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Threadbare: The unraveling of Henry County

Draped in prosperity
For seven decades, Martinsville and Henry County's textile industry clothed America and employed one in five workers.

By Matt Chittum
The Roanoke Times
Aug. 17, 2002

Clay Frazier, 87, went to work for Virginia Underwear Co. during the Depression.
In the 1930s, textile work "wasn't like it is now," Frazier recalls.
Diane Gauldin and Lois Turner started at VF about 40 years ago.
Recordings by Matt Chittum
MARTINSVILLE -- He became a textile magnate, but before that, he was a spy.

Unravel the history of Martinsville's textile industry to its first stitch, and there you'll find a savvy Southerner who infiltrated the Yankee knitting monopoly in an act of turn-of-the-century corporate espionage.

He was William Letcher Pannill, a young and ambitious North Carolinian who would become the godfather of textiles in Martinsville and Henry County.

Around 1908, Pannill swept himself to a knitting education. He was still in his twenties when he grabbed a broom and went to work at the largest knitting mill in the world, Utica Knitting Mills in New York. As he pushed around piles of lint, he stole glances at the whirling, steam-driven knitting machines and made mental notes.

When he returned to the bosses who had sent him to Utica, Pannill established one of the first knitting mills in the South for Mayo Mills of Mayodan, N.C.

Soon after, he founded Pannill Knitting Co. in Martinsville with secondhand machinery making ribbed long underwear and union suits in retrofitted tobacco warehouses. The company ultimately employed 5,200, and five companies in Martinsville could trace their roots to Pannill in one way or another. All were finally swallowed by conglomerates.

The last of those companies to still make knit goods in the area, VF Imagewear, closed its operations over the last eight months, putting 2,300 out of work. Only a handful are still knitting fleece for sweat shirts in VF's Bassett factory.

It was the final gasp of a seven-decades-long boom that clothed America and employed one in five workers in Martinsville and Henry County.

The Martinsville area, once draped in the prosperity brought by the clothing industry, is now almost completely stripped of textile factories. More than 9,000 jobs have disappeared since the advent of global free trade nine years ago. Many of the workers who spent decades in the factories have lost their incomes, their self-worth and their identities.

Capitalizing on cheaper labor and a proximity to the South's cotton fields, Pannill and his handful of disciples effected almost a complete theft of the knitting industry from the Northeast. They had brought wealth and jobs to their hometown. But at the same time, they created a dangerous dependence upon a single industry for jobs.

Chasing cheaper labor, the textile industry moved once -- and it would do it again.

Tobacco to textiles

In the boom time of textiles, from the 1950s to the early 1990s, Martinsville and Henry County claimed the title of "Sweat Shirt Capital of the World." But before that, the area was the "Plug Tobacco Capital of the World."

Pre-Civil War Martinsville had 498 tobacco plantations, according to Desmond Kendrick of the Martinsville-Henry County Historical Society.

Factories all over town pressed and cut the leaves into hard blocks of chewing tobacco. The business was the bedrock of the region's economy, until larger firms such as R.J. Reynolds began buying the companies and moving or closing them.

By about 1910, the tobacco business had been almost completely plucked from the region. The furniture industry had a start by then, though, thanks to J.D. and Charles Bassett. In 1925, 40 percent of the working population in Martinsville-Henry County was employed in the furniture business.

The area had a few cotton mills, which processed raw cotton into yarn, but textiles and apparel had no significant presence in the area economy. Fabric production in the South at the time was limited to weaving coarse muslin cloth, used in such inexpensive products as sheets.

Utica had a near monopoly on knitting, a more sophisticated process than weaving muslin. Production of men's long underwear, the preferred type of the era, dominated the economy there.

In 1910, the two-county region around Utica had 72 knitting plants that employed more than 18,000, according to economist Virgil Crisafulli in "The History of Oneida County." Nearly half the people who worked in manufacturing around Utica earned their pay in a knitting mill. At its peak during World War I, knitting put 22,000 people to work in the area.

During the 75-year dominance of textiles in Utica, the area grew faster in population than any other place in the state of New York.

It was in that bustling atmosphere that the Southern interloper Pannill learned how knit goods were made.

'1-Man Chamber of Commerce'

Pannill was no suit-and-tie boardroom executive. He knew how to operate, dismantle and reassemble a knitting machine. He learned the industry from the bottom up, and had the business acumen to run a knitting operation from the top once he got there.

He had proved it at Mayo Mills upon his return from Utica and again at P.H. Hanes Knitting Co. in Winston-Salem, N.C., in 1916.

By 1924, Pannill decided he could compete against the Northern mills and his former employers. Soon, he found himself wooed to Martinsville by a man who would come to be known as the "One-Man Chamber of Commerce."

Hezekiah "Heck" Ford was an extraordinarily civic-minded man with deep family roots in Martinsville. The city had been named for his great-grandfather Col. Joseph Martin, who led Colonial forces in the area during the Revolutionary War. And Ford was bent on bringing industry there to replace the tobacco factories.

Ford began selling real estate in 1908, when he was just 21, according to the book "Foresight, Founders, and Fortitude; the Growth of Industry in Martinsville and Henry County, Virginia" by Dorothy Cleal and Hiram H. Herbert. Within 10 years, he had established himself as a wheeler-dealer. One of his first really big scores came at age 31, when he brokered a 2,000-acre, 20-parcel deal that brought the first textile plant to the area.

The Marshall Field Co. of Chicago set up a towel mill on a barren stretch of land outside of Martinsville. The company built the roads, post office, two grocery stores, a furniture store, theater and bank building. It also erected rows of small houses for employees, which rented for 25 cents per room per week. It named the new town after itself: Fieldale.

Ford and others personally guaranteed state loans that paid for a road from Fieldale to Martinsville, the first paved road in Henry County.

Ford visited Pannill in Reidsville, N.C., to sell him on opening a mill in Martinsville, according to "Foresight, Founders and Fortitude."

Pannill was drawn to the area not just by Ford, but by the ready-made work force he saw in the wives of the men who worked in the furniture factories.

He bought an old plug tobacco plant near the center of town for $20,000, and secured backing from Ford and a dentist named C.T. Womack. Pannill named his new company Pannill Knitting, and issued about 1,000 shares of $100 stock.

Pannill bought used knitting machines and refurbished them himself. He hired mostly local women to run them, along with the sewing machines.

Work was seasonal at first, with the mill running between spring and Thanksgiving. But Pannill found he could compete in the market by making a product as good as those made up North but at a lower cost.

Sales in 1925, the first year of operation, totaled $207,000. Adjusted for inflation, that would equal slightly more than $2.1 million today.

'Mr. Sam'

The first of many Pannill proteges was Samuel Stanhope Walker. His destiny always seemed to lie in textiles, but a tragedy delayed it.

Walker was raised in a South Carolina textile family that moved to Martinsville in 1909 to found the Martinsville Cotton Mill.

Walker went off to the North Carolina School of Textiles to learn the business and returned to work at the mill as a spinning room foreman.

But a short time later, as the mill's office was being moved, the company safe fell on Walker's father and killed him. The family sold the business and Walker was left knocking around at odd jobs until 1928, when he decided to become a mill man after all.

Walker approached Pannill, who sold him land within the Pannill Knitting complex on Cleveland Avenue in Martinsville. Pannill also served as a mentor to Walker, then 31.

"Mr. Pannill gave my father a great deal of help and support," said Walker's son, Dudley Walker, who still lives in Martinsville.

But Sam Walker also did plenty on his own. He financed his company by going out and peddling stock to local investors. With the proceeds he acquired used knitting machines from Roanoke Mills.

He signed up the same selling agent Pannill used to market his goods: Pannill's brother, Gordon.

Walker opened Virginia Underwear Co. in 1928, producing children's underwear and pajamas. Most of its employees were young women. Affectionately, they called their boss "Mr. Sam."

'It wasn't like it is now'

Clay Frazier went to work for "Mr. Sam" fresh out of Henry County's Axton High School in 1931. Most of the country was foundering in the Great Depression, but Martinsville was an exception. Business there was booming and jobs were plentiful. Frazier was just 17 when she landed her first job.

Three women showed up to begin as inspectors at Virginia Underwear that August morning, but the company could only let one start immediately. They drew straws to see who it would be.

"I got the shortest straw, so I went to work that morning," said Frazier, now 87. She clocked out for the last time in 1984, 53 years later.

"I went to work for 12 cents an hour. I got to work 10 hours a day and five hours on Saturday morning and got $6.75 a week. And I had to pay three dollars and a half of that for room and board and laundry." She paid another 35 cents a week for her ride to work and back. One year, in 1935, Frazier and everyone else got a $1 bonus.

"Times was hard, so you had to work," Frazier said.

The knitting mills were hiring, in large part, because they made underwear. People needed it no matter how bad the economy was, Dudley Walker noted.

A workday usually ran from 7 a.m. to 5:30 p.m., sometimes shorter if there wasn't enough work to do. Frazier soon moved into sewing.

"Oh, we had a good time. It wasn't like it is now. You could just almost play around, and on Friday, we had an hour for lunch and nobody much had cars, so we'd go uptown and buy something, say candy or peanuts and things like that, and bring it back and after lunch we just had a big time. Nobody said anything to you."

Pannill Knitting and Virginia Underwear grew through the Depression. Because the companies employed mostly married women, the Martinsville area had an unusually high number of dual-income households. Economically, the whole region fared better than most during the 30s.

The industry continued to put women to work until its demise.

"I went to get out of milking cows and chopping tobacco," said Diane Gauldin, 59. So did Lois Turner, 64.

Both started at Virginia Underwear's successor, Bassett-Walker Knitting Co. Their boss was Frazier, who had worked her way up to supervisor.

In the old days, even when the locally owned companies employed thousands, the atmosphere remained social and family oriented.

Pannill and Sam Walker were known for spending as much time on the production floor as in their offices. Those who worked for Walker swear he knew the name of everyone on his payroll.

"They would come through, they was nice and you knowed that they was there," Turner said about Pannill and Walker. "They was just hometown people."

Across the state, women made up almost 60 percent of the textile work force in 1948, according to the book "Textile Leaders of the South," by Marjorie W. Young.

Few blacks worked in the industry. One exception was Jobbers Pants Co. in Martinsville, which operated two plants -- one for white workers and one for black workers.

Virginia Underwear/Bassett-Walker had black men working in its dye house long before integration became the trend, Dudley Walker said.

Frazier remembers when the first three black women were hired in the sewing department around 1960. They were frightened about how they would be received, Frazier said, so she gave them some advice.

"I said, 'Just sit down, go to work and start talking.

Wherever it's the cheapest

Both Walker and Pannill expanded their influence as the Depression ended.

The Bassett family had struggled to establish a knitting plant that would employ wives of men who worked in the Bassett furniture factory. But it wasn't going well. So they partnered with Sam Walker to create Bassett-Walker Knitting, which operated for 23 years as a separate business from Virginia Underwear. Walker merged the two companies under the name Bassett-Walker in 1964.

Meanwhile, Pannill founded Sale Knitting Co. and put his son-in-law, E.A. "Mike" Sale, at the head of it. It was the first sweat shirt factory in an area that would eventually produce 60 percent of all of the sweat shirts made in the world.

Sale ran it until he fell into disfavor with too many people in the company, including other managers, and retired in 1953. After a few short-term presidents, another of Pannill's sons-in-law, William Franck, took the helm until he retired in 1989.

The Martinsville textile business wasn't devoted solely to cotton underpants and sweat shirts. The city was also ahead of the curve on manufacturing synthetic textiles.

In 1941, Heck Ford, the "One-Man Chamber of Commerce," brought still more jobs to the region when he brokered a deal to get E.I. DuPont De Nemours Inc. to build the world's second nylon factory in Martinsville. DuPont put 500 people to work making women's hosiery. The company built a golf club adjacent to the plant and named it Lynwood, after plant manager W.T. Wood and his wife Evelyn.

According to "Foresight, Founders and Fortitude," the first pair of hose made in Martinsville was presented as a gift to first lady Eleanor Roosevelt.

By 1948, textiles employed one in five working people in Henry County and Martinsville. The mills begun by Pannill, Walker and others with fewer than 50 workers cut paychecks for thousands.

Meanwhile, the knitting industry was unraveling in Utica, where it had been the bedrock of the economy since the 1840s.

It had once employed nearly half of all people who worked in manufacturing there. By 1947, that number was down to 20 percent. By 1970, it was less than 4 percent. After a period of local depression, Utica retooled as a center of light military industrial manufacturing.

Pannill died in 1940. Control of his company passed first to his brother, Gordon, and ultimately to his son, William G. "Bill" Pannill.

Sam Walker died in December 1960 of a heart attack in his office in Bassett. His son Dudley succeeded him and merged Bassett-Walker Knitting with Walker Knitting, which had been Virginia Underwear.

The industry these few men fostered served Martinsville and Henry County well for decades more. Unemployment in the early 1970s was just 1.9 percent in the area, less than half the state average. Martinsville was an All-America City.

But it wasn't long before all that began to disintegrate. The textile industry proved to be as mercurial as when a few Southern pioneers wrested it from the North.

Of the early textile mills, only the former Marshall Field Co., now Pillowtex, remains.

As the companies grew beyond the grasp of local textile magnates, they were bought by bigger companies that generally lacked the loyalty to the community that possessed Pannill, Walker and their heirs.

Pannill Knitting was taken over by Sara Lee Corp. in 1989 when the Chicago-based conglomerate bought all of Pannill's public stock -- 50 percent of the company -- and then bought the remaining shares from a New York investment group.

The company that started with a few dozen workers had 5,200 at the time of the sale.

But when the North American Free Trade Agreement was passed in 1994, it became cheaper for American textile and apparel makers to move production overseas. They could get their product made for a pittance of the labor cost they paid here, and thanks to NAFTA, they could bring the goods back into the United States at greatly reduced tariffs. Suddenly, production abroad was very cost-effective.

"Textiles follow wherever they can make it the cheapest," said Bill Franck, William Pannill's son-in-law, "and it's not here."

Sara Lee gave up making garments in Martinsville in 1994, but by then it employed only 240 workers there. The company now operates a distribution center in the city.

DuPont, which employed 4,400 at one point, closed in June 1998, putting 500 out of work. The second plant in the world to make the now ubiquitous nylon is a ruin in the process of being demolished.

Sale Knitting changed its name to Tultex in 1976 to reflect part ownership by its selling agent, Henry J. Tulley Inc. It became one of the largest sweat shirt makers in the world.

But the company filed Chapter 11 bankruptcy in 1999. More than 1,800 workers in the Martinsville/Henry County area alone lost their jobs. The conventional wisdom on Tultex is that it suffered from not moving its production offshore.

Others came and went, too, including Pluma, which folded in September 1999, putting 450 workers on the street.

The last holdout was VF Imagewear, which many incarnations ago was Sam Walker's Virginia Underwear Co. Dudley Walker sold the company to Vanity Fair in 1989. At the time, the company had 8,500 employees in 13 plants in Virginia and North Carolina.

VF stayed in the area longer than its competitors. But last fall, company leaders decided the market for sweat shirts and sweat pants was becoming too competitive.

The average loom operator or cutting room worker is far removed from such high-minded concepts as free trade, globalization of the marketplace and multimillion-dollar international business deals conducted in minutes via the Internet.

But it was a collision of those forces that drove VF officials to make an announcement last year that profoundly changed the lives of 2,300 workers, and seemed to signal the death of the textiles in Martinsville and Henry County.