Undoubtedly, one of the chief influences contributing to the physical growth of the cotton manufacturing industry of the South has been the willingness, perhaps the eagerness, of commission firms and manufacturers of cotton machinery to encourage 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 to, was proving successful, it was determined not to seek aid from commission merchants because they "—want too many enlargements; they want more goods; the more they sell, the more they get. This does not always suit the local stockholders."[327]
An interesting allusion, showing the effect of the desire for enlargment on the part by commission houses and machinery manufacturers, is contained in an Augusta dispatch to The News and Courier, Charleston, in April, 1881. "At the meeting of the Sibley Manufacturing Company today (it was the first annual meeting of the stockholders)[328] it was decided to increase the capital stock to one million dollars. Stock for the additional amount will first be offered, and, if 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 stories to four, in spindleage of 30,000, and in looms to 1,000; $66,500 was proposed to be spent on the village-tenements, operatives' homes, boarding house, etc.[331] While there is no specific evidence to show that these directors represented commission houses or machinery manufacturers, or that they would take the seven per cent. bonds in case the community would not absorb the additional stock to be issued first,[332] indications point to this having been the case.
It has been seen how the builders of the Gaffney Manufacturing Company's first plant refrained from including commission merchants in the venture, and still earlier in this chapter it was said that the two-story addition, 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 of the projectors was weakened by the four years since the first mill was erected, or perhaps success had altered judgment, with some local subscriptions, the machinery people took a considerable amount of stock.[333]
A striking case here is that of the Rock Hill, South Carolina, Cotton Factory, "the 'Pet' of the town," it was called by the correspondent of a State newspaper, who continuing said: "This factory is owned and controlled by the citizens of the town, except $15,000 in stock owned in Charleston. It has a capital of $100,000 has over 6,000 spindles, 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 later date, is significant: "It is the intention of the company, at an early day to run the factory day and night in order to keep up with its orders. The company, I learn, expect to increase their stock to $200,000 and build a duplicate factory."[334] A large part of the stock for this enlargement was subscribed by Northern capitalists.[335]
The circumstances attending the enlargment of the Loray Mill, at Gastonia, have been alluded to in another connection, John F. Love, a Gastonia man, and the son of R. C. G. Love, who had been very prominent in the Gastonia development, was the primary projector of the mill, he having a larger part in the enterprise than G. A. Gray, the greatest of the Gastonia mill builders. He got the building up, but the factory had not commenced 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, and the Whitin representative in Charlotte is president of the mill. Commission houses hold some of the stock. The Loray Mill is the largest and the poorest in Gastonia; it makes coarse cloth from the local short-staple cotton on some 2,000 looms,[336] while the small mills built by local capital for the most part are making good profits from some of the finest yarns, of long-staple cotton, spun anywhere in the Southern States.
It has not always been the machinery manufacturers alone or together with the commission houses who facilitated the installation of more looms and spindles. Sometimes the ends aimed at by the commission merchants could be accomplished only through machinery, and they have been willing to undertake the financing of the enlargements or alterations in plant singly. The so-called Plaid Trust was sought to be formed; it was to handle the plaids of all the Southern mills, and was to be a New Jersey corporation. The plan did not carry, and the Cone Export and Commission Company went 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 denim mill at the same place. All this time the mills were being urged to diversify their product, and the commission firm was financing them in the machinery changes which frequently had to be made. The client mills served were slow in establishing, as the commission firm urged them to do, individual finishing plants, and until this growth came about, the Southern Finishing Mills, founded by the Cones at Greensboro, served them; it was discontinued as a finishing plant when the mills had their own finishing works, which they presently built and operated successfully.[337]
There is another way in which unsolicited outside capital frequently has lodged in the Southern mills. The conditions under which this would come about are well described by a banker now in Richmond and formerly the president of the Chamber of Commerce in Raleigh, North Carolina; "Usually the people who made the spirit for cotton mills in this way (through appeals to town pride and by town rivalry) were those least able 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, Carrollton, Mississippi, which cost originally $210,000. "The Georgia Pacific Railroad", says the notice of the purchase, "will run almost by its doors, and will give competition in freights."[339] Evidently here was a mill which was commenced by local effort and had declined until it could be bought at a lower figure than its cost and held out the prospect of becoming profitable by the coming of new transportation facilities.
The Kessler Mill, the third built at Salisbury, North Carolina, offers a case in point. The first mill built in the place was a produce of the most whole-hearted local support centering about community pride; the second mill was an outgrowth of 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 depleted was not quick in offering because of lack of interest in the project.[340] Under these circumstances the mill ran an indifferent course until taken over by a large manufacturer of a nearby town, who could command outside capital.[341]
A mulatto started a cotton mill at Concord in the same State; no white people of the place took shares; the negroes all over the State who subscribed were allowed to pay in little instalments. The operatives were negroes. The promoter was faithful to the enterprise, but came to be heavily in debt, foreclosure followed on ill success, and the mill passed to the hands of the same capitalist who took over the Kessler Mill of Salisbury.[342]