Extractive Industries, Poverty, and Underdevelopment in Central Appalchia

By Hunter Wallace

The following excerpts come from Richard B. Drake’s A History of Appalachia:

“Mayo went among his people on horseback and by buckboard wagon with his pockets full of gold dollars, buying thousands of acres of mineral rights. He had his farmer-customers sign a “Broadform Deed,” which gave the owner of the mineral the privilege of using the service, which the mountaineer retained, in any way necessary to get at the minerals beneath the surface. Of course, with his yeoman values, the mountaineer could see value only in the surface. Obviously the mountaineer had in mind only the deep mining methods used at that time, the kind of mining he had seen at Millers Fork on the Big Sandy or the few holes that were hacked into the coal seams then operative in the Kentucky River or the Big Sandy Valleys.

Mayo brought thousands of parcels of mineral rights, and then consolidated these titles into blocks of mineral rights, which he sold or leased to companies that might actually do the mining. These dealings made him a rich man and a respected “benefactor to his region.” His mansion in Paintsville, Kentucky, a huge Victorian structure, is still a showplace in the region. His funeral in 1914 was the largest ever held in eastern Kentucky.”

So, this is how it all gets started by buying up the mineral rights to vast coal deposits in Appalachia, consolidating them into huge blocks, and then selling the rights to Northern corporations:

“Historian Ronald Lewis has noted that the late-developing Central Coalfield of northeastern Tennessee, eastern Kentucky, southwestern Virginia and southern West Virginia, transformed a vast farming and virgin forest area in 1880 into an area covered with coal towns and small cities dedicated to coal. Population boomed as coal production “tripled by 1900 and multiplied fivefold by 1900.”

During the early 20th century, Central Appalachia – roughly the area corresponding to the Central Coalfield – developed the most intensely colonial, extractive economy in the United States:

“In almost every case of industrial paternalism – some called it “corporate feudalism” – it worked badly. In the Appalachian coalfields, the company towns – necessarily built by a company needing the workers in areas remote from regular urban services – often became centers of oppression. Appalachia, in fact, had a much higher concentration of company towns than any other area of the nation. Some towns quickly became fiefdoms run by the resident manager or mine manager, using the leverage of the company store, the company-financed church, and the school, or control of company housing, to strengthen the company’s control.”

Just so you know, the antebellum cotton plantation never penetrated this area. Instead, the free-market system led to this type of Northern corporate feudalism in Central Appalachia after 1900.

“These and scores of other coal towns, many constructed as shacks row on row, spread across the Cumberland-Allegheny portion of Appalachia. They became at best small cities of romance for those wishing to escape the confinement of the mountains and the poverty of mountain farming. For others they were a grim lure into a neo-feudal vassalage to some mining corporation.

In many of these towns, one company literally owned the whole. The coal company paid the preacher, owned the company store, the houses, the hotels, and the school. A wage check-off paid for the doctor, the teacher and other services. The very smallest towns – jerry built villages erected by get-rich-quick developers – provided only the barest housing and no services. In the large company-built towns, important amenities were provided, and a sense of permanence and community existed. Usually only company men could bring their families to live in the company houses. The company often paid its wages in scrip covertible only at the company store, where prices were often higher than in competing stores in the county. Miners frequently came to think of themselves as virtual vassals, working for the company in unsafe mines for low-wages, renting a company-owned house, and paid in scrip. In some communities, a reputation for being a “model town” was widely recognized by elite and worker alike, although in times of industrial trouble such “model” towns often suffered from particularly bitter divisions.”

By the 1920s, the ruthless exploitation of Central Appalachia was so bad that the region descended into warfare between striking miners and the puppet governments of West Virginia:

“West Virginia’s governor, Epharaim F. Morgan, called out the state police and the state militia and appealed to President Harding for help. On the last day of August 1921, the two armies met at Blair Mountain at the crest of the watershed between the Central Mine Fields and the fields of Mingo and Logan. Twelve hundred state police, militia, and sheriff’s deputies and mine guards met the three thousand UMW marchers in a pitched battle that probably had more sophisticated logistics across a twenty-five-mile front than was involved in the Battle of New Orleans in 1815. Both sides were supported by scouts, physicians, nurses, and even chaplains.

On the side of the State of West Virginia and the operators, airplanes dropped bombs on the miners’ army during the battle. The operators defending their domain suffered three deaths and about forty wounded. The “invading” miners’ casualties were not known. Neither side gained any particular advantage until a detachment from the U.S. Army arrived on September 4 to support the operators’ army. With the appearance of the U.S. Army contingent, the miners withdrew and the battle ceased.”

The extractive industries in Central Appalachia – coal and railroads – created a plutocracy which captured control of the state governments of West Virginia and Kentucky:

“The 1920s, though hard years for the coal industry generally, were also years in which control of the region seemed wholly within the hands of the region’s coal operators. Not only had the union been beaten back and the rising consciousness of labor frustrated, but the handles of power seemed to rest totally in the hands of the region’s coal and railroad barons. Perhaps the major manifestation of this mind of plutocratic power concentration was in the rise of the so-called Fairmont Ring during the early decades of the twentieth century. This was a small group of West Virginia politicians and coal-owners, including Peter H. Watson, Johnson N. Camden, Clarence Wayland Watson, and Aretas B. Fleming. These gentlemen sat atop a netwoek that included such great corporations as the Standard Oil Company of Ohio, the Baltimore and Ohio Railway, the Fairmont Coal Company , Consolidation Coal Company, and the Monongah Coal and Coke Company. This combine openly bought U.S. senatorships for Johnson Camden in Kentucky and for Clarence Watson in West Virginia.

Even U.S. senatorships were bought and sold on the free-market. As the profits from coal mining flowed out of Kentucky and West Virginia to Northern investors in Ohio, Pennsylvania and New York, the Northern-owned timber companies invaded the area too and stripped the entire region of its virgin forest:

“Such companies as the Kentucky Coal and Timber Company of New York; the Chicago Lumber Company; the American Associates Ltd of London, England; Burt and Babb Lumber Company of Michigan; the Yellow Popular Lumber Company of Ohio; and W.M. Ritter of Pennsylvania”

Northern corporations made large fortunes by denuding huge swathes of the Appalachian Forest at firesale prices, one of the most biologically diverse regions in the world, between 1880 and 1920.

The libertarian dream of privately-owned transportation was also achieved in Central Appalachia. All the railroads that crisscrosed the region were also owned by private Northern corporations. The railroads hired armies of lobbyists, bribed newspaper editors and politicians, and had so much power they designed West Virgina’s constitution. Monopoly control of the transportation system allowed them to price gauge Appalachian consumers and rip them off in that way as well.