| Summary |
The purpose of this study is to examine the role of state government in the promotion of economic development in North Carolina from 1876 to 1896. Traditionally, the period between 1876 and 1896 has been characterized as an era of retrenchment with respect to governmental participation in economic affairs. In actuality, the state promoted and participated in economic development in very positive ways. Throughout the period, every inducement was offered for business and industrial expansion. Liberal charter privileges for construction and multi-business activities and the absence of excessive taxation were incentives for corporate development, particularly with respect to railroads. The extension of railroad lines was vitally important in promoting economic growth, and the state's preferential policy toward railroad corporations reflected this concern. Continuing a policy which was begun in earlier years, the state gave direct aid to railroads in the form of capital investments in stock and bonds. In addition, the state leased its convicts for railroad construction projects at minimal expense to the railroad companies. The burden of increased expenditures for rail construction. particularly on the Western North Carolina Railroad, led to a reversal of the state policy of joint private and state ownership of railroad lines in the 1880's when most of the state-controlled lines were sold or leased. The abandonment of the state's dream of a grand trunk line was a realization of the inadequacies of North Carolina ports and the inadvisability of attempting to channel the natural north-south flow of trade into an east-west pattern. In many instances, by exercising a policy of non-intervention, the state promoted economic progress. The liberal charter and taxation policies of the state, which were incentives for railroad expansion. were also Inducements for industrial growth. The absence of restrictive labor legislation, along with an abundance of natural resources and cheap labor, helped to account for the increased growth of manufactories during the period. The creation of new governmental agencies reflected the assumption by the state of a greater responsibility in providing services and regulatory supervision for the welfare of its citizens. The establishment of a Department of Agriculture represented the first effort to develop and implement a program for economic development through a state agency. Although the department was unable to remedy the basic inequities of the economic structure, it provided direct services to the farmers through the research programs of the experiment station and the distribution of information on crop experimentation and farming methods. The fertilizer analysis program conducted by the experiment station insured a high quality product at a reasonable price. Geological surveys contributed to the location and definition of the state's natural resources. In addition to its other responsibilities, the Department of Agriculture supervised the preparation of the state's exhibits at national fairs and expositions. Through exhibitions the state advertised its resources to outsiders. The state's immigration program was also under the direction of the department, and, although largely unsuccessful, it represented an attempt to solicit investments and laborers for economic growth. As liberal forces gained strength in the legislature, agitation for change increased. In the 1890's hostility to government intervention in corporate regulation decreased, and the state moved to provide greater protection for its citizens against corporate abuse. The railroads were the principal target for reformers, and in 1891 the legislature established a Railroad Commission. Under the authority of the commission, railroad. telegraph, and express companies were brought into more strict accountability to the state. Freight and passenger rates were subject to commission approval, and the assessment of railroad property was brought more in line with its true value. Most important was the suspension of tax exemptions enjoyed by the state's railroads. Frugality and conservatism dominated state policy from 1876 to 1896, and the accomplishments of the period are overshadowed by the more progressive programs which followed. However, the Democrats should be credited with initiating new programs and formulating regulatory policies which promoted the economic development of the state. |
