The Man Who Built The Modern South Demanded Big Role For Government

          

R.J. Reynolds cowed the city of Winston, N.C., into putting down rail lines to benefit manufacturers.

By BARTON SWAIM

Richard Joshua Reynolds, born in 1850 in Patrick County, Va., reached manhood just after the Civil War had concluded. By his mid-teens he was doing backbreaking work on his father's tobacco farm and traveling throughout the woods of southwest Virginia peddling chewing tobacco to farmers. In 1874 or 1875, Reynolds headed south to the tiny but rail-connected village of Winston, N.C., and there he stayed, literally putting Winston on the map—the town became Winston-Salem when Reynolds, by then the head of one of the largest companies in the region, persuaded the two towns' officials to consolidate in order to attract investment. A few years and a great deal of wealth and capital later, when the tobacco giant Buck Duke temporarily subsumed his company under the American Tobacco Co., Reynolds refused to move his headquarters to New Jersey.

Katherine and R.J. Reynolds

By Michele Gillespie
Georgia, 381 pages, $32.95

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University of Georgia Press

RJ's Room:The tobacco stemming room at the Reynolds Tobacco Co. in 1938.

That, as Michele Gillespie shows in "Katherine and R.J. Reynolds RAI +0.09% : Partners of Fortune in the Making of the New South," was just one way in which Reynolds resisted the corporatization of American manufacturing. His ledger books are also full of gifts to churches and civic groups, both black and white, and he was famous for encouraging his workers to approach him for help. Ms. Gillespie calls this "paternalism" and points out that Reynolds's concern for his employees had as much to do with his own interests as any moral concern.

The book is partly a biographical study of the extraordinary match made when Reynolds, age 55, married a well-heeled 25-year-old named Katherine, then working as a secretary at the company in Winston. Katherine turned both her husband and his corporate empire in a philanthropic direction, and Ms. Gillespie uses Katherine's life and work as a kind of prism through which to view the prejudices and predilections of Southern culture in the 1910s and 1920s.

The author, a history professor at Wake Forest University in Winston-Salem, also offers an impressively researched essay on the emergence of the post-bellum Southern economy. If the book is overlong and occasionally gets bogged down in a surfeit of material, Ms. Gillespie has nevertheless produced a rich and original history of a misunderstood period, one drawn almost entirely from primary sources.

Katherine and R.J., Ms. Gillespie suggests, tacitly accepted the premises of Southern white racism. Yet when the North Carolina Supreme Court heard a case hinging on the legality of racial segregation—a black man had been arrested for trying to build a house in a white neighborhood—Reynolds used his connections to influence the decision in the defendant's favor. Why did he do it? Because, Ms. Gillespie argues, many of Reynolds's black laborers would have packed up and headed north if the state went much further in humiliating them.

Maybe so. But there is an important point here, and Ms. Gillespie misses it. The profit motive can compromise all kinds of human endeavors, but it also has a way of undermining bigotries.

Another aspect of Reynolds's legacy that Ms. Gillespie deals with only obliquely is his approach to attracting investments from other, primarily Northern, moneyed men. In Reynolds's view, this could only be done with proactive governmental involvement. It wasn't enough to keep taxes low and regulatory burdens light; government had to provide infrastructure. As early as 1879, Reynolds cowed the city of Winston into putting down rail lines for the benefit of the city's manufacturers. He argued that this would benefit the whole community.

True enough, and over the past century Southern states have mastered the art of "economic development" by using precisely that logic. For decades, Dixie has attracted large companies by offering multi-million-dollar "incentive" packages to private enterprise. Yet Southern states still sit at or near the bottom of every relevant economic gauge. Why? Because corporate welfare doesn't fall from the sky—it comes from taxpayers.

This, on the evidence of Ms. Gillespie's book, is one of the great man's unintended legacies. She is right to see in the Reynolds' lives the beginnings of what the American South would become—for good and ill.