CONDITION AND PROSPECTS 
 
 AMERICAN 
 
 COTTON MANUFACTURES 
 
 IN 1849-50. 
 
 REPRINTED 
 
 r>S MERCHANTS' MAGAZINE. 
 

COTTON MANUFACTURES. 
 
 [From the Merchants’ Magazine, for Dc 
 
 In an article in the Merchants’ Magazine for the 
 month of November, upon the “ Production and Manu¬ 
 facture of Cotton,” there appeared some statements, 
 which, if correct, are new to many persons familiar with 
 the subject to which they relate. If they are incorrect, a 
 brief examination of them may be useful in dispelling the 
 visions of wealth so vividly brought to the view of the 
 Southern planters, now urged to become manufacturers. 
 We hope that nothing will be said or done to discourage 
 manufacturing at the South ; far from it: it is legitimate, 
 and must steadily go on increasing. At the same time, 
 we shall consider it to be doing good service to them and 
 to us at the North, if we can bring to light errors which 
 might deceive those who are beginning to inquire into 
 this business, with reference to pursuing it. 
 
 Without commenting upon the remarks made at the 
 commencement of the article, in regard to the elements 
 of wealth, and the causes of the unequal distribution of 
 property in Great Britain, about which some of the best 
 informed statesmen have expressed opinions entirely dif¬ 
 ferent from those of the writer, we pass to the first sug- 
 
4 
 
 gegtion made for a remedy to the great evil under which 
 ' we now suffer—of sending our cotton to Great Britain for 
 manufacture, instead of securing to the cotton-growing 
 States all the benefits which arise from that process. 
 
 The remedy proposed is to withhold the cotton from 
 the European markets, and manufacture it at the South ; 
 to curtail the production, until it can all be manufactured 
 where it is grown. We should not have presumed that 
 this is to be done suddenly, and at once, did the writer 
 not tell us that “ if we wish for more labor and skill, they 
 can readily be procured, to any amount.” 
 
 But from what source can the labor and the skill be 
 derived, to set in operation an amount of machinery so 
 vast as is here contemplated ? Certainly not from the 
 North, where every good agent, sub-agent, and overseer, 
 is prized and retained, and where operatives are not to be 
 had to ran the machinery now built. Agents and over¬ 
 seers may be brought from England; but unless the 
 Southern men and girls, who are to be under their con¬ 
 trol, have less independence, or, if one choose to call it so, 
 less prejudice, against obeying foreigners than the girls 
 and men in New England, it will be necessary to bring 
 the operatives also from the manufacturing districts of 
 England; not a desirable population at home, much less 
 so here. 
 
 But supposing this difficulty were overcome, from what 
 quarter is to proceed the capital required for the enter¬ 
 prise ? Have our Southern friends such resources of 
 money now at their command as to create these immense 
 works, or are they borrowers? We have always supposed 
 the latter to be the case. We sell our fabrics, which are 
 made at the North, to the Southern buyers, on a credit of 
 from six to ten months. Neither do we receive a similar 
 credit in return, for the reason that they are not in a con¬ 
 dition to grant it. All the great staples sent from the 
 
Southern market are sold for cash, or on a credit of sixty 
 days. It is in this way that the foreign aud the home 
 manufacturers supply themselves with cotton. Though 
 there are many rich men in the large cotton-growing 
 States, the number of moneyed men is very small, and 
 they are not usually the projectors of new enterprises. 
 The planters are generally in debt, more or less, either 
 from having extended their business beyond their means, 
 or from the habit of anticipating their incomes, by bor¬ 
 rowing of their cotton factors, the banks, or by credits at 
 the stores. 
 
 This lack of capital is forcibly shown, in the amount of 
 land still unsold and uncultivated in the great cotton¬ 
 growing States :— 
 
 Louisiana hi 
 Alabama, 
 
 Total, 
 
 Acres. VnsoM. Owned . 
 29,715,S40 23,052,018 6,203,872 
 
 30,174,080 14,326,430 15,811,650 
 
 32,462,080 17,450,560 15,911,520 
 33,406,720 27,464,603 5,942,117 
 
 125,75S,720 82,693,611 43,929,109 
 
 Or almost two-thirds of the land still laying waste for 
 want of the means and the population to bring it into 
 use. 
 
 If it were not an unpleasant subject, we might allude 
 to the State debts of some of them, still unpaid, principal 
 and interest, as another evidence of inability to command 
 the use of money. 
 
 To carry out this plan of withholding the cotton, it 
 will be necessary to obtain the passage of a law imposing 
 an export duty. Without this, it would be impossible to 
 prevent it from going abroad, as soon as the withdrawal 
 of a portion had produced its effect of raising the price in 
 Europe. This duty must be prohibitive, or it will not 
 answer the purpose in view. Of course this would be 
 met by retaliative duties from other countries. But the 
 
6 
 
 scheme appears to be wholly impracticable, and we will 
 not introduce any farther objections to it. 
 
 The writer of the article to which we refer, starts upon 
 the supposition that the production of cotton is in excess. 
 “ There is too much produced. True, a great deal too 
 much. Make a proper distribution of labor and skill: 
 produce no more cotton than can be manufactured at 
 home.” The crop of the United States, in 1S43, was 
 2,378,875 bales; in 1844, 2,030,409; in 1845, 2,394,503 ; 
 in 1846, 2,100,537; in 1S47, 1,778,651: in 1848, 
 2,347,634; and it has not reached the amount of 1843, 
 (excepting in the year 1845,) until this year of 1849, 
 when the crop is 2,728,596 bales. Meantime, there has 
 been a large increase in the number of manufacturing 
 establishments in Europe, and in this country. Our own 
 factories required, in 1843, 346,744 bales; in 1844, 
 389,006 bales; in 1845, 422,597 bales ; in 1846, 427,967 
 bales ; in 1847, 531,772 bales ; in 1848, 518,039 bales ; 
 in 1849, if it were not for the depression which exists in 
 this business, and which prevents many new mills from 
 starting, and lessens the product of others, there would 
 have been required more than 600,000 bales for our own 
 use. The increase abroad, though not in the same pro¬ 
 portion, has been very great. This explains, in a great 
 measure, the cause of the present high price of cotton,* 
 which, with the large crop of last year, is not sufficient to 
 supply the machinery when in full operation. 
 
 The production of cotton, for the last five years, has 
 been 11,323,000 bales; and the consumption has been 
 11,939,000 bales ; showing an excess of consumption of 
 
 * The great rise in the price, since last year, is to be attributed partly 
 to speculation; but this is based upon the fact here referred to. Not¬ 
 withstanding the immense importations into England, during the past 
 year, the stock on hand (October 27th) was 112,000 bales less than in 
 1848. 
 
7 
 
 616,000 bales, which has been supplied by the surplus on 
 hand at the commencement of the time. The present 
 price renders the manufacture of all descriptions of coarse 
 goods impossible, except at a loss; a state of things which 
 cannot continue long, and will be followed, during the 
 coming season, by a rise in the price of goods, or by a fall 
 in the raw material; perhaps by both. 
 
 The argument which has been used, that the manu¬ 
 facturer receives a very much larger rate of interest on 
 his capital invested, than the cotton-grower, now brought 
 forward by the writer of the article before referred to, will 
 not bear investigation. It is asserted that the cotton 
 planters have received, for that part of their crop sent to 
 Great Britain in 1847, but $29,000,000; whereas, if they 
 had received as much in proportion to their outlay 
 of capital, as the manufacturer, it would have been 
 $150,000,000; leaving a deficit of $121,000,000, which 
 the planter may save, by adopting the plan before 
 named. 
 
 It may be useless to undertake to prove that the plant¬ 
 ers of this country receive and are satisfied with a lower 
 rate of interest than the British manufacturers, or even 
 than our own; but in this case it is easily done. It is 
 asserted that the capital required to raise as much cotton 
 as is used in Great Britain, is $150,000,000, and that it is 
 from this outlay that $29,000,000 only is received; 
 whereas the vast amount of other produce raised on the 
 cotton estates is kept entirely out of view; the corn, 
 potatoes, pork, &c., which comprise almost the whole 
 living of the planter and his hands, and some of which are 
 forwarded in large quantities to New Orleans, and the 
 other markets, are not mentioned. Another error in this 
 calculation is, that the price of cotton is put at 6 cents, 
 when, if we should take the present price, for the purpose 
 of making the comparison, fair cotton as high as 12 © 13 
 
8 
 
 cents * and middling fair at 11 cents, after deducting the 
 expense of selling, this would leave for the planters 
 §50,000,000, to which add §20,000,000 for farm produce, 
 and we obtain the result of §70,000,000, instead of 
 §29,000,000. If the estimates given of the cost of cotton 
 lands and slaves, and the yield per acre, are as incorrect 
 as the other data, the result will be still more unlike that 
 which is given. 
 
 The estimate of the investment in cotton manufactures 
 in Great Britain ($149,600,000) is wholly incorrect. 
 The real capital used in this business is more than 
 §250,000,000; since, besides the investment in buildings 
 and machinery, there is required a large amount of cash 
 capital, which the manufacturer must either own or bor¬ 
 row. In New England, a manufacturing establishment is 
 supposed to require one-third as much cash capital as the 
 amount invested in land, buildings, and machinery. One 
 is called the “floating,” and the other the “fixed capital,” 
 and the one is as necessary to success as the other. The 
 proportions vary in the different kinds of manufacture ; 
 none should have less than one-third in cash, unless they 
 are willing to depend upon facilities granted by their 
 commission merchants, and for which they must pay a 
 high price, or upon banks and money-lenders, who gen¬ 
 erally call in their loans in times of scarcity, when most 
 wanted by the borrower. 
 
 The next comparison introduced by the writer of the 
 article in question, to show the inequality in the compen¬ 
 sation received by the cotton planter, and by the manu¬ 
 facturer, is that in which he contrasts the labor of 57,000 
 persons in the New England factories, in 1839, upon a 
 capital of §42,000,000, with the labor of the planters and 
 
 * The price, in 1847, when the estimate was made of the value of 
 British manufactures, averaged rather lower than this. 
 
9 
 
 their hands, in the same year, (1839,) upon a capital of 
 $150,000,000 ; and the conclusion drawn from it is that 
 the New England manufacturers and operatives received 
 as much for their labor as the planters received for their 
 whole cotton crop of that year, namely, 11 $27,278,762.” 
 But, as the crop of that year was 61,442,900 lbs., and as 
 the price was fourteen cents in the Southern ports, or 13 
 cents to the planter, they must have received $80,005,770. 
 There is another error in the same comparison, in regard 
 to the amount allowed for materials used in manufac¬ 
 turing, which would increase the discrepancy of the 
 results. 
 
 The next argument introduced, is to show by figures 
 that a factory requiring an investment of $250,000, is 
 better property and will yield a larger income than ten 
 plantations, costing, with the hands, $738,000. The net 
 income of the plantations is put at $S0,000, or 11 per 
 cent., (a much higher rate of interest than ever has been 
 received, for a series of years, from the best average in¬ 
 vestments in manufacturing establishments, as we shall 
 hereafter show,) and the net profit of the cotton-mill is 
 stated at $90,000, or 35 per cent, per annum. We have 
 never heard of any such rate of profit, and to a manufac¬ 
 turer it would seem to be enough to state this result, to 
 have its correctness doubted. 
 
 The first error in the calculation is found in the cost of 
 the mill, and the capital required to run it, which is stated 
 60 per cent too small; that is, it should be $400,000 in¬ 
 stead of $250,000 ; or $270,000 for the mill, and the 
 balance for floating capital. The first cost of a steam 
 mill would be rather less, but not much, with the houses 
 for the operatives, cotton house, and other buildings, 
 &c.* 
 
 * In reckoning the cost of manufacturing establishments, it is fre¬ 
 quently the case that the cost of the mill and machinery only is given, 
 
10 
 
 The cloth produced is valued at 7J cents a yard, which 
 is a higher price than has been received for ’Vo. 14 or 15 
 plain or twilled cottons, for two years past. For the last 
 nine months it has averaged 5.90 cents for sheetings and 
 drills, which would yield, upon the estimated production, 
 4,500,000 yards, (a large allowance for 10,000 spindles,) 
 §265,000 instead of §337,500, the sum stated. But we 
 will take the goods at a fair average price—say 7 cents 
 net, and they will yield §315,000. From this we are 
 told to deduct the cost of cotton, labor, steam-power, in¬ 
 terest on capital, &c.—“ $247,000.” Omitting the in¬ 
 terest, (§15,000,) this will be $232,000, which, taken 
 from §315,000, leaves §83,000 profit, or 20J per cent, on 
 a capital of §400,000. 
 
 This extraordinary result (which has not been obtained 
 by any of the New England mills making these goods, 
 for the past three years) indicates another error, which we 
 
 whereas the whole of the buildings required to carry on the business 
 should be included, since they are as necessary as the mill itself. It 
 is this omission which has given rise to much trouble and embarrass¬ 
 ment to those who have commenced manufacturing with capital sup¬ 
 posed to he ample, hut which has been expended in the erection of the 
 works, and has rendered it necessary to mortgage the establishment, to 
 obtain the means to carry it on, or even to complete it Where the 
 owners have been in companies incorporated, they have resorted to the 
 creation of new shares, at a half, or even a quarter of the original 
 price. This operation has been, and is now going on, through the 
 whole of New England, to a large extent, not only in manufacturing, 
 but in railroad, and other corporations. 
 
 Among the manufacturing establishments, none have been more re¬ 
 markable for their creation of new stock than those at Newburyport 
 and Salem, for which the estimates were made by General James, the 
 stockholders being unacquainted with manufacturing. The “ James 
 Steam Mill,” the “Bartlett,” and the “Globe,” at Newburyport, and 
 the “Naumkeag Mill,” at Salem, have all been found without cash 
 capital, and in debt when completed, and all have been obliged to call 
 in more, and they are still deficient, with the exception, perhaps, of 
 the Bartlett. 
 
soon discover to be in the price of the cotton, which is 
 again taken at 6 cents, though it has not been as low as 
 that in the New York market for 20 days, daring the last 
 twenty years.* Supposing we calculate the cotton at the 
 present price, which is 11 £ cents, and the goods at the 
 present price, it would take away all the profit of $83,000, 
 and leave a loss of $16,000, which gives the actual state 
 of all the mills in this country making coarse goods and 
 working new cotton, at the present time. The mills with 
 ample capitals have been, and some are still, working 
 cotton bought at a low price, and for the present six 
 months will show a small profit, but all others are making 
 and must continue to make, a loss, until there is a 
 change. 
 
 The profits of manufacturing are so often over-rated, 
 that it is with difficulty that the truth can be believed. 
 The well-managed New England mills have been as 
 successful, during the last ten years, as any in the world 
 —certainly more successful than in any other section of 
 the United States; though for many years after their first 
 establishment, they brought great losses upon the stock¬ 
 holders. The following table will show the results of 
 the business of the best establishments: f— 
 
 * If we take the cotton at a fair average price of 9 cents, $63,000 
 of the 83,000 profits will be taken away ; leaving a profit of 5 per cent, 
 per annum, on $400,000, which is as high as the average profits of the 
 present year. The goods are still at a lower price than the average, 
 though higher than they were six months ago. 
 
 f All these are taken from the books of the companies, or furnished, 
 by the Treasurers themselves. 
 
13 
 
 Many smaller mills have been equally successful, and 
 many have embarrassed the owners, and passed into other 
 hands during the same period. 
 
 The following table, prepared by Messrs. Head and 
 Perkins, Stock Brokers, shows the present price of shares, 
 and when there have been no sales, the price they would 
 bring if put into the market. The difference between the 
 par and the present price is just so much loss, which 
 should be subtracted from the dividends, in order to judge 
 fairly of the business. 
 
 Boott, tlC ’. 
 
 Cabot, . 
 Chicopee, 
 Cocheco, 
 
 Jackson, . 
 Lancaster, 
 
 Manchester Mills, 
 Massachusetts, 
 
 We defer to another number the examination of some 
 of the other calculations in the article oil “ Cotton and its 
 Manufacture,” and shall hereafter give some facts in 
 regard to the value of water-power at the present time in 
 the coal districts of England, which will show that, after 
 long experience, the English manufacturers prefer to buy 
 water at a higher price than is paid in any part of this 
 country, though they can have coal for their steam-power 
 at from 4 to 5 shillings a ton, certainly as low as in any 
 of the cotton-growing States. 
 
 Some facts will also be given, in regard to the steam- 
 mills built under the superintendence of General James, 
 which will exhibit the unexpected result that they have 
 not yet yielded to their proprietors simple interest upon 
 the investments made. 
 
14 
 
 [From the Merchants’ Magazine, January, 1850.] 
 
 In the last number of this Magazine, we endeavored to 
 point out some errors which we believed were calculated 
 to do harm, in an article in the November number, under 
 the title of “ Production and Manufacture of Cotton, with 
 reference to its Manufacture in the Cotton-Growing 
 States, by General Charles T. James, civil engineer, of 
 Rhode Island.” In doing so, we stated:—That the in¬ 
 crease of machinery for manufacturing cotton, has outrun 
 the production of the raw material. This is made evident 
 by the amount taken by the manufacturers during the 
 last five years, and the amount of the crop for the same 
 years, showing an excess of consumption of 616,000 
 bales. Also by the present high price of cotton, which is 
 not caused by speculation merely, but is based upon the 
 fact stated above ; also by the present low price of goods, 
 of which some kinds, especially those of which the cotton 
 comprises a great part of the value, cannot be sold at the 
 cost. 
 
 We endeavored to show that the profits of manufactur¬ 
 ing in this country have not been as large as they have 
 been represented, and we have given a table of the divi¬ 
 dends, for eleven years, of 27 manufacturing establish¬ 
 ments in New England, of. the first class, with capitals 
 amounting to §24,925,000. 
 
 We gave some reasons why the cotton planters are not 
 in a condition at the present time, to establish manufac¬ 
 tures on so extensive a scale as is recommended. 
 
 In what follows we wish to give some more facts, 
 which will go to confirm the conclusions already reached, 
 and to show the unsoundness of the views of those who 
 would artificially stimulate the business of manufacturing, 
 even in districts wholly unsuited for it. 
 
 For the sake of making a fair exhibition of the results 
 of manufacturing, under the most favorable circumstances, 
 
15 
 
 we selected for the table referred to, only mills of the first 
 class; that is, those with ample capitals, good water¬ 
 power, good machinery and buildings, responsible and 
 skillful agents, and all the appliances for pursuing the 
 business in the best manner. We believe there is no part 
 of this country where the same fabrics have been manu¬ 
 factured with as good success, or will be for some time to 
 come. In fact we cannot expect that the same mills will 
 again produce results at all equal to these for so long a 
 period. The steam-mills we have omitted altogether, as 
 we consider them to have a radical defect, which does 
 not allow them to be placed in the list of the “ first class.” 
 Their success here, even under the most favorable cir¬ 
 cumstances, has been, on the whole, bad, as tve shall 
 show hereafter. By calculating the rate of dividends paid 
 to the proprietors of these first class mills, from the profits 
 made during these eleven years, we shall find it to aver¬ 
 age Sxlhr per cent, per annum. But if the losses in bad 
 years, and the loss which would result from a sale of the 
 shares at the present prices were to be deducted from the 
 dividends, this average rate would be considerably re¬ 
 duced. Would the cotton planters be satisfied with the 
 same interest* on their investment, and assume the same 
 risk to obtain it ? f 
 
 “ If eXamlne tlle statements in a work published in 
 
 1644, called “JNotes on Political Economy, as applicable to the United 
 tates; by a Southern Planter,” he will be satisfied that the profits of 
 growing cotton are any tiling but small; and that when the planter 
 attends to Ins own crop, and manages his business with his own 
 capual, the income from his investment has been more liberal than 
 from any principal branch of business in the manufacturing States. 
 
 f If owing to civil convulsions, to war, to foreign competition, or 
 any fltVi er f ause ’ 1)16 business °f manufacturing should cease to be 
 profitable, the value of the cotton mills would soon be entirely lost • in 
 fact, a stoppage of three years would be r- - ■ - ’ 
 
16 
 
 If it would add any force to our argument, beyond that 
 of the facts already given, we would make a list of estab¬ 
 lishments commenced upon estimates made by one set of 
 proprietors and completed by others, with a total loss of 
 the first outlay; of individuals and corporations ruined by 
 changing from fabrics found to be unprofitable to others 
 which became not less so; of others whose capital has 
 been lost by locating on imperfect water-power, creating 
 the necessity of abandoning their works for other uses, or 
 of calling in requisition the aid of steam, always an ex¬ 
 pensive remedy, and, in some localities, disastrous; of 
 others, (and this includes a large class,) who have under¬ 
 taken more than, under a money pressure, they could 
 carry on, and who have broken down from inability to 
 meet their engagements, even with a great amount of 
 property in their hands. 
 
 It would hardly be too much to say that all the country 
 mills in New England, which have been built fifteen 
 years, have wholly or partially failed. There are excep¬ 
 tions, but they are only exceptions to the general truth. 
 Some of those which are now ranked among the first 
 class, were a total loss to the original proprietors. Even 
 during the last ten years, which have been generally so 
 prosperous for the manufacturers, how many mills have 
 changed hands from the necessities of the owners ! * 
 
 ment exists, the market value of the shares in some of the best manu¬ 
 facturing establishments, with handsome reserves, is from 15 to 20 per 
 cent below the par. On the other hand, the cotton planter, in case 
 his present business is broken up, may raise other products. He will 
 have his land, which an intermission of crops will improve, rather than 
 injure; and though it probably would not he so valuable to sell, it 
 would possess all its capability to produce, and he and his family 
 mig ht live upon it, and be well supported. 
 
 * While the Merrimac Company, for example, has been making 
 large dividends from making and printing calicoes, and the Cocheco 
 Company has made good earnings by the same business, the long- 
 established works of the Messrs. Robeson, at Fall River, have been 
 
17 
 
 The following list shows the dividends of the largest 
 establishments in New Hampshire for a series of years up 
 to the first of January, 1849:—* 
 
 Us Company, 
 w Market Company, 
 rtsmouth Steam Mills, 
 lumbian Company, . 
 
 
 480,000 10 110 
 
 1,250,000 S 73 
 
 1,200,000 24 
 
 1,300,000 10 40 
 
 1,500,000 9 90f “ 
 
 162,000 10 5.5 
 
 1,000,000 4 45 
 
 600,000 10 44 
 
 537,000 2* 
 
 180,000 21 133 
 
 150,000 2 riivid’s in 13 vears. 
 
 1S3.000 15 40 percent. 
 
 The average dividend, (calling the Pittsfield 20 per 
 cent.,) is less than 6,% per cent, per annum. If the 
 difference between the cost of the stocks and their present 
 market value be taken from the amount of the dividends, 
 (which will produce the only true result,) the rate will be 
 less than 5 per cent, per annum. 
 
 This is a faithful exhibition of the results of manufac¬ 
 turing, taking the good and the bad together. These 
 mills are chiefly owned in Massachusetts, and are carried 
 
 stopped by die ill success and failure of the energetic proprietors. 
 The same has happened to the large works at North Adams, Massa¬ 
 chusetts, at Providence, and some other places in Rhode Island, and 
 in the vicinity of New York and Philadelphia. 
 
 * This does not include the Amoskeag Company, of $2,500,000 
 capital, which is not exclusively a manufacturing company, but derives 
 its profits, in part, from sales of land and water-power. This list in¬ 
 cludes some of the companies given in the previous number, among 
 those of the “ first class,” and as it was made out at a different time, 
 and not by the same person, it differs from that somewhat, but not in 
 any material point. 
 
 f The extra dividend is here omitted, since it was not earned by 
 manufacturing, hut was made by the very low valuation at which the 
 property had been taken. It was partly in stock and partly in money. 
 
IS 
 
 on in the same manner as those at Lowell and others 
 within the State. A list of Massachusetts mills taken 
 indiscriminately for the same period, would show a result 
 very similar. 
 
 Yet manufactures have been a source of great wealth to 
 New Hampshire, and to New England. The mouthly 
 pay rolls of these New Hampshire companies amount to 
 $167,757, or $2,013,084 per annum* a great part of 
 which is sent home by the workmen and women, a part 
 is deposited in the savings banks, and the rest is expended 
 for dress and luxuries. The same benefits to the working 
 class will be derived, in whatever part of our countru 
 factories are established, under circumstances which allow 
 of their being kept in operation. 
 
 The merits of steam as a motive-power have often been 
 discussed, and many estimates have been made of its ad¬ 
 vantages even over water-power. This question we do 
 not propose to disturb; but we will give some facts which 
 may be of service to those who are making plans for 
 going into the business of building mills. 
 
 In the article in the November number, to which we 
 have before referred, a statement is made, in detail, of the 
 last year’s business of a mill with 10,000 spindles, which 
 resulted in a profit of $S9,000, on a capital of $250,000: 
 There is an error in addition of $10,000, which would 
 leave by these figures a profit of $79,000, or more than 
 31 per cent, for the year 1848. This, we are told, was 
 from a steam-mill; and it is so different from the result of 
 the best water-mills, that one unacquainted with the sub¬ 
 ject might infer that the difference arises from the power 
 used. Perhaps the northern steam-mills are not a fair 
 criterion by which to judge of the profits of steam-mills 
 
 * The dividends of the New Market Company, for example, have 
 amounted to 44 per cent., for ten years, which, on the present capital, 
 would he less than $300,000, while the pay roll for the same period;- 
 has Been $1,014,849. 
 
19 
 
 in other parts of the country, though the writer informs 
 us that “ they are driven at as great a profit, to say the 
 least, as the water-mills.” 
 
 The most celebrated in New England are those in 
 Portsmouth, New Hampshire ; Newburyport and Salem, 
 Massachusetts ; most of them built under the superintend¬ 
 ence of General James, the writer of the article to which 
 we allude. 
 
 The Portsmouth mill was erected in 1845-6, after a 
 course of lectures delivered in that town by General 
 James. By a reference to these lectures, which were 
 printed, it will be seen at a glance that the estimates and 
 calculations have been wholly disregarded by the results.* 
 The public spirited stockholders have waited patiently for 
 dividends, but have not, as yet, been gratified ; and the 
 price of the shares has continued to sink, until they can¬ 
 not now be sold for more than the interest which has 
 been lost upon them.f 
 
 The “James Steam-Mill,at Newburyport, is some¬ 
 times held up as a model for all steam-mills. It has 
 17,000 spindles, and manufactures fine shirtings. It was 
 put in operation in 1843, just before a period of as great 
 prosperity as manufacturers had ever seen in this country. 
 The dividends have been as follows3, 4, 5, 7, 6, 3, per 
 cent., or 28 per cent., in rather less than 6 years, or about 
 5 per cent, per annum. 
 
 to tile capability 
 
 * By this we mean the estimates and calculations a; 
 of steam-power to produce results, 
 t Within the past year, the directors have obtained the services of 
 Ii Samuel Batchelder, formerly the agent of the York Company, at 
 baco , and under his management it is hoped that this company will 
 reap the reward which every one wishes to attend die efforts nmde in 
 establishing a new branch of manufacture. 
 
 are^tentvM^ her , e ™ ade - in regard to die Newburyport Mills 
 theifb T r Mr ' S Frothingham, who has been acquainted with 
 
 of Ae^BartleUMlf 16 ? 0mmencen!lent ’ and has been the Boston agent 
 ot the Bartlett Mills, since they were started. 
 
20 
 
 To show the uncertainty with which estimates of the 
 cost of mills should be received, we will mention that 
 this was at first designed for 6,000 spindles, and was to 
 have cost $65,000. The first subscription was for 
 $75,000, which would have left but a small cash capital; 
 but it was supposed that with a good run of business it 
 would answer the purpose. When the mill was comple¬ 
 ted it was found to have cost $100,000, and the stock¬ 
 holders were called upon for an additional subscription. 
 Afterwards a plan was introduced for increasing the ma¬ 
 chinery to 11,000 spindles, which were to make the 
 whole cost $1S9,000. But when the whole was com¬ 
 pleted the cost was found to be over $250,000, and the 
 stockholders were again called on for subscriptions. We 
 do not know what the cost has been up to this time. It 
 would be difficult to guess at what price $10,000 of the 
 stock could be sold ; certainly not near the par value. 
 
 Another mill, called the “Globe,” in the same town, 
 has been erected under the same supervision as the 
 “James.” It has 12,200 spindles, for the manufacture of 
 number 14 drillings. This was put in operation in 1846, 
 and has made no dividends, but a loss.* This mill was 
 planned for 10,000 spindles, and was estimated to cost 
 $200,000, but when complete it contained 12,200 spin¬ 
 dles, and had cost $348,797 97. Here again the stock¬ 
 holders were forced to make a new subscription, which 
 they did, at the rate of $400 a share, instead of $500, the 
 price of the first. The present value of the shares is not 
 more than $180, and we think they cannot be sold at that 
 price. 
 
 But the last, the largest, and the most expensive of the 
 steam-mills in New England, is the Naumkeag, at Salem. 
 
 * The selling agents are Messrs. Read and Chadwick, one of the 
 best commission houses in Massachusetts. We mention this to show 
 that the bad success of the mill cannot be attributed to bad manage¬ 
 ment of the goods, but must be traced to the mill itself. 
 
21 
 
 This has 31,000 spindles, and cost, with the appurtenan¬ 
 ces, $680,000. This expenditure is very wide from the first 
 estimate, and has consumed the whole capital, requiring a 
 new subscription. The mill is a very fine one ; it has 
 been in operation two years, but has not paid simple in¬ 
 terest on the investment. No considerable amount of the 
 stock can be sold in the market without submitting to a 
 reduction equal to all the dividends yet made. It is in 
 the hands of able and wealthy men, who will bring out 
 its full capacity. 
 
 These three mills as here described, are the last built, 
 and are said to be the finest steam-mills in the United 
 States.* They have all been built under the superin¬ 
 tendence of the writer, who now informs the Southern 
 Planters, as an argument for building mills to manufacture 
 their own cotton, and who are not within reach of water¬ 
 power, that “ it would be better to pay for steam-power 
 contiguous to navigable waters, than to have water-power 
 gratis taxed with twenty miles transportation.”f 
 
 * The Bartlett Mills, at Newburyport, were built before either of 
 these, and have been more successful, though they cost §334,000, in- 
 stead of $505,000, "which is the estimate. 
 
 f All the mills in our list of “ first class,” given in the last number, 
 are more than twenty miles inland ; some are more than fifty miles— 
 while the steam mills at Newburyport and Salem are in sea-port towns, 
 with good harbors, affording every facility for freight. Coal, which is 
 the chief article to be considered in saving freight for a steam-mill, 
 has been delivered at these wharves as cheap (§5 to SO a ton) as it is 
 said to have cost the two nameless mills, which are given in the No¬ 
 vember article as examples of the great success of manufacturing by 
 steam at the North, and which earned from 30 to 40 per cent, durum 
 tie last year, “and made more money, in proportion to their number 
 0 s PincHes, than any two in the North driven by water.” (This is 
 true ; but it might be added that they earned more than any five other 
 m, s "'"i by steam ; and we are the more curious to know where 
 
 wonderful mills a 
 
 situated.) Certainly our friend, the 
 
 General, will not refuse to inform us what mills these ai 
 whose management such results have been achieved. 
 
 , and under 
 
22 
 
 If it were possible to find a locality where mills driven 
 by water-power and by steam-power are running together 
 side by side, with the latter under the greatest advantages 
 for cheapness of fuel and labor, we should know by the 
 value of water-power in that neighborhood, which of the 
 two is most appreciated. If the steam-power is really 
 better than the water, then the water-power would cease 
 to be used, and steam would take its place; for who, 
 merely for the sake of having his machinery turned by 
 water, would incur a daily and hourly expense which he 
 could as well avoid. There are several places in this 
 country where the two powers are used, and even in the 
 same establishment; # but we do not know of any where 
 the steam-power is applied under the greatest possible ad¬ 
 vantages, that is, in the vicinity of a coal region, where 
 fuel is at its lowest price, and where the raw material and 
 the labor are not higher than the average rate. This fact 
 may, in some measure, account for the low estimation in 
 which steam-power is held in places where water can be 
 had; besides, we have not yet, by a long series of years, 
 had an opportunity to test the relative value of each. 
 
 But fortunately there are places in Europe where the 
 two are used together; there are many in Great Britain, 
 where the steam-engine had its birth, and where it has 
 been brought nearest to perfection; where coal, too, is in 
 
 * The Cocheeo Company, it Dover, New Hampshire, have four 
 mills, one of which, containing 12,000 spindles, is driven by steam 
 during a part of the year. The expense of running this mill, including 
 fuel, labor on the steam-engine, repairs of engine, oil, and interest, has 
 been $45 a day, or at the rate of $13,500 a year. But as it is seldom 
 driven by steam more than six months in the year, the actual expense 
 is only $6,250—more than is required to run the same amount of 
 machinery in the other mills. This is but four years old, and has an 
 expensive engine, and is a first-rate mill, with the exception of the 
 steam. It would have been cheaper for the company to have pur¬ 
 chased the additional water-power required, at an expense of $75,000. 
 Though a new mill, we would not hold this up as a model. 
 
23 
 
 abundance, almost at the cost of transportation merely ; 
 and where the two powers have been tested ever since 
 the steam-engine was invented. 
 
 If, then, we can find a neighborhood, where, under all 
 the favorable circumstances here named for making a 
 comparison, a rate of value for each is established, we 
 may take it as a criterion of value for all the rest. Taking 
 then, for example, the vicinity of Manchester, where, for 
 a long period, water was the only power used, do we find 
 that since the introduction of steam it has lost its value ? 
 So far from true is it, that the water rents were never so 
 high as at present; much higher than when steam was 
 first introduced ; higher than in any part of this country, 
 and twice as high as at Lowell, Lawrence, Amoskeag, 
 Saco, Hadley, and other places in New England. 
 
 The following letter is from a gentleman who holds a 
 high place in the estimation of the successful manufac¬ 
 turers in Massachusetts, (and to whose success few have 
 contributed more,) who, by his long experience in apply¬ 
 ing the moving power to machinery, as well as by a re¬ 
 cent visit to the manufacturing districts of England and 
 Scotland, is as well informed on this subject as any one 
 in this country. It shows the exact value of water power 
 in the centre of a large manufacturing district, where 
 steam is used under the greatest advantages. 
 
 Lowell, November 24, 1849. 
 
 Dear Sir In July last I visited Greenock, in Scotland, and 
 the water-power, called the Shaw’s Water Works, beiim to me 
 one of the most interesting things in the town, I called on Mr 
 Morrison, the superintendent, who very politely communicated 
 tome the following information, of which I took notes at the 
 
 The water is collected from various sources in an artificial 
 
 reservoir, situated about six miies from Greenock, called Loch 
 
 au n t’vir ‘ he t er L glne ? r ; vho P ro P°sed the scheme. The 
 at 1 200 v T ° ® rehed Up ° n for r °S u,ar use i ^estimated 
 at 1,200 cubic feet per minute, the use being limited to twelve 
 
 fe°et rS Th/^’ and 31 °, days P er annum - The total fall is 512 
 eet. 1 he power is used for various purposes, and is leased at 
 
24 
 
 prices depending on the situation of the privilege. The sites 
 near the upper parts of the fall are difficult of access ; some of 
 these are leased at £\ 10s. per horse-power per annum. The 
 water company do not furnish the mill site, or, in fact, any land; 
 this is leased by the mill owners from other parties, at the rate 
 of about £12 per Scots acre per annum. 
 
 The lower falls are in the business part of the town, and are 
 leased at £4 10s. per horse-power per annum ; the rent of land 
 at the lower falls I did not learn; it must be much greater, how¬ 
 ever, than at the upper falls. The cost of coal at the mills, on 
 the lower falls, Mr. Morrison stated to be six shillings sterling 
 per ton. 
 
 The horse-power of the different falls is determined from the 
 total power of the water, reckoning 44,000 lbs. one foot per 
 minute, equal to one horse-power. To compare this with the 
 price of water-power at Lowell, I will take the last sale of war¬ 
 ranted water-power. This was in 1839, w'hen the Massachusetts 
 cotton mills, chartered in that year, purchased nine mill powers, 
 on the lower fall, and about 400,000 square feet of land. 
 
 They paid in cash at the time of the purchase, 884,024, 
 which, at six per cent, interest, represents an annual rent of 
 85,041 44. They also stipulated to pay in addition to the 
 above, an annual rent of 82,700, making a total of 87,741 44, 
 which may be taken as the annual rent paid by the Massachu¬ 
 setts cotton mills, for their water-power, and the necessary 
 quantity of land on which to erect their mills. By the terms of 
 the lease, each mill pow'er is declared to be 45i cubic feet of 
 water per second, on a 17 feet fall. Consequently, by the 
 Greenock mode of computation, the nine mill-powers are equal 
 to 592 horse-power. 
 
 Taking Greenock rates, 592 horse-power at £4 10, . . £2,66-1 
 7i Soots acres of land at £12, . 81 
 
 Annual rent of power, . . . £2,751 
 
 At 84 84 to the pound sterling, this is equal to 813,314 84 per 
 annum, or 72 per cent, greater than the actual rates paid at 
 Lowell. Taking into account that coal in any part of Massa¬ 
 chusetts costs at least three times as much as at Greenock, it 
 will be readily seen that the cost of steam-power in Massachu¬ 
 setts, is enormously greater than the actual rates paid at Lowell 
 for water-power. Yours very respectfully, 
 
 James B. Francis. 
 
 A. A. Lawrence, Esq., Boston. 
 
 In the last number we gave the market price of the 
 shares in the principal manufacturing corporations, as it 
 
25 
 
 has been during the past year, and as it is now.* By that 
 it will be seen that very few of them are worth the par 
 value, and that the greater proportion are at a discount of 
 from 10 to 30 per cent., and a few even lower than this. 
 Some of these establishments have large reserved funds 
 accumulated by many years of successful business, all 
 have some reserve, which is absolutely necessary for re¬ 
 newing the machinery and buildings, and to secure im¬ 
 provements required by the improvement made every year 
 in the process of manufacturing. The machinery of most 
 of them is kept in perfect order, and the shares are gener¬ 
 ally more valuable than when first created, since new 
 mills must have sufficient success to lay aside the same 
 contingent funds, before they can venture to divide their 
 profits.f This depreciation occurs, too, when there is no 
 unusual fear of investments in manufacturing, and at a 
 time of depression not as great as has occurred several 
 times before. Does not this strengthen the assertion 
 which we have made, that the business of manufacturing 
 cotton, here and elsewhere, has been pushed beyond the 
 limits of the present demand for goods, and beyond the 
 supply of cotton. Were there no other proof, would not 
 
 * Within the last month sales have been made of some of these 
 stocks at unction, as well as at the brokers’board, in Boston, and by 
 individuals at prices lower than the quotations of Messrs. Plead and 
 Perkins; which indicates that others equally as good would meet with 
 a simdar reduction, if forced into market at the present time. Chico- 
 pee, for instance, sold for S 505, Perkins at $670, and Cabot S760, for 
 
 av^'t. e r’ f0reXaffiPle e tIle HamUt ° n Com P an y> a t Lowell, which has 
 fiveTears 1 "T* 0 f, nearI y ® 200 ’ 000 - The dividends, for the last 
 Jen?’ Z B ee : 4 , 4 PCT C6nt ’ and the Shares Wit at 80 
 
 the dividends of fte LtTvr 7 Z" fUnd ’ aIS °’ ^ 
 
 cannot be sold u- , , 6 years have been 48 Per cent.; the shares 
 
 S36,0M™lS7“ k f” Th. OMwill, 
 
 have been 30 per cent hn l 1 t dmdends > for 1116 last five years, 
 cent, of the ^ bMn S ° ld ’ as ab -e, at about 50 per 
 
 4 
 
26 
 
 this be enough to assure us that the profits of manufac¬ 
 turing are now small, and have been so for some time 
 past, and must continue so until there is a change in the 
 course of trade. How can we otherwise account for the 
 unwilliugness of capitalists to buy the shares at the 
 present low rates. 
 
 If it be true that there is a plenty of capital at the South 
 ready for investment, would it not be far more profitable 
 for the holders of it to send it to the North, and purchase 
 the best stocks, which will be the first to feel a return of 
 prosperity, rather than to build new mills, to be driven by 
 steam, or even by water-power. 
 
 Some idea of the competition in manufacturing, and its 
 consequences, and of the necessity for those engaged in it 
 to use the greatest vigilance and activity to keep up with 
 the constant improvements which are made, may be 
 formed by reviewing the prices of any of the staple goods 
 ten or twenty years ago, and at the present time. In 
 182S, Amoskeag tickings were sold at 27J cents and 23 
 cents a yard; the same as are now sold at 11 and 9£ 
 cents. Merrimac prints fell from 17 cents, in 1837, to 
 9.2S in 1849. Cocheco prints, in 1837, were 14^- cents, 
 and now 8j 0 %. Printing cloths which in 1835, were sold 
 at 10 cents, are now at 5 to 6 cents. The Indian Head, 
 Tremont, and other staple sheetings of No. 14 yarn, 
 which, in 1832, were sold at 10 cents, are now at 6J to 7 
 cents. The prices of Newmarket cottons in 1837 were 
 12, 13, and lli cents ; they are now 7£, 6£, and 6 cents. 
 The Boott and Suffolk drillings in 1836 were sold at 14 
 cents, and now at 7 cents. Neither has this reduction* 
 
 * The argument that protective duties on goods tends to raise the 
 price, loses its force, when we look at these results. The rise in price 
 will be temporary, hut the reduction caused by competition is a 
 perpetual benefit to the consumer. We have no fear now, of foreign 
 competition in ike heavy goods, and we care little what the rate of duly 
 may be. But some new fabrics, such as lawns, ginghams, also cali¬ 
 coes, and some others, require protective duties for some time longer. 
 
27 
 
 been sudden, but has gone on steadily to the present 
 time.* 
 
 Cotton was formerly much higher than now, but the 
 reduction in the price of it has not been at all equal to 
 that of the goods. The following table indicates the 
 price of cotton to the manufacturer, for the last fifteen 
 years; and also the cost of the cloth per pound during the 
 same time. It embraces two qualities of cotton, as well 
 as of cloth, f 
 
 1835, 
 
 1836, 
 
 1837, 
 1S3S, 
 
 1842, 
 
 1843, 
 
 Vine cotton. Course. 
 
 20. 5 18.36 
 
 19. 8 17.44 
 
 13.2S 11.55 
 
 16. o 14.53 
 
 12. o 10.58 
 
 11. 9. 2 
 
 8. 6.S8 
 
 8.12 7.61 
 
 10. 4 10. 4 
 
 . to llj 7 to 11 G 
 
 Fine doth. 
 35.39 
 43. 9 
 
 33.33 IS* 12 
 
 28.21 16.96 
 
 25.52 13.57 
 
 21.4S 14.91 
 
 22.49 12.13 
 
 22.37 15.42 
 
 21.69 18.2G 
 
 23.62 15.12 
 
 20.36 G mo. 14.Go 
 
 Showing that the reduction in the price of cotton has 
 been 10 and 9 cents, while in the cost of cloth it has been 
 15.03, and 13.47 cents a pound, (or rather less, if carried 
 out for the whole of 1849. 
 
 The mixed goods (cotton and wool) all require some protection, and 
 all woolen goods, unless the duty should be taken off the raw material. 
 If the present rates of duty could be made specific, or if any plan can 
 be adopted by which they can be fairly collected, we presume they 
 would be found high enough. 
 
 * Some valuable facts of which these are a few, have been prepared 
 by Mr. G. W. Gordon, for the Treasury Department. 
 
 t This was made up from the books of the Lawrence Company. 
 
 t Cotton is no lower, at the present time, (Dec. 1, 1849,) titan it was 
 in the years 1823, 1826, 1827, 1828, 1829, 1830, 1831, 1832, 1833 
 1838, 1840,1841, 1842,1843, 1844, 1845, 1846, 1847, 1848, and ls 
 much higher than during some of these years. 
 
28 
 
 Labor, too, is much higher than formerly, especially 
 that of females, and so far adds to the cost; * so are the 
 articles of oil, starch, and some others used upon the 
 machinery, and in the processes. The improvement in 
 machinery, and the constant effort to produce at a cheaper 
 rate, are the chief causes of this great change in value. 
 We can hardly imagine that this cheapening process can 
 go on much farther, and yet it has appeared as improbable 
 for several years past as it does now. 
 
 Neither will this competition become less. The great 
 number of mills imposes the necessity upon the managers 
 to watch every improvement, and to spare no pains and 
 no expense to secure it. A new invention, or a new pro¬ 
 cess by which a saving can be made, is no sooner adopted 
 by one, than others are forced to follow. Besides this, as 
 long as a fair interest can be obtained, or whenever there 
 is a prospect of doing a profitable business, no opportunity 
 will be lost to get up new establishments, upon the great 
 water powers, created with such a vast outlay. The 
 great dam just made at Hadley, Massachusetts, and the 
 other preparations for a great manufacturing city, will 
 yield no income, unless the water which it affords can be 
 sold or leased; and the proprietors themselves will be the 
 first to embark in new enterprises. The same is true of 
 
 * In 1814, and to 1818, a woman’s labor, for one week, would enable 
 her to buy but one yard of ticking-. Now it will buy 23 yards. Then 
 she earned 2 yards of sheeting with a week’s work; now, 35 yards. 
 Then, 21 yards of calico; now, 30 yards. Then, 21 yards of shirting ; 
 now, 39 yards. Women’s wages have risen nearly, or quite, three¬ 
 fold, and men’s have doubled. Then we imported all the woolen cloth 
 used, except what was made on hand looms; now we export many 
 articles. To some countries we export the very goods which we once 
 received from them. The export of cotton goods has steadily increased, 
 from §2,898,750, in 1844, to 85,718,205 in 1848; and the increase is 
 greater than appears by this valuation, since the price of goods was 
 much lower in 1848, and a larger quantity was required to reach the 
 same value. The export of this year will probably be larger than 
 
29 
 
 Lawrence, of Amoskeag, Saco, and many other places of 
 less note. The unoccupied water-power, situated or 
 owned in Massachusetts alone, is enough to drive all the 
 cotton machinery now running in the United States, out 
 of Massachusetts. 
 
 Though the benefits of manufacturing have been so 
 great to New England, they have, for the most part, but 
 indirectly reached the proprietors. How great the in¬ 
 crease of wealth would have been, had it not been under¬ 
 taken, cannot now be known ; but we think the result 
 would not have been so very different as is sometimes 
 supposed. The people are industrious and enterprising; 
 and the result of thirty years of general industry, is a great 
 increase in the comforts of living and in wealth ; it is 
 very much the same as it would be with an individual.* 
 The same industry and well-directed enterprise will pro¬ 
 duce the same results in the Southern States. The erec¬ 
 tion of steam mills will not do it, nor any other mills 
 built with borrowed capital. Skill, industry, persever¬ 
 ance, and capital must be united; and when they do exist 
 together , success will follow at the South as well as at the 
 North. 
 
 “ Expectes et sustineas necesse est; nam tibi 
 Quod solvat non habet area Jovis." 
 
 * The other manufactures, in proportion to their magnitude, have 
 not added less to the wealth of the whole of the people; neither are 
 they in any respect less important. The woolen manufacture, and the 
 boot and shoe manufacture, are each nearly, or quite, equal to that of 
 cotton in New England.