See also: Manufacturing (From NC Atlas Revisited); Manufacturing Table of Contents ; Manufacturing Overview ; Exports ; Furniture ; Information Technology ; Iron and Steel Industry ; Textiles ; Tobacco ; Chatham Manufacturing Company; Coleman Manufacturing Company ; Fries Manufacturing and Power Company 
Part 3: Decline of Iron Production and the Effects of the Civil War
By 1860 North Carolina was one of the South's leading industrial states, with nearly 3,700 manufacturing plants of all types capitalized at $9.7 million and producing products valued at $16.7 million. Many of these comprised a number of small operations. Turpentine manufacture was the largest industry (North Carolina produced two-thirds of the U.S. supply), but the state's manufacturing establishments also included 640 gristmills  and 100 tobacco  products factories. There were also 39 textile  mills, more than in any other southern state. The state's leading industries were almost all related to agricultural products. Some analysts have seen this close connection as a weakness and a result of planter design. More likely, however, it reflected the scarce nonagricultural resources of the state.
North Carolina's iron  industry declined rapidly after the discovery of the process of making cheap, reliable iron from anthracite coal in Pennsylvania. The dearth of iron production would prove costly, especially during the Civil War . The state's poor iron supplies account for the fact that North Carolina and Florida were the only Confederate  states east of the Mississippi that did not produce a significant number of cannons for the war. Propellers, shafts, and anchors, as well as parts for engines and boilers, were produced at the Confederate Navy Yard  in Charlotte, however. In the production of small arms, the state fared better. Privately owned factories near Jamestown and Greensboro  manufactured modest quantities of rifles, pistols, and carbines. Following the capture of the Federal arsenal at Harpers Ferry, Va. (now West Virginia), by Gen. Stonewall Jackson , the Confederate government moved much of the arsenal's machinery to Fayetteville , where quantities of small arms were produced.
With severe shortages of consumer goods brought on by a Union naval blockade, there was considerable interest in increasing domestic manufacturing. However, limited natural resources and machinery, as well as military priority for all available resources, prevented many new factories from being built. Most production increases came at factories that existed before the war. During the war, many textile mills that had previously spun only yarn began to make cloth as well. Even so, most of the cloth produced went to the military, where it was used for uniforms and tents and as substitute for scarcer materials (horse bridles and rifle slings, for example, were often made of cloth to conserve leather for army shoes). Most civilian manufacturing needs went begging as North Carolinians often had to return to the pioneer days of home manufacture. The state government helped as it could. It purchased blockade-runners  to bring in goods, including cotton cards (pairs of wire-toothed brushes that straighten fibers) so that soldiers' wives and widows could use the state's abundant raw cotton to spin yarn and knit or weave their own cloth.
Brent D. Glass, The Textile Industry in North Carolina: A History (1992).
Douglass C. North, The Economic Growth of the United States, 1790-1860 (1961).
North Carolina Dept. of Commerce and Harris Publishing Co., North Carolina Manufacturers Directory (2002).
George B. Tindall, The Emergence of the New South, 1913-1945 (1967).
Confederate Navy Yard, NC Highway Historical Marker L-56: http://www.ncmarkers.com/Markers.aspx?ct=ddl&sp=search&k=Markers&sv=L-56%20-%20CONFEDERATE%20NAVY%20YARD 
1 January 2006 | deTreville, John R.; Hall, Lisa Coston