George L. Carter - Mountain Capitalist - Part 1 of 2

By Sebert L. Sisson © 1989

Issue: October, 1989

George L. Carter - January 10, 1857 - December 30, 1936.In the late 1800's and early 1900's the development of the natural resources in southwestern Virginia, eastern Tennessee, southern West Virginia, and eastern Kentucky led to the rise of complex business empires. Many men, mostly from outside the Appalachian region became famous as entrepreneurs, coal barons, and railroad builders. However, one man who built such an empire and who, more than any other man, brought industrial development to these areas, is today virtually unknown even in the very places he once owned and developed. Not an "outsider" but a man who was born and reared in southwestern Virginia, his business career lasted more than fifty years and generated millions of dollars and thousands of jobs.

George Lafayette Carter was born January 10, 1857 near the town of Hillsville in Carroll County, Virginia. He was the oldest of nine children of Walter Crockett and Lucy Ann Jennings Carter. George L. (as Mr. Carter was known) grew up under trying circumstances where he was forced to assume much of the responsibilities in providing a living for the family. His father was a disabled Confederate veteran who had served as a captain in the local militia and had sustained injuries which led to the amputation of one leg. Five of his brothers and sisters died before reaching age twenty. Three sisters lived to adulthood. Bertie married Marshall W. Doggett, a Presbyterian minister who served a number of churches in the Kingsport, Tennessee area. Ruth married J. Fred Johnson, who was later closely associated with Carter in his many business endeavors. Lara June married Robert G. Wilkinson and remained in Hillsville where a number of their descendents now live.

At age of sixteen, George L. Carter began his first job as a clerk in Johnson's General Store in Hillsville (the store belonged to the family of J. Fred Johnson). He earned fifty cents a week plus board. He was quoted in later years as saying that one of the greatest thrills of his early life was when he earned enough money working at this job to purchase his own horse and saddle.

Mayetta Wilkinson Carter - February 24, 1871 - January 10, 1957.In 1877, Carter was employed by the Wythe Lead Mine Company in Austinville, Virginia on the New River (Wythe County, Virginia). Here he held positions as bookkeeper, buyer and later manager of the company. The lead mine operation needed considerable capital improvements at that time and the owners did not think they could get adequate financing. The Board of Directors authorized Carter to sell the plant and mining land at a specific price. Realizing that should he be successful in selling the property, the new owners would need considerable ore acreage of adjacent land for future expansion, Carter immediately secured options on additional mining land in the area. He was assisted in financing the deal by his banking friend and future father-in-law, James Wilkinson of Hillsville.

Surprisingly, Carter did succeed in closing the sale of mine holding to the New Jersey Zinc Company for some $10,000 above the quoted price. He also sold them all the land and mineral rights that he had under option in the area. This was Mr. Carter's first successful business venture, and it was the foundation upon which he was to build his empire.

George L. Carter was familiar with existing iron mining and charcoal fired furnaces along the New River in Wythe and Pulaski Counties many of which were not doing well financially. Carter became associated with George T. Mills who was building the Dora Iron Furnace in Pulaski, Virginia. When Mills died before the furnace was completed, Carter moved from vice president and manager to president of the operation.

While at Dora Furnace, Carter developed a plan whereby several of the small dying charcoal fired furnaces merged into one operation. After convincing a number of the companies to join him, he immediately borrowed $400,000 against the property using the newly combined venture as collateral and developed a new quality iron known as Dora Pig.

It was obvious in a short time that the price of coke then being processed and transported from the Pennsylvania coal fields to the Dora furnace facilities in Pulaski had become one of the major costs in the operation. Needing less expensive coal to fire his furnace, Carter began exploring coal veins in southwestern Virginia and southern West Virginia. Because of the availability of rail service, Carter opened his first mine at Crane's Nest on Tom's Creek in Wise County, Virginia. In a short period he had established a second modern mining facility there and was operating 700 coke ovens. About the same time, his company purchased the Crozier Furnace in Roanoke, Virginia and combined it with the Dora furnace and Tom's Creek operations. In 1898 the new company was named the Carter Coal and Iron Company.

The Carter Coal and Iron Company moved its headquarters to two rooms of the State and Moore Building in Bristol, Virginia. The company made large land purchases in the undeveloped, mineral wealthy mountain regions including approximately 20,000 acres near Middlesboro, Kentucky.

Seeking additional capital for expansion, Carter went to New York City where he found backing from the firm of Moore and Schley. That company "advanced him $10 million to exploit the mineral wealth of his region" and Carter began his collaboration with northern financiers that was to continue for many years.

Realizing that the new enterprise would require more capital, George L. Carter, Ben L. Dulaney, and John H. Caldwell organized the Virginia Iron, Coal and Coke Company (VICCC) in 1899. The twelve-million dollar company of which Carter was the president had its central offices in Bristol, Virginia. It generated industrial growth in the Bristol area and brought a number of plants and businesses to the community.

The Virginia Iron, Coal and Coke Company under Mr. Carter's leadership acquired the iron mills of the Crescent Horseshoe and Iron Company and the Radford pipe works, built iron furnaces at Max Meadows and Ivanhoe, Virginia, and a tool plant in Middlesboro, Kentucky. To reach these operations, the company acquired control of the 136-mile Virginia and Southwestern Railroad extending from Big Stone Gap in Virginia through Bristol to Maymead, Tennessee. The Virginia Iron, Coal and Coke Company purchased 150,000 acres of coal mining land in southwestern Virginia plus 60,000 acres of iron mining land including much of the iron deposits along the New River, Cripple Creek, and Little Reed Creek in Wythe County; along the New River in Pulaski County; and the great Gossan Lead Mine and the Betty Baker Mine in Carroll County.

On April 9, 1895 when George L. was thirty-eight years old, he married Mayetta, the twenty-four year old daughter of James and Lillian J. Reeves Wilkinson of Hillsville and in June, 1896 their only son, James Walter, was born.

The Carters moved from Pulaski, Virginia to Bristol Virginia around 1900 and bought a house at 210 Solar Street. While millions of dollars were generated by Carter's business, he and his wife remained private people taking part in no social organizations and activities. Most of his business was done through his agents and the many attorneys Mr. Carter kept on staff. His real estate holdings were extensive, and at one time he owned about one fourth of the total area of present day Bristol. His business included several banks, flour mills, and the Bristol Herald Courier among others. In 1901 his income from the VICCC salary alone was listed at $15,000. His financial standing allowed the family the luxury of a nurse to care for their son and a cook for the family.

In March 1901 the Virginia Iron, Coal and Coke Company defaulted after the discovery of a higher quality iron ore in the Great Lakes area of the country. Carter could have lost a great amount of money but he filed suit and Judge A.A. Phlegar, Carter's friend, was appointed to receivership in the case. After a hard fought battle, Carter received $500,000 for his portion of the business.

Even before the collapse of the Virginia Iron, Coal and Coke Company, Carter had begun what would be his greatest undertaking - the building of the Carolina, Clinchfield, and Ohio Railroad. He originally planned for the line to serve the rich Clinchfield coal fields with terminals in Chicago in the northwest and in Southport, North Carolina on the Atlantic seaboard at the southern end, but that scheme was too ambitious even for Mr. Carter. The final proposal was to build north from Johnson City to Elkhorn City, Kentucky and connect there with the Chesapeake and Ohio Railroad and south from Johnson City to connect with the Southern Railroad at Spartanburg, South Carolina. The terrain was rugged and mountainous and power machinery was not yet available. Most of the work was to be done by men and animals. Drilling the holes for dynamiting inside the tunnels and the cuts of right-of-way was done by hand. Upon its completion the railroad would cover about 275 miles, have some 50 tunnels, numerous trestles and viaducts.

Conservatively, the project would require some fifty million dollars and Carter again turned to northern financiers. He secured the backing of a group of investors who came to survey the proposed route, several of whom were later associated with the building of Kingsport, Tennessee. The group included: Thomas Fortune Ryan, a Virginia native who had made a fortune in northern utilities; Norman B. Ream, director of U.S. Steel and an important financier in Chicago; W. M. Ritter of Columbus, Ohio, leading lumberman who later marketed most of the timber; James A. Blair, New York banker, whose son James A. Blair, Jr. was later active in Kingsport; Isaac T. Mann, a banker and financier of Bramwell, West Virginia; John P. and H.R. Dennis, New York bankers who were to play an important role in Kingsport; and George A. Kent of Bristol, chief locating engineer. In 1904 George L. Carter was authorized by the group to proceed with the venture.

Through his agents and attorneys Carter began making massive land purchases in connection with the building of the railroad. He bought some 350,000 acres of coal mining land in Dickenson and Buchanan Counties, Virginia. According to C. J. Harkrader's account, "Various sites for real estate development were considered including Marion, Altapass, and Spruce Pine, North Carolina; Erwin, Johnson City, and Old Kingsport, Tennessee; Clinchport and St. Paul in Virginia. Options on land would have to be obtained, if at all, before news of the railroad leaked out. Time was short so Carter made a hasty decision to make the first big strike at Kingsport. The plans for Erwin, Johnson City and elsewhere would have to wait." His dream of a large modern planned industrial city in the area of Old Kingsport got top priority.

Continued