Those were hard times at the mill

100 years of history of the Town of Wake Forest from 1909

The three imposing houses along Faculty Avenue proclaimed the wealth of Royall Cotton Mill, but their foundations were being undermined along with the financial security of many during the Depression.

William C. Powell built what is perhaps the grandest, the gray three-story American Colonial home with its porte-cochere and long walk, in 1895, four years before he, Robert E. Royall and Wait C. Brewer formed Royall Cotton Mill. Powell and Royall were both Wake Forest College graduates and Powell had married Royall’s sister. (T.E. Holding, one of the original directors, also married one of Royall’s sisters.)

W.C. Powell’s sons built the other two large homes.

William R. Powell with his wife, Susie, founder of the Wake Forest Garden Club, built their Classical Revival home on 6 acres just south of his father’s home and called it Cameron Heights.

Robert E. Powell built a somewhat idiosyncratic home on equally generous acreage just to the north of W.C. Powell’s house in 1915.

Since 1917, when the mill like other Southern cotton mills was experiencing a prosperity caused by the war, the mill’s executives had been paid handsome salaries. Robert E. Royall was paid $7,500, W.C. Powell $6,000 and George H. Greason, the superintendent, $6,000. In 1926, Greason’s contract called for the mill to provide him and his family a house (on Faculty Avenue) rent-free in addition to all the fuel for the house and gasoline for his automobile.

Greason, who was the mayor of the Town of Royall Cotton Mills, was also a Wake Forest commissioner, as was William Royall Powell. W.R. Powell’s salary was cut to $75 a month in 1925 because he had purchased the company store (now renovated for apartments) and was operating it for his own profit.

In contrast, during the 1920s, professors’ salaries at the college were $1,500 or less.

During the 1920s, the mill had paid high dividends to its stockholders, “bleeding the mill until it was face-to-face with receivership,” Don P. Johnston Jr. wrote years later in his thesis at Princeton. His father, W.C. Powell’s son-in-law, managed the mill in the 1930s.

In the late 1920s, cotton mills began experiencing more competition and lower profits. Management imposed the stretch-out – assigning more and more machines to one hand – and other cost-saving measures. In Gastonia, militant mill hands went on strike. There were bloody clashes that left several strikers and the chief of police dead. The events have been detailed in the  book by Doug Marlett, “The Bridge.”

Royall Cotton Mill executives had also been borrowing money, even money it really did not own.

Andrew Davis, then the mayor, had loaned the mill $2,000 in 1926. The mill had borrowed and borrowed from the college’s Denmark Student Loan Fund until the total was $10,000. At that time, J.H. Gorrell was the head of the modern languages department at the college, a town commissioner and the administrator for the loan fund. He was urging the mill to provide more collateral, usually property in town, for the mill’s debt.

W.C. Powell died in 1923, leaving a young widow who received $50,000 in trust. The trustees deposited the money in the mill and then borrowed against it in 1927. The $50,000 became a first mortgage on the mill, the younger Johnston wrote.

By 1930, both Davis and Mrs. Powell were demanding they be repaid. The older Johnston and his fellow son-in-law Harvey Seward – they had married Petrona and Annie Powell, respectively – had taken over control of the mill in 1929 and had spent the intervening two years attempting to shore up the mill’s finances. The cash reserve had gone from $110,519.39 in 1923 to a $219.29 overdraft in 1929 although dividends had been paid until 1927.

Their efforts were too late, and the mill went into voluntary receivership (bankruptcy) in 1931.

Shortly afterward, William Royall Powell resigned from the town board and in June of 1934 the commissioners told the town attorney to foreclose on his white pillared home. He had been unable to pay his taxes. To keep the house, Powell gave the town some mill bonds instead.

T.E. Holding, a long-time mill director as well as the owner of a drug store and the Bank of Wake, had been ill during the latter part of the 1920s. After his death in 1930, his family nearly lost their Queen Anne home on South Avenue because of unpaid taxes. The Bank of Wake went under in 1932, and in 1934 the town commissioners were ready to foreclose on the house. Holding’s executor, Harvey Holding, was able to save it by giving the town three lots valued at $5,000.

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