized and requested to say that the whole of the stock of the +Charleston Manufacturing Company, being half a million dollars, has been +subscribed, and that the books are closed. It is useless, therefore, to +continue to send in subscriptions. + +"We believe that more than three-fifths of the whole capital stock are +held in Charleston, so that right here will come the bulk of the direct +profit by the working of the company...." + +But before the Charleston Manufacturing Company had completed its +organization another corporation had come into existence. This was a mill +company promoted and most largely subscribed to by the Germans of +Charleston, headed by Captain Tecklenburg. Not much was said about the +concern in the papers, but of its $100,000 of capital stock, $75,000 were +subscribed between January and May of 1881. This Palmetto Manufacturing +Company, as it was called, was apparently, the most restricted in its +stockholders of any mill that had been projected in the South to this +time. + +Little towns, villages almost, did not fail of local enthusiasm and +capital in small amounts.[214] In January of 1882 Fort Mill, in York +County, was agitating the building of a cotton mill there, and $50,000 was +set as the amount of stock to be secured.[215] Chester, a little earlier +concluded her size would compel her to produce $300,000 for a mill within +her borders.[216] A gentleman of Griffin, Georgia, offered to subscribe +one fourth of the capital necessary to start a mill there.[217] + +Having seen the character of the arguments used in attracting native +capital to the Southern cotton mill projects, and the extent of the +response to these appeals, it is next necessary to turn to the other +source of assistance--outside capital. Practically this may be termed +Northern capital, although Englishmen interested themselves in the +Southern ventures, and much money came from what were strictly termed, the +Eastern States. In the minds of the people of South Carolina, North +Carolina, Georgia, Alabama and those States, capital stock of a Southern +mill held in Baltimore would be classed as appertaining to the North. + +It is proper first to consider the attitude of the South toward Northern +capital; second, the appeals made to Northern capital; and third, the +effect of these appeals or the response of them. + +In many aspects the rise of cotton mills in the South was less an +industrial development than a subtle drama, powerful in its great motives. +As William Garratt Brown has said of the history of the Southern States +in their struggle upward after the war, it is not only to be studied with +diligence of research, but is to be viewed with passion. The story of the +cotton mills is filled with elemental emotions; the moving characters are +splendid, clear-cut dramatic types; there are the villain, the hero, the +schemer, the lover of his fellow men. The vices and virtues take their +part--self-sacrifice, jealousy, hate, charity, revenge, bravery, honor, +patriotism. + +The first act of the drama is constituted in the defeat of Hancock and the +magnificent refusal of the South to be baffled--the oath to rebuild her +shattered fortunes. The actors leave the stage with hope filling the +future. The curtain rises on the second act to discover the chief spirits +of the South setting systematically about "the cotton mill campaign"; +their brethren converted to a belief that manufacturing the staple would +transform the South, they turn in entreaty to their fellows for support, +and the answer is loyal and gallant. + +The third act opens with a situation which tests the greatness of the +players' faith in what they profess. Domestic resources exhausted or +exhausting, or slow in response to the need, should the object for which +they were striving be lessened in its meaning, importance and +desirability? Should the cotton mills which were to mean so much be +restricted to the means of the South, urged to the front by a splendid +pride and devotion? Should the _esprit de corps_ which animated the +Southerners, and the cheerfulness of their co-operation, with all that +inspired these, when they failed of further effect, be considered to set +the natural and proper limits to expansion? + +Was this to close the action? Or was the South, remembering her vows, to +cling to her ambition undiminished? In spite of wounds yet fresh and +burning, which in the name of pity and honor and self-esteem cried out to +be nursed and comforted at home, could the South face again her enemies, +and this time not just to challenge, which was hard, but to entreat, which +was hardest? Would the South rise superior to pride, and be content with +nothing short of the fullest heroism? Would she go to the North for +capital for her young cotton mills? + +It was a silent struggle with herself. Little was uttered, but fundamental +emotions were at play. When she decided to appeal for assistance in a work +which she knew to be right, the climax of the drama had been reached. The +crucial test had been endured, and the South had emerged triumphant. + +As has been said, few lines are there to indicate the feeling. It is +largely dumb show. But we may look at the expressions that did occur to +show the attitude of the South toward the question of Northern capital. + +The following manifesto is significant, involving as it does recognition +of the necessity for a modification of political views if capital to be +invested in the South, in the eyes of the North, was to be made safe: "In +this state (South Carolina) we need capital and less party and +politics.... Such men as Gould, Vanderbilt and Plant have invested +millions of dollars in our railroads, manufactories and other enterprises, +and have been remunerated in the face of a 'Solid South and a Solid +North'. It is useless to say that millions have been driven off from like +investments on account of personal whims and jealousies among prominent +politicians in both parties. _Can the South afford to remain solid?_ This +is the great question of the day, and it can be answered in the +negative.... We want all the capital possible to develop our hidden and +inexhaustible resources...."[218] And again: "So long as we have section +unity in politics in the South its material prosperity will be checked and +an absolute injury will be sustained through its entire commercial and +agricultural dealings by exciting distrust of capital.... So taking the +past and the present as indices for the future, it is plain to see that a +dissolution of the solid South will cut at the very roots of all these +wrangles between the North and the South in which sectionalism is +involved."[219] + +The News and Courier wished to accord to every dollar of Northern capital +invested in the South the same credit as was felt to be due home capital +likewise contributed to the building up of the section. "Outside capital +... is beginning to seek this Southern field to aid in a more rapid and +thorough work of restoration of dead or dormant enterprises. This movement +needs a wise encouragement by public and private approval. Some of that +credit which was accorded to the man who caused an additional blade of +grass to grow should be given to everyone who affords facilities to +manufacture an additional boll of cotton, or to carry it and other produce +to market."[220] + +A gentleman connected with the International Cotton Exposition said: "We +people of the South should embrace every opportunity which, like the +opportunity afforded by this Exposition, will bring among us intelligent +and interested observers of our industrial condition, resources and +aptitudes. We have in the midst of us the raw material, so to speak, of a +magnificent prosperity. We lack knowledge, population and capital. These +may be slowly accumulated in the course of years, or they may be rapidly +by well directed efforts to obtain them from beyond our own borders. We +advocate the latter plan."[221] This is as business-like as anyone could +desire. + +In an interview with the Atlanta Constitution, Francis Cogin reviewed the +cotton manufacturing situation in Augusta, reciting the profits and +asserting that the Southern mills had an advantage over those of the North +such as would allow the former to earn dividends at a time when the latter +would not be making a dollar. He concluded: "The future of cotton +manufacture in the South will be limited simply by the good sense and +courtesy of our own people. If we invite capital, make it safe here, and +welcome those who bring it, we will get all we want."[222] The element of +safety, here remarked, meant frequently safety to be brought about by +political arrangements which would violate the established creed of the +South; but sometimes ordinary business balance was pleaded for, as when a +North Carolina paper quoted with approval from the Financial Chronicle: +"Why cannot the South understand ... that the worst hindrance to her +needed influx of industry and capital is uncertainty?"[223] + +In another chapter the degrees of intensity with which the cotton mill +campaign was urged were seen to vary, roughly, with the distance from +Columbia, South Carolina, say, as a center. There is a casual note in the +little that found its way into the Richmond papers. This is to be +remarked in Richmond's attitude toward Northern capital. It was not a +stirring, vital thing in Virginia. For instance: "When we consider that +the takings of the Continent from Lancashire are not piece goods, but +yarns, why cannot we in the South make these yarns for the Continent +ourselves and save to ourselves the profit of conversion now enjoyed by +the English buyer of the raw material? Why not have a large and successful +cotton manufacturing industry? + +"We are persuaded that once the folks in New England, who have surplus +money awaiting employment, thoroughly investigate the points Richmond +presents for a safe lodgment of that capital in manufacturing, the flow +will start this way."[224] + +The attitude of W. H. Gannon was peculiar, but serves as an introduction +to the mention of a phase of the subject which is important. Mr. Gannon, +referred to in other connections, believed that Northern capital ought to +be welcomed at the South as helping to develop an industry in which the +South could stand without a rival. He favored inducing Northern +manufacturers to set up plants bodily in the South. But, being the agent +of a society which sought to colonize New England consumptive operatives +in co-operative mill villages in the South, the settlement to be +financially backed by a Northern capitalist or manufacturer, Mr. Gannon +wished to place a modification upon the influx of capital to the Southern +States. He asked whether the South should encourage an economic system +with "large stock companies with hundreds of thousands of dollars, in +which the operatives have no pecuniary interest in the plant, and from the +active management of which we ourselves would be virtually excluded? (It +is to be borne in mind that, as at present organized, the treasurer and +selling agents in those great concerns necessarily control their +direction); or is it better that we aid small co-operative concerns +wherein the plant is owned in great part by the operatives, and in which +we might familiarize ourselves with manufacturing in all its +details?"[225] + +To contend for small mills, whether as above for the co-operative features +suitable to them, or as a means of insuring proper caution in the +development of the industry, frequently with entire sincerity, was +nonetheless, I think, one evidence of dislike and distrust of Northern +capital. H. P. Hammett, an old cotton mill man in South Carolina, said: "I +do not share in the opinion commonly expressed that we must procure +capital from the North to manufacture the cotton at the South. I would by +no means exclude it, but gladly welcome it." But he worked around +gradually to this concluding statement, relative to the report that +English and Northern capitalists were seeking to locate mills on the water +powers of the South: "--it would be unfortunate if most of the best powers +should pass from the control of our own people before they knew it."[226] + +One more characteristic quotation, and the point is clear: Objection had +been raised to the legislation forbidding the pooling of railroads, +producing corners in freights with rising rates--the Sherman Act was +probably meant. This was too much for the Winnsboro, South Carolina, News, +the reaction of which resulted in these words: "Well enough is it to talk +about repelling Northern capital by discriminating legislation, but far +better have no Northern capital than have it holding native noses down to +the grindstone. The half-starved wolf refused to change places with the +sleek mastiff that wore a master's collar. Northern capital that brings +Northern collars is not what we wish, and we will not have it as long as +the people send incorruptible legislators to Columbia. We welcome foreign +capital down here, provided it recognizes that the State is +supreme...."[227] + +While it is easily understood how this attitude obtained--the wonder is, +in fact, as already seen, that it was not more nearly universal than +sporadic--the shortsightedness of such a policy for the South is apparent. +For whatever outside capital reaped in dividends, the South reaped a +larger advantage in collateral benefits socially. The gain to the +communities where mills were located, supposing even that Northern capital +was greatly in preponderance, were more than any money earnings, in sums +however large, for it meant building for the future in material +institutions that would prove dynamic. The cotton mills, and all they +brought in their train, presaged a change in social ideals and economic +outlook on which no price was to be set. + +If Mr. Baldwin, the railroad president, was a little early in making the +statement in the middle months of 1881, surely his purpose was good, and +his hopefulness was justified, when he said: "I say on the strength of +recent and extended observation that whatever of antagonism to Northern +capital may have existed in the South has disappeared. I never met it, at +any time, but (I) am willing to grant that it may have existed sometime +and somewhere."[228] + +As a corollary of the fact, recognized at the South, that whatever were +the social gains resultant upon the establishment of cotton factories, +capitalists put their money into these ventures because they believed the +conditions of manufacture assured to them dividend, the South grounded its +appeals to Northern investors in the hard physical advantages possessed by +the South as a field for cotton manufacture, usually stressing +superiorities over the Northern States. Northern capitalists were as eager +to reap profits as were Southern projectors of mills to enlist their aid +and interest, and so the claims of the South were easily investigated +without the medium of propaganda. The widespread publicity given to the +whole matter of Southern manufacturing in the cotton mill campaign, while +no doubt it was registered in all parts of the North and East, was +commenced and carried on as of concern to the South. + +Correspondence of the New York Times from Atlanta well illustrates this. +It is to be noticed how quickly the preliminaries are got +over--considerations and speculations in which Southern papers indulged to +any length: "Manufacturing in the South is the one subject on which +thinking men here speak with entire confidence. They have, most of them, +some qualifying doubts as to agricultural progress, the cheapening of +cotton production, the raising of home supplies, immigration, mining, and +the many other now ambitions and enterprises which have engaged so much +attention since the opening of the new era of industrial development. But +concerning the future of manufactures, particularly of cotton, all men of +intelligence and business experience speak with the assurance of inspired +prophecy. It is, in fact, not easy to see why the mill should not seek the +cotton instead of the cotton seeking the mill." With this introduction, +the plunge is made into the supporting facts, which ought to turn the flow +of capital toward the South. + +The first statement is that it is a dead waste to ship raw cotton to a +mill 1,500 miles away, when it can be made into yarns or fabrics in +factories distant from the field only short half-day's journey for a mule. +The cost of sending the cotton to New England is reckoned, in expenses of +bagging, ties, ginning, baling, storage, insurance, drayage, sampling, +compressing, commissions of brokerage, waste in handling, and freight to +amount to $14.90 per bale, or almost exactly 1-1/2 cents per pound which +the New England manufacturer pays for the cotton above the price received +by the planter. The estimate of $100,000,000 is given as the charge on the +cotton crop of the South of 1879, on Edward Atkinson's figures, for the +items mentioned. + +"... to the anxious capitalist tired of a petty 4 per cent. and seeking +new and more profitable investments such facts are not without interest. +They go to support the claim that the Southern mill has an advantage of +from 10 to 20 per cent. over its New England competitor. But these +advantages are by no means confined to the elimination of unnecessary +charges for baling and transportation." Water power in the South, six +dollars per horse power per annum, or in some instances given away for the +location of a mill, as against a cost of twelve dollars in New England, is +dwelt upon, with the greater utility of the Southern water powers due to +the absence of freezes. The cheapness of labor is given prominent place, +and the suitability of the climate of the South for cotton +manufacture.[229] + +Exemption from taxation was a regular method of inviting outside as well +as encouraging domestic investment. South Carolina exempted from taxation +for a period of ten years all new machinery put in a factory. The +Observer, of Raleigh, said editorially: "... North Carolina might well +learn a lesson from the liberal course pursued in South Carolina and +exempt from taxation for ten years all cotton factories within our +borders. The tax does not net the State more than a thousand dollars or +so, and the counties only double as much. But then there may be a great +deal in it tending to induce Northern capitalists to make investments with +us. Once here, they will be so pleased with our advantages that they will +never think of leaving us."[230] + +As early as 1872 Georgia had passed a statute remitting taxes on cotton +and woolen mills for a decade.[231] + +An indication of the comparative coolness of the States near Northern +influence, already remarked, in a little controversy which took place in +the Richmond papers over exemption of mills from taxation. Said "Hanover": +"It is true that a law exempting capital invested in manufacturing, even +for a limited period, is unconstitutional. But if it is necessary to that +end, the constitution can be amended." The farmers would not object, he +thought, since increased size and prosperity of the cities would mean +increased gains to them in sale of produce. Richmond, he said, in addition +to her natural advantages, needed to offer exemption from taxation to +secure the desired capital. But "King William", in rejoinder, asserted +that the city was more dependent upon the country than was the latter on +the former; that exempting manufactures from taxation would mean +increasing the tax for farmers; and that Richmond was doing well enough as +it was. + +An indirect appeal to outside capital was felt to lie in a direct appeal +to domestic capital, and the fact that foreign interest would be attracted +by evidence of native faith in the mills was used as an argument in +securing capital at home. Thus the Columbia Register, speaking of the plan +of the Columbia and Lexington Water Power Company said editorially: +"Columbia is now resolved to find money for herself, in the City and the +State, for the development of the Canal and the establishment of +factories. This will bring in outside capital later on. Nothing so +attracts investors in other States as the knowledge that people on the +ground have proved their faith in an undertaking by putting money in +it."[232] + +Again it was said: "More than three-fourths of the capital invested in the +cotton mills since the war has been subscribed by our own people, and new +enterprises are opening up the way to a proud and successful future. The +Southern investment encourages Northern capital to come into the same +field, and the rate of progress is far more rapid than if it depended on +either Southern savings or Northern capital alone."[233] + +A county paper told its readers: "We believe there is money enough in the +county, here and there, to make at least a modest beginning so as to +attract outside capital."[234] + +Having sought to define the attitude of the South toward Northern capital, +and to indicate the nature of the appeals made to the outside capitalist, +the last topic of this discussion is reached in an examination of the +response of investors outside of the South to invitations, and the influx +of capital when the opportunities for profit had become apparent. + +It must be plain that as the sections drew together with each year that +removed the "reminders of the Civil War, the South was more welcoming in +her attitude toward Northern capital, and the North more ready to invest +in the South. This is recognized in an editorial of The News and Courier, +headed The North and Europe Building Up the South": "It has been evident +during the past two years that the distrust which had prevented capital +from coming to the Southern States for investment has, in a large measure, +been dissipated, and that the disposition to place money in the South in +undertakings which promise a fair return is rapidly growing strong. +Indeed, the process has gone on much more swiftly than is supposed by +those who have not watched the course of events...." Continuing, the +editorial quotes an estimate appearing in the New York Herald, that in the +eighteen months preceding Northern and European capitalists subscribed to +Southern enterprises located in the section east of the Mississippi and +South of the James, $100,000,000. Of this amount, more than $90,000,000 +was invested in railroads, without the $20,000,000 in the Cincinnati +Southern. "Besides the investments in railroads there are the investments +in cotton manufactures. There is hardly a city in the South in which there +is not a new factory building organizing, and in nearly every case a +considerable part of the capital is raised at the North."[235] + +The Baltimore American said the same thing: "The South is now the focal +point of trade aspirations for the whole country. Capital and industrial +activity are crowding upon it from every point of the compass. Every +railroad system in the land is struggling to reach it...."[236] + +Outside capital invested in Southern cotton mills took two +forms--subscriptions to the stock of mills managed in whole or in part by +Southern men, and the actual setting up of plants in the South owned +throughout by Northern promoters. Of these two, the second was of much the +rarer occurrence. Capital not domestic came from two main sources, the +North and East, and from England. There is no reason to believe that the +English subscriptions, in spite of frequent allusions to England as a +possible investor, were large or many. + +Pawtucket being the pioneer cotton manufacturing place in the North, +Providence, which had come to virtually absorb the smaller city, took a +great interest in the new mills of the South after the Civil War. A +Providence mechanical engineer designed the mills and machinery for some +of the most successful plants, and that its men were thinking of setting +up mills of their own in the South is evidenced by the visit of Mr. Boyd +to Georgia in 1881, when on behalf of New England capitalists he +prospected the State for the best location for a large cotton +factory.[237] + +A little later it was given as common knowledge that several of the +largest manufacturing firms of Manchester, England, had secured sites for +mills in the Southern States.[238] A London correspondent of the New York +World remarked a clear disposition of English capital to seek investment +in Southern manufactures.[239] + +The railroads, both the minor lines connecting individual points, and the +great systems penetrating the South in this period, were influential in +fostering and inaugurating manufactures. The little railroads helped the +mills by affording transportation facilities and by making the inland +water powers accessible, but the big ones could lend money and did of +course make it their business to encourage manufacturing along their +lines. President Baldwin, of the Louisville and Nashville, distinguished +three ways in which the railroads assisted the sections by aiding mills in +reach of their tracks, by uniting the parts of the country, and by +affording a strong commercial backbone.[240] Hon. Gabriel Gannon urged +the claims of railroads upon South Carolina as bringing capital to the +Southern field; he attributed the erection of a mill with $500,000 capital +largely to the railroad connections of Spartanburg.[241] + +An article already referred to said of the railroads in their bearing upon +manufactures: "The railroad syndicates are of necessity interested in the +general growth of the country through which the lines run, and will spare +no pains to bring in immigrants and to encourage the opening of mines and +the establishment of factories." + +In the majority of instances, Northern capitalists subscribed to the stock +of Southern mills after a considerable proportion of the shares had been +taken at the South. Similarly, a very usual juncture for the investment of +Northern capital was a projected enlargement of a plant, machinery +manufacturers taking stock in payment for equipment. Thus the Rock Hill +Cotton Factory, the $100,000 capital stock of which was owned in Rock Hill +and Charleston, South Carolina, in doubling the capital secured a large +part of the additional $100,000 at the North.[242] + +A vigorous solicitor of Northern funds for Southern mills was D. L. Love, +the pioneer cotton manufacturer of Huntsville, Alabama. Before going on +one of his trips to New England "for continuous exertion for the +establishment of factories in the South," he made a statement of his +successes and plans. His project of a cotton mill at Vicksburg, +Mississippi, was "on the high-road to success;" he had secured the +organization of a company with $40,000 then subscribed to manufacture the +staple at Jackson, Tennessee; he had about consummated a contract with New +England capitalists to revive manufacture in a building at Corinth, +Mississippi; a Connecticut manufacturer was looking for an opening at the +South, and would be induced to settle at Huntsville; in all, he expected +to bring about the investment of $1,000,000 in factories in Huntsville in +the three years to come. + +Mr. Verdery, of Augusta, telegraphed from New York news of his success in +seeking capital at the North. He "placed $85,000 of the new stock of the +Enterprise Factory, and expects to book from $25,000 to $50,000 more in +that city. He has had urgent requests from Boston, Philadelphia and other +cities to go to those places, and has no doubt he will be able to obtain +large subscriptions...."[243] + +Much is to be learned from a close study of the founding of the Charleston +Manufacturing Company, which was a representative Southern mill, a child +of the cotton mill campaign and an expression of the patriotism, +statesmanship and farsightedness of the South of the day. It embodied in +its history nearly every element and feature to be noticed in this study. +In an advertisement calling for additional local subscriptions, the +company made the statement: "Arrangements have been made with capitalists +at the North to take such an amount of stock as may be necessary to ensure +the success of this enterprise."[244] This statement is to be interpreted +in connection with the announcement a fortnight later[245] of the complete +organization of the company, with the exception of the election of a +secretary and treasurer, two of the nine directors being W. H. Baldwin, +Jr., and O. H. Sampson. "Maj. Smythe stated that a considerable amount of +the stock was held in Baltimore and Boston, and for that reason Mr. W. H. +Baldwin, Jr., of Baltimore, and Mr. C. H. Sampson, of Boston, had been +nominated." Woodward, Baldwin and Norris were dry goods commission +merchants of Baltimore, and "agents for the goods of several Southern +cotton mills," and C. H. Sampson was the senior partner in the firm of +Sampson & Co., of Boston, "dealers in yarns and also agents for several +Southern cotton mills." Two days earlier Messrs. Sampson and Baldwin +visited the site for the company's mill and expressed themselves as +pleased with it. On the same day a meeting was held at which it was +decided that the mill should manufacture standard sheetings and 3-ply +yarns. + +In this instance the commission merchants in all probability were those +who agreed "to take such an amount of stock as may be necessary to ensure +the success of this enterprise," it being either agreed that in return for +this they should get the brokerage of the mill, or even, perhaps, +receiving their pay as agents in shares of stock, which meant taking +dividends instead of commissions. The practise was a common one, and +machinery manufacturers followed the same plan. It is not at all clear +that it could have been avoided, and the net profits which were earned by +the mills of the South in this period would seem to dispute the statement, +that the commissions charged by firms which had thus gained control over +the product were exorbitant, and left the mills barely enough earnings to +continue to turn out the goods which was the instrument of their own +exploitation. + +A final instance of Northern pecuniary interest in the development of +cotton manufactures at the South may be noticed in the fact that New York +bankers were expected to exceed the subscription of $25,000 to the +International Cotton Exposition at Atlanta, alloted to the city. Among the +large subscribers were Inman, Swan & Co., $2,000; Drexel, Morgan & Co., +$1,000; Brown Bros. & Co., $1,000.[246] + + + + +CHAPTER V + +_FINANCING THE MILLS_ + + +The preceding chapter dealt with the capital of the Southern cotton mills +in the period of their establishment. It was first noticed that local +capital was naturally drawn upon before any other, and the character of +the appeals to local resources and the response to these appeals were +brought out. The second division of the report dealt with the attitude of +the Southern mill promoters toward outside, usually Northern capital, the +nature of the appeals made to Northern capital, and the extent of the +response to these solicitations. + +Altogether, the surface aspects of the securing of capital were dealt with +in a large way; in denominating the present chapter and that following: +"The Financing of the Mills", it is intended to bring out the minutiae of +the process, and to set forth the mechanism of the problem in its detail. + +In seeking to make clear the methods of securing capital in the South, it +is convenient to consider first the soliciting of subscriptions to stock, +and at the outset it will be well to give a notice that appeared in the +financial advertising columns of the Charleston News and Courier at the +beginning of the period of cotton mill growth. This notice is directed by +"The Charleston Manufacturing Company to The Citizens of Charleston", and +carries a contemporary flavor that is of service in an understanding of +the problem. Given almost entire, it reads: + +"The necessity of establishing manufactures in our city, not only as a +profitable means of utilizing capital, but more especially for furnishing +employment to many in our midst, has been long felt. To put this matter +into practical operation, a few gentlemen applied to the last Legislature +and obtained a most favorable charter for 'The Charleston Manufacturing +Company'. + +"The intention is to raise the capital necessary and to proceed forthwith +with energy and activity to erect and put into operation a cotton factory +and yarn mill which will be second to none in the South. The marked and +rapid success of the Charleston Bagging Company shows what can be done +here. + +"The undersigned, therefore, being those named in the charter and their +associates, lay the matter before you, and respectfully urge your +co-operation in carrying the work into effect. + +"For this purpose Books of Subscription to the Capital Stock of 'The +Charleston Manufacturing Company', under the charter granted by the last +Legislature, will be opened on Thursday next, 27th instant, at 10 o'clock +A.M., at Office of the Carolina Savings Bank, corner of East Bay and Broad +Streets, and continue open from day to day until the entire Capital stock +is subscribed. Shares One Hundred Dollars each. Ten per cent. of the +amount subscribed will be called for when all the Capital is taken and the +Company organized. Further instalments will be called for as needed."[247] +There follow the twenty names of those obtaining the charter. + +The dignified yet homely character of this advertisement is made even more +intimate by a dispatch from the capital, Columbia, to the same paper two +months later, in which it is announced that over $90,000 had been +subscribed in amounts of $2,500 and $5,000 to the project of "The Columbia +and Lexington Water-Power Company" (a plan for a large development of +cotton mills). The charter provided for a minimum capital of $500,000 and +a maximum of $1,000,000. "The present object (in opening books of +subscription before calling upon first subscribers for more) is to give +everybody in the State an equal chance.... It is designed to visit each +county of the State, with a view of making it as far as possible a State +institution. It is expected that the $500,000 necessary can be easily +secured in the State, but as much in addition will be welcomed to complete +the capital stock ... nearly every man who is able will contribute to its +(the undertaking's) speedy fruition." There is added the significant +circumstance that "Governor Hagood will accompany the committee when they +go to Charleston (to open books there) and use his influence in behalf of +the enterprise."[248] + +The plant of the Pelzer Manufacturing Company is in the so-called +up-country of South Carolina, but its projectors were Charlestonians, and +Charleston was the financial center of the State and of the South, indeed, +at that time. Consequently books of subscription were opened in +Charleston,[249] rather than in Greenville or Spartanburg, the little +cities they were then, near the water power which should drive the mill. +Ten per cent. of the amount subscribed would be required in cash.[250] + +The time necessary to secure the needed subscriptions may be checked up +by following the optimistic notices that appeared in the paper from day to +day as the capital grew. In this instance books were opened on January +25th, and on the twenty-seventh it was published that "the subscriptions +to the stock ... amounted yesterday to $30,000, leaving but $50,000 to be +subscribed. The books remain open today...." Toward the Trough Shoals +(South Carolina) mill project of Walker, Fleming & Co., $50,000 was +subscribed in capital stock in one week.[251] Subscriptions to the +Charleston Manufacturing Company, pursuant to the advertisement already +quoted, were first received on January 27th; by February 4th, 189 +subscribers had taken stock to the amount of $206,600.[252] Two days later +the amount had reached $220,200 representing 195 shareholders.[253] + +Mr. Converse, one of the proprietors of the Glendale Factory, which had +proved itself successful, bought up the site of the Rolling Mill of Mr. +Boles, at Hurricane Shoals, seven miles from Spartanburg; the first +$200,000 was quickly subscribed for, and books of subscription for +$300,000 additional stock were opened January 1st; February 14th they were +closed, the amount having been taken.[254] + +This suggests a practise which was and still is frequent in the +development of cotton mills in the South, namely, that of increasing the +capital stock over the amount first proposed, as soon as the original sum +had been subscribed, or when subscriptions somewhat in excess of the +intended maximum had been received. In the case above, the additional +stock was larger by $100,000 than the amount first offered. The Cannon +Cotton Mill, Concord, North Carolina, was organized with a capital of +$75,000. Before the building was completed, the capital stock was +increased to $90,000 or so, most of the stockholders adding to the amount +of their subscriptions.[255] The Seminole Mill, now erecting at Gastonia, +was designed to have $175,000 capital. Mr. Armstrong, its projector, saw +that more persons wanted stock, and he increased the capitalization to +$225,000. The plant was intended first to have 10,000 spindles, later +increased to 12,000 or 15,000 spindles.[256] Similarly, some others of the +new mills under construction in Gastonia are capitalized above the amount +named in their charters.[257] + +A very usual occasion for increase in the capital stock of a mill company +has been the enlargement of the plant. Thus the Enterprise Factory, +Augusta, Georgia, declared a 10 per cent. dividend and decided to increase +its capacity by 125 per cent. or more.[258] In this case the entire +$350,000 extra capital stock was being negotiated for by M. J. Verdery & +Co., brokers of Augusta; it was understood that one man and his friends +would take stock to the amount of $140,000.[259] If the statement of a +rather flambuoyant trade review of three years later may be trusted, the +entire stock of this mill after enlargement was $500,000 which would make +the increase in stock $200,000 greater than the original capital.[260] It +is probable that the stock was doubled to bring it up to $500,000;[261] +three months after the decision to increase the stock, it appears, all but +$50,000 had been secured, and this would be placed within the week. The +directors of the Louisville and Nashville Railroad took $95,000 of the +stock--"of course as individuals."[262] Evidently, the plan of the brokers +did not carry through, and the mill corporation put its stock regularly up +for subscription. + +The mill projected by Walker, Fleming & Co., already mentioned, was +intended to have $100,000 capital as a beginning, this later to be +increased to $200,000. + +At a meeting of the organizers of the Salisbury Cotton Mills, held in +November of 1887, "The capital stock was upon motion fixed at not less +than $50,000, and not exceeding $100,000."[263] A month later at a meeting +of the subscribers, it appeared that $66,400 had been subscribed.[264] +Later the stock was increased; those soliciting subscriptions to the +original stock experienced no difficulty in securing increase of these +subscriptions. By March, 1893, the capital stock of the company had +reached $250,000.[265] + +This last instance accords with what was told me by a gentleman of wide +experience in the business, that the plants now having a stock of +$100,000, etc., got their large capitalization by selling additional stock +to the original subscribers at a reduction--say at 75 or 80 when the par +was 100. The ventures were profitable generally, and the stock was +maintained at its par value.[266] + +The character of the promoters of a venture always carries weight, but +this was peculiarly true in the establishment of cotton mills in the +South. Today, truly prominent men are known all over this State, and all +over the section. Thirty-five years ago this was the fact even more than +at present; the signatures to prospectuses were important through personal +qualities as well as through business reputation. When it was said that +those back of the scheme to build a factory in York County, South +Carolina, were "among the most reliable and responsible men" in the +county, the statement probably carried as much earnest of good faith as +the accompanying notice that $25,000 toward $75,000 had already been +taken.[267] + +The size of the plant to be erected was given consideration in financing a +mill, though this did not enter to the extent that one would think. +Opposite views were held as to the practicability of financing small +mills. As far back as 1849 it seems natural to find a plan for financing a +mill, by which fifteen planters would take each $4,000 worth of stock, +select a site near their plantations, each detail three men, making a +building force of forty-five, with teams and an overseer and general +manager, the latter one of the stock-holders; these proceeding to put up a +wooden building of three rooms.[268] A persistence of the economy which +suggested this arrangement is reflected, perhaps, in an editorial of The +Daily Constitution, Atlanta, thirty years later, in which it is pointed +out: "The people of the South who have money to put into manufacturing +enterprises should build spinning mills. The South is not rich enough to +do much weaving, but there is no reason why it should not convert a good +part of the great crop into yarns.... There is plenty of surplus money in +the South with which to establish spinning mills.... We do not refer now +to mammoth mills, but to little neighborhood spinning mills."[269] + +The mills about Greenville are nearly all of considerable size. This is +due perhaps to the effect of the example of the failure of the Huguenot +and Campderdown mills, small ventures, both located within the city +limits, as contrasted with the success of Pelzer, built later, and in the +depths of the country. It is said to be the impression around Greenville +that the small mill is hard to finance; so far from considering the small +project suitable to the financial strength of the community in which the +plant is proposed to be located, the reason for the lack of favor for +small concerns was given the writer in the opinion that they could not +attract outside capital, and that consolidations had recently resulted in +South Carolina from this fact.[270] For different reasons, principally +considerations of managements, there is now a well discerned tendency in +the Carolinas, at least, back to the small mill. + +Mention has been made of the power of reputation in the financing of a +cotton mill. Not only was this stressed in suitable ways by those +concerned in securing funds directly, but it was used in another way. This +may be conveniently illustrated by the history of the great mill at +Albemarle, North Carolina. Some years ago this village was an isolated one +of five or six hundred inhabitants. A family of planters near the place, +the Efirds, wanted to see a cotton mill located at Albemarle. They were +probably as little able to attract capital as the village was uninviting +to the industrialist. In this situation, the Efirds approached J. W. +Cannon, of Concord, a town nearby, who had succeeded in the cotton +manufacturing business and had extended his interests to mills in other +places, and asked him to take the presidency of the mill proposed, and +subscribe to $10,000 of stock. Mr. Cannon was not much inclined to go into +the venture, but the Albemarle family showed determination. The plant +today is a mile long, and represents an investment of some +$3,000,000.[271] It is said that most of Mr. Cannon's mills outside of +Concord had birth in the minds of people of the several communities; for +instance, a merchant named Petterson interested him in a mill at China +Grove.[272] + +One of the most interesting cotton mills in the Southern States is that of +the Gaffney, South Carolina, Manufacturing Company. The mill was conceived +by a building contractor of the place while working upon churchs and +cottages in a nearby mill village, that of Clifton. When he had planted +his idea in the minds of the leading men of Gaffney, spurred them to local +subscription and then to seeking money at the North, and because receiving +small encouragement in New York and Philadelphia, their enthusiasm +subsided, Mr. Baker, considering home enterprise and outside assistance +unavailing, went to Mr. Converse, head of the successful Clifton Mill, and +asked him to take over the Gaffney project at the point at which it had +been dropped. Mr. Converse was aged, and felt himself overburdened with +mill cares, but he encouraged the Gaffney man in his ambition, saying that +mills in the South would pay better dividends than Northern mills, either +large or small. + +Meantime, however, Mr. Baker had come to know H. D. Wheat, the +superintendent at Clifton. The indomitable promoter had hard work to +persuade the practical-minded superintendent to leave his good position at +Clifton for the uncertain fortune of a factory at a town which had failed +to establish the mill itself, and could not interest Northern support; but +finally, Mr. Wheat agreed to raise $20,000 besides his own subscription, +to add to the subscriptions still in force at Gaffney, and to take charge +of the mill as its active president. The $20,000 was invested by friends +of Mr. Wheat at Clifton and at Kings Mountain, nearby. Directors were soon +elected, and the imported president with his contributions to the venture, +was installed.[273] + +At the commencement of the great period of cotton mill building in the +South, every town which could make any pretensions to ability to establish +a mill was engaging the utmost resources of the moneyed men it +had--capital was hardly seeking opportunities for investment. Sometimes, +however, a place with almost no resources and with only a few enterprising +citizens, perhaps, would advertise itself openly as an inviting chance. An +advertisement in the winter of 1881 read: "We will give to a Cotton +Manufacturing Company, that will organize and locate at Landsford, S.C., +with a capital of $300,000 a site, 20 acres of land and 300 horse water +power." Those interested were directed to apply for particulars to three +gentlemen living respectively in Rock Hill, Landsford and Charleston.[274] +These were doubtless promoters who had settled on this particular town as +worth effort, or who were burdened with real estate of no value unless the +town could be built up. + +But these instances were the exception at a time when everybody was too +much concerned with the cotton mill in his own town, to think of the needs +of another place. There is a notable instance of the bidding of one place +against another for a proposed cotton mill, however, in recent years. +Captain Ellison A. Smythe announced that he would put up a fine goods mill +as all of his interests in the Piedmont of South Carolina have prospered, +there was keen rivalry between Greenville and Laurens for the plant. There +were campaigns in both places, much enthusiasm being evidenced; Greenville +was able to offer the best proposition, and got the Dunean Mill.[275] + +In the methods of securing capital at home, two co-operative schemes are +to be considered. The plan that comes first to mind as co-operative is +said by Mr. Holland Thompson book to have been often employed in the +building of cotton mills in North Carolina; shares would be of $100 par +value, made payable in weekly instalments of one dollar, fifty or even +twenty-five cents, thus attracting the very small investor--operatives +took shares under such an arrangement. The last payment plan requires +eight years for completion, as against four or two for the first plans; +those wishing to do so might pay cash, less six per cent. for the aver +payment-time, the discount bringing the share down to $89.60 plus.[276] + +The second mill--the Cabarrus--built by Mr. Cannon at Concord, North +Carolina, was financed in this manner. Its plant was an old wood-working +and iron establishment slightly modified to house cotton machinery; its +capital stock was only $15,000 one-half paid up, and the other half +payable in fifty cents weekly instalments, the whole to be paid in two +years. Mr. Hartsell of Concord, remembers seeing the old +secretary-treasurer of the mill going about the town with his collection +books under his arm.[277] The Spartan Mills, Spartanburg, South Carolina, +were rected under a building and loan scheme which gave the mill +management little ready money.[278] Besides the expense of collecting the +small and frequent payments, serious disadvantages might result from such +a method of financing a mill. For instance, in the case of the Spartan +Mills, John H. Montgomery, the projector, was persuaded to buy the old +machinery of a mill at Newberryport, Massachusetts; he lacked capital to +purchase machinery otherwise, and the Newberryport mill took payment in +stock. The machinery thus installed was worn out, out of date, showed +quick deterioration and proved very expensive.[279] + +The other co-operative plan is said to have been followed in the case of a +good many South Carolina mills. All of those who might contribute to the +erection of the plant--dealers in lumber, paint, tin, brick, etc.,--would +be asked the question: "If you get this contract, how much stock will you +take?"[280] + +Some account has been given of the additional issues of stock on account +of extensions in plant. There is evidence that very often, however, +increases in capacity were made through earnings and credit rather than by +the issue of more stock. Indeed, the latter method has been much more +frequently followed, if the opinion of one of the best informed of the +younger cotton mill men is to be taken.[281] He recited in support of his +contention the typical case of the 5,000 spindle mill at Williamston, +South Carolina, which issued extra stock to $30,000 and increased its +spindleage to 15,000. Since then, the plant has grown to have 32,000 +spindles, its capital standing at $300,000; this was accomplished through +earnings and credit. It is fair to say that the normal capitalization of a +plant of 32,000 spindles would be something in excess of $600,000, +computing the cost at $20 to the spindle. + +The first two-story addition of the Gaffney Manufacturing Company was +rected upon earnings of the original plant in the first three years of its +operation.[282] The finishing plant of the same mill, erected some years +later, had to be dismanteled and given over to looms because the +stockholders in the company would not give the president the required +support, and the debt incurred was pressing.[283] + +The Young-Hartsell Mill, at Concord, North Carolina, has been built up in +plant by putting earnings back into the factory. Considerable enlargement, +on the most approved lines, has recently been completed, the end of the +extension being weatherboarded to allow of easy further addition.[284] + +The capital stock of the Arlington Mill, Gastonia, organized by G. W. +Ragan and some of his friends who had withdrawn their holdings in the +Trenton Mill, at the same town, was over-subscribed in fifteen minutes. At +organization, the stock was fixed at $130,000 for 3,000 spindles; in three +years an additional stock dividend of $45,000 was issued, and the +spindleage increased to 9,500 and later still to 12,000.[285] There +evidently was not here, as it has been intimated there sometimes was, an +impetus toward expansion by reason of over-subscription at the time of +organization, for the additional stock issued, presumably at least, went +automatically to the original subscribers. It was a case of extension from +earnings. + +The mills established at the opening of the era made frequently huge +profits, which made increases in size from earnings to the natural +course.[286] + +Also, just as earnings have in such cases quickened plant extension, so +the investment of profits back into the business has in turn increased +efficiency and earnings. The capital of the Salisbury Mill, as has been +said, has now reached $250,000, but much of the increase in size of the +plant has come by the agency of gains reinvested.[287] + +Having seen some of the ways in which capital was secured from Southern +sources, the paragraphs following deal with the means through which +capital was induced to come to the Southern cotton mills from without the +section. + +From a reading of the preceding chapter, the question might naturally be +asked: By just what methods did a Southerner anxious to establish a cotton +mill secure financial assistance at the North? + +Not a few Southern mills were projected by merchants, frequently small +country store-keepers, as they would be called; but it is to be borne in +mind that the proprietor of a general store in a rural community or in a +small town in the South occupies a position very different from that of +the small merchant elsewhere. The economy of the neighborhood pivots upon +him--he is the agent of the fertilizer manufacturers, and extends, credit +for fertilizers and food until the cotton crop is gathered; he probably +markets the cotton when the bales are hauled. He is the link between the +great sphere of business without and the little world of affairs within. +What the country lawyer is as real estate broker and arbiter of landed +fortunes, that, and a great deal more, is the country merchant in all +other departments of material activity. Holding, as he did, the contacts +of the community with moneyed interests without, it was natural that the +merchant should often be the leader, and also natural that he should turn +to his mercantile connections for assistance. One case will illustrate how +this worked out. + +James W. Cannon was born at or near the little place of Concord, North +Carolina. He early went into a general store as clerk, and through +successive stages, largely aided by his attention to business and his +civility, he came to own a general merchandise business of his own in the +town. He was in the habit of buying brogans from the house of Albert +Stone; cloth he got from Leo Loeb, and he had an arrangement by which he +shipped raw cotton to William Wood and Son. He decided to build a cotton +mill at Concord--really the first at the place belonging to the great +period of establishment--and got some $60,000 in subscriptions to stock +locally. This was not sufficient capital, $75,000 being aimed for. Mr. +Cannon under these conditions went to Stone, to Loeb and to Wood and Son +and explained his plans. The mill would enable the town of Concord to +grow, and he could do a larger business with each of them. Whether moved +by this reasoning, or influenced by the fact, that it was almost worth the +amount of the subscription to keep Cannon's business and good will, each +of the three firms subscribed to $5,000 worth of stock.[288] + +Judging from the statement made by an old gentleman who has seen the whole +development of Mr. Cannon's interests, he has held to these former +merchant-day connections, though he is now as far from country +store-keeping as could well be imagined. After explaining that Mr. Cannon +in the early days was merchandising and could get money from his +mercantile connections at the North, he said that retired wholesale +merchants of Philadelphia, New York and Boston have so much confidence in +him that they give him any amount of capital he needs.[289] + +Out of 1,287 shares of the Young-Hartsell Mill at the same town, 1,250 are +held by North Carolinians. The other 37 shares are owned in Baltimore. Mr. +Hartsell was born on a farm near Concord, and some thirty years ago came +to town and went in business. In this way he knew the Baltimore merchants +who hold 35 of the thirty-seven shares, the other two shares belonging now +to the son of one of these men. + +Of the two sources[290] of outside assistance to Southern Cotton Mills, +cotton goods commission houses and manufacturers of cotton machinery were +more often appealed to for capital in financing a mill than were firms +with which the Southerner had mercantile relations. The influence of the +commission houses and machinery manufacturers upon the rise, development +and degree of success of cotton manufactures in the Southern States is of +the first rank of importance, and not the least interesting phase of their +connection with the industry is the way in which they were approached for +help. + +A South Carolinian, say, wishing Northern capital for a cotton mill which +he was projecting, would usually have associated with him some man who had +experience in manufacturing in the State. The manufacturer would introduce +the projector to the commission merchant in New York who was serving his +mill. The Southern promoter thus put upon the track would make the best +bargain in New York that he could, that is to say, find the commission +house which would take the largest block of stock and lend the most money. +He would, similarly, be introduced to machinery manufacturers, and might +induce several to become parties to his venture.[291] + +Commission houses and cotton machinery manufacturing companies were not, +however, making yarns and cloth. Other things apart, their business was +selling the product and supplying the means of production, rather than +manufacturing goods. They were willing, and sometimes anxious, to lend +their assistance to a proposed mill to get its business, but they were not +ordinarily interested in establishing mills. Consequently, the promoter +had to have his home money first. He would secure, say, for the mill of +ordinary size, $50,000 locally, and would go to the machinery people and +say he had this backing, asking whether they would sell him the machinery, +and what amount of the payment they would be willing to take in +stock.[292] + +The history of the relations of the Gaffney Manufacturing Company with +commission houses is instructive. When Mr. Baker commenced the agitation +in Gaffney for a cotton mill, A. N. Wood was doing a sort of private +banking and investment business in the work. A fund of about $50,000 was +subscribed, Mr. Wood made president of the organization, and a charter +applied for.[293] + +Mr. Wood went North to seek additional capital, going to Baltimore and New +York. In Baltimore he called upon Woodward Baldwin & Co., Mr. Baldwin was +very cordial, and when the plans of the Gaffney people had been explained +to him, took $5,000 of the stock right away, with no strings tied to the +subscription. It was not specifically understood that the firm was to have +the account of the mill, but Mr. Wood supposes Mr. Baldwin expected it, +and that probably it would have been given to his house. + +Mr. Wood introduced himself to the chief member of another firm, of whom +he knew as commission merchant for the Pacolet Manufacturing Company in +South Carolina. In this case, the promise of the account was wanted, but +to this Mr. Wood did not agree. Mr. Wood said that it was attempted from +the outset to take advantage of the position in which he was placed.[294] + +Having noticed to this extent the minutiae of securing assistance from +commission houses and machinery manufacturers, it will be interesting to +observe in general the part played by such firms in the establishment of +mills in the South. First of commission houses. + +It is possible to be deceived as to the wealth of Southern communities +thirty-five years ago by a recital of the capitalization of the mills +they built, coupled with the statement that a large proportion of the +stockholders were local people, and that nearly all of the paid-up capital +was from the neighborhood or State. There might well be a greater number +of small local investors, and one or two Northern firms with quite as +large holdings as all these together; the capital paid in might be of +local origin, but only a small proportion might be paid up,[295] the rest +representing the holdings of commission houses and machinery manufacturers +in one way and another. If it be asked how the mills hoped to succeed with +so little paid-up capital, the answer lies partly in the fact of reliance +upon earnings to take care of debt, and partly in the scarce provision of +working capital. + +The influence of the commission house on the Southern cotton mill is a +subject of the deepest interest, and this might be drawn out in some +detail under a discussion of the marketing of the product of the mills. +Whether the commission houses' participation, as marketing agents, or as +stockholders with a voice in the affairs of the company, was on the whole +helpful or detrimental is of concern where only incidentally as pertaining +to those involved in the launching of the enterprises. For the present +purpose, that the commission merchant was an investor is enough, except +only for the consideration as to whether it were wise to invite his +connection in the first place. + +One practical-minded man declared that the mills could not have existed +without the commission houses, be their influence good or bad, and +dismissed the matter with this.[296] + +A mill president grown old in the business in North Carolina said that the +Southern mills could not have gotten along at all without the commission +houses at first; that not only in their establishment, but in selling +their product, they needed an influential agent.[297] After explaining +that Northern commission houses had supplied much of the capital for the +developing of the cotton manufacturing in his region, another mill +president, and one who has had experience of every phase of the mills' +growth, said: "Their influence (that of the commission houses) was good; +you ought to praise always the bridge that carried you over."[298] + +The editor of one of the chief textile periodicals in North Carolina said +that there were cases where the commission houses hurt the profits of the +mills, but they did start the mills.[299] Another North Carolinian, of +conservative turn of mind and much practical knowledge, gave a parallel +statement, that even as a general rule the commission houses formerly had +a baleful influence, though this is no longer the case; that they have had +the effect of promoting the development of mills in the South.[300] + +A mill treasurer in what is perhaps the most progressive and ambitious +spinning district of the South, gave it as his belief that as a whole, +while there are commission houses and commission houses, their influence +on the Southern textile industry had been bad. Asked whether there were +not many Southern mills that would not have come into existence but for +the aid of the commission houses, he answered yes, but that such mills +were built as feeders for a commission house and not to earn money for the +local stockholders.[301] + +Reference has been made to the effort of Mr. Wood to secure capital from +commission firms for the Gaffney Manufacturing Company. He returned to the +South discouraged, and the mill project for Gaffney was dropped for the +time. When it was later revived, no subscriptions were sought from +commission houses. Mr. Wood said: "We wanted to be free and do as we +pleased. A mill is very unfortunate to be controlled by a commission +house. have not done as well as others."[302] + +The South Carolinian well versed in the financial affairs and history of +cotton mills in the South, computes that in the cases where the mill +projector sought the commission house and machinery manufacturer, from 40 +to 50 per cent. of the total capital was supplied by them. Mr. Separtk, of +Gastonia, already quoted as opposed to the participation of commission +houses in the financial affairs of Southern mills, said that in the two +mills of which he is treasurer and the one of which he is vice-president, +no stock is owned by commission houses, and that "They can't get it." The +way to rid a mill of the influence of a commission house, he said, is to +pay what is owed. If this debt is held by the commission house in the +shape of a majority of the shares, they must be bought at an exorbitant +figure, but nonetheless bought.[303] + +One of the principal bankers of Raleigh asserted with some feeling that +the commission houses have been an incubus on the cotton mills of the +South; it is true, partially, that many mills would not have come into +existance without them, but it is also true that the commission houses put +into the hands of the mill projectors little real money; they would take +bonds or advance working capital after the _capital_ stock of the mill +was exhausted in erecting the plant, but when they advanced money, it was +usually on goods sent them to sell, and then only two-thirds of the value +of the goods would be advanced.[304] + +This statement is rather borne out by information given by a member of a +commission firm which has gone into the South with all its interests, and +would therefore be inclined, one would suppose, to lend sympathetic ear to +Southern mills in their financing problems, namely, that usually the +commission house stands to the mill in the position of creditor rather +than of shareholder, for it must have a liquid and not a fixed capital; +the commission house arranges loans, discounts loans, and lends +direct.[305] + +It would appear from one source that when a commission firm lent money to +a mill, it did not take a mortgage on the plant, for this would have +destroyed its credit. They had, in fact, hardly any security other than +the value of the plant.[306] + +A young lawyer whose firm has had considerable to do with suits over +cotton mill securities, referred to the fact that in the process of +starting a mill capital is often depleted before goods are got on the +market; at this critical juncture, he said, come to the commission men. +Their part has not by any means always been for the good of the people of +the South. They get a breeches hold on the president of a mill. The mill +may in time go up, but they will have cleared on their commissions.[307] + +For a reason which will appear in a moment, the same importance, from a +financing standpoint, does not attach to the machinery manufacturers in +their relation to the Southern cotton mills as immediately applies in the +case of commission firms. There seems to be a strange diversity of opinion +as to the extent of the participation of machinery manufacturers in the +financing of the mills. A mill man of Anderson, South Carolina, said that +the machinery people have played a larger part than the commission houses +in the establishment of Southern mills; that the machinery business was at +a standstill in New England at the time of the great activity in mill +building in the Southern States, and the machinery manufacturers began to +look about for mills to equip.[308] Another informant stated that the +machinery manufacturers are not found to be very heavy stockholders; that +the stock is sometimes not even in the name of the machinery +manufacturing company, but is held by the president and directors of the +company.[309] A third, whose testimony, however, may be questioned very +seriously on this point, went so far as to say that cotton machinery +manufacturers took no stock in the mills of the South to amount to +anything; nobody asked them to take stock; the machinery was bought +outright.[310] + +Whatever the extent of the participation of the manufacturers of the +machinery in the building of the mills in which it was installed, their +arrangement for payment seems to have included three means of +reimbursements--stock, cash and time notes; a mill might have purchased +machinery from several firms under such agreements.[311] It is said that +those mills which bought their machinery for cash, rather than seeking to +make the machinery manufacturers to greater or less degree a party to the +venture, received rebates and many privileges and advantages, though the +mill men were assured, particularly those projecting new plants, that the +time payment method was just as advantageous to them.[312] + +While the fact might better find place in the discussion of the part +played by machinery manufacturers and commission houses in the extension +of plants, it may be mentioned here, and in conclusion of this particular +topic, that Southerners projecting mills were sometimes encouraged, by the +offers of machinery manufacturers to sell machinery for stock and on time, +to make their plants too large.[313] + +The opinion was held by a well-informed man very close to the whole +Southern industry that the influence of the machinery manufacturers has +been good, except that they caused the mills to expand beyond wise limits; +they have not exploited the mills otherwise.[314] + +It has been said above that the same importance did not attach, from a +financing standpoint, to the taking of stock by machinery manufacturers as +applied in the case of commission houses. The reason for this is that, +generally speaking, the machinery manufacturers have not held their shares +for long, while the commission firms have usually been stockholders over a +period of years, their holdings sometimes diminishing and sometimes +decreasing, but their influence in the affairs of the mills being always +felt. A banker's experience was that generally machinery manufacturers +taking stock in a mill sold it almost immediately at a discount; it is +not reasonable to suppose that a machinery manufacturer would wish to take +stock; he did it in order to sell his machinery.[315] An interesting +explanation of the statement that the machinery manufacturers were heavier +stockholders in the Southern mills than the commission houses is implied +in a remark made by Mr. Thackston, of Greenville, a stock broker already +quoted; the machinery men must get their profits quickly; these they +received partly in the cash payment, two-thirds of the price of the +machinery; their shares may have been numerous for either or both of two +reasons--they may have been forced to take considerable stock in +consequence of making the largest possible sale of machinery, which in +turn was made necessary if they were to get a profit out of the proportion +of the price paid in cash, or knowing that they must look forward to a +quick sale at discount, they figured this into their price to the mill +man, and counted upon deriving a profit from as large a number of shares +as they could get in payment.[316] + +The commission men, on the other hand, must expect to get their returns +slowly,[317] either through dividends as shareholders, or through profits +from the handling of the product of the plant, or by both of these means; +in the former case, the necessity of their holding their shares is +obvious; in the latter case, to have a voice in the affairs of the mill, +particularly in the annual elections and in instances where increased +profits from commissions must come through extension of output, active +connection with the affairs of the mill must be maintained.[318] + +The machinery men have in a few cases held the stock they have taken in a +mill.[319] An instance of this is seen in the fact that D. A. Tompkins, +until a few years ago, the representative in Charlotte, North Carolina, of +many Northern machinery manufactures, was obliged to have sold two or +three mills to which he had supplied machinery and taken payment partly in +stock; ordinarily the machinery manufacturers would not stay in long +enough for the first flush of establishment to dwindle to failure, taking +away all possibility of sale with minimum discount losses.[320] + +Another case in which the machinery manufacturers have retained their +stock, and a very notable one, is that of the great Loray, known as the +"Million Dollar Mill," at Gastonia, North Carolina. The mill is +controlled by machinery makers, holding preferred stock, of which there is +an actual majority; they became thus heavily involved when the mill was +reorganized incident to the doubling of its capacity, to which more +detailed reference appears later. The president of the mill is a +representative of a large machinery manufacturing concern, and, in the +affairs of the mill, speaks for another great firm.[321] + +Before concluding this division of the subject, it is proper to say +something of borrowing particularly from banks, in the financing of the +mills. Soon after the outbreak of the war in Europe, the greatest of the +cotton mill mergers in the South came to disruption. A committee +representing New England manufacturers made an investigation into the +affairs of the mills concerned in the combination and found that, in its +opinion, the mills of the South have an advantage over mills in other +parts of the country, particularly New England, amounting to 25 per cent. +in labor, and 50 per cent. in respect to taxes. The statement was made by +the committee that, in spite of these superiorities of situation, the +cotton mills in the South make less than the mills of New England because, +in considerable measure, of poor financing, particularly poor borrowing +facilities; their credit is not good.[322] + +Northern mills can borrow money frequently at 2 or 3 per cent. less than +Southern mills even today, though the credit of the Southern manufacturies +has steadily risen. It is true that New England mill paper will sell +cheaper, almost invariably, than Southern mill paper.[323] + +In spite of this disadvantage, however, if its credit is good, a Southern +mill can borrow money at 4-1/2 or 5 per cent. + +It was formerly, early in the period, frequently the case that a mill +company borrowed money to augment local subscriptions and the assistance +given by commission houses and machinery manufacturers, to put up the +plant.[324] Borrowing for this purpose is not often done today--the time +of very large earnings, due to superior local advantages unmarred by +competition, and to the peculiar conditions of manufacture then, which +made it possible to pay off a plant debt, is passed; money is still +sometimes borrowed for extensions of plant, however. But while it was once +a rule to borrow all the working capital, in addition probably to some of +the fixed capital, working capital has not passed from this category; the +mills still borrow working capital at certain periods.[325] + +Richmond has done more than any Southern city in recent years, not +excepting Baltimore, to assist the cotton mills of the section in their +operation and growth. The mills with which one young official is +connected, centering about Anderson, South Carolina, have at some seasons +of the year owed Richmond as much as $3,000,000 or even $4,000,000. He +said that the First National Bank of Richmond, probably has more Southern +cotton mill paper than all the banks of Atlanta combined.[326] + +The next paragraphs consider the principal channels through which capital +came to the development of the Southern industry from outside sources, +more or less of its own accord, rather than being the subject of +solicitation on the part of the Southern manufacturers. + +Undoubtedly, one of the chief influences contributing to the physical +growth of the cotton manufacturing industry of the South has been the +willingness, perhaps the eagerness, of commission firms and manufacturers +of cotton machinery to encourage enlargements and extensions of plants; +and in the enumeration of counts against these houses, this consideration +figures in the mind of the Southern mill man. When the second and +effective agitation for a cotton mill at Gaffney, already referred to, was +proving successful, it was determined not to seek aid from commission +merchants because they "--want too many enlargements; they want more +goods; the more they sell, the more they get. This does not always suit +the local stockholders."[327] + +An interesting allusion, showing the effect of the desire for enlargment +on the part by commission houses and machinery manufacturers, is contained +in an Augusta dispatch to The News and Courier, Charleston, in April, +1881. "At the meeting of the Sibley Manufacturing Company today (it was +the first annual meeting of the stockholders)[328] it was decided to +increase the capital stock to one million dollars. Stock for the +additional amount will first be offered, and, if this is not promptly +taken, seven per cent. bonds will be issued." The resolution for the +increase was offered by Mr. Samuel Keyser of New York, and seconded by Mr. +David Sinton, of Cincinnati, two of the largest stockholders in the +company.[329] Mr. Keyser and Mr. Sinton were two of the six directors of +the company.[330] The mill was first planned to be three stories high, +with 23,936 spindles and 672 looms; the doubled capitalization was to +allow of an increase of stories to four, in spindleage of 30,000, and in +looms to 1,000; $66,500 was proposed to be spent on the village-tenements, +operatives' homes, boarding house, etc.[331] While there is no specific +evidence to show that these directors represented commission houses or +machinery manufacturers, or that they would take the seven per cent. bonds +in case the community would not absorb the additional stock to be issued +first,[332] indications point to this having been the case. + +It has been seen how the builders of the Gaffney Manufacturing Company's +first plant refrained from including commission merchants in the venture, +and still earlier in this chapter it was said that the two-story addition, +next built, was a product of the earnings of the original plant in its +first three years of operation. When, however, the third addition to the +plant was made, a great mill costing $800,000, the persistence of the +projectors was weakened by the four years since the first mill was +erected, or perhaps success had altered judgment, with some local +subscriptions, the machinery people took a considerable amount of +stock.[333] + +A striking case here is that of the Rock Hill, South Carolina, Cotton +Factory, "the 'Pet' of the town," it was called by the correspondent of a +State newspaper, who continuing said: "This factory is owned and +controlled by the citizens of the town, except $15,000 in stock owned in +Charleston. It has a capital of $100,000 has over 6,000 spindles, with +1,500 more to be added in a few days. The best evidence of its success is +that not one dollar of its stock can be bought." This clearly, was a mill +born of local effort, with about the right capitalization for a plant of +its small size. The conclusion of the notice, coupled with information +taken from the same paper of two days later date, is significant: "It is +the intention of the company, at an early day to run the factory day and +night in order to keep up with its orders. The company, I learn, expect to +increase their stock to $200,000 and build a duplicate factory."[334] A +large part of the stock for this enlargement was subscribed by Northern +capitalists.[335] + +The circumstances attending the enlargment of the Loray Mill, at Gastonia, +have been alluded to in another connection, John F. Love, a Gastonia man, +and the son of R. C. G. Love, who had been very prominent in the Gastonia +development, was the primary projector of the mill, he having a larger +part in the enterprise than G. A. Gray, the greatest of the Gastonia mill +builders. He got the building up, but the factory had not commenced +operation, when the company had to be reorganized. It was intended when +the mill was started to have 25,000 spindles; it was now wished to +increase the spindles to 50,000. The local investors were scared off by +this proposal, but the machinery manufacturers encouraged the enlargement, +supplying the machinery and taking preferred stock in payment. The Whitin +and Draper companies own most of the stock of the mill, and the Whitin +representative in Charlotte is president of the mill. Commission houses +hold some of the stock. The Loray Mill is the largest and the poorest in +Gastonia; it makes coarse cloth from the local short-staple cotton on some +2,000 looms,[336] while the small mills built by local capital for the +most part are making good profits from some of the finest yarns, of +long-staple cotton, spun anywhere in the Southern States. + +It has not always been the machinery manufacturers alone or together with +the commission houses who facilitated the installation of more looms and +spindles. Sometimes the ends aimed at by the commission merchants could be +accomplished only through machinery, and they have been willing to +undertake the financing of the enlargements or alterations in plant +singly. The so-called Plaid Trust was sought to be formed; it was to +handle the plaids of all the Southern mills, and was to be a New Jersey +corporation. The plan did not carry, and the Cone Export and Commission +Company went into the Southern field to handle the products of the mills +generally. The older sheetings and plaids had been sold largely in the +South, or almost so; the commission firm, to supply a larger trade, found +it must re-organize the product of its client mills. It was attempted to +persuade a mill at Durham, North Carolina to increase its denim output, +but this was not done. In order to provide canton flannel, a new goods for +the South, the commission house induced some interests to establish a mill +at Greensboro, North Carolina. This prospered, and the house itself built +a denim mill at the same place. All this time the mills were being urged +to diversify their product, and the commission firm was financing them in +the machinery changes which frequently had to be made. The client mills +served were slow in establishing, as the commission firm urged them to do, +individual finishing plants, and until this growth came about, the +Southern Finishing Mills, founded by the Cones at Greensboro, served them; +it was discontinued as a finishing plant when the mills had their own +finishing works, which they presently built and operated +successfully.[337] + +There is another way in which unsolicited outside capital frequently has +lodged in the Southern mills. The conditions under which this would come +about are well described by a banker now in Richmond and formerly the +president of the Chamber of Commerce in Raleigh, North Carolina; "Usually +the people who made the spirit for cotton mills in this way (through +appeals to town pride and by town rivalry) were those least able to +participate financially. Many mills started without sufficient capital and +never did have enough till they failed in the hands of the original +promoters and were bought up by other people, those who had been +responsible for the enterprise losing out entirely."[338] Thus as far back +as 1882 Colonel Walter S. Gordon, one of the projectors of the Georgia +Pacific Railroad, purchased the Stansbury Cotton Mills, Carrollton, +Mississippi, which cost originally $210,000. "The Georgia Pacific +Railroad", says the notice of the purchase, "will run almost by its doors, +and will give competition in freights."[339] Evidently here was a mill +which was commenced by local effort and had declined until it could be +bought at a lower figure than its cost and held out the prospect of +becoming profitable by the coming of new transportation facilities. + +The Kessler Mill, the third built at Salisbury, North Carolina, offers a +case in point. The first mill built in the place was a produce of the most +whole-hearted local support centering about community pride; the second +mill was an outgrowth of the success of the first, and was advantaged by +the spirit aroused by the first mill, not too far spent. The Kessler Mill +was organized by a faction which split off from the projectors of the +first enterprise; local capital already seriously depleted was not quick +in offering because of lack of interest in the project.[340] Under these +circumstances the mill ran an indifferent course until taken over by a +large manufacturer of a nearby town, who could command outside +capital.[341] + +A mulatto started a cotton mill at Concord in the same State; no white +people of the place took shares; the negroes all over the State who +subscribed were allowed to pay in little instalments. The operatives were +negroes. The promoter was faithful to the enterprise, but came to be +heavily in debt, foreclosure followed on ill success, and the mill passed +to the hands of the same capitalist who took over the Kessler Mill of +Salisbury.[342] + + + + +CHAPTER VI + +_FINANCING THE MILLS (Continued)_ + + +An eminently successful mill president in Augusta was full of pessimism +toward all the problems broached to him, but three characteristic +sentences as to the capacity of Southern cotton manufacturers for +financial administration fit the case of too many mill officials, +undoubtedly: + +"The people of the South have got no business sense; I am a Southern man, +and I say that. Back yonder before the war what money they had was in land +and niggers. They knew nothing about financial management on close +make-or-lose propositions." This judgment is borne out by that of one of +the foremost newspaper editors of the South, who is also a large investor +in cotton factories, who said: "The history of the industry abundantly +vindicated what Edward Atkinson said about the South not knowing the +difference between a penny and a nickel. None of the projectors, with the +exception of H. P. Hammett and a few like him, could carry to the mills +more than a general business and executive capacity." Because of +prosperous conditions, he said, most of them made money in their ventures, +despite their lack of business experience, but he added "... when +depression came, when it was necessary to discriminate between a penny and +a nickel, the mill went to blazes. It was the exceptional man who could +endure the test of the penny rather than the nickel." + +Similarly, a Charlestonian who had just returned to the city after +attending the reorganization of one of the most famous mills in the South, +in which he is a heavy investor, was moved to declare: "Mismanagement and +incompetency (the Southern people are the poorest business men in the +world with a few exceptions) ... are responsible for most failures." + +Mr. August Kohn, in Columbia, who is himself a broker and the historian of +the South Carolina mills, while recognizing the fact of these shortcomings +in Southerners, as obtaining in the past and yet not overcome, held out a +more hopeful view for the future: "Lack of capital and lack of trained +management have been the great difficulties where mills have failed. We +are developing management of the trained sort in experience and in the +improvement in the business tone of our people."[343] + +With this introduction, it is convenient under the general topic of +financial administration, to dispose of several random points at the +outset of the chapter. + +Until the outbreak of the European war, two great cotton mill combinations +in North and South Carolina, were those controlled by Mr. James W. Cannon, +and centering about Concord and Kannapolis, North Carolina, and that of +the late Mr. Lewis W. Parker, with principal offices at Greenville, South +Carolina. The former consists of thirteen plants, and the latter, which is +no longer in existence, once numbered as many as sixteen mills. These +combinations were financed on opposite plans. A gentleman trained by Mr. +Parker, and at one time in a leading position in the management of the +mills in the Parker Merger, so called, explained that "... Lewis Parker in +his merger thought that amalgamation would reduce over-head expense; that +he could get cheaper money and cheaper supplies by buying in quantities." +He "... was offered immense sums of money at 3 per cent. when his merger +went together, although before he had never gotten money at least than 5 +per cent. for the individual mills." + +In distinction from this plan, the Cannon mills have not been constituted +into a merger in the same sense, though they are all under the presidency +of Mr. Cannon, who said: "The management of each of the ... mills is +distinct, though there are practically the same stockholders in all the +mills. Lewis Parker had a merger, and tried to run it all from one office. +my view is that each mill must have its own management and separate +attention to secure success." He admitted that "There is not much saving +on concentration where each corporation is a separate organization. Each +mill has its own directors. Each mill must stand on its own financial +strength. In many instances where the quantity is large, supplies are +purchased for all the mills together, but where the quantity is less, +this is not done."[344] + +These two plans are brought nearer together, however, by Dr. Beattie's +opinion that in practice Dr. Parker's idea of the saving to be derived +from the merger would not work out, from the fact that all officers and +higher employees of the combination would want increased pay for +additional work, and not in proportion to the extra labor and +responsibility imposed.[345] To this is to be added the caution that Mr. +Cannon probably does, in borrowing and in administration generally, +accomplish many economies not indicated in his statement. + +An editor said that there was no "graft" particularly in the promoting of +the mills; that the minutest details of an enterprise were watched by the +people of the community. This tends to be a confirmation of the view the +writer brought to take of the development of the industry in the South, +that it was to a larger extent the child of the public initiative and +concern than most economic movements. + +Mr. Thompson says that "The North Carolina mills have been almost +invariably managed honestly in the interest of all the +stockholders."[347] This is true of the entire South. There have, however, +been two instances of fraud, one chargeable to Northern selling agents, +but the other, unhappily, though also inexplicably, the result of +wrong-doing on the part of a Southern man who had drawn together a number +of mills. The former case was one in which a New York commission firm +which had taken the president of a successful plant under its patronage, +and placed him at the head of a mill in which the firm was sinking large +sums, was angered at his effective attempts to free the second mill from +the influence of the selling agents, and sought vengeance by ruining the +original mill of which he was president. In the second instance, it is +said, the president of the merger, during years in which his associates +and the general public had every confidence in him, had been owing, +unknown to a soul, $400,000 to the holding company and to the constituent +mills. When there was a directors' meeting of the holding company, the +constituent mills would appear to be the ones involved, and when the +several companies met, the sum seemed due to the general company. One of +his intimate co-workers stated that "His failure shook this whole section, +not only in a business way, but in a moral way."[348] And of both +incidents, it was believed by another that to them was attributable a loss +of interest by the Southern communities in mill building. + +The depression following the panic of 1873 gave trouble to most of the +cotton mills established in the years before the period of the industrial +revival. During the hard times, for instance, some of those who had gone +into Colonel Hammett's enterprise for the Piedmont Factory declined to pay +their subscriptions. For the three months during which the machinery was +being installed, the only pay the workmen got was credit for groceries at +a small store in Greenville, two officers of the company giving their +individual note of $500 as guarantee.[349] Colonel Hammett drew upon every +resource of business and personal friendship to tide the venture over from +1873 to 1876.[350] He went so far as to mortgage his horses and carriage +to buy the belting for the plant.[351] + +In some of the mills, the treasurer has the largest part in financial +administration. In such cases he is frequently a younger man, a product of +the newer South, who has pushed his way up in the enterprise to the +position of real power, leaving the president, who is perhaps a man better +equipped in community esteem than in specific training, as nominal head of +the concern. This has happened at Gastonia, North Carolina, a particularly +progressive spinning place. But in most of the companies, especially the +smaller concerns, the president is in chief control of financial affairs. +He often stamps his personality deeply on every department of the business +of the mill and village and region even. A case in point is that of Mr. +Charles Estes, when interviewed 98 years old, and for twenty years before +his retirement in 1901, president of the John P. King Manufacturing +Company, Augusta. With some show of pride, he related how during his +active career the manager of the R. G. Dunn commercial agency in Augusta +one day called him into the office and let him see the report of the King +Mill. It read: "John P. King Mfg. Co. Capital Stock $1,000,000. 3 per +cent. semi-annual dividends. President calls directors together once in +six months and tells them what he has done." "And that was the way I ran +the mill," he declared.[352] + +The Salisbury, N.C., Mill has a singular plan. Financial administration is +concentrated in the hands of a finance committee composed of the +president, treasurer and agent, or manager. The directors do about as the +finance committee indicates; they hold a less important place because of +the ill health of several of their number. Though nominally the whole +finance committee passes on questions, the president does not attend +regularly, and one of the directors not on the committee always agrees in +the action of the smaller group.[353] + +The effect of strong personality in a promoter and of the business +reputation of his enterprise upon impressionable Southern communities has +been mentioned in a previous report. This came out clearly in the ease +with which money could be borrowed. It was said by an old gentleman who +knew Colonel Hammett in South Carolina very well that "The few capitalists +we had then (we didn't have many) just came to his assistance whenever he +asked them."[354] With respect to certain wholesale merchants of New +York, Philadelphia and Boston, the writer was made to believe that they +have so much confidence in a particular North Carolina manufacturer, that +they give him any amount of capital he needs.[355] Mention has already +been made in another connection, of the fact that Mr. Parker was offered +large sums of money at 3 instead of 5 per cent. when he broached his +merger successfully. The recent depression of the famous Graniteville +mill, one of the first in the South, was accounted for by the statement +that everybody was ready to lend money to Graniteville as an old and +reliable mill, and never thought of requiring it back, until all at once +all the lenders wanted their money, and this fortuitous trend made +reorganization necessary.[356] + +During the war the old Augusta Factory was sold into new hands at, +ostensibly, $200,000. The new company capitalized the plant at $600,000, +about what it was worth. It must have been a device to lend financial +prestige to the mill that Governor Jenkins of Georgia was given $100,000 +stock for his influence as a director. He did nothing to earn this, was +the writer's assurance.[357] + +Perhaps it was to facilitate financial management of his mill that William +C. Sibley preferred New York and Cincinnati subscriptions to large blocks +of stock, to local subscriptions in smaller amounts, when soliciting +backing for the Sibley Mill at Augusta.[358] + +Turning now from the subject of financial administration of the mills to +that of profits; it is not clear that gratifying earnings were usually due +to good management; it is, however, true that poor profits or no profits +were due oftener than otherwise to faulty executive control. It is meant +by this to indicate that the industry in the South has shown itself, on +the side of profitableness, singularly responsive to the material +condition of the section, and to the state and trend of public opinion. +The degree of success of the mills has displayed the fundamental fact that +the South has in the past forty years been above all else in a process of +growth, and has given fresh proof of the intimate connection between the +fortunes of the companies and the changes in the whole section--economic, +mental and spiritual. The profits of the mills have constituted a good +barometer to the evolution of the South since Reconstruction. Graphically +represented, the earnings of the plants would exhibit a curve of decided +aspect. It is sought by specific references to make this curve appear, and +afterwards to sum up the results with several reasons therefore. + +Tompkins, by many believed to have been the best authority on cotton +manufacturing in the South, wrote: "It has been abundantly proved by +experience in the Carolinas that cotton mills on every class of goods +manufactured there, can make a profit of 10 to 30 per cent. This has been +done by the smallest as well as the largest mills on the coarsest and the +finest yarns, single as well as twisted; and on the heaviest as well as +the lightest weight cloths; and on dyed and undyed yarns and cloths. The +variation in profit between 10 and 30 per cent. is caused by variation in +prices of cotton and of manufactured goods, and also by variation in +management." + +In another passage he has said: "From the experience of the best mills +that have been running in the South for twenty years and over, and which +have always been kept well up to date, it would appear that about 15 per +cent. is the average annual profit in clear money for the whole +time."[359] + +The writer was given the opinion by Mr. Thackston of Greenville, South +Carolina, in whose knowledge and judgment great reliance is put, that for +the last ten years the average earnings for well-managed Southern mills +have been $2.50 per spindle, which, reckoning the average cost of the +plants at $20 to the spindle (leaving aside other capital invested) is a +profit of 12.25 per cent.[360] + +A banker of Winston-Salem, which is an industrial community, could not +understand how the Southern mills succeeded "as well as they have." When +there were mentioned to him several mills which have been consistently +profitable, he found special advantages accountable for their favorable +showing. In one case it was tidewater freight rates, in another skilful +cotton buying by a manager of long experience. It was his belief that the +average profits of Southern mills from 1880 to 1914 (omitting, that is, +the years since the outbreak of the war) were not as much as 10 per +cent.[361] + +So much for the gains over the whole period. The earnings at several +points in the development of the industry show a wider range. + +A nephew of Mr. Tompkins, quoted above, who has succeeded in considerable +measure to his uncle's manufacturing interests, and who is of too +practical a turn of mind to be affected by the enchantment of distance, +speaking of the success of mills right at the opening of the era, said +that some made from 30 to 70 per cent. profit.[362] In a previous chapter, +it has been seen how many mills at this juncture increased their plants +from earnings. A Utopian tinge may be suspected in an article appearing in +The Daily Constitution, Atlanta, in March of 1880, which, in urging upon +Southern communities the establishment of spinning mills, stated: "At +prevailing prices there is nearly or quite six cents per pound profit over +all expenses in spinning No. 14 yarn, or three cents per spindle per day; +this would give $9 per spindle per year, and as spinning mills can be +built for less than $18 per spindle, no other figures are required to +demonstrate the statement that the spinning mills in the South bid fair to +realize this year fifty per cent. on the capital invested. Nearly all of +these mills are running night and day, and every one of them is realizing +handsome profits. These are facts."[363] The goods of the Wesson Cotton +Mills, Mississippi, took a premium at the Centennial Exhibition in +Philadelphia in 1876. The company started with one mill and a capital of +$300,000. This plant made 30 per cent. profits, so another was built and +the stock increased to $1,000,000.[364] A North Carolina newspaper trying +to encourage cotton manufacturing in that State, stated in 1880 that upon +the $2,288,000 invested in the mills in South Carolina, the profits ranged +from 18 to 25 per cent.[365] The Boston Journal of Commerce in 1881 gave +the opinion of an Englishman visiting the Eagle and Phoenix Mills, +Columbus, Georgia, that the No. 3 Mill, then new, was the best equipped in +the world, and said that "The profit of these mills last year was 20 per +cent. on a capital of $1,250,000 or $5.76 per spindle."[366] + +Saffold Berney, in his Handbook of Alabama, published in 1878, made a +rather elaborate computation of the earning capacity of a 4,000-spindle, +125-loom mill, making 6,000 yards of cloth per day.[367] It may not be +uninteresting to see how he worked out a considerable rate of profit for a +small plant. His calculations are: + + 3,000 yds. 7-8 shirting at 6 cents $ 180.00 + 3,000 yds. 4-4 sheeting " 7 " 210.00 + -------- + Total gross income $ 390.00 + + Cotton on a basis of 10 1-2 cents, + 15 per cent. waste $220.94 + Labor and mill expenses 63.44 + Office and general expenses 9.62 + Coal, gas, oil, starch & supplies 19.00 + Insurance 3.11 + Charges in selling goods, 2 1/2 per + cent 9.75 + Wear and tear machinery 5 per cent 13.69 339.55 + ------ ------- + Leaving a net profit per day of $ 50.45 + + Or for 300 working days or one year of $15,135.00 + +Figuring the cost of this mill at $20 per spindle, and leaving aside, as +before, money otherwise invested about the business, there is a capital of +$80,000, upon which a profit of $15,135.00 is 18.8 per cent. + +"Profits in the past," says Mr. Thompson, "have been so large that often +before the last payment on the stock is due, a sum sufficient to pay all +obligations has been accumulated." He cites as a particularly favorable +instance, that of a mill which required no further instalments on +subscriptions after a little more than one-third of the instalment-payment +period had run out.[368] + +A little incident is interesting as involving two of the most important +and picturesque personalities and one of the chief mills connected with +the rise of cotton manufacturing in the South, and it bears directly on +the topic now being considered. It seems that the founding of the Piedmont +Factory by Colonel H. P. Hammett in South Carolina inspired a notice from +Mr. Edward Atkinson, of Boston, in which he reasoned that cotton +manufacturing in the South could never pay. This came under the eye of +Colonel Hammett. To the article he pinned his annual balance sheet, +showing a profit of 20 per cent., and sent the two to Mr. Atkinson.[369] + +In regard to these first years of the large establishment of cotton mills +in the South, it is common to hear the opinion that the big profits made +attracted the energies of the people to mill building.[370] Going a little +further back, the mills in operation just before the textile era, though +few in number, showed gains that bore a part in the boom about 1880.[371] + +Twelve years after taking charge of the plant, Colonel Hickman had earned +by the old Graniteville mill sufficient surplus to build the Vaucluse Mill +at a cost of $361,513.24 without calling for assessments upon +stockholders, and five years later had accumulated a cash surplus of +$220,831.86. He had doubled the production of the original Graniteville +Mill. The statement of the affairs of the two plants in 1804 showed: + + _Gross Profits:_ + + Graniteville $82,724.69 + Vaucluse 37,131.31 + ----------- + Total profits $120,856.00 + Net profits 80,701.71 + +This net profit amount represented 13.5 per cent. profit on $600,000 +capital.[372] + +Coming down, now, a decade later in the period. There is shown a degree +of success pretty much uniform for the various mills. + +The first plant of the Gaffney Manufacturing Company which was paid for +when operation commenced, in three years earned enough to build an +additional plant of two stories.[373] This mill indicates very well a fact +brought out in the preceding chapter, that many additions to plant, which +were being made after the mills had been a few years in operation, were +accomplished from earnings. The Salisbury Mill is a case in point. Its +inception and that of the Gaffney Mill the two being projected at about +the same time had many things in common (as did the towns in which they +were built). Increases in plant of the Salisbury Mill have been greater +proportionally than the increases in capitalization.[374] + +From manufacturers, from investors, and from persons acquainted with the +public economy, have been had statements, each reflecting an individual +bias, but each showing unmistakably that there was a general and marked +decline in profits in the second decade of the development. A retired mill +president, whose decision to leave the field was perhaps affected by the +condition she described, regretted that the companies are still laboring +under decreased profits as a result of the fact that mills were built +more rapidly than the market for goods expanded to meet the +development.[375] Another mill president thought that no more mills are +likely to be built in his section too many years. "They went it too rank, +you know," he declared with some feeling. "Once in a while you hear of a +new mill starting up, but its not as common as it was ten or fifteen years +ago." He put the date of the fall-off in profits at about 1900.[376] The +son of Colonel Hammett, several times mentioned, who is a successful +manufacturer, deplored the building of too many mills in a short period, +and said that profits fell away abruptly.[377] + +A bank president whose institution has played a leading part in the +textile prominence of Columbia, South Carolina, said that "1890 to 1900 +was the heaviest borrowing period, as this was the greatest period of +development. Profits were poor, especially from 1895 to 1903."[378] + +Though he does not believe selling agents have taken much stock in North +Carolina mills, Mr. Thompson attributes many failures of mills to "slavery +to commission houses through which they sell their product." He implies +that it was the grip which the agents got on the mill by the loan of +running capital that brought the ill effects. At any rate, the commission +houses became more deeply interested in the mills as the plants increased +in numbers, and profits were hurt by this fact, he believes.[379] This +influence continues, thinks a former president of the great Graniteville +Mill, who said: "The commission merchants take the very heart out of the +mills. The commission houses of New York, Philadelphia and Boston get more +out of the mills than the stockholders in the South."[380] + +While it is true that "most of the mills of the South have +succeeded,"[381] there have been, besides some concerns which have stood +still, neither making nor losing, a few notable failures. It is the common +opinion that failures have been due almost entirely to lack of capital and +bad management. Probably these faults and a good many others contributed +to the ill success of the old Charleston Manufacturing Company, which +began life with such high hopes at the outset of the cotton mill era. If +any enterprise was an expression of the motive forces in the South in +1880, this one was. It supplied a potent example to communities all over +the South contemplating cotton factories. The property of the Charleston +Manufacturing Company was sold under the hammer to the Vesta Cotton Mill +Company, which was not more successful with the plant. After standing a +year idle, the attempt was made to operate the mill with colored help, and +a reorganization of the Vesta Company was had for this purpose. A large +proportion of the subscribers to the original company remained in the two +reorganizations that followed.[382] In the experiment of negro operatives +the old factory was again opening up a vista to the South, for, as it was +vainly pointed out to the negro population of Charleston, if the trial of +colored operatives in the Vesta Mill had succeeded, plants all over the +section would offer employment to negroes.[383] When this third effort to +use the plant for a cotton mill came to nought, the machinery was moved to +Gainesville, Georgia, and though the top of the new mill was carried away +by a cyclone almost as soon as completed, the company is now doing well in +its new location.[384] The great, gloomy pile that thrice held so much of +the confidence of the South and the best hopes of Charleston still flanks +the railway tracks and rears itself above the depot, and seems all very +silent in spite of the fact that it is now occupied by tobacco +manufacturers. + +The grandfather mill, as it might be called, of the Southern textile +industry, is that of Graniteville, established by William Gregg in 1846. +The factory nearly failed in 1867, but was saved by the genius of H. H. +Hickman, a merchant of Augusta, who became its president at the critical +juncture. He died in 1898, and his son came in as president. At his +retirement and the reorganization of the mill, a business man of Augusta +has been elected the new president, but it will require, it is said, from +seven to ten years for him to build up the organization again.[385] + +The Royal Mills, the only cotton factory now operating in Charleston, was +built eighteen or twenty years ago, in the period of stress just noticed. +George Wagener, the original manager, left the mill at his death with a +surplus of $90,000. It went into slovenly hands, and failed. It has been +remodelled, however, and is now making money.[386] + +The small mills' success inspired the belief that large plants would +succeed. The Olympia, until recently the largest mill in the world, was +built at Columbia, and the Loray Mill, with more than half as many +spindles, was founded at Gastonia. It is the general opinion, whether +colored too largely by the unsatisfactory history of these two +conspicuous factories or not it cannot be told, that there have been more +failures among the large than among the small mills.[387] It has been said +of the North Carolina manufacturers as opposed to those of South Carolina +that they "are not so ambitious for big places, (at the head of large +companies) and a lot of those little fellows are getting rich." The North +Carolina mind seems to run on smaller things. I am not sure but what the +North Carolina mills have been more successful than the South Carolina +mills. + +A committee representing New England manufacturers has stated in spite of +an advantage over the Eastern mills of 25 per cent. in labor, and 50 per +cent. in respect to taxes, the Southern mills have made less profits than +their older competitors because of poor financing. However this may be, +the total losses on $100,000,000 invested in cotton manufacturing in the +South in thirty years does not represent more than 20 per cent., is the +belief of Mr. Thackston, of Greenville.[388] + +To go to a lyceum lecture on a sultry summer night and be whisked away by +picture and description to the snowy peaks and green glaciers of the +Canadian Rockies is not a more complete or refreshing transition than +that experienced by the traveler who lumbers along the Southern Railway +for weary, slow miles of sodden country and ill-kept settlement, all at +once to alight at the neat station and view the trim town of Gastonia, +North Carolina. It is not attempted here to account for the New England +psychology that animates this nonetheless Southern place, but it is +deserving of better praise than its harsh name gives it. Neither is it +proper in this place to seek to account for the success of its score and a +half of cotton mills. The recital of the profits they have made since the +European War is astounding, but there is every cause to believe in the +accuracy of the information given. + +In the first place, while the big Loray Mill, as has been seen, has not +reflected much credit upon the community of factories at Gastonia, and is +spoken of not very warmly there, no mill in Gastonia has ever had a +receivership.[389] + +The mills at Belmont right near Gastonia are making on the average 25 per +cent profits. The Treanton Mill at Gastonia, paid 100% in cash during the +first five years of its operation. The Majestic Mill, at Belmont, was +expected to make in 1916-1917, 100 per cent., or the price of the plant in +a single year.[390] + +In cataloguing the notes from a summer trip to the mill towns, the writer +feared he had made some mistake in setting down the results of an +interview with the vice-president and cashier of the First National Bank, +Gastonia, which is most largely interested in the mills of the place, as +to the earnings. He therefore wrote for a restatement on doubtful points, +and found himself confirmed. To quote the case of one mill from Mr. +Robinson's reply. "We have a mill here that had $150,000 capital paid in, +and after a short time issued a stock dividend of 20 per cent. which gave +them (it) a capital of $180,000, and this mill made $155,000 net profits +for the year 1915. I am satisfied that this same mill will make 125 per +cent. profit this year (1916) on their (its) $180,000 capital, or around +$225,000 net profit."[391] + +From the interview, there is the instance of a 12,000 spindle mill; not +one of the most successful in Gastonia, which made $2,500 the week +previous. + +While the mill expected to make 125 per cent. net profits for 1916 is said +to be exceptional, a number of mills were, as near the end of the old year +as November 28th, expected to show from 75 to 100 per cent. net profits +for 1916, the writer was told that it would be a pretty poorly managed +plant that did not clear the lower percentages.[392] + +A burly, forceful man in middle life, who has risen from foot pedlar to +mill president, said with frankness: "I am making more money than I know +what to do with. I am ashamed to take it!" He showed me the statements of +the orders for product with which his four mills would be kept busy for +the next four or five months. He expected to clear $60,000 on the output +of each plant for this period.[393] Mr. Robinson, previously quoted, +recognizes that the cotton mills at Gastonia are more prosperous than +those of any other section of which he knows.[394] Not even early in the +period, when mills were first building, did they make such profits as now, +is the opinion of an old manufacturer at Gastonia.[395] + +The foregoing citation of the earnings of various mills at various points +of time in the period since their establishment has served to exhibit the +general movement of profits. At the outset, most conditions were favorable +to large gains--there was little competition, labor was most plentiful and +cheap, the lack of advantageous marketing facilities was to some degree +offset by purely local demand for the product, and the deficiencies of +management tended to be neutralized by the presence of physical advantages +which disappeared when a more advanced development increased the size of +plants, widened the area from which raw cotton was drawn, and extended the +market for product. It is said repeatedly that in those days any fool +could make money in cotton manufacture in the South.[396] + +With the closing years of the second decade of the mill growth, most of +these advantaging circumstances were fading before the increase of +competition. Their very success was proving fatal to the mills. They had +ceased to be local affairs. When outside influences came in--commission +and machinery men--new and difficult problems had to be faced. The +factories were assuming the physical proportions which they were bound to +assume, and which it was right they should assume, but they ran ahead of +the development in the textile industry, and in the South of expertness of +management, business resourcefulness and economic outlook. The spirit +could not keep up with the flesh, and the mind lagged behind the body. + +The prosperity which the mills are now enjoying they very well understand +to be hectic, the result of the European War. They were having a hard time +enough until the war came and put them all on velvet, as someone expressed +it; 25% of the Southern Mills were in bad shape, defaulting an interest, +etc.[397] + +There are in the industrial community of Gastonia, however, and in certain +individual mills and managers, particularly in North Carolina, signs, that +point to a catching up of internal capacities with external maturity. +There is being developed--not yet clearly seen by any means, and in not a +few points apparently contradicted[398]--a manufacturing spirit in the +South, an industrial faculty that is able to cope with difficult +conditions, the results of economic progress. This promises that the South +is learning after forty years what Edward Atkinson said it did not know, +the difference between a penny and a nickel. It indicates that the South +will be meeting narrow margins of profit with close figuring of the costs +of production. + +It is natural to turn from the subject of profits to that of dividends. +There is in the history of the mills a general parallel between the two, +with, however, certain variations arising from the fact that the industry +has been and is now in constant process of growth. With the exception of +perhaps a few years, earnings could always be profitably invested in the +business,[399] particularly in expansions of plant.[400] As will be seen +in more detail later, the peculiar conditions under which the mills took +their rise involved indebtedness for plant and for running capital, and +earnings had to go to pay interest and principal of this. + +The Augusta Factory was founded in 1847,[401] and, with Graniteville +nearby, though in South Carolina, resembled in its earlier years, and to a +diminished extent still does, the English and Continental textile +manufactories.[402] They have both fallen upon evil days more recently. +The Augusta Factory made 5 per cent. quarterly dividends for eight years +and nine months from its founding.[403] In 1858, eleven years after +establishment, the plant was sold to a company with Wm. H. Jackson at its +head, for the sum of $140,000. Though the stockholders in the Jackson +Company paid $60,000 for repairs to the property, the purchase price, +payable in instalments for ten years, was made up from profits. The mill +at the close of the war was the wealthiest in the South. It was said in +1884 that it had had an uninterrupted course of prosperity since the war. +From 1865 to 1880 the company paid average annual dividends of 14 21/32 +per cent.[404] + +In 1880 the stock of the mills at Augusta, Georgia, paid about 8 per cent. +interest per annum, in semi-annual and quarterly dividends.[405] + +Under Col. H. H. Hickman's management of Graniteville there were regular +dividends of 10 per cent.[406] The son of this former president, and until +recently himself president of the mill as his father's successor, said: +"Graniteville was so successful it had a large influence. It never ceased +operation, and to my certain knowledge it had a fifty-year record of +dividends."[407] + +Perhaps some indication of the widespread popularity of cotton mills as an +investment from a purely dividend-seeking point of view is contained in a +newspaper notice of 1881 setting forth that a large mill at Nashville, +Tennessee, had declared a dividend of 14 per cent. and another was built. +In 1881 the Enterprise Factory, in Georgia, declared a 10 per cent. +dividend, and decided to increase its capacity by 125 per cent. or +more--from 13,890 spindles to over 33,000, and from 264 looms to more +than 600.[408] Mills as Pulaski, in the same State, were anxious to double +their capacity; $50,000 was subscribed for a mill at Jackson, West +Tennessee; Dallas, Texas, was starting a $200,000 spindle plant, and the +town of Sherman wanted a $75,000 factory.[409] The following year, the +same paper printed an item showing further that dividends were being paid +to stockholders in factories all over the South: "The cotton mills in +Mississippi have proved bonanzas for the owners. The one at Wesson (it has +been seen that this company made 30 per cent. profit from the plant) pays +26 per cent. dividends...."[410] The mill established by Mayor Courtenay, +of Charleston, at Newry, South Carolina, paid no dividends for the first +seven years of its life; this distinction from the earlier mills in regard +to dividends, bears out what was said of profits in the period in which +this plant was built (1892-3). Over the whole twenty-four years of its +history, however, the company has paid an average of 6 per cent. to its +shareholders.[411] + +The building of the Salisbury Mill was completed December 1, 1888. The +first cloth was turned out February 9, 1889. The first dividend of 5 per +cent. was declared January 11, 1890. The mill has missed only one dividend +payment, a quarterly one, since this time.[412] It is true that for the +first three or four years of its life, the concern was in an uncertain +way, the panic of 1893 proving embarrassing to it, though not as seriously +so as in the case of the Newry Mill, just cited. For a long time the +investment paid 8 per cent. dividends, then for several years of late 10 +per cent. On July 10, 1916, the directors declared an extra dividend of 5 +per cent., paid August 1. A part of the profits has for years and years +gone back into the business, enabling it now to earn good sums.[413] + +In the first ten years of its operation, the Laurens Mills were very +profitable. Borrowing money to bring its spindleage up to thirty thousand, +it expanded to 43,000 spindles on earnings. At the end of the ten-year +period there was the plant worth about $800,000; the company owed no +money, and the only liability against it was $350,000 of common stock. +There was a cash surplus, probably small. For six years it had been paying +12 per cent. annual dividends. The mill was incorporated in 1895.[414] It +is not certain that dividend payments were made by this company while it +was carrying its debt, but the Anderson Mill, Anderson, South Carolina, +paid interest on its indebtedness and 8 per cent. dividends as well.[415] + +Reference has been made to Mr. Thompson's statement that large profits +have frequently enabled mill companies to discharge all obligations before +the last subscription-payment was due. He cites the case of an enterprise +of $100,000 capitalization, with shares payable in weekly instalments of +50 cents, which after 70 weeks, with only $35 on the share paid up, +declared a dividend of 4 per cent. on the capitalization. This plant, +which he says is by no means universal, has, besides building large +additions from profits always paid 4 or 5 per cent. in dividends each +half-year. This is probably the Cabarrus, one of the Cannon mills, at +Concord.[416] + +From Mr. August Kohn was had a valuable estimate of the whole matter of +Southern cotton manufactories as investments, assuming, that is, that the +mills of his State have been typical in this respect of those of the rest +of the section. He said: "If the people of South Carolina had put their +money into farm loans at 7 per cent.--the same people and the same +money--they would have been better off personally than they are after +having invested in cotton mills. There are no failures in real estate +mortgages at 7 per cent., but in cotton mill investments, principal and +interest has frequently been lost."[417] + +If this opinion is to be believed, had Mr. Goldsmith taken all the +factories of the State, and not "the fifty more important cotton mills of +South Carolina," he would have found an annual average dividend for 1905, +1906 and 1907, not of 7.56 per cent., but something below 7 per cent.[418] + +It is well to conclude this random review of the dividends paid by the +textile enterprises of the South with a thoughtful caution from Mr. +Thackston, of Greenville, who has been of chief assistance to the writer +in the financial aspects of the problem: "When it is said that the mills +(have) made such and such dividends, it is to be remembered that in many +cases the plant had cost more than the capitalization would show. Twelve +or 10 per cent. on a $50,000 investment is very different from 12 or 10 +per cent. on $30,000 paid up. The mills made so much money that they could +pay off their indebtedness frequently in a few years, but the returns on +capital paid up were not so great as might appear in some statements. + +"Piedmont is capitalized at $800,000. The plant probably cost $1,500,000. +When they pay 10 per cent. on the investment, it is because they are +neglecting to reduce the debt on the plant. They are really paying about 6 +per cent. on the investment, considering the total liabilities of the +stockholders." + +Tompkins has placed a useful modification upon the nominal showing of +dividends which finds place here, and has application to what was earlier +said of profits as well: "The tables ... showing range of profits, are +made up from exhibits as usually made in annual reports. This is exclusive +of depreciation, or wear and tear. Even in cases where an item of +depreciation is carried in the accounts, it is often simply a matter of +bookkeeping, and not a sum set aside for replacing of machinery.... Where +large profits are reported, and large dividends paid, it is always a +question whether the vitality of the mill is not suffering. There is a +number of cases where mills have paid several large dividends at the +start, but, on account of making no provision for depreciation, have +finally collapsed."[419] + +Some mills to continue Mr. Thackston's statement, cost in plant, he said +four times their total capital. A man would build a 10,000-spindle mill +and add to it greatly, not increasing the capital at all; he trusted to +earnings to care for the debt, and delayed payments on common stock. + +A remark of Mr. Goldsmith, though he unfortunately does not give the +source of his information, confirms this calculation. He says: "The +average South Carolina weaving mill costs about $20 to $21 per spindle; it +is capitalized at about $12 per spindle, and earns from $2 to $4 per annum +per spindle."[420] + +A statement covering five years for average well-managed mill properties +in and around Greenville, South Carolina, shows, he said: + + Average earnings on plant cost 13.47 per cent. + " " per spindle $ 2.94 + " cost " " 21.08 + Capitalized at " " 12.72 + +His conclusion was that "In general, the dividends on the actual cost of +the plants have not been over 12 per cent."[421] + +As to the development, nature and persistence of a market in the South for +cotton mill securities, the principal partner in a firm dealing in stocks, +bonds, real estate loans, and fire insurance, who has besides long been +identified with the cotton manufacturing industry in the Piedmont region, +said: "... as far as I am able to recall, the stock market began to +develop in this section about 1898 to 1901; and referring to some old +records, as of March, 1901, I find such entries as this: + + "5 Monaghan at 95 + 3 Brandon at 90" + +with other entries of the same kind. + +"About this date, in the up-country there were several young men who began +trading in these stocks largely on a brokerage proposition. I recall the +names of: + + A. M. Law & Co Spartanburg, S.C. + W. D. Glenn Spartanburg, S.C. + F. C. Abbott & Co Charlotte, N.C. + George E. Gibbon Charleston, S.C. + +and a few others whose names I do not recall just now. + +"In Greenville, there was Mr. A. G. Furman.... All these men are still in +the same line of business, and from small beginnings, have developed +satisfactory business in the buying and selling of these securities. + +"One element that lends itself to this business was the fact that in a +number of instances builders of machinery would take part of their bill in +stock, and later dispose of these holdings at concessions. I recall in one +year that I disposed of about $2,000,000.00 worth of such stocks."[422] + +An investor with considerable cotton mill holdings, in his replies, threw +a little different light on the matter in some particulars: "A market for +cotton mill securities developed between 1890 and 1900. There is less sale +for them now, but in those ten years they used to go like hot cakes. All +these brokers take a whack at them, but any man would starve that tried to +deal in them exclusively. I had a friend that tried to make his living +from dealing in them, but he didn't make his office rent, I deal in them a +little, more than anything else for accommodation to friends. There is +practically nothing in it for me."[423] + +Mr. Buist has here placed the commencement of this market as far back as +1890. But in the early months of 1881 M. J. Verdery & Co., brokers of +Augusta, were negotiating for the entire issue of $350,000 extra capital +stock to be made in connection with enlargements to the Enterprise +Factory. It was said that one man and his friends would take $140,000 of +the stock.[424] This was, however, an underwriting transaction, such as +those of which the first quotation speaks as being conducted on a +brokerage proposition, rather than the regular marketing of stocks +indicated by Mr. Buist. + +Another said: "Nobody deals exclusively in cotton mill securities, and +they are not quoted on the big exchanges either."[425] There is no doubt +about either of these points, judging from all the information received. +And further: "At the opening of the period, the sale for cotton mill +stocks was very local, and each mill took charge of its own sales."[426] + +A mill president of Augusta said that he frequently has inquiries for +stock; he refers these applicants to brokers in the city.[427] + +It has been seen that the curve of dividends of the mills shows a rough +correspondence to that of profits; it may be observed in the paragraphs +that follow that the third curve of market values of mill stocks follows +more or less the other two curves. There will be mentioned first the cases +in which the securities sold, for one reason and another, at low figures, +and second the instances of more advantageous quotation, with some +comments on the occasion for the high and low prices. + +The cotton manufacturing business in the South has been a precarious one; +it has proved quixotic, and there have been intervals of sterility.[428] +This may be taken as accountable for the fact that "mill stocks usually +sell below their book value."[429] This consideration has not, however, +as will appear more clearly a little later, prevented great variation in +the selling price of securities of mills in different sections of the +South, at the same point of time. + +"Mill shares have been a drug on the market and confidence in them has +been lost to a large degree."[430] In conformity with this, an +ex-manufacturer, now a cotton factor, of Augusta, Georgia, explained that: +"Stocks of mills in Augusta haven't sold at par in twenty years. You can +buy preferred stock of mills in Augusta at less than par. You can buy the +stock of the Augusta and Enterprise mills at 20 or so. The Augusta Factory +hasn't paid a dividend in twenty years." He could not understand why this +was true of the local manufacturing community, which is one of the most +notable in the entire South.[431] + +These considerations are in contrast to the statement of Mr. Goldsmith: +"The market value of the stock is almost always above par, increasing in +proportion to the age of the mill." The writer inclined to doubt this +accuracy of Mr. Goldsmith's information.[432] + +Referring now to the sale of stock at less than its book value, it may be +noticed again that during the war the Augusta Factory was sold into new +hands at, ostensibly, $200,000. The new company capitalized it at $600,000 +about what it was worth.[433] F. W. Wagener and Julius Koester bought in +the property which is now the Royal Mills, at Charleston, at about 20 +cents on the dollar.[434] An indication of the prevalence of this +condition is seen in the fact that the people of Charleston, who +previously had been generous subscribers to cotton mill stock, every +promoter going to Charleston for the placement of a large block, "about +1905 or 6 ... got canny, and quit subscribing to the stock of new mills, +for they found they could wait and buy the stock at less than par. For +twelve or fourteen years Charleston has not contributed to new +mills."[435] The reason for the general drop in the value of mill +securities twelve or fourteen years ago lies in the depression in the +industry caused by the ill-considered boom in mill building, already dwelt +upon; a cause which had its rise earlier, but which no doubt continued to +operate through this later period, was set forth plainly by a banker of +Columbia. He said: + +"Suppose a Southerner was promoting a mill that was to cost $1,000,000. In +contracting for $600,000 worth of machinery, the machinery people would +take half of the amount in stock. Machinery was in great demand, and high +in price. The machinery manufacturers could throw their stock on the +market quickly at 50 cents on the dollar, and make money. But in doing +this they hurt the price of the stock of the mill."[436] + +There seems to be pretty clear cause for the sensational drop that once +occurred in the selling price of the stock of Pacolet, one of the greatest +of the Southern mills. The factory had been making heavy goods for the +Chinese market; this market was so unfavorably affected by the exclusion +act that the goods became unprofitable to the mill. It cost money to +change the machinery. So much preferred stock was issued that the common +stock of the mill fell from 300 to a point below par.[437] + +It has been seen that for the last six years of the first decade of the +operation of the Laurens Mills, 12 per cent. annual dividends were paid. +Within two years after the fight between local shareholders and Northern +selling agents, the dividends got down to 5 per cent. and the stock fell +from 175 to par.[438] A similar decline has been very apparent in the +stock of Pelzer, in the same State, which ten years ago was selling at 175 +or 180, and which now may be bought at a little above par. + +T. C. Duncan built the Union Mills, and these succeeded. The stock went to +$150 a share in 1900 or 1902. Then he built the Buffalo Mills. The +projector of these mills was, however, a cotton speculator, it is said, +and the market went against him. The town of Union, South Carolina, +"busted with Tom Duncan", as it was expressed. + +At the opening of the cotton mill period, it was said of the Rock Bill +Cotton Factory that "The best evidence of its success is that not one +dollar of its stock can be bought."[439] In the same month of the same +year it was published that of the successful Mississippi mills, "The one +at Wesson pays 26 per cent. dividends, and the stock is worth over +300."[440] Pacolet was built in 1880. The architect suggested a certain +firm as selling agents for the mill, and Captain John H. Montgomery, the +projector of the company, was introduced to a member of this firm. In +consideration of receiving the account of the factory, this official +subscribed for the commission firm to fifty or a hundred shares of +Pacolet's stock. He told a friend shortly afterwards that he did not know +why he bought the stock, and offered to sell it at $50 on the share. It +happened that he held the stock, and he afterwards sold the stock at $300 +per share.[441] + +This buoyant success of the early mills, previously remarked with +reference to profits and dividends, and here seen in the advance in the +price of stock, is further illustrated by the history of some plants now +having large capitalization. These sold additional stock to the original +subscribers at a reduction--say at 75 or 80 when the par was 100. The +ventures were so profitable that the stock remained at par value.[442] The +same observation comes out, as applicable to a still earlier time, in the +circumstance of the issue, in 1865, when the Augusta Factory was paying +more than 14 per cent. dividends of three shares for one, bringing up the +capitalization to $600,000.[443] + +Fifteen years later it was said: "Augusta is becoming prominent in the +South as a manufacturing city, there being eight cotton factories running +here successfully.... These factories aggregate about 2,500 looms and +10,000 spindles; they consume about 50,000 bales of cotton annually, +manufacture about 50,000,000 yarns (yards) of cloths, (this besides yarn +mills) and employ 2,000 operatives. The capital stock of nearly all these +factories is at a high premium."[444] + +If the success of the Augusta Factory in 1865 was sufficient to maintain +at par issues of extra stock, as just noted, the reverse was true of +Graniteville two years later, when the elder Hickman took charge. Twenty +years earlier, the plant had cost to build $375,000. By 1867 the stock had +increased to $716,000, and the shares had fallen to $62.50 in value. The +mill was $50,000 in debt. Colonel Hickman cancelled $116,000 capital +shares, bringing the interest-bearing stock of the company down to +$600,000. He restored the depreciated stock to its proper value.[445] +Reference has been made to a stock dividend of 20 per cent. issued by a +mill of Gastonia within the last few years. + +A very present instance of this same quality, reflected this time in the +recuperative power of a mill, is contained in a prediction made by the +gentleman who knows most about the Graniteville Mill, that the stock which +then, at reorganization, sold for $60 the share will in a year, if all +goes well, sell at par.[446] + +It has been said that the stock of the Rock Hill Cotton Factory could not +be bought, and that the stock of several mills sold for $300 per share. +That of the Tucapau Mills, in South Carolina, is not to be had today, or +it can be had only at 3 or 5 for one. This is by some regarded as the +most successful mill in the State. + +It would seem that absolutely no stock of the Salisbury Mills is on the +market. Recently an energetic young man anxious to buy stock of the mill +for principals, went to the treasurer of the company and to shareholders +individually, without success. The treasurer said that by looking long +enough, and waiting for his chance, he might induce some stockholder to +sell at 200.[447] This comparatively low figure in his prognostication is +perhaps accounted for by the conservative character of the company from +the start, and the uniformly satisfactory, though not brilliant dividends +of the enterprise, together with the fact, maybe most potent of all, that +sixty of the one hundred and five shareholders in the Salisbury Mills are +ladies, the majority of whom have received their holdings through +inheritance.[448] + +The Majestic Mill, Gaston County, North Carolina, which in 1916 after nine +months' operation declared a dividend of 10 per cent., sold three shares +of stock which in some way had not been marketed, at 150 each.[449] + +In mentioning the contrast between the market price at this time of the +stock of mills in various localities. Thought was particularly of the +facts as to the Augusta mills' securities and those of the plants in and +about Gastonia. The latter are as optimistic as the former are the +reverse. Mills in Gastonia making in 1916 from 75 to 100 per cent. net +profits, are represented by stock selling at figures ranging from $150 to +$250 the share.[450] + + + + +VITA + + +Broadus Mitchell was born at Georgetown, Kentucky, December 27, 1892; he +attended a primary school in Richmond, Virginia, and then, for four years +until 1908, Richmond Academy; for one session, 1908-1909, attended the +Hope Street High School, Providence, Rhode Island; in 1909 entered the +University of South Carolina; in the summer of 1911 was a member of the +reportorial staff of The Daily Record, Columbia, South Carolina; graduated +from the University of South Carolina with A.B. degree in 1913; from June, +1913, until October, 1914, was a member of the reportorial staff of the +Richmond Evening Journal; entered The Johns Hopkins University in 1914; +was a Hopkins Scholar during this and the succeeding session; was Fellow +in Political Economy, 1916-1917; in July, 1917, became special staff +writer The New Leader, Richmond, Virginia, and was given furlough from +this position to return to the University in the fall of 1917; Fellow by +Courtesy and instructor in Courses in Business Economics, 1917-1918. + + + + +FOOTNOTES: + +[1] P. H. Goldsmith, The Cotton Mill South, p. 4. + +[2] D. A. Tompkins, in The South in the Building of the Nation, Vol. II, +p. 58. A more summary statement by the same author is the following; after +speaking of the prominence in the South of manufactures in the early years +of the nineteenth century: "The profit of cotton raising with slave labor +drew people away from manufactures to cotton planting. On the abolition of +slavery, the capabilities of the people to organize and conduct +manufactures showed itself again.... The re-establishment was not +commenced immediately after the civil war, because of the chaotic disorder +brought about by the abolition of slavery and the enfranchisement of the +negro." But now (1899) "every obstacle to the development of manufactures +has been removed. In many parts of the South the development is already +well advanced and in others it will undoubtedly grow rapidly." (Ibid., +Cotton Mill, Commercial Features, pp. 108-109.) + +[3] The South's Position in American Affairs, p. 1. Cf. "Upon the whole, +the last half of the Eighteenth Century, before the influence of the +cotton gin and Arkwright's inventions were fully felt in the South, was a +period when agriculture yielded some ground in primary manufactures and +household industries." (V. S. Clark, in South in Building of Nation, Vol. +V, p. 308.) + +[4] Holland Thompson, From the Cotton Field to the Cotton Mill, p. 25. +"Except in the East, the feeling against slavery was strong during the +first quarter of the nineteenth century", and there is remarked the +foundation in 1816 of the Manumission Society, which had thirty-six +branches in 1825 and 1600 active members in 1826. (Ibid., pp. 26-27.) + +[5] August Kohn, The Cotton Mills of South Carolina, pp. 10-11. + +[6] Kohn, Cotton Mills of South Carolina, pp. 9-10. + +[7] Kohn, Cotton Mills of South Carolina, pp. 10-11. In 1809 the +legislative committee on incorporations reported unfavorably a request of +John Johnson, Jr., President of the Homespun Company of South Carolina, +for a loan on account of a patent, but it was recommended that he be +allowed until the next meeting of the legislature "to report on the +utility of the machine called the Columbia Spinster, so as to entitle, in +case the same be approved, the inventor of the same to the sum provided by +law for his benefit." (Ibid., pp. 11) Cf. Ibid., pp. 11-13. + +[8] For these facts the writer is indebted to an unpublished manuscript of +M. R. Pleasants, "Manufacturing in North Carolina before 1860", to which +reference will frequently be had. + +[9] Clark, in South in Building of Nation, Vol. V, p. 310. + +[10] Kohn, Cotton Mills of South Carolina, p. 7. + +[11] Kohn, Cotton Mills of South Carolina, p. 7. + +[12] Ibid. + +[13] Ibid. + +[14] Kohn, Cotton Mills of South Carolina, p. 7. His citation is of the +South Carolina and American General Gazette, Jan. 30, 1777. Cf. Ibid., pp. +6-7. + +[15] Ibid., p. 8. Reference is particularly to the City Gazette and Daily +Advertiser, of Charleston, January 24, 1779. + +[16] Kohn, Cotton Mills of South Carolina. Citation is of the American +Museum, VIII, Appendix IV, part II, July 1, 1790. The question mark is Mr. +Kohn's. + +[17] Kohn, Cotton Mills of South Carolina, pp. 8-9. + +[18] W. W. Sellers, A History of Marion County, p. 26. + +[19] Clark, in South in Building of Nation, Vol. V, p. 312. Cf. Ibid., pp. +328-9. Referring to the manufactories near Charleston and Statesburg, and +to carding and spinning machinery set up in eastern Tennessee in 1791, he +concludes, "However the industrial progress of these years was irregular +and local rather than general and permanent." Ibid., p. 310. + +[20] Clark, History of Manufactures in the United States, 1607-1860, p. +537. As indicating further the lack of causation in these earliest +ventures, it is said: "Maryland is hardly typical industrially of the +Southern States. Its factories date from the Revolution...." (Ibid., in +South in Building of Nation, Vol. V, pp. 328-9.) + +[21] "In this country, as well as in England, the germ of the textile +industry existed in the fulling and carding mills; the former, dating +earlier, being the mills for finishing the coarse cloths woven by hand in +the looms of our ancestors; and in the latter, the carding mill, the wool +was prepared for the hand-wheel. At the close of the Revolution the +domestic system of manufactures prevailed throughout the states" (Carroll +D. Wright, "The Factory System of the U.S." p. 6, in U.S. Census of +manufactures, 1880.) + +[22] The Bolton Factory was built in 1811 on Upton Creek, nine miles +southwest of Washington, Wilkes County, Ga., in 1794, on this site had +been erected one of Whitney's first cotton gins, propelled by the water +power that later ran the cotton mill. It is said that here Lyon conceived +important improvements on the Whitney invention, making a saw gin. +(Southern Cotton Spinners' Association proceedings seventh annual +convention, pp. 41 ff.) Here is a rather striking indication of the fact +that the South was on the right road--a gin, so far from diverting +attention entirely to the cultivation of the staple, gave way to a cotton +mill which was located on the same site and operated by the same water +power. + +[23] H. R. Helper, The Impending Crisis of the South, (ed. of 1860) pp. +161-162. + +[24] W. F. Marshall, interview, Raleigh, N.C., September 16, 1916. + +[25] "The first cotton mill built in North Carolina was built at +Lincolnton in 1813 by Michael Schenck.... This mill was the forerunner of +that remarkable industrial development which has taken place in North +Carolina since that time." (Pleasants, ibid.) + +[26] John Nichols, interview, Raleigh, N.C., Sept. 16, 1916. A. A. +Thompson, President of the Raleigh Cotton Mill, expressed about the same +view in an interview at Raleigh on the same day. + +[27] J. L. Hartsell, interview, Concord, N.C., September 2nd 1916. + +[28] Kohn, Cotton Mills of South Carolina, p. 15. Cf. Charlotte News, +(N.C.) Textile Industrial Edition, Feb., 1917, with reference to the Rocky +Mount Mill. + +[29] Though their father had been prominent for his conduct of the mill +and had displayed in his personality a generous disposition toward the +community, the sons were said to be wild and reckless, and when they fell +heir to the plant alienated the sympathies of the people of the vicinity. +Any possible public character for the business was thus destroyed. + +[30] Charles E. Johnson, interview, Raleigh, N.C., Sept. 16, 1916. + +[31] C. D. Wright, "Factory System of the U.S.", p. 6, in U.S. Census of +Manufactures, 1880. Cf. Clark, in South in Building of Nation, Vol. V., p. +319. + +[32] For a careful narrative of the establishments of the settlers who +moved into South Carolina from New England about 1816, with details of the +mills of the Hills, Shelden, Clark, Bates, Hutchings, Stack, the Weavers, +McBee, Bivings, etc., consult Kohn, Cotton Mills of S.C., and The Water +Powers of South Carolina; for those in North Carolina H. Thompson is +useful. Cf. also Southern Cotton Spinners' Association proceedings seventh +annual convention, pp. 41 ff. and Tompkins, Cotton Mill, Commercial +Features, pp. 301-302. + +[33] Wood for the boiler of the Mount Hecla Mills, growing scarce, the +machinery was taken to Mountain Island, and there run by water. (H. +Thompson, pp. 48-9.) + +[34] Cf. Kohn, Cotton Mills of South Carolina, p. 14. + +[35] Kohn, Cotton Mills of South Carolina, p. 14. Cf. Charlotte News, +Ibid., with reference to the Rocky Mount Mill. + +[36] H. Thompson, pp. 45 ff. + +[37] Ibid. + +[38] J. B. Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916. + +[39] H. Thompson, pp. 42-43. Cf. p. 12. + +[40] Theckston, interview, Greenville, S.C., Sept. 12, 1916. + +[41] Theckston, interview, Greenville, S.C., Sept. 12, 1916. + +[42] Clark, in South in Building of Nation, Vol. V., p. 321. Cf. Kohn, +Cotton Mills of South Carolina, giving quotation from Columbia Telescope. + +[43] Charlotte News, Ibid. The McDonald Mill at Concord during the Civil +War dealt in barter. A gentleman in a nearby town told the writer that he +remembered as a boy trading a load of corn for yarn to be woven by the +women at home. (Theodore Klutz, interview, Salisbury, N.C., Sept. 1, +1916.) In 1862 the Confederate government commandered the Batesville +factory in South Carolina, and took nearly all of the product. That +portion which was allowed to private purchasers was always sold by ten +o'clock in the morning. (Thackston, interview, Greenville, S.C., Sept. 12, +1916.) + +[44] Thompson, pp. 48-9. + +[45] Tompkins, Cotton Mill, Commercial Features, pp. 183-4. + +[46] Walter Montgomery, interview, Spartanburg, S.C., Sept. 5th, 1916. + +[47] Thackston, interview, Greenville, S.C., Sept. 12th, 1916. + +[48] John W. Fries, interview, Winston-Salem, N.C., Aug. 31, 1916. + +Another with a broad view of the history of the industry in the South was +willing to include in a similar statement the Graniteville mill about +which a good deal of controversy has clustered: "The cotton mills in the +South before the war were third-rate affairs. I speak of Graniteville and +Batesville and such plants as these. I remember my mother's telling me +that the warp ... used to be supplied by the mills for use in the homes of +the housewives. They were not regular cotton mills as the plants of later +establishment have come to be." (W. W. Ball, interview, Columbia, S.C., +Jan. 1, 1917.) + +[49] Figures of Thompson give 700 ______ and 7000 bales of cotton +consumed. (Thompson, pp. 49 ff.) + +[50] U.S. Census of Manufactures, 1900. Cotton Manufactures, pp. 54 ff. A +map showing the distribution of cotton spindles in 1839 indicates a good +representation for all the Southern States, except Mississippi, Louisiana, +Arkansas and Florida, as to mills of small size, but the localization both +as to plants and spindles in New England is marked. (Clark, History of +Manufactures in the U.S., section on cotton manufactures, pp. 533-560. See +the whole section for a masterful discussion of both historical and +economic phases.) + +[51] Cf. Thompson, pp. 49 ff. + +[52] Clark, in South in Building of Nation, Vol. V, pp. 319-320. "Few +mills south of Virginia had power looms prior to 1840." (Ibid., p. 321.) +Cf. omission of looms for Southern States in the census figures quoted +above. + +[53] Clark, South in Building of Nation, Vol. V. p. 322. + +[54] William E. Dodd, in South in Building of Nation, Vol. V. pp. 566-7. + +[55] Quoted in Pleasants. + +[56] Quoted in Pleasants. + +[57] Quoted from Niles' Register, May 10, 1828, in Pleasants. Mr. +Pleasants remarks that not until the late twenties did the leaders of +thought awaken to the disintegrating process that had set in two decades +before, and he notices the striking fact that in a report to the +legislature in 1828 it was said: "Nothing but a change of system can +restore health and prosperity at large. With all the material and elements +for manufacturing, we annually expend millions for the purchase of +articles manufactured in Europe and in the North out of our own raw +material. At this rate the state is on the road to bankruptcy. There must +be a change. But how is this important revolution to be accomplished? We +unhesitatingly answer--by introducing the manufacturing system into our +own state and fabricating at least to the extent of our wants.... Our +habits and prejudices are against manufacturing, but we must yield to the +force of things and profit by the indications of nature. The policy that +resists the change is unwise and suicidal. Nothing else can restore us." + +[58] Tompkins, History of Mecklenburg County, Vol. I, p. 124. Cf. Ibid., +pp. 126-7. + +[59] Kohn, Cotton Mills of South Carolina, pp. 18-19. + +[60] Clark, History of Manufactures in U.S., pp. 553 ff. Cf. Ibid., in +South in Building of Nation, Vol. V, pp. 213-214, and pp. 316 ff. + +[61] Kohn, Cotton Mills of South Carolina, p. 16. + +[62] "Cheapness of cotton, abundance of water-power, the resources of the +coal-fields, when steam began to supplant the dam, the other mineral +resources, and the wealth of forests of pine, live oak, cypress, and other +woods in which the South abounded, did not even attract from other parts +sufficient capital to develop the section to anything like its full +extent. No artificial expedients were necessary there. But capital did not +come." (Ingle, Southern Sidelights, p. 73.) + +[63] Quoted in A. B. Hart, The Southern South, pp. 231-232. + +[64] Helper, p. 25. + +[65] Tompkins, History of Mecklenburg, Vol. I, p. 100. + +[66] Ibid., Vol. II, pp. 200-201. + +[67] Tompkins, History of Mecklenburg, Vol. I, pp. 98-99. This statement +is strongly influenced by Tench Coxe. Cf. Ibid., Cotton Growing, pp. 3-4. +It has been said of the Irish people by Lord Dufferin that "the entire +nation flung itself back upon the land, with as fatal an impulse as when a +river, whose current is suddenly impeded, rolls back and drowns the valley +which it once fertilized", and Sir Horace Plunkett comments, "The +energies, the hopes, nay, the very existence of the race, became thus +intimately bound up with agriculture." (Sir Horace Plunkett, Ireland in +the New Century, p. 20.) + +[68] Tompkins, Building and Loan Associations, p. 43. Cf. Ibid., The +Cultivation, Picking, Baling and Manufacturing of Cotton from Southern +Handpoint, pp. 5-6. + +[69] Tompkins, Cotton Mill, Commercial Features, pp. 109-110. It is +interesting that this occurs in a book by a practical manufacturer +intended to point the way to technical success in mill management. It is +perhaps an indication of how social the South is in even its most +distinctly industrial aspects. + +[70] Another has used the expression that "the South was throttled by an +out grown Economic System." (F. T. Carlton, History and Problems of +Organized Labor, pp. 19-20.) + +[71] Tompkins, Cultivation, Picking, Baling and Manufacturing of Cotton, +pp. 5-6. "Agricultural Methods were 'stereotyped'." This writer did more +than any other in showing the character of the equipment for cotton +cultivation and the alterations made therein after the war. + +[72] W. H. Gannon, The Landowners of the South, and the Industrial Classes +of the North, pp. 7 ff. + +[73] William Gregg, Essays on Domestic Industry, pp. 18-19. + +[74] Tompkins, History of Mecklenburg, Vol. I, p. 194. "The price which +America paid for the introduction and use of cotton was sectionalism, +slavery, and war." (James A. B. Scherer, Cotton as a World Power, p. 243.) +For a careful description of the circumstances surrounding the invention +of the cotton gin, and the legal documents in the dispute over the rights +to it, cf. ibid., Cotton and Cotton Oil, pp. 19 to 31, inclusive, and +appendix. "We abandoned a once leading factory system; we imported slaves; +we let all public highways become quagmires; we destroyed every +possibility for the farmer except cotton and by cut-throat competition +amongst ourselves we reduced the price to where there was not a living in +it for the cotton producer. We made cotton in a quantity and at a price to +clothe all the world excepting ourselves." (Ibid., Road Building and +Repairs, p. 24.) + +[75] Ingle, Southern Sidelights, p. 49. + +[76] Scherer, p. 253. + +[77] Scherer, pp. 168 ff. Cf. Walter H. Page, The Rebuilding of Old +Commonwealths, p. 139. + +[78] A. D. Mayo, In The Social Economist, Oct., 1893, pp. 203-204. + +[79] F. L. Olmsted, The Seaboard Slave States, pp. 140-141. Cf. Ibid., p. +185, pp. 213-214. + +[80] Olmsted, Seaboard Slave States, pp. 298-299. Cf. "The amount of it, +then, is this: Improvement and progress in South Carolina is forbidden by +its present system." (Ibid., pp. 522-523. And for his general philosophy +on the subject, Ibid., pp. 490-491.) + +[81] Olmsted, Seaboard Slave States, pp. 179-180. + +[82] Ibid., pp. 288 ff. + +[83] Plunkett, p. 147. + +[84] Ingle, Southern Sidelights, pp. 68-69. + +[85] Ingle, Southern Sidelights, p. 11. + +[86] Clark, in South in Building of Nation, Vol. V, pp. 213-214. Not only +did slavery deter from coming to the South immigrants opposed to the +institution, but the Southern whites were indisposed to welcome those who +refused to grow into the system. A Southern Newspaper of the fifties +betrayed this: "A large proportion of the mechanical force that migrate to +the South, are a curse instead of a blessing; they are generally a +worthless, unprincipled class--enemies to our peculiar institutions, and +formidable barriers to the success of our native mechanics. Not so, +however, with another class who migrate southward--we mean that class +known as merchants; they are generally intelligent and trustworthy, and +they seldom fail to discover their true interests. They become +slaveholders and landed proprietors; and, in ninety-nine cases out of a +hundred, they are better qualified to become constituents of our +institution, than even a certain class of our native born.... The +intelligent mercantile class ... are generally valuable acquisitions to +society, and every way qualified to sustain 'our institution'; but the +mechanics, most of them, are pests to society, dangerous among the slave +population, and ever ready to form combinations against the interest of +the slave-holder, against the laws of the country, and against the peace +of the Commonwealth." (Quoted in Olmsted, Seaboard Slave States, p. 511.) + +[87] Tompkins, History of Mecklenburg, Vol. II, p. 204. + +[88] Cf. Ibid., Vol. I, p. 153. + +[89] Olmsted, Seaboard Slave States, p. 511. + +[90] Sidney Andrews, The South Since the War, pp. 342-343. + +[91] Olmsted, Seaboard Slave States, p. 543. + +[92] Olmsted, Seaboard Slave States, p. 210. + +[93] Gregg, Essays on Domestic Industry, p. 10. + +[94] Gregg, Essays on Domestic Industry, pp. 9-10. "He who has possessed +himself of the notion that we have the industry, and are wronged out of +our hard earnings by a lazy set of scheming Yankees, to get rid of this +delusion, needs only seat himself on the Charleston wharves for a few +days, and behold ship after ship arrive laden down with the various +articles produced by Yankee industry." (Ibid.) + +[95] Gregg, Essays on Domestic Industry, pp. 9-10. "He who has possessed +himself of the notion that we have the industry, and are wronged out of +our hard earnings by a lazy set of scheming Yankees, to get rid of this +delusion, needs only seat himself on the Charleston wharves for a few +days, and behold ship after ship arrive laden down with the various +articles produced by Yankee industry." (Ibid., p. 11.) + +[96] Helper, pp. 21 and 23. See these pages also for interesting +illustrations of dependence upon the North, some of which plainly +influenced Henry W. Grady. + +[97] William Gregg, Essays on Domestic Industry, p. 8. Nothing is more +frequently remarked as indicative of the exclusive attention to the +cultivation of cotton than the large reliance of an almost purely +agricultural country upon other sections for many articles of food. And +not only subsistance for the people, but subsistence for the plantation as +such often had to be imported. Missing nothing, Olmsted said, in a +description of a rail journey in North Carolina, "The principal other +freight of the train was one hundred and twenty bales of Northern hay. It +belonged ... to a planter who lived some twenty miles beyond here, and who +had bought it in Wilmington at a dollar and a half a hundred weight, to +feed to his mules. Including the steam-boat and railroad freight, and all +the labor of getting it to his stables, its entire cost to him would not +be much less than two dollars a hundred. This would be at least four times +as much as it would have cost to raise and make it in the interior of New +York or New England.... He had preferred to employ his slaves at other +business." (Olmsted, Seaboard Slave States, pp. 376-379.) + +But Gregg gave encouragement in any brighter aspects that he found, as +when he said, "Limited as our manufactures are in South Carolina, we can +now, more than supply the State with Coarse Cotton Fabrics. Many of the +fabrics now manufactured here are exported to New York, and for aught I +know, find their way to the East Indies." (Ibid., pp. 11) And he held out +to his State the prospect of the results that might reasonably be expected +from adoption of his proposals: "Were all our hopes ... consumated, South +Carolina would present a delightful picture. Every son and daughter would +find healthful and lucrative employment; our roads, which are now a +disgrace to us, would be improved; we would no longer be under the +necessity of sending to the North for half made wagons and carriages, to +break our necks; we would have, if not as handsome, at least as honestly +and faithfully made ones.... Workshops would take the place of the throngs +of clothing, hat, and shoe stores, and the watch-word would be, from the +seaboard to the mountains, success to domestic industry." (Ibid., p. 17.) +When Southern resources were exploited, the total benefit might not come +to the locality; "The great abundance of the best lumber for the purpose, +in the United States, growing in the vicinity of the town, has lately +induced some persons to attempt ship-building at Mobile. The mechanics +employed are mainly from the North." (Olmsted, Seaboard Slave States, p. +567.) + +[98] Olmsted, Seaboard Slave States, p. 544. + +[99] Quoted in Olmsted, Seaboard Slave States, p. 175. + +[100] Olmsted, Seaboard Slave States, p. 363. + +[101] Olmsted, Seaboard Slave States, p. 166. + +[102] Tompkins, Cotton Mill, Commercial Features, preface to appendix. +This is one of a thousand incidents which bring to mind the similarity +between Irish temperament and that of the people of the South--how prone +both have been to obscure to themselves real issues in public affairs for +a joke's sake. And the reflection would be dismal for both peoples but for +the finer discernment of which each, at other times, has shown itself +capable. Cf. Plunkett. + +[103] Gregg, Essays on Domestic Industry, p. 18. + +[104] Ingle, Southern Sidelights, p. 47. Cf. Burkett and Poe, Cotton, pp. +312 and 313, and E. C. Brooks, The Story of Cotton, p. 157. + +[105] Olmsted, Seaboard Slave States, p. 169. + +[106] Gregg, Essays on Domestic Industry, p. 20. "Lamentable, indeed is it +to see so wise and so pure a man as Langdon Cheves, putting forth the +doctrine, to South Carolina, that manufactures should be the last resort +of a country. With the greatest possible respect for the opinions of this +truly great man, and the humblest pretensions on my part, I will venture +the assertion, that a greater error was never committed by a statesman." +(Ibid., p. 14) For a very fine passage, omitted here only because of its +length, showing the fallacy of Cheves' position, and defining what Gregg +meant by "domestic manufactures"--not household industry, but the erection +of steam mills in Charleston, of cotton factories there and throughout the +State; "I mean, that, at every village and cross-road in the State, we +should have a tannery, a shoe-maker, a clothier, a hatter, a blacksmith +... a wagon maker ... this is the kind of manufactures I speak of, as +being necessary to bring forth the energies of a country, and give +healthful and vigorous action to agriculture, commerce and every +department of industry"--See Ibid., pp. 14-15-16. The Southern Quarterly +Review in 1845 quoted Cheves: "'Manufacturing should be the last resort of +industry in every country, for one forced as with us, they serve no +interests but those of the capitalists who set them in motion, and their +immediate localities'." And Mr. Kohn remarks, "This expression was not +peculiar to any one class of leaders in South Carolina at that time," and +he instances other examples. (Kohn, Cotton Mill of S.C., p. 13.) Cf. also +references to Burkett and Poe and to Brooks. + +[107] Gregg, Essays on Domestic Industry, p. 14. See p. 52. + +[108] Gregg, Essays on Domestic Industry, pp. 19-20. + +[109] Ibid., p. 20. + +[110] Gregg, Speech on Blue Ridge Railroad, p. 67. + +[111] Gregg, Speech on Blue Ridge Railroad, p. 29. + +[112] Quoted in The News and Courier, Charleston, March 9, 1881. Said +Olmsted in 1856: "Singularly simple, childlike ideas about commercial +success, you find among the Virginians.... The agency by which commodities +are transferred from the producer to the consumer, they seem to look upon +as a kind of swindling operation: ... They speak angrily of New York, as +if it fattened on the country without any good in return." (Olmsted, +Seaboard Slave States, p. 138.) + +[113] "... the labor of negroes and blind horse can never supply the place +of _steam_, and this power is withheld lest the smoke of an engine should +disturb the delicate nerves of an agriculturist; or the noise of the +mechanic's hammer should break in upon the slumber of a real estate +holder, or importing merchant, while he is indulging in fanciful dreams, +or building on paper, _the Queen City of the South_--the _paragon_ of the +age. No reflections on the members of the City Council are here intended, +they are no doubt fairly representing public opinion on this subject...." +(Gregg, Essays on Domestic Industry, p. 23.) + +[114] "The State of South Carolina has been extremely guarded in extending +grants to banking institutions, and in this she has shown her wisdom, for +it is an extremely dangerous power to exercise." He hoped, however, that +the danger to be apprehended from banking privileged would "not be +confounded with, and brought injudiciously to bear against the charters +which are necessary to develop the resources of our country, and give an +impetus to all industrial pursuits.... The practice of operating by +associated capital gives a wonderful stimulus to enterprise, and where +such investments are fashionable, no undertaking is too great to be +consummated. Why is it that the Bostonians are able in a day, or a week, +to raise millions at one stroke, to purchase the land on both sides of a +river, for miles, to secure a great water power and the erection of a +manufacturing city?... The divine, lawyer, doctor, schoolmaster, guardian, +widow, farmer, merchant, mechanic, common labourer, in fact, the whole +community is made tributary to these great enterprises. The utility and +safety of such institutions is no longer problematical.... If we shut the +door against associated capital and place reliance on individual exertion, +we may talk over the matter and grow poorer for fifty years to come, +without effecting the change in our industrial pursuits, necessary to +renovate the fortunes of our State. Individuals will not be found amongst +us who are willing to embark their 100, 200 or $300,000 in untried +pursuits: ... If liberal charters were granted, one hundred successful +establishments would spring into existence, where one, of feeble order, +could be expected from individual effort.... About three-fourths of the +manufacturing of the United States, is carried on by joint-stock +companies: ... We shall certainly have to look to such companies to +introduce the business with us...." He showed the perpetuity of the +corporate form by instancing one South Carolina cotton factory operated by +a joint stock company; "... there is but one of the original proprietors +living, yet the factory is still going on prosperously, producing as good +results as it ever has done ...", and this mill he contrasted with the +venture of an individual which was prosperous until his death, when the +legatees, not able to carry on the manufacture, forced the sale of the +property at half its value. (Gregg, An Enquiry into the Propriety of +Granting Charters of Incorporation for Manufacturing and Other Purposes, +in South Carolina, pp. 4-11.) + +[115] Clark, in South in Building of Nation, Vol. V, pp. 314-315. + +[116] Olmsted, Seaboard Slave States, p. 361. + +[117] Ibid., pp. 358-359. + +[118] Ingle, Southern Side Lights, p. 32 ff. "There were 101 persons in +the jails of Georgia on June 1, 1860; Virginia had 189; Massachusetts, +1161 and Illinois, 489. In the open life of the South and West, where men +could easily get to the land, there was little crime and jails were often +empty; in the industrial belt the prisons were always occupied. In like +manner and for the same reasons Southern and Western hospitals for the +insane and homes for the poor often showed very small percentages of these +unfortunates." (William E. Dodd, Expansion and Conflict, p. 231.) Cf. the +map on p. 188, showing the industrial belt of 1860 to extend along the +Atlantic Seaboard from New Hampshire to the head of Chesapeake Bay, +covering the coastal States, with scattering development indicated to the +westward. The territory south of Maryland shows a few plants of an output +of $250,000. + +[119] Upon this whole matter, see Scherer, p. 179 ff. "In 1816, when +Webster opposed protection, there was a capital of only about $52,000,000 +invested in textile manufacture, of which much still lay in the South. In +1828, when he reversed his position, this capital had probably doubled, +and had become localized in and about New England." (Ibid., p. 181.) Cf. +Ibid., p. 234. + +[120] Scherer, p. 152. "When the United States of America was formed, +manufacturing interests were as well developed in the South as the North. +Slavery ... existed under protection of law more than a hundred years in +Massachusetts before it was tolerated by law in Georgia. At the beginning +of the nineteenth century the tariff was not a matter which was +exclusively political.... The subject ceased to be an economic one and +became a political one in proportion as slavery grew in the South and +diminished in the North, and in inverse proportion as manufactures dried +up in the South and became of greater importance in the North.... The time +came when the South stood for free trade and the North for protection. +This was because slavery made agriculture more profitable in the South and +protection made manufacturing more profitable in the North with the South +as a protected market." (Tompkins, The Tariff and Reciprocity.) + +[121] Tompkins, Tariff and Protection. + +[122] Clark, in South in Building of Nation, Vol. V, p. 316 ff. See pp. +30-31-32. Contrast Tompkins, History of Mecklenburg, Vol. I, pp. 133-137. + +[123] But some of the agitation in favor of industries in this period, as +in other ante-bellum and indeed post-bellum years, had a flavor not +symptomatic of healthy desire for improvement. One hundred and thirty-one +delegates represented nineteen North Carolina counties at a meeting held +in Salisbury in 1836, at which resolutions were adopted asking the +legislature to give assistance in the building of railroads; another +evidence of this interest was the Knoxville railroad convention of about +the same date. Of the advantages which it was agreed would flow from the +building of the Charleston and Cincinnati Railroad, it was declared that +"it will form a bond of union among the States which will give safety to +our property and security to our institutions." (Tompkins, History of +Mecklenburg, Vol. I, p. 125.) Of more positive character was the utterance +of a Southerner who viewed with deep concern the danger that the North +would crush slavery and place the South under complete submission to +tariff aggressions, congressional representation for the latter section +finding a stop in the limit to slave territory: "Under these +circumstances, the true policy of the south is distinct and clearly +marked. She must resort to the same means by which power is accumulated at +the North, to secure it for herself. She must embark in that system of +manufacturing which has been so successfully employed at the north.... All +civilized nations are now dependent upon our staple to give employment to +their machinery and their labor.... If, then, we manufacture a large +portion of it ourselves, we reduce the quantity for export, and the +competition for that remainder will add greatly to our wealth, while it +will place us in a position to dictate our own terms. The manufactories +will increase our population; increased population and wealth will enable +us to chain the southern States proudly and indissolubly together by +railroads and other internal improvements; and these works by affording a +speedy communication from point to point, will prove our surest defense +against either foreign aggression or domestic revolt." (J. D. B. DeBow, +Industrial Resources of the South and Southwest, Vol. II, p. 127.) J. H. +Taylor, of Charleston, combatted the antipathy toward massing the poor +whites in factories with the reflection that small farming in competition +with slave labor brought discontent that might mean social upheaval, +whereas the factory opened a door of opportunity that allowed of +intelligence and stability; with the chance of coming to own a slave, +"they would increase the demand for that kind of property, and would +become firm and uncompromising supporters of Southern institutions." +(Ingle, Southern Sidelights, pp. 25-26.) + +[124] In earlier pages he has developed with much care the promising +industrial status of the Colonial and Revolutionary South. "In the +Southern colonies iron making became an important industry, even before +the beginning of the eighteenth century." The activity in Maryland, +Virginia, the Carolinas, Tennessee, Alabama and Georgia is shown: +Governor's Spottswood's ventures in Virginia, the passage in 1727 by the +Virginia General Assembly of "an act for encouraging adventures in +iron-works"; South Carolina forges built in 1773 are dwelt upon. His +original investigations reveal valuable facts as to iron-making in North +Carolina and upper South Carolina--details are given of the works of E. +Graham & Company, formed in 1826 and later merged with the King's Mountain +Iron Company; the Magnetic Iron Company, 1837, near the former plant, and +the South Carolina Manufacturing Company. It is to be noticed, however, as +a modification upon the good effect which might have been expected from +these enterprises, that the Graham Company had a considerable part of its +capital invested in slaves, and sixty per cent. of the Magnetic Company's +capital of $250,000 was used for the same purpose. (Richard H. Edmonds, +Facts About the South, Ed. 1894, pp. 3 ff.) + +[125] Ibid., pp. 10 ff. + +[126] Edmonds, p. 18 ff. + +[127] In reference to the false idea of wealth and prosperity in the +ante-bellum South, it has been said, "A delusion of great wealth was +created in the listing as taxable property of slaves to the amount of at +least two thousand millions." (A. B. Hart, The Southern South, p. 218.) + +[128] Edmonds, p. 2. + +[129] Ibid., p. 14. + +[130] Edmonds, pp. 1-2. + +[131] Ibid., pp. 2-8, 19-20. + +[132] Edmonds, p. 21. Cf. Ibid., pp. 19-20. + +[133] E. G. Murphy, The Present South, p. 97. + +[134] Murphy, p. 102. + +[135] Murphy, pp. 10-11. + +[136] Murphy, p. 21. + +[137] There were earlier expressions of the same spirit, some, as if in +foretaste of the South's fate under the old system, before the Civil War, +and others immediately following the war. But the motives were liable to +be selfish and unsound, as for the purpose of retaining slavery, and if +they did not lack, that fire and conviction which marked the full movement +commencing fifteen years later, they were fruitless of large results. "We +are going to work in good earnest, not only to repair the waste places of +the war, but to build up and improve and prosper, and to show the world +that we can be good soldiers in peace as we are in war." (W. J. Barbee, +published 1866) Cf. + +[138] News and Observer, Raleigh, N.C., Nov. 9, 1880. + +[139] "... business is driving sentimental politics to the woods." (News +and Observer, Dec. 31, 1880.) + +[140] Reprinted in News and Courier, Charleston, S.C., July 11, 1881. + +[141] "... they (the New York Times, which carried an editorial +questioning the word of General Wade Hampton, and the 'malignants' of the +Republican party) must realize the difference between a Southern gentleman +and a Northern malignant. They know that the former cannot prevaricate, +while the Northern leaders of the Republican party and the malignants are +usually devoid of personal honor." This is from an editorial in the News +and Observer, Raleigh, N.C., and is too characteristic of most of the +political writing in the South which was an outcome of reconstruction. + +[142] Reprinted in News and Courier, May 14, 1881. + +[143] Reprinted from the Memphis Avalanche, in The Daily Constitution, +Atlanta, Ga., March 30, 1880. + +[144] Reprinted in News and Courier, March 18, 1881. The writer had been a +slave-holder. + +[145] A sentence occurring in an editorial of the News and Courier, in the +issue of March 24, 1881, is indicative of the love with which this city +looked upon the undertaking proposed: "A man who has been in the whirl of +New York or in any of the brand new cities of the great West coming into +Charleston might readily enough come to the conclusion that the old city +was in a sad state of decadence ... but our own people ... if they have +their eyes open (or hearts open would perhaps be the better expression) +could not fail to see manifest improvement." + + "They dub thee idler, smilingly sneeringly, and why?-- + How know they, these good gossips, what to thee + The ocean and its wanderers may have brought? + How know they, in their busy vacancy, + With what far aim thy spirit may be fraught? + Or that thou dost not bow thee silently + Before some great unutterable thought." + + --Henry Timrod + +[146] "The people of South Carolina are nothing if not heroic, and right +or wrong, they are sincere, earnest, and brave ... the same heroic +qualities are now leading in the restoration of the South to prosperity, +and on a basis that must speedily give the reconstructed States a degree +of substantial wealth and power that was never dreamed of before the war." +(A. K. McClure, "The South: Industrial, financial and political", p. 55, +published 1886.) + +[147] The News and Courier, in an editorial on March 19, 1881: "Every true +South Carolinian must rejoice at the prudence and energy exhibited by the +citizens of Columbia in their management of the cotton mill campaign.... +It will be a happy day for the whole State when the hum of myriad spindles +is heard on the banks of the historic canal. Columbia will then grow +rapidly, speedily rivalling Augusta in the number and success of the +cotton mills. Thousands will be added to the population, and from our +political center additional life and energy will flow to every part of the +State.... we confess to having a weakness for Columbia, which suffered so +sorely at the end of the war, and which is the only place of consequence +in South Carolina that has not improved its business and enlarged its +boundaries since the overthrow of Radicalism in 1876. But cotton mills +will soon make amends for the vicissitudes and hopelessness of the past, +and for that reason The News and Courier takes the warmest possible +interest in the cotton mill campaign at Columbia." The Observer, Raleigh, +N.C., July 11, 1800: "... when our people once begin to mingle freely, +having a community of interests and a common purpose, sectional feelings +will be obliterated, and we will forget that there has been an East, a +center, or a West, and remember only that we are all North Carolinians, +sharing the same fortunes, blessed with a common hope and ennobled with +the same proud memories of a glorious past." The News and Courier, January +25, 1881, carried a plea for State aid for Columbia in her enterprise to +build a 16,000-spindle mill, the same as forms the subject of the first +part of this note. The editorial especially advocated the placing of +convicts at work on the construction: "... The capital, _because it was +the capital_, was laid in ashes by Sherman's troops. In the person of +Columbia, all South Carolina was ravaged and laid waste. The city which +suffered so sorely may reasonably expect the just assistance of the State +in the endeavor to repair her losses caused by war, and intensified by +years of contact with political profligacy and misrule." + +[148] "What the South should do is the caption that graces the editorial +effusions of all classes cf papers, and especially those of our own deeply +solicitous and anxious friends of the North. Many of us think we know. The +South should depend upon its own virtue, its own brain, its own energy, +attend to its own business, make money, build up its waste places, and +thus force upon the North that recognition of our worth and dignity of +character to which that people will always be blind unless they can see it +through the medium of material, industrial and intellectual strength. We +may proclaim political theories, but it is the more potent and powerful +argument of the mighty dollar that secures an audience there, and the +sooner we realize it the better for us." (News and Observer, Raleigh, +N.C., Nov. 27, 1880.) + +[149] Editorial in News and Courier, Mar. 9, 1881. + +[150] It is interesting and pathetic to observe how unaccustomed the South +was to the most obvious facts of business. Concentration upon one crop had +precluded from the Southern mind--speaking in the aggregate, of +course--the first reasonings springing from diversification of industry +and from ordinary competition. But once the necessity for a different +attitude became apparent, the statesmanlike manner in which this was +pressed must provoke admiration. The article in J. D. B. DeBow's +"Industrial Resources", etc., pp. 124-125, presents the consideration that +the cotton crop of Tennessee, amounting to 200,000 bales, 90,000,000 +pounds at 6-1/2 cents an average pound, gave the producers 11-1/2 per +cent. profit on their investment, while the manufacturers of the same crop +made 24 per cent. profit--more than twice as great. "Are there any so +blind as not to see the advantages of the system?" Much earlier Southern +statements of the true fact from manufacturing cotton was to be found, but +in the delirium of the latter days of slavery these were lost sight of. +Wm. J. Barbee, in his "The Cotton Question" pp. 138 and following, +commends for the reflection of capitalists in 1866 the "Manufacture of +Cotton by its Producers, suggestions of S. R. Cockrill seventeen years +ago." Cockrill speculated as to the gain to be derived from cotton mills +in the cotton states, and said: "Facts like these should fix the attention +of the cotton planter, teach him his true interest, and stimulate him to +become the manufacturer of the product of his field, instead of permitting +others to reap the entire profit." + +[151] News and Courier, Feb. 2, 1881. The editorial appeared apropos of +the opening of books for subscriptions to the Charleston Manufacturing +Company, which occupies a prominent place in the history of cotton +manufacturing in the South. The editorial concluded: "This is the logic of +the investment of money in cotton mills in Charleston. It will pay the +stockholders their ten or twelve per cent., and the city at large will get +a dollar's profit on every dollar's worth of raw cotton that the mills +consume." + +[152] While the manufacture of cotton was the most prominent manifestation +of the newly quickened spirit in the South, it was by no means the only +one. Every opportunity for productive enterprise was eagerly investigated; +the discovery of one of these was hailed in the papers with an enthusiasm +like the joy of a child in a new-found plaything. Properties of soils, the +use of the telephone, the most profitable employment for State convicts +were some of the topics of interest. There was, of course, a complete +absorption for a time in railroads in the Southern Atlantic coast states, +either for the further building of small independent lines, the merging of +these into systems, or the extension of the coastal lines over the +mountains into Tennessee. + +There was also a phase of the movement distinctly moral in tone, as, e.g., +the wide formation of temperance societies about this time. + +[153] News and Courier, Aug. 1, 1881. + +[154] While it is clear that the purpose to build cotton mills in the +South arose irrespective of the means at the disposal of the people with +which to do so, and would have come about had their financial limitations +been even more discouraging, it is certainly true that a revival of +business at the time of the commencement of the cotton mill campaign was a +spur to the widespread investigation into the profitableness of cotton +manufacturing. That there was coming to be money seeking investment, or at +any rate capable of investment, was good reason for the searching out of +opportunities for productive industry. The following gives an insight into +the better times that had begun: "The year that is just finished will be +to the present generation a red-letter one, for it brought to an end the +long and weary period of enforced economy and restricted business that +followed the panic of 1873, and put every branch of industry at work. +Agriculture was encouraged in the West and South by good crops and +remunerative prices, the factories received more orders than they could +fill, the railroads were blocked with freight, the mines were pushed to a +greater extent than ever, and all other interests were quickened towards +the end of the old year in a way that was full of promise." This summary +of the year 1879 appeared in The Daily Constitution, Atlanta, January 7, +1880. The return to specie payments did much to stimulate trade. A +contribution to the Savannah, Ga. Morning News, quoted by W. H. Gannon in +"The Landowners of the South and the Industrial Classes of the North", pp. +6, 7 and 8. The article was probably written by Mr. Gannon himself. + +[155] Quoted from Savannah Morning News by W. H. Gannon, The Landowners of +the South and the Industrial Classes of the North. "The cotton mill to the +cotton field" was the familiar dogma which crystallized out of the course +events were taking. + +[156] The term is taken from The News and Courier, where it was used +first, perhaps, in the issue of January 31, 1881. Before long it had come +to be a phrase in everybody's mouth, and proved to be apt beyond any +thought, probably, of the editor who first ran the line over a column of +notices of new mills established. + +[157] "The News and Courier busies itself with every enterprise, big and +little, that will turn a dollar's worth of raw material into more than a +dollar's worth of manufactures." (News and Courier, Mar. 19, 1881.) + +[158] Reprinted in Daily Constitution, Mar. 9, 1880. + +[159] News and Courier, Jan. 12, 1882. + +[160] Ibid., Feb. 22, 1881, see p. 11, note 3. + +[161] Ibid., January 26, 1881. + +[162] "While Charleston and other points in the State are discussing and +initiating their cotton manufactories, Spartanburg is pushing ahead with +her grand enterprise. (Spartanburg correspondence of News and Courier, +Feb. 4, 1881.) The same purpose to encourage new mills actuated the News +and Observer, December 24, 1880, in referring to Edward Richardson, of the +firm of Richardson and May, cotton factors, in New Orleans ... the cotton +king of the world. He runs ten to twelve plantations.... Has built a town +(Cresson) ... where he has factories employing 400 looms, 18000 spindles +and 800 hands. He is worth from $15,000,000 to $18,000,000, all +accumulated in the South, the poor South." The encouragement lent by one +mill to others to come into the field was recognized. In working for the +establishment of the Charleston Manufacturing Company, the News and +Courier was starting a force that would grow in power through the years: +"When this pioneer company shall have made a good start, other companies +will speedily follow...." (January 28, 1881). And again (Observer, January +2, 1880): "Another large cotton factory. The Charlotte Observer chronicles +the erection in the immediate future of a cotton factory in that city, and +regards it as the beginning of a prosperous growth of manufactures." An +item in the Barnwell, S.C. Sentinel, reprinted in the News and Courier, +Feb. 8, 1881, declared: "The people of Charleston should have never +hesitated as long as they have about embanking in the manufacture of +cotton goods, and we firmly believe, as the ball is started, that it will +be kept moving...." The Keowee Courier, in an editorial also reprinted in +the Charleston paper, commended Charleston as setting an example to the +entire State. A Georgia note, carried in the News and Courier of February +24, 1881, is especially specific in this connection: "If the organization +of this manufacturing company (the Enterprise Factory, Augusta, Georgia, +which was to be greatly enlarged after making good profits) proves a good +omen--its extension may work as an invaluable stimulus to other +enterprises now. It will hurry up the walls of the stupendous Sibley Mill, +where 25,000 spindles will soon mingle in our industrial acclaim. It will +quicken the shuttles of that giant corporation, the Augusta Factory." "It +will spur on the Globe Factory and the Summerville Mills to renewed +effort, while our South Carolina neighbors cannot but catch the spirit of +improvement." + +[163] Reprinted in the News and Courier, Jan. 31, 1881. + +[164] Reprinted in the News and Courier, Feb. 23, 1881. + +[165] Ibid., Jan. 27, Mar. 20 and May 4, 1881. + +[166] The commencement of the movement was right clearly marked in the +minds of the people. The News and Courier (August 1, 1881) in an editorial +commenting on the address of Major Hammett on cotton manufacturing in the +South, printed in that issue of the paper, had these words: "Major Hammett +was the founder of the Piedmont Factory, which, under his management, is +one of the finest and most profitable cotton mills in the South. The +Piedmont Factory was projected and built before the opening of the cotton +mill campaign in the South, and Maj. Hammett ranks, therefore, as one of +the pioneers in cotton manufacturing in South Carolina." + +[167] News and Courier, Oct. 13, 1881. + +[168] "We people of the South should embrace every opportunity which, like +the opportunity offered by this exposition, will bring among us +intelligent and interested observers of our industrial condition, +resources and aptitudes. We have in the midst of us the raw material, so +to speak, of a magnificent prosperity. We lack knowledge, population and +capital. These may be slowly accumulated in the course of years, or they +may be rapidly by well directed efforts to obtain them from beyond our own +borders. We advocate the latter plan." (Interview with one of the +officials of the exposition, printed in News and Courier, Mar. 14, 1881.) + +[169] News and Courier, Dec. 27, 1881. + +[170] An Atlanta dispatch to the News and Courier, February 25, 1881, said +the executive committee of the exposition was fully organized, with H. I. +Kimball, chairman and J. W. Rickman, secretary. By March 8 (News and +Courier) $20,000 had been subscribed in Atlanta, and General Sherman had +headed the Northern subscription to the capital stock with $2,000. By the +17th (News and Courier) the stock had reached $40,000, four subscriptions +of $1,000 each having been received from private individuals, and eleven +of $500 each from like sources. Railroad subscriptions at this date were: +Western and Atlantic Railroad Company, $10,000; Louisville and Nashville, +$5,000; Richmond and Danville Road, $2,500; East Tennessee, Virginia and +Georgia Road, $2,000. By the first day of April (News and Courier still) +New York bankers seemed likely to increase by $5,000 the amount of +subscriptions sought from them, and make their shares $30,000. Inman, Swan +& Co. subscribed to $2,000 worth of stock Drexel, Morgan & Co. took +$1,000; and Brown Bros. & Co. $1,000. Before the week was out, (News and +Courier, April 5) the Boston Herald had taken $1,000 worth of stock. The +executive committee had sent an agent to Europe and had made a tour of +investigation through the North earlier. + +[171] News and Courier, Oct. 21, 1881. + +[172] Ibid., Oct. 7, 1881. + +[173] News and Courier, Oct. 10, 1881. + +[174] November 1, 1881. This paper maintained Mr. Hemphill as staff +correspondent at the exposition for some time after its opening. + +[175] News and Courier, Dec. 5, 1881. The speech details the number of +miles of railroads that spread like a web over New England. "I have said +that there is no better simple standard than the proportion of railroads +to the square mile of territory of any State, by which to gauge the +condition and prosperity of the people. I ask you, gentlemen of Georgia, +if you will lag behind. I ask you men of the South what you will do in +this matter." "I told you last year you needed the savings bank more than +any other institution; there is a vast unused capital in your Southern +States in the hordes of the working people waiting for us, but there is +one condition precedent to the savings bank--you must set up schools." +This paragraph illustrates Mr. Atkinson's ideas singularly well. His +advocacy here of common schools was a part of his great desire to see the +South rebuilt, and so was his proposal of savings banks. But he could not +understand how the South wished to see money taken out of savings banks +and placed immediately in cotton mills, where it would be more productive +to its owners, and to the country. As far as Mr. Atkinson went, his +reasoning was astonishing sound, but where he stopped, he stopped +irrevocably. + +"Where are your dairies? You farmers of the hills of Georgia, from the +mountains of the Carolinas and Tennessee, aye, from the North Cumberland +valley, from the French Broad River, even from that great blue grass +country of Kentucky. Where are your dairies?" he seemed to think of +everything but what to his hearers seemed most obvious. He suggested stock +raising as profitable in the South, and finally the culture of Pongee, +Tussah or Cheefoo silk worms, though the latter would be, he thought, +perhaps of doubtful success. A week after this speech, Mr. Atkinson had a +talk, reported in the News and Courier of May 8, 1881, with the press +representatives in their pavilion. He discussed first "whether a single +roller gin, operating against a saw gin, will do an equal amount of work +with less motive power and less labor." He had arranged to take to Boston +to lay before the New England Cotton Manufactures' Association samples of +cotton from all the gins on the grounds. "Mr. Atkinson has proposed +another trial of every kind of gin, cleaner, press and picker, to be made +in the building of the New England Mechanics' Institute in Boston, in +December, 1882. Every man in the South who is especially interested in +cotton production and manufacture will be invited to plant a specific acre +for use at this trial, which will be the second step in what has been so +well begun in Atlanta. The picking and saving the cotton wasted on the +ground, the cleaning, ginning and packing of the staple in good condition, +offers to the Southern States a branch of manufacturing the most important +in the whole series of operations which neither the Northern States nor +Europe can share, but in which there is greater opportunity for profit in +ration to the capital invested than in any other department of +manufacture. 'No staple in the world,' said Mr. Atkinson, 'except the +sugar raised by the Maylays, is treated so barbarously as the cotton +produced in the Southern States of the American Union'." Tests, Mr. +Atkinson thought, showed that cotton from the Charlotte steam compress +worked up more smoothly, though the yarn was somewhat weaker, perhaps, +than cotton from the county compresses and loose cotton just as it came +from the field. It may be that this interview was written by Mr. Atkinson +himself, and run into the reports of the day at the exposition as sent out +by the correspondents. + +[176] Examples of this abound. The Manufacturer and Industrial Gazette, +Springfield, Mass., was quoted in the News and Courier, Feb. 3, 1881: +"They (the Southern States) have the advantage of cotton location, and, +when they have secured new and improved machinery, will do any unrivalled +business. They can save freights, buy cheaper and hire cheaper labor. They +save buyers' commission, and warehouse delivery and cartage, sampling, +classing, pressing, shipping, marine risks and freight and cartage to +interior towns, which amounts in all to some seven dollars per bale. The +Northern mills also lose from receiving cotton poorly ginned, containing a +good deal of leaf and sand, which is computed at six per cent. of the +entire crop. The difference between the cost of a bale sent to Fall River, +Mass., and a bale sent to Columbia, Ga., is eight dollars and six cents. +This makes a tax of eighteen per cent. which Fall River pays in +competition with Columbus. It is estimated that, if the planters could +manufacture their cotton near home, they would save $50,000,000 in +transportation.... As yet the South manufactures principally coarser +goods, yarns, ducks, unbleached muslins, sheetings, shirtings, osnaburgs, +jeans, etc., but the time is not distant when it will come to make prints, +cambrics, laces, and all the finer qualities of staple goods." + +[177] News and Courier, Dec. 5, 1881. (In the same issue excerpts from the +address were printed.) + +[178] News and Courier, Oct. 13, 1881. In the following editorial comment +of the Augusta, Ga., Chronicle and Constitutionalist (reprinted in the +News and Courier, Dec. 8, 1881) the contrast between Mr. Atkinson's views +and the facts as the South was finding them is made sharp: "Augusta has an +abiding faith in her manufactories, despite Mr. Edward Atkinson, and +people outside seem to think as well of them, at any rate they are willing +to invest their money in such enterprise.... For such factories as the +Augusta, the Enterprise and Sibley and the King are of immense importance +to a city. There will be when all of them are at work, fully twenty +thousand people dependent upon them, including the operatives and their +families, to say nothing of the stores that will be supported by their +trade. Each factory like the Sibley or the King adds five thousand to the +population." + +[179] "We have found that we cannot stand alone, that our fight must be +made within the Union." (News and Courier, Oct. 24, 1881.) + +[180] News and Courier, Charleston, S.C., July 13, 1881. When Garfield was +shot, July 2, this paper carried an editorial of similar content. Five +days after the appearance of the editorial here quoted, when recovery +seemed assured, the paper said this: "One thing the President's desperate +illness has unquestionably effected. It has done more than years of +ordinary events in bringing the North and South together--vainly will the +politicians flourish the 'bloody flag'. The people will not rally on the +ensanguined colors again. For the Republic, as well as the President, the +danger line is well nigh, passed." + +[181] News and Courier, Sept. 20, 1881. Garfield died at Elberton, N.J., +September 19. That Charleston meant what she said is shown in the +reception which was accorded the First Connecticut Regiment, invited to +visit the city after attending the Centennial Celebration at Yorktown, +Virginia. The New Englanders came six weeks after the death of +Garfield--October 24. On this day the newspaper carried at the head of the +first column the Connecticut and South Carolina flags crossed, above them +the words "Yankee Doodle Came to Town", and below "A Welcome Invasion!" An +editorial headed "Happy Day" had these words: "It does not strain the +probabilities to believe that the visit of the First Connecticut Regiment +to Charleston is the outgrowth and sentiment and interest which found +expression when the President of the United States lay dying, and when +after his long agony he died. Had not President Garfield been slain, and +the South felt differently and, therefore, acted differently, this present +unpremeditated fraternization would have been impossible. There is no +shock now in removing mourning trappings to make room for the wreaths and +garlands of joy. It is the fit succession of events, a consequence of the +murder of the President. The blood of the Chief Magistrate is the seed of +union. Yorktown in itself a reminder of the days when North and South had +felt one aim and purpose, furnished the opportunity or occasion, and the +unselfish sorrow of the Southern people during the President's mortal +illness furnished the motive. The relation of the two events is too plain +to be ignored or misunderstood. This is the significance of the coming of +the Connecticut First from the land of abundance and diversified wealth to +battle-scarred and struggling Charleston." + +[182] Interview with C. C. Baldwin In the New York Herald, reprinted in +News and Courier, July 11, 1881. + +[183] The Daily Dispatch, Richmond, Va., March 5, 1880. + +[184] News and Observer, Dec. 1, 1880. + +[185] News and Observer, Mar. 25, 1881. + +[186] Mar. 18, 1881. In this instance also it is apparent that the State +was looked to as a natural unit upon which the company had claims. The +dispatch says: "The estimates of the subscriptions here has (have) been +raised, in view of the encouragement received already, to at least +$125,000, and it is believed that with this substantial backing the whole +State will be assured of the character of the organization, and join in +the enterprise." + +[187] News and Courier, Jan. 14, 1882. + +[188] News and Observer, Raleigh, Nov. 9, 1880. + +[189] Dec. 24, 1880. + +[190] Newberry Herald, quoted in News and Courier, Feb. 8, 1881. + +[191] Quoted in News and Courier, Feb. 8, 1881. + +[192] January 28, 1881. + +[193] The same dual basis of appeal was recognized in a notice +supplementing an advertisement of the company appearing the day before the +editorial here quoted (Jan. 27, 1881): "The advantages, direct and +incidental, accruing to every citizen of Charleston from this industry +about to be started in our city are so manifest that those who have +inaugurated the enterprise have every reason to feel confident of a ready +response to the call for capital and for abundant success." + +[194] News and Courier, Apr. 13, 1881. + +[195] Quoted in News and Courier, Mar. 31, 1881. + +[196] Quoted in News and Courier, Jan. 31, 1881. + +[197] News and Courier, Sept. 1, 1881. + +[198] Thompson, P. + +[199] Rock Hill Correspondent in News and Courier, Jan. 12, 1882. + +[200] News and Courier, Dec. 17, 1881. + +[201] Yorkville Correspondence, Ibid., March 25, 1881. + +[202] Ibid., Feb. 26, 1881. + +[203] Ibid., Apr., 6, 1881; see p. 19. + +[204] The Observer, Sept. 10, 1880. The Daily Constitution, Atlanta, on +Mch. 9, 1880, carried from the Columbus Enquirer: "... there are 213,157 +spindles to Georgia's credit.... Of this number Columbus has 60,000--near +a third of the whole.... The Eagle and Phenix mills alone operate 44,000 +spindles. All this has been done since 1866 ... with Southern capital and +brains." The editor of The Observer, Raleigh, paid a visit to Durham and +Winston, North Carolina, and went back to his desk glowing with enthusiasm +for what they had accomplished. In an editorial (May 19, 1880) headed +"Manufacturing Towns"; he wrote of Durham: "Literally the town has been +created through the energy and enterprise of its inhabitants. They began +with no capital to speak of, and now they levy contributions on hundreds +of thousands of people who live in distant parts of the Union, and with +their gains have built and beautified a town whose history should be +continually kept in view by all who would have their own homes to +prosper." + +[205] C. C. Baldwin, president Louisville and Nashville Railroad; the +interview was reprinted in News and Courier, July 11, 1881. + +[206] Staff correspondence from Spartanburg to News and Courier, May 21, +1881. + +[207] Ibid., Feb. 4, 1881. + +[208] News and Courier, Oct. 24, 1881. + +[209] News and Courier, Mch. 8, 1881. + +[210] News and Courier, Mar. 19 and 25, 1881. The personnel of committees +appointed from among the early subscribers is significant. The names are +all, or nearly all, old ones in South Carolina, and some of the men are +still among the first citizens of the capit. The committees were made up +of W. A. Clark, Jno. C. Seegers, Nathaniel B. Barnwell, F. W. McMaster, +Preston C. Lorick, T. A. McCreery, Jno. T. Sloan, Jr. + +[211] Ibid., Mar. 17, 1881. + +[212] Columbia Dispatch, Ibid., Mar. 31, 1881. + +[213] News and Courier, Jan. 28, 1881. + +[214] See p. 14. + +[215] News and Courier, Jan. 9, 1882. + +[216] News and Courier, Dec. 14, 1881. + +[217] Ibid., Mch. 25, 1881. + +[218] "Brutus", writing from Barnwell to News and Courier, May 25, 1881. + +[219] Sumter, S.C. Southron, quoted in News and Courier, May 14, 1881. + +[220] News and Courier, June 28, 1881. + +[221] Ibid., Mar. 14, 1881. + +[222] Quoted News and Courier, Aug. 18, 1881. + +[223] Observer, June 27, 1880. + +[224] Dispatch quoted in News and Courier, Mar. 25, 1881. Francis +Fontaine, commissioner of immigration for Georgia, did not represent the +method of appeal of his fellow Georgians, when he said tritely and smugly: +"The truth is only to be made known, when capital will find its own way to +the sunny land." (Observer, Mar. 20, 1880.) + +[225] Gannon, W. H., The Landowners of the South, and the Industrial +Classes of the North, pp. 6, 7 and 8. + +[226] News and Courier, Aug. 9, 1881. + +[227] Quoted in News and Courier, July 7, 1881. The isolation of this +editor and the provincial quality of his utterance are clearly seen in +such phrases as "we welcome foreign capital down here". Even without the +context. + +[228] Quoted from New York Herald, in News and Courier, July 11, 1881. +Hon. Cassius M. Clay, writing in The Industrial South declared: "I am +tired of hearing the deprecating cry of 'We want Yankee brains and +enterprise.' We don't want any such thing; We want Southern brains and +enterprise." (Quoted in Gannon, pp. 18 and 19.) + +[229] Quoted in News and Courier, Nov. 5, 1881. + +[230] Feb. 13, 1880. + +[231] News and Courier, Nov. 5, 1881. + +[232] Quoted in News and Courier, Mar. 8, 1881. + +[233] Quoted in News and Courier, Annual Trade Summary, Sept. 1, 1881. + +[234] Winnsboro (South Carolina) News, quoted in News and Courier, Feb. 8, +1881. + +[235] July 30, 1881. + +[236] Quoted in News and Courier, Apr. 25, 1881. + +[237] Ibid., Apr. 9, 1881. The Batesville Cotton Factory, built by William +Bates forty years before, was bought by G. Putnam, of Massachusetts for +$8,000, and he invested $10,000 additional in the plant. The building was +frame, two and half stories high, all was burned in March of 1881, +catching from sparks from the boiler room. It was believed that Mr. Putnam +would rebuild the plant on better lines. (Ibid., Mar. 2, 1881, et seq.) + +[238] Ibid., July 11, 1881. + +[239] Ibid., Nov. 10, 1881. + +[240] News and Courier, July 11, 1881. + +[241] Ibid., Jan. 14, 1882. + +[242] News and Courier, Jan. 12 and 14, 1882. When the Sibley +Manufacturing Company of Augusta, Georgia, was increasing its capital by +$400,000, President W. C. Sibley received from Boston a telegram ordering +$20,000 of the new stock. (News and Courier May 21, 1881.) Cf. Thompson. + +[243] News and Courier, Apr. 6, 1881. + +[244] Ibid., Mch. 15, 1881. + +[245] Ibid., Mch. 29, 1881. + +[246] News and Courier, Apr. 1, 1881. These subscriptions may have been +partly influenced by the purpose of Mr. Atkinson to have the Exposition +further the cultivation and preparation, and not the manufacture, of the +staple. + +[247] Jan. 27, 1881. + +[248] March 21, 1881. + +[249] News and Courier, Jan. 21, 1881. + +[250] It seems to have been usual to call first for a payment of 10 per +cent. of the stock subscribed, rather than to require a certain proportion +in cash at subscription. Thus the books of subscription of the Charleston +Manufacturing Company were opened January 27th; on March 29th the +directors called for the payment of the first instalment of 10 per cent., +and at 2 o'clock on the morning of April 9th--how closely the progress of +the undertaking was watched by papers and public!--more than half of the +amount was in the hands of the officers of the company. + +[251] Ibid., Feb. 10, 1882. + +[252] Ibid., Feb. 5, 1881. + +[253] Ibid., Feb. 7, 1881. + +[254] News and Courier, Mar. 25, 1881. + +[255] Hartsell, J. L., interview, Concord, N.C., Sept. 2, 1916. + +[256] C. B. Armstrong, interview, Gastonia, N.C., Sept. 14, 1916. + +[257] Joseph Separt, interview, Gastonia, N.C., Sept. 14, 1916. + +[258] S. N. Boyce and J. Lee Robinson, interview, Gastonia, N.C., Sept. +14, 1916. + +[259] Ibid., Feb. 26, 1881. + +[260] News and Courier, S.C., Feb. 24, 1881. + +[261] Augusta Trade Review, Augusta, Ga., Oct., 1884. + +[262] News and Courier, Apr. 9, 1881. This paper in the issue of Feb. 26th +spoke of the additional stock as being $350, but puts the amount at +$100,000 lower in this later notice. + +[263] North Carolina Herald, Salisbury, N.C., Nov. 9, 1887, quoted in +minute book of Salisbury Cotton Mills. + +[264] The meeting was held Dec. 2nd; the minute book record is signed by +F. J. Murdoch, sec. pro tem. + +[265] Klutz, Theodore F., interview, Salisbury, N.C., Sept. 1, 1918. + +[266] J. B. Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916. + +[267] News and Courier, Mar. 31, 1881. + +[268] Barbee, Wm. J., The Cotton Question, pp. 138 ff. + +[269] March 18, 1880. + +[270] Clement F. Haynesworth, interview, Greenville, S.C., Sept. 9, 1916. + +[271] J. L. Hartsell, interview, Concord, N.C., Sept. 2, 1916. + +[272] W. R. Odell, interview, Concord, N.C., Sept. 2, 1916. + +[273] L. Baker, interview, Gaffney, S.C., Sept. 13, 1916. + +[274] News and Courier, Feb. 23, 1881. + +[275] Haynesworth, interview, Greenville, S.C., Sept. 9, 1916. + +[276] From Cotton Field to Cotton Mill, pp. 82 ff. + +[277] Hartsell, interview, Concord, N.C., Sept. 2, 1916. + +[278] L. G. Porter, interview, Gaffney, S.C., Sept. 13, 1916. + +[279] Potter, interview, Gaffney, S.C., Sept. 13, 1916. + +[280] Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916. + +[281] B. B. Gossett, interview, Anderson, S.C., Sept. 11, 1916. + +[282] Baker, interview, Gaffney, S.C., Sept. 13, 1916. + +[283] Ibid. + +[284] Hartsell, interview. Concord, N.C., Sept. 2, 1916. + +[285] Rogan, G. W., interview, Gastonia, N.C., Sept. 14, 1916. + +[286] Sterling Graydon, interview, Charlotte, N.C., Sept. 4, 1916. + +[287] C. S. Morris, interview, Salisbury, N.C., Sept. 1, 1916. + +[288] Hartsell, interview, Concord, N.C., Sept. 2, 1916. + +[289] Charles McDonald, interview, Charlotte, N.C., Sept. 3, 1916. + +[290] Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916. + +[291] J. W. Norwood, interview, Greenville, S.C., Sept. 9, 1916. + +[292] Thackston, interview, Greenville, S.C., Sept. 12, 1916. J. A. +Chapman, interview, Spartanburg, S.C., Sept. 5, 1916. The mills around +Spartanburg had a nucleus of local capital, and the commission houses and +machinery manufacturers took an interest in the development. + +[293] Baker, interview, Gaffney, S.C., Sept. 13, 1916. + +[294] Wood, Interview, Gaffney, S.C., Sept. 13, 1916. + +[295] Gossett, interview, Anderson, S.C., Sept. 11, 1916. + +[296] Chapman, interview, Spartanburg, S.C., Sept. 5, 1916. + +[297] A. A. Thompson, interview, Raleigh, N.C., Sept. 16, 1916. + +[298] Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916. + +[299] Clark, David, interview, Charlotte, N.C., Sept. 4, 1916. + +[300] C. D. Morris, interview, Salisbury, N.C., Sept. 1, 1916. + +[301] Seport, interview, Gastonia, N.C., Sept. 14, 1916. + +[302] Wood, interview, Gaffney, S.C., Sept. 13, 1916. + +[303] Separk, interview, Gastonia, N.C., Sept. 14, 1916. + +[304] Charles E. Johnson, interview, Raleigh, N.C., Sept. 16, 1916. + +[305] Bernard Case, interview, Greensboro, N.C., Aug. 30, 1916. + +[306] Chapman, interview, Spartanburg, S.C., Sept. 5, 1916. + +[307] Haynesworth, interview, Greenville, S.C., Sept. 9, 1916. + +[308] Gossett, interview, Anderson, S.C., Sept. 11, 1916. + +[309] Haynesworth, interview, Greenville, S.C., Sept. 9, 1916. + +[310] Odell, W. R., interview, Concord, N.C., Sept. 1, 1916. + +[311] Norwood, interview, Greenville, S.C., Sept. 9, 1916. + +[312] Ibid. + +[313] Norwood, interview, Greenville, S.C., Sept. 9, 1916. + +[314] Clark, interview, Charlotte, N.C., Sept. 4, 1916. + +[315] Ibid., Also Separk, interview, Gastonia, N.C., Sept. 14, 1916; also +H. D. Wheat, interview, Gaffney, S.C., Sept. 13, 1916. + +[316] Thackston, interview, Greenville, S.C., Sept. 12, 1916. + +[317] Ibid. + +[318] Graydon, interview, Charlotte, N.C., Sept. 4, 1916, also J. A. +Brock, interview, Anderson, S.C., Sept. 11, 1916. + +[319] Separk, interview, Gastonia, N.C., Sept. 14, 1916; also Thackston, +ibid. + +[320] Graydon, interview, Charlotte, N.C., Sept. 4, 1916. + +[321] Boyce, and Robinson, interview, Gastonia, N.C., Sept. 14, 1916; also +Ragan, interview, Gastonia, N.C., Sept. 14th, 1916. + +[322] Thackston, interview, Greenville, S.C., Sept. 12, 1916. + +[323] Gossett, interview, Anderson, S.C., Sept. 14, 1916. + +[324] Chapman, interview, Spartanburg, S.C., Sept. 5, 1916; also Boyce and +Robinson, interview, Gastonia, N.C., Sept. 14, 1916. + +[325] Boyce and Robinson, interview, Gastonia, N.C., Sept. 14, 1916. + +[326] Gossett, interview, Anderson, S.C., Sept. 11, 1916. + +[327] Wood, interview, Gaffney, S.C., Sept. 13, 1916. + +[328] News and Courier, Apr. 29, 1881. + +[329] April 28, 1881. + +[330] News and Courier, Apr. 28, 1881. + +[331] Ibid., Apr. 29, 1881. + +[332] One commission house thirty years ago took all the bonds of a mill. +A. A. Thompson, interview, Raleigh, N.C., Sept. 16, 1916. + +[333] Wheat, interview, Gaffney, S.C., Sept. 13, 1916. + +[334] News and Courier, Jan. 12, 1882. + +[335] Ibid., Jan. 14, 1882. + +[336] Boyce, and Robinson, interview, Gastonia, N.C., Sept. 14, 1916. + +[337] Bernard Cone, interview, Greensboro, N.C., Aug. 30, 1916. + +[338] Henry E. Litchford, interview, Richmond, Va., Aug. 29, 1916. + +[339] News and Courier, Jan. 14, 1882. + +[340] Klutz, interview, Salisbury, N.C., Sept. 1, 1916. + +[341] O. D. Davis, interview, Salisbury, N.C., Sept. 1, 1916. + +[342] McDonald, interview, Charlotte, N.C., Sept. 3, 1916. The Caborrus +Mill, at Concord, previously referred to as having been financed on the +co-operative plan was begun by others and taken over by Mr. Cannon when +its prospects had declined. (Ibid.) + +[343] Interview, Columbia, S.C., Jan. 5, 1917. + +[344] James W. Cannon, interview, Concord, N.C., Jan. 6, 1917. + +[345] J. H. Meaus Beattie, interview, Columbia, S.C., Jan. 3, 1917. + +[346] W. W. Ball, interview, Columbia, S.C., Jan. 3, 1917. + +[347] Thompson, pp. 82 ff. + +[348] W. W. Ball, interview, Columbia, S.C., Jan. 3, 1917. A minor episode +partaking of the character of both of the above may be worth mentioning. +Mrs. M. Putnam Gridley, who, until her retirement from the presidency of +the Batesville, S.C. Mill, was the only woman cotton mill president in +America, said that the Boston commission house which owned and operated +the factory under her father's control, was "about to commit a wrong" when +the enterprise failed of its own accord. (Mrs. M. Putnam Gridley, +interview, Greenville, S.C., Sept. 9, 1916.) + +[349] Thackston, interview, Greenville, S.C., Sept. 12, 1916. + +[350] Jas. D. Hammett, interview, Anderson, S.C., Sept. 11, 1916. + +[351] Marshall Orr, interview, Anderson, S.C., Sept. 10, 1916. + +[352] Charles Estes, interview, Augusta, Ga., Dec. 29, 1916. "When I was +mayor of Augusta and Black was City Attorney, we ran the city on the +commission plan and didn't know it. I used to draft ordinances in my own +handwriting, show them to Black to see whether they were legal, and to +Blum to see if they were grammatical, and that was all there was to it!" + +[353] David, interview, Salisbury, N.C., Sept. 1, 1916. The financial +administration of this mill is attributable in its form to the +conservatism of the company, and to the peculiar conditions of its +inception. One director has nervous prostration, and another is too aged +to attend meetings, but none have been elected in their places. + +[354] Samuel Stradley, interview, Greenville, S.C., Sept. 12, 1916. + +[355] McDonald, interview, Charlotte, N.C., Sept. 3, 1916. + +[356] Thomas W. Loyless, interview, Augusta, Ga. + +[357] Estes, interview, Augusta, Ga., Dec. 29, 1916. + +[358] T. S. Raworth, interview, Augusta, Ga., Dec. 30, 1916. + +[359] D. S. Thompson, Cotton Mill, Commercial Features, p. 51. + +[360] Thackston, interview, Greenville, S.C., Sept. 12, 1916. + +[361] John W. Fries, interview, Winston-Salem, N.C., Aug. 31, 1916. + +[362] Graydon, interview, Charlotte, N.C., Sept. 4, 1916. + +[363] Mar. 18, 1880. + +[364] News and Courier, Aug. 12, 1881. + +[365] Observer, Feb. 13, 1880. + +[366] Quoted in News and Courier, Mar. 22, 1881. + +[367] p. 271. + +[368] Thompson, pp. 82 ff. + +[369] Thackston, interview, Greenville, S.C., Sept. 12, 1916. + +[370] Orr, interview, Anderson, S.C., Sept. 10, 1916. + +[371] Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916. + +[372] Augusta Trade Review, Oct., 1884 + +[373] Baker, interview, Gaffney, S.C., Sept. 13, 1916. + +[374] Morris, interview, Salisbury, N.C., Sept. 1, 1916. + +[375] Mrs. Gridley, interview, Greenville, S.C., Sept. 9, 1916. + +[376] J. A. Brock, interview, Anderson, S.C., Sept. 11, 1916. + +[377] Jas. D. Hammett, interview, Anderson, S.C., Sept. 11, 1916. + +[378] Washington Clark, interview, Columbia, S.C., Jan. 1, 1917. + +[379] Thompson, pp. 89 and 90. + +[380] Tracy I. Hickman, interview, Augusta, Ga., Dec. 29, 1916. + +[381] Thomas Purse, interview, Savannah, Ga., Dec. 26, 1916. + +[382] Geo. W. Williams, interview, Charleston, S.C., Dec. 27, 1916. + +[383] W. P. Carrington, interview, Charleston, S.C., Dec. 27, 1916. + +[384] Geo. Williams, interview, Charleston, S.C., Dec. 27, 1916. + +[385] H. R. Buist, interview, Charleston, S.C., Dec. 28, 1916. + +[386] Julius Koester, interview, Charleston, S.C., Dec. 27, 1916. + +[387] Boyce and Robinson, interview, Gastonia, N.C., Sept. 14, 1916. + +[388] Thackston, interview, Greenville, S.C., Sept. 12, 1916. + +[389] Boyce and Robinson, interview, Gastonia, N.C., Sept. 14, 1916. + +[390] Royan, interview, Gastonia, N.C., Sept. 14, 1916. + +[391] J. Lee Robinson, letter, Gastonia, N.C., Nov. 28, 1916. + +[392] Boyce and Robinson, interview, Gastonia, N.C., Sept. 14, 1916, and +Robinson, letter, Gastonia, N.C., Nov. 28, 1916. + +[393] C. B. Armstrong, interview, Gastonia, N.C., Sept. 14, 1916. + +[394] Robinson, letter, Gastonia, N.C., Nov. 28, 1916. + +[395] Rogan, interview, Gastonia, N.C., Sept. 14, 1916. + +[396] Estes, interview, Augusta, Ga., Dec. 29, 1916. + +[397] Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916. + +[398] The trained men in the industry are in the technical branches, and +that when a leader is wanted at the top, as for the president of a mill, a +man is still chosen who enjoys a general business reputation rather than +specific mill experience. + +[399] Morris, interview, Salisbury, N.C., Sept. 1, 1916. + +[400] Graydon, interview, Charlotte, N.C., Sept. 4, 1916. + +[401] Augusta Trade Review, Oct., 1884. + +[402] G. T. Lynch, interview, Augusta, Ga., Dec. 30, 1916, and Tracey I. +Hickman, interview, Augusta, Ga., Dec. 29, 1916. + +[403] Estes, interview, Augusta, Ga., Dec. 29, 1916. + +[404] Augusta Trade Review, Oct., 1884. + +[405] News and Observer, Nov. 16, 1880. + +[406] Augusta Trade Review, Oct., 1884. + +[407] Hickman, interview, Augusta, Ga., Dec. 29, 1916. + +[408] News and Courier, Feb. 24, 1881. + +[409] Ibid., Aug. 12, 1881. + +[410] Ibid., Aug. 12, 1881. + +[411] Buist, interview, Charleston, S.C., Dec. 28, 1916. + +[412] Keatz, interview, Salisbury, N.C., Sept. 1, 1916. + +[413] Davis, interview, Salisbury, N.C., Sept. 1, 1916. + +[414] Ball, interview, Columbia, S.C., Jan. 3, 1917, and Davison's Textile +Blue Book, 1916. + +[415] Brock, interview, Anderson, S.C., Sept. 11, 1916. See p. + +[416] Thompson, pp. 82 ff. + +[417] Interview, Columbia, S.C., Jan. 5, 1917. + +[418] Goldsmith, p. 6. + +[419] Tompkins, Cotton Mill, Commercial Features, p. 172. + +[420] Goldsmith, p. 6. + +[421] Thackston, interview, Greenville, S.C., Sept. 12, 1916. A mill man +near Greenville said: "The money actually paid in was more or less local +in those days (the early years of the period) but not much paid in." +(Gossett, interview, Anderson, S.C., Sept. 11, 1916.) + +[422] W. J. Thackston, letter, Greenville, S.C., Nov. 28, 1916. + +[423] Buist, interview, Charleston, S.C., Dec. 28, 1916. + +[424] News and Courier, Feb. 24, 1881. + +[425] Raworth, interview, Augusta, Ga., Dec. 30, 1916. He knew of no +Southern mills quoted on any of the exchanges. + +[426] Hickman, interview, Augusta, Ga., Dec. 29, 1916. + +[427] Raworth, interview, Augusta, Ga., Dec. 30, 1916. + +[428] Ball, interview, Columbia, Jan. 3, 1917. + +[429] Ibid. + +[430] Ragan, interview, Gastonia, N.C., Sept. 14, 1916. + +[431] Hickman, interview, Augusta, Ga., Dec. 29, 1916. + +[432] Goldsmith, The Cotton Mill South. + +[433] Estes, interview, Augusta, Ga., Dec. 29, 1916. + +[434] Buist, interview, Charleston, S.C., Dec. 28, 1916. + +[435] Ball, interview, Columbia, S.C., Jan. 3, 1917. + +[436] Washington Clark, interview, Columbia, S.C., Jan. 1, 1917. + +[437] Wool, interview, Gaffney, S.C., Sept. 13, 1916. + +[438] Ball, interview, Columbia, S.C., Jan. 3, 1917. + +[439] A Rock Hill correspondent in News and Courier, Jan. 12, 1882. + +[440] In ibid., A Rock Hill correspondent in News and Courier, Jan. 12, +1882. + +[441] Walter Montgomery, interview, Spartanburg, S.C., Sept. 5, 1916. + +[442] Cleveland, interview, Spartanburg, S.C., Sept. 8, 1916. + +[443] Augusta Trade Review, Oct. 1884. + +[444] News and Observer, Nov. 16, 1880. + +[445] Augusta Trade Review, Oct. 1884. + +[446] Hickman, interview, Augusta, Ga., Dec. 29, 1916. + +[447] Davis, interview, Salisbury, N.C., Sept. 1, 1916. + +[448] Ibid. + +[449] Ragan, interview, Gastonia, N.C., Sept. 14, 1916. + +[450] Robinson, letter, Gastonia, N.C., Nov. 28, 1916. + + + +Transcriber's Notes: + +Underlined passages are indicated by _underline_. + +The original text includes a blank spaces in Footnote 49 which is +represented by ______ in this text version. + +The following typographical and spelling errors have been corrected: + + "evidenes" corrected to "evidences" (page 2) + "be lieved" corrected to "believed" (page 4) + "American" corrected to "America" (page 15) + "powerul" corrected to "powerful" (page 16) + "controservy" corrected to "controversy" (page 16) + "Carolinaian" corrected to "Carolinian" (page 17) + "Id" corrected to "If" (page 18) + "build" corrected to "built" (page 19) + "newsness" corrected to "newness"(page 19) + "propserous" corrected to "prosperous" (page 22) + "mangers" corrected to "managers" (page 22) + "temas" corrected to "teams" (page 26) + "tage" corrected to "stage" (page 29) + "advances" corrected to "advanced" (page 29) + missing "in" added (page 29) + "steambot" corrected to "steamboat" (page 31) + "sucess" corrected to "success" (page 33) + "delcared" corrected to "declared" (page 45) + "Calhoung" corrected to "Calhoun" (page 46) + "feel" corrected to "fell" (page 48) + "quote" corrected to "quite" (page 49) + "imiginary" corrected to "imaginary" (page 52) + "repating" corrected to "repeating" (page 58) + "reproahced" corrected to "reproached" (page 59) + "expression" corrected to "expressing" (page 67) + "tectile" corrected to "textile" (page 69) + "warm" corrected to "war" (page 71) + "seaw" corrected to "sea" (page 75) + "where" corrected to "were" (page 75) + "perosns" corrected to "persons" (page 76) + "charged" corrected to "changed" (page 77) + "an" corrected to "as" (page 82) + "advances" corrected to "advanced" (page 83) + "repvailed" corrected to "prevailed" (page 89) + "understodd" corrected to "understood" (page 95) + "munitiae" corrected to "minutiae" (page 95) + "Herland" corrected to "Herald" (page 98) + "sawrm" corrected to "swarm" (page 100) + "officiaals" corrected to "officials" (page 100) + "Sate" corrected to "State" (page 105) + "and" corrected to "an" (page 112) + "grow" corrected to "grew" (page 117) + "happaned" corrected to "happened" (page 123) + missing "is" added (page 126) + "back-bitting" corrected to "back-biting" (page 127) + "wlecomed" corrected to "welcomed" (page 128) + "bounds" corrected to "bound" (page 128) + "adhorred" corrected to "abhorred" (page 129) + "whol" corrected to "whole" (page 129) + "di" corrected to "do" (page 130) + "pilosophy" corrected to "philosophy" (page 132) + "telehone" corrected to "telephone" (page 133) + "capaign" corrected to "campaign" (page 134) + "loca" corrected to "local" (page 134) + "natice" corrected to "native" (page 137) + "capitalists" corrected to "capitalist" (page 139) + "urges" corrected to "urged" (page 139) + "Souther" corrected to "Southern" (page 148) + "anive" corrected to "naive" (page 150) + "hav" corrected to "have" (page 150) + "struglle" corrected to "struggle" (page 159) + "renumerated" corrected to "remunerated" (page 160) + "Crhonicle" corrected to "Chronicle" (page 162) + "If" corrected to "It" (page 170) + "And" corrected to "An" (page 171) + "Heraldn" corrected to "Herald" (page 173) + "1811" corrected to "1881" (page 174) + "pressent" corrected to "present" (page 181) + "porblem" corrected to "problem" (page 181) + "he" corrected to "the" (page 181) + "ot" corrected to "to" (page 182) + "aided" corrected to "added" (page 184) + "wss" corrected to "was" (page 186) + "neat" corrected to "near" (page 189) + "mil;" corrected to "mill" (page 194) + "sotkc" corrected to "stock" (page 201) + "sone" corrected to "some" (page 202) + "in" corrected to "is" (page 203) + "orgin" corrected to "origin" (page 205) + "yed" corrected to "yes" (page 207) + "ouright" corrected to "outright" (page 211) + "consideraion" corrected to "consideration" (page 218) + "intented" corrected to "intended" (page 221) + "build" corrected to "built" (page 221) + "or" corrected to "of" (page 222) + "propsered" corrected to "prospered" (page 222) + "Unitl" corrected to "Until" (page 227) + "annul" corrected to "annual" (page 232) + "Salsibury" corrected to "Salisbury" (page 233) + "wanters" corrected to "wanted" (page 234) + "deciaion" corrected to "decision" (page 242) + "theys" corrected to "they" (page 251) + "unproftiable" corrected to "unprofitable" (page 266) + "laides" corrected to "ladies" (page 270) + "inheirtance" corrected to "inheritance" (page 270) + "Commerical" corrected to "Commercial" (footnote 2) + "us" corrected to "up" (footnote 19) + "2n" corrected to "2nd" (footnote 17) + "destroyer" corrected to "destroyed" (footnote 29) + "Commerical" corrected to "Commercial" (footnote 45) + "Grenville" corrected to "Greenville" (Footnote 47) + "suidical" corrected to "suicidal" (footnote 57) + "Ibis." corrected to "Ibid." (footnote 82) + "sgainst" corrected to "against" (footnote 86) + "Olmstead" corrected to "Olmsted" (footnote 97) + "Ble" corrected to "Blue" (footnote 110) + "itno" corrected to "into" (footnote 114) + "intenal" corrected to "internal" (footnote 123) + "1811" corrected to "1881" (footnote 144) + missing "to" added (footnote 147) + "solicitious" corrected to "solicitous" (footnote 148) + "to" corrected to "the" (footnote 150) + "ot" corrected to "to" (footnote 162) + "acaclim" corrected to "acclaim" (footnote 162) + "Nasvhile" corrected to "Nashville" (footnote 170) + "unusued" corrected to "unused" (footnote 175) + "you" corrected to "your" (footnote 175) + "rebuilt" corrected to "rebuild" (footnote 237) + "Bid." corrected to "Ibid." (footnote 237) + "Grenville" corrected to "Greenville" (footnote 291) + "Grenville" corrected to "Greenville" (footnote 421) + +Other than the corrections listed above, inconsistencies in spelling and +hyphenation have been retained from the original. + + + + + + +End of the Project Gutenberg EBook of The Rise of Cotton Mills in the South, by +Broadus Mitchell + +*** END OF THIS PROJECT GUTENBERG EBOOK RISE OF COTTON MILLS IN SOUTH *** + +***** This file should be named 37784.txt or 37784.zip ***** +This and all associated files of various formats will be found in: + https://www.gutenberg.org/3/7/7/8/37784/ + +Produced by The Online Distributed Proofreading Team at +https://www.pgdp.net (This file was produced from images +generously made available by The Internet Archive.) + + +Updated editions will replace the previous one--the old editions +will be renamed. + +Creating the works from public domain print editions means that no +one owns a United States copyright in these works, so the Foundation +(and you!) can copy and distribute it in the United States without +permission and without paying copyright royalties. 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