Chapter 5 No.5

Industrial Development

Though the Old South was in the main agricultural, it was not entirely destitute of industrial skill. The recent industrial development is really a revival, not a revolution, in some parts of the South. In 1810, according to Tench Coxe's semi-official Statement of Arts and Manufactures, the value of the textile products of North Carolina was greater than that of Massachusetts. Every farmhouse had spinning-wheels and one loom or several on which the women of the family spun yarn and wove cloth for the family wardrobe. On the large plantations negro women produced much of the cloth for both slaves and family. Except on special occasions, a very large proportion of the clothing worn by the average Southern community was of household or local manufacture. Hats were made of fur, wool, or plaited straw. Hides were tanned on the plantations or more commonly at a local tannery and were made into shoes by local cobblers, white or black.

Local cabinet-makers made furniture, all of it strong, and some of it good in line and finish. Many of the pieces sold by dealers in antiques in the great cities as coming from Europe by way of the South were made by cabinet-makers in Southern villages in the first half of the nineteenth century. Farm wagons as well as carriages with some pretensions to elegance were made in local shops. In fact, up to 1810 or 1820 it seemed that the logical development of one or two of the South Atlantic States would be into frugal manufacturing commonwealths. Few of the thousands of small shops developed into real manufacturing establishments, however, though many continued to exist. The belief in the profits apparently to be made from the cultivation of cotton and tobacco changed the ideals of the people. To own a plantation on which he might lead a patriarchal existence became the ambition of the successful man. Even the lawyer, the doctor, or the merchant was likely to own a plantation to which he expected to retire, if indeed he did not already live on it while he engaged in his other occupation. As the century went on, the section began to depend more and more upon other parts of the country or upon Europe to supply its wants, and general interest in Southern industries began to wane.

Textile establishments had appeared early in the century. The first cotton mill in North Carolina was built in 1810 and one in Georgia about the same time. Much of the machinery for the former was built by local workmen. Other mills were built in the succeeding years until in 1860 there were about 160 in the Southern States, with 300,000 spindles, and a yearly product worth more than $8,000,000. The establishments were small, less than one-third the average size of the mills in New England, and few attempted to supply more than the local demand for coarse yarn which the country women knit into socks or wove into cloth. The surplus was peddled from wagons in adjoining counties or even in a neighboring State. Little attempt was made to seek a wider outlet, and many of these mills could supply the small local demand by running only a few months in the year.

During the Civil War, however, these mills were worked to their full capacity. At the cessation of hostilities many mills were literally worn out; others were destroyed by the invading armies; and fewer were in operation in 1870 than before the War. During the next decade, hope of industrial success began to return to the South. The mills in operation were making some money; the high price of cotton had brought money into the section; and a few men had saved enough to revive the industry. Old mills were enlarged, and new mills were built. The number in operation in 1880 was about the same as in 1860, but the number of spindles was nearly twice as great.

The Cotton Exposition at Atlanta in 1881 and the New Orleans Exposition in 1884 gave an impetus to the construction of mills. There were prophecies of future success in the industry, though some self-appointed guardians of the South proved, to their own satisfaction at least, that neither the section nor the people were adapted to the manufacture of cotton and that all their efforts should be devoted to the production of raw material for the mills of New England. Difficulties were magnified and advantages were minimized by those whose interests were opposed to Southern industrial development, but the movement had now gained momentum and was not to be stopped. Timidly and hesitantly, capital for building mills was scraped together in dozens of Southern communities, and the number of spindles was doubled between 1880 and 1885 and continued to increase.

In developing this Southern industry there were many difficulties to be overcome, and mistakes were sometimes made. Seduced by apparent cheapness, many of the new mills bought machinery which the New England mills had discarded for better patterns, or because of a change of product. Operatives had to be drawn from the farms and needed to be trained not only to work in the mills but also to habits of regularity and punctuality. The New England overseers who were imported for this purpose sometimes failed in dealing with these new recruits to industrialism because of inability to make due allowance for their limitations. Accustomed to the truck system in agriculture, the managers often paid wages in scrip always good for supplies at the company store but redeemable in cash only at infrequent intervals. The operatives therefore sometimes found that they had exchanged one sort of economic dependence for another. Another difficulty was that a place for Southern yarn and Southern cloth had to be gained in the market, and this was difficult of accomplishment for the product was often not up to the Northern standard.

Managing ability, however, was found not to be so rare in the South as had been supposed. Some of the managers, drawn perhaps from the village store, the small town bank, or the farm, succeeded so well in the broader field that others were encouraged to seek similar industrial success. As the construction of new mills went on, the temper of the South Atlantic States began to change. The people began to believe in Southern industrial development and to be eager to invest their savings in something other than a land mortgage. An instalment plan by which the savings of the people, small individually but large in the aggregate, were united, furnished capital for mills in scores of towns and villages. In 1890 there were nearly a million and three-quarters spindles in the South compared with less than six hundred thousand ten years before.

It seemed as though nearly every mill was profitable, and the occasional failures did not seriously check the movement, which developed about 1900 almost into a craze in some parts of the South. In these sections every town talked of building one mill or more. The machine shops of the North, which had been cold or at least indifferent to Southern development, woke up, as Southern mills began to double or triple their equipment out of their profits. Agents were sent to the South to encourage the building of new mills, and to give advice and aid in planning them. The new mill-owners were good customers. They had learned wisdom by the mistakes of the pioneers, and they demanded the best machinery with all the latest devices. Long credit was now freely offered by Northern manufacturers of machinery, and some of them even subscribed for stock-to be paid, of course, in machinery.

The Northern textile manufacturers also woke up. They found that in coarse yarns the Southern mills were successfully competing with their products. Some pessimistic representatives of the industry in the North prophesied that the Southern mills would soon control the market. Some New England mills built branch mills in the South; some turned to the finer yarns; and some sought to throw obstacles in the way of their competitors. It has been freely charged by many Southerners that New England manufacturers bore the expense of labor organizers in an unsuccessful attempt to unionize the Southern mill operatives. It has also been charged that the propaganda for legislation restricting the hours of labor and the age of operatives in Southern mills was financed to some extent by New England manufacturers, and that the writers of the many lurid accounts purporting to describe conditions in Southern mills received pay from the same source.

The system of paying for stock on the instalment plan permitted the construction of many mills for which capital could not have been raised otherwise and had also certain distinct social consequences. According to this plan, the subscriptions to the stock were made payable in weekly instalments of 50 cents or $1.00 a share, thus requiring approximately two or four years to complete payment. Those having money in hand might pay in full, less six per cent discount for the average time. Since almost or quite a year was usually necessary to build the mill and the necessary tenements for the hands, the instalments more than paid this item of expense. The weekly receipts and the payments in full were kept in a local bank, which also expected future business and was therefore likely to be liberal when credit was demanded. Often the officers and directors of the bank were also personally interested in the new enterprise. The machinery manufacturers gave long credit and often took stock in the mill. Commission houses which sold yarns and cloth also took stock with the expectation of controlling the marketing of the product.

Many mills built on this plan were so profitable that they were able to pay for a considerable part of the machinery from the profits long before the last instalment was paid, and some even paid a dividend or two in addition. Such mills started operations with many things in their favor. The ownership was widely distributed, since it was not at all uncommon for a hundred thousand dollar mill to have a hundred or more stockholders, some of whom held only one or two shares. Further, since the amount of money paid in the immediate neighborhood for wages, fuel, and raw material was large, every one was disposed to aid the enterprise in every way possible. Town limits were often changed almost by common consent in order to throw a mill outside so that it would not be subject to town taxes. Where the state constitutions permitted, taxes on the mill were even remitted for a term of years. Where this could not be done, assessors were lenient and usually assessed mill property at much less than its real value.

Not only did some Northern corporations build branch mills in the South, but a considerable amount of Northern capital was invested in mills under the management of Southern men. It is of course impossible to discover the residence of every stockholder, but enough is known to support the assertion that the proportion of Northern capital is comparatively small. The greater part of the investment in Southern mills has come from the savings of Southern people or has been earned by the mills themselves. Lately several successful mills have been bought by large department stores and mail-order houses, in order to supply them with goods either for the counter directly or else for the manufacture of sheets, pillowcases, underwear, and the like. Marshall Field and Company of Chicago, for example, own several mills in North Carolina.

The mills of the South have continued to increase until they are now much more numerous than in the North. They are smaller in size, however, for in 1915 the number of spindles in the cotton-growing States was 12,711,000 compared with 19,396,000 in all other States. The consumption of cotton was nevertheless much greater in the South and amounted to 3,414,000 bales, compared with 2,770,000 bales in the other States. This difference is explained by the fact that Southern mills generally spin coarser yarn and may therefore easily consume twice or even three times as much cotton as mills of the same number of spindles engaged in spinning finer yarn. Some Southern mills, however, spin very fine yarn from either Egyptian or sea-island cotton, but time is required to educate a considerable body of operatives competent to do the more delicate tasks, while less skillful workers are able to produce the coarser numbers.

Southern mills have paid high dividends in the past and have also greatly enlarged their plants from their earnings. They had, years ago, several advantages, some of which persist to the present day. The cost of the raw material was less where a local supply of cotton could be obtained, since freight charges were saved by purchase in the neighborhood; land and buildings for plant and tenements cost less than in the North; fuel was cheaper; water power was often utilized, though sometimes this saving was offset by the cost of transportation; taxes were lower; the rate of wages was lower; there was little or no restriction of the conditions of employment; and there were comparatively few labor troubles.

With the great growth of the industry, however, some of these early advantages have disappeared. Many mills can no longer depend upon the local supply of cotton, and the freight charge from the Lower South is as high as the rate by water to New England or even higher; the transportation of the finished product to Northern markets is an additional expense; wages have risen with the growth of the industry and are approaching closely, if they have not reached, the rate per unit of product paid in other sections. The cost of fuel has increased, although in some localities the development of hydro-electric power has reduced this item. All the States have imposed restrictions upon the employment of women and children in the mills, particularly at night. On the other hand, taxes remain lower, the cost of building is less, and strikes and other forms of industrial friction are still uncommon. When well managed, the Southern mills are still extremely profitable, but margin for error in management has become less.

The Southern mills are chiefly to be found in four States, North Carolina, South Carolina, Georgia, and Alabama, and in the hill country of these States, though a few large mills are situated in the lowlands. North Carolina, with over three hundred mills, has more than any other State, North or South, and consumes more cotton than any other Southern State-over a million bales. South Carolina, however, has more spindles, the average size of its mills is larger, and it spins more fine yarn. North Carolina is second only to Massachusetts in the value of its cotton products, South Carolina comes third, Georgia fourth, and Alabama eighth. Virginia and Tennessee are lower on the list. In quantity of cotton consumed, the cotton growing States passed all others in 1905; and in 1916 the consumption was twenty-five per cent greater, in spite of the fact that New England had been increasing her spindles. Some Southern mills are built in cities, but usually they are in the smaller towns and in little villages which have grown up around the mills and owe their existence to them. There is some localization of industry: a very large number of mills, for instance, may be found in a radius of one hundred miles from Charlotte, North Carolina, and one North Carolina county has more than fifty mills, though the total number of spindles in that county is not much greater than in some single New England establishment.

In the allied knitting industry the production of the South is increasing in importance. North Carolina led the South in 1914, with Tennessee, Georgia, Virginia, following in the order named. Though most of the establishments are small, some are important and are establishing a wide reputation for their product. Generally they are situated in the towns where cotton mills have already been located.

The textile industry, though it is the most important, is not the only great industrial enterprise in the New South. Two others, both in a way the by-products of cotton, deserve attention. Only a few years ago cotton seed was considered a nuisance. A small quantity was fed to stock; a somewhat larger quantity was composted with stable manure and used for fertilizer; but the greater part was left to rot or was even dumped into the streams which ran the gins. Since the discovery of the value of cottonseed products, the industry has grown rapidly. The oil is now used in cooking, is mixed with olive oil, is sold pure for salad oil, and is an important constituent of oleomargarine, lard substitutes, and soap, to name only a few of the uses to which it is put. The cake, or meal from which the oil has been pressed, is rich in nitrogen and is therefore valuable as fertilizer; it is also a standard food for cattle, and tentative experiments with it have even been made as a food for human beings. The hulls have also considerable value as cattle food, and from them are obtained annually nearly a million bales of "linters," that is, short fibers of cotton which escaped the gin. Since the seed is bulky and the cost of transportation is correspondingly high, there are many small cottonseed oil mills rather than a few large ones. Texas is the leader in this industry, with Georgia next, though oil mills are to be found in all the cotton States, and the value of the seed adds considerably to the income of every cotton grower. In 1914 the value of cottonseed products was $212,000,000.

The industry of making fertilizer depends largely upon cottonseed meal. More than a hundred oil mills have fertilizer departments. The phosphate deposits of the South Atlantic States are also important, and the fertilizer industry is showing more and more a tendency to become sectional. Georgia easily leads, Maryland is second, and no Northern State ranks higher than seventh.

From the standpoint of values lumbering is a more important industry than the manufacture of fertilizers. In this respect Louisiana is the second State in value of products, and the industry is important in Arkansas, Mississippi, and North Carolina. The South furnishes nearly half of the lumber produced in the United States. This industry is, of course, only one step from the raw material. The manufacture of wood into finished articles is, however, increasing in some of the Southern States. The vehicle industry is considerable, and the same may be said of agricultural machinery, railway and street cars, and coffins. North Carolina especially is taking rank in the manufacture of furniture, most of it cheap but some of it of high grade. So far, ambition has in few cases gone beyond utilization of the native woods, some of which are surprisingly beautiful. Many small establishments in different States make such special products as spokes, shuttle blocks, pails, broom handles, containers for fruits and vegetables, and the like, but the total value of these products is small compared with the value of the crude lumber which is sent out of the South.

The iron industry is important chiefly in Alabama, of the purely Southern States. This State is fourth in the product of its blast furnaces but supplied in 1914 only a little more than six per cent of the total for the United States. Virginia, Tennessee, and West Virginia produce appreciable quantities of pig iron; no Southern State plays a really important part in the steel industry, though Maryland, Alabama, and West Virginia are all represented. Birmingham, Alabama, is the center of steel manufacture and has been called the Pittsburgh of the South, but though the industry has grown rapidly in Birmingham, it has also grown in Pittsburgh, and the Southern city is gaining very slowly. There are great beds of bituminous coal in the South, but only in West Virginia and Alabama is the production really important, though Kentucky, Tennessee, and Virginia produce appreciable quantities.

In the total value of the products of mines of all sorts, West Virginia and Oklahoma are among the leaders, owing to their iron, coal, and petroleum output. Other Southern States follow in the rear. Alabama, Kentucky, Tennessee, Texas, Virginia, Florida, and Louisiana all have a mineral output which is large in the aggregate but a small part of the total. The sulphur mines of Louisiana are growing increasingly important. North Carolina produces a little of almost everything, but its mineral production, except of mica, is not important. In this State large aluminum works have been constructed and the quantity of precious and semiprecious stones found there is a large part of the production for the United States.

The tobacco industry is growing rapidly in the South. There have always been small establishments for the manufacture of tobacco, and many of these during the last three decades have grown to large proportions. New establishments have been opened, some of which are among the largest in the world. The development of the American Tobacco Company and its affiliated and subsidiary organizations has greatly reduced the number of separate establishments. Many were bought by the combination; their brands were transferred to another factory; and the original establishments were closed as uneconomical. Many other small factories, feeling or fearing the competition, closed voluntarily. But the total production of tobacco has steadily increased. Plug and smoking tobacco are largely confined to the Upper South. North Carolina easily leads, while Virginia, Kentucky, and Missouri (if it be classed as a Southern State) also have factories which are known all over the world. Richmond, St. Louis, Louisville, and New Orleans, and Winston-Salem and Durham in North Carolina are the cities which lead in this industry. Winston-Salem probably now makes more plug, and Durham more smoking tobacco, than any other cities in the United States, and the cigarette production of the former is increasing enormously. Some factories supply export trade almost exclusively. There has been little development of the fine cigar industry except in Louisiana and Florida, though in all cities of the Lower South there are local establishments for the manufacture of cigars from Cuban leaf. Richmond is a center for the manufacture of domestic cigars and cheroots and has one mammoth establishment.

Twenty years or thirty years ago scattered over the South there were thousands of small grist mills which ground the farmer's wheat or corn between stones in the old-fashioned way. These are being superseded by roller mills, some of them quite large, which handle all the local wheat and even import some from the West. However, as the annual production of wheat in the South has decreased rather than increased since 1880, it is obvious that the industry has changed in form rather than increased in importance.

There are other less important manufacturing enterprises in the South. The census shows about two hundred and fifty distinct industries pursued to a greater or less extent. Maryland ranked fourteenth in the total value of manufactured products in 1914. Only seven Southern States were found in the first twenty-five, while Minnesota, which is generally considered an agricultural State, ranked higher in manufactures than any of the Southern group in 1914. The next census will undoubtedly give some Southern States high rank, though the section as a whole is not yet industrial. The manufacturing output is increasing with marvelous rapidity, but it is increasing in other sections of the country as well. Although the South was credited in 1914 with an increase of nearly 72 per cent in the value of its products during the decade, its proportion of the total value of products in the United States as a whole increased only from 12.8 per cent in 1904 to 13.1 per cent in 1914. The section is still far from equaling or surpassing other sections except in the manufacture of textiles.