The South's New Leader

North Carolina, observed Historian Arnold Toynbee in 1939, enjoys a "springlike burgeoning of life" because, unlike other Deep South states, it is not "a country living under a spell." The most important new fact about the U.S. South in the spring of 1959: burgeoning North Carolina, too busy in pursuit of 20th century economic development to be inhibited by diehard last stands against school integration, has quietly taken over the mantle of Southern leadership that Virginia wore so long, so proudly.

Springlike Tarheel vigor was at work last week from Kitty Hawk to Cherokee, from missile plant to church pulpit, reshaping a landscape once principally adorned by loblolly pine, flue-cured tobacco and two-room farm shacks. Near Laurinburg, Presbyterians broke ground for a new college, a few weeks behind the Methodist groundbreaking for a college at Rocky Mount and three years behind the brand-new $19 million campus of Baptist-affiliated Wake Forest College in Winston-Salem. All were additions to Dixie's best college complex, fed by Dixie's best public school system. In the center of the Piedmont, engineers mapped sites for nuclear, chemical and industrial research labs in a new, 4,000-acre "Research Triangle." East of Charlotte's booming suburbs, Alcoa let $40 million worth of contracts to expand its aluminum plant. Over the South's best highway net, semitrailers snorted day and night to serve a state economy so vigorous that it kept right on growing through the late recession.

Up from Segregation. In the solid granite Capitol in Raleigh, white-haired Governor Luther Hartwell Hodges, 61, businessman turned politician, totted up some headline statistics that proved the vigor behind his fondest dream: from January to March, industry built some $25,000,000 worth of new plants in North Carolina to add 5,600 new jobs (up 40% over 1958) paying $16 million a year (up 46%) to the state's payrolls. Showing its heels to its industry-hungry neighbors, North Carolina would almost certainly better its 1958 total of $253,000,000 in new-plant investment, tops for the South.*

Behind the thriving economy lay an even greater achievement: a state of mind and spirit that recognized long ago that good schools, expanding culture and economic development were too vital to be stopped short by a fight over integration. Like all Southern states, North Carolina met its toughest test after the Supreme Court's 1954 decision. But guided by able leadership, it did not panic. Instead it plotted minimum but legal compliance, went on to more important business--and in so doing soon put the crisis in reasonable perspective. Part of the credit was due to Governor Hodges and his sharp eye for business; part of it was due to the special heritage of the state that produced both Hodges and the kind of climate that he could operate in.

Statewide Campus. Next to the last colony into the Union, North Carolina lacked good seaports for the cotton-slave boom that swept Virginia and South Carolina. "A vale of humility," the state was called, "between two mountains of conceit." In the Civil War it lost more soldiers than any other Confederate state; later it suffered its share of corrupt Reconstruction government until 1901. Heading the new leaders that year: "Education Governor" Charles B. Aycock, whose fiery crusade for schools got a new one built every day for ten years, gave education a permanent claim on a lion's share of state spending (76% of the 1959 budget).

Spreading to adults, Aycock's education drive produced the South's first great college extension service at the University of North Carolina in Chapel Hill. Its regular faculty members roamed far and wide, by World War I came near their dream of using "the whole state for a campus." Sample of their work: road-planning "institutes" at Chapel Hill (1914-19) kicked off the South's first big, well-planned highway system; statewide high school debates focused on the need for good school libraries, got them going; extension service teachers organized part-time refresher courses for country doctors, inspired three medical schools (North Carolina U., Duke and Wake Forest); a community drama bureau set up three permanent historical dramas, e.g., The Lost Colony, on Roanoke Island, which yearly lure thousands of tourists for a night's pageantry. The community music bureau whipped up such interest that the North Carolina Symphony annually barnstorms the whole state; the Institute of Government became the adviser to every level of government.

Less obvious but more pervasive was the university's effect upon the state's business community, dominated by Chapel Hill alumni. Under the watchful eye of a benign oligarchy (R. J. Reynolds Tobacco Co., Wachovia Bank & Trust Co., Duke Power Co. and the "textile aristocracy"), North Carolina has been developed with uncommon imagination. Business leaders have endowed well-paid professorial chairs, set up string-free foundations, protected professors back at the alma mater from the political censorship common to state-supported Southern schools.

Business Governor. Chapel Hill beckoned early to Luther Hodges, born March 9, 1898, eighth among nine children of a poor tenant farmer who gave up and moved into the textile-mill town of Spray (1950 pop. 5,500). Though Luther quit seventh grade to work in the mill (50-c- a day), he later saved $62.50, at 17 went off to work his way through Chapel Hill (class of '19). After college, he resolved to go back home and make his mark in the mills, in 17 years worked his way up to production manager of Marshall Field & Co.'s textile empire.

The university had infected Hodges with an urge for public service. He took war leave to head the Office of Price Administration's textile division, spent two postwar hitches (1948, 1950-51) supervising U.S. aid in Germany. In 1952, urged by a business friend, he surprised Tarheel politicians by jumping in, almost unknown, to win the Lieutenant Governor's race. He held office only two years before the Supreme Court handed down its desegregation decision, and soon after, Incumbent Governor William B. Umstead died of a heart attack. Suddenly the tenant farmer's son stood amidst the biggest crisis since Appomattox.

No Massive Resistance. Working with legislative advisory commissions, new Governor Hodges sent to Chapel Hill for a bright young lawyer to spend full time on the complex school crisis. Result: clear understanding that the court had not ordered immediate mass integration, as many a Southerner feared, or left the states free to interpose their authority between the courts and specific schools, as Virginia's "massive resisters" began to preach. Hodges, himself a segregationist, pleaded with Negro leaders to maintain "voluntary separatism of the races." But, never first segregation before education, he pushed through laws (1955-56) which allowed local boards to accept Negro applicants, but gave local voters the ultimate "escape valve" choice of locking their schools rather than accept court-ordered integration--a choice he was pretty sure they would not take.

Under these laws, without court pressure, three cities (Winston-Salem, Charlotte, Greensboro) integrated the Deep South's first eleven Negro pupils in the fall of 1957.

The integration crisis faced (though far from finished), Hodges could focus state effort on the grim economic problem brought on by the sharp cut in farm employment. Watching over the nation's biggest farm population, Hodges knew that industrialization was an urgent necessity. But before he joined the platoon of Southern Governors wooing Yankee companies, Businessman Hodges spent three years getting his state in shape.

Business of Government. A new source of risk capital, Hodges knew, was needed to help Tarheels start new small enter prises of their own. He launched a privately financed Business Development Corp., personally headed a campaign that sold $1,000,000 worth of $10 shares (he bought $5,000 worth) for a kitty to back small business. Though B.D.C.'s fund represented only a small stick of capital, Hodges gave it leverage by signing up banks and loan associations to participate in B.D.C. risks. Run by a board of prominent citizens, B.D.C. took part in small loans totaling $5,000,000, created 8,000 new jobs, helped build a climate of confident risk-taking.

To get rid of a barrier to out-of-state corporations, Hodges took a long political risk in backing a bill to kill discriminatory corporate tax, lured in enough new plants to cut an anticipated $7,000,000 loss to $2,000,000 (TIME, Oct. 20). Planning for industry's long-run research needs, he talked the business oligarchy into financing the nonprofit Research Triangle equidistant from the 900 scientists at Chapel Hill, Duke University and North Carolina State College. Hodges persuaded local capitalists to kick in $1,590,000 to buy the land, build and run the first labs for three years. While engineers last week rushed along the plans, three private companies had research staffs in Raleigh and Durham, waiting for Triangle space.

Equally vigorous at the regular business of the state, Hodges tightened up cumbersome administrative machinery, started economy measures which in the current biennium, he estimates, will save about $13.5 million. One result: he sent this year's legislature a balanced budget, no proposals for new taxes. Although barred by law from succeeding himself, since he won his own term in 1956, Hodges refused to act like a lame duck. Out of ten study commissions, he sent the legislature proposals for such basic reforms as abolition of the justices of the peace, a rewrite of the state's 1868 constitution, a zoning and planning law to cope with the onrush of urbanization.

Develop the Best. Hodges' continued popularity stands as a remarkable phenomenon for a man who has made many hard decisions, a few of them bad, and stepped on many a political toe.* New enemies, finding hot-eyed support among the diehard segregationist minority, have begun to organize in the legislature against his programs.

But Luther Hodges, who will step down at the end of next year, can survey both his enemies and his state with considerable equanimity. When the future historians and educators put their heads together to find the South's most striking example of leadership during the segregation crisis, they will look long and hard before they surpass the Business Governor. Hodges had the good sense to develop the best instead of the worst instincts of his state by turning its eyes toward the future rather than "living under a spell" of the past.

* Comparable 1958 figures from other states: Louisiana $197,242,387, Georgia $156,484,500, Virginia $152,000,000, South Carolina $122,625,000, Tennessee $109,000,000, Florida $100,000,000 (est), Alabama $49,101,500, Mississippi $38,688,000, Arkansas $25,400,000 (cut after Little Rock from $131,100,000 in 1956, $44,900,000 in 1957).

* One recent setback to the good-business climate: Henderson's Harriet-Henderson Cotton Mills tangled with the Textile Workers Union of America in a strife-ridden, five-month strike that Hodges tried to mediate, only to see the agreement blown apart last week by company intransigence and a new outburst of union-led riots.

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