CONTINENTAL GIN COMPANY The Second Twenty-Six Years

1926-1952

AT THE JANUARY 14, 1926 meeting no changes were made in directors or any of the officials. In 1925 some of the large stockholders had been considering selling their holdings. Parties in Chicago became interested in the purchase of the Company, provided a large majority of the stock well beyond the amount necessary for control of the company, could be secured. In the meantime, Ernest Woodruff, a prominent financier and banker of Atlanta, Georgia, whose family had been largely interested in the Company throughout the years, learned of the possibility of the sale of the controlling stock. He, with his associates, secured on February 4, 1926, a six-day option on the stock which was being offered, with the understanding that all stockholders would be given the privilege of selling at the same price. The option was exercised.

A directors meeting was called for February 25th and the following directors tendered their resignations: F. C. Gammons, J. B. Bell, S. 1. Munger, Jr., L. R. Munger and R. C. Munger. Elected in their places were: Thomas Elliott, J. N. Goddard, George W. Woodruff, Robert W. Woodruff and Thomas K. Glenn. L. R. Munger tendered his resignation as president and Thomas Elliott was elected to succeed him. The certificate of incorporation of the Company was amended with the principal place of business changed from Dover, Delaware, to Wilmington, Delaware. There was authorized the issuance of 100,000 shares of preferred stock at $100.00 par value, and 250,000 shares of common stock without par value. The Board of Directors ordered a call for a stockholders meeting to be held March 17, 1926, to ratify an amendment to the charter and to adopt new by-laws.

At the meeting on March 17th, due to no quorum, adjournment was made until March 31st; a meeting of the directors was called for the same date.

On March 31st the stockholders met and the amendment to the charter was ratified and new by-laws adopted. At this meeting L. R. Munger, M. P. Northington and F. E. Smith tendered their resignations as directors and the following were elected: W. C. Potter, Daniel B. Candler, J. S. Pevear and J. J. Goodrum, Jr.

The Executive Committee and Trustees of the Munger Benefit Fund resigned and were succeeded by Thomas K. Glenn, Thomas Elliott, A. W. Smith, Robert W. Woodruff and Daniel Pratt.

The charter was further amended and there was an authorization of the issuance of 60,000 shares of 7% preferred and 100,000 shares of common stock, $25.00 par value. This was to replace the 45,000 shares of stock in the old Company and the surplus that had accumulated. The old stockholders who had not signed an agreement for the sale of their stock, and those who had sold for cash, were offered the new stock, both preferred and common. This was on the basis of their holdings in the old Company, and any stock not exchanged was to be offered to the public. The new by-laws called for quarterly meetings instead of two each year.

The new office building was completed, and the general offices were moved from the Title Guarantee Building, where they had been located since 1903.

Thomas Elliott came to the presidency of the Company with fine mechanical engineering knowledge and experience. He began at once to investigate the needs of the sales organization and the manufacturing department for such changes as might reduce costs.

A directory of the new organization showed the following directors and officials:

Directors:

Thomas Elliott     J. S. Pevear     J. N. Goddard   George W. Woodruff     Daniel Pratt     C. R. Winship

A. W. Smith     Thomas K. Glenn     George Winship   Eugene Munger     Robert W. Woodruff     Daniel B. Caridler

A. L. Smith     J. J. Goodrum,     Jr. W. C. Potter

Officials:

Thomas Elliott, President.

George W. Woodruff, Assistant to President.

A. W. Smith, Vice President and Treasurer.

Daniel Pratt, Vice President and Manager at Prattville.

C. R. Winship, Vice President.

Daniel B. Candler, Vice President.

Wm. C. Shropshire, Vice President (Authority to sign stock certificates only).

N. W. Proctor, Secretary.

L. L. McCullough, Assistant Secretary (Authority to sign stock certificates only).

A. L. Smith, General Sales Manager. F. E. Smith, General Superintendent. J. A. Chapman, Assistant Secretary.

J. F. Humphrey, District Sales Manager, Atlanta.      W. M. Hurt, District Sales Manager, Birmingham.      H. W. Brooks, District Sales Manager, Memphis.     J. S. McAnulty, District Sales Manager, Dallas.     Walter S. Going, Manager of Export.

A. W. Merkel, Superintendent Birmingham factory.     J. A. Garthright, Superintendent Prattville factory.     J. A. McLin, Superintendent Memphis factory.     R. E. Wilson, Superintendent Dallas factory.   L. L. Perrine, Superintendent Atlanta factory.

At the June 3rd directors meeting, the Corporate Trust Company of America, Wilmington, Delaware, was made the legal agent for the Company, thus giving the Company a permanent address in Wilmington. The National Park Bank and the Guaranty Trust Company of New York, and the Exchange National Bank of Dallas, Texas, were made depositories.

A call was made for a meeting at Grove Park Inn, Asheville, N. C. on August 26th, at which meeting a majority of the board members were present, as well as Ernest Woodruff, who attended upon invitation. Reports were made by Thomas Elliott regarding the factory conditions, by George W. Woodruff as to finances, and A. L. Smith as to sales. At this meeting authorization was given to purchase a life insurance policy on the life of Thomas Elliott, President, in the amount of $200,000.00.

Later in the year the stockholders met in Atlanta in the Trust Company of Georgia Building to discuss domestication of the Company in Georgia. The domestication was approved and, in addition, the president was authorized to dispose of all real estate in Birmingham, other than the newly constructed plant and office building in South Avondale. Appraisals indicated the thirty-six acres with improvements in North Birmingham was valued at $90,000.00, the East Birmingham property at $120,000.00, and the Avondale property at $91,750.00.

Tools were still in the Machinery Improvement Department building at the East Birmingham plant and were being used, under the supervision of the president, for experimental purposes in an attempt to increase the efficiency of machinery being produced by the Company. During the summer of 1926 two demonstration outfits were built at the new Birmingham plant-one an air blast, and the other a brush outfit. Buildings for storing cotton, seed, etc., were also built in order that prospective customers might be brought to the plant and given a factory demonstration of ginning.

The 1926 cotton crop was the largest in history, which naturally affected sales and profits, which were the largest in the Company's history. This year was a forerunner to three prosperous years for the Company.

Since the money market was very favorable, at the first directors meeting in 1927 it was felt that the sixty thousand shares of 7% cumulative preferred stock could be refinanced on a better basis. A meeting of the stockholders on May 19th approved the redemption of the sixty thousand shares of 7% cumulative preferred stock and the issuance of fifty thousand shares of 6% cumulative preferred stock; the new issue to be exchanged for the old, share for share, and the stock not exchanged was to be called and paid for out of the Company's surplus.

With the banks in the small towns eager to make loans, many of the customers borrowed money in order to get a 5% cash discount on their purchases. This being the situation, the Company began to accumulate quite a sum of cash instead of notes receivable, in fact to such an extent that the funds were used in making call-loans through banking connections. At one time the Company had as much as two and one-half million dollars in call-loans.

In 1927 Walter S. Going, Export Manager, made a trip to India and reported sales prospects good in that territory, especially if the outfits already sold could be operated properly. He found many improperly operated and he was instructed to remain and train the operators of the outfits.

In 1928 N. W. Proctor was made treasurer of the Company; J. A. Chapman, secretary; N. W. Proctor, Jr., assistant secretary; A. L. Smith's title was changed from general sales manager to vice president in charge of sales; H. W. Brooks, district sales manager at Memphis, resigned; F. S. Middleton who had been his assistant, was made district sales manager; and B. W. Faust was made production manager.

In 1929 George W. Woodruff was made vice president and general manager. W. M. Hurt resigned as district sales manager of the Birmingham office, and was succeeded by W. S. Reynolds, his assistant.

In 1929 the Company was badly in need of increased warehouse space at the Birmingham plant, and this capacity was doubled at a cost of approximately $100,000.00.

During the three years Thomas Elliott had served as president a number of improvements were made in the line of machinery. The majority of these improvements were patentable and patents on them were secured. On presses, Mr. Elliott designed a steel bound press and also a special door lock. The breast of the Huller Gin was very heavy and was lifted by a lever. He changed this in order that the breast could be lifted easier by a device. The device was patented and used until later years, when a change was made for removing the breast from the roll box. He also designed and made quite a number of improvements on a Down Packing Press. He developed a drive for the vertical screw elevator. He also developed a Model Forty Condenser which reversed the usual direction of the Drum, and it has been in use continuously until the present time. The Company was a very heavy user of screw conveyors, and Mr. Elliott designed a machine for making this conveyor. He also designed and patented the Model Thirty Front.

There had been one weakness throughout the years on huller gins, in that the picker roll which threw the cotton against the saws, to be taken up into the roll box, would drop some locks of cotton, these going out with the hulls. This was a rather serious matter and for years attempts had been made to solve it in various ways, and the Model Thirty Front proved to be the answer. It was not only the answer to preventing any loss of cotton by the gin, but it became the foundation for the building of a Huller-Extractor-Feeder, which provided means for reclaiming cotton from the hulls before delivery to the gin. Several patents were taken out on the Huller-Extractor-Feeder.

A great loss was suffered in the fall of 1929 in the death of C. R. Winship of Atlanta, who had been a member of the Board of Directors since its organization in 1899. His keen business ability, foresight and good judgment made him a very important member of the Board.

At the first stockholders meeting in 1930 the officers were instructed to invest the surplus thereafter in high class securities rather than call-loans as had been done the previous year.

J. B. Campbell of Atlanta, was elected a director to fill the vacancy caused by the death of C. R. Winship, and C. J. Root was elected to replace J. J. Goodrum, Jr. who had died in 1929.

At the first directors meeting in 1930 Thomas Elliott asked to be relieved of the active management of the Company in order that he might devote more time to his personal affairs. He recommended to the Board that George W. Woodruff be

made president. His recommendation was accepted and George W. Woodruff was elected president. It was requested of Mr. Elliott that he remain as consultant for the Company. After giving his consent, Mr. Elliott was elected consultant.

George W. Woodruff had been educated as a mechanical engineer at the Georgia School of Technology, trained under his father in finances, and with four years experience as assistant to the president, vice president and general manager, he was well qualified to take over the presidency of the Company. During the four and one-half years which he served as president, the Company passed through the most critical period of its existence. The depression which had started in the fall of 1929 was increasing in 1930, and while sales held up fairly well, and also the price of cotton, yet before the summer of 1930 was over, there was the realization there would be very little, if any business, in 1931. A reduction was made in number of employees and several decreases were made in salaries and wages during the next two years, as badly as the Company officials regretted to do so.

By fall the Company realized a depression, which defied the strength and ingenuity of the industrial world, had settled like a pall and that it would be necessary to shut down almost entirely. Practically all the plants in Birmingham were closed already. The Community Chest was feeding those who were actually in need, and while the Company contributed liberally to the Community Chest, they were given a list of Continental employees' names and in addition a request was made that no employees be given assistance inasmuch as the Company would take care of them. The salaried employees who had jobs contributed to a Relief Fund and the Company added a like amount. A committee was formed with Miss Essie May Dodd, who was in charge of the First Aid Department, as chairman, with several of the foremen who knew the men and their conditions, and those who were in actual need were furnished fuel, clothes, shoes and food.

In October 1930 the Company lost Ralph E. Wilson, the Dallas superintendent, by death. He had been superintendent of the Dallas factory for more than twenty-five years. He was replaced by his assistant, H. F. Haslbauer, who had come to the Company after graduating from Texas A. & M. College.

During 1930 a suit was brought against the Company by the Bailey-Burruss Manufacturing Company of Atlanta, Georgia, claiming infringement of their patents by a machine that Thomas Elliott had designed for making a screw conveyor. When the suit finally came to trial, it lasted eight days and the judge's decision was short, as he stated: "I find that Mr. Bailey had no patent and that if he had, the patent was not infringed."

In December 1930 a contract was made to purchase a patent owned by J. T. Beaty of Charlotte, North Carolina, for a screw conveyor distributor. The owners of the Liddell Company, with whom Mr. Beaty was associated, were anxious to close out their business as the original owners had died. Mr. Beaty made the condition of the sale of the patent the liquidation of the Liddell Company. It took nearly two years to liquidate the Liddell Company, and it was accomplished without any loss on the part of Continental Gin Company.

In order to give the men some employment, the Company for the first time began to manufacture steel buildings for gin outfits. There was also a demand for cotton driers and for the first time a few of these were manufactured. The manufacture of grader blades for road equipment was begun and sold at cost to keep a few men employed.

The cotton crop was one of the largest in history in 1931, but the price had dropped below 5 cents a pound. This meant that there was practically no business. The losses in 1931 were very heavy for the Company.

A story brought in by one of the salesmen in the Mississippi Delta illustrates the situation clearly as to the prospects for 1932. He said that an old farmer, while sitting on his porch one afternoon looking over his fields white with cotton, was approached by a tramp passing by who asked the farmer if he could give him some work. The farmer replied, "No." The tramp asked, "What about all that cotton out there in your field?" The old farmer replied, "Why, you may have all of that you can pick." The tramp turned and walked down the road a few yards, came back and asked the farmer if he couldn't possibly do better than that. This joke expresses the situation fairly well. As a matter of fact, the cost of gathering the cotton and the cost of ginning was just about as much as the cotton would bring when sold.

In 1932 the capital stock of the Company was reduced from $25.00 per share, common, to $10.00 per share, with 100,000 shares outstanding, thus making possible use of the difference, amounting to one and one-half million dollars, to reduce the real estate and building items of the plant and equipment accounts.

During the year L. R. Munger was elected as a director, replacing Daniel B. Candler who retired, and E. W. Stetson replaced W. C. Potter.

The National Industrial Recovery Act which had been passed by the government, forced the cotton gin manufacturers to organize as an industry. This was done and A. L. Smith was made president of the association. The Company was forced to use the same prices and terms as other companies. Though many trips to Washington were required, the industry was helped very little. After the emergency was over, the organization was dropped.

In 1934 conditions improved and there were prospects of a fairly good year. There were no changes in the officers or directors until the August 25th directors meeting at Grove Park Inn, Asheville, North Carolina, at which time George W. Woodruff tendered his resignation as president, due to his change of residence to Florida. His resignation was accepted with regrets and with an expression of thanks from the Board for the fine work he had done through the worst depression the nation had ever experienced. - A. L. Smith was elected president to succeed George W. Woodruff. At the time Mr. Smith became president it was with forty-eight years of experience in the ginning industry, thirty of which had been in direct charge of the sales of the Continental Gin Company. Merrill E. Pratt was made vice president in charge of engineering; Walter S. Going was made vice president in charge of exports, and A. W. Merkel, vice president in charge of production.

Since the first contract with John E. Mitchell Company for the exclusive selling of their Huller-Extractor-Feeder in January 1924, the Company renewed the contract for several years, and finally on January 1, 1929, made a perpetual contract, subject to changes under certain conditions. There was also stipulated the privilege of purchasing stock of the John E. Mitchell Company on a specified basis. The great need for business for the factories had spurred the Company to develop an extractor so that they might be manufactured instead of purchased. There were two patents that, it was felt, would clear any infringement and enable the Company to make a machine equal to, if not better, than any one on the market. In order to be safe, the Company had its local attorney secure the services of one of the most prominent patent attorneys in the country. After studying the situation for thirty days, it was advised that the machine contemplated would not be an infringement on any patents then in existence. The John E. Mitchell Company was then advised of the cancellation of the contract with them, to expire on November 30, 1934. While there was no hope of making any great profit in manufacturing the extractors, it would assist materially in cutting down overhead costs and also keeping men employed.

In the fall of 1929 the Company began making gin outfits of all-steel which were offered for the market in 1930. Purchasers for the next few years had the privilege of choosing either wood or all-steel outfits. By 1934 very few other than the all-steel outfits were selling. This was quite a change in the line of manufacturing, necessitating the Company to replace the woodworking tools with sheet metal tools. The steel outfit was one-story with all machines on one floor. By using direct-connected gins, the power plant, pumps, fans and other equipment could be placed in a separate room away from the dust, which was so prevalent in the gin rooms. This was a new idea and very desirable, but the Continental Gin Company could not hold off competition. Other gin manufacturers introduced all-steel outfits before the effects of normal times returned.

During the four and one-half years A. L. Smith served as president, economic conditions had become normal and cotton crop production along with prices followed the same trend; therefore, sales and profits for the Company reacted accordingly.

In January 1935 J. F. Humphrey, District Sales Manager at Atlanta, died. He had been connected with the Company since its organization, first as a salesman in Mississippi and later as district sales manager. He was succeeded by W. M. Wilks, who had been his assistant and at one time district sales manager at the Charlotte office before it was closed.

At the February meeting of the stockholders, A. A. Acklin was made a director, though later at the May meeting, he resigned and was replaced by Charles F. Stone of Atlanta.

In 1935 George W. Woodruff was made Chairman of the Board of Directors. The Executive Committee consisted of George W. Woodruff, A. L. Smith, A. W. Smith, Thomas K. Glenn and Robert W. Woodruff.

While the Company had not usually made an exhibit at the Ginners Convention held each year in Dallas, Texas at the Fairgrounds, in 1935 an exhibit of a complete gin outfit showing the latest machines and especially the new extractor went on display at the convention. The Company manufactured a Triple "X" Extractor during the year, and also a small extractor known as the Model "A;" and then later the Four "X." The Triple "X" machine did splendid work except when cotton was damp or wet, and since there were very few driers in use at that time, the Triple "X" machine was discontinued.

Ever mindful of the importance of export trade, Walter S. Going, Vice President in charge of Export, made a very satisfactory trip to South America in an effort to secure trade.

As the directors meeting was being held on August 28, 1936, A. L. Smith, President, received a wire with the news of the death of John E. Mitchell, Sr. He had died suddenly at his summer home at Eagle River, Wisconsin. Mr. Smith stated to those present that he had known Mr. Mitchell intimately during the past ten years and in all his business experience he had never known a man with a keener mind and finer character. Expressions of regret and sympathy were passed by the Board at once and sent to the family.

At this time needing a larger plant for repair work at Memphis, an addition was built which greatly facilitated the handling of repair work in that area. The Company did a large volume of such work in Memphis which necessitated the carrying of a large stool: of parts.

During 1936 when the Bankhead Bill was introduced in Congress, reducing the acreage of cotton, the Company realized the cotton crop would probably never increase to the level of the peak years; therefore consideration was given to diversification. Since the demand for ginning machinery was already far less than the Company's capacity to make, it was decided to create two new departments: the Industrial Division, to make conveying, elevating and transmission equipment; and the Special Products Department to handle oil mill and special products made to order.

The Company had been trying for a year or two to investigate articles that might be manufactured in addition to gin machinery, but practically everything considered meant a big new selling organization and also complete tooling equipment. The present tools were such that any business produced by the Industrial Department and Special Products Department could easily be handled.

The Special Products Department would secure business that did not have to be engineered, while the Industrial Department would make contracts for equipment that required engineering. The services of R. Y. MacIntyre, as manager of the Industrial Division, and George C. Morgan as manager of the Special Products Department, were secured. The Company had been making a linter, but very few changes had been made in it since 1901. Mr. Morgan redesigned and made an entirely new linter, bringing it up to date and ahead of others on the market.

In 1937 W. B. White replaced Robert W. Woodruff on the Executive Committee. Mr. White, at the first stockholders meeting during the year, was elected a director, succeeding L. R. Munger who had resigned.

In 1937 an attempt to install an incentive system for the employees was made and the Bedaux plan was adopted. This plan was not satisfactory to all of the employees and the CIO Union, which had been trying to organize the plant, used this in persuading about 70 to 80 percent of the men to join the Union. Soon the men made demands, not only for an increase in wages, but the check-off. The demands were turned down, and a strike was called. The strikers finally settled in about three weeks. It was the first strike the Company ever had.

During the year the chief engineer, F. E. Deems, designed a new gin with an arrangement for rolling the breast out of the saws instead of having to lift it out. This facilitated dumping the roll which was necessary in ginning cotton which contained stems. Most machines used picked the stems along with the cotton.

On February 28, 1938, the Company lost the superintendent of the Memphis repair plant, J. A. McLin, by death. He was succeeded by John W. Woody, Jr., one of the salesmen. In March of 1938 the Company had secured a large amount of export business which had to be shipped by a given date. On account of increasing the force to meet the shipping dates, the leaders of the Union decided it was the opportune time to strike again for the check-off. Pickets were brought in to assist the strikers. Although a majority of the men wanted to work they were afraid to enter the gates. However, after nearly three weeks, pressure was brought on the City of Birmingham officials to enforce an ordinance which was then in existence against picketing, and as a result the pickets were removed across the street from the plant gates. After this was done, the men immediately came back to work and there was no further trouble. Fortunately, in the fall of the year before as insurance against work stoppage, the Company had run full force and the warehouses were full of machinery, otherwise all orders could not have been filled during the strikes.

At the September 25, 1938 meeting, A. L. Smith tendered his resignation as president of the Company effective December 1st. His resignation was accepted with regret and he was elected vice chairman of the Board. Merrill E. Pratt was elected president to succeed Mr. Smith; Walter S. Going was made vice president in charge of sales; A. W. Merkel was made vice president in charge of production, and E. H. Brooks, vice president, Dallas district.

Merrill E. Pratt spent his entire business career in the employ of the Continental Gin Company and therefore came to the presidency well equipped for the position. At the same time Mr. Pratt was elected president he was also made a director, to fill the vacancy on the Board because of the death of Thomas Elliott, former president of the Company.

At the stockholders meeting on February 16, 1939, N. W. Proctor, Sr., Treasurer, requested to be relieved of any official responsibility as treasurer, having served thirty-nine years, twenty-eight as Secretary and eleven years as Treasurer.

This request was granted with regret, and an expression of appreciation for his splendid service to the Company was made.

Merrill E. Pratt, President, began his administration with the following officers:

George W. Woodruff, Chairman of the Board. A. L. Smith, Vice Chairman of the Board. Merrill E. Pratt, President. Walter S. Going, Vice President in Charge of Sales. A. W. Merkel, Vice President in Charge of Operations. E. H. Brooks, Vice President in Charge of Dallas District. A. D. Boylston, Vice President (with authority to sign stock certificates only). Dameron Black, Vice President (with authority to sign stock certificates only). J. A. Chapman, Treasurer. N. W. Proctor, Jr., Secretary and Assistant Treasurer. H. F. Cordray, Assistant Treasurer. B. C. Downs, Assistant Secretary. H. C. Vandersloot, Assistant Secretary. L. L. McCullough, Assistant Secretary (with authority to sign stock certificates only). Roff Sims, Assistant Secretary with authority to sign stock certificates only.

Elected as Executive Committee: George W. Woodruff, A. L. Smith, Merrill E. Prat,t Thomas K. Glenn, George Winship

As Trustees Munger Benefit Fund:George W. Woodruff, A. L. Smith, Merrill E. Pratt, W. B. White, Eugene Munger

No changes were made in the district sales managers or factory superintendents. W. C. Bentley was made export sales manager succeeding Walter S. Going.

The May 18th meeting of the directors was held at the home of Thomas K. Glenn, "Glennridge," near the city of Atlanta, Georgia. Mr. Glenn had extended an invitation at the last directors meeting to hold this meeting at his home. The occasion was most enjoyable.

At this meeting the directors were notified of the death of A. W. Merkel on May 6th, Vice President in charge of Production. Mr. Merkel had been connected with the Company for thirty-five years, starting in 1904 after graduating from the Alabama Polytechnic Institute at Auburn. Through his ability, energy and loyalty he was steadily appointed to important positions. C. E. Hagler, who had been superintendent of the Birmingham factory was appointed general superintendent to replace Mr. Merkel.

Also at this meeting A. L. Smith, Vice Chairman, reported on the New Products Committee. Good progress was reported in the Industrial Division and also in the Oil Mill Department.

James A. Garthright who had been superintendent at the Prattville factory for many years, resigned on October 1, 1939, and his assistant, Alpheus L. Powell, was made superintendent succeeding him. Mr. Powell had come to the Company directly from the University of Alabama, where he had graduated.

In 1939 the Company lost money largely because of the short 1938-39 cotton crops and the low price of cotton. In 1940 the country began making preparation for the war which was felt might occur soon. Continental Gin Company was awarded two contracts by the Navy, one for gun mounts and one for gun shields. Both were large contracts and were taken in competition. The Company provided tools for these contracts, at its own expense and late in the year was in full mass production, working three shifts. These contracts, as well as all of the war contracts, were handled by the Special Products Department. In order to keep in close touch with the war contracts, an office was opened in Washington, D. C. with T. Yancey Milburn in charge.

During this year the Company lost by death one of its directors, J. B. Campbell, who had been on the Board since

February 20, 1930. He was replaced in February 1941 by R. T. Brooke.

During 1941 the production of a new design gin, the Model "F," was started, using the Tucker patent with double moting. During the same year, the Industrial Division developed and patented a special idler support for trough, or belt-conveyor, which helped greatly in increased sales. Because of the war contracts, sales for the year were the largest in the history of the Company.

On March 6, 1941, the Company lost by death one of the directors who had served since February 1926, Jesse S. Pevear of Birmingham, whose counsel had always been helpful. This vacancy was filled February 19, 1942, by Lee Ashcraft of Atlanta. On November 10th the Company lost by death its treasurer, J. A. Chapman. He had served the Company many years but only two years as treasurer. He was succeeded by D. C. Peabody, who had been connected with Ernst and Ernst, nationally known accountants.

On October 21, 1941, Secretary of the Navy, Hon. Frank Knox, notified Mr. Pratt that the Company had been chosen to receive the flag of the Bureau of Ordnance, Navy Department, and the Navy "E" pennant as recognition of outstanding effort in the production of ordnance materials vital to national defense.

Secretary Knox's letter read as follows:

"Dear Sir:

It gives me pleasure to advise you, confidentially for the present, that your company has been chosen to receive the flag of the Bureau of Ordnance, Navy Department, and the Navy "E" pennant, as a recognition of outstanding effort in the production of ordnance materials vital to national defense.

Your company will have the privilege of flying this flag and pennant as a public evidence of deserved honor and distinction. In addition, your employees will be entitled to wear a special lapel button bearing the name of the company, the insignia of the Bureau of Ordnance and the Navy "E" which, as you doubtless know, is a traditional Navy award.

In the knowledge that recognition will be an incentive to other employers and their employees, we have arranged to pre-

sent the award to your company with an appropriate ceremony here in Washington, at which time similar honors will also be accorded to several other concerns.

We should be glad, therefore, if you can arrange to be present at my office at 11 a.m. on Friday, October 24, to receive the awards. If you cannot be there personally, will you designate another official of your company as your representative? Can you also bring your public relations or industrial relations director to plan at that time the arrangement for a subsequent presentation at your plant, by a high ranking Navy official?

To guard against any possible dilution of the public effect of this event, will you please hold this letter and the information it contains in confidence until the award is made?

Sincerely yours,

(Signed) FRANK KNOX

On November 8, 1941, at a public ceremony at the plant, with high ranking officials and distinguished visitors attending, the flag was presented by Captain Spanagel of the Navy. The Company received the following congratulatory telegrams from Secretary Knox and Admiral Blandy:

"M. E. Pratt, President Continental Gin Company Birmingham, Alabama

The splendid achievement of the Continental Gin Company, its management, and its employees in producing an ever growing output of ordnance for the United States Navy is characteristic of the vigor, intelligence and patriotism which have made America great and which have kept her free. On this occasion of public recognition of your accomplishment, please accept my congratulations.

Frank Knox, Secretary of the Navy Washington, D. C."

"M. E. Pratt, President Continental Gin Company Birmingham, Alabama

Thanks to the wholehearted cooperation of such companies as the Continental Gin Company, America's ability to rise to the occasion in time of international crisis is again being proved with overwhelming evidence. Congratulations and best wishes for continuing success.

Rear Admiral W. H. P. Blandy, Chief Bureau of Navy Ordnance, Washington, D. C."

Many congratulatory telegrams and letters were received from friends over the South. While the Company was proud of this award, it was even more proud of the fact that it was received every six months until the end of the war.

In 1942 war activities were increasing at all of the factories. Another contract for 5-inch gun shields was awarded the Company. The use of armor plates necessitated additional tooling. There were also contracts for 100-pound chemical bombs, sighting systems, fragmentation bombs, 5-inch shells, rockets and a large number of other items. Fragmentation bombs were manufactured at all of the factories. The Birmingham plant was 95 percent on war work. The Dallas plant and the Prattville factory were on an approximately 50 percent war basis, the remainder being used for gin machinery.

On August 22, 1942, the Company received news of the death of the retired treasurer, N. W. Proctor, Sr. In September, W. S. Reynolds, Birmingham District Sales Manager, resigned because of ill health, and D. P. Griswold, his assistant, succeeded hill).

For many years the Company had operated without a Cost System. Due to the Industrial and Special Products Departments and the war work, it became necessary to establish one. A nationally known accounting firm was employed to set up a Cost System and at the same time Henry I. Barclay, Jr., engaged as comptroller. By 1943 business had increased to such an extent that it was felt necessary to keep in close touch with Washington. T. Yancey Milburn, who was in charge of that office, was made vice president in charge of Eastern business, a position he held until the end of the war.

All of the factories were still crowded with war work but the Company received a great shock when it renegotiated on contracts for the year 1941 and 1942. It had bid on these contracts against strong competition and was the lowest bidder. It had borrowed nothing from the government and had spent thousands of dollars for tools to cut the cost of production, had operated three shifts a day, and the profits showed several million dollars. After renegotiation the Company was left only a few hundred thousand dollars, no more than would have been made in a normal year of 40-hour per week production of gin machinery. Many people were under the impression that manufacturers became rich on war work, but this was not Continental Gin's experience, and perhaps not the experience of many others.

The December 1943 directors meeting was held in Prattville the the first meeting to be held there. Several of the directors had never seen this plant.

In 1944 war work was still being pushed and, for the first time in the history of the Company, women were employed in the plants due to the scarcity of manpower. A 5-inch shell contract was completed during the latter part of the year.

On March 13, 1944, A. W. Smith, a director of Continental Gin Company for forty-four years, and vice president and treasurer for twenty-eight years, died. He had been prominent in financial circles and an outstanding citizen.

The scarcity of farm labor and the new labor laws had raised the cost of harvesting cotton to such an extent that mechanical means began to be used. This increased the amount of trash in the cotton, lowering the grade and affecting the output of the gins. Realizing the need for a machine that would remove hulls and trash in cotton gathered mechanically, the Company's engineers, Deems and McDaniel, developed a machine called an Impact Cleaner. This machine was composed of a series of cylinders using discs, spaced sufficiently apart to permit the hulls to pass through, and a series of spiked drums above the disc cylinders. The cotton passing through the machine was thrown back and forth between the series of cylinders, loosening the hulls which, along with the dirt, dropped through the space between the discs. Surprisingly, this machine also removed a large amount of motes which heretofore had been removed largely by the gin. This was one of the most important improvements made in gin machinery in the past twenty-six years.

At the directors meeting on January 17, 1945, an amendment to the Company's charter was passed permitting the issuance of 50,000 shares of 4 1/2% Cumulative Convertible Preferred stock. This stock was to be offered for exchange for the outstanding 6% Preferred, and all stock not exchanged, to be called. Practically all of the 6% Preferred stock was exchanged.

George H. Lanier of West Point, Georgia, was elected a director to fill the vacancy caused by the death of A. W. Smith in 1944.

On February 3, 1945, C. E. Woodrow, who had served as purchasing agent for thirty-six years, resigned, but he continued in the service of the Company in an advisory capacity. Henry F. Davis was elected purchasing agent to replace him.

The cotton crop was being gathered with so much trash it was very difficult for the gins to produce a good sample, and the Vice President, E. H. Brooks of Dallas, began experimenting with a machine to remove leaf, pepper trash and any motes the gin failed to remove. This machine removed the trash from the lint as it passed from the gins to the press, and on all except especially clean picked cotton this machine increased the value of a bale of cotton from $10.00 to $20.00 per bale.  With such results there was a great demand for the Lint Cleaner, and today it is considered a necessity for all modern outfits. This machine added more value to the cotton '` crop than any machine developed in the past thirty years.

On March 20, 1945, W. M. Wilks, District Sales Manager, Atlanta, died, and was succeeded by Robert E. Weinmeister of Atlanta.

By the fall of 1945 the Company had completed all war work and was back on the normal line of manufacturing. In January 1946, due to the great expansion of the Industrial and Special Products Department, which was suffering for office space, a large addition to the office building was made.

At the stockholders meeting in February 1946, Charles T. Winship was elected a director to replace C. J. Root, who died November 30, 1945.

On June 19, 1946, F. S. Middleton, District Sales Manager at Memphis since 1928, passed away. He was an efficient mechanical engineer. He was succeeded by E. H. Shackelford, his assistant.

At the September 1946 directors meeting an appropriation of $70,000.00 was authorized for air conditioning the office building in Birmingham, to add to the comfort and efficiency of the employees.

On October 26, 1946, the Company lost by death one of its most valued directors, Thomas K. Glenn, who had served on the Board since the reorganization of the Company in February 1926. He was prominent in financial and manufacturing circles, and his counsel was always sound and helpful. On March 13, 1947, the superintendent of the Prattville factory, Alpheus L. Powell, died. He had been superintendent of the plant since 1939. He was succeeded by jasper N. Buckner, his assistant.

During the year Henry I. Barclay, Jr. tendered his resignation as comptroller to become effective November 30th. The directors meeting of May 20, 1948, was held at the Prattville plant. This was the second time the Board had met there. At this meeting Walter S. Going, Vice President in charge of Sales, was granted a six months' leave of absence because of ill health. At the September 16th meeting Merrill E. Pratt, President, reported Mr. Going had not sufficiently recovered to resume active duty. The vice president, E. H. Brooks at Dallas, was transferred to Birmingham and made vice president in charge of all sales. Walter S. Going was elected vice president to handle such duties as his health would permit. Glenn McCarty was made assistant district sales manager at Dallas, and Nelson J. Kemp was elected comptroller, replacing Henry 1. Barclay, resigned.

On September 17th the Company suffered the loss by death of Director George H. Lanier, who had served only a short time on the board. At the December 2nd meeting, Joe L. Lanier, his son, was elected to replace him.

January 1, 1949, E. H. Shackelford, Memphis District Sales Manager, was transferred to Birmingham as special representative. Harold J. Osborne, who had been in the Birmingham sales office, was transferred to Memphis to succeed Mr. Shackelford.

At the directors meeting on February 17th, the death of J. N. Goddard on December 9, 1948, was announced. He had been on the Board since February 1926 and his death was a loss to the Company. R. D. Warren of Memphis, Tennessee, was elected to replace him.

The May meeting of the Board was held in Dallas in order that the directors could inspect the plant. The Company was building an entirely new demonstration building in Dallas, equipped with the latest improved machinery, which interested the directors very much. At the meeting the resignation of R. T. Brooke was accepted and Will C. Jones of Dallas, Texas, was elected to fill this vacancy. Mr. Brooke had served as a director since 1941.

Merrill E. Pratt, President, made a trip to Europe in the early fall, visiting many of the old customers. While there he received the sad news of the death of his father, Daniel Pratt, who died on October 7, 1949. Daniel Pratt was greatly missed from the Board, having served faithfully for more than fifty years. He was the last of the original Board of Directors. - Walter S. Going, Vice President, died in September 1949. His entire life, since graduating from Alabama Polytechnic Institute, at Auburn, had been spent with the Company. No one had worked harder and more efficiently or was more loyal.

A machine for making 16-inch conveyors was needed and this, like many other machines, was designed and built in the Company plant.

At the "1949 Alabama Dinner" of the Newcomen Society of England, held at the Mountain Brook Club, Birmingham, on December 13, 1949, the Continental Gin Company was honored by Merrill E. Pratt delivering the address, "Daniel Pratt, Alabama's First Industrialist", a story of the founder of the Daniel Pratt Gin Company.

Earnings for 1949 had been very satisfactory, the largest on record and a liberal disbursement was made to officers and employees.

By 1950 the Industrial Department had expanded to such an extent that it became necessary to open an office in New York City to keep in touch with the large chemical, engineering and mining corporations.

James F. Smith who had been superintendent of the repair plant in Atlanta since 1927, resigned on March 1, 1950, and died soon thereafter. He was succeeded by W. A. Lewis.

At the April stockholders meeting Dameron Black was elected a director replacing Daniel Pratt who had died. Other business transacted at this meeting included the authorization giving the privilege for the exchange of Common stock for Preferred stock by any stockholders who cared for the exchange on the basis of two shares of Common for one of Preferred. The privilege was extended to June 1, 1955.

The May 1950 meeting of the directors was held for the first time in Memphis to give the directors an opportunity to inspect the property there.

At the April 19, 1951 stockholders meeting Bradford C. Colcord, President of the Woodward Iron Company, Birmingham, was elected a director, replacing Dameron Black, who had resigned after serving as a director for only one year.

In the summer of 1949 the engineers designed an entirely new gin having ninety saws instead of the usual eighty. The major changes were in the roll box and in the method of moting; and in addition, the frame was radically changed. A few gins were manufactured and put in the field in the fall for testing. The results were remarkable. Ginning capacity was increased thirty percent. This new gin removed an exceedingly large amount of motes, thereby improving the sample. Sales of these gins were large in 1951. These have superseded practically all other models produced by the Company.

Due to the fact the government had called for a large cotton crop and removed all restrictions, the Company had the largest peace time sales of gin machinery in its history. However, on account of the change in the income tax schedule, profits were considerably less than in 1949. Had material been available, sales in gin machinery and in the Industrial Department could have been doubled. From the beginning of the Korean War, the Company had been greatly handicapped by lack of steel.

Between the demands of the labor unions and the struggle to secure steel, the past few years have been somewhat perplexing.

OIL MILL AND SPECIAL PRODUCTS DEPARTMENT

These two departments, starting in 1936, have expanded to such an extent that they are producing a substantial volume of the total business.

Due to the fact that during the war the Company had established a reputation for doing precision work with very close tolerances, this enabled the Special Products Department to secure a good volume of business such as:

Machine Tools:  Engine Lathes  Automatic Lathes  Honing Machines  Gun Boring Lathes 

Commercial Laundry Machinery: 2-Roll Flat Work Ironers 6-Roll Flat Work Ironers 2-Roll Cylinder Type Ironers

Diesel Engine Equipment: Radial Engine Cylinder for 11 and 12- Cylinder l4"x16" Radial Engines

    Cylinder Heads and Relief Valves, 16" Marine Engines

    Valve Gear Drives and Governor Driven Marine Engines

Textile Machinery:  Knitting Machines  Spinning Machines   Warping Machines   Twisting Machines   Filter Presses

Paper Mill Machinery: for manufacturing Paper Bags Machinery:

Ammonium Nitrate Processing Equipment: Ammonium Nitrate Crystallizing Kettles. This unit was completely redesigned and produced for some of the large powder companies.

Baling Presses: Special Baling Presses for baling synthetic Wool, Viscose Rayon and Cellulose Acetate.

        This department also produces pillow block housings for S. K. F. Industries, Inc.

The Company has made crane and hoisting components, fly ash separating equipment, and pipe molds for centrifugal molding of soil pipe. It has also produced Meehanite castings and many miscellaneous items of machinery.

While this department is supposed to take contracts for machines or work that has been engineered, a number of engineers have been required to prepare the details for the factories.

INDUSTRIAL DIVISION

The growth of the Industrial Division has been remarkable during the fifteen years since its organization, and especially since it has been greatly handicapped by the shortage of engineers and steel.

It has supplied material-handling equipment to many nationally known corporations, classified in the following categories: steel and aluminum mills, chemical and fertilizer industries, mines, oil mills, grain elevators, feed mills, utility plants, paper mills; sand, gravel, gypsum plants and quarries; cement plants, textile mills, food industries; foundries, brick, tile and ceramics; agricultural implements, engineering and construction companies.

Material-handling equipment is perhaps the most important factor in lowering the cost in handling raw material and finished products. Each particular installation requires special engineering, pertinent to a special use required by the company placing the order. This often requires research, surveys and inspections before an order is completed.

Pictures on the following page show a few of the various types of installations furnished by the Industrial Division. In the manufacture of steel products the Continental Gin Company has become an important user of steel. Fabrication of steel products is an important link in the chain of steel production in the nation.

The Industrial Department has developed a number of items which were patentable. It has placed equipment in every state in the Union, in Canada and abroad.

Due to the exceedingly high cost of labor, the future for this division, especially in producing labor-saving equipment, is unlimited.

MODERN GINS

A MODERN gin outfit (see pictures following) is today far different from the 1900 outfit. Most of the machines in the outfit are used to remove foreign material and moisture from the cotton before it reaches the gins; these machines were not in existence in 1900.

Such a modern outfit to handle any class of cotton brought to it, should be equipped with a six-cylinder cleaner to open the cotton; two driers to remove the moisture (to dry cotton with one drier would require such heat as to damage the staple) ; one big burr machine, removing a large part of hulls and heavy trash; two impact cleaners removing the remaining hulls and a large quantity of motes. The cotton is then delivered to the conveyor distributor which delivers it to the extractor feeders over a battery of four or five gins.

The gins not only remove the seed from the cotton but remove motes at two different points. They then deliver the cotton to lint cleaners, removing any remaining pin trash or motes while the cotton is being passed to the press and machinery for conveying the seed and trash from the building.

Such an outfit as described, ginning 60 bales per day (some outfits gin 100 or 120 bales per day) on snapped cotton, removes 40,000 to 50,000 pounds of foreign material. On stripped cotton it removes 90,000 to 150,000 pounds of foreign material, and on machine-picked cotton 15,000 to 20,000 pounds of foreign material and 60 gallons of water each day, making a sample equal to hand-picked cotton. Approximately sixty percent of the 1951 crop was hand picked, twenty percent snapped, and twenty percent either stripped or machine picked. Stripping and machine-picking has replaced more than 150,000 cotton pickers and saved the farmers more than a hundred million dollars.

The harvesting of cotton mechanically has only been made possible and practical by the modern gin outfit.

Another remarkable fact is that four basic patents which were owned by the Continental Gin Company in 1900: The Ellis Double Rib Huller Gin, the Munger Common Lint Flue, the Common Battery Condenser and Double Box Press are being used today by the entire industry manufacturing cotton ginning machinery.

Throughout the fifty-two years of its history, the Continental Gin Company has made liberal donations each year to the Community Chest, the Red Cross and other worthy causes; and in recent years gifts have been made to the Southern Research Institute, Birmingham, and the Oscar Johnston Cotton Foundation for the advancement of the cotton industry.

During the fifty-two years of operation, losses have occurred only four times: 1921, 1931, 1932 and 1939. With the exception of the first three years, 1900, 1901 and 1902, when there was practically no working capital, the Company never missed paying a dividend, and in the first twenty-six years between $300,000 and $400,000 was spent on buildings, new tools and equipment. In the last twenty-six years, $872,000 has been spent on buildings and office equipment, and $1,670,000 on new tools and equipment, largely in the past ten years. An appraisal made in 1949 fixed the value of the plants, on replacement basis, at $17,000,000. The earned surplus has grown to something more than four million dollars.

The Company at the end of fifty-two years was never better organized. Practically all of the department heads, from the president down, since leaving college, have spent their entire lives in the employ of the Company.

The factory employees number between 1,700 and 2,000 as compared to 1,000 or 1,200 in 1900. With improved tools, their production capacity is equivalent to that of five or six thousand men in 1900. The work in the plants is directed by more than sixty competent, well-trained foremen.

There are three Engineering Departments: one for ginning machinery, one for the Industrial Division, and one for the Special Products Department. The sales force numbers between forty and fifty salesmen. They are specially trained.  There is also an Experimental and Research Department for developing and testing improvements in machinery produced.

First Aid Departments are maintained at both the Birmingham factory and Prattville factory, with graduate nurses on duty to handle all accidents, except those of serious nature.

A meeting of the heads of all departments is held each week to discuss problems and to keep these men posted on all conditions confronting the Company. A planning conference is also held each week, composed of the engineers, heads of the sales departments and factory, to discuss matters of efficiency in manufacturing and suggest improvements which would be beneficial to the Sales Department.

The office force or clerical help numbers more than four hundred, a great increase over the number required fifty-two years ago. Part of this increase has been occasioned by government rules and regulations.

The Company has always endeavored to merit, and has long enjoyed, a low labor turn-over. 'Many employees have remained with the Company for unusually long periods of time; in fact, many have spent their entire careers in its employ.

In order to give recognition to those whom it was due, and to reward long and loyal service, the Company decided in 1951 to award gold service buttons to the men and gold service pins to women for certain periods of employment and in addition, to give watches to those with extremely long years of service.

Accordingly, five-year, fifteen-year, twenty-five-year, thirty five-year and fifty-year buttons and pins were given for those respective periods of service. Watches were given to men who had been with the Company thirty-five years or longer, and to women who had twenty-five or more years' service.

On November 1, 1951, a total of sixty watches were presented to men and nine to women, at the different offices and plants. Among the men who received watches, fifteen had been with the Company fifty years or more. Each successive year watches will be given all men when they attain a 35-year service record and to women when they have served 25 years with the Company.

The Continental Gin Company continues as the foremost gin manufacturer in the world with sixty percent of its business in the category for which the Company was originally organized fifty-two years ago.

05/09/2007