Mr. Buist has here placed the commencement of this market as far back as 1890. But in the early months of 1881 M. J. Verdery & Co., brokers of Augusta, were negotiating for the entire issue of $350,000 extra capital stock to be made in connection with enlargements to the Enterprise Factory. It was said that one man and his friends would take $140,000 of the stock.[424] This was, however, an underwriting transaction, such as those of which the first quotation speaks as being conducted on a brokerage proposition, rather than the regular marketing of stocks indicated by Mr. Buist.
Another said: "Nobody deals exclusively in cotton mill securities, and they are not quoted on the big exchanges either."[425] There is no doubt about either of these points, judging from all the information received. And further: "At the opening of the period, the sale for cotton mill stocks was very local, and each mill took charge of its own sales."[426]
A mill president of Augusta said that he frequently has inquiries for stock; he refers these applicants to brokers in the city.[427]
It has been seen that the curve of dividends of the mills shows a rough correspondence to that of profits; it may be observed in the paragraphs that follow that the third curve of market values of mill stocks follows more or less the other two curves. There will be mentioned first the cases in which the securities sold, for one reason and another, at low figures, and second the instances of more advantageous quotation, with some comments on the occasion for the high and low prices.
The cotton manufacturing business in the South has been a precarious one; it has proved quixotic, and there have been intervals of sterility.[428] This may be taken as accountable for the fact that "mill stocks usually sell below their book value."[429] This consideration has not, however, as will appear more clearly a little later, prevented great variation in the selling price of securities of mills in different sections of the South, at the same point of time.
"Mill shares have been a drug on the market and confidence in them has been lost to a large degree."[430] In conformity with this, an ex-manufacturer, now a cotton factor, of Augusta, Georgia, explained that: "Stocks of mills in Augusta haven't sold at par in twenty years. You can buy preferred stock of mills in Augusta at less than par. You can buy the stock of the Augusta and Enterprise mills at 20 or so. The Augusta Factory hasn't paid a dividend in twenty years." He could not understand why this was true of the local manufacturing community, which is one of the most notable in the entire South.[431]