Four centuries in the making
By Edward Martin
Water lapped the shore as they stepped out of their small boats. On land, though, locked in drought, the water supply was miserably short. It was summer 1587 on Roanoke Island, and Sir Walter Raleigh’s business enterprise was off on the wrong foot. His boss, Queen Elizabeth, had signed a contract promising him 20% of riches such as silver and gold he found, plus a cut of whatever privateers operating from his outpost could steal from entrenched Spaniard competitors.
There were religious and social overtones, of course, including converting natives to Christianity, and Raleigh’s venture — like progressive employers today — was family friendly. The little boats disgorged the CEO, Gov. John White, along with husbands, wives and children. Raleigh was undeterred by two previous attempts to colonize the area, and as with many new ventures, unforeseeable setbacks followed. Drought continued to plague the colonists — and England became locked in war with Spain. By 1590, when Raleigh’s ships returned, the colony was lost, possibly having mingled with Native Americans and moved inland, and taking with it Virginia Dare, the first English child born in America.
Roanoke Island underscores a common thread in more than 400 years of North Carolina’s past. History doesn’t unfold in a vacuum, neatly compartmentalized as business or political or social. That became apparent as, triggered by Business North Carolina’s 35th anniversary, we asked historians to suggest 35 influential Tar Heel companies, trends and events.
The best example may be James B. “Buck” Duke’s legacy. His hydroelectric dams powered textile and furniture mills that attracted farmers, hastened the state’s transition from farm to factory and created mill towns with distinctive cultures, including child labor and worker oppression. The dams also impounded lakes that now provide water for cities and house multimillion dollar waterside homes that shelter retired industry executives and newcomers.
Several events loom large. The Halifax Resolves, a resolution signed April 12, 1776 and sparked by anger over tariffs and other insults, made North Carolina the first colony to seek independence. That spirit would characterize business and social life into the 21st century.
More isolated than its east region, western North Carolina was largely settled by families arriving via The Great Wagon Road from the north. These newcomers were reluctant to take orders from employers, the government or anyone else.
William Byrd II, Virginia planter and surveyor of the border between the two states in the early 1700s, called them “a breed of people the likes of which no one has ever seen,” according to Michael Hill, an executive in the state’s archives and history office. “He helped give the state the reputation as a refuge for people who were lazy and useless,” an unfair branding that resurfaced in the 1930s Depression, when Works Progress Administration and other New Deal programs employed men building and maintaining parks. Hill cites a popular ditty suggesting it took four WPA workers to handle the work of one: “One a’comin’, one a’goin’, one a’shittin’, one a’mowin’.”
There were two North Carolinas, divisions that persist today in industry and politics. Early on, UNC Chapel Hill historian Harry Watson says, poor areas such as the Piedmont with little slave labor wanted public improvements like railroads. But that required higher taxes on eastern plantation owners. “The sectional divide keeps eastern North Carolina closely tied to the Deep South, and the west more open to social and economic change.”
The Civil War, though less devastating to North Carolina than Virginia, profoundly influenced the fabric of today’s state. “This region was really in bad shape,” says Charlotte historian Tom Hanchett. “Our economy was a mess, slavery was gone, our people had to figure out how to build a new society, a new economy.”
A racial truce enforced by Reconstruction followed, but collapsed around the turn of the century. White supremacy was more flexible in the factory-heavy Piedmont, Watson says, “allowing the emergence of a black middle class that would eventually spearhead the civil rights movement.” The antebellum dominance of the east was over, “leaving a state that was unquestionably ‘Southern,’ but also different.”
Political divisions aren’t new either. David Brook, a former state historical agency director, says that post-Civil War, Democrats were archconservatives and Republicans liberals. “Solid South” Democrats dominated for decades but in 2010, Republicans won both legislative branches for the first time since 1870. They claimed the governor’s and lieutenant governor’s offices in 2012.
It’s all part of the state’s four-century-long habit of remaking itself, Hanchett says. “We’ve gone from fields to factories to finance, from slavery to segregation to civil rights,” he says. “This is a state that has continually reinvented itself, like the populations flocking here now from around the globe, and the conflicts expressing themselves in Raleigh. People look at history and say, ‘Oh, that’s the past.’ No, it’s not. It’s how we got here and where we’re going.”
35 KEY EVENTS IN NORTH CAROLINA HISTORY
Tar on the heels
Mention “Tar Heel” and listeners the world over think North Carolina. Few may know how the state’s early tar and turpentine industry influences its economy even today. England’s Parliament voted to subsidize the industry in 1720 to obtain tar to caulk wooden ships. Turpentine had myriad uses, including lamplight fuel. The 1850 census shows eastern North Carolina had nearly 1,600 tar and turpentine manufacturers supplying fleets and homes, with combined annual revenue equal to about $130 million today. But pine forests were overharvested and later cleared for cotton and tobacco fields, which supplied mills and factories that would dominate the Tar Heel economy in the 20th century.
The old college try
England-born William Richardson Davie came to America in 1763 and earned scars fighting former countrymen in the Revolution. But he’s most remembered for his 1789 legislative bill creating the nation’s first state college, the University of North Carolina at Chapel Hill. Boosted over the years by wealthy philanthropists such as Wilmington’s Kenan family, it became flagship of a 17-member system that grew to educate not only young frontiersmen but African-Americans, Native Americans and women. In 1963, lawmakers created a 31-school community-college system, now the country’s third-largest with 58 schools.
Buck Duke’s devil deal
Just look at Brown’s Schoolhouse today. Established in 1838 in Randolph County, the private school morphed into Trinity College and moved to Durham in 1892. Tobacco magnate James Buchanan Duke established the Duke Endowment and, in 1924, funneled much of its initial $40 million kitty into the renamed Duke University. While basketball’s Coach K and others have created a global brand, the endowment is an underappreciated asset, says Charlotte historian Tom Hanchett. Payments from its $3.4 billion corpus help fund Duke, Davidson College and Johnson C. Smith University, along with churches, hospitals and other organizations.
After lawmakers approved a cross-state railroad, North Carolina Railroad President John Motley Morehead came back in 1854 asking for more money. They gave $3 million, while private investors put up $1 million more. Arcing 317 miles from Morehead City to Charlotte, the line helped turn Raleigh, Durham, Greensboro and Charlotte into the Piedmont Crescent, home to two-thirds of the state’s population, industry and commerce. State owned and privately run, NCRR can’t take all the credit for the crescent’s prosperity. It was first an Indian trading path, and, since the 1950s, interstates 85 and 40 roughly parallel the route.
Ten years after the Civil War, Richard Joshua Reynolds began R.J. Reynolds Tobacco Co. in Winston to make chewing tobacco. (The city’s combination with Salem came later.) In Durham, Washington Duke was handing over his tobacco company to sons Buck and Benjamin. Buck launched American Tobacco Co. and a brazen tobacco takeover attempt. When the smoke cleared, trustbusters carved up American. Reynolds remains a powerhouse, surviving a merger creating RJR Nabisco in 1986 and a takeover by buyout kingpins KKR & Co. in 1988, emerging as public enemy No. 1 because of its controversial product. Today, Reynolds American Inc. is valued at $72 billion.
When R.J. Reynolds went to his bank, it was Wachovia National, created four years after the tobacco company. Its name stems from the Forsyth County settlement Moravians thought looked like Germany’s Wachau Valley. Led by CEOs Archie Davis, John Watlington and John Medlin, Wachovia grew into the state’s most prominent bank, gulping dozens of smaller ones. But its ambitions didn’t match more aggressive Charlotte rivals, and in 2001 First Union Corp. acquired Wachovia, taking on its name. In 2008, reeling from bad housing loans, the company entered a government-brokered bailout with California-based Wells Fargo. The last Wachovia sign came down in 2011.
William Henry Belk, 26, called his first store New York Racket. Renamed Belk Bros. Co., he moved the business from Monroe to Charlotte in 1909. Over the next three decades, he and partners opened more than 200 stores. Generations shopped at Belk for wedding gowns, baby clothes and funeral suits. John M. Belk, four-term Charlotte mayor from 1969 to 1977, joined his dad in 1945, retiring as CEO in 2004. He died three years later, the year America’s largest privately held department store chain peaked at 311 stores. Facing stiffening online competition, Belk was sold to New York-based Sycamore Partners for $3 billion in 2015.
Ace in the hole
The early pine-tar trade resurfaced in 1895. James Walker Tufts bought the first of the 5,500 acres that would become Pinehurst for $1.25 an acre, the going rate for Sandhills land once scoured by the shipping industry. He had in mind a health resort, but opened his first golf course in 1899. Pinehurst took flight in 1907, when the Donald Ross-designed No. 2 course was christened. Considered the home of American golf, it has hosted three U.S. Opens — the 2014 tournament had an estimated impact of $140 million or more.
A German family named Kahn changed its name to Cone soon after arriving in the area in the 1840s, and in 1895, brothers Moses and Ceasar established a Greensboro plant that would become Cone Mills Corp., the world’s biggest denim maker. Sixty-five miles south in Kannapolis, James Cannon had founded in 1887 Cannon Mills Corp., the world’s largest towel maker. Nearby cotton fields supplied the companies, which both built mill villages that would become prototype company towns. Both succumbed at about the same age: Cannon was acquired in 2003, Cone a year later, partly from strains from free-trade agreements signed in 1994.
Reconstruction was over, but African-Americans faced financial exclusion. In Durham, John Merrick, left, and Aaron Moore, right, founded the precursor to N.C. Mutual Life Insurance Co., selling dime-a-week funeral insurance. For a period, it was the nation’s largest black-owned business. With Mechanics and Farmers Bank, established in 1907, and others, N.C. Mutual anchored a district in Durham called Black Wall Street. Earlier in 1898, whites overthrew Wilmington’s biracial government, drove blacks out of town at gunpoint, and soon, state laws disenfranchised blacks. “Jim Crow,” says David Brook, former director of the state Division of Historical Resources, “was coming back.”
The founders of the power company that became Duke Energy Corp. changed not only the terrain but the culture of the state. They included Gill Wylie, who started Catawba Power Co. in 1900 and in 1905 convinced Buck Duke to finance Southern Power Co., and William States Lee Sr., to become its first engineer. Duke Power harnessed rivers to power mills and homes. In 2012, Duke acquired Progress Energy Inc., becoming the nation’s largest electric utility. Duke’s lakes, including Norman, Wylie and Jordan, adjoin property valued in the billions of dollars.
Getting our Hanes on you
Michael Jordan hasn’t changed underwear for 25 years, but John Wesley Hanes surely wouldn’t mind. In 1901, Winston-Salem’s John Wesley and brother Pleasant started making stockings and underwear that the basketball great has hawked for a quarter century. Shamrock Knitting Mills and P.H. Hanes Knitting Co. would become the world’s largest makers of hosiery and unmentionables. Corporate names and owners came and went, but the Hanes name lives on through Winston-Salem-based Hanesbrands. As a result of offshoring, only memories of the company’s local manufacturing glory remain.
Thomasville Chair Co. saws first whined in 1904, started by brothers T.J. and C.F. Finch, and within a year were grinding out 1,000 chairs a day. Other furniture makers, particularly in High Point and Hickory, followed suit, thriving on cheap labor, rail transportation and nearby hardwood forests. By the 1980s, furniture factories employed 90,000. Beset by Asian competition, the state’s furniture employment has shrunk to 35,000, according to the N.C. Economic Development Partnership. Thomasville Furniture’s parent, High Point-based Heritage Home Group LLC, closed its last Thomasville plants in 2014.
A squirrel, some joked, could walk across the state never touching the ground. In 1906, when Reuben Robertson established Canton’s Champion Fibre Co., forests remained one of North Carolina’s richest natural resources. Champion thrived, even through the Great Depression, partly by selling $3 million in land for the Great Smoky Mountains National Park. Facing profit pressure, Champion sold to employee-owned Blue Ridge Paper Products for $200 million in 1999. Eight years later, New Zealand investor Graeme Hart bought it for $338 million. The Canton mill now employs more than 1,000 people.
Ninety-eight years after starting as a backwoods artillery camp, Fort Bragg’s big bang — along with the Marines’ Camp Lejeune and Cherry Point Air Station and Seymour Johnson Air Force Base — is economic. Bragg ballooned in World War II to more than 150,000 troops, including the storied 82nd Airborne Division, and Vietnam brought the grim glamor of Special Forces, often called the Green Berets. Troop numbers fluctuate but often approach 70,000, while an estimated 44,000 military retirees live in Cumberland County. The military economy adds up to $50 billion annually, about 10% of gross state product.
Buck Duke, flush with American Tobacco profits, in 1925 earmarked $4 million to start a hospital and the medical and nursing schools that today make up the heart of Durham’s 9.2 million-square-foot Duke University Medical Center complex. Duke University Hospital opened in 1930 and then, as it does today, ranked among the nation’s best. Now, the 957-bed hospital anchors a multi-hospital system, like other health care giants: Winston-Salem’s Wake Forest Baptist Medical Center and Novant Health; Carolinas HealthCare in Charlotte, which says it is the nation’s second-largest not-for-profit system; and Vidant Health, affiliated with East Carolina University’s medical school.
Today it sits at the back of a lumber yard, unmarked, an abandoned shaft dank and musty when its metal doors open. In Chatham County north of Sanford, the Coal Glen explosion of 1925 effectively ended Tar Heel coal production, leaving 53 dead. It remains North Carolina’s worst industrial accident, though it wasn’t the industry’s first. Explosions ripped the nearby Egypt Coal Co. mine in 1895 and 1900, killing a total of 64 people and prompting the state’s first workers’ compensation program. The state still relies on coal from Virginia, West Virginia and elsewhere for about 38% of its energy production.
No union label
The Loray Mill strike’s impact is still felt today. Unrest at the Gastonia textile plant turned violent when the local police chief was killed. Vigilantes then gunned down union advocate Ella Mae Wiggins. She and three workers killed in a textile strike in Marion the next month would be lionized by folk singer Woody Guthrie. With communist organizers supporting unionization, an anti-union backlash spread through the state. A half century later, another union hero — Norma Rae in film, real name, Crystal Sutton — emerged from discord at Roanoke Rapids’ J.P. Stevens Co. plants. Today, only 3% of the state’s workers are unionized.
Tears flowed on the last flight. Few companies and CEOs ever commanded the loyalty of Piedmont Airlines founder and CEO Tom Davis. Piedmont’s roots were in Maryland in 1931, but Davis landed it in Winston-Salem in 1940, and when it disappeared into US Airways in 1989, it was the nation’s ninth-largest airline. It gave wings to Charlotte-Douglas International Airport, the nation’s seventh-busiest airport last year. It began as Charlotte Municipal in 1935, but took off in 1982 when Piedmont pioneered its hub concept there. American Airlines swallowed successor US Airways in 2013, and the Charlotte hub is now second only to Dallas in the number of daily flights.
Known as a leading trucking state, North Carolina’s most successful hauler is Old Dominion Freight Line Inc., started in 1934 by Lillian and Earl Congdon. They bought a High Point furniture mover and moved to Thomasville in 1939. After Earl’s death in 1950, Lillian became CEO, aided by sons Earl Jr. and Jack. Grandson David Congdon now runs the carrier. Deregulation in the 1980s prompted rapid industry consolidation: Cherryville’s Carolina Freight Lines Corp. was bought by Arkansas Best Trucking Co. in 1995. Old Dominion lost money for a while, rebounded, went public in 1991 and is now valued at $5.5 billion.
Lots of parking
The federal government, never too popular in North Carolina, deserves a starring role in the $21.9 billion in state tourism revenue reported in 2015. The Blue Ridge Parkway, Great Smoky Mountains National Park and Cape Hatteras National Seashore were all started or built by Franklin Roosevelt’s Civilian Conservation Corps and Works Progress Administration and private contractors. “My dad, who’s 93, still hates FDR,” laughs one historian. “North Carolina politicians fought the New Deal every step of the way.” But the programs created thousands of Depression-era jobs and opened isolated regions to the world.
Historian Michael Hill notes that the Research Triangle Park “has many fathers,” including Gov. Luther Hodges, plus anchors UNC Chapel Hill, Duke and N.C. State. Initially derided by skeptics, the project was validated in 1965 when IBM showed up. The numbers today are eye-popping: 7,000 acres, 22.5 million square feet — that’s the size of 22 major shopping malls — 50,000 employees and many tech titans including GlaxoSmithKline and Cisco Systems. It’s the engine, National Geographic once declared, that turned a poor, once-sluggish state into “The Dixie Dynamo.”
To gauge the impact of North Carolina’s seven interstates, look to its newest. “It’ll transform this region,” says John Chaffee, CEO of Greenville-based nonprofit NCEast Alliance. I-87 will link Raleigh and Hampton Roads, Va., through “The Forgotten Corner” (July, 2013) and carry on a tradition dating to 1958, when segments of 85, 95 and 40 got their first red, white and blue shields. Interstates range from I-26 and I-40 in the west to I-40, I-95 and the developing I-42, flat funnels of commerce in the east. It doesn’t come cheap: Charlotte’s I-485 loop cost $1.3 billion. Unintended consequence? Decay of bypassed towns.
Bruton Smith was the businessman, Curtis Turner the superstar driver. Partners, they built Charlotte Motor Speedway but went bust in 1961, a year after its first race. The track reorganized under furniture magnate Richard Howard, and Smith reemerged in 1975 as principal stockholder. (Turner died in a 1970 plane crash.) Buoyed by famed pitchman H.A. “Humpy” Wheeler, the speedway soared with the popularity of Richard Petty and Dale Earnhardt and trailblazed with trackside condos and lights for night racing. Smith, 89, remains chairman of the track’s publicly traded parent company and also oversees one of the nation’s largest auto dealership empires.
SAS strikes gold
Students Jim Goodnight and John Sall stepped into a 1966 government-funded N.C. State University program to search haystacks of data for needles of invaluable information for corporations and others. In 1976, they founded Cary-based SAS Institute Inc. It now employs 14,000 worldwide and had $3.2 billion revenue in 2015. Consistently rated among the nation’s most worker-friendly companies — more people know it provides employees with free M&Ms than what it does — the private software company thrives by pouring cash back into R&D. Goodnight and Sall, CEO and executive vice president, are estimated to have a combined net worth of $12 billion.
Price was right
Pick an icon — Joseph Bryan, Julian Price, NCNB. Price, the founder of Greensboro-based Jefferson Standard Life Insurance Co., hired Bryan in 1931, and and he helped diversify into broadcasting, including Charlotte’s WBT, one of the South’s first radio stations, in 1945. Jefferson-Pilot Corp. resulted from a 1968 merger, and its media interests helped spread its brand. By 2000, it held $200 billion in life insurance. It was a key investor in North Carolina National Bank, today’s Bank of America. Lincoln Financial Group acquired the business in 2006, but the fortune of Bryan, who died in 1995, still supports many causes.
Charlotte’s second downtown
Where heifers had grazed, Charlotte’s SouthPark Mall, the state’s biggest at 1.7 million square feet, opened in 1970 in a partnership of the Belk, Ivey and Harris families. Its surroundings are home to about 20,000 and an employment center for 40,000 workers. The former 3,000-acre farm of Cameron Morrison, North Carolina’s governor from 1921-25, hosts steel maker Nucor Corp. and drywall giant National Gypsum Co. Morrison’s nearby 2,000-acre hunting preserve is now Ballantyne, another large office park developed by his heirs. While Morrison is remembered as “The Good Roads Governor,” the area is now famed for its congestion.
No more rivers to cross
Completed in 1974, Jordan Lake southwest of Raleigh is the last of the state’s great lakes. “They’ve literally changed the landscape of North Carolina,” says Charlotte historian Tom Hanchett. Starting with 1916’s Lake James in the west, hydroelectric dams powered industrialization. Mountain Island Lake, formed in 1924, remains Charlotte’s water source. Kerr Lake north of Raleigh-Durham was filled in 1952, while Lake Norman, the largest N.C. lake, opened in 1959. Jordan and others spawned billions in development and created their own lake culture. North Carolina has 301 miles of seashore; its eight largest freshwater lakes have 2,497 miles.
When the General Assembly approved the North Carolina Biotechnology Center in 1981, nobody imagined today’s life-sciences industry: 230,000 employees, $73 billion annual economic impact and large companies such as drug contract researcher Quintiles Transnational Holdings Inc. Brit Dennis Gillings founded the company in 1982; it now has 35,000 workers. Charles Hamner, the biotech center’s CEO for 14 years, promoted a loan fund that helped 52 startups obtain $50 million in venture capital. Legislators threatened to ditch the center in 2014, but thought better. “We don’t want this industry to go the way of textiles, furniture and tobacco,” says Doug Edgeton, current CEO.
Pro sports is big business in North Carolina. Minor league baseball dates to the ‘40s, pro hockey to the ‘50s, pro basketball in the ‘70s. But the big money arrived with George Shinn’s Charlotte Hornets basketball team in 1988, Jerry Richardson’s Carolina Panthers football team in 1995 and Peter Karmanos’ Carolina Hurricanes hockey team in 1997. Massive public support has buoyed the franchises; a snit over arena improvements prompted the Hornets to decamp in 2002; they are now back with new owners. In terms of impact, the Panthers dominate: Forbes estimates the team is worth $2.1 billion.
West of the river fall line, early agriculture “was more suited to small family farms,” says UNC Chapel Hill historian Harry Watson. In the east, plantations reigned, including Bladen County, where Smithfield, Va.-based Smithfield Foods Inc., in 1992 built the world’s largest pork-processing plant, where about 34,000 hogs meet their fate daily. A Chinese company bought Smithfield in 2013. Agriculture is the state’s third-largest economic sector, with annual gross income of $15 billion, says economist Michael Walden. There are 10 chickens and about nine pigs for each of roughly 10 million humans, the N.C. Department of Agriculture says.
Roll the dice
Once, the Eastern Band of the Cherokee Indians was western North Carolina’s economic albatross. Then, in 1997, Harrah’s Cherokee Casino Resort opened and is now the region’s largest employer. The Cherokees have a $75 million hospital, and casino revenue tops $500 million a year. Proceeds are split between the tribe and its 15,000 members, who last year received about $11,000 each. Most of the resort’s 7,000 employees are not Cherokee. The tribe opened a $110 million casino in Murphy in 2015, creating 1,000 jobs. Despite the riches, some Cherokees see gambling as a predatory evil.
After North Carolina National Bank CEO Tom Storrs bought a little Florida bank in 1982, his successor, Hugh McColl Jr., spent the next decade-and-a-half buying dozens of institutions. McColl capped his run by acquiring San Francisco-based BankAmerica Corp. in 1998. Bank of America now has $2.15 trillion in assets, second only to JPMorgan Chase Corp. Under McColl’s successor Ken Lewis, the bank acquired Countrywide Financial Corp. in 2008 and Merrill Lynch & Co. Inc. a year later. With massive numbers of defaults hitting the company, the federal government saved the bank with a $45 billion bailout in 2009.
Hard to say which came first, the craft-beer craze or the myth-versus-reality brouhaha over urban scientist Richard Florida’s 2002 proclamation that Asheville embodies “the creative class.” No question, Highland Brewing Co., born in 1994, was on to something. With a capacity of 50,000 barrels a year, it’s the patriarch of Tar Heel craft brewing, which the North Carolina Craft Brewers Guild says numbers 175 breweries and brewpubs. Asheville has attracted national companies, such as Fort Collins, Colo.-based New Belgium Brewing Co. and Sierra Nevada Brewing Co., based in Chico, Calif., mainstays of the state’s $1.2 billion beer industry.
Tech’s N.C. love affair
The Data Corridor’s watchword is irony. Power-hungry new tech was attracted to west-central North Carolina by Duke Power Co.’s hearty electric grid built for textiles and furniture. Google landed in Lenoir in 2007 with what’s now a $1.2 billion center; Apple followed in 2009 and is investing more than $1 billion in Maiden; and Facebook’s $450 million Forest City center, opened in 2010, is undergoing a $200 million expansion. Despite the massive outlays, the centers employ just a fraction of the tens of thousands who once made furniture, yarn and clothing. Google’s site has about 250 workers.