Postbellum Economic Growth: Phosphate Fertilizer Industry Case Studies

 

In most case studies about southern industrialization, scholars examine cotton manufacturing as it is considered the foundation of the southern economy. However, the phosphate mining and fertilizer industry in South Carolina and Florida can help illuminate aspects of the southern model of industrial economic growth in the postbellum period that cotton manufacturing cannot.

Research methodology includes an overview of the histories of the phosphate fertilizer industries in South Carolina and Florida, which are used comparatively because the South Carolinian fertilizer industry experienced a boom and decline within a two-decade period while the Floridian model is still a prominent feature of the state’s economy. Historical records from South Carolina and Florida will be provided in this overview. Census and other data on income, revenue, production, and manufacture will also be compared in order to understand the economic growth models of this industry. Finally, factors that led to the decline of the South Carolina model and the factors that led to the success of the Florida model will be proposed.

The phosphate fertilizer industry began in the late 1860s in postbellum South Carolina. This industry experienced a sharp increase from 1867, when about six tons of phosphate was being mined, to 1880, at which point 95,680 tons was being mined.[1] By 1890, 586,798 tons was being mined annually and accounted for more than half of global production.[2] The phosphate industry also accounted for more than twenty percent of the state’s economy in the same year.

Figure 1: South Carolina phosphate deposits 
Courtesy Kershaw County Historical Society

A number of factors led to the development of this industry in South Carolina. First, significant deposits of phosphate were discovered in the Lowcountry, the area between the Savannah and Ashley Rivers. Demand rose after the Civil War because both planters and yeoman farmers were incentivized to maximize crop yield with the rising cost of labor. The first company, Charleston Mining and Manufacturing Company, was formed in 1867 with a million-dollar investment from Philadelphian investors.[3] Twenty-one other companies quickly followed suit with more than three million dollars invested in all twenty-two companies. By 1889, South Carolina supplied ninety-five percent of phosphate-based fertilizer in the United States and generated more than two million dollars in tax revenue to the state. However, difficulty in finding reliable workers, price instability, and rising costs of mining contributed to the decline of the industry. As well, mining companies found an enemy in Governor Ben “Pitchfork” Tillman, who felt the state was being cheated out of revenue and took action to gain greater regulatory control of the industry. A disastrous hurricane in 1893 damaged river mining operations, furthering the decline of the industry in South Carolina. South Carolina’s virtual monopoly over the market ended by 1900 with when its market share dropped to twenty-two percent for phosphate-based fertilizer.

In contrast, Floridian hard rock phosphate mining began almost two decades later in 1883 near Alachua County near Gainesville. In 1887, a significantly easier method of pebble mining began in central Florida.[4] A “Phosphate Fever” quickly followed with thousands of would-be prospectors flooding into Florida much like the California gold rush of 1849.[5] Florida became the largest supplier in the United States in 1894, was host to more than two hundred mining companies with a combined capital investment of more than five million dollars and extracted 528,000 tons valued at more than two million dollars.[6] At the same time, Governor Tillman was heavily taxing and regulating the phosphate industry in South Carolina while Florida was actively encouraging the phosphate industry.[7] Phosphate mining in Florida is still a prominent industry while in South Carolina, it accounts for less than one percent of the current state economy.[8]

In 1880, per capita income in both South Carolina and Florida were on par while South Carolina was the wealthier state in terms of real and personal property.[9] While the U.S. Census did not start tracking personal income by state again until 1929, even at its height, the phosphate fertilizer industry did little to raise South Carolina’s low standard of living, among the poorest places in the United States, because the boom was so short lived.[10]

South Carolina’s  industrial boom and precipitous decline within a two-decade period has been referred to as the “Stillbirth of the New South” and indicative of the failure of the phosphate industry to revive South Carolina’s economic prospects.[11] However, given the heavy regulation, lack of a stable workforce, and rising costs, it seemed that phosphate mining was doomed in South Carolina. In Florida’s case, however, the state government actively encouraged investment in the industry and placed little regulation on it. Combined with the easier method of mining, Florida’s phosphate industry continues to thrive today.

 

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[1] Ross A. Smith, The South Carolina State Gazetteer and Business Directory (Charleston: R. A. Smith, 1880), 166, http://link.gale.com/apps/doc/CY0111182322/SABN?u=vic_liberty&sid=zotero&xid=8f8d1c0a.

[2] Robert Behre and Chloe Johnson, “SC’s Forgotten Phosphate Industry Spurred Transformations at Home and Worldwide,” Post and Courier, accessed October 28, 2020, https://www.postandcourier.com/news/scs-forgotten-phosphate-industry-spurred-transformations-at-home-and-worldwide/article_59cc13be-71d8-11e9-b6c6-c7d09b5f2b43.html.

[3] Tom W. Shick and Don H. Doyle, “The South Carolina Phosphate Boom and the Stillbirth of the New South, 1867-1920,” The South Carolina Historical Magazine 86, no. 1 (1985): 6.

[4] “Phosphate,” Florida Department of Environmental Protection, accessed October 28, 2020, https://floridadep.gov/water/mining-mitigation/content/phosphate.

[5] Arch Fredric Blakey, The Florida Phosphate Industry: A History of the Development and Use of a Vital Mineral. (Cambridge, Mass., 1973), 24, http://hdl.handle.net/2027/uc1.b4410236.

[6] Blakey, 35.

[7] Blakey, 39.

[8] Kristrina A. Shuler and Ralph Bailey, “A History of the Phosphate Mining Industry in the South Carolina Lowcountry” (Mount Pleasant, South Carolina: Brockington and Associates, Inc., 2004), 40, http://nationalregister.sc.gov/SurveyReports/hyphosphatesindustryLowcountry2SM.pdf.

[9] US Census Bureau, “1880 Census: Report on the Valuation, Taxation, and Public Indebtedness in the United States, as Returned at the Tenth Census” (US Census Bureau), plates I and VI, accessed October 29, 2020, https://www.census.gov/library/publications/1884/dec/vol-07-valuation-taxation.html.

[10] Shepherd W. McKinley, Stinking Stones and Rocks of Gold: Phosphate, Fertilizer, and Industrialization in Postbellum South Carolina (Gainesville: University Press of Florida, 2014), 9.

[11] Shick and Doyle, “The South Carolina Phosphate Boom and the Stillbirth of the New South, 1867-1920,” 2.