Tompkins, by many believed to have been the best authority on cotton manufacturing in the South, wrote: "It has been abundantly proved by experience in the Carolinas that cotton mills on every class of goods manufactured there, can make a profit of 10 to 30 per cent. This has been done by the smallest as well as the largest mills on the coarsest and the finest yarns, single as well as twisted; and on the heaviest as well as the lightest weight cloths; and on dyed and undyed yarns and cloths. The variation in profit between 10 and 30 per cent. is caused by variation in prices of cotton and of manufactured goods, and also by variation in management."
In another passage he has said: "From the experience of the best mills that have been running in the South for twenty years and over, and which have always been kept well up to date, it would appear that about 15 per cent. is the average annual profit in clear money for the whole time."[359]
The writer was given the opinion by Mr. Thackston of Greenville, South Carolina, in whose knowledge and judgment great reliance is put, that for the last ten years the average earnings for well-managed Southern mills have been $2.50 per spindle, which, reckoning the average cost of the plants at $20 to the spindle (leaving aside other capital invested) is a profit of 12.25 per cent.[360]
A banker of Winston-Salem, which is an industrial community, could not understand how the Southern mills succeeded "as well as they have." When there were mentioned to him several mills which have been consistently profitable, he found special advantages accountable for their favorable showing. In one case it was tidewater freight rates, in another skilful cotton buying by a manager of long experience. It was his belief that the average profits of Southern mills from 1880 to 1914 (omitting, that is, the years since the outbreak of the war) were not as much as 10 per cent.[361]
So much for the gains over the whole period. The earnings at several points in the development of the industry show a wider range.
A nephew of Mr. Tompkins, quoted above, who has succeeded in considerable measure to his uncle's manufacturing interests, and who is of too practical a turn of mind to be affected by the enchantment of distance, speaking of the success of mills right at the opening of the era, said that some made from 30 to 70 per cent. profit.[362] In a previous chapter, it has been seen how many mills at this juncture increased their plants from earnings. A Utopian tinge may be suspected in an article appearing in The Daily Constitution, Atlanta, in March of 1880, which, in urging upon Southern communities the establishment of spinning mills, stated: "At prevailing prices there is nearly or quite six cents per pound profit over all expenses in spinning No. 14 yarn, or three cents per spindle per day; this would give $9 per spindle per year, and as spinning mills can be built for less than $18 per spindle, no other figures are required to demonstrate the statement that the spinning mills in the South bid fair to realize this year fifty per cent. on the capital invested. Nearly all of these mills are running night and day, and every one of them is realizing handsome profits. These are facts."[363] The goods of the Wesson Cotton Mills, Mississippi, took a premium at the Centennial Exhibition in Philadelphia in 1876. The company started with one mill and a capital of $300,000. This plant made 30 per cent. profits, so another was built and the stock increased to $1,000,000.[364] A North Carolina newspaper trying to encourage cotton manufacturing in that State, stated in 1880 that upon the $2,288,000 invested in the mills in South Carolina, the profits ranged from 18 to 25 per cent.[365] The Boston Journal of Commerce in 1881 gave the opinion of an Englishman visiting the Eagle and Phoenix Mills, Columbus, Georgia, that the No. 3 Mill, then new, was the best equipped in the world, and said that "The profit of these mills last year was 20 per cent. on a capital of $1,250,000 or $5.76 per spindle."[366]
Saffold Berney, in his Handbook of Alabama, published in 1878, made a rather elaborate computation of the earning capacity of a 4,000-spindle, 125-loom mill, making 6,000 yards of cloth per day.[367] It may not be uninteresting to see how he worked out a considerable rate of profit for a small plant. His calculations are:
| 3,000 yds. 7-8 shirting at 6 cents | $180.00 | ||
| 3,000 yds. 4-4 sheeting " 7 " | 210.00 | ||
| Total gross income | $390.00 | ||
| Cotton on a basis of 10 1-2 cents, 15 per cent. waste | $220.94 | ||
| Labor and mill expenses | 63.44 | ||
| Office and general expenses | 9.62 | ||
| Coal, gas, oil, starch & supplies | 19.00 | ||
| Insurance | 3.11 | ||
| Charges in selling goods, 2 ½ per cent | 9.75 | ||
| Wear and tear machinery 5 per cent | 13.69 | 339.55 | |
| Leaving a net profit per day of | $ 50.45 | ||
| Or for 300 working days or one year of | $15,135.00 |
Figuring the cost of this mill at $20 per spindle, and leaving aside, as before, money otherwise invested about the business, there is a capital of $80,000, upon which a profit of $15,135.00 is 18.8 per cent.
"Profits in the past," says Mr. Thompson, "have been so large that often before the last payment on the stock is due, a sum sufficient to pay all obligations has been accumulated." He cites as a particularly favorable instance, that of a mill which required no further instalments on subscriptions after a little more than one-third of the instalment-payment period had run out.[368]