[TAPE 1, SIDE A]

JOSEPH MOSNIER:

This is an interview for the North Carolina Business History series of the Southern Oral History Program at UNC Chapel Hill. I am in Clinton, North Carolina, on Friday, July 16, with Senator Lauch Faircloth. My name is Joe Mosnier. This is cassette 7.16.99-LF. Senator Faircloth, thanks very much for sharing the time today. Let me ask to start, I thought I might visit with you just for a few minutes before we turn to ag[ricultural] history on the issue of the rise of North Carolina's trans-banking center, the rise of big banks in Charlotte and so forth and your perspective. Certainly up in Washington you were engaged and involved in some of those issues.

LAUCH FAIRCLOTH:

Well, I think you have to credit the rise of major banking in North Carolina first to two people and then later on to a third. Number one, never were there two more aggressive bankers or effective ones, for that matter, than Hugh McColl and Ed Crutchfield. They both got into it early, the expanding of the banks. You've got to realize that NationsBank is forty years old. It started from two very small banks in Charlotte American Trust and Commercial Bank of Charlotte and then Security to where it is today. Although a man named Addison Reese started this and then Tom Storrs—. But certainly the super aggressiveness that moved NCNB was put together by McColl in a very fortuitous move by the FDIC in allowing him to move into Texas with the Republic bank, which was a tremendous boost. Actually, Republic Bank was probably a stronger bank than NCNB at the time of the merger. But the FDIC decided to go with NCNB, and that's where it went. The Texans said that NCNB was an acronym for 'No Cash for Nobody' after they moved to Texas. It was a very, very unpopular bank down there when they moved for a long time.

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The same to a lesser degree is true with Crutchfield. But Crutchfield didn't have much of a predecessor. Hugh Cameron went in and had started some little merger, but actually, First Union was put together by Skipper Bowles. Skipper's father in law had a bank and he merged it with a bank an eastern bank that I had some interest in — the Scottish Bank — and called it First Union. At first they were thinking about calling it Scottish but decided that would be too local. Then they brought in a Cameron-Brown Investment Company in it. Then Cameron became head of the bank and pretty quick[ly]. I guess twenty-five or thirty years ago, McColl, Crutchfield came. He's done a spectacular job of growing the bank, though always the biggest bank in the state was Wachovia. But about this time, Wattlington left and John Medlin took over that. John started some pretty aggressive growth at Wachovia. It has seen some right spectacular movement in the last year or two. First Citizen's has expanded but much slower. It's totally controlled by the Holding family. They are very conservative people and have to be. They have started growing the bank fairly aggressively though in the last fifteen years. A very fine bank it is. The other one was a group of smaller banks that [were] put together. The core bank was a bank called Waccamaw Bank. Then there was the bank I had right much interest in called Cape Fear. It merged with Waccamaw. Waccamaw then formed with a bank from Monroe which took the name of the old initial bank. It had nothing to do with but just accepted the name that went into forming NCNB, which was American Trust. They used the name twice and they formed UCB and a man named Rowan Sasser ran that. Then it merged with the old bank from Wilson — Branch Bank and Trust Company — which had been strictly a farmer bank. John Allison is now rapidly growing BB&T and it has become a major player in the banking industry.

JOSEPH MOSNIER:

: Let me ask your perspective on this. How significant to NationsBank's —now B of A's [Bank of America] — tremendous growth in the last ten to fifteen years has been McColl's success at reshaping the long standing regulatory climate for banks in this country?

LAUCH FAIRCLOTH:

I don't know that McColl has reshaped the regulatory climate. There was interstate banking law, but that had been pretty well circumvented. Actually, the passing of the interstate banking law was a moot point because they all had under just a veil of being a separate bank had already been interstate.

JOSEPH MOSNIER:

[Do you have] any personal perspectives on McColl that you think are important to understanding him as one of a handful of the nation's most distinguished present day business leaders?

LAUCH FAIRCLOTH:

He is a straightforward, tough, aggressive man. He is from Bennettsville, South Carolina. He had the fortuitous of having an understanding of the people he was dealing with. He has a great insight as to how people think and move. He is very aggressive and strong. He came from a modest background, as did Crutchfield and Medlin. They both came up understanding how a dollar was made. Crutchfield was from Mt. Gilead. Medlin was from a little place [called] Benson. His father was the police chief.

JOSEPH MOSNIER:

I hadn't known that Crutchfield was from Mt. Gilead. That's interesting. That's a tiny little place, even today. Let me turn to agriculture. Let me have you roll your mind back to the late '40s and the family farm and the family produce business and so forth. If you can, sketch the broad contours of North Carolina agriculture coming out of the Second World War.

LAUCH FAIRCLOTH:

Well, to sketch the contours of agriculture, you have to go before the Second World War. Agriculture went through a major, major change during the Second World War. When the war was over, you were dealing with a totally new and different product. [Agriculture was] totally changed. It had to make rapid adjustments. There is a very a new book you would thoroughly enjoy, called No Ordinary Times. It is on Roosevelt and the times between the German invasion of Poland and the end of World War Two. But going into World War Two and going right on back to the end of slavery, go[ing] back into the 1880s, '90s, '70s and this transition, it's taken it a hundred years to transpire, but it is pretty well there now. Agriculture was a way of life. It had nothing to do with a business. The president of Anderson and Clayton — world's biggest cotton dealers — was asked one time what it cost to grow a pound of cotton. This was during the thirties. He said, "Whatever they can get for it. They will grow it." This is what agriculture was. It was the surplus of people — a surplus of the commodity. The first goal of agriculture was to subsist. If you could pick up any change, a little money on something, [that was] well and good, but the first role of agriculture was for the landowner and the workers to subsist. I grew up in that economy. People were just absolutely everywhere going into 1939. I've forgotten the percentages, but you can check them. It was like thirty percent of the people were unemployed. If you went to underemployment, over fifty [percent] had no job. Massive amounts of them were [working] on subsistence agricultural operations. We called them farms. They were there because they could produce a little corn, a few hogs, keep a cow, and survive. That's what agriculture was. [You'd] can a lot of beans in the summertime and go through the winter. Money was a practically an unknown and a very, very rare item at best.

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All of a sudden, there was a massive transition. All of a sudden, starting in '39, Roosevelt convinced Congress that we were facing a worldwide conflict, and we began to gear up for a war effort. We had no army. The great maneuvers in Louisiana with the army, they were using stovepipes for bazookas and wooden two by four rifles. This massive war effort, which William Knudsen — who had been president of General Motors — headed up, started expansion. As rapidly as the nation could get buildings built, they put people in them producing armaments of everything. Armaments required socks, shirts, everything. All of a sudden these massive amounts of people who had been on subsistence farming had jobs — high paying jobs. It sounds ludicrous today, but Fort Bragg expanded from a few Civilian Conservation Corps boys to a hundred thousand trainees and rapidly. All the barracks had to be built. Anybody that could use a hammer in any way was called a carpenter. They went from fifty cents a day wages—. You talk about a spectacular move, fifty cents a day was standard farm wages. [They went from that] to ninety cents an hour, seven dollars and twenty cents a day. Who is going to plow a mule for fifty cents a day when you can drive down to Lejeune or Fort Bragg and you'd make seven dollars and twenty cents a day? Anything that would run, any kind of old bus, was put together, and people piled on it. Farming was forced into the transition in the '40s, late '30s from a mule to a tractor. This did not happen as fast as it would have because the tractors were not available. Even at that time, it's small tractors and two row tractors. One man on the tractor did what six people did with a mule. Now they do what forty would do. But the massive transition [started] from one man and a mule to one man and a tractor doing six times as much work.

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When the war was over and industries continued to expand, these people never came back to the farms. This was as true in California. They went into the aircraft factories. [They found] better ways to pick fruit in the Medford, Oregon because of they went to Boeing. [They had] bigger combines in Kansas because they went to Wichita and Vaught. So this transition between the Civil War and World War Two—. Farms had been a storehouse of people. People were warehoused on farms. There was absolutely no need for any attempt for modernization or increased efficiency. What the hell difference did it make? You needed three people, you had nine standing there, and you were producing more than you could give away. What did efficiency mean? But all of a sudden, the people were gone. I mean, they went by the busloads and never came back. They left here for Detroit, for the Army bases and it was really the breaking down of segregation, too.

JOSEPH MOSNIER:

Tell me about the specifics of the North Carolina farm economy as you were busy here in the late '40s, early '50s. [What do you recall about]1950s tobacco?

LAUCH FAIRCLOTH:

Well, you have to go back to the North Carolina farm economy, which made another major transition. North Carolina and most southeastern states were cotton states prior to World War One. Now, immediately after World War One — 1921, exactly, it got to North Carolina — came the boll weevil. The boll weevil practically eradicated cotton. For all intents and purposes, it became impossible to grow. We saw a movement of agriculture. The counties that had grown tobacco in North Carolina, you don't even think of as agricultural counties today. They were Guilford, Forsyth, Granville, Person, Wake, Durham. These were the counties that grew tobacco. The eastern counties grew cotton. With the invention of the and the great improvement of the cigarette machine, which was

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the thing that made smoking popular and picked up more than fifty percent of the [smoking] population in women—. No matter how bad you wanted a cigarette, in 1912 it just wasn't very exciting to get out a piece of paper and dump some tobacco in it and lick it and twist the ends together and start smoking. You might have been in an unsophisticated business, but that wasn't a very elegant way to approach something. That's the way you smoked a cigarette if you wanted one. You got that paper out and poured the tobacco in it and licked it and twisted it and had a cigarette. Golden Grain and RJR, that was the tobacco business. But all of a sudden with the cigarette rolling machine—. It was, I think, invented in Switzerland but dominated by Duke. He controlled the machine and the use of it and the manufacturing and everything else. He acquired all of the tobacco companies in the world. Literally, all of them. [It is] not an overstatement. He had them all. So all of a sudden, instead of getting out a little sack of tobacco and rolling a cigarette, it became very elegant to bring out a very well designed pack, and all you had to do was light the end of it. If they'd never had invented the cigarette rolling machine and everybody had to roll a cigarette by hand, you'd have never heard the furor over tobacco because, hell it took so long to roll one, nobody'd have ever smoked any. In fact, it may be a southern saying, but a vernacular that we used on cigarettes for many, many years, you've probably never heard. They were never referred to as "cigarettes." They were known as "ready rolls." A "cigarette" was something you made with your hands, and a factory made cigarette was known as a "ready roll." But anyway, that's what the tobacco industry [did]. So then the eastern [part of the state] having more desirable agriculture land and this massive demand for tobacco, it just exploded with the cigarette machine and the end of World War Two. Tobacco replaced

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cotton. Tobacco came in just in time. The explosive use of tobacco supplemented and then took over cotton [farming]. Certain sections of North Carolina all of a sudden got into the produce business pretty heavily. It's hard to realize but fresh vegetables and produce sections of stores were an unknown item forty years ago, fifty years ago, sixty years ago. A grocery store carried a few in-season, locally-grown produce. If you wanted some in the winter, you canned it. Except for a very, very few, very, very wealthy people, that was produce. Maybe three percent of the population or one percent, more likely, had access to vegetables and fruit other than in the immediate season that they lived. At the turn of the century and on into World War One, fresh vegetables were unknown. The fruit and vegetable business really began to pick up after World War Two. People had traveled. The standard of living [improved]. They came back and they were not willing to go back into farming. They went to colleges by massive amounts and took jobs not related to agriculture. So all of a sudden there was a demand for produce, which has continued to grow to this day. So many types of produce that used to be strictly local items, all of a sudden — even in the last twenty-five years — have become nationwide and highly accepted and highly sought after. That business has grown throughout the state and particularly in this area. There will probably be fifteen thousand acres of bell pepper here [this year]. It's going out by the truckloads [and] trainloads every day. The same thing's true with all sorts of cucumbers and corn and that type of thing. You've got a whole new market. Then there's a different type of produce that the state has grown in rapidly. Leaf vegetables, sweet potatoes, collards, [these] used to be absolutely a redneck, welfare dish. There is a farmer here in the county that has twenty-five hundred acres of them on a continuing basis and cannot supply the market. I noticed

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very elegant restaurants in New York have them. They use the French word, choux, for them. It's actually a French vegetable [that was] brought here by French settlers. Sweet potatoes, it used to be you could not give one away north of Richmond. Today it's a highly accepted health food and distributed nationwide. So we've seen the growth of that. Now cotton moved to the west to Arizona, California because they did not have the boll weevil, and the boll weevil could not survive [there]. The boll weevil requires continuous moist ground to hatch. The eggs are laid in square drops on the ground, and it's the moisture of the ground keeps it alive, and the heat hatches it, and you've got another boll weevil. Well in the deserts of Arizona and California, you watered the cotton once every ten days and when you cut the water off, there was no chance for a boll weevil to survive until you watered again, and he can't hatch in one day. It takes about ten days so there were no boll weevils. There were massive amounts of free government water. Massive amounts of free government water pumped into that whole southwestern area. So now we come back, the boll weevil has for all intents and purposes been eradicated. Now, this area, this county—. This is true all over, you can just multiply it twenty-five or thirty times. It went from absolute no cotton to this year, it's going to have one hundred thousand acres in this county. Raising it's cheap. It's the ideal country to grow it in. [There's] no irrigation, dry falls, two, two and a half bales to the acre, better than California or Arizona. But now the pressure's on there for the vegetables and the land and water for recreational and other uses, so they will eventually get out of the cotton business. It will move back here.

JOSEPH MOSNIER:

Can you sketch the way the expanding federal agricultural policy complex began to have its shaping effect on the economy? What is your perspective on the ways

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in which federal agriculture policy has had its impact on the North Carolina farm economy?

LAUCH FAIRCLOTH:

Well, you have to back to why it started. When Roosevelt came into office, Henry Wallace was the Secretary of Agriculture. He had been an Iowa professor and a very, very socialistic man. I'm not trying to label Henry Wallace with some bad name, because he was not. But he was very socialistic. What you don't realize and what we don't realize was that the Depression had hit such depths by the time that Roosevelt had come into office, that in desperation a lot of people had turned to or thought they turned to embrace Communism. If you think Communism is bad, try staving to death. This is hell. What else is out there? They started something called the Agriculture Adjustment Act, which was nothing but a euphemism for welfare for farmers. They destroyed crops and finally got around to strict allotments controls and paid people to kill little pigs and not let them grow up and kill calves and not let them become cows and dairy cows. It was a well-intended but pitiful program. They started the thing in '36 and along about 1939 to'40 they began to get all the infrastructure and order to make it work. Then hell, along came the war effort and there was a shortage of everything. We went from hiring farmers to kill pigs and not letting them become adults to meat rationing in a very brief moment there really. It was quick time. Then we went through a period, I'd say, from '40 to '46 of encouraging people to produce all you can. What was the term? Produce "hedge row to hedge row." Hell, people plowed up golf courses. England did, and maybe some in this country. Had to have the food. I never could figure out why it took more food during a war than it did [in other times], but it obviously did. Then we came along and started—. Immediately when the war was over, magically we needed less food again.

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There began to be these surpluses because of the increased productivity from farms. So many things came into being that just converted the whole thing. One man on a tractor was doing what twenty-four people with a mule could do and twenty-four mules could do. You created a surplus that compounded itself. Number one, you didn't need the feed to feed your mule. It took a lot of corn to feed the mule. It took a lot of corn to feed twenty-four mules. You didn't need any of it. Your corn was hybrid seed and new seed, better [seed]. You went from a thirty-bushel an acre crop to a hundred and twenty-five [acres] to a hundred and thirty [acres]. This was true with wheat and the other crops. And at this point you did see a massive expansion of the fruit and vegetable industry. All of a sudden people became more sophisticated and canned peas were not considered a vegetable. That's when the programs came back strictly on tobacco. North Carolina was extremely powerful in this. Of the major committees in the House—. You can check the exact figure I'm saying, but this is close enough, we had eleven congressmen at the time and headed a tenth of the major committees — the standing committees — in the House, particularly agriculture. [North Carolina] totally dominated it. When you've got ten committee chairmen from one state, you don't ask what's going on, you tell. That went from Muley Doughton in the mountains to the man from Nashville, Harold Cooley. With Harold Cooley as chairman of the House Agriculture Committee, do you have any question about why tobacco was so, or peanuts? So many of these North Carolina commodities became entrenched in controlled programs because it could supply a lot of money to a lot of farmers and assure them of a high standard of living. I would say the dominant influence of the House members on the control of agriculture, and the Congress as a whole, contributed to the programs.

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[The farm programs] are far outdated, but you have a mindset in the Senate and the Congress today that absolutely say they have to stay there. They have gone from a way to help the farmer to a way to assure the re-election of the politicians. Grassley, Harkins, Wellston, Pat Roberts, they're just absolutely mesmerized with trying to continue these farm programs. They pass the so-called "Freedom to Farm" bill, but it'll never be enforced. As long as we have elected officials, we'll have agricultural welfare.

JOSEPH MOSNIER:

It's wonderful the way you can draw up this big contextual picture. Let me ask you to move to your own path as a farmer early in the produce business. Then [tell me about when you] became substantially involved in whole range of other business activities and then finally one of the leading hog producers through your various farm business involvements.

LAUCH FAIRCLOTH:

Finally? We've been in the business for forty years.

JOSEPH MOSNIER:

Well, indeed.

LAUCH FAIRCLOTH:

We sort of evolved with the technology.

JOSEPH MOSNIER:

Tell me about that. Tell me about that personal path you've taken in farming.

LAUCH FAIRCLOTH:

As a farmer and the moving into other businesses?

JOSEPH MOSNIER:

Sure. Let me be more specific. Tell me how you've made your choices, how you've measured your opportunities in farming across that period of time. Tell me how you made your choices about where to be involved and why.

LAUCH FAIRCLOTH:

Well, number one, I tried not to be involved, as best I could, in anything that the government was involved in, because it was a sure line to poverty. In the case of a few tobacco people, that was not true. But generally, if you wanted to have absolutely

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catapulted into poverty, be involved in a program the government was involved in because there was a warehouse or whatever it was sitting somewhere, and nobody wanted it. My approach was to grow something that there was an expanding market for and people wanted to buy. [Something] that we didn't have to sell to the government at some graded warehouse. That would be the movement into produce. As I say, we were beginning to—. I think they refer to young people with money as "yuppies." Well, back then they might have been referred to as "hopies." They were hoping to have some. They wanted to get away from dry beans. If you can imagine such a thing, it became very elegant to serve salad, so we moved into that business — cucumbers, peppers into that [kind of farming]. As for farming, I didn't really think much of farming as a business anyway, although the produce end was good. I saw it as a—. Well, Pope John one time described farming. He said there were two ways to wreck yourself physically and financially. One was women and whiskey, and the other was farming. He said that his father had chosen the least exciting one. I began to look at other opportunities for income and also for the utilization of people year round, which brought me to the produce business and some of the Florida farming and into the bull dozing and land clearing, drag line ditching and developing businesses. We had a pretty good sized produce business, but at that point, early on, it was concentrated here. To get the administration to run that—. Although we did use a lot of school people that were off in the summer, to try to use the sort of infrastructure we had built, we started using farm related things and then got into the ready mix concrete. Then I remember I bought the first automobile dealership cheaper than I could buy an automobile, so I went into the automobile dealership and various other things.

JOSEPH MOSNIER:

Tell me the story of the evolution of what has become this very successful hog operation. Describe its inception. If you can, tell that story in detail. I think it would be interesting as a case study in how livestock have become—.

LAUCH FAIRCLOTH:

Well maybe it's all over the world but, you seem to have had a lot of tough entrepreneurial, pragmatic men that evolved in North Carolina immediately after World War Two. We went through McColl, Crutchfield, a lot of people. Some of these people were down east in farming. I remember one time I was making a speech on the same program with John Medlin who was, at that time, CEO of Wachovia. John got up and said that if it had not been for a scholarship, he would still be in eastern North Carolina farming for a living. I followed him and I said, "Hell John, I didn't get a scholarship." So the midwestern farmer—. I'm not running for office in Iowa and Illinois, it's the most hide bound, locked in mindset [part of the world] that you'll ever find anywhere. If great grandpa from Sweden built a barn forty feet high to put forty cows in and attached it to his house, no matter that the whole dairy industry's gone to hell and we can't sell the milk, I'm going to build a forty foot barn and attach it to the house. They were raising pigs. Thoughout all the midwest pigs were raised literally in forty-foot high barns with a few pigs in one corner of it smelling to all hell. There was no way to clean it. There was no nothing. These mammoth dairy barns that absolutely were just antiquated when they were made to hold loose hay — built before the day of a hay baler — they had fifty pigs sitting in the corner of it. You couldn't have made enough on the pigs to paint the barn every ten years, but that's the way papa did it. Some very bright people here discovered that you didn't need—. Very few pigs were over thirty-nine feet high, so we did not need a forty-foot barn. It served no benefit except [for a pig] getting diseases by rooting in the

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mud and freezing to death in the winter and having a million flies on him in the summertime. They began to design — and this is primarily a case of where the university system followed the farmer — these smaller houses. Flat fans cooled [the houses] and all of a sudden rather than one sow producing four pigs a year, these people were producing twenty pigs a year to a sow. Instead of in the midwest not knowing, having no earthly idea—. [It was like] what he said, "What does it cost to grow a pound of cotton? It doesn't make any difference, they're going to grow it. Whatever they can get for it. What's it cost to grow a hog? Didn't make any difference. Whatever you can get for him." Feed conversion would've been—. You might as well have been talking Swahili to them [to midwestern farmers]. Well, all of a sudden, the North Carolina farmers got into computers, cooling, fans, and there were—. You can get the figures, but there were millions of hog farmers. There were probably three million in the country, all with little infinitesimal ten or twelve sows. Well this area [North Carolina] all of a sudden discovered they could grow a hog much cheaper and much faster and much cleaner regardless of what is said. I mean, we are irrigating on four and five hundred acres of land. Actually, most of the farms irrigate contrary to what you would be led to believe. They actually have to supply additional fertilizer and nitrogen because it's simply spread so thin on such a wide area, that there isn't enough to grow a crop on it. You have to supplement it. Anyway, I must say a credit to the banks. They right quick were willing to make million dollar farm loans and multi-million dollar loans. All of a sudden they understood to put one hog farm together cost a million and a half dollars. Well if you had walked into the average Iowa bank or farmer and said [it would cost] a million dollars,

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he'd have said, "You want to buy this bank and which other one?" They were just staggered. So when they look back, the hog industry—.

[TAPE 1, SIDE B]

LAUCH FAIRCLOTH:

Bill Prestage was one of the leaders in [the hog industry] with Carrolls. Of course, Wendell Murphy got into it heavy. It just became a massive business. They were producing hogs so much cheaper than the Midwest that once you had—. It's a very cyclical business. Once the price dropped, the midwestern farmer was out. This crowd just expanded and expanded and expanded with unlimited access to credit. Can you imagine a farm community being inundated by German bankers wanting to lend money? So much of the money came out of Germany and foreign banks into here.

JOSEPH MOSNIER:

Is that right?

LAUCH FAIRCLOTH:

Yeah, readily available.

JOSEPH MOSNIER:

They came soliciting farm business?

LAUCH FAIRCLOTH:

Yeah. First Union had put enormous amounts of money into it early. [So had] Nation's Bank, so the money was available. I remember one time—. It was just a funny little story, but let me finish my train [of thought]. What happened was when the big farm operations here started penetrating into Iowa and Illinois and building the big farms there, that's when all the resentment started. See, Murphy is probably the biggest hog farmer in Iowa, Minnesota, Nebraska. Prestage is the biggest in North Carolina, Mississippi, Tennessee. They're not grown here, these huge operations. I was in the Senate and Chuck Grassley was telling me that the Iowa Pork Growers were having their annual convention. If you had a convention of the North Carolina pork growers that really own and control farming operations, you could have it in this room and have a lot of room left over. The Iowa Pork Growers were down there. There was a mob of them, five or six hundred [people]. I just went because Senator Grassley from Iowa asked me.

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I was moving around, and this Iowa banker was there. There were a lot of bankers there. I said, "Do you make farm loans to farmers?" "Oh yes. We work closely with the agriculture community." I said, "Well, I was thinking maybe I might build a small hog farm in Iowa. We need about three million dollars to build the first farm." He went gray. I was of course picking at him. I knew of course what he was going to say. He went gray. He said, "We've never made a farm loan that exceeded a hundred thousand dollars and that was on land." So, that's the mindset. It became a great industry.

JOSEPH MOSNIER:

Let me ask you about that early lending. The returns proved out so quickly that bankers quickly got very comfortable or was there some other reason that they were so willing?

LAUCH FAIRCLOTH:

The returns were so quick and so good. It was as if when Ford was struggling to get his first automobile out with a tiller attached, General Motors had come out with a Corvette. I mean, it was as if in 1910 automobile production, somebody had all of a sudden come out with a new BMW as it is today. So, [it happened] all of a sudden. When a man quits teaching school and forty years later is listed as one of the forty richest men in the nation [by] raising hogs, it's profitable.

JOSEPH MOSNIER:

Let me ask you about Wendell Murphy. When folks look back on the history of evolving agriculture in North Carolina, Murphy's name comes up. What are the key things that somebody ought to understand about Wendell Murphy?

LAUCH FAIRCLOTH:

[Murphy is] very clever, very smart, hard working, [and] innovative. [He's] smart as they come and straight as an arrow. [He's] absolute pressed trash, but so what.

JOSEPH MOSNIER:

Let me ask about the criticism you've alluded to over times. You've said some of it bounced back from the effort to expand and come to a certain kind of notice

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and prominence in the midwest, rather than here. Any appreciable impact on the underlying health of the business from all that criticism?

LAUCH FAIRCLOTH:

No.

JOSEPH MOSNIER:

None at all?

LAUCH FAIRCLOTH:

I mean, they write the papers and the general effect is somebody will wrap fish in it tomorrow. I think they've about worn it out.

JOSEPH MOSNIER:

What do you make of these complaints that are presented in criticisms of contemporary farming that the nature of the local farm community has changed? It sounds like you weren't too sentimental about that community.

LAUCH FAIRCLOTH:

Of course, to hell it's changed. It's changed dramatically. I don't know. These people that are opposed to the change, I don't know what they want to go back to. Why don't we take the land between Raleigh, Durham and Chapel Hill and put it back into tobacco farms? [We could] clean all those buildings out and start building four acres of tobacco in little hillside patches. That would be wonderful to return to that way of life. How many want to return? We ought to really clean all those trashy buildings and things out and put those farms back like they were.

JOSEPH MOSNIER:

Let me ask you the fortunes of tobacco across – well, if we can pick up the story with the first Surgeon General report, I suppose.

LAUCH FAIRCLOTH:

Oh, you can pick it up anywhere. What I think I see in so many people is a refusal to face change. They want to imagine a segment of society to which they are not involved moving and remaining as they read about it in the fifth grade. They want themselves to have moved and the immediate society that they are involved in to have evolved into a new society, but they want that society they are not involved in to be

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exactly as they read about it in the fifth grade. The old woman in the shoe. The pig wouldn't get over the style. The fox eating the chickens. Bucolic trips to the beach down sylvan lanes. Massive miles of beach with one hotdog stand that only opens for two months out of the year. This is the way it was read about in the book. It doesn't stay that way. There had to be a massive change in farming. My father must've had, at one time, five hundred people planting and harvesting a crop that twenty-five would do today and spend a month at the beach each. What would you do with those people today? They're fighting the evolution of farming. Now, not one of them has ever said — I don't mean this to be racist — that people should rip their suits and ties off and take a sack and go down the road picking cotton. If you wanted to do away with — take an item — the cotton picker [machine], you could eliminate employment in the United States tomorrow. There would be none because it would take every person you could find to pick enough cotton to make the consumption we use today. But these same people for some reason [think] the chicken raised in a thirty acre field is somehow a healthier chicken. [The chicken] that picks up bugs and dead animals and eats them, is a much healthier chicken than one that moves through a house fed a formula that changes daily as his weight changes. [The formula is] balanced far better than what they ever ate in their life as to proteins and carbohydrates. There is not a person in this country that eats as balanced a diet as we feed hogs everyday. We adjust that formula every three days. [We] micromanage it for fiber to the epitome of the diet, to vitamins, to—. Yet there's some kind of antiquated mindset that that's bad. [There is the mindset] that an animal raised in "the wild" is better than one that is heated and air-conditioned and never suffered a moment in its life. They say this and you go, "Absolutely." It makes nice cookout and cocktail party talk, but the

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reality of it is that they have no idea what they are talking about. The easiest cow to raise in the world — we've had them, we've had a lot of them — are longhorns. They are tough. They can eat anything under the sun. They can have a calf and never even slow down walking. He'd jump up and catch his mother and nurse. Flies don't bother them. They don't have diseases. They are wonderful, except you can't give the son of a bitch away. There's no fat on him. He's fat free. I mean, there is not enough fat in there. There isn't any fat on a longhorn. Wouldn't that sound like an ideal animal? Except, try to sell it in a restaurant. That is tough, stringy beef and they send it back. I took the bait. I thought it sounded so good. It was devastating. You couldn't give them away. Nobody wants them.

JOSEPH MOSNIER:

Let me ask you this. Let me have you reflect on how the part of the state's agricultural economy that is still growing a lot of tobacco has been fairing in the last ten, fifteen years.

LAUCH FAIRCLOTH:

Well, I drifted off on you. It's changing. The cigarette machine changed the tobacco industry. What changed the tobacco industry? The cigarette machine. Do you think Greta Garbo could've sold cigarettes if she'd have had to take out a sack of paper and licked it and spit it and pulled the tobacco into it? How glamorous would that have been? Nothing like sitting under a beach umbrella with a hat on with an elegant pack of Lucky Strikes in a green, beautiful pack. You didn't know they used to be green, did you? Lucky Strikes used to be green and the war came on. God knows, I never have understood the war, but all of a sudden they wanted the green dye — the government did. So Lucky Strikes came in a white pack. The slogan was "Lucky Strike green has gone to war." The cigarette machine made it. "I'll have a cigarette." Just some paper, here's a

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little sack of tobacco, roll yourself one. How about sitting in that Stork Club rolling yourself a cigarette? The cigarette machine made it highly acceptable. No question, tobacco's addictive, habit forming, whatever. What isn't? So are corn flakes if you eat them every morning. So is anything that you do on a regular, consistent basis. Now no question, it'll destroy your health, but as far as the habit forming part of it, I don't see that it's any more habit forming than taking Metamucil every morning. If you take it every morning, you feel like you've got to have it. Certainly, it's devastating to your health. There's no argument. There's no question. We've discovered that. I don't think that the man that invented the cigarette machine had any idea. I'm satisfied that J.B. Duke had no earthly idea that cigarettes were harmful. It's in the span of time just in the last few years that we've become aware here, and pretty much people have quit smoking. A few still are, but it's a social change and the tobacco industry, the farming of it's pretty well over. There'll be some tobacco grown, but cigarette consumption is going to continue to decline. It's not a socially acceptable practice, but there'll be a few [smokers]. [There will be a] little tobacco grown. There'll be a few people smoking. What the hell? Prostitution is still around, but it's not much of a way of life or affecting many people.

JOSEPH MOSNIER:

I'm surprised at how definitive your views are about how tobacco acreage in North Carolina—.

LAUCH FAIRCLOTH:

Oh, it'll drop out to nothing.

JOSEPH MOSNIER:

How fast?

LAUCH FAIRCLOTH:

Pretty more rapidly than we expect. Number one, you can grow tobacco anywhere in the world. Finest country to grow tobacco in was Zimbabwe or Rhodesia. Of course, they have such political turmoil, they can't grow anything. They can only

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grow welfare checks and subsidies. That's the finest country. China can grow tobacco. So the companies will be moving their manufacturing overseas. The reason it's still here now is Marlboro. A pack of Marlboro cigarettes will bring a dollar more in Germany made in the United States than they will made in Germany. That's a stupid way [to do it], but they'll do it. So, that gap will begin to close. As the Chinese become more sophisticated, as the Asians become more sophisticated, the consumption of tobacco will be a fourth world habit. It will disappear.

JOSEPH MOSNIER:

So you think it's going to fall off say in China and Asia as well in another generation because of the underlying health issue?

LAUCH FAIRCLOTH:

All right, who smokes in the United States today? Who smokes?

JOSEPH MOSNIER:

I imagine it's pretty much a class-defined thing by and large.

LAUCH FAIRCLOTH:

A what?

JOSEPH MOSNIER:

[It's a ] class defined thing, increasingly.

LAUCH FAIRCLOTH:

Increasingly. When we were talking about putting the tax on tobacco, the statistics were that we were going to put the biggest tax increase in the history of the world on about twenty-six percent of the lowest income segment of society. Who wants to identify themselves, except a few nuts, with being in the lower segment of society? How many people go to Goldman-Sachs for a job in a T-shirt with a pack of Marlboros sticking out of their pocket?

JOSEPH MOSNIER:

How well has NC State and the North Carolina Department of Agriculture—. I'm thinking of Jim Graham's broad ambition towards diversification over the last twenty years. That's largely the sort of description he gives of his record over there. What's your sense of the state's agricultural apparatus, so to speak?

LAUCH FAIRCLOTH:

Cut the machine. [Break]

JOSEPH MOSNIER:

Speak generally about your sense of the range of impact of the State Department of Agriculture.

LAUCH FAIRCLOTH:

I don't think the State Department of Agriculture has had any impact on the state of agriculture at all. It performs its regulatory functions, and that's about what it does. It inspects gasoline, chicken plants, and it's a regulatory agency of inspection. But as far as the growth, the dynamics of agriculture in the state, it has had no effect whatsoever.

JOSEPH MOSNIER:

What's the impact, in your view, been of all the university-based ag research, say at NC State?

LAUCH FAIRCLOTH:

Research at NC State has been very good. Actually, the system that puts cooperative agriculture in the counties has become much, much better. They started out in the '30s by Mr. Wallace's social program. There's still a little of that still going on, but today it's affected pretty much agriculture. They've still got a few women teaching farm wives that drive up in sixty thousand-dollar Mercedes how to can cucumbers, but generally that mindset has left. Particularly the research at the university has been very good and the cooperative service [has been good] because they have found a niche. They do work in agriculture and got away from trying to be a social program.

JOSEPH MOSNIER:

Let me ask you about the broad issue of trends in land use. [Discuss] suburban sprawl outside so many cities in North Carolina, as well as elsewhere, and the relationship of that expanding suburban landscape as it impinges on the farm landscape. Has that been a big challenge or so far not too much of one?

LAUCH FAIRCLOTH:

What do you mean, "challenge?"

JOSEPH MOSNIER:

[Is it a] tough one for the farm community to manage?

LAUCH FAIRCLOTH:

In what way?

JOSEPH MOSNIER:

I'm wondering if, for example, the pressures to sell to developers, the troubles with new suburbanization wanting to impose restrictions on traditional farm practices, increasing attention to—.

LAUCH FAIRCLOTH:

That has not come into this part of the country. I don't know anywhere that it has. You know, you run into great problems and when you're in the—. These farmers around Raleigh have really suffered. They have and it's been kind of sad. Some of them have been farming on land with a subsistence existence for a hundred years, and all of a sudden they sell it for eight million dollars. They've really had that tough time. They've found Palm Beach much more exhilarating. I had a farm out here that was doing very well. It was producing about seven hundred dollars worth of hay a year. I rented it for fifty thousand dollars a month for a shopping center last week. I've been hating to see that hay go. It's a joke.

JOSEPH MOSNIER:

All right.

LAUCH FAIRCLOTH:

Half the farmland in this country is unused. Half of it. I hear that, "Oh, we're taking up valuable farmland." Tell me one commodity that isn't in the pits in price. Name one farm commodity from kumquats to radishes, from cotton to flax, that isn't grossly overproduced. Take any trip in any car any where and a full third of the fields you'll see are untended at all and one half of those that are tended are tended at far less than maximum production. It is a figment of the imagination of newspaper writers. Corn is a dollar and ninety cents at the market this morning. If it were eight dollars a bushel, you could quadruple production. Cotton that's fifty and less cents a pound, if it were two

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dollars a pound, you could wrap the world up in cotton. They talk about this sprawl. Now I must say, maybe it is more pleasant on the way to the beach to ride through a sylvan cow pasture that is on its best netting four dollars a year as compared to a shopping center. It's nice to have the shopping center near your house and your development, in your section of town, but for heaven sakes when I leave here, keep things open and clean for me.

JOSEPH MOSNIER:

Any aspects, since you're such an ardent champion of the new with substantial cause certainly—.

LAUCH FAIRCLOTH:

Well, what's your thought on that?

JOSEPH MOSNIER:

Oh, I don't know that I have one. I don't know much about agriculture. I've not lived around agriculture. No, I can well respect your position. It's easy to understand. Any concerns about the cutting edge of agricultural science and technology today? You begin now to hear, for example, the European Union—.

LAUCH FAIRCLOTH:

Genetic engineering, yes. It's absolutely common. The people that are opposing it are as antiquated as anything can possibly be. They are as ridiculous as the laws that were passed in most counties at the turn of the century that you had to have somebody walking in front of a car waving with a flag when it came down the street so it wouldn't frighten the mules. Do they want to go back to before we had hybrid corn when you could make twenty bushels to the acre? These people are so opposed to any advance, yet they considered themselves highly enlightened people. [They think] any advance is bad. Why not produce a soybean that you can go over one time and spray a chemical on and eliminate all weeds and not damage the soybean because it has been genetically engineered to be resistant to the chemical? Would they like to have thousands and

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thousands of people out of Chicago come down with a hoe and weed those soybeans? Is that the way of the future they see? It is so ludicrous.

JOSEPH MOSNIER:

What's the next big change that's coming?

LAUCH FAIRCLOTH:

A big change?

JOSEPH MOSNIER:

Yeah.

LAUCH FAIRCLOTH:

Advances in agriculture. You can buy a turkey today frozen and dressed, ready to cook at any supermarket in this country cheaper than you can buy a turkey in 1931 in the depth of the Depression, not counting inflation. A turkey was six and seven dollars, an absolute luxury food that rarely could ordinary people even begin to think about eating. You could buy the same turkey today for five dollars or six [and it's a] hell of a lot better turkey. So [they're] against advances. They focus on one thing. Cows give eighteen to twenty gallons of milk a day. You can buy a gallon of milk cheaper today than you could in the '40s because of these advances. They want the price down. How much would a gallon of milk cost if the average dairy cow in this country gave a gallon and a half of milk as it did in the '20s? How much would a gallon cost today?

JOSEPH MOSNIER:

Where are the folks looking down the road for agriculture today starting to spend their money on? What are the trends to bet on? [What are the] new things beyond what's there now?

LAUCH FAIRCLOTH:

There will be many of them, but there's going to be a massive consolidation of them. There has been, and there's going to be, more and more of it in agriculture. Regardless of the government trying to stop it, it is a business. Business people will be running it. It's a business and not a way of life anymore. It was a subsistence. It was a way of life. But as I said, World War Two and the event of the tractor. I don't mean the

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tractor was invented, but it the advent of the tractor, and of hybrid seed, herbicides, and insecticides, totally changed the [agriculture business]. And these advances have continued. To get the insects off of plants, thousands of children would crawl up and down the row in the hot sun and pick the bugs and put them in a jar. You tell me that to spray a chemical on it is not an improvement. To put thousands of children from five years old on, crawling up and down the row in a hundred degree sun. That's the way it was done. These people are just naysayers and have no idea of what they're talking about. I run into them all the time and I simply just grin and move on.

JOSEPH MOSNIER:

How much have farmers had to adjust their practices to accommodate the gradually expanding environmental regime? Much yet?

LAUCH FAIRCLOTH:

Not that I'm aware of.

JOSEPH MOSNIER:

Do you think that that's likely to change?

LAUCH FAIRCLOTH:

I don't see the environmental—. Oh, there's been some, but most of it was—. I assume you would be thinking about something like wetlands.

JOSEPH MOSNIER:

Sure, as one example. Sure.

LAUCH FAIRCLOTH:

The draining of wetlands was never a farm practice. That was a government practice financed by the Soil Conservation Service. I think I told you this before. Did I? In the Everglades, who drained them?

JOSEPH MOSNIER:

Army Corps of Engineers, I'm sure.

LAUCH FAIRCLOTH:

Who dug the canals here? Early on you asked me if there was more money playing with the government in cutting canals. I had six drag lines and we cut them by the miles. If this had any impact, these were cut by the government. No farmer could ever afford them. The water level in Florida is maintained by the Corps of Engineers.

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They're the ones that spent six hundred million dollars channelizing the Kissimmee River down to the Everglades and now they're going to spend a billion and a half unchannelizing it. So, I don't see any—. I've been farming all my life. I can't think of any real environmental problems.

JOSEPH MOSNIER:

No, my question was really turned more to the issue of: is it becoming more difficult to manage farm operations in light of environmental regulations that are being promulgated out of political systems? These regulations are probably much more influenced by urban and suburban voters than agricultural voters.

LAUCH FAIRCLOTH:

Actually no. That has not been true.

JOSEPH MOSNIER:

And you're not too worried that that's going to—?

LAUCH FAIRCLOTH:

No, I really am not. I really am not. I don't know of anything. There are rules on how we have to get rid of waste, but they should've been here. It's so, so much better than [it used to be]. These people want to go back to the family farm where you dumped it straight into the river with no questions asked. They thought that was great. That was the family farm. Albeit the man didn't have many hogs and many cows, but ultimately the number of hogs and cows were the same. Ultimately the waste might have been dispersed more, but it wound up in the same ecosystem.

JOSEPH MOSNIER:

Final thoughts as we kind of sum up on this long trajectory of agriculture and its history in North Carolina and more generally? [Are there] other things that I haven't pointed to that you think are important parts of this?

LAUCH FAIRCLOTH:

I think that the eastern part of the state and outside of the urban sprawl areas [are important]. Everybody's waiting and talking about, "I sure hope it sprawls in my direction. Bring it on." If you've been sitting in a four-room house with one bathroom

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for a hundred years and someone starts talking about four million dollars, sprawl all sounds pretty good. If you're living in a twenty-room house and want to ride to the beach, it's probably nicer to have seen it as a cow pasture. But farming will—. Two very effective types of farming are moving in and will tend to dominate agriculture, probably nationwide, but certainly in the south for over the period of the next forty years. You'll see the highly efficient agricultural companies. They'll grow corn. They'll grow soybeans or they'll grow hogs. They will run a dairy. They'll grow sweet potatoes and have big grade machines and big warehouses and big sweet potatoes or asparagus. They'll be strictly commercial. I mean, we've got six hundred acres of asparagus. You'll have the commercial packinghouse, the uniformity, the quality, and that will supply the market.

Then you're going to see part-time farming. These will be people that probably own the land. They bought small farms and are doing specialized farming, too, but in a different way. [They're growing things like] herbs. A lot of them will cater to the free-range chicken house, which will always be an infinitesimal segment of the market. They will raise a few eggs from so-called range-roamed chickens. They'll find them in the weeds and buy some from the grocery store to supplement their sales. You're going to see a lot of that because there is a nostalgia for the farm the way it was. These will be part-time. This will not be, by any sense of the imagination, their principle source of income. In fact, what they will do is serve as a conduit for laundering money. They will spend three thousand dollars a year on the farm and sell the produce for cash and write off the difference.

JOSEPH MOSNIER:

You don't see any that trend towards any specialized, boutique vegetables and so forth — romantics and all that? You don't think that's likely to change the relative market share to any appreciable degree?

LAUCH FAIRCLOTH:

No. I think you'll see the rise of organic farming and boutique farming. That's a good description of it. Herbs, that's going to be fast-moving and [so will] specialized vegetables [such as] bibb lettuce from the local summer season's little hothouse, and that type of thing. Yes. But the seventy-acre farmer, midsized, will disappear. It will become a cottage industry, supplemental income, which is very good, and a nice way of life and maintains the small farming and the little specialized boutique stuff that the commercial farmer can't. It's like General Motors turning out six cars a year of a special, little kind. So farming will do—

JOSEPH MOSNIER:

Let me thank you. We're at the limit of our time.

LAUCH FAIRCLOTH:

One thing, [the] biggest change in agricultural that you're going to see is very little farming. This is the biggest change you're going to see in agriculture. Vegetables will all be grown under what we call plastic. I don't know if you've ever seen it or not. As you go back out of town, on the right hand side if you see that field of cucumbers, that man picked those cucumbers fifteen times. Now he sprayed and killed the vines because he's getting ready to put another crop in right back on those same beds, but you see the pepper. That is really specialized farming. Under that bed, throw up the dirt and they put a canvas. You can stop and look at it.

JOSEPH MOSNIER:

Yeah sure.

LAUCH FAIRCLOTH:

He'd be glad for you to.

JOSEPH MOSNIER:

Sure.

LAUCH FAIRCLOTH:

Then a plastic over that, and then in that is a what they call a trickle line or hose. You know how it works?

JOSEPH MOSNIER:

Sure.

LAUCH FAIRCLOTH:

They throw fertilizer and water. That's what it's coming to with all vegetables.

JOSEPH MOSNIER:

Thank you so much for all this time.

LAUCH FAIRCLOTH:

Thank you. I enjoyed talking to you.

JOSEPH MOSNIER:

It's been very, very interesting.