As early as 1872 Georgia had passed a statute remitting taxes on cotton and woolen mills for a decade.[231]
An indication of the comparative coolness of the States near Northern influence, already remarked, in a little controversy which took place in the Richmond papers over exemption of mills from taxation. Said "Hanover": "It is true that a law exempting capital invested in manufacturing, even for a limited period, is unconstitutional. But if it is necessary to that end, the constitution can be amended." The farmers would not object, he thought, since increased size and prosperity of the cities would mean increased gains to them in sale of produce. Richmond, he said, in addition to her natural advantages, needed to offer exemption from taxation to secure the desired capital. But "King William", in rejoinder, asserted that the city was more dependent upon the country than was the latter on the former; that exempting manufactures from taxation would mean increasing the tax for farmers; and that Richmond was doing well enough as it was.
An indirect appeal to outside capital was felt to lie in a direct appeal to domestic capital, and the fact that foreign interest would be attracted by evidence of native faith in the mills was used as an argument in securing capital at home. Thus the Columbia Register, speaking of the plan of the Columbia and Lexington Water Power Company said editorially: "Columbia is now resolved to find money for herself, in the City and the State, for the development of the Canal and the establishment of factories. This will bring in outside capital later on. Nothing so attracts investors in other States as the knowledge that people on the ground have proved their faith in an undertaking by putting money in it."[232]
Again it was said: "More than three-fourths of the capital invested in the cotton mills since the war has been subscribed by our own people, and new enterprises are opening up the way to a proud and successful future. The Southern investment encourages Northern capital to come into the same field, and the rate of progress is far more rapid than if it depended on either Southern savings or Northern capital alone."[233]
A county paper told its readers: "We believe there is money enough in the county, here and there, to make at least a modest beginning so as to attract outside capital."[234]