Indiana Cotton Mills, Cannelton Indiana
Organized by Southern, Western, and Northeastern capitalists and chartered by the state of Indiana on 15 February 18A8, the Cannelton Cotton Mills - known shortly thereafter as the Indiana Cotton Mills - was promoted as a challenge to New England's cotton mills and an experiment in inter-regional cooperation. The town of Cannelton, founded in 1835, was thought to be situated atop vast fields of bituminous coal. With inexpensive fuel to power the mill's machinery, inexpensive transportation costs provided by Ohio River steamers, and proximity to southern cotton fields, the Indiana Mills were said to possess all the resources necessary to rival the established mills in Lowell, Massachusetts.
The organizers made two serious miscalculations, however. The coal seams, which were thought to be inexhaustible, proved to be extremely shallow and within 10 years were nearly depleted. Also, the amount of capital required to construct and furnish the mil! with machinery was seriously underestimated. Although such oversights soon forced the original organizers to sell the mill, It eventually achieved sound financial footing and - during the decade when southern and western interests attempted to create an atmosphere of political accommodation based on sectional interests - the mill stood as proof of industrial cooperation for mutual benefit.
Hamilton Smith, an organizer of the company who obtained the charter from the state government, was an "enlightened visionary" who thought of the Indiana Mills as an economic union of southern and western interests. Smith, who was born in New Hampshire and settled in Louisville, published several articles vaunting the advantages of the location and resources of Cannelton, and was probably instrumental in gaining an 3.8 acre grant for the mill site from the Cannelton Coal Company. Smith estimated that inexpensive fuel would enable the Indiana Mills to produce cloth for a penny a yard less than Lowell. In DeSow's Commercial Review, July 1849, he proposed a 10,000 spindle mill to southern planters which duplicated the blueprints of the mill begun a month before in Cannelton.
Smith brought Charles T. James into the project during its formative period. James, with Salmon P. Chase, a classmate of Smith's at Dartmouth College and later a Chief Justice of the Supreme Court, and Judge Elisha M. Huntington of Indiana aided Smith In incorporating the company. James, a long-time resident of Providence, Rhode island, was made a director of the company and, as he had been supervisor of the Slater Mills in Providence, was responsible for the overall technical organization. James organized the mill, procured the materials for its construction, hired the engineers, and purchased the machinery He contracted with Tallman and Bucklin to design the mill building, and the Providence firm turned the design problem over to Thomas A. Tefft, a young assistant. James also hired Alexander McGregor of Newport as supervising architect. The close integration of technical and architectural elements In the building's design has led Wriston to conclude that James contributed the engineering information incorporated Into the mill's novel design.
James also took a hand in promoting the Indiana Cotton Mills, In a pamphlet published in 38^9 entitled "Practical Hints on the Comparative Costs and Productiveness of the Culture of Cotton and Costs and Productiveness of Its Manufacture . .Addressed to the Cotton Planters and Capitalists of the South" he declared, “The convenient location of the spot for transportation, its close proximity to the cotton growing regions, its vast abundance of the best fuel...its command of the Mississippi for markets...al1 these advantages and others ...make Cannelton the finest site for manufacturing...in the Union and fully justify the prediction that ere many years have elapsed, it will become an extensive manufacturing city, not outrival led even by Lowell, herself.”
While Smith and James encountered no difficulty securing backers for their enterprise, they seriously underestimated the capital required to float the Indiana Mills. Smith felt that $220,000 was required; James calculated $225 ,000. According to Wi1son, additional expenses $55,000 for factory construction, and $15,000 for machinery (much of which proved unsatisfactory) - and the rapid depletion of the nearby coal beds contributed to the financial constraints that forced the original backers to sell the mi11.
Smith had believed that Cannelton's coal could give the Indiana Mills a crucial economic advantage over Lowell's cotton mills. The coal, which had cost less than 2 cents per bushel in 1849 had risen to 5 cents in 1852 when the seams proved to be only a few feet thick. The following year, 1853, the owners sold the Indiana Cotton Mills to Horatio Dalton Newcomb of Louisville.
Newcomb had migrated to Louisville from Massachusetts following the Panic of 1837. Beginning in the grocery business, the Newcomb family later became involved in steamboating and eventually became interested in the coal mining operations in Cannelton. Newcomb was treasurer of the original company, and when Smith encountered financial problems during the mill's early development, Newcomb advanced Smith $30,000, In 1853, Newcomb bought the mill outright for its debt of $200,000.
Though the mills never returned the 40% profit Smith promised his backers, it was highly lucrative. According to Wilson, the mill was valued at $200,000 at the sale in 1853 and appreciated four times by 1858 Given the 1853 debt of $200,000, operational costs of $80,000 per year, and a gross income totalling $200,000 per year, Wilson states that much of the debt was probably retired by 1860. He estimates that the new owners earned a profit "well in excess" of 20% on their investment during the early years of the mill's operation,
Indiana Cotton Mills became one of the largest producers of cotton sheeting in the West. Production began on 7 January 1851 and expanded gradually. During the first month 7000 yards of 36" heavy sheeting was produced1 by the end of two years the mill produced twice that amount per day. The company consumed $100,000 worth of cotton annually, or 10% of the cotton shipped to the upper Mississippi.
The principal product of the mill throughout its early history was cotton sheeting, although a cotton batting factory was added to the rear of the plant in 1853- Under various trade names--”Cannelton Sheeting", "Great Western Sheeting", and “Hoosier Sheeting" - a plain brown muslin was produced which sold along the Ohio, Missouri, and Mississippi Rivers and as far south as Memphis and New Orleans.
Though Smith and James never realized the profits of their vision, their dream of inter-regional cooperation was successful. "Out of the 500 shares of stock (at $500 per share) outstanding in the Indiana Cotton Mills, two men from Boston owned 252 shares, the Newcombs of Louisville owned 122, and three planters from northern Louisiana owned 110." The planters, hard pressed for cash, paid for their shares with cotton from their plantations. The shareholders, as well as other planters, sold directly to the mill to avoid paying a factor's fee, and by purchasing directly from the planters, the mill avoided a broker's commission. The Boston capitalists sold out following the recession of 1857 and two planters weathered three years of Civil War before they sold their shares. The third planter, John C. Ford, retained his interest, and with Newcomb was an owner of the mill.
The Indiana Cotton Mills, promoted as a challenge to the cotton mills of Lowell and an experiment in sectional cooperation, remained a center of textile manufacture until 1954. Following the sale in 1853, the Newcomb family maintained control until 1881, when they sold the mill to a Louisville distiller, George Buchanan . Buchanan operated the factory for a year until it failed, and he was forced to sell to a group of Louisville bankers. The bankers placed Edward W. Chamberlain in charge of the operation and in 1906 Lee Rodman assumed charge of the mill. In 1919 Rodman purchased a controlling interest and in 1941 had become the principal stockholder, president and treasurer of the Indiana Cotton Mills.
In 1954, the Indiana Cotton Mills was purchased by the Bemis Bag Company and discontinued textile production.