This is the story of one man and his community, and how together they brought an end to the Great Depression much earlier than the rest of the country. The story draws extensively from speeches by historians memorializing the efforts of the man and his company as well as company records and the words of those who worked for the man and his company. It also draws on business and national statistics, and principles of macroeconomic theory to set the story within a national context, hopefully to help the reader understand what makes this story truly remarkable.
Elliott White Springs took control of the Springs Cotton Mill industry in 1931, at the height (or depth if you prefer) of the Depression. Cotton mills were closing all over the country, but Springs kept his open, primarily as a service to his community. He had just inherited control of the company from his father, Leroy Springs, and the situation was bleak. According to Walter Y. Elisha, Springs “fought off creditors, the New Deal, union organizers and imports” while he “modernized the plants. . .[which] ran through the depression even when the warehouses were bulging with unsold goods.”[i] Springs stockpiled his goods “everwhere he could stick a piece of cloth” just to keep the mill opened.[ii] One unnamed employee gave Springs credit for running the mills “to give us three days a week. So we could live.”[iii]
In many ways, Springs was simply continuing the legacy of his grandfather, Samuel White, who had founded the cotton mill in the wake of Reconstruction and the need among community members for employment.[iv] The business that Springs inherited was not well-positioned to weather the Great Depression. Springs’ father, Leroy Springs, had badly damaged the confidence of New York bankers by telling them that his son had no idea about the operation of the mills, and also buried the corporation in debt.[v] Many of the company holdings were also insolvent, in most cases in bankruptcy themselves, making it difficult for the company to raise the capital needed to remain open.[vi] The plants themselves had outdated equipment, and the business had been coasting on the general growth commonly referred to as "The Roaring 20's." Therefore, the Springs Cotton Mill company fit the typical narrative of an early Depression-Era business: It was a high risk creditor unable to obtain financing because it wasn’t safe enough of an investment, and its holdings were not liquid enough to be called upon in order to make up any short-falls. It was precisely this kind of debt that the banks could no longer afford to hold in the growing economic crisis of the early 1930’s.[vii] One of Springs' ownly saving graces was his ownership of the Bank of Lancaster, which provided all of the funding for his actions; and this was certainly key in allowing Springs to succeed where many others could not.[viii]
Springs showed a tremendous ingenuity in keeping his cotton mills operating; all of which were in bad need of modernization. For those who were committed to keeping their plants opened as Springs was, the Depression was something of an opportunity in disguise. Springs purchased wholesale machinery, much of which was somewhat outdated itself, but still represented an upgrade to his own plants’ current inventory, at vastly discounted rates. A lot of the machinery came from closing or greatly reduced New England plants, responding to national trends which saw textile production shrink by 15% between 1929 and 1933.[ix] Equipment valued at $4,000 in 1950 was purchased for $30, Springs bought $1,000 looms for $25 each plus freight, and in one case he acquired equipment from a New England mill for free, provided that he was willing to dismantle and remove it from the property so that the original owner could avoid paying taxes on capital.[x] The end result was that when he finished outfitting his plants with new machinery, he “had one more cotton mill than when he started and more modern equipment everywhere.” Springs dedication to his mill workers (and therefore to the mills that employed them) was uncommon, and his mechanical intellect matched his dedication. Springs had a loom machine moved to the basement of his home and tinkered incessantly with it until he could completely disassemble and reassemble the whole apparatus.[xi]
In part, Springs undoubtedly succeeded where others failed due to his non-compliance with federal regulations and union actions, both of which greatly curtailed the ability of his competitors to remain in business. After initial cooperation with federal regulation expressed in the Textile Codes of 1933, Springs quickly reversed course in 1934 and refused to report his production figures to the Textile Code Institute.[xii] In one particularly humorous and rambling inventory request response, Springs reported that he had taken over accounting because his bookkeeper had suffered a nervous breakdown, but sadly was not up to the task himself.[xiii] Springs dissembling response blamed his difficulties in accounting based on the fact that he had some frames in railway cars, some in temporary storage, and a few that he believed had “floated down the river from Mount Holly in the flood of 1916.”[xiv] Springs partially hid the fact that he was expanding operations at a time when New Deal policy, in general, favored large decreases in production in order to limit supply and bolster prices. However, Springs' letter written to President Roosevelt reveals that to him, the New Deal meant something very different than it came to mean in the sphere of public policy. Springs was proud to report wage increases for every employee (except himself, who didn't draw a salary until 1937), the ending of child labor practices, and an equal opportunity to work that did not exclude those “who have bad eyes, stiff fingers, or rheumatic joints.”[xv] However, Springs initiated these actions voluntarily, and seems to have conceived of the New Deal as representing a call to action by those citizens in a position to aid their communities, not as a sweeping government regulation initiative.
Springs also fought unionization at his plants, but not without the full support of his employees. In part, Springs was aided by the simple fact that he was independently wealthy, and so in one regard his employees needed the plants to remain open much more than he did. However, Springs’ actions don’t fit with a man who didn’t need the plants to remain opened. Moving a loom to his basement, updating rather than scrapping the plants, and often being seen in his plants during the 3rd shift, usually on the floors rather than in his office,[xvi] demonstrated a personal concern that was reciprocated by the employees. An elderly woman, who had previously worked in the mill and needed her job back as the Depression threatened her livelihood, was given a job by Springs despite the hiring manager’s repeated denials of having work for her.[xvii] According to employee legend, the woman entreated Springs personally for the job one day in the street, which Springs responded to by instructing her to meet him at the mill gate the next morning. That morning, Springs had the desk chair removed from the manager’s office, brought to the floor, and instructed the women that her new job (complete with wages) was to sit in it until work was found for her.[xviii] True or embellished, these were the kinds of legends which could only be generated from genuine affection. In a very limited and somewhat anecdotal fashion, it is stories like these that represent the real people behind Fishback’s assertion that private employment had a much higher influence in raising the standard of living among workers during the Depression than New Deal policies.[xix]
Unionization in the 1930’s was a hotly contested issue, and not always voluntary, as the Springs Cotton Mills clearly demonstrate. There was a serious belief held by union officials that every business within a sector must be unionized, whether they wanted to or not. Union agitators often came with guns and threats of violence. According to one employee’s recollection, Springs vowed to allow his workers to make the choice themselves, but pledged to, “move his bed into the office and stand siege with them,” should his workers want to resist unionization.[xx] In his tying of his own person well-being to that of his broader community, Springs inspired his workers to have more faith more in their boss, than in collective action against him, and as a result of the joint commitments of Springs and his employees, the Springs Cotton Mill Company never unionized.
Despite the Great Depression, The Springs Cotton Mills property value grew every year from 1933 to 1940, and the total amount paid in wages and salary also tripled in the same timeframe.[xxi] The company’s net sales only posted one year of decline, understandably in 1938 when the national economy shrunk a second time. Of course, in many ways, the Springs Cotton Mills were uniquely positioned to immediately benefit from the initiation of World War II, although somewhat accidentally. Springs had stockpiled large amounts of textiles in order to keep his plants opened and prevent him from needing to cut production, and therefore employment. These textiles became immediately liquid as demand for cloth soared for wholesale production of military uniforms during WWII. This was however, an incidental boon to the Springs Company, not the explanation for its survival.[xxii]
The history of the Springs Cotton Mill Company during the Great Depression runs counter to most traditional explanations for the end of the Depression. The sales and business figures for the Springs Cotton Mills demonstrated that the company was growing long before World War II production began. Additionally, the New Deal policies enacted during the period were certainly not helpful, and probably adversarial to the company. However, its degree of non-compliance (which was the highest among all South Carolina Cottom Mills) with those policies certainly gave Springs Cotton Mill Company an advantage, so it could be argued that the benefit to the company was in gaining a competitive edge against others who were conforming to government regulation. Therefore, at least on a case-by-case basis, it cannot be argued that New Deal policies were beneficial to the cotton mill industry. Whether or not they rescued the industry as a whole cannot be ascertained based on the story of one company.
So then, it can be said that in this one case, in one community in South Carolina, the Springs Cotton Mill Companies, which had not yet been consolidated by Elliott at the time, were certainly a microcosm of the causes of the Depression. Shrinking availability of credit, bankruptcy of related investments, complacent business practices which took for granted the boons of the “Roaring 20’s” and collapsing demand almost ruined the company. Its escape from the Depression, however, defies explanation along the lines of normal macroeconomical theory. Rather is the personal success story of Elliott White Springs, and the thousands of employees who worked with and fought for the man who owned their company.
[i] Elisha, Walter Y. “Standing on the Shoulders of Visionaries: The Story of Springs Industries, Inc.” Speech. 1993 South Carolina Meeting, The Newcomen Society of the United States, Rock Hill, SC. April 22, 1993. 17.
[iv] Ibid, 13-14.
[v] Pettus, Louise. “Elliott White Springs: Master of Mills and Many Other Things,” in The Legacy: Three Men and What They Built, Speech. University of South Caroliniana Society, Columbia, SC. May 22, 1987. 25.
[vi] Pettus, Louise. The Springs Story: Our First 100 Years, Springs Industries, Inc: Fort Mill, South Carolina, 1987. 89.
[vii] Ben Bernanke argued that greatly tightening lending practices was a large contributor to the radical collapse of the entire business sector. Loans were still available, but only given to those who were considered “safe.” This explains why interest rates declined but were not received with a corresponding increase in business activity, as is normally the case when interest rates decrease. In this case, Elliott White Springs, whose business acumen had been called into question by his father, and who had a reputation as an author, war hero, and playboy millionaire, but not as a businessman, faced a serious crisis for the continuance of his business which needed increased inflows of capital for modernization, but was considered far too high of a risk to actually secure loans from the New York firms.
Bernanke, Ben S. "Nonmonetary Effects of the Financial Crisis in the Propagation of the Great Depression." The American Economic Review 73, no. 3 (1983): 257-76.
[viii] Pettus, The Legacy, 26.
[ix] “Indexes of Manufacturing Production, by Industry Group: 1889 to 1954,” in Bicentennial Edition: Historical Statistics of the United States, Colonial Times to 1970, United States Department of Commerce, 668.
[x] Pettus, The Springs Story, 95.
[xi] Ibid, 27.
[xii] Ibid, 27-28.
[xiii] Ibid, 101.
[xv] Springs, Elliott. “Letter to Franklin D. Roosevelt, July 28, 1933” in The Springs Story, 97.
[xvi] Pettus, The Legacy, 26.
[xvii] Ibid, 27.
[xix] Fishback, Price. “The Newest on the New Deal.” Essays in Economic & Business History, Vol. 36, 2008. 5
[xx] Pettus, The Legacy, 29.
[xxi] “Springs Growth,” in Our 75 Anniversary: The Story of the Springs Cotton Mills 1888-1963, Springs Industries, Inc: Fort Mill, South Carolina, 1963. n.p.
[xxii] This point is, in many ways commiserate with Christina Romer’s assertion that gold influxes from Europe in the lead up to WWII led to economic conditions that benefitted American business. It was therefore in this case, not the mobilization of the American industrial sector for wartime production that rescued America from the Depression, as is the typical historical narrative, but rather other factors related to the War that influenced the economy. The Springs Cotton Mill Company did not need to sell its stockpiled items in order to escape the Depression, but it was a definite beneficiary of increased demand for its products.
Romer, Christina D. "What Ended the Great Depression?" The Journal of Economic History 52, no. 4 (1992): 757-84.
Charles A. Conant had a very important role in America’s transition to a global, imperial power. Notable libertarian writer, economist, and historian Murray Rothbard details the various actions that Conant took to enthusiastically facilitate the expansion of the United States into the Philippines, Puerto Rico, and other territories over which the US gained influence in the wake of the Spanish-American War. Perhaps the most damning indictment of Conant was not his failure, but rather his great degree of success in bringing these regions of the world under American control.
Calls for Imperialism
Conant believed that the urge for economic imperialism was irresistible, drawing clear connections between Rome, the British Empire, and contemporary America, which he believed was “about to enter the path” of these prior empires.[i] Further, according to Conant, the imperialistic tendency which he observed in America was clearly and firmly rooted in race theory, and his belief that the American civilization was more developed, and that this gave a moral superiority to their domination of lesser races.[ii] According to Conant, economic domination as a place to sell excess goods was nothing less than necessary for the continuation of the prosperity of the American (and other similarly developed Western) nation(s).
We are closely acquainted with the image of Cecil Rhodes triumphantly straddling the continent of Africa, holding a telegraph wire and asserting his domination over the continent. Westerners have, fortunately, come to be very critical of this act of domination, under which rested strong racial supremacy theories that convinced Rhodes that “[the British] are the finest race in the world and that the more of the world we inhabit the better it is for the human race.”[iii] In essence, the world should be grateful and, in fact desperate, to be subjugated by the British, because subjugation brought “the most despicable specimens of human beings. . . under Anglo-Saxon influence.”[iv] Furthermore, Rhodes justified conquest in economic terms, pointing to “the extra employment a new country added to our dominions gives.”[v] In schools, histories, and various other remembrances of our shared past, Rhodes receives few positive mentions, and is known to many as an unapologetic apostle of Western Expansion.
According to Conant, the essential problem was that Westerners saved too much money.[vi] If nobody saved anything, there wouldn’t be a problem, because this would allow the economy to continue developing, but every dime saved, according to Conant, led to an unconsumed product, which led to lower demand and inefficiencies. Rather than changing consumer or spending habits in America, Conant reasoned it would be much easier to force other nations to purchase American-made products.
Centralization of the American State
Rothbard noted that “Conant was bold enough to derive important domestic conclusions from his enthusiasm for imperialism.”[vii] Conant was willing to sacrifice principle as well as the well-being of those in other parts of the world for the continued growth of the American economy. He fully recognized that his principles were at odds with the Founding principles of self-rule and limited government, but Conant believed that that pragmatic American economic interests should supersede ideological commitments.[viii]
To this end, Conant wrote a brief biography of Alexander Hamilton, the Founder whose own views tended to assist Conant the most in his attempts to justify expansion both domestically and abroad. Conant saw Hamilton’s enduring contribution to the United States primarily in terms of his advocacy for a strong federal government: “It is certain that the conditions of the time presented a rare opportunity for such a man as Hamilton, and that without some directing and organizing genius like his, the consolidation of the Union must have been delayed. . .”[ix] Throughout the book, Conant repeatedly credits Hamilton with the strength of the federal government and plainly believes that Hamilton, more than any other Founder, helped to shape the eventual government of his own contemporary days.
Hamilton was a natural fit for Conant’s own domestic arguments, but also fit nicely into his imperialist framework. According to Conant, Hamilton “was among the first to maintain that the United States should have complete control of the valley of the Mississippi” and “the admirers of Hamilton credit him with a still wider vision of the future power of the United States, which was eventually to bear fruit in the Monroe doctrine.”[x] Conant, guilty of a great deal of anachronism, connected Hamilton not only to the Monroe Doctrine of the early 1800’s, but also to American Imperialism in general by linking the statements of “Secretary Olney in 1895, that ‘to-day the United States is practically sovereign on this continent, and its fiat is law upon the subjects to which it confines its interposition.’” with Hamilton’s own words “in ‘The Federalist,’ before the adoption of the Constitution, that "our situation invites and our situation prompts us to aim at an ascendant in American affairs.’”[xi] According to Conant, Hamilton would have approved.
Hamilton’s advocacy for federal currency created another natural fit for Conant, who sought to expand the influence of the US Dollar abroad. The Philippines had a stable currency based on Mexican silver dollars which the Spanish had unsuccessfully attempted to discourage for decades.[xii] The difficulty in converting silver to American currency, then based on Conant’s preferred gold, led to “many complaints. . .against what [American officers and civilians] considered excessive rates [of exchange] charged by the banks.”[xiii] Conant’s monetary policies, however, were more subtle than his generalized views on Imperialism.
Throughout his essay, The Currency of the Philippine Islands, Conant seems to advocate for a monetary policy which was acceptable both to the United States and the Philippino people without particular bias to one or the other. He candidly admits that having all nations in the world on one metal standard would be the best-case scenario for the Western nations, but stops well short of actually advocating that this should be forced upon the Philippines or any other American territorial holding.[xiv]
However, according to Rothbard, this was just a “cunning plan” to “replace the full-bodied Mexican silver coin” with “an American silver coin tied to gold at a debased value.”[xv] According to Rothbard, it would essentially net U.S. banks large reserves which they could then use to issue paper currency, and serve as the standard for the way of “exploiting and controlling Third-World economies based on silver.”[xvi] In essence, Conant had discovered a way to place poorer nations on a gold standard that clearly benefited nations already on a gold standard while appearing to do nothing of the sort. Ultimately, the new US currency, the “conant” was the new currency in the Philippines, having been successful by “force, luck, and trickery.”[xvii]
Lessons from American Imperialism
Conant’s monetary plan, then, was a subtly disguised accomplice to his broader and more naked ambition for the expansion of the US Federal Government, domestically and abroad. His schemes took nothing into account but the betterment of the specific big-business interests within America, to the detriment of many other interests. Studying the actions and philosophy of Conant is a stark reminder of what happens when a man’s only principle is pragmatism. Conant argued persuasively and effectively for Imperialistic policies, fully cognizant that his plans flaunted the principles upon which America had been founded. It is unfair to blame this fully on Conant, he was just a product of the more generalized thinking of the Progressive Era. There were Charles A. Conants in education, finance, politics, the military, and every sector of public life; men (and women) for whom pragmatism was the chief ideal.
In fact, I argue that in this respect, the Progressive Era has never ended. Ideals and principles are in short supply in modern American civil discourse; they are tiresome obstacles that prevent high-minded obstructionists from being willing to cooperate with Progressive politicians (of both parties) to “get things done.” The ideas advanced by Conant and other Progressives succeeded in leading to American political domination of the world for a time, but the true legacy of their Era has been the almost complete conquest of the American Public Spirit, and the ideals of the Founders for many of whom principle was more important than pragmatism.
[i] Conant, Charles A. "The Economic Basis of "Imperialism"." The North American Review 167, no. 502 (1898): 326
[iii] Rhodes, Cecil. “Confession of Faith.” 1877.
[vi] Conant, “The Economic Basis of Imperialism”,” 330.
[vii] Rothbard, Murray. “The Origins of the Federal Reserve.” The Quarterly Journal of Austrian Economics, 2, no. 3 (1999): 21
[viii] Rothbard, 21.
[ix] Conant, Charles A. Alexander Hamilton. Ebook: Project Gutenberg. New York: Houghton, Mifflin, and Company, 1901.
[xii] Conant, Charles A. "The Currency of the Philippine Islands." The Annals of the American Academy of Political and Social Science20 (1902): 44-45.
[xiii] Ibid, 45.
[xiv] Ibid, 531-32.
[xv] Rothbard, 27.
[xvi] Rothbard, 28.
[xvii] Rothbard, 29.
Nathan Gilson is a Social Studies Teacher in South Carolina with over 10 years of experience in the public school systems. He has taught US and World History courses, and is currently working toward a Ph.D. in History from Liberty University.