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A History of the U.S. Carpet Industry

Randall L. Patton, Kennesaw State University

Paul Krugman (1993, p. 5) has written that “the most striking feature of the geography of economic activity…. is surely concentration” (emphasis in the original). There are few better examples of highly concentrated economic activity than the U.S. carpet industry. Today, carpet mills located within a 65-mile radius of Dalton, Georgia, produce about 85% of the carpet sold in the U.S. market. The U.S. industry accounts for about 45% of the world’s carpet production. While many segments of the textile industry have struggled in the post-World War II era, carpet makers have prospered. The U.S. carpet industry also exemplifies the southward drift of textile production within the United States during the twentieth century. Indeed, it is probably useful to conceptualize the U.S. carpet industry as two distinct industries with different trajectories. The early American carpet industry was, like other textile segments, a product of borrowed (from the United Kingdom) technology and skill that struggled throughout its existence against imports. The second American carpet industry grew from deep southern roots and utilized locally developed technology and skills. The second industry also came along at just the right time to ride the boom in consumer spending associated with the economic golden age that followed World War II.

The First U.S. Carpet Industry

The first U.S. carpet industry emerged at the end of the eighteenth century. Skilled weavers produced carpets and rugs with handloom technology. In its early years, American carpet makers encountered the same problem as other textile manufacturers – imports. Congress protected the infant U.S. industry, along with textiles generally, in 1816 and raised protective tariffs in the 1820s. In an early survey of the industry conducted in 1834, Timothy Pitkin found 20 carpet mills producing about 1 million square yards. By 1850, a government survey found 116 mills producing 8 million square yards of carpets and rugs (employing more than 6,000 workers). Twenty years later, U.S. carpet mills numbered 215, wove more than 20 million square yards, and employed 12,000 persons. In the nineteenth century Americans used carpet to cover poor quality, soft wood floors. A commentator wrote in 1872 that the “general use of carpets was a necessity some few years ago, from the fact that the floors of our houses were generally built of such poor material, and in such a shiftless manner, that the floor was too unsightly to be left exposed” (Greeley, 1872). The mid-nineteenth century saw the introduction of the varnished hardwood floor. With the hardwood floor came a declining demand for wall-to-wall carpets and an increasing demand for smaller rugs to provide stylistic accents.

Employment and production figures indicate that, although there was an incremental increase in productivity, production effectively rose in concert with the number of workers. Erastus Bigelow introduced power loom technology for various types of carpeting in the early 1840s, and others quickly followed with competing designs. Though Bigelow’s idea – the use of power looms in carpet production – would eventually result in great productivity gains, Bigelow’s own looms were not the primary source of the gains, nor did those gains materialize overnight. Handloom production outweighed power loom production as late as the 1870s in the Philadelphia area. Power looms were expensive and manufacturers had great difficulty in matching the quality of goods produced with handlooms.

Boom and Bust in the First Half of the Twentieth Century

After 1870, refinements in power loom technology allowed manufacturers to produce reasonable substitutes for higher quality handloom woven goods. This resulted in a decline in the production of the cheapest carpets as consumers moved toward higher quality goods as the price of higher quality weaves declined. Large rugs became a staple in upper-middle class American homes by the early twentieth century. Sales ballooned to more than 83 million square yards by 1923. Firms such as Bigelow-Hartford produced lavish catalogs and advertised products direct to consumers in the early twentieth century, bypassing the traditional commission agents who had dominated marketing in the nineteenth century. The industry seemed, however, to have peaked in 1923. Sales fell off even before the Great Depression, and the economic disaster of the 1930s offered no respite. Firms such as Bigelow and Mohawk struggled. Industry production hovered in the 60 million square yard range throughout the 1930s. Most mills converted to war production during the Second World War, a move that helped forestall a deeper crisis. Just after World War II, the industry experienced a brief boom, with sales jumping to nearly 90 million square yards in 1948, but the boom quickly turned bust. Even the seemingly robust sales of 1948 amounted to a scant increase over the peak of a quarter century earlier. When compared with population growth, the industry’s sales had actually declined. Worse still, sales fell through the early 1950s back into the 60 million yard range.

The Second U.S. Carpet Industry

Carpet in the United States had three salient characteristics in 1950. Carpets were (1) woven on power looms out of (2) wool in (3) mills located in the northeastern United States. In just one short decade, each of those critical elements had changed dramatically. By 1960, most carpet in the United States was made on tufting machines from synthetic fibers such as nylon in factories located in the southeastern United States – and the vast majority of these new mills were located in and around the Appalachian foothills town of Dalton, Georgia.

The U.S. economy entered a prolonged boom period after World War II that many historians have labeled the “golden age.” The release of pent-up consumer demand associated with the sacrifices of World War II, Keyenesian government policies aimed at maintaining a high level of demand, and other factors helped produce a period of unparalleled economic growth. Northeastern carpet manufacturers tried a variety of approaches during the late 1940s and early 1950s to reverse their industry’s fortunes, but had little success. Annual per household carpet consumption stood at 1.97 square yards in 1950, virtually unchanged from the beginning of the twentieth century. Industry executives expressed increasing frustration throughout the early 1950s with their inability to tap the booming housing market of the postwar period. Many northern carpet mills began to open new plants in the South. Moving south allowed older firms to escape unionized work forces, take advantage of the region’s lower labor costs and, occasionally, benefit from incentives offered by state and local governments in the region (Greenville, Mississippi, built a $4 million facility to entice the Alexander Smith Company in the early 1950s, for example). Bigelow, Mohawk, and other northeastern companies built facilities in Virginia, South Carolina, Georgia, and Mississippi during the 1950s.

With few exceptions, these facilities produced carpet using weaving technology. The shining new mills in Greenville, Mississippi and Liberty, South Carolina, used the latest and most productive looms and were constructed according to the most up-to-date standards – single-floor construction and concrete floors, for example, to make the use of lift trucks possible. Yet the industry encountered one insurmountable barrier. In spite of decades of incremental progress, woven carpets were still too expensive to penetrate the working class market. The wholesale price of woven carpets rose slightly during the 1950s. The quite modest increases were interpreted within the industry as something of a success.

The woven carpet manufacturers also tried other strategies to boost sales in the 1950s. Some manufacturers experimented with selling carpet “on time” (credit) through retailers; others emphasized style and elegance. The chief impact of the advertising campaigns seems to have been to raise awareness of and desire for carpeting in general. In 1949, this would have seemed a winning strategy.

Tufted Textiles Take the Floor

During the same decade, however, a new southern industry produced a cheaper substitute for woven goods – tufted carpets and rugs, whose sales grew from near zero in the late 1940s to more than 100 million square yards by 1958. The origins of this new carpet industry in the South can be traced to a combination of purposeful action and historical accident.

The Tufted Bedspread Industry

The historical accident, as Krugman called it, was the revival of the hand tufting tradition in northwest Georgia (and elsewhere in the region) in the early twentieth century. To create a tufted bedspread, the craftsperson inserted raised tufts of yarn into a pre-woven piece of backing material (generally cotton sheeting) to form a pattern, then boiled the sheeting to shrink it and lock in the tufts of yarn. Catherine Evans, a young woman living near Dalton, Georgia, saw an old hand tufted bedspread at a friend’s house in 1895. Evans duplicated the design and made a similar spread as a wedding gift. Evans and some of her relatives began teaching other area women the art of tufting. From these beginnings, a cottage industry developed. By the 1920s, local entrepreneurs had created numerous “spread houses.” The spread houses operated a putting out system, sending “haulers” into the countryside with sheeting and yarn. The haulers returned later to pay the farm families for their hand work and pick up tufted spreads for finishing – washing and, for some, dyeing. These spreads found a ready market, not just regionally, but in the northeast as well. (Wannamaker’s department stores stocked Georgia bedspreads in the 1930s.) This cottage industry became a source of economic growth in north Georgia even during the Great Depression.

Here the residue of purposeful action intersected with Catherine Evans’ historical accident. By the 1920s, the South had become home to the lion’s share of U.S. textile production. Some of this shift southward was due to capital movement from North to South, but most of the shift could be accounted for by new southern firms – large firms such as Georgia’s West Point Manufacturing and North Carolina’s Burlington Mills and smaller firms like Dalton, Georgia’s Crown Cotton Mill and American Hosiery Mill. After the Civil War, and especially after 1880, southern firms had borrowed northern technology, begun at the bottom of the quality chain with the coarsest fabrics, and initiated what might be called a process of regional learning. Much of this development was the result of a purposeful effort to industrialize the region. By the early twentieth century, the South still had not developed a regional textile machine-making industry, but the cotton mills, hosiery mills, and other textile firms had recruited and trained a large number of mechanics to maintain machinery purchased in the northeast. Mechanics from the Dalton area and nearby Chattanooga began adapting sewing machines for the purpose of inserting raised yarn tufts, and in the early 1930s many of the spread houses moved toward becoming spread mills, or factories. Spread mill owners employed a largely female work force to operate the sewing machines that now created the raised patterns.

From Spread Mills to Carpet Mills

By the end of the 1930s, a number of these firms had begun to experiment with multi-needle machines that could tuft wider swaths of backing material more quickly. Some firms, such as the cleverly named Cabin Crafts (to conjure the image of a cottage industry that already had ceased to exist) had begun making small rugs by covering the entire surface of a piece of backing material with tufts. Hosiery mill mechanics like Albert and Joe Cobble founded firms in the southern industrial dynamo of Chattanooga, Tennessee (less than 30 miles from Dalton) to build special machines for the tufted bedspread and small rug industry. From these technological roots, area entrepreneurs began experimenting with making large rugs and wall-to-wall carpeting with this tufting process. About 1949, the Cobble Brothers firm and an innovative Dalton spread making company, Cabin Crafts, introduced tufting machinery wide enough to produce carpeting in a single pass. Carpet makers could buy cheap pre-woven backing materials. Manufacturers tried cotton with mostly poor results. Eventually Indian jute became the primary backing material for tufted carpets through the 1960s. In the 1970s, manufacturers developed suitable synthetic substitutes for jute.

The traditional woven carpet industry primarily used wool. (One manufacturer lamented in 1950 that it was “unfortunate that the carpet industry was tied to the back of a sheep.”) Wool made an excellent material for floor coverings – it was durable and resilient. The new southern tufting mills used cotton yarn at first. Cotton did not compare with wool as a floor covering material – it crushed easily and wore more quickly. Yet already by 1955, southern carpet mills were selling more carpets than northern mills, in spite of the clearly inferior nature of the product. The key was price: the wholesale price of tufted carpet was about half that of woven products. Consumer surveys in the 1950s demonstrated that few carpet buyers could name the manufacturer of the carpets they had purchased. The same consumers were almost without exception unable to distinguish between a tufted and a woven construction with a visual inspection. The old woven firms’ ad campaigns of the 1950s probably helped move more tufted carpet than woven.

Synthetic Fibers

The tufted carpet industry experienced a meteoric rise in the 1950s, but many skeptics saw it as a fad that would fade. One machinery executive quipped that “every year was the last big year for tufting” in the 1950s, according to industry observers. The obvious inferiority of cotton made the argument plausible. Surely consumers, many in the old woven industry argued, would eventually tire of placing glorified bedspreads on their floors. Tufted manufacturers experimented with rayon (disastrously) and staple (chopped, spun) nylon (with some success) in the 1950s. The most significant breakthrough in terms of raw materials came in the mid-1950s from the DuPont Corporation. Woven manufacturers and others had experimented with DuPont’s nylon as a carpet fiber, but nylon lacked the bulk needed in floor coverings. DuPont helped insure that the bust never came by developing bulked continuous filament (BCF) nylon in the mid-1950s. DuPont’s initiative was clearly stimulated by the growth of carpet sales. In essence, tufted manufacturers created a market large enough to justify DuPont’s research and development costs. DuPont even helped the new industry along by launching its own ad campaign for carpets made with its trademark 501 nylon in the late 1950s and early 1960s.

BCF nylon helped insure the long-term future of the tufted carpet industry. Tufted carpets used, and still use, a variety of fibers. Staple nylon could be used in constructions and styles that were not possible with a continuous filament yarn – plush, lustrous constructions. And in recent years, the industry has made increasing use polypropylene and other continuous filament yarns. DuPont’s BCF nylon (and similar products introduced by Monsanto a bit later), however, fit perfectly with the least expensive, low pile height, loop constructions that sold best in the emerging modest income market.

By the end of the 1950s, the new tufted carpet industry had raced past the old woven industry. While the total volume of carpet sales skyrocketed, woven sales actually fell. Tufted products accounted for all the growth in the industry through the 1970s. Tufted carpet sales increased from about 6 million square yards in 1951 to nearly 400 million yards in 1968. Carpet finally became a staple of middle and working class home furnishings – indeed, it became the default floor covering over much of the nation for decades. The logjam had been broken by product substitution. Per household sales increased for the first time since the turn of the century. By 1990, Americans consumed over 12 square yards of carpet per family per year, up from 1.97 in the early 1950s. Woven sales drifted downward in the same period from 67 million yards to just over 40 million. Woven products did not disappear. High-end consumers still sought the assumed quality of woven goods, and woven products continued to dominate specialty commercial markets – hotel lobbies, casinos, etc. But tufted carpet achieved total dominance of not just the residential carpet market, but the residential flooring market in general.

Table 1

Average Mill Value of Carpet Shipments, 1950-1965 (price per square yard)

All Broadloom Carpet and Rugs Woven Tufted
1950 $6.26 $6.26 n.a.
1955 5.30 6.19 3.36
1960 4.50 6.56 3.49
1965 3.76 6.09 3.40

Table 2

Carpet Industry Output, 1951-1968 (square yards)

Tufted Carpet Shipments(square yards) Woven Carpet Shipments(square yards) Total IndustryShipments

(square yards)

1951 6,076,000 66,924,000 73,000,000
1960 113,764,000 52,044,000 165,808,000
1963 250,000,000 41,000,000 291,000,000
1968 395,000,000 40,000,000 435,000,000

The tufted carpet industry was the nation’s fourth fastest growing industry in the 1960s, trailing only aircraft, television picture tubes, and computers. Robert Shaw, CEO of Shaw Industries, for two decades the nation’s leading manufacturer of carpet, recalled the late 1950s and 1960s as the era of the “gold coast” in the Dalton area, an era in which demand constantly outstripped supply and small manufacturers and large could succeed with few controls and a “seat-of-the-pants” management style.

Carpet Capital: An Industrial District

The brief narrative sketched above outlines the emergence of an industrial district. By the 1960s, the district had developed several distinct features. The carpet complex was characterized by the rapid emergence of new firms. No single firm accounted for as much ten percent of the industry’s output. The industry had developed from the deep roots of textile manufacture and, specifically, bedspread making. Carpet making emerged out of a process of regional learning (albeit a small region, similar to Jane Jacobs’ “city regions”). Carpet manufacture was also a decentralized affair. A few large firms, such as Cabin Crafts and E.T. Barwick Mills, spun some of their own yarn and finished some of their own carpets in-house by the 1960s, but most of the hundreds of small firms relied on independent yarn spinning or production mills and independent commission finishing firms. Carpet finishing provided the industry with significant flexibility. Mills produced some carpets with pre-dyed yarns, but tufted significant yardage with undyed yarn. This allowed manufacturers to delay the critical decision on color until later, increasing the company’s flexibility. Commission finishing companies provided these services. Initially post-production dyeing was handled in dye becks, or large drums. That is, finishers dyed carpets by the piece (albeit large pieces, 900 feet or more in length). Dye becks were produced locally and regionally.

The Dalton district offered a classic example of the great Victorian economist Alfred Marshall’s industrial district based on external economies. Clearly this industry originated in northwest Georgia because of the peculiar skill set developed among managers, mechanics, and workers. The finishing companies and other suppliers clearly filled the role of Marshall’s “subsidiary trades” devoted “to one small branch of the process of production.” Innovation and ideas were “in the air,” as Marshall put it. With so many firms and workers in close proximity, improvements in technology, management practices, marketing, and other arenas were rapidly transmitted throughout the industry. Though different in many ways, Paul Krugman has observed, the relatively low-tech carpet industry of the Appalachian foothills was quite similar to the high-tech Silicon Valley in these respects.

In the 1960s, European firms introduced continuous dyeing equipment to the U.S. carpet market. Continuous dyeing equipment held out the potential for more effective use of mass production techniques – an endless stream of white carpet moving through a dye range capable of rapidly shifting colors. The continuous ranges were, however, frightfully expensive compared to dye becks. The relative expense of the equipment in this evolving industry offers a window into the strategic options available to management. A tufting machine might have sold for $10,000 in the late 1950s, with Cobble Brothers or some other firm offering in-house financing. Through the 1960s, the well-nigh indestructible tufting machines were available second-hand – a bit slower than brand new models installed by larger mills, but still effective for smaller product runs. That particular barrier to entry into this new industry was quite low. To establish a beck dyeing operation, the equipment alone would have cost more than $700,000 by the end of the 1960s. The stakes in finishing were much higher, but the risks were shared among the finisher and his many customers. Just one of the new continuous dye ranges in the early 1970s cost more than $800,000. The capital stakes rose for finishers.

The Maturing of the Industry

The carpet boom slowed in the 1970s as did the rest of the US economy. The recessions of the mid-1970s brought an end to the double-digit annual growth rates of the earlier period. In a slower growth environment, attention to cost became critical. Some firms adapted to the changing environment, but many did not. Adaptation generally involved vertical integration. Particularly during the 1980s, a few firms took the lead in bringing yarn spinning (and eventually production of extruded, continuous filament yarn) in-house, integrating backward toward raw materials. The most successful large manufacturers also integrated forward through finishing, investing in their own dyeing facilities. The recession of 1981-82 proved a pivotal moment – many smaller and mid-sized firms had continued to struggle along and occasionally prosper during the inflationary 1970s. The recession of the early 1980s claimed nearly half of the 285 mills that had been in operation in 1980; by 1992 the industry counted only about 100 mills, down dramatically from its early 1970s peak of more than 400. Shaw Industries, a revamped Mohawk Industries, and a few others bought competitors and moved the industry towards greater consolidation. Moreover, the top four firms, led by Shaw Industries, accounted for more than 80% of total production by the early 1990s.

The Industry Today

The carpet industry today is essentially the domain of a few large firms, led by Shaw Industries and Mohawk. The nation’s largest carpet making firms are headquartered in northwest Georgia. Shaw and other carpet firms have moved into the production and distribution of other flooring surfaces – tile, wood, vinyl, etc. – as carpet has slipped in market share. No longer the unchallenged leader in covering America’s floors, carpet is still the single most popular choice. Perhaps the most notable change associated with the industry today is its increasing use of workers of Hispanic descent. Since the late 1980s, Hispanic immigrants have moved in large numbers to Dalton, as they have to many new destinations throughout the nation. The region’s employers laud the immigrant workers as the saviors of the industry, a solution to the region’s recurrent labor shortages. Some community leaders and longtime residents express anxiety about the pace of cultural change in the small communities that still serve as hosts to the industry.


Cole, Arthur H., and Harold Williamson. The American Carpet Manufacture: A History and an Analysis. Cambridge, MA: Harvard University Press, 1926.

Deaton, Thomas M. From Bedspreads to Broadloom: The Story of the Tufted Carpet Industry. Acton, MA: Tapestry Press, 1993.

Ewing, John S., and Nancy Norton. Broadlooms and Businessmen: A History of the Bigelow-Sanford Company. Cambridge, MA: Harvard University Press, 1955.

Flamming, Douglas. Creating the Modern South: Millhands and Managers in Dalton, Georgia, 1884-1984. Chapel Hill: University of North Carolina Press, 1992.

Friedman, Tami J. “Communities in Competition: Capital Migration and Plant Relocation in the United States Carpet Industry, 1929-1975.” Ph.D. diss., Columbia University, 2001.

Greeley, Horace, et al. Great Industries of the United States: Being an Historical Summary of the Origin, Growth, andPerfection of the Chief Industrial Arts ofThis County. Hartford: J.B. Burr and Hyde, 1872.

Krugman, Paul. Geography and Trade. Cambridge, MA: MIT Press, 1993.

Patton, Randall L. Shaw Industries: A History. Athens, GA: University of Georgia Press, 2002.

Patton, Randall L., with David B. Parker. Carpet Capital: The Rise of a New South Industry. Athens, GA: University of Georgia Press, 1999.

Scranton, Philip. Proprietary Capitalism: The Textile Manufacture at Philadelphia, 1800-1885. Cambridge, MA: Cambridge University Press, 1985.

Scranton, Philip. Figured Tapestry: Production, Markets, and Power in Philadelphia Textiles, 1885-1941. Cambridge, MA: Cambridge University Press, 1989.

Walters, Billie J. and James O. Wheeler, “Localization Economies in the American Carpet Industry.” Geographical Review 74 (Spring 1984): 183-91.

Zuniga, Victor, and Ruben Hernandez-Leon, “Making Carpet by the Mile: The Emergence of a Mexican Immigrant Community in an Industrial Community of the U.S. Historic South.” Social Science Quarterly 81, no. 1 (2000): 49-66.

Citation: Patton, Randall. “A History of the U.S. Carpet Industry”. EH.Net Encyclopedia, edited by Robert Whaples. September 22, 2006. URL

The New South’s New Frontier: A Social History of Economic Development in Southwestern North Carolina

Author(s):Taylor, Stephen Wallace
Reviewer(s):Phillips, William H.

Published by EH.NET (March 2002)

Stephen Wallace Taylor, The New South’s New Frontier: A Social History of

Economic Development in Southwestern North Carolina. Gainesville:

University Press of Florida, 2001. xix + 186 pp. $55 (cloth), ISBN:


Reviewed for EH.NET by William H. Phillips, Department of Economics, University

of South Carolina.

In this book, Stephen Wallace Taylor, assistant professor of history at Macon

State College, has written a descriptive view of economic conditions in North

Carolina’s southwestern tip since 1880. This mountainous region, bordered by

Asheville on the east and Gatlinburg, Tennessee on the north, is identified

today by its proximity to the Great Smoky Mountains National Park. In the

modern mind, it is a recreational area that was never affected by American

industrialization. However, Professor Taylor recounts the history of an area

that was actively engaged in timber and mining operations, with local boosters

dreaming of future industrialization based on water-generated electrical power.

This future was sidetracked in the twentieth century by wider national

concerns: the rise of the conservation movement in the early 1900s, and the New

Deal showcase of government regional planning, the Tennessee Valley Authority


Taylor gives an important role in his story to postbellum writers who

stereotyped the region as one of isolated mountainfolk. This included the

popular writings of Horace Kephart, who idealized a pioneer lifestyle that had

disappeared from commercialized America. In fact, the inhabitants of the

mountains were survivors, who rotated between agriculture, mining and timber as

economic opportunities warranted. Of necessity, they were more mobile than the

writers imagined, and the region had many seemingly timeless villages that had

once been boomtowns.

In the early 1900s the booming sectors were copper and lumber. Although the

copper expansion was limited by marginal ores, large scale clear-cutting fed

major lumberyards that required company town housing. The future of the area

seemed to ride on Alcoa and the aluminum industry. With massive power

requirements for plants in eastern Tennessee, Alcoa begin buying land in

anticipation of building a massive dam at Fontana, on the Little Tennessee

River. Although the reservoir would result in the loss of precious farmland,

boosters hoped that surplus power from the dam could fuel a local industrial


The 1920s and early 30s were a critical time for the Smokies. Forest depletion

in the most accessible areas led to timber industry decline. Then the Great

Depression reduced mineral demand. Besides the direct impact on the local

copper mines, concern about over-capacity led Alcoa to put its water power

plans on hold. Into this gloomy atmosphere came a national drive by

preservationists and conservationists to create national parks and forests in

the eastern United States. The fascination with America’s mountain regions

began with the health resorts favored by wealthy industrialists. Attention was

further focused on southwestern North Carolina by Vanderbilt’s estate in


Local boosters argued that the region could get tourism dollars now, while

industrial development would come with the eventual construction of Alcoa’s

dam. The first decision to be made was whether to create a national park,

favored by preservationists, or a national forest, favored by conservationists.

The park option would generate the most tourism, while the forest option would

enable the timber industry to continue operations. Despite significant

opposition from lumber companies, who still had large land holdings, Congress

approved the Smoky Mountains Park in 1925.

The park was not actually formed until the onset of the Depression, by which

time another institution with interest in the area entered the scene. The

Tennessee Valley Authority’s business was regional planning. The key to that

planning was complete control over the water flow of the Tennessee River

watershed. This meant that Alcoa’s control of a future dam on the Little

Tennessee River would permanently hamstring its operations. Alcoa’s monopoly

position in the aluminum market further intensified the hostility of TVA’s New

Deal progressives, who sought to purchase the dam site and run the dam in the

agency’s interest.

Before this political battle could completely play out, World War II raised the

stakes. Aluminum for airplanes was now a critical need, and the power from the

Fontana Dam was needed as soon as possible. A bid by Alcoa to retain ownership

and have the Federal Government pay for construction costs backfired

politically. The result was that Alcoa was forced to sell the Fontana site to

the TVA in return for a guaranteed power supply. Professor Taylor believes that

with the TVA in charge of the dam and its uses, the interests of the Smoky

Mountain region and its inhabitants were inevitably given little weight. TVA’s

main contact with the local area was during the dam’s construction, after which

it concentrated on distributing the power into eastern Tennessee. Even the

recreational use of the reservoir was limited, as annual summer draw downs to

meet power needs left docks and boat ramps stranded.

The perception that Tennessee was getting most of the benefits of federal

policy was reinforced by the actions of the Park Service in the Smokies. Many

inhabitants of land included in the park felt that officials misled them over

how long and under what conditions they could continue to reside there. Some of

this was due to changing views of what the park should be. The final policy was

one that attempted to eradicate traces of the land development that had already

occurred within park boundaries. This created more dislocation on the North

Carolina side, where more development had taken place.

The final battle revolved around the “North Shore Road.” This was a road that

the Park Service had agreed to build along Fontana Lake to replace a route

inundated after dam construction. Such a road would have given Bryson City,

North Carolina immediate entry into the park, enhancing its value as a tourist

stop. Park officials came to feel that such a road would create too much damage

to park land, and they successfully lobbied for abandonment of the original

plan. As a result, the Cherokee Reservation became North Carolina’s entryway to

the park, with the subsequent diversion of tourist dollars. Local civic

boosters especially resented the success of Gatlinburg, whose entryway on the

Tennessee side became the most popular destination for visitors.

The only shortcoming in this well written book is the lack of a critical

assessment of the area’s true industrial potential. In the absence of a

concrete proposal of what industries would have moved into the area had not the

TVA diverted the dam’s power, it is difficult to take the dreams of civic

boosters at face value. Unless an industry was to develop around some unique

mineral resource in southwestern North Carolina, the region was only left with

the standard Southern industrialization strategy: labor-intensive

manufacturing. But if labor is mobile, it is easier for Southern manufacturers

to entice the local population to more convenient locations for plant

operation. In their early years, Piedmont textile firms regularly sent labor

recruiters into the mountains offering train tickets. Perhaps a look at the

North Carolina furniture industry or Dalton, Georgia’s carpet industry might

reveal how the region could have forged an industry built around local craft

skills. Despite this reservation, the book will be very useful to historians

interested in the economic development of the Appalachian region.

William H. Phillips is Associate Professor of Economics at the University of

South Carolina. He is currently researching the development of the Southern

cotton gin manufacturing industry and, more generally, patents issued to

Southern inventors before World War I.

Subject(s):Urban and Regional History
Geographic Area(s):North America
Time Period(s):20th Century: Pre WWII

Traditional Industry in the Economy of Colonial India

Author(s):Roy, Tirthankar
Reviewer(s):Wolcott, Susan

Published by EH.NET (February 2001)

Tirthankar Roy, Traditional Industry in the Economy of Colonial India.

Cambridge: Cambridge University Press, 1999. xi + 252 pp. $64.95 (cloth),

ISBN: 0-521-65012-7.

Reviewed for EH.NET by Susan Wolcott, Department of Economics, University of


This new book by Tirthankar Roy of the Indira Gandhi Institute of Development

Research, Bombay is well worth reading. It is a careful and extremely well

researched discussion of the evolution of five important craft-based

industries during the colonial period: handloom weaving, on which Roy has

written before, gold thread (jari), brassware, leather, and carpets. Roy

addresses himself to India’s failure to grow. Why did industrialization never

lead to a sustained increase in per capita income? He sets out to do two

things in this book. The first is to dispute the contention that the craft

industries were devitalized by the colonial economy, and thus prevented from

becoming the incubators of an indigenous industrial revolution. His second

task is to show that the true root of stagnation was the too rapid rate of

growth of population and an absence of government involvement in the provision

of education and credit. In the first of these tasks, the book succeeds. The

thorough discussion and careful analysis of the history and organization of

each of these crafts well illustrate the dynamism and inventiveness of the

Indian entrepreneur. But the second task remains for further research. Roy

shows that the laissez faire policy of the British colonial government did not

crush these indigenous craft industries. But a history of craft industries by

itself is not well suited to answering the question of why modern industry did

not establish itself in India.

It can, however, offer certain hints. But the hints in this case do not

support Roy’s contention in an obvious manner. If the histories had shown that

there were attempts to move from small scale craft production to large scale

factory production, but these attempts were thwarted by a lack of capital,

that would have lent support to Roy’s claim that more direct intervention by

the government would have fostered faster growth. That is not the case. In

fact, just the opposite is true. The centralization of the craft industries as

they moved from their rural roots to a more urban existence is a recurrent

theme in Roy’s book. All of these crafts moved away from production for local

consumption to production for long distance trade, either for export to

Europe, or intra-India trade via the new railroads. To some extent, this was

just small craft shops moving to the cities for economies of agglomeration;

information sharing is one theme Roy often stresses. But the urban shift was

frequently accompanied by a large increase in the size of the typical factory,

and a move away from family labor to wage labor. To this reader, large

increases in the scale of individual operations suggest capital constraints

were not a critical issue. (The large scale of modern factory operations in

India during this period support this contention.)

Nor do the histories of these crafts suggest that there was a problem that a

broad program of education would address. Roy makes the important point that

the artisans were quick to adopt modern methods. Examples include the move to

use sheet metal in constructing brassware, mineral dyes for carpets, and the

fly-shuttle in handloomed silks. Through simplification, entrepreneurs

increased productivity. His examples successfully dispel any notion that the

Indians were technologically stagnant, at least in these areas. But this makes

it difficult to believe that these crafts, at least, would have seen greater

productivity increase with a more educated workforce.

What the histories do suggest is the importance of caste and regional ties in

the transmission of knowledge and access to credit. Roy’s attention to these

details in his histories is one of the chief reasons for the book’s

usefulness. It appears that knowledge and credit were accessible in India, but

not to everyone. Leather, the longest chapter, provides perhaps the most

interesting discussion. Leather manufacture has until very recently been the

preserve of the lowest rungs of Indian society as it involves handling dead

animals, a very polluting activity among Hindus. (Anything involving death is

polluting (dead cows even more so), and anything which is polluting is avoided

by higher caste Hindus.) Originally leather tanning was done in the village.

Members of certain castes would have the right to the carcass of animals that

died by natural causes in return for removing and disposing of the carcass.

These animals provided more than sufficient leather for the shoes, water bags

and straps needed by villagers. But the development in the late nineteenth

century of large-scale chrome tanning in the US and mineral leather dyes in

Germany created an upsurge in international demand for hides. Suddenly the

carcasses of animals had a significant value. There was a fairly rapid switch

from a small rural craft to large urban slaughterhouses and tanning factories.

Interestingly, these factories remained chiefly staffed and quite often owned

by the same castes that had performed these functions in the villages.

However, although there had been a quick response to the change in export

demand, and yet another rapid switch in product mix when export demand died

down in the interwar period, the further step of developing chrome tanning in

India was pursued only on a very limited basis. Roy attributes this to the

restricted access to capital of the lower caste Hindus who had skills in

leather working. Capital was available in India, but not to them.

Another illustrative story is the non-adoption of the fly shuttle in much of

the trade for coarse cotton cloth. But the reason is not that the workers did

not know better. There had been adoption of better techniques and large-scale

manufacture in handloomed silks. The cotton weavers were unwilling to make

even this relatively small capital investment in what was essentially a use

for otherwise unemployable household labor – women in agricultural off

seasons. The question of why the opportunity cost of women remained virtually

zero is not directly addressed.

These two examples provide a different justification for government

involvement in education and capital markets than what is typically given in

development texts. Roy writes that “the conversion of craft skills into

industrial and innovative capacity required an induced social

revolution in India, the conditions for which were not created,” (emphasis

mine, see p. 59). His book does not directly prove that this was the case. But

it does provide hints to this effect. A discussion that addresses this point

directly instead of obliquely might yield very interesting results.

Susan Wolcott is currently working on an article entitled “The Role of Caste

Relations in the Slow Industrialization of Colonial India: Evidence from

Textile Strikes, 1921-38.”

Subject(s):Industry: Manufacturing and Construction
Geographic Area(s):Asia
Time Period(s):20th Century: Pre WWII

Life and Labor in the New New South

Reviewer(s):Friedman, Gerald

Published by EH.Net (June 2013)

Robert H. Zieger, editor, Life and Labor in the New New South.? Gainesville, Florida: University of Florida Press, 2012.? xi + 363 pp. $75 (hardcover), ISBN: 978-0-8130-3795-0.

Reviewed for EH.Net by Gerald Friedman, Department of Economics, University of Massachusetts.

The Levine Museum of the New South in Charlotte, North Carolina, has an exhibit about Kannapolis, the textile city built around Cannon Manufacturing?s textile mills.? Drawing cotton locally from throughout the South, and using the most up-to-date machinery powered by local water, Cannon made Kannapolis a world center in the production of cotton sheets and towels. As recently as the 1980s, Cannon employed 30,000 workers in Kannapolis, and the Levine Museum includes exhibits of working conditions, living conditions, recreation, and culture.? There are even pictures of the first black workers at the Cannon Mills.

Kannapolis was part of the New South of the decades before World War I and is part of both the success and failure of that New South.? On Youtube, one can watch the demolition of the great Cannon Mills in 2005 after the company?s final bankruptcy; and with the loss of the mills from the Carolinas and the Southeast went much of the promised affluence and new opportunities for many of their workers.? Yet, amid the economic wreckage, Kannapolis survives; instead of the giant textile mills, the city?s economy is now built around a public-private venture, the North Carolina Research Campus.? Built on the former Cannon Mills site, it is a collection of research facilities with laboratories for biological and other research.? Kannapolis is now part of Carolina?s Research Triangle, home to a prosperous and cosmopolitan population able to produce products that sell throughout the world.? There are jobs there; although one may wonder how many are filled by the former mill hands.

There have been many ?new Souths.? Before the Civil War, there was the trans-Appalachia west, a new slave empire of large-scale plantation agriculture and staple crop production carved out of lands conquered from the native peoples and from Mexico.? In the 1880s, Henry Grady famously proclaimed a ?new South? of ?union and freedom,? a ?perfect democracy? with a diversified industry to meet ?the complex needs of this complex age.?? Again, even while saying that the ?new South? would move beyond racism and authoritarian politics, Grady?s New South was based on an authoritarian state able to maintain “the supremacy of the white race of the South? and to advance the economic interests of rich capitalists (Woodward 1951; Lichtenstein 1996; Blackmon 2008).?

Yet, Grady?s words show the enduring interest in a new South that would be both prosperous and democratic.? New Dealers and Civil Rights activists campaigned for political reforms and economic diversification to promote broad-based prosperity through education, by spreading purchasing power, and by ending racial injustice (Badger 2007; Wright 1986; Wright 2013).? There has been some progress, especially around the southern periphery where improving education and reduced racial discrimination has brought new industry and prosperity.? Those who feared that a new South would lose its distinctive identity into a soul-less, homogenized United States might grieve at how Atlanta or Charlotte have come to resemble Chicago or the Boston suburbs; but this fear is still premature.? Outside of a few enclaves, much of the South remains poor, left behind by many of the industries of the twenty-first century economy.??

What then of the ?New New South??? Robert Zieger and his colleagues think there is one and their collection shows how labor relations in the South have come to resemble those in the North and elsewhere.? Rather than showing how the South has changed, however, much of their work shows how the South has helped to transform the rest of the United States by undermining unions and democratic impulses.? In an excellent study of capital mobility focused on the movement of the carpet industry south, Tami Friedman shows how the weakness of southern unions gave capitalists a way to escape unionization in the North as well as leverage against their northern workers.? Michael Pierce writes of political struggles between Dixiecrats and New Deal liberals in Arkansas.? Building on work of Anthony J. Badger and others, Pierce shows that a liberal, pro-labor, biracial coalition was viable in Arkansas right up to 1957 when the Little Rock school integration fight polarized white voters, insuring the triumph of the most conservative, anti-organized labor elements.?

Other chapters are more optimistic about the New New South by showing how the Civil Rights movements of the 1950s and 1960s improved the situation of low-wage public sector workers in Baltimore (Jane Berger), Texas farm workers (Max Krochmal), Texas prisoners (Robert Chase), and migrant farm workers in Georgia (Michael Bess).? It is unclear, however, whether these gains will be any more enduring than those of reforms during an earlier southern reconstruction after the Civil War.? Robert Bussel?s chapter on Teamster Local 688?s Community Stewards Program, for example, shows how an alliance of organized labor and neighborhood organizers promoted political democracy in St. Louis in the 1950s.? By helping workers realize their potential as ?first-class citizens,? the Teamsters helped to improve education, transit, housing, and public services for working people and the poor.? This would be a disappointing model for a New New South, however, because the program died with the collapse of the Teamsters? Union.

Little more encouragement can be found from the other chapters in this collection.? Michael Honey and David Ciscel report from Memphis, home of Martin Luther King?s last campaign where little remains of King?s dream of political empowerment and economic equality.? While the city is dominated politically by a black political elite, it has lost much of its manufacturing employment and many of its African-American residents are without jobs and locked in poverty.? Timothy Minchin gives a preview of his new book on the decline of southern textiles.? Hardly had textile jobs been opened to African Americans when they disappeared to foreign imports that left entire communities poverty-stricken in a new world for which they are poorly prepared; few have made the transition as successfully as has Kannapolis.? Chapters by Bruce Nissen and Michael Dennis are a little more optimistic and report organizing successes for health care workers in Florida and for communities in Virginia respectively.? In a larger context, one may want to withhold judgment about the long-term success of these initiatives.

What then remains of the democratic and egalitarian hopes for a New New South?? Perhaps hope lies in the variety of southern experiences shown in this excellent collection.? The southern story has been varied, filled not only with disappointments and tragedies but with brilliant struggle and even occasional triumphs.? If a new Kannapolis can rise from the ashes, may a new prosperous and democratic South rise as well??


Badger, Anthony J.? 2007. New Deal/New South: An Anthony J. Badger Reader. Fayetteville: University of Arkansas Press.

Blackmon, Douglas A. 2008. Slavery by Another Name: The Re-enslavement of Black People in America from the Civil War to World War II. New York: Doubleday.

Lichtenstein, Alexander C. 1996. Twice the Work of Free Labor: The Political Economy of Convict Labor in the New South. New York: Verso.

Woodward, C. Vann. 1951. Origins of the New South, 1877-1913. Baton Rouge: Louisiana State University Press.

Wright, Gavin. 1986. Old South, New South: Revolutions in the Southern Economy since the Civil War. New York: Basic Books.

Wright, Gavin. 2013. Sharing the Prize: The Economics of the Civil Rights Revolution in the American South. Cambridge, MA: Harvard University Press.

Gerald Friedman?s publications include ?The Political Economy of Early Southern Unionism: Race, Politics, and Labor in the South, 1880-1953,? Journal of Economic History (2000).

Copyright (c) 2013 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (June 2013). All EH.Net reviews are archived at

Subject(s):Labor and Employment History
Geographic Area(s):North America
Time Period(s):20th Century: WWII and post-WWII

Cotton and Race in the Making of America: The Human Costs of Economic Power

Author(s):Dattel, Gene
Reviewer(s):Miller, Melinda

Published by EH.NET (March 2010)

Gene Dattel, Cotton and Race in the Making of America: The Human Costs of Economic Power. Chicago: Ivan Dee, 2009. xiv + 416 pp. $29 (hardcover), ISBN: 978-1-56663-747-3.

Reviewed for EH.NET by Melinda Miller, Department of Economics, U.S. Naval Academy.

Gene Dattel, an independent scholar with a background in the finance industry, weaves together cotton and race into a sweeping narrative of racial oppression and its role in the economic growth of the United States. His central premise is that economic self-interest, and not moral or ethical imperatives, has driven much of American history. Although most of the facts in this book will be familiar, Dattel nicely draws together the literature on the cotton South, financial markets, and northern racism to make the compelling argument that the South?s desire for cotton and northern complicity irrevocably altered American racial history. The book?s narrative is divided into six parts.

In Part One, Dattel uses the Constitutional Convention to illustrate how ?the desire for economic development trumped … almost all else? (p. 5). He persuasively argues that freedom for slaves was sacrificed to commercial interests, order, and security.

Part Two explores cotton?s role in American economic growth from 1787 until 1861. It begins with an analysis of factors influencing the tremendous increase in the supply of and demand for cotton at the beginning of the nineteenth century. The remainder of this part explores the burgeoning cotton industry?s influence on the United States and its expansion throughout the South. Dattel carefully chronicles the business and finance of cotton while demonstrating that, through cotton, slavery touched the world: New York City profited from cotton finance; Britain, France, and New England depended on raw cotton; and the federal government depended on the tariff revenues made possible by cotton’s favorable effect on the balance of trade.

Part Three documents the conditions of blacks in the North before the Civil War. While the northern states had outlawed slavery, their citizens were not welcoming to African-Americans and wished to rid themselves of their black populations. Chapters 8 and 9 provide a detailed analysis of northern laws and document the hostile and racist atmosphere for blacks in the North. Chapter 8 focuses on the original northern colonies, while Chapter 9 discusses the western states. These two chapters can serve as a concise, freestanding compilation of racist laws and attitudes in the North. They could very nicely be incorporated into an economic history class to dispel any misperceptions students have about the history of racial (in)equality in the North.

Part Four focuses on the role of cotton in the Civil War and argues, ?none of this destruction would have occurred if not for cotton? (p. 166). Cotton served as both a bargaining tool and a means of credit for the South. These dual roles were possible largely because Great Britain?s textile industry relied on southern cotton. Chapter 13 delves deeply into the role of cotton in war financing. The Confederacy developed complicated financing schemes, including the famous Erlanger bond, which Dattel praises as both ?prescient and brilliant? (p. 188). Overall, however, the Confederacy bungled financing. The origins of its fundraising problems can be found, Dattel suggests, in the South?s choice to use cotton as a bargaining chip, and not just a fundraiser. Entertaining tales of blockade-runners who moved cotton out of the South and brought guns and supplies to the Confederates dominate chapter 14. There was also a large illicit flow of cotton within the United States. In another example of shameful and prejudiced northern behavior, General Grant blamed the Jewish population of Tennessee for this trade and expelled them from parts of the state. Part Four concludes with a discussion of the future of the freed slaves. For the North, there was a simple answer: containment of the freedmen in the South and in the cotton fields.

Part Five examines the lives of blacks and carpetbaggers from 1860 to 1930. The central argument of this section is that ?the possibilities for black acceptance in these years (1865-1876) have been grossly exaggerated in our history.? During Reconstruction, the lives of freedmen were largely shaped by two forces: the northern hatred of blacks, and the southern desire for cotton. Together, they led to Federal and state government policies that served to firmly anchor blacks to the cotton fields. These included the decision to restrict land acquisition by freedmen, the failure of most civil rights legislation, Supreme Court decisions that reinforced racist policies, and a lack of adequate schooling for freed slaves and their children. While this era also saw an increase in racial violence in the South, the life of northern blacks was so poor that southern blacks were essentially trapped.

Part Six takes on the issue of cotton production after the war, particularly the expansion of cotton and the rise of sharecropping. The state of postwar southern financial markets and the unique financing needs of cotton together served to severely constrain the economic advancement of freedmen. Dattel presents sharecropping as inevitable: ?With cotton production as the goal, sharecropping was a predictable outcome? (p. 331). He presents the tale of Mound Bayou, an all black town in Mississippi, to illustrate this point. Mound Bayou was both owned and controlled by blacks. Despite some initial success, it eventually succumbed to the vagaries of King Cotton and a lack of financial infrastructure and provides us with an ?abject lesson in the futility of black economic hopes after the Civil War? (p. 341). Both part six and cotton?s hold on African-Americans concluded with the rise of the mechanical cotton picker. This technology ended the need for black labor in the cotton fields.

Dattel?s choice to conclude with a technological innovation fits well with one of his underlying themes: history is largely shaped by technology and finance. As Dattel argues in the introduction, ?the slaveholder and the slave before the Civil War, and the plantation owner and the sharecropper afterwards, were all ? each in his own way –pawns in the hands of finance? (p. xi). Shortly thereafter he returns to this general theme when arguing that, ?the cotton boom was a perfect example of how machines and technology control human destiny? (p. 30). Dattel tends to treat both finance and technology as exogenous, and then argues that fates of both African-Americans and the South were ?foreordained? (p. 312) given the financial system and state of technological progress. Although insight can be gained from this approach, I think this ultimately fatalistic viewpoint of the past introduces two weaknesses into Dattel?s analysis. First, despite the repeated emphasis on finance and technology, an important set of questions remains unaddressed. Why did the financial system and technology evolve as they did? Were they, too, foreordained given some initial conditions? Or could government policy have influenced their organization and, ultimately, the status of African-Americans? A second, related issue concerns public policy. Dattel seems to leave little role for government programs, legislation, or institutions to influence the economic status of former slaves and their descendents. Despite a brief mention of current issues facing African-Americans on the closing pages, the potential role of government policy today remains unclear. Could anything mitigate racial disparities today? Or does finance and technology still trump all?

Melinda Miller is an assistant professor of economics at the U.S. Naval Academy. Her research focuses on slavery, emancipation, and racial inequality. She can be reached at

Copyright (c) 2010 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (March 2010). All EH.Net reviews are archived at

Subject(s):Servitude and Slavery
Geographic Area(s):North America
Time Period(s):20th Century: Pre WWII