“For the last three or four years, or until the middle of 1920, the cotton mills passed through a very prosperous period, just as did every other kind of business that was properly managed.
“The cotton mills made large profits, but if any other business, including farming, failed to make large profits during the period named the manager of that business should have resigned and gone to work for wages. The mills, the farmers, the merchants and in fact, everyone, passed through a very prosperous period, but all of us failed to realize while passing through the prosperous period that an end to that period was inevitable.
“We failed to take into account the inevitable fact that that tail end of all booms must show a loss, deducting of course a portion of the profits which were heretofore made.
“During the Spring of 1920 the cotton goods market began to decline very seriously and buyers of cloths became very scarce. The buyers who had purchased in advance were disposed to be very critical and in many cases took advantage of technicalities and in some cases bankruptcy in order to cancel contracts.
“The mills having sold the goods naturally purchased the cotton at a high price to make those goods and when the contracts for goods were cancelled, either legitimately or through the bankruptcy courts, or otherwise, the mills had to bear the burden of loss on the cotton which they purchased to manufacture the high priced goods.
“The income tax has been very excessive and unfortunately the idea has been permitted to creep into the minds of the public that profits of the mills represented the gross profits without first deducting the large amounts taken from the mills by the Federal Government through profit taxes.
“In addition to this the State and County taxes, including school taxes, have materially increased so that our present tax from both Federal and State has become burdensome.
“For the last several months it has been impossible to secure a profitable business and as a matter of fact for the last few months practically all of the goods which have been sold have been sold at a material loss, and at the moment we are unable to do a business that is in any way satisfactory.
“Most of the mills have kept their machinery running most of the time in order that their organizations may be kept intact and to give employment to those people who are more or less dependent upon the mills. The operation of the mills has been done at a loss, and while I do not intend claiming any philanthropic motives, at the same time I do contend that the mill management as a rule has at all times kept the welfare of their employees before them and has endeavored to furnish enough employment to avoid serious trouble on the part of the operatives.
“The mills’ payrolls in the last few years have increased in excess of 200 per cent above the pre-war wage scale, and it is my understanding that the wage scale has necessarily been decreased about 25 per cent below the scale prevailing in July 1920.
“There has been a disposition in many quarters to misrepresent the position of the mills, and the statements have not always been in line with the truth. In fact in many cases the statements made have been entirely at variance with the truth.
“Unfortunately a few officials whom we have every reason to feel should represent us as well as other lines of industry have been inclined to make political capital at the expense of the mills and at the expense of the truth.
“It is impossible to forecast the future, but I feel it safe to say that the mills will operate so far as may be possible so as to avoid serious want on the part of those who are dependent upon the mills, and while we are hoping for an improved business and have no doubt that it will come sooner or later, at the same time we do recognize that the intense speculation in cotton, cloths, stocks, land and everything else that was experienced during and directly after the war ended has not been in the interest of the people generally, and that everything must come down to a legitimate price before a happy and prosperous condition can prevail.
“At the present the prices of cotton goods are about one third the price prevailing in the Spring of 1920 and are about in line with the prices prevailing in 1913. We are operating at present without profit and often with loss and of course that condition cannot continue indefinitely without serious injury to the capital of the mills, though as stated above we are hoping for better times and will in most cases endeavor to so conduct the business as to avoid serious want on the part of operatives.
“The writer personally feels it would be much in the interest of all if everyone will recognize the loss experienced by them during the last several months and accept that loss in good faith and go to work on a proper basis or a basis that is normal, forgetting the losses experienced, and assume a cheerful attitude towards the future.
“There is no question in my mind but that the present condition is largely psychological and that if everyone will get their liver to working correctly and forget their troubles of the past, and look forward with confidence to the future, we will have a better 1921 than the last half of 1920 has proven to be.”
James D. Hammett, of Anderson, SC, president of the Cotton Manufacturers Association of South Carolina, in
Annual report of the Commissioner of Agriculture, Commerce and Industries, Volume 12 , by South Carolina. Dept. of Agriculture, Commerce, and Industries, 1920