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]