The greatest southern industry is cotton manufacturing. Even before the Civil War there were traces of progress in this direction, but in 1860 there were few mills in all the southern states, and these were small. As compared with the output of the New England mills their product was negligible. After 1870 the South began to build cotton factories, and at the present time there are more in that section than in the North. The southern mills now consume more raw cotton, and there are more spindles actually working there than in the North. In fact, at the present time the great cotton manufacturing syndicates are not only buying up plants in the South but are building new ones, and transferring business from New England to the new centers. In years past the southern mills specialized on the coarser grades of yarn and fabric, but some of their mills have turned out finer grades of the very highest quality.

For a number of years the southern mills enjoyed certain distinct advantages over their northern competitors. They were much nearer the source of their raw material for one thing, and with the discovery of coal at various points in the South they were sure of relatively cheap fuel. Then the land for buildings, both for the manufacturing plants and for tenements, was cheaper than elsewhere.

On the whole taxes were lower, and wages were decidedly lower. In the South of the '80's, as in New England of the early '20's, the cotton mills opened up to the farmers an entirely new source of income. Farmers' sons and especially farmers' daughters found a chance to earn money, and the wages were higher than any they had known before. In North Carolina especially, where the mountain white people were drawn upon, there was an abundant supply of cheap labor. Under these conditions there were few if any labor troubles. The employees were too well satisfied with their wages to think of causing trouble, and professional agitators or organizers from the North were kept out. Even to-day industrial troubles in Southern cotton mills, as compared with the New England centers at Lawrence, Fall River, and New Bedford, have been almost nonexistent.

Another important southern industry is that which utilizes the by-products of cotton, the seed in particular. Formerly thrown away, the cotton-seed is now made to produce oil for salads, oil for cooking, and oil for soap, while cotton-seed meal is used as cattle feed, and what is left, for fertilizer.

As a result of the industrial development in the South the section is not set off so sharply from the rest of the country as it was before the Civil War. Or, to put it another way, the forces working toward nationalism and centralization have penetrated the South almost as completely as they have the other sections. Back in the thirties of the nineteenth century industrialism drove the old-fashioned states' rights theories out of New England; the same force, plus the overwhelming power of the central government, has now driven them out of the South. By 1890, with the practical completion of the processes of filling up the West, and of bringing the South into harmony with the course of national development, the work of nation building was nearly complete.

CHAPTER L

TRANSPORTATION, 1865-1890

While the West and the South were concerned with their problems of growth and development, the industrial structure of the East was undergoing changes so far-reaching as to justify the use of the term "economic revolution." This revolution was taking place in transportation, in business, and in labor, with the result that by 1890, a new nation had clearly come into being, a nation of "big business." The rise of this new nation was made possible primarily by the railroads. Without them the different parts of the country might have been held together, although that is not at all certain, but the Union as we knew it could not have been created. The great business structure especially would have been an utter impossibility without railroads, or some equally fast and dependable means of transportation. The "trusts" could not have grown up without a nation-wide market. Without cheap and fast transportation the range of commercial interests would have remained as they were at the close of the eighteenth century.

For thirty years before the Civil War the country had been experimenting with railroad transportation and before 1860 connections, but not through service, had been established between tidewater and the Mississippi Valley. The various lines were short, owned by a variety of companies, and not at all well articulated. The defects in this disjointed arrangement were clearly emphasized by the needs of war. Through service became a military necessity, to facilitate troop movements. After the war the desirability of through service for commercial purposes was too plain to be disregarded.

IMPROVED TRANSPORTATION

Between 1865 and 1875 the trunk lines were developed. Separate lines were linked together, and through service was established. By 1875 there were five of these trunk lines between the Atlantic Coast and the Middle West: the New York Central, the Pennsylvania, the Baltimore and Ohio, the Grand Trunk,-a Canadian line--and the

Erie. During this same time construction was standardized. For example, during the Civil War there were no less than eight different gauges in use, so that the rolling stock of one road could not be used on another. The Erie for example used a gauge of six feet. Shortly after 1865 the present standard gauge of four feet eight and one half inches was adopted. The demand for through service made it necessary to build bridges where there had been none before. There was no railroad bridge across the Hudson River at Albany until after the Civil War. Passengers had been ferried across in summer, and driven across in sleighs in winter.

Numerous improvements were introduced, to make travel not only more comfortable, but safer. Dining cars and Pullman sleeping cars came into general use. Better heating and lighting systems were installed. In 1868 the air-brake was invented, and its use became general. The automatic block-signal system was introduced soon after. By 1875 the railroads, and the trains upon them, had undergone a great change. The locomotives were larger and heavier, and steel rails took the place of iron. Down to 1866 there was not a double track line in the country. Then Cornelius Vanderbilt laid two tracks from New York to Albany, and four from Albany to Buffalo.

COMMODORE VANDERBILT

The transition from the old railroad to the new, from old methods to modern, as well as the general policy of the new railroad executives, was all typified in the career of Cornelius Vanderbilt, "the Commodore," builder of the New York Central system. In 1865, at the age of seventy, Vanderbilt sold out his fleet of steamboats, and began to invest his money in railroads. At this time he had a fortune of about ten million dollars. When he died in 1877, he left about a hundred and four millions, the product of his railroad business.

The Commodore was a brilliant example of the "captain of industry" type. Big, fine looking, abounding in energy, possessed of a mind and an imagination which enabled him to see the possibilities in railroading, a self-made man in all respects, he was one of the greatest figures of his age. Of course he had peculiarities. He was excessively superstitious, and he generally sought the advice of mediums before making investments. At one time he tried to get in touch with the ghost of "Jim" Fisk, to ask his advice about a certain speculative venture which he was considering. He was also extraordi

narily vain. He had his picture engraved on some of his railroad bonds, and his statue erected near one of his important stations. But these were minor matters in a man who could do big things.

He was also typical of the business man of his time in his attitude toward the law. In connection with one of his promotion schemes, one of his associates told him that every one of his recent transactions was forbidden by New York law. "My God, John," he replied, "you don't suppose you can run a railroad in accordance with the statutes of New York, do you?" And again he exclaimed: "Law! What do I care about law? Hain't I got the power?" This same Commodore Vanderbilt is supposed to have coined the pregnant phrase: "The public be damned." Whether he ever said it or not, he consistently acted upon that principle. He lived in a time of selfishness, corruption, and extraordinary disregard of private rights, and of contempt for law. And yet, it was a period of tremendous achievement, much of which has been of permanent value.

THE NEW YORK CENTRAL

The lasting monument to his fame is his railroad. He made a fortune by manipulating railroad stock, and some of this he used to make the New York Central. In 1869, when the New York Central and Hudson River Railroad was incorporated, it included eight hundred and fifty miles of track. By 1885 William Vanderbilt had secured the Lake Shore and Michigan Southern, and the Michigan Central, thereby getting into Chicago. Then he got the Canada Southern, and in the same year, 1885, he got the West Shore, a competing line from New York to Albany running parallel to his own. Soon afterward he secured the "Big Four"-Cleveland, Cincinnati, Chicago and St. Louis. Other lines, including the Boston and Albany, he or his successors picked up later.

If this story of genuine achievement constituted the whole history of railroading after the Civil War, the railroad problem and the demand for federal regulation would never have arisen. But the constructive work was accompanied by a continuous performance in some of the most astounding stock-jobbing spectacles of all time. In these the ethics of the Tweed Ring predominated. Perhaps the plundering operations connected with the Erie were the most glaring and the most famous, but even the managers of the Erie occasionally learned a lesson from Commodore Vanderbilt.