We are in an age where it seems the free-market basis for this country’s incredible prosperity and global prestige (and make no mistake, we are viewed around the globe with great admiration — many millions more people struggle to get IN here rather than get out) is under increasing assault from within by those ashamed and terrified of our success. Our system is far from perfect, but even the Garden of Eden had its flaws. One can never win an argument with people who see the very prosperity we enjoy, and the system which engenders it, as inherently evil. They are zealots, and zealots are unmoved by rationality. There are others among us who, after being bombarded with daily media messages on the latest crime against humanity perpetrated by evil corporations, might be forgiven if we begin to question the wisdom of the free market and contemplate having government take over steering our lives. For those of us who want continued prosperity and opportunity for all, but might question whether the free market, capitalist model is the best way to achieve it, it might help to look back at an example of how the system worked to the great benefit of all during the single most trying event in our country’s history.
In the first half of the 19th century, the small city of Lewiston, Maine, and its sister city Auburn, straddled the powerful Androscoggin River at point where it made a significant drop and formed a large waterfall. Entrepreneurs long understood the industrial possibilities in harnessing the river’s energy to power machines. Throughout New England entrepreneurs took advantage of the opportunities offered by the region’s abundant river system, and a nascent textile industry was born. In a symbiotic relationship fraught with historical irony, the New England area was in a position to turn the cotton made readily available by slave labor and the cotton gin into finished textile products. Cities like Fall River and Lowell, Massachusetts and Manchester, New Hampshire, fronting on powerful rivers, exploded with growth. Mills sprang up seemingly overnight to produce goods demanded by the prospering American consumer.
The middling towns of Lewiston and Auburn, Maine were already situated at a point where the power of water could be readily harnessed. A group of Boston entrepreneurs, which included a Quaker named Benjamin Bates, incorporated and created the Franklin Company, which gained control and ownership of the water-power rights of the river and the property (including already existing mills) fronting it. The investors raised the capital necessary to begin constructing new textile mills in Lewiston (interestingly, though immediately across the river and almost a mirror image, Auburn’s industrial base developed around shoes and leather goods as opposed to textiles). By 1849, these investors brought the railroad to Lewiston, and this opened the gates to an influx of Irish immigrants hungry for work and a new place to call home. With a willing workforce at hand, Bates and his partners financed the digging of an elaborate system of canals to channel and control the water needed to power the planned textile mills. Lewiston was beginning to thrive.
The Lincoln Mill, built directly on the riverbank, commenced operations in 1846. This mill still stands. I can look out my window and see the 5 story brick structure with its mansard roof hovering by the river, as solid as the day it opened. It now longer houses textile operations, but a few small shoe-making operations continue to hang on. My mother worked for many years in one of the shoe shops housed in this mill during the latter half of the 20th century. The canals dug and formed by the burgeoning immigrant work-force allowed the construction of mill buildings some distance away from the river itself. The growth of Lewiston was not as explosive as it was in some towns like Lowell, MA, but it was steady. The textile mill’s looms and spindles were run by “operatives”, basically semi-skilled laborers drawn from the rural farms and forests surrounding the area. Interestingly, women “operators” outnumbered men by about 2 to 1 in those early days. By 1847, the area was thriving enough to support a daily newspaper, the Lewiston “Journal”, which remains in business to this day under the “Sun-Journal” banner (a paper I delivered as a young boy). Mills continued to rise and produce. By 1856, the aforementioned Benjamin Bates felt secure enough to quietly endow a new institute of higher learning, the Maine State Seminary. In 1863, the seminary took on its more familiar name, Bates College, a still-thriving university (one of Maine’s “Little Ivies”, along with Colby and Bowdoin), the alma mater of Bernard Lown and Bryant Gumbel among others.
Even as Lewiston prospered, trouble was brewing across the entire country. It was increasingly clear the nation was headed for some serious problems. As the 1850s faded into the 1860s, it was apparent that southern states were angry and frustrated enough with the progression of events that they were willing to take the radical step of attempting to secede from the Union of States. With businesses so dependent on the continued flow of cotton from its southern source, the owners of New England’s mills could not afford to pretend everything was OK and stumble along as if things would never change. They could hope for the best, but they had to plan for the worst. These textile mill owners fully understood that secession meant war, and war meant the loss of access to their most basic raw material, cotton. Understanding that war was almost inevitable, mill owners were faced with the basic question of whether it would be a short war or a long war. If it were short, say a year or so at most, they could weather the storm without too much difficulty. If the war lasted much more than a year, they’d be in trouble unless they planned ahead very carefully. They had to gamble on which was the more likely scenario. By and large, most of the mill owners placed their bets on the short-war option. Thinking their wayward southern brethren would be quickly brought back into the fold, owners chose not to buy large quantities of cotton then selling for “inflated” prices, lest they end up overstocked with material that dropped in price when the “short” war ended and supplies flowed freely once again.
Benjamin Bates and his partners placed their bet on the “long war” option. They did not think events would (or could) progress so neatly, that the short-war camp was engaging in dangerous wishful thinking. Cotton was harvested in abundance in the South in the immediate antebellum years, producing record bumper crops. This glut of cotton allowed people like Bates to buy up enormous stocks at the relatively good price of 12 cents a pound. Bates packed his warehouses with bales and bales of raw cotton, and he patiently waited. By contrast, the mill owners in Lowell, MA sold what “surplus” cotton they had when the price reached an incredible 30 cents a pound, thinking they’d made quite a nice profit. However, the price of cotton would rise to well over $1 a pound as the war dragged on and supplies dried up. Not only did Bates’ operation buy large amounts of cotton at what turned out to be a bargain price, it had enough in stock to continue running at full capacity for much of the war period. During this same period, many textile mills were forced to shut down entirely for lack of raw material. (from “Historic Lewiston, A Textile City in Transition” LHS, 1976)
Needless to say, there was a huge demand for finished cotton products. It’s my understanding that individual states were responsible for equipping their volunteer regiments (I’m sure forum members will correct me if I’m wrong), and the state of Maine came knocking on the door of Bates’ and his mills. Working at capacity, the existent Lewiston mills churned out a seemingly endless supply of high-quality tent fabric, non-wool accouterments such as knapsacks and cotton uniform parts. (untitled Civil War Paper #71, Lewiston Public Library) In addition, the shoe shops across the Androscoggin River in Auburn, were hard at work making enough shoes and leather goods such as belts, haversacks, ammunition pouches and the like to equip almost all of Maine’s volunteer regiments.
Here is an example of a win-win-win situation under the economic model in this country in 1861. The Federal and state governments had a steady, reliable source of high quality material at competitive prices to equip its forces; the local population had the opportunity to make decent wages working in the mills ($40,000 in wages, the equivalent of over $1 million in 2010 terms, were paid to workers in Bates’ mills in 1863), raising their standard of living well-beyond what they experienced back on the farm; and Bates and his fellow investors made very handsome profits, $400,000 in 1862 alone (which equates to over $10 million dollars in today’s terms). During this boom, Bates was able to construct the new Androscoggin Mill #1, barely more than an idea at Lincoln’s Inauguration, in 11 months time even though the workers had to make their own bricks! The loan taken out to build the new mill was fully paid off in 14 months time. Bates built yet a third mill in 1863, and the owners of the Hill Mill/Bleachery Works constructed their own second mill in 1864.
This winning situation carried over well after the war ended. The textile mills built by Benjamin Bates and his fellow investors fueled the economic engine of the area for over a hundred years, providing employment for huge numbers of people, including the French-Canadian immigrants pouring into Maine from Quebec at the end of the 19th century. At one time, the mills were the largest employer in the state of Maine. The wages paid to employees of the mill built the city that stands today. As I look out my window, I see these same mills standing today. They’re as solid and imposing as ever, monuments to a different time. The textile mills are long gone, Bates Manufacturing finally pulling up stakes for good in the 1990s (as an aside, my father-in-law was one of the last half-dozen employees of Bates before it left, a fact which has it’s own special poignancy). The mill buildings today are in a state of flux, a kind of uneasy limbo. Space is rent out to small manufacturers and as storage space. Part of of mill is occupied as a service center by a large, multinational bank (where my wife is employed). Yet another part, the huge Mill #5 built after the Civil War, is on the verge of being wholly dismantled by the city, unless it’s turned into a casino first. The canals that once powered the enormous looms and spindles are still there, but empty of water as often as not.
Whatever becomes of these old mill buildings, nothing can take away their contribution to the Civil War effort. Not every textile mill in the north did as well during the Civil War, but that’s the nature of the beast. There are no guarantees in the free market model. You take your chances and make your choices, and you live or die by those choices. In the Civil War, Benjamin Bates and his fellow investors did their research and made their bets and won. Others did not do so well and they either faded away, unable to compete, or adapted and moved on. It’s notable that the mills in Lowell, Fall River, Manchester and many of the other New England towns managed to survive and thrive in the post war period. It seems to me that in our present world, there is a fear of risk bordering on a phobia. It feels like we as a people will opt for the safety of guaranteed mediocrity rather than risk failure when aiming for the big reward laying just ahead. In the Civil War, one group of investors took a big risk and won big. Another took the opposite gamble and lost, or at least fell down hard. They knew the rules going in, and they did the best they could. When it worked, everyone won, the investors, the workers, the government and the surrounding communities. Quality of life rose rapidly, squalor was replaced with relative comfort, illness often nudged aside by robust health. The northern economy boomed during the Civil War, improving the lives of the vast majority of its citizens — all without government rules, handouts or entitlements. When it didn’t work so well, that was just the way things were. You got up, dusted yourself off and went on to the next challenge (of course, the 1860s was a time when whole families would pull up stakes and head out into the great western unknown on the chance that things would get better, not a time like now when a single person gone missing during a sailing trip can send the entire population into spasms of rage and grief).
I would like to thank Jim Allard of the Lewiston Public Library for assisting me in gathering many of the facts used in this blog. I’m including links to the LPL site and another page I used in researching the Lewiston Mills. I wanted to add a couple of photos to this post, but I’m not nearly skilled enough with the blogware to do it. Instead, I’ll post them in the regular forum.