Cannon Mills and Kannapolis: Persistent Paternalism in a Textile Town

12. The Danger of Larger Forces: War, Imports, and Government Policies

Chapter 12 The Danger of Larger Forces: War, Imports, and Government Policies As Operation Dixie came to an end, the textile industry turned its attention to a more pressing issue: providing textile products for America’s war effort in Korea. The textile industry had been working with the government to prepare for such a conflict for some time. A plan to “convert [the industry] to large scale war production immediately,” in the light of growing Cold War tensions, had been in place for more than three years before the Korean War. Industry leader Charles Cannon, past president of the Quartermaster Association, believed that the plan would draw upon the experiences of World War II to avoid bottlenecks and other production and distribution problems.1 The textile industry quickly moved to meet the nation’s military requirements. The Korean War helped pull the industry out of the slump of 1949. Mill activity in 1950 outpaced the war years of 1941–45.2 In addition, purchases of new textile equipment hit a record high.3 The record setting pace of 1950, however, did not carry over into the following year. Market conditions turned against textile mills in 1951 as demand for textile products fell in spite of the war. According to figures issued jointly by the Securities and Exchange Commission and the Federal Trade Commission, the textile industry suffered the greatest decline of twenty-two major manufacturing industries during the second and third quarters of the year.4 Mills responded by laying off workers and temporarily shutting down.5 Fully half of all textile mills were shut down in late 1951.6 144 @ The Danger of Larger Forces Industry spokesmen blamed the downturn on several factors. First, the industry’s modernization effort following World War II had been highly successful. With fewer textile mills and workers than during the wartime period, the industry had met consumer demand and more than twenty billion dollars in military orders during 1950 and 1951 “without visible strain.”7 A press release from the Textile Information Service summed up the problem as “a very real underestimation of its [the textile industry’s] productive power, coupled with an exaggerated estimate of military requirements.”8 Second, cotton prices hit an all-time high of more than forty-five cents per pound in March 1951.9 Mill margins fell as costs for raw material increased, wages remained high, and demand fell as mills filled government orders quickly. And third, mill owners blamed government wartime economic programs for the downturn. Textile leaders reserved their harshest criticism for the Office of Price Stabilization (OPS). Established in January 1951, the OPS “established and administered price regulations” with the help of various “industry advisory committees.”10 The office set up wage and price controls over raw cotton and textile production to combat inflation. Textile trade associations, however, accused the government agency of contributing to the downturn of 1951. The president of the American Cotton Manufacturers Institute (AMCI), Charles Hertwig, accused the OPS of vacillating in setting price controls on cotton textiles: “Starting with the voluntary ‘hold the line’ freeze of December 1 [1950], followed by the wage-price freeze of January and the general order for all manufacturers on April 25, a series of actions of a temporary nature by OPS had done nothing more than to throw the industry into a state of confused indecision.”11 ACMI press releases accused the OPS of canceling a directive the day it was to go into effect and replacing it with another that required a team of industry lawyers to unravel its meaning.12 Julian Robertson, president of the North Carolina Cotton Manufacturers Association, expressed the belief that OPS policies and other government wartime business regulations were unnecessary since the industry had met consumer and military demand with capacity to spare.13 Charles Cannon also chafed under government wartime regulations. He became concerned over the price of cotton, government price supports for cotton, and the difficulty of textile firms in following wartime regulations. Known as “Mr. Cotton” by his colleagues, Cannon was renowned for his knowledge of cotton and cotton policy. The textile manufacturer believed that “of the factors affecting cotton, the two principal ones are weather and politics. Of the two, the weather is more predictable.”14 As a result of his The Danger of Larger Forces ^ 145 reputation, Cannon served on various trade association committees that dealt with cotton policy matters, including...