TENNESSEE: A GUIDE TO THE STATE
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Industry and Commerce
For more than a century before pioneer homeseekers began coming over the mountains into Tennessee, English and French fur traders had been carrying on a brisk and profitable commerce with the Indians. The English traded chiefly with the Cherokee in the East and the Chickasaw along the Mississippi bluffs, and the French with the Shawnee in Middle Tennessee. By 1755 the fur trade between Tennessee and the English colonies alone amounted to a million dollars annually.
Fur seekers who followed Indian tradepaths through Tennessee played a role more important than that indicated by these figures. Their accounts of the rich wilderness beyond the mountains turned men's minds westward and gave first impetus to the great wave of immigration that began in 1768. Trading posts, such as Charleville's on the site of Nashville, John Overton's post at Chickasaw Bluffs, and John Ross, at Chattanooga, were almost invariably followed by settlements.
Though food in the pioneer period could be had from the soil and the game-teeming forests, and salt from numerous salt springs and "licks," the problem of obtaining cloth garments and tools was more difficult. To meet it, itinerant merchants with caravans of pack horses established trade routes throughout the territory. Because of an almost total absence of money, trade between merchant and pioneer farmer, and between farmer and farmer, was largely carried on by barter. On the whole the trader and peddler drove hard bargains, exchanging pot metal rifles, likely to explode at the first charge, poorly soldered utensils, and adulterated powder for the frontier farmer's prime peltries. As fur-bearing animals grew scarce, by-products of the pioneer home - bacon, corn, lye-soap, sorghum-sugar and molasses, and strong whisky - became the medium of exchange, along with Spanish silver, which trickled in as river trade with Louisiana began to assume importance.
By 1790 better trade routes and lessened danger from the Indians were making necessities, and even some luxuries, cheaper and more abundant. Stores, such as Peter Norrison's in Knoxville and Lardner Clark's in Nashville, were well stocked with goods, ranging from bright gewgaws for the Indian trade to high-grade carpenter's tools, English and Pennsylvania rifles, fine French powder, pure pig-lead for bullet molding, gold jewelry and watches, imported shawls, and Philadelphia kid gloves. However, each pioneer community had so nearly become a self-sufficient unit that improved communication with the East did not bring a parallel commercial expansion.
Milling provided the State with its first established industry. A grist mill was set up on Buffalo Creek in 1775, and some meal and flour was shipped to New Orleans and the Atlantic Coast. Other mills followed shortly: on Little Limestone Creek in East Tennessee; on White's Creek Mill Creek, and on a barge in the Cumberland River near Nashville; one in Palmyra, run in conjunction with a distillery; a fulling mill on Yellow Creek; and a powder mill in Sumner County. These, like other "first" industries in the area, converted existing crops or natural resources into processed necessities.
When wheat became one of the largest cash crops in the 1830's, flour milling became the most important industry. It retained this supremacy until 1845, when competition from the prairie regions of the Middle West forced wheat to be abandoned as a major crop in Tennessee. Later it was discovered that Tennessee's hard wheat made a damp-resisting flour which would remain sweet during shipment but had a great capacity for water absorption in baking. This quality made it especially suitable for tropical countries and the industry revived on the export trade.
The textile industry, also dependent upon agriculture for its raw materials, dates back to 1791 when John Hague, of Manchester, advertised in the Knoxville Gazette that the machines in his spinning mill on the Cumberland were "in order for carding, spinning and weaving." A venture into silk-worm culture, begun by Dr. Frederick A. Ross, of Kingsport, in 1850, died in an experimental stage. It remained for wool and cotton to put textile manufacturing on its feet.
One of the earliest cotton mills was established in Lebanon. In 1846 it was operating 2,000 spindles, 21 carding machines, and 40 power looms, turning out 1,000 yards of cloth a day. But as competition from better cotton lands in the lower South drove most of the farmers of the State to other crops, the industry declined until the War between the States virtually destroyed it. During Reconstruction, however, it was seen to have new possibilities. In 1880 a woolen mill in Tullahoma was turning out $1,000,000 worth of cloth a year. Other plants were established in Knoxville, Nashville, and Jackson. By 1900 textile manufacturing had climbed back to fifth place among the State's industries.
During the next twenty-five years the textile industry grew steadily. In 1925 the establishment of a rayon plant in Old Hickory, near Nashville, gave it tremendous impetus. The Old Hickory plant, which later added the manufacturing of cellophane, is now one of the largest in the country, with an annual output of 25,000,000 pounds of rayon and 25,000,000 pounds of cellophane. Among other synthetic-yarn plants which have been established, the second largest is at Elizabethton.
The land, which produced the agricultural wealth of Tennessee during its early years, has likewise been the foundation of much of its industrial wealth. Some of Tennessee's earliest industries were founded on iron. In East Tennessee small forges and bloomeries, supplied by crude mining operations, were turning out bar iron, nails, and tools as early as 1785. But the iron resources of the State were not extensively exploited until coal was discovered. Tennessee iron was soon being shipped to Louisville, Cincinnati, and Pittsburgh, where it was in demand for the manufacture of steam engine boilers. Further expansion came when railroad transportation was made available in 1854. By 1860 a total of 75 bloomeries and forges, 71 furnaces, and four rolling mills were in operation. The iron industry in Tennessee boomed briefly in filling demands for war materials needed by the Confederacy, but Union occupation of the State brought it sudden disruption. After Reconstruction, the industry was revived and grew steadily until 1929, when iron and steel production totaled $3,100,000. Since then the industry has drifted toward stagnation. The small and scattered units in Tennessee could not compete with the newer and more efficient plants of the Birmingham area, and by 1935 the production figures had dropped to $28,438.
Coal fields of East Tennessee, first worked in 1814 near the site of Rockwood, yield a high-grade bituminous type valuable for coking purposes. Because mining costs are low and the supply plentiful, this coal has been an important factor in the State's industrial development. Tennessee coal fields show no parallel to the sharp decline in the iron mining areas. There is at present an annual production of more than 3,500,000 short tons, much of it for domestic use.
Tennessee quarries twenty varieties of marble; the monotone is best known because of its massive structure, soft color, and complete crystallization, which permits a high polish. In the early quarries drilling was done entirely by hand. The blocks, roughly dressed at the quarry, were hauled by sledge to the nearest boat landing. In 1857 the first quarry south of the Potomac River to use derricks and channeling machines was opened near Rogersville. The second largest marble quarry in the United States and one of the world's largest plants for producing finished marble are in Knoxville.
Profitable amounts of other minerals have been extracted and processed in Tennessee. Barites reached a peak value of $345,000 in 1925. Chert and flint from Tennessee were substituted for the usual Belgian supply when the World War curtailed that source. Lignite, limestone, manganese, petroleum and natural gas, pigments, tripoli, fuller's earth, mineral waters, and even gold have been produced at a profit. Bauxite has been mined experimentally and there are extensive reserves near Chattanooga.
The last mentioned industry makes use of the Tennessee River hydroelectric development. The raw materials are imported from surrounding states where reserves have already been mined and equipment is set up. To date, cryolite - the "flux" necessary for the electrolytic refining of aluminum - must be brought from Greenland, where the only exploited deposits exist.
Since the recent development of phosphate rock deposits, discovered in Tennessee in 1893, the State ranks second to Florida in production of this valuable fertilizer material. The present annual output is valued at $2,500,000. Availability of cheap Tennessee Valley Authority electric power has fostered the building of several large chemical plants in the Middle Tennessee phosphate regions. Other leading mining industries include copper, sulphuric acid, and zinc.
Upon the forests of the State is based an extensive lumber industry. One of the largest plants for finishing hardwood floors is in Memphis; another is in Johnson City. Many cedar products, including pencils and buckets, are manufactured in increasing quantities in Middle Tennessee. From a small beginning in 1792, the distillation of wood by-products has grown into an industry with a $60,000,000 yearly output. The principal products are tannic acid, paper pulp, photographic films, celluloid, varnish, and dyes.
Starting with the Knoxville Gazette, which began operation in Rogersville in 1791, printing and publishing have been important industries in the State. The southern churches established their publication headquarters in this centrally situated area. More than 300 publications are now printed in Tennessee; Nashville and Kingsport are the centers of the industry.
In 1860, the end of the ante bellum period, the first ten industries ranked roughly in this order: flour and meal, iron, lumber, leather, steam railroad and agricultural machinery, cotton and wool textiles, printing, coal, copper, and spirits. At that time about one-third of the wealth of the State was represented by slaves and slave-operated farms.
The War between the States brought industry to a standstill. However, despite currency depreciation and destruction of property, there was a 72 per cent increase in output from 1860 to 1870, most marked in grain milling, publishing, lumber products, and woolen goods; much of this production had hitherto been outside the State. Production figures for grain milling doubled between 1870 and 1879, with conversion of forest products next in importance. Industry in general showed a steady increase.
By the turn of the century, the size of factories had greatly increased while many of the small industries had gone under. Though flour and milling still ranked first, textiles had made large gains. Tobacco and cottonseed products ranked seventh and eighth respectively, and coal, copper, and spirits had lost their places among the first ten industries.
The future industrial pattern of the State was visible in outline. Centers for lumber manufacturing, iron works, tobacco factories, market and distribution points, were already located. Urban manufacturing was increasing much faster than rural, with the greatest increase noted in knit goods. New industries, such as cottonseed and soy bean processing and fertilizer manufacturing, were making strong beginnings.
The development up to the World War paralleled that of the country at large. Industries grew out of such newer food preparations as sweetening sirups, lard compounds, and vegetable oils. During the World War a powder plant at Jacksonville (now Old Hickory), near Nashville, boomed for a short time, then died. Later it was reestablished as a rayon and cellophane plant, and its present payroll amounts to $10,000,000 annually.
The U. S. Census for 1920 listed a total of 7,245 establishments. They had a combined payroll of $65,741,045 for 75,446 persons and paid $225,911,368 for raw materials to produce $374,038,316 worth of goods. In order of value of products, they ranked: lumber and timber, flour and grist mills, knit goods, cars and general shop work, food preparations, printing and publishing, tobacco products, cottonseed products, foundries and machine shops, cotton goods, furniture, confectionery, patent medicines, cloth bags, coffee and spices, meat products, men's clothing, leather, chemicals, marble, ice, fertilizers, carriage and wagon parts and construction, mineral and soda waters.
The development of banking supported the growth of commercial endeavor and stimulated the earliest industrial efforts. Establishment in 1807 of the Bank of Nashville, first in the State, supplied local enterprise with credit. From 1811 with the foundation of the Bank of the State of Tennessee in Knoxville, to 1819, the State went through a period of inflation and wildcat banking which resulted in the suspension of specie payments by all but the State Bank of Knoxville. Banking became a political issue | involving private interests, the "Old" and "New" State Banks, the United States Bank (which had been outlawed in the State in 1817), as well as public lands and school funds. However, a general price rise in 1826 allowed all but the original Bank of Nashville to resume specie payments.
The failure of the Nashville institution caused the repeal of the 1817 law and allowed the establishment of the U. S. Bank there in 1827. With the closing of the "New," State Bank in 1829, a system was evolved strong enough to carry through the 1838 panic and survive the railroad and school fund scandals of the times. Credit was nearly swept away during the War between the States, and in 1865 only three or four Tennessee banks were solvent. A nationally reorganized system of money and banking played an important part in Reconstruction.
In 1826 the State's first insurance company was formed in Nashville. The insurance companies, like the banks, were linked with school funds and followed a course parallel to that of the banks. Continued confusion in these fields resulted in regulatory control passing into the hands of a combined State Department of Insurance and Banking in 1923. In 1931 Tennessee led the twelve southern States in new insurance written, averaging $119.25 per capita, and was second in per capita coverage.
Economic Tennessee in general follows its geographic divisions, with commercial activity for the surrounding regions centering in neighboring cities and towns. Nashville and Memphis are predominantly commercial cities; Knoxville and Chattanooga are more industrial. In these four cities, which contain two-thirds of the urban population of Tennessee, are establishments representing nearly every commercial and industrial interest in the State.
In East Tennessee are the railroad towns of Erwin and Harriman. Knoxville draws on farming, textiles, mining, processing of marbles, and the rayon activities of Elizabethton, to the northeast. Kingsport has developed as an industrial community in the past two decades. Mines support much of the activity of Rockwood, Maryville, and Alcoa. Greeneville and Morristown are burley-tobacco centers, while Cleveland and Lenoir City depend on the agricultural activity of the outlying farms, as do the smaller market and mining towns located on the highways. Chattanooga, a manufacturing center, concentrates on heavy metals and textile finishing, and has a trade area which includes northern Georgia and Alabama.
Nashville is the financial, wholesale, and distribution focus for Middle Tennessee; the surrounding towns serve their local trade areas in the same way. Springfield and Clarksville, to the northeast, are important tobacco markets. Columbia, to the south, is significant as a mule and livestock market, as well as for the trade from a rich agricultural and phosphate mining area. Dickson and Bruceton, on the railroads and highways, have several manufacturing plants. Lawrenceburg is again becoming active as a phosphate mining town.
Industrial activity of West Tennessee is mainly in Jackson and Memphis, the latter drawing on Mississippi and Arkansas as sources of supply for woodworking, cotton handling, cottonseed processing, and drug manufacturing. Memphis, the railroad hub of the South, is the largest inland cotton-handling port in the country. Jackson is also a railroad center and, like the smaller towns of Paris, Dyersburg, and Humboldt, attracts trade from the surrounding farm areas.
Occasionally some communities have offered new industries preferred tax rates for a period, but in general this has not been the trend. On the whole, there is a wide diversification of activities, as shown by the U. S. Census of Manufactures for 1935. The total value of products was $531,338,490. The 2,011 establishments employed an average number of 116,624 wage earners for the year, and paid out $86,714,390 in wages.
More than five hundred banks and insurance affiliates served as a buffer of credit and protection for these activities. With economical transportation available by land and water, and cheap hydroelectric power being developed by the TVA, the State is a likely field for further industrial expansion.
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TENNESSEE: A GUIDE TO THE STATE