The Rise of Cotton Mills in the South

efore 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

minating the present chapter and that following: "The Financing of the Mills", it is intended to b

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

ially for furnishing employment to many in our midst, has been long felt. To put this matter into practical operation, a few

to erect and put into operation a cotton factory and yarn mill which will be second to none in th

and their associates, lay the matter before you, and respect

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

ded 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 eas

cial 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 Spa

iptions 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

Mill of Mr. Boles, at Hurricane Shoals, seven miles from Spartanburg; the first $200,000 was quickly subscribed for, and books of su

r 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

derstood 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,

mentioned, was intended to have $100,000 capital as

$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 subscript

stock of $100,000, etc., got their large capitalization by selling additional stock to the original subscribers at a reduction-

ive 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 i

l 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

try. 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 wri

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 su

eading 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 Clift

ctory 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

s 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 wate

e 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

s 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 las

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 fina

ills. All of those who might contribute to the erection of the plant-dealers in lumber, paint, tin, b

llowed, 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

ars of its operation.[282] The finishing plant of the same mill, erected some years later, had to be dismanteled and given over to loo

gs back into the factory. Considerable enlargement, on the most approved lines, has recently been

s 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 som

ade frequently huge profits, which made increases

usiness has in turn increased efficiency and earnings. The capital of the Salisbury Mill, as has been said, has n

urces, the paragraphs following deal with the means through which capital

rally be asked: By just what methods did a Southerner anxious to

e 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, t

eo 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, t

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 connect

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

ill 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

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 t

ere 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, s

enced the agitation in Gaffney for a cotton mill, A. N. Wood was doing a sort of private banking and investment business in

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 specificall

anufacturing Company in South Carolina. In this case, the promise of the account was wanted, but to this Mr. Wood did not

and machinery manufacturers, it will be interesting to observe in general the part play

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

ommission 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 involve

have existed without the commission houses, be their infl

ling 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 mi

tart 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 comm

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 b

scouraged, and the mill project for Gaffney was dropped for the time. When it was later revived, no subscriptions were sought from commission houses. Mr. Wo

. 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 th

ome 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 capi

ined, 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 positi

it did not take a mortgage on the plant, for this would have destroyed its credi

ten 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 g

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 stockhold

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 o

tension of plants, it may be mentioned here, and in conclusion of this particular topic, that Southerners projecting mills were someti

at the influence of the machinery manufacturers has been good, except that they caused t

ery 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, t

ant, 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

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; ordinar

s 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, t

and 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 res

n today, though the credit of the Southern manufacturies has steadily risen. It is true tha

, if its credit is good, a Southern mi

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

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,

velopment of the Southern industry from outside sources, more or less of its own accord,

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

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

ition, 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 o

dles, 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 l

ommenced 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, an

ent 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

e 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, Carroll

f 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

ed were allowed to pay in little instalments. The operatives were negroes. The promoter was faithful to the enterprise, but came to be heavily in d