A little incident is interesting as involving two of the most important and picturesque personalities and one of the chief mills connected with the rise of cotton manufacturing in the South, and it bears directly on the topic now being considered. It seems that the founding of the Piedmont Factory by Colonel H. P. Hammett in South Carolina inspired a notice from Mr. Edward Atkinson, of Boston, in which he reasoned that cotton manufacturing in the South could never pay. This came under the eye of Colonel Hammett. To the article he pinned his annual balance sheet, showing a profit of 20 per cent., and sent the two to Mr. Atkinson.[369]
In regard to these first years of the large establishment of cotton mills in the South, it is common to hear the opinion that the big profits made attracted the energies of the people to mill building.[370] Going a little further back, the mills in operation just before the textile era, though few in number, showed gains that bore a part in the boom about 1880.[371]
Twelve years after taking charge of the plant, Colonel Hickman had earned by the old Graniteville mill sufficient surplus to build the Vaucluse Mill at a cost of $361,513.24 without calling for assessments upon stockholders, and five years later had accumulated a cash surplus of $220,831.86. He had doubled the production of the original Graniteville Mill. The statement of the affairs of the two plants in 1804 showed:
Gross Profits:
| Graniteville | $82,724.69 | |
| Vaucluse | 37,131.31 | |
| Total profits | $120,856.00 | |
| Net profits | 80,701.71 |
This net profit amount represented 13.5 per cent. profit on $600,000 capital.[372]
Coming down, now, a decade later in the period. There is shown a degree of success pretty much uniform for the various mills.
The first plant of the Gaffney Manufacturing Company which was paid for when operation commenced, in three years earned enough to build an additional plant of two stories.[373] This mill indicates very well a fact brought out in the preceding chapter, that many additions to plant, which were being made after the mills had been a few years in operation, were accomplished from earnings. The Salisbury Mill is a case in point. Its inception and that of the Gaffney Mill the two being projected at about the same time had many things in common (as did the towns in which they were built). Increases in plant of the Salisbury Mill have been greater proportionally than the increases in capitalization.[374]
From manufacturers, from investors, and from persons acquainted with the public economy, have been had statements, each reflecting an individual bias, but each showing unmistakably that there was a general and marked decline in profits in the second decade of the development. A retired mill president, whose decision to leave the field was perhaps affected by the condition she described, regretted that the companies are still laboring under decreased profits as a result of the fact that mills were built more rapidly than the market for goods expanded to meet the development.[375] Another mill president thought that no more mills are likely to be built in his section too many years. "They went it too rank, you know," he declared with some feeling. "Once in a while you hear of a new mill starting up, but its not as common as it was ten or fifteen years ago." He put the date of the fall-off in profits at about 1900.[376] The son of Colonel Hammett, several times mentioned, who is a successful manufacturer, deplored the building of too many mills in a short period, and said that profits fell away abruptly.[377]
A bank president whose institution has played a leading part in the textile prominence of Columbia, South Carolina, said that "1890 to 1900 was the heaviest borrowing period, as this was the greatest period of development. Profits were poor, especially from 1895 to 1903."[378]