Private Investment Is the Answer to Declining Postindustrial Towns



My town, Tallassee, Alabama, is an old mill town. It straddles the Tallapoosa River, which is dammed at that point by the Thurlow Dam to generate electricity. On both sides of the river are the ruins of a massive complex of textile mills which employed a significant portion of the town’s population until 2005. In fact, the current mayor, Johnny Hammock, worked in the mills as a young man, and his father and grandfather also worked there. Today, the town is somewhat stagnant: some of the mills, which were burned in a massive fire in 2016, are in shambles; the bridge connecting the two sides of the town is rusty and the paint flakes off in the wind; and there are many empty storefronts and houses. Many people think that the way to restore the town is for the government to take an aggressive role, and one of the mayor’s main strategies has been to apply for grants to undertake the projects that he thinks would benefit the town most. In light of this approach, it is important to take a look at how Tallassee developed into the bustling little city it once was. Private industry had a strong hand in the town’s development.

Tallassee is one of many examples of towns that were developed by private industry. Although large landholders and small-scale businesses contributed to the town’s development, arguably the most significant changes were spurred by the cotton mills. The Tallassee Manufacturing Company built the first mill on the west side of the river in 1844. It constructed a larger, four-story mill nearby in 1852. In this early period, the company also built “grist and flour mills, a gin, a sawmill, a foundry, and a blacksmith shop” to serve its employees (many part-time farmers) and local people. These mills were powered by electricity generated by a dam that the company had built partway across the river.

In the earliest years of the mills’ existence, before 1850, Tallassee was a hamlet with a few stores and plain, unpainted log houses. As the operation grew, however, the mills undertook the development of a local infrastructure. A third mill was built on the east side of the river in 1897. In the 1890s, the company created a new division and built a railroad to connect the town to the Western Railway of Alabama, which made the town less isolated than before. To power its growing operation, it also built a larger dam, this time spanning the whole river, and a new power plant, which also lit other businesses, the streets, and a few select residences. Unfortunately, in 1916, the Alabama Power Company, a state utility, took the mills to the Supreme Court for its rights to the land and water, seeking to build its own dam at the location, and the court ruled hydroelectric power manufacture a public use of property, opening the structure to eminent domain. Alabama Power only took over the dam in 1924, however, it and the mills having finally agreed to share the electricity generated at the Tallassee Falls the year before.

The company also built a bridge across the river in 1896 to connect the west mills to the new mill it was going to build on the east bank of the river. Although a covered bridge had existed a mile downriver, built privately in 1845 by John H. McKenzie (in fact, he bequeathed the bridge and all toll proceeds from it to his daughter as part of her dowry), this bridge had collapsed of old age in 1863 and had not been replaced. For decades, the only way to cross the river to the other side of town was by a ferry that was pulled across the river by a cable. The ferry was maintained by the mills but operated by “Old George.” When the mills undertook to build the bridge, the State of Alabama “relieved and released [the company] from all penalties now provided by law for failing hereafter to maintain and operate said ferry.”

The bridge, of course, was built to make it easier for the company to receive materials and transport goods, but it was also a boon to the community. The company allowed people associated with the company to cross for free, as well as people transporting cotton, the company’s key raw material. Everyone else paid a toll, and the company used the proceeds to maintain the bridge. Unfortunately, the state quickly encroached on private infrastructure. After protests that the tolls were too high, the judge probate of Tallapoosa County (where the east side of town is) claimed the power to control toll rates, and the state legislature backed him on it. Market pricing was snuffed out after an appeal before the Supreme Court of Alabama failed in 1909. Although the company had tried to sell off the bridge in 1908—who wouldn’t?—the county commissioners, so helpfully forcing nonsensically low toll rates on the true owners of the bridge, could not afford to purchase it outright. The tolls remained. After 1925, the company continued to maintain the bridge, but the people indirectly paid the company a rental fee to use the bridge through their counties instead.

In the 1920s, the mills, by this time incorporated as Mount Vernon-Woodberry Mills, embarked on a new spate of updates to the mills and “the villages” (the developments on either side of the river, which were each complete with a company store, housing, and increasing amenities over time). In 1923, a new bridge replaced the temporary 1920 bridge, which had been built after a flood damaged the old bridge in 1919. The mills also built “the Mt. Vernon Theater, the school buildings, the Community Hospital, and the . . . Guest House.” At least as late as the 1940s, the mills maintained the town’s water supply and sewage system. The company also built the town’s library (est. 1921) and expanded its collection over the years, donating it to the city in 1978, just after adding a new wing to it.

The mills also built most of the houses in the town, including my own, which are referred to as mill houses. Employees initially lived in these simple pine houses rent-free, but later, probably as living standards improved and costs rose, the company sold them to employees instead. Initially served by wells and outhouses, and lit by carbon and kerosene, the mills’ 1920s improvements brought electricity, running water, and finally “sanitary toilets” to Tallassee homes. In an era of state-enforced racial segregation, the mills also maintained “a Negro village to the south of West Tallassee . . . [with] a twelve-grade school with a cafeteria, an athletic field, a lodge hall and a church building” in addition to the East and West Tallassee villages. Local historian W.C. Bryant, writing in the 1930s, also noted that the mills planned many cultural and entertainment events for the town, such as carnivals, circuses, parades, and patriotic celebrations. In fact, the book by Virginia Noble Golden that I’ve been citing here was published by the company in 1949, showing the depth of their investment in the town. The wealth that Tallasseeans created in the mills put money in their pockets, and consequently the town had over 150 private businesses in the 1940s.

No benevolent motives were needed to encourage this long record of contributions. The town’s physical and social integrity benefitted the business’s operations, improving efficiency and likely encouraging the best laborers to remain with the company long term. By the same token, since the market is constantly adjusting, the west mills ceased operation in the 1960s, leaving only the newer east mills active. These mills remained open until 2005, when Mount Vernon was forced to downsize and close its Alabama mills for good (it still maintains other mills in the South).

It might seem like the market burned Tallasseeans in the end, leaving them with aging infrastructure, less jobs, and a bunch of empty buildings, but that is not the case. The market, being an aggregation of individual human choices, does not change things overnight, but people see value in the mills and not long after they closed down, other entrepreneurs moved in on them.

The west mills sat for some time, but were finally purchased in 1991 by Montgomery speculators who wanted to take them apart gradually to sell the materials for reuse. They “removed the window sash and gutted the five-story wooden interior structural system,” but the rest of the project seems to have fallen by the wayside. The owners may be waiting for the right moment to act on the remains. (Oddly enough, I could not find a sale record for the site, and the plot is not acknowledged by the Alabama GIS.)

The east mills were purchased by Process Knowledge in 2006; they deconstructed some cotton warehouses on the site for resale and sold the property to Mount Vernon Pine in 2016. Mount Vernon Pine planned to salvage the valued long-leaf heart pine in Mill No. 2. In fact, when these mills burned down later that year, the owner says they already “had hundreds of thousands of dollars of orders for which we received deposits. One man bought $230,000 of wood. He sent us by wire transfer $45,000 because he found the wood to be so desirable.” They had also intended to improve the other mill on the property, added in the 1920s, to lease as warehouse space and also planned to make part of it a museum. The fire was a major setback, of course. The company bought the property for $1,088,000 but only had a $1 million insurance policy on the place. There is very little reclaimable wood left in the remains, ruining the original business plan. The insurance also would not cover the cleanup, which was estimated to run $1 million. 

Although the owners of the eastern mills were looking for a new use for their property (their most recent plan was to crush the rubble and convert it into construction aggregate), the mayor of the town was eager to purchase it to put it to the use that he and other prominent townsmen think best. Finally, not able to get the company to sell voluntarily, the city sued Mount Vernon Pine in 2019, for “public nuisance after the property was not properly cleaned up” following the fire. As a “resolution” to the case, Mount Vernon Pine “donated” the east mills to the city this year, basically coerced but at least getting a tax advantage to help defray its massive sunk costs.

Given that private industry built Tallassee and that the market was already in the process of recycling the mills, making room for new opportunity, politicians should have stood down. The process of market renewal takes time, and although it may be thwarted by unexpected events like the fire, it is inexorable given leeway. Entrepreneurs would have found a good use for the remains and the land. Instead, the city is flying blind, asking the people what they think it should do with its ill-gotten property. The result will be arbitrary, whether based on nothing but the whims of people with no financial skin in the game. Those who will inevitably be hired to do the actual work of revitalization will charge a pretty penny, knowing they’re dealing with a big spender, and will enrich themselves. Some locals may clamor for a fancy new shopping district or housing—they’ll order the caviar, because, hey, it’s not their land. 

The reality is that after the fire it may not be worth moving forward in any way for the foreseeable future—it all depends on what people are willing to invest in voluntarily. No one had to beg Mount Vernon Pine to drop over $1 million dollars on buildings that to some probably seemed worthless. In time, people would have identified new opportunities in the seemingly worthless rubble. They would have been willing to put their money where their mouth is to put one of those ideas to the test, and people would have voted on it with their dollars.

Bleeding local taxpayers to repurpose the area based on the decisions of people with no financial skin in the game is a bad idea and, like all central planning, will be proven a failure in time. Instead of applying for so many grants, Tallassee should place the mills, the rusty infrastructure, the schools, the “substandard” rental properties, and the other buildings it has seized back in the care of the market that sprouted them. Doing so will lead to less costly and likely quicker outcomes that are tailored to the acting preferences of the people of the town themselves.



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