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 a.s.sist 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 coa.r.s.er 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 ca.n.a.l scheme, as ill.u.s.trating 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 ca.n.a.l 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 ca.n.a.l 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 ca.n.a.l pa.s.sed to the hands of the State Ca.n.a.l 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 Ca.n.a.l 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 a.s.sistance--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 cla.s.sed as appertaining to the North.

It is proper first to consider the att.i.tude 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 pa.s.sion. 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 const.i.tuted in the defeat of Hanc.o.c.k 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 a.s.sistance 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 att.i.tude 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 gra.s.s 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 apt.i.tudes. 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 acc.u.mulated 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 Const.i.tution, Francis Cogin reviewed the cotton manufacturing situation in Augusta, reciting the profits and a.s.serting 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 att.i.tude 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 att.i.tude 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 pa.s.s 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 att.i.tude 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 inst.i.tutions 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 a.s.sured 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 ill.u.s.trates 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 a.s.surance 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 compet.i.tor. 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 pa.s.sed 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 unconst.i.tutional. But if it is necessary to that end, the const.i.tution 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, a.s.serted 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 Ca.n.a.l 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]