An Approach to West Virginia's Economic History
By Paul Salstrom
Local "subsistence-barter-and-borrow" systems, based mostly on voluntary reciprocity, were brought to West Virginia by its earliest white settlers. When heavy industrialization began in West Virginia (about one hundred years ago), these traditional economic systems did not cease to function. Their continuation subsidized the state's industrialization. These systems have been called "household economy," however, they may more accurately be described as systems of exchange or distribution rather than simply systems of production. These local systems have carried on production largely through labor-intensive subsistence farming, and their methods of exchange have consisted mainly of barter and borrowing.
By 1726, white settlers began filtering into the northern part of the Shenandoah Valley, including West Virginia's eastern panhandle. The overall population of the thirteen colonies burgeoned from a mere 630,000 in 1730 to about 2,150,000 by 1770, and this unprecedented growth propelled many thousands of settlers into the Shenandoah Valley.1 By the 1740s, the eastern panhandle supported the minor industries of blacksmithing and grist milling, as well as an iron furnace which produced pig iron.2
In the 1730s, settlement began along the South Branch of the Potomac River and in the next decades proceeded into the southeast, into the Greenbrier River Valley and other fertile valleys which somewhat resembled the Shenandoah.3 Pioneers also settled along West Virginia's north-central boundary with Pennsylvania, which was then ill marked and disputed, and finally, in the 1760s, settlers reached its northwestern boundary along the Ohio River and some of its tributaries, such as the Kanawha.
In all of these frontier zones confusion reigned, particularly in the Ohio Valley. Despite the founding of the ambitious Ohio Company of Virginia in 1748 and the departure of French troops by 1759, it was not until almost 1770 that George Washington and other speculators gained secure ownership of any Ohio Valley lands.4 Then in 1774, Virginians narrowly defeated Shawnees at Point Pleasant and this victory helped open the way for white settlement along the Ohio River. The immediate onset of the Revolutionary War distracted George Washington and some of his fellow speculators from their western affairs, but it did not deter the westward push of thousands of settlers.
Many of these pioneers achieved their livelihoods through a combination of stock-raising and farming. Before the Revolution, cattle farmers along the South Branch of the Potomac River were also growing corn to fatten their cattle before driving them to markets in eastern cities such as Alexandria, Baltimore, and Philadelphia. A consignment of such stall-fed South Branch cattle was sold near Pittsburgh as early as 1761 to help provision British and American troops during the French and Indian War. Most cattle at that time evidently weighed less than four hundred pounds, but by 1785, the weight of South Branch cattle began increasing due to the importation of several breeding bulls from Britain.5
Regardless of how much of their output they were able to sell, most early settlers were dependent for their economic security on what they called a "competency," the use of sufficient productive property and access to sufficient land or other natural resources, to allow a family to enjoy a comfortable living standard.6 Trapping or hunting deer and other fur-bearing animals contributed to many families' competency. Although major exports of skins and pelts from West Virginia's far northern counties such as Preston ended during the 1820s, they continued strong through the 1850s from Braxton and other central counties. In the southwest, pelts were still being exported in bulk from Huntington as late as the 1870s.7 Ginseng also continued to be a major export from many parts of West Virginia well into, and from some parts throughout, the 1800s.8
Pioneer families certainly did not object to exporting their farm or forest products to help them maintain their competency. Prior to the 1840s, terms of trade were balanced between West Virginia and the rest of the United States. Until productivity rates elsewhere in the nation began to outstrip West Virginia's productivity rates, the exportation of West Virginia products was not the cause of impoverishment. Since the 1840s, the North's productivity rates have increasingly surpassed West Virginia's, resulting in an "unequal exchange" between the two. This was particularly true after the expansion of railroads. Between 1850 and 1880, railroad mileage in West Virginia increased from less than two hundred to almost seven hundred miles. Railroads made it easier to export heavy and bulky goods such as timber and coal out of West Virginia, and more feasible to import food and finished manufactured products. By the 1870s, according to one scholar, Midwestern farm products were pouring into West Virginia by rail "in such huge amounts and at such low prices that local producers were often forced out of their own [local] markets."9
Among the state's manufacturing enterprises that were doomed by the arrival of railroads was north-central West Virginia's iron industry. The more highly capitalized outside iron makers, who in the 1850s began to use strip-mined iron ore brought by boat from Michigan's upper peninsula, captured the local markets. Thanks to the Great Lakes water route, Ohio and Pennsylvania iron makers could import Michigan, and later Minnesota, iron ore cheaper than could north-central West Virginia's iron makers.
This unequal exchange is measured in the amount of time and work required to produce the same amount of market value, to produce an equivalent axe, for example, or an equivalent bushel of corn. Economist Donald R. Adams in a major new statistical study finds that, even before the Civil War, West Virginia's farm productivity was probably already growing more slowly than farm productivity in the rest of the United States.10 Less work-time was required in the North's industrial centers and on midwestern farms to produce the same market value that in West Virginia still entailed a great deal of work-time to produce. When transportation into West Virginia became sufficiently streamlined to deliver outside products cheaply to West Virginia's markets, the work-time of West Virginia laborers was automatically cheapened in average market value.
The disparity between the cost of West Virginia and midwestern farm products occurred dramatically. Between 1850 and 1880, mechanization leapt forward on midwestern farms while on West Virginia farms it did not. In 1850, the average value of farm implements and machinery per farm stood at $82.53 in the Midwest and at $65.24 in West Virginia. By 1880, the Midwest value had risen to $121.60, while the West Virginia figure fell to $43.07.11 That translated directly into a widening productivity gap between midwestern and West Virginia farms, which in turn lowered the income of West Virginia farm families competing with Midwestern farm families to supply West Virginia's food markets. As the price of corn from the Midwest fell, for example, West Virginia's corn growers had to sell their produce cheaper or fail to sell it. This also lowered the "transfer wage" that induced West Virginia farmers to accept part- or full-time work, which in turn led to lower wages for many of West Virginia's wage workers (lower than the wages of Midwestern workers).12
Despite West Virginia's increasingly lagging productivity rates after 1840, there nonetheless remained at least two ways for West Virginians to avoid impoverishment. One was to make the state a financial center, a sort of Switzerland of North America. No analytic financial history of West Virginia has ever been published, so only in a general way do we know how the state failed to become financially independent.13
The second means to avoid impoverishment was to maintain a competency by keeping family farms of sufficient size to sustain themselves without much recourse to buying or selling in the market. Families supported themselves through a mixture of self-sufficiency and moneyless exchange within local neighborhoods. In fact, rural West Virginia has always been pervaded with local bartering and borrowing networks operating outside both the market and money economies. Economic anthropologist Rhoda H. Halperin, studying similar networks in present-day Kentucky, describes the system as an "informal economy."14 Throughout West Virginia's history, rural families have practiced a give-and-take with each other that was not based on legal contracts or even steadfast agreements, but on voluntary reciprocity. In practice, families performed favors for neighboring families which were generally not repaid until a time of mutual convenience for both. Usually no money changed hands, although rough monetary values were generally assigned, at least in people's private calculations, to keep track of the value of the goods and services exchanged. Until the early 1900s, money was so scarce in most of West Virginia that an attitude of voluntary reciprocity perforce had to undergird almost everyone's economic well-being.
Moneyless bartering and borrowing networks helped many West Virginians maintain their competency. Subsistence farming, bartering, and borrowing have composed the fabric of thousands of local economic systems in rural West Virginia, systems that still exist in many areas. A historical examination of these local systems reveals that the outside context within which they operated changed over time. In the numerous cases where families took wage- earning jobs while continuing subsistence farming, as well as bartering and borrowing, the combined income sources helped them only temporarily. In time, it tended to impoverish them.
Subsistence-barter-and-borrow systems didn't require a family to own land or resources, but both had to be readily available, for sharecropping perhaps, or as part of some other exchange. However, as West Virginia's population increased, arable land grew scarce and an ever-increasing population had to supplement its subsistence-barter-borrow income with other sources. Until the 1880s, major new farming frontiers further west drew many farm families out of the state.15 Yet West Virginia's population continued to swell, growing 39.9 percent in the 1870s and 23.3 percent in the 1880s.16
By the end of the 1880s, thousands of West Virginians began turning for income to the state's newly opening coal mines. Most of the miners' families could still partially support themselves from the land or from land-based networking. Therefore, West Virginians were willing to accept lower wages than northern miners demanded. Between 1897 and 1909, West Virginia's average coal miner earned only two-thirds to three-quarters as much as the average coal miner in the United States as a whole for working at least the same number of hours.17 The subsistence farming and informal networking which the families of most West Virginia coal miners continued to practice added up to an immense grassroots agricultural subsidy to the state's coal industry. Without this local subsistence economy, far less mining would have been economically feasible.
Looking back over this sequence of events it is evident that, two hundred years ago, most West Virginians were relatively prosperous farmers, and many were entrepreneurs. One hundred years ago, however, many West Virginians became coal miners or adopted other wage work in an effort to forestall impoverishment. The trend toward wage labor did not bring an end to rural grassroots economic systems. Instead, the rising capitalist relations of exchange meshed with the traditional practices of subsistence farming, bartering, and borrowing. Capitalistic relations were characterized by contracts, such as labor contracted in exchange for wages, while the traditional community relations continued to be based on voluntary reciprocity.
The pace of industrialization in West Virginia accelerated in the 1880S and increasing numbers of farm families who found themselves growing poorer chose to stay in West Virginia rather than migrate west, where enticing opportunities were fast diminishing. Their primary option was to supplement their income through wage work. The wages offered by coal operators were usually low in West Virginia, but were still attractive because they could be combined with farming income to increase temporarily the living standard of farm families.
Many of the mountain miners' families did not initially relocate to the coal camps, but those who did generally continued to garden and raise stock. Writing of Kanawha County in 1896, a touring organizer for the United Mine Workers reported,
"there does not exist the hunger and suffering here that is found in [other coal fields]. . . . Every spot of ground seems to have received attention from the plow or spade, the houses resemble the homes of the market gardener. . . . This explains their comparatively comfortable position. They raise all the vegetables that they require and this assures them that the wolf shall be kept from the door."18
As they entered the mines, West Virginia farmers probably reflected little about their new dependence on outside forces beyond their control. Many of them viewed mining as a temporary expedient, a mere phase in their progression toward a state of landed competency which they hoped to someday maintain without the need for further wage work.
Gradually, however, the economic system of the employers prevailed, trapping many "temporary" industrial workers into a cycle of wage dependency. This cycle resulted from a ruthlessness inherent in capitalism, and the self- defeating factors within the local subsistence-barter-borrow systems. Engrossment of land and resources by capitalists cannot be denied, but such engrossment merely hastened a decline many farm families inflicted upon themselves by combining their traditional subsistence farming with wage labor. The labor-intensive nature of farming necessitated large families with more children than the land could support. Eventually, insufficient land remained to provide a competency for all those adults whose labor on the land as children had been required. The continuation of this natural cycle resulted in ever-increasing population juxtaposed with ever-decreasing acres of arable land.
Given adequate land, however, West Virginia families engaged in subsistence farming full time could have remained virtually independent of economic forces beyond the region. While these full-time subsistence farm families were rarely self-sufficient as separate households, they had access to more than the animals and produce they raised. The family household got by, and often quite prosperously so, through a combination of subsistence farming and a prodigious amount of barter and borrowing of both objects and labor.
These exchange activities did not happen with equal frequency between all residents of a locality. Instead, they flourished primarily within what Appalachian sociologists call "family groups." As defined by an eastern Kentucky study, a family group consisted "of two, three, or more family- households that were particularly solidary and bonded together by strong ties of mutual friendship, and frequent visiting exchanges, as well as by ties of kinship. These were primary groups of siblings' families or of siblings and their parental families." Beyond these family groups, there existed "little cooperation in common tasks for the good of the whole neighborhood. Few interfamily economic relationships, such as borrowing farm implements or exchanging labor, existed."19 A similar organization of family groups, accompanied by a comparable lack of community-wide cooperation, was documented by a study of Pendleton County.20 Nonetheless, some of the bartering and borrowing did extend beyond family groups.
Folkways can tell us much about the non-monetized economic exchanges of rural West Virginia. If someone possessed an implement that was not in use, another person could arrange to borrow it or request help with the work he or she intended to do. It was implied that the borrower would later repay the favor by lending something in return, volunteering labor when necessary, or contributing other goods at some mutually convenient time. Within this context, a relatively poor farmer might contribute mostly labor while a relatively prosperous farmer might more readily lend equipment.
Urbanites might suppose that the workings of such subsistence-barter-and- borrow systems were sustained merely by custom or tradition. However, the sustaining factor was short-term economic benefits. Within this framework, several households had access to every tool possessed by any one of them. Today, tools, farm implements, and other productive goods are still heavily borrowed and traded throughout most of rural West Virginia. Within that exchange context, a tool or implement is valuable over and above its productive value; it also holds exchange value. In financial terms, this can be viewed as a system of leasing. It could also be described as selling objects piecemeal to people who, through their return favors, share in paying amortized attrition costs which otherwise would prove too costly for an object's nominal owner.
Voluntary reciprocity has not been studied as an economic phenomenon in West Virginia. Money and money-equivalents, "in-kind" values, cannot accurately measure wealth or income in a money-poor but barter-and-borrow-rich environment. Until a method is devised that can render subsistence-barter-and- borrow systems quantitatively comparable to the money system, there is little ability to estimate the real income or wealth of a state like West Virginia, even at the present day. Ethnographic comparisons can be made but meaningful economic comparisons between voluntary reciprocity and monetized exchanges remain questionable. Sociologists will doubtlessly continue puzzling over the supposedly "self-limiting" attributes of rural West Virginians' behavior.
Evaluations of this "self-limiting," or perhaps "selfless," behavior have accentuated the negative. A nineteenth-century mining engineer described the Appalachian mountaineers as "supremely unconscious of their own misery."21 Likewise, a socialist economist declared in 1940 that "extreme poverty comparable to that of the poorest sharecropper, is all that the `self- sufficing' farm can provide."22 No less a scholar than Rupert Vance has similarly confused ways of life with standards of living. Writing in 1962, Vance noted that during the 1930s, the New Deal's "standards made at least half the population in certain Appalachian areas eligible for relief" and that this "introduced the people to the money economy and increased their wants. The depression, then," he continued, "actually served to raise standards for many families in the region who lacked contact with the American standard of living." Vance hastened to add that the Depression "left the region with a high rate of relief [welfare payments] and a low basis for economic security," but let stand his implicit equation of "the American standard" with a raised standard and not merely with "the money economy."23
A recent judgement by Jack Temple Kirby seems equally uncritical. By 1960, Kirby says, "millions of acres of [Appalachian] land were abandoned. The shabby remains of semisubsistence life on remote family farms were abandoned, too, or mercifully executed at last by the manifold outside forces of the commercial world, its demands of efficiency and specialization, and the cash nexus." Yet Kirby mentions no viable alternative to such "semisubsistence life on remote family farms." He explicitly disqualifies the most chosen alternative: "Tantalizing hopes of stable work in industries old and new were dimmed, if not dashed, by the vagaries of the world marketplace."24
In two crucial respects, West Virginia's local subsistence-barter-and-borrow systems depend upon the monetized economy. First, their barter aspect is related to the market price levels. As Karl Polanyi points out, "unless [a market] pattern is present, at least in patches, the propensity to barter will find insufficient scope: it cannot produce prices. . . . The principle of barter depends for its effectiveness on the market pattern."25 Secondly, West Virginia's local systems rely on the market for an often small but nonetheless crucial infusion of money with which farm families purchase some of their implements and other productive goods, or buy the few consumptive goods that are not native to their neighborhoods.
Today's scale of dependence on corporate employers and government subsidies in rural West Virginia has weakened but not obliterated the state's subsistence- barter-and-borrow systems. The many social and cultural consequences of this phenomenon have been studied by other writers.26 The fact that voluntary reciprocity no longer saturates rural life can be expressed in social and cultural terms, but only an economic analysis will explain why it has waned.
By analyzing this economic transition from the West Virginia perspective (the micro) and then proceeding outward to the larger United States market economy (the macro), one may better understand the effects of corporate and government intrusion on local subsistence-barter-and-borrow economies. Unfortunately, few writers have adopted this in-state perspective, even when studying West Virginia as an economic unit. There remains the tendency to ask how West Virginia has affected the rest of the United States, rather than ask how the United States has affected West Virginia. Only when the latter question is posed can policies be formulated that will allow the state to benefit rather than suffer from the national context surrounding it.
1. U.S. Bureau of the Census, Historical Statistics of the United States: Colonial Times to 1970, two parts, bicentennial edition (Washington, DC: GPO, 1975), II: 1068.
2. Millard Kessler Bushong, Historic Jefferson County (Boyce, VA: Carr Publishing Co., 1972), 82 and ff. Further details on economic life appear in Robert L. Skidmore, "A Social History of the Eastern Panhandle of West Virginia to 1810" (Master's thesis, West Virginia University, 1953), and William D. Theriault, A History of Eastern Jefferson County, West Virginia (Bakerton: Jefferson County Oral and Visual History Association, 1988).
3. Albert H. Tillson, Jr., Gentry and Common Folk: Political Culture on a Virginia Frontier, 1740-1790 (Lexington: Univ. Press of Kentucky, 1991), 5-17, 25, 33.
4. Also active in western Virginia were the Greenbrier Company, Indiana Company, and Vandalia Company.
5. Richard K. McMaster, "The Cattle Trade in Western Virginia, 1760-1830," in Appalachian Frontiers: Settlement, Society, and Development in the Preindustrial Era, ed. by Robert D. Mitchell (Lexington: Univ. Press of Kentucky, 1991). For other details see Richard K. McMaster, The History of Hardy County, 1786-1986 (Salem: Walsworth Printing, 1986), chs. 3 and 6.
6. For an in-depth look at rural "competency" see Daniel Vickers, "Competency and Competition: Economic Culture in Early America," William and Mary Quarterly, 3rd series, 47(January 1990): 3-4, 13-29.
7. On Preston County see Reardon S. Cuppett, "Harrison Hagans and His Times" (Master's thesis, West Virginia University, 1933), 16. Hagans owned a network of stores in early Preston County. The prices he paid for various pelts are also listed on page 16. On Braxton County see Festus P. Summers, Johnson Newlon Camden: A Study in Individualism (New York: G. P. Putnam's Sons, 1973), 59-62. On pelts being shipped still later from Huntington see Charles Henry Ambler, West Virginia: The Mountain State (New York: Prentice-Hall, 1940), 453. Most pelts shipped from Huntington were no doubt gathered further south in the Guyandot River and Big Sandy River watersheds.
8. On the seventeenth-century ginseng trade in southwestern West Virginia see Edwin Albert Cubby, "The Transformation of the Tug and Guyandot Valleys: Economic Development and Social Change in West Virginia, 1888-1921" (Ph.D. diss., Syracuse University, 1962), 127-31.
9. James Morton Callahan, History of West Virginia, 3 vols. (Chicago: The American Historical Society, 1923), 1:197; U.S. Bureau of the Census, Report on the Agencies of Transportation in the United States, 1880 (Washington: GPO, 1883), 307; William D. Barns, The West Virginia State Grange: The First Century, 1873-1973 (Morgantown: Morgantown Printing and Binding, 1973), 19. See also Nat T. Frame, "West Virginia Agricultural and Rural Life," (unpublished ms., West Virginia and Regional History Collection, West Virginia Univ.), part 1:15. This crucial question of food imports into West Virginia invites more research to determine its extent in each decade since it began.
10. Donald R. Adams, Jr. "Prices, Wages and the Standard of Living in West Virginia," Journal of Economic History 52(March 1992): 206-16.
11. U.S. Bureau of the Census, Seventh Census of the United States, 1850, 273-74; U.S. Bureau of the Census, Compendium of the Seventh Census, 1850, 169, 322, 328; and U.S. Bureau of the Census, Report on the Productions of Agriculture, 1880 (Washington: GPO, 1883), 4. Between 1850 and 1880, consumer prices inflated 16 percent, making a real fall of 47 percent in the value of farm implements and machinery on West Virginia farms.
12. See Jerry Bruce Thomas, "Coal Country: The Rise of the Southern Smokeless Coal Industry and Its Effect on Area Development, 1872-1910" (Ph.D. diss., University of North Carolina, 1971), 200.
13. Basic sources for a financial history of West Virginia include the annual reports of the state's Bank Examiner, which began in 1891. In 1901, they became the annual reports of the state's Commissioner of Banking. For the national context see Louis A. Ruffner, Money and Banking in the United States (Boston: Houghton-Mifflin, 1930). Ruffner was a West Virginia University economics professor.
14. See Rhoda H. Halperin, The Livelihood of Kin: Making Ends Meet "The Kentucky Way" (Austin: Univ. of Texas Press, 1990). For a summary see Halperin, "The Kentucky Way: Resistance to Dependency upon Capitalism in an Appalachian Region," in Appalachia: Social Context Past and Present (Dubuque: Kendall/Hunt, 1991). For West Virginia examples see Kate Long, "Barter Economy Serves Cash-Poor Residents Well," Charleston Gazette, 21 October 1991.
15. In the 1870s and 1880s, according to William D. Barns, "as many as twelve or even thirty families might depart in a single month" from some West Virginia counties. Their primary destinations were Kansas and Nebraska, but many others went to Indiana, Iowa, Missouri, Arkansas, and Texas. Some went to California and Oregon. Yet, Barns added, "West Virginia's total population continued to increase." Barns, The West Virginia State Grange, 21.
16. U.S. Bureau of the Census, Compendium of the Eleventh Census, 1890, I: Population, 45. Population figures county-by-county are also given there for 1790-1890. The county-by-county population figures for 1890-1930 are given in the Compendium of the Fifteenth Census, 1930, I: Population, 1165. Later editions of the census give later county-by- county population figures. The boundary lines for all U.S. counties in each census year from 1840-1980 are drawn in Thomas D. Rabenhorst, Historical U.S. County Outline Map Collection, 1840-1980 (Baltimore: Dept. of Geography, Univ. of Maryland, Baltimore County, 1984).
17. Thomas, "Coal Country," 200, table.
18. P. M. McBride, letter to the editor, United Mine Workers Journal, 28 May 1896, quoted in David Alan Corbin, Life, Work, and Rebellion in the Coal Fields: The Southern West Virginia Miners, 1880-1922 (Urbana: Univ. of Illinois Press, 1981), 34.
19. Harry K. Schwarzweller, James S. Brown, and J. J. Mangalam, Mountain Families in Transition: A Case Study of Appalachian Migration (University Park: Pennsylvania State Univ. Press, 1971), 40.
20. John Craft Taylor, "Depression and New Deal in Pendleton: A History of a West Virginia County from the Great Crash to Pearl Harbor, 1929-1941" (Ph.D. diss., Pennsylvania State University, 1980), 124-27, 133. 21. George Fowler, "Social and Industrial Conditions in the Pocahontas Coal Field," Engineering Magazine 27(June 1904): 386-87, quoted in Ronald D Eller, Miners, Millhands, and Mountaineers: Industrialization of the Appalachian South, 1880-1930 (Knoxville: Univ. of Tennessee Press, 1982), 166.
22. Anna Rochester, Why Farmers Are Poor: The Agricultural Crisis in the United States (New York: International Publishers, 1940), 68-69.
23. Rupert B. Vance, "The Region: A New Survey," in The Southern Appalachian Region: A Survey, ed. by Thomas R. Ford (Lexington: Univ. of Kentucky Press, 1962), 5.
24. Jack Temple Kirby, Rural Worlds Lost: The American South, 1920-1960 (Baton Rouge: Louisiana State Univ. Press, 1987), 111.
25. Karl Polanyi, The Great Transformation (Boston: Beacon Press, 1957), 56.
26. For a summary of this ethnological literature see Dwight Billings, Kathleen Blee, and Louis Swanson, "Culture, Family, and Community in Preindustrial Appalachia," Appalachian Journal 13 (Winter 1986): 154- 57, 161-67.
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