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]