Post-war Economics and Politics Fightin’, Feudin’, Speculatin’

Mid-19 th century America was a highly stratified society, and Appalachia was no exception. Billings and Blee point out that “In 1860, the top 5% of households owned one-third of all wealth in [Clay Co. KY], with the top 10% owning 48%…” (244) What is most important is what the few with wealth did with that wealth.

“Although a small elite in Clay County held a vastly disproportionate amount of personal wealth and land, they did not invest these resources in the diversified industries or local infrastructure that might generate sustained economic development. Rather, some invested their fortunes outside the county, in areas such as the Bluegrass. Others used their fortunes to leverage lucrative financial arrangements with outside resource extractive industries intent on plundering the riches of Clay County.” (245)

After the Civil War, westward expansion, railroad development in the west, and mechanization of agriculture created competition with Appalachian farmers. Once the “meat locker”, if not the breadbasket of the nation, Appalachia loses its competitive advantage. This leads to out migration, and a surprising consequence.

“The outmigration of propertyless and economically marginal farm families meant that as generations succeeded each other in the rural neighborhoods of Beech Creek, greater parity of land ownership was achieved, leading later ethnographers to misperceive rural Appalachia as a region of longstanding egalitarianism.” (Billings & Blee, 247)

Feuds Clan violence and moonshining are cornerstones of the Appalachian stereotype. The Hatfield McCoy feud is the most mythologized. Historian Altina Waller, in Feud: Hatfields, McCoys, and Social Change in Appalachia, (Univ. of NC Press, 1988), has provided the best study of what may have really happened.

The feud takes place in the Tug Valley, along the Kentucky West Virginia boarder. The most important figure is William Anderson “Devil Anse” Hatfield of West Virginia. Across the Tug Fork, in Kentucky, live Randolph “Old Ranel” McCoy and his wise, “Aunt Sally.”

Devil Anse Hatfield

Devil Anse, ca. 1910

Randolph McCoy

One legend has it that the feud began over a pig. Another legend has it that it began when Devil Anse’s womanizing son, Johnse, captured the heart of Old Ranel and Aunt Sally’s beautiful daughter, Roseanna. Neither explanation survives Waller’s account.

Roseanna McCoy

Uncle Dyke Garrett, who baptized Devil Anse at age 73, in 1911.

Anse Hatfield headed the “Logan Raiders,” a Confederate band of guerillas, during the Civil War. For reasons that Waller cannot clearly identify, his father left him landless. Hatfield, drawing upon his leadership skills, perhaps his ability to intimidate, and some considerable legal maneuvering built a timbering business.

Specifically, Hatfield won in a lawsuit 5,000 acres of timberland from one Perry Cline. Cline, orphaned before the Civil War, chose John Dils of Pike Co. as guardian. Dils was a Unionist, imprisoned by the Confederates, who later formed his own regiment. Dils was also a Pikeville businessman and an evangelical Christian.

With his connections in Pike Co. Cline becomes a successful politician and lawyer. As economic promoter and defender of law and order, Cline positions himself to get revenge on Anse Hatfield. At its height, the feud becomes a battle between a county seat elite (Pikeville) and the Tug Valley.

In eventual defeat, Anse Hatfield sells his property to a coal speculator. The Hatfield McCoy feud was neither so deadly nor did it last as long as the Garrard White feud of Clay Co. KY. It had its beginnings in the 1840’s and lasted past the turn of the century. The most violent years were the 1890’s when land prices were driven up by speculation.

Like the Hatfield McCoy feud, the driving force was not the ignorant, isolated mountaineer, but town dwelling, politically connected, financially ambitious elites. And like the Tug Valley feud, political division grounded in the Civil War preceded the violence. The Garrards were Democrats with statewide connections. The Whites, Republican, dominated local elections.

The dependency of other families on the patronage of Garrards or Whites was both older and stronger in Clay Co. than in Pike/Logan. The split was so bad that on several occasions KY governors were advised to split the county up. Shortage of land was a major factor in both feuds.

The inordinate power of the sheriff’s office was a factor in both feuds, as it will also be in the Harlan Co. mine wars. Kentucky sheriffs are law enforcement officers with significant patronage power. They are also tax collectors and conduct land sales for tax defaults.

Billings and Blee (p. 304ff.) identify several institutional legacies of the Clay Co. feud. A lack of governmental autonomy from the factions of the elite. A vulnerability to corruption. Ever increasing patronage. Use of government office for private gain. The subordination of economic development to political interests.

Another, opportunistic, outcome of the feuds was the stereotyping of the mountaineer as resistant to progress, and in need of the leadership of the outside investor and developer.

Speculation William Mahone of the Richmond Whig and Henry Watterson of the Louisville Courier-Journal are only two of the “New South boosters” who called for the industrial development of the mountainous regions of their states. Gov. John Debar of WVA produced thousands of pieces of promotional literature advertising the state.

WVA, KY, TN, NC, VA and GA all established immigration boards to recruit people into the states.

The British firm, Southern States Coal, Iron and Land Company, bought Bald Mountain in TN, and then sold the 25,000 acres to Tennessee Coal, Iron and Railroad. (Davis, 153) Alexander A. Arthur acquired 80,000 acres around Yellow Creek and brought in over $20 million in British capital to develop Middlesboro KY. (Gaventa, 53-55)

In 1874 British industrialist James Bowron purchased 150,000 acres in Tennessee to develop iron production. (Davis, 163-4) “By 1894, La Societé Anonyme du Centre des Appalaches (Kentucky, U.S.A.), a Belgian corporation, had acquired 72,000 acres in Clay and other southeastern Kentucky counties, secured with a mortgage of $160,000.

Confederate General John Daniel Imboden, in 1880, bought 47,000 acres of mineral land in Wise Co, and 1/6 interest in another 100,000 acres.* While serving as Lee’s topographical engineer in 1861, Major Jedidiah Hotchkiss observed large outcroppings of coal along the eastern base of Flat Top Mountain. Two decade later he finally interested the financial backers of the N & W Railroad in the field. *This and the following is detailed in Eller, Chapter 2.

In Pike and Letcher Counties KY, Richard M. Broas of NY purchased or leased thousands of acres which eventually were sold to Consolidation Coal Co. SW VA native Rufus A. Ayers organized the Appalachia Steel and Iron Co. at BSG, helped organize the Virginia, Tennessee and Carolina Steel and Iron Co., controlled thousands of acres in Wise, Dickenson, Tazewell and Buchanan Counties, and was extensively involved in railroads.

George L. Carter of Hillsville VA started in iron production. He organized the Tom’s Creek Coal Co., consolidated holdings into the Carter Coal and Iron Co., and after acquiring 300,000 acres in Dickenson, Russell and Wise Counties, created the Clinchfield Coal Co.

John C. Calhoun Mayo, born in Pike Co. and raised in Paintsville KY, was that state’s most industrious and successful speculator. In 1886 he was teaching school in Pike and Johnson Counties, but would spend weekends riding through the Big Sandy valley. He would buy options on mineral lands for 50 cents to a dollar an acre. He would then sell the lands for as much as $16 an acre.

Like Broas before him, Mayo made extensive use of the broad form deed. The Broad form deed severed mineral rights from the surface rights, and conferred upon the mineral owner the right to obtain the minerals in whatever means necessary.

“By 1907, he controlled or owned outright 700,000 acres of mountain land, held principal interest in several banks and coal companies in Kentucky and southwest Virginia, and was a chief stockholder in Consolidation Coal… At the time of his death, Mayo’s fortune was reported to be worth over twenty million dollars.” (Eller, 63)

Helping fuel the speculation in Appalachian resources, and finance the construction of railroads to haul those resources from the mountains, was an influx of foreign capital. Rapid development in the U.S. created higher interest rates on investment here than could be had in Europe. This caused a pulling of capital from Europe.

Industrial development in Europe, especially in England, had reached a level of maturity that demanded less capital. Coupled with a high level of savings, that caused a “push” effect. “During the period , 34 per cent of the total new overseas portfolio capital issued in Britain went to North America…”* *M. Edelstein, “Foreign investment and empire, ,” in The Economic History of Britain Since 1700, v to the 1970s. Roderick Floud and Donald McCloskey, eds. New York: Cambridge University Press, 1981.

“… the flow of British funds to the US was dominated by the push of domestic British forces. This domination was stronger in the early years of the period than it was towards the end. A relative dearth of both domestic and other overseas portfolio assets with the high return/medium risk characteristics of US assets and a heightened desire for relatively risky portfolio assets as British national wealth increased seem to have been the most important reasons for the early domination of push forces.” ibid

So, by the last quarter of the 19 th century, Appalachia was deeply involved in what today we call a globalized economy.