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  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.