USA > Indiana > Perry County > Cannelton > Cannelton, Perry County, Ind., at the intersection of the eastern margin of the Illinois coal basin, by the Ohio River : its natural advantages as a site for manufacturing > Part 5
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advised as to how much of this capital is required to enable the mill to sell on credit, or whether the surplus fund, usually laid aside out of pro- fits, is sufficient for this purpose. The Lowell corporations rarely pub- lish the amount of their reserved funds, or even of their profits, unless these profits are remarkably low.
The mill in question will turn out, on the average, two tons of goods a day-say six hundred tons per annum. The English estimate of waste and loss is one sixth; our rule gives eighty-nine pounds of goods for one hundred pounds of cotton; by this the mill will require six hun- dred and sixty six tons of cotton per annumn.
The following estimate of the cost of bringing dry goods to Louis- ville from Boston, via New Orleans, is below the average rates.
Boston wharfage, per bale 02}
Freight to New Orleans, per bale 45
Charges at New Orleans, per bale 30
Insurance, 2 per cent. on $66, or on cost and 10 per cent.
added . 1 32
Interest in transitu 40 days
40
Exchange & per cent. 30
Freight to Louisville 63g
$3 42
Add average cost on the bale from the mill to and at Boston,
at least. 40
$3 82
The bale, 4.8 brown cotton, of 750 yards, average cost $60; three yards to the pound. This gives over & cent to the yard, 1} cents to the pound, and $30 per ton.
There are, however, but few houses that ship by New Orleans, and at times when freights are low; altogether the largest portion of brown cottons and prints brought to the central West come from the Eastern agent or jobber, and by the lakes or across the mountains.
This is the ordinary course of trade, and there is no reason why we should not base our estimates on what is usually done, if the same sys- tem is likely to continue.
By these last routes, as every dry goods merchant (wholesale) can sat- isfy himself by reference to his books, the average freights from the Eastern cities is from two-thirds to three-fourths of one cent per yard. If to this is added the coastwise freight, insurance, interest, profit of the jobber or commission of the second agent, the cost will swell up to, at least one cent per yard, three cents per pound, or sixty dollars per ton.
But, as I have often been told, the agent at Baltimore will sell do- mestics just as low as they can be had at Boston or Lowell, and the Philadelphia jobber will often sell lower to draw in customers, as he re- lies for his profits on other goods. All very true; but a moment's re- flection will satisfy any man of the fallacy of this reasoning. The manufacturer may wish to get rid of his surplus, and find it his interest
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to pay the transportation to, and the commission of an agent in a remote market, but this does not lessen the actual cost of the transportation or agency. The jobber may entice a customer into his store by selling sil- ver at fifty cents an ounce, but this does not prove that the ounce of sil- ver is actually worth less than a dollar. The same kind of argument is often applied to cost of transportation on our river. The Peytona will ask five dollars from a passenger to Louisville who calls her in at Bran- denburg, and the price would be the same if he got in at Cairo; yet the writer on the Western carrying trade would be laughed at were he to state that the cost of transportation from Cairo and Brandenburg to Lou- isville was the same. Coal often sells for a less price at St. Petersburg than at Newcastle; yet no one has attempted to show that the shipment of coal a thousand miles lessens its cost, or that St. Petersburg is the proper site of manufactures, because coal was sold there at a particular day cheaper than at the English coal mines. The balance sheet of er- ery business must show the profits or losses in each of its branches .- The high prices demanded by the larger boats for way passengers and freight have introduced the river packets, and the extra costs paid by the Eastern manufacturer are now building up the Western mills.
To return to the figures; the mill given will consume 666 tons of cot- ton per annum.
Freight from the cotton districts of Nashville, Florence, Tuscumbia, and points on the Mississippi river in Tennessee and Arkansas, and ou the Arkansas river, are about the same to Louisville as to New Orleans. As the river packets multiply, the rates in this direction will probably be lower. Besides, as our agricultural exports increase, the return boats will run light and charge less. Our mill, then, will save the charges on the cotton at New Orleans and the cost between that city and the New England mill, say :
Drayage, storage, brokerage, and commission of agent or mer-
chant at New Orleans per bale of 450 lbs $1 00
Insurance on $36, or 8 cents per lb. 50
Freight, 3 cent per lb. 3 38
Interest, 45 days. 27
$5 15
Or, 1 14-100 cent per pound, or per ton $22 00
Add charges in Boston. . 10
Average freight to the mill 2 70
Total per ton
$25 80
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666 tons* required at $25 80 gives. $17,182 80 Add saving in interest of capital per annum. 3,000 00 Add minimum freight on goods, or $30 per ton on 600
tons, $18,000 00
Minimum advantage
$38,182 80
But if we add the ordinary freight on the goods, or $60 per ton, we have the maximum advantage of $56,182 80, or an average of $47,- 182 80 on a capital of $220,000, or near 21} per cent. per annum .- I might add from 1 to 2 per cent. loss on Exchange, as the agents of the largest mills usually sell Bills at 60 days, and at a discount of from 2 to 3 per cent. to pay for the cotton they purchase at New Orleans.
Besides, a large amount of cotton manufactured at the East pays a second profit and the costs of a second transportation.
As I have not access to the Exchange accounts of the Kentucky Banks, (whose agents invest largely in these Bills) or to the Books of the New York cotton speculator, or of the Sound steamboats, I cannot make an average of these items of cost, and omit them in the foregoing calculation .¡
I say nothing here of the great saving in fuel and in food; to these points and to giving an aggregate of advantages I propose to devote an- other paper.
I believe the foregoing estimates are within the truth, and that I have not been able to get at all the items of cost; indeed, many of these are of such a character that they cannot well be specified; such, for in- stance, as the expenses and time of the merchant who goes abroad to make his purchases; occasional loss and delays in receiving goods for which insurance offices and transportation lines cannot be made liable; and all the contingencies to which a trade between distant points is sub- ject.#
* The improved machinery will turn out a large per cent. over this estimate: say 840 tons for a mill of this size and making No. 14 cloth.
t The Connecticut and Rhode Island manufacturers are, to a large extent, supplied with cotton from New York. The New York commission merchant, on the average computes the freight-charges, from New Orleans, and his 2} commissions at 1} cent per pound; say per bale $5 00.
The Providence dealer pays half brokerage at home and half at New York, or 123 cents per bale. Freight to Providence 25 cents per bale. Cartage at New York 8 cents, and at Providence 8 cents-16 cents per bale. He sells on six months credit, and at an advance on New York price of 1 cent per pound, or per bale of 400 lbs. $4 00 Deduct 12$ plus 16 plus 25 and you have $0 533
3 per cent. interest on say $36,
1 08
1 61}
Giving him a profit per bale, of . $2 383
The Providence manufacturer, then, pays about2 cents per pound more than the manufacturer of Cannelton or say 25 per cent. on the average price of cotton. : Mr. James Montgomery, whose estimates have already been alluded to, and who is very high authority in whatever pertains to the theory and practice of
€
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The sixth element of a manufacturing district is a healthy position, and a climate so equable and temperate that man may sustain continu- ous exertion even in partial confinement.
Such is and ever will be the competition in manufacturing that the mere operative can expect only a slight advance in wages over the agri- culturist.
The latter is usually the owner of the soil he tills; he bears exposure willingly for the increased value of his farm obtained by that exposure. He drains the morass, despite of its noxious effluvia, with the prospect of rich harvests on the same site; but the former stipulates for and only receives a stated pay, and with no expectation of an advance; to be sure, the "factory girl" works by the piece, but she knows, before en- tering the mill, how many pieces she can turn out. Besides, when the ploughman is sick, his place can readily be supplied; but the sickness of the engineer may stop the work of hundreds, and a large capital may lie idle while a substitute is sought for.
I refer specially to large manufacturing establishments, carried on by associated capital, and under the organization of directors, superintend- ents, and overseers, of whom the active managers are men of character, and generally men of family, who prefer a liberal and certain income, to the uncertainties of trade or of the learned professions-men who would not, for a limited salary, risk the climate of Singapore or Spits. bergen.
Indeed, the reasons are too obvious for enumeration, why such labor can only be obtained and rendered productive in the temperate zone, and there never was and never will be a manufacturing town at any other than a perfectly healthy position-not even in those countries where labor is constantly pressing for employment. Even after a place (Louisville for example) has become healthy, it requires years to remove unfavorable prejudices.
On this river, at least as far down as the lowlands at the confluence of its western tributaries, there are as few permament causes of disease as exist in any other part of the world; the causes of malaria will soon
manufacturing cotton. has recently made a personal examination of the manu- facturing facilities of the South and West. and thus expresses his opinions :
"I have read General James's pamphlet and the pamphlets written by Mr. Gregg, on the comparative advantages of the South for manufacturing, and yet, after all I have read on the subject, I may say, with the Queen of Sheba, half the truth has not yet been told. Cheap living, and, of course, low wages. cheap cotton, coals, and iron, constitute the great elements of success in the introduction and prosecution of the cotton manufacture. No country in the world possesses these clements in a degree equal to the southern and southwestern scc- tions of the United States. Great Britain, with her cheap coals and iron, stands at the head of all nations in point of wealth and commerce. She is now mak- ing a desperate effort to introduce cheap living, but she can never introduce cheap cotton. The Northern States can never equal the South in either of the above named elements. I hope your Cannelton mill is to be a model for all the South. It is only in manufacturing towns and cities, where there is a concen- tration of skill and talent, that we look for the highest degree of perfection in the mechanical and manufacturing arts. Such citics always exert the greatest influence on the country generally."
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be entirely removed by the cultivation of its banks, and the constant agitation of its surface by boats; and, in a few years, bilious fevers will be as rare here as at the East, while we are comparatively exempt from that scourge of the Northeastern seaboard, the consumption. There, as experience has shown, the piercing winds, coming unobstructed from the icebergs of the Arctic ocean, bring death to those coming out of the heated rooms of a city or manufactory; but the cold air of the lakes and the mountains is tempered before it reaches us.
Our coal districts are proverbially healthy. Coal smoke is by many believed to be one of the best disinfecting agents, and the usual epidem- ies of the country have become less fatal when the use of coal has be- come common; perhaps this is one of the causes why the centers of our cities are always regarded as more healthy than the suburbs.
The eighth element is a convenient site, and near suitable building materials.
It would astonish one who has never thought of the subject to calcu- late the amount of fixed capital expended in grading an uneven site of a city, and in its buildings. The filling up of our ponds and cutting down of our sandhills has been but a mere trifle when compared with simlar expenditure in other cities.
The splendid Quincy market house in Boston, and the immense blocks of granite warehouses around it, now stand where ships once an- chored; millions of dollars have been paid by New York for the timber and lime of Maine, the granite of Massachusetts, the sandstone of Con- nesticut and New Jersey-and she has even been obliged to send to New Hampshire and Maryland for brick.
The very cost of transportation on the building materials, already sent to New Orleans from New England and the Ohio river, would, at many points on this river, build a large manufacturing town, and fur- nish it with a working capital.
At our coal fields on the Ohio are the best of building materials- common elay, fire clay, fire stone, and limestone are on the spot or in the immediate vicinity; while, underlying the coal, is a stratum of sand- stone, with a single stratification which splits readily, is soft in the quar- ry and hardens on exposure to the atmosphere. This is now being ta- ken for the construction of the public works at Memphis, and is pro- nounced equal in durability to the same character of stone used in the construction of Trinity church, New York, while it is cut more readily.
Here, then, on the banks of the Ohio and its tributaries, and especi- ally at Cannelton, we have all, the natural elements of a manufactu- ring distriet: cheap fuel, cheap living, cheap land, cheap stone, clay and timber, cheap raw materials, cheap transportation, in a healthy country, in the centre of a great market; and, besides, we have good laws and light taxes.
Where else, in the wide world, are all these advantages found in combination?
The artificial elements of a manufacturing district are capital;
Labor and skill in all the departments depending on cach other;
Reputation, or, as it is sometimes termed-good will ;- and a condi
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tion of society and code of laws adapted to the permanent employment of labor and capital in manufacturing.
First of Capital. There are three distinct epochs in the history of manufacturers-
The first is typified by the Arab of the desert with his warp stretched from pegs stuck in the sand, and by the early emigrant at her wheel or loom. The manufacturer here has grown the material and will wear the product.
The second is where one or more unite capital and skill, under some form or other of copartnership, to manufacture what others have grown and others will consume.
In the West we have reached this stage, which, in this country at least, will not admit of great extension; because partners often disagree, and at the dissolution of the partnership by death or otherwise, the con- cern has to be re-organized; and because the father is rarely sure that his son will have similar taste or skill to employ capital advantageously in the mill.
In Europe, society is much divided into castes, and the son is trained up to follow the calling of his father. In France we see the same brand on the wine cask that was noted a century ago; so in England the sign of a shop often occupies its place without change through sev- cral generations. In such a state of society, joint or family interests may be sufficiently strong to give permanency and profit to a manufac- tory requiring a large outlay of fixed capital.
This system was tried at the East and was soon abandoned as unsuit- able to our people and institutions, and as soon as it was evident that the business of spinning and weaving cotton could be made permanent and profitable, the shrewd and calculating New Englanders passed to the third, or golden age, in manufacturing; and it is to the well-consid- ered system of Lowell and his associates, and the working plans drafted by them, that New England is now indebted for her eminent success and the largest part of her present wealth and importance.
That system is,
The association of capital, protected by liberal charters, und un- der the management of Superintendents of high character, Over- seers carefully selected, and Directors in whom the public have entire confidence.
This system, which has worked so well elsewhere, is worthy of our adoption; wherever it has been tried the results have been the same; it has stood the test of a quarter of a century and it does not require the gift of prophecy to predict the same result here.
It is admirably adapted to our institutions and the character of our people.
It is the democratic system,-for by it the hundred dollars of the poor man, invested in the stock of the corporation, draws as large a dividend as the hundred dollars of the rich man: it is the system safe for the public,-for it requires at the outset a capital sufficient for its purposes and asks no credit; and safe for the stockholder, as he only risks his stock and cannot well be ruined by the mismanagement or knavery of
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associates; this is the system which gives surety to the operative for his wages, and to the agriculturalist for the price of the food furnished. by him to the operative; and the results of its adoption here will be seen in lessening the cost of fabrics our necessities require,-in increasing the amount of our productive capital,-in enlarging the number of profita- ble employments of our young men of capital and enterprise, and in giving us an important home market for our raw materials and provis- ions.
The way in which this system works, and why it works well will be seen hereafter; but under it, as perhaps every reflecting man will admit, the West has already abundance of capital for the purpose. It is not expected that our very rich men will leave their comfortable homes for new positions where there are peculiar natural advantages and where manufacturing can be made most profitable; or that they will personally superintend the details of making cotton or any other fabrics; nor can it be expected that they will risk the earnings of years to the management of a distant co-partner or agent.
To manufacture cotton, or indeed any other great staple, at the most profit we must do a large business; the cotton mill of 10,000 spindles will make goods probably ten per cent cheaper than one of 1,000 spindles; the first requires a capital of, say $300,000; now it would be preposterous to make the attempt to get a Lexington capitalist to furnish that large sum of money to any man or for any purpose, however great the "paper profits" might appear, or however strong might be the faith of the capitalist in the general profits in the business proposed: it would be equally preposterous to ask three hundred men to contribute $1,000 each, and also their individual skill and labor, to any copartnership con- cern. But, if you start twenty mills under the guardianship of the same men who so satisfactorily manage our Bank and Insurance capital and under the direct superintendence of a man of unquestionable capacity and integrity, and with the checks of Treasurer, Overseers, &c., where there is no liability beyond the capital invested, and where the stock promises large dividends, you will find the rich man taking his risks in each mill; while the man of less capital will follow the example to the extent of his means. They who construct the buildings or furnish the materials and machinery, and they who wish to sell the goods or obtain employment in or about the mill will be glad to take all the stock they can afford to hold. Labor and materials to a considerable extent will be equal to money.
It is said that steamboat capital does not, on the average, pay 6 per cent per annum-yet how easy is it, on any point of our river, to start a boat costing from thirty to fifty thousand dollars-in this the shares are rarely over 1-16-but in a cotton mill each share would be, say 1-3000. The boat owners are the builders of the hull and the engine, the officers and the commission merchant; would it not be far easier to raise the capital of the mill and partially in the same way, with anticipated pro- fits of 20 to 40 per cent, and in a business attended with less risk and giving constant employment, and at the same place? Let those who scorn small contributions to great works remember that most glorious of
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all monuments, the Polish mound, made by a grateful people, of whoms each contributed but a spadeful of earth-or the more recent instance of the subscription of half a million of dollars by Irish laborers, which ensured the completion of the western rail-road from Boston to Albany.
It is believed by many that there has been an increase of specie cap .. ital in the Mississippi valley since 1836 of nearly one hundred million of dollars, and that its annual increase is from ten to fifteen millions. It is said by those who have the best means of knowing the facts that something like five millions of specie are annually brought into the West by European emigrants. Some shrewd calculators make the ex- ports of Indiana and Illinois over their imports from six to seven millions of dollars per annum. It will be remembered that the Gov- ernment does not now drain us of specie through its land offices, and that we are now nearly freed from Eastern land speculators. Our in- dependence is shown in the strength of our banks and the favorable state of our domestic and foreign exchanges. In the interior, the rate of interest has fallen to 6, and in some sections to 5, per cent per annum; while in our cities and large towns our banks furnish all the facilities desired for legitimate business transactions.
We have so long been dependent on the East for money capital that it is difficult for us to look for it in any other direction. We have now sufficient strength to stand erect, but have scarcely learned the use of our feet.
But, perhaps, we are to look to the South for capital, either in money or its equivalent cotton. The cotton planter for years has been cha- grined that he has made less in producing than the New Englander has in manufacturing the cotton; and he will gladly avail himself of the opportunity, now perhaps first presented to him in a practical shape, of making the manufacturers' profit. He could not manufacture in Glas- gow or Manchester; and Lowell was too far distant for him to invest in her mills. At home he has not the labor, power, conveniences or skill. The lower Ohio is within his reach. (I refer to the planters on the Mis- sissippi and its tributaries.) Here he can, while overlooking the management of the mill, mingle business with pleasure during the sum- mer. Many may smile at the idea of getting surplus capital from a cot- ton planter, and may exclaim, mortgages, execution, advances, &c., yet let me assure such that the southwest is in quite a different condition now from what it was ten years since. Let them remember that not only has the cotton crop vastly increased in that period, but that the fa- cilities for obtaining credits in New Orleans have been greatly diminish- ed, while at home there are now comparatively no such facilities. Ma- ny of the planters now consign their crop to Louisville, Cincinnati, Pittsburgh, the Eastern cities and even to Liverpool, and neither ask nor wish for an advance. Let it also be remembered that the cotton plan- ter has nothing at home to invest his surplus in, save more land and slaves. He has no canals or railroads, houses, or ships to build; he has no banks to deposit his money in even; he does not wish to take mer- cantile risks or to leave his money long in the hands of those who do take such risks; would he not gladly invest in mills near him, where his-
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own cotton would be spun and woven, and on its way to market and on his way to the springs or his summer residence? Indeed he might find a healthy summer residence within sight of the mill. He would realize the value of his cotton (indeed trebled in value) from the goods before he could get his returns from that consigned to the Liverpool factor.
This direct consignment is, of course, the most favorable for the plan- ter. When the New Orleans or New York speculator buys the cotton and consigns it, the planter, of course pays, or rather loses, the inter- mediate profits.
On this reliance on the South I have not only to state its reasonable- ness, but the positive assurances of very many planters who have sur- plus capital, that they and their friends are ready to take stock in cotton mills just as soon as they, who practically understand the details of put- ting up and managing mills, will obtain the charters and superiniend- ants and contractors.
But we cannot expect cotton mills to leap into existence at once. Several years will be required to erect buildings, obtain machinery, &c. Then the first that are started will make profits to build others; besides, the moment we show the East that we have systematically and energeti- cally undertaken to manufacture our cotton and hemp and to eat our corn and pork at home, the building of new mills there will be checked, and the men of capital and enterprise there, who wish to engage in the business, will bring their capital, skill, and labor here.
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