Finance in History: Labor Days

Many of the mills reopened after the war, but eventually most moved to the South themselves. Although most attribute this development to the lure of cheaper labor and proximity to raw materials, another factor played a part. As the management hierarchy of the mills suggests, investors focused on finance and labor. Responsibility for technology — specifically, the machines that spun, wove, and finished the cloth — was relegated to an outside superintendent. As Steven Lubar reports in "Managerial Structure and Technological Style: the Lowell Mills, 1821-1880," shareholders challenged the need for skilled (and therefore costly) managers for these machines. Neither the management system nor the accounting systems (this was before the day of useful cost accounting) fostered an appreciation for the role technology played in operations. As a result, the Lowell mills were slow to repair and slower to invent more efficient machinery. In the end, operators found it simpler to start over in a new location than to repair old machinery.

Today, of course, even the southern mills are closed, with almost all textiles made overseas. But you can still visit the remarkable cotton mills of New England. They're museums.

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