How Caswell County Affected Railroad Expansion into Western North Carolina
Before the Civil War
Caswell County's involvement in North Carolina's railroad history must begin with the vision of Archibald DeBow Murphey (1777-1832). Murphey was born in Caswell County the same year it became a county, being created from Orange County. By 1919, he was a lawyer and legislator who promoted education and internal improvements. These internal improvements focused on transportation, a vision that would result in the railroad movement that came to fruition after his death.
The early history of railroads in North Carolina is, to say the least, confusing. Many railroads were proposed, but few were built. A local group would petition the legislature for a charter (authorization) to create a railroad company and seek investors -- purchasers of stock in the new company. Few of these early efforts were able to generate sufficient funds to proceed. Several such early plans were floated in Caswell County, but no railroads were constructed.1
The early successful railroads were in the eastern part of North Carolina and generally ran north-south. These include: (1) Wilmington & Weldon Railroad; (2) Greenville & Roanoke Railroad; and (3) Raleigh & Gaston Railroad.
North Carolina Railroad. The first railroad to extend significantly westward turned out to be the most successful (and least corrupt): the North Carolina Railroad. And, of course, Caswell County played a central role.
In 1849, a bill was introduced in the North Carolina General Assembly to charter the North Carolina Railroad Company, with a capital of $3 million. The state would buy shares totaling $2 million, with the remaining one-third sold to the public. The line would run from Goldsboro to Charlotte, passing through Raleigh. Here is how historian William Powell described proceedings in the North Carolina Senate:
Powell, William S. North Carolina Through Four Centuries. (Chapel Hill and London: The University of North Carolina Press, 1989.
Another historian describes the event as follows:
The "Baptist Enigma"
A major issue before the North Carolina Legislature during the 1848/1849 term was funding the North Carolina Railroad. Some favored a north-south line, while others supported extending the railroad to Charlotte to open the western parts of North Carolina.
When the bill proposing the east-west route to Charlotte came before the North Carolina Senate, Caswell County's Calvin Graves was Speaker. Following is Senator Rufus Barringer's account of the episode, which effectively ended the political career of Calvin Graves as his constituents favored a north-south route that would pass through Caswell County (on to Danville and Richmond):
"The chances in the Senate were all in doubt. That body was Democratic; and up to this time, no special effort had been made to draw the old ship from its Jeffersonian moorings. And such men as Henry W. Conner, John H. Drake, A. B. Hawkins, John Berry, George Bower, W. D. Bethel, George W. Thompson, and John Walker were hard to lead and could not be driven. And above them all sat Speaker Calvin Graves, a recognized force from a county just under the nose of Danville, and devoted to Richmond. The speaker was tall, angular, and singularly ugly in feature; but his character was high; he was strictly impartial, and with all courtesy in bearing.
"From first to last no one could divine a leaning either way. But now a mighty effort was made to teach these born men of the plow and of the people a new tenet of republican faith, an awakening to what the State owed the public. Judge Romulus M. Saunders [from Caswell County] and W. W. Holden [of Kirk-Holden War fame] both stepped forward and made strong appeals for the new departure [against the bill]. But all to no purpose. And then some of the Whigs, left out by the Ashe bill, stood aloof. From these and other causes, it was seen from day to day, in all the preliminary skirmishes, as also in the final struggle, the result would be very close, and that all might hang on the 'Baptist Enigma,' Calvin Graves.
"By consent, the first and second readings were chiefly formal, to get the measure in shape, and to secure all sides and parties a just showing. This was after the old style, quiet North Carolina way, when, as a hundred years before, Dissenters and Churchmen were alike honoring King, Queen and Royal Governor by naming towns, counties and mountain peaks after them, but at the same time, solemnly resolved to hurl them instantly from power 'if they did not do exactly the fair thing.'
"So here, every courtesy was shown opposing parties and interests until January 25, when the bill came regularly up, after full debate, and was put on its third and final reading. The Senate chamber was packed with visitors and strangers from all quarters to see the fate of the momentous struggle, now so full of weal or woe to the dear 'Old North State,' and which might settle here once for all the mighty effort to awake North Carolina from the long sleep of her death-like 'Rip-Van-Winkleism.'
"Speaker Graves calmly announced: 'The bill to charter the North Carolina Railroad Company and for other purposes is now upon its third reading. Is the Senate ready for the question?' Feeble responses said, 'Question.' The roll call began; and as feared nearly every Democrat voted 'No.' The tally was kept by hundreds, and when the clerk announced 22 yeas and 22 nays, there was an awful silence. The slender form of Speaker Graves stood up, and leaning slightly forward, with gavel in hand, he said: 'The vote on the bill being equal, 22 yeas and 22 nays, the chair votes Yea. The bill has passed its third and last reading.'"2
Graves's fellow Caswellian and member of the North Carolina House of Representatives, Romulus M. Saunders, spoke against the bill with respect to which Graves broke the tie, voting in favor. But, the bill passed the House by six votes.
The North Carolina Railroad Company was organized July 11, 1850, in Salisbury at a meeting of the stockholders. Surveying began in August, and in Greensboro July 11, 1851, Calvin Graves participated in a ceremony laying the first rails. On January 29, 1856, the road was ready to open from Goldsboro to Charlotte (223 miles). Then came the Civil War.
Western North Carolina Railroad. The first serious attempt to extend railroad service to western North Carolina occurred in 1852, when the North Carolina & Western Railroad was chartered to run from Salisbury to Morganton. Little progress was made, and in 1855 the North Carolina General Assembly abandoned the North Carolina & Western Railroad and created in its place the Western North Carolina Railroad. Some progress apparently was made in the Piedmont west of Salisbury (extending the line toward Morganton), but construction was halted by the Civil War.
As with most railroad ventures of the time, the Western North Carolina Railroad was partially financed by the State of North Carolina issuing bonds to purchase stock (shares) in the railroad corporation (usually taking a two-thirds ownership position). With respect to the Western North Carolina Railroad, the State of North Carolina purchased $1.4 million of the total capitalization of $2.1 million.
Civil War Years
At the beginning of the Civil War there were approximately 750-900 miles of railroad in North Carolina (fourteen railroads). The tracks stretched as far west as a few miles east of Morganton in Burke County and Lincolnton in Lincoln County, and as far east as Morehead City in Carteret County - connecting the Piedmont with three significant port cities: Beaufort, New Bern, and Wilmington. Two railroads connected the state with Virginia, and two railroads connected the state with South Carolina.
Fifty more miles were built during the war, connecting Greensboro to Danville, Virginia (actually running through western Caswell County). All the roads were poorly equipped when the war started, and most were barely operable at war's end.3. Funds were not available to maintain the lines and equipment, some lines were cannibalized to maintain others, and Union forces delighted in destroying railroads (with Stoneman being a prime example).
Hamilton, cited above, writing only a few decades after hostilities ceased, will be relied upon heavily here for his insights into North Carolina railroad history during Reconstruction (roughly 1865-1877). He is one of the few authors able to explain the railroad fraud that was rampant.
Swepson apparently moved to Caswell County, North Carolina, around 1840 after the death of his parents. In 1842, he married Virginia Bartlett Yancey, daughter and youngest child of Caswell County's Bartlett Yancey, Jr. (1785-1828).4
To continue the work of the Western North Carolina Railroad, the state in 1866 subscribed $4 million in additional investments. How much of this investment actually resulted in cash is not certain. However, some progress was made extending the line from Salisbury toward Morganton, and plans were for the next section: Morganton to Old Fort. This depleted the available funds.
By act of a special session of the North Carolina General Assembly August 19, 1868, the Western North Carolina Railroad Company's charter was amended to divide the company's property between Western North Carolina Railroad Company - Eastern Division and Western North Carolina Railroad Company - Western Division. George W. Swepson was elected president of the Western Division, which was to have constructed two lines westward from Asheville to the Tennessee border. The Eastern Division was responsible for the line from Salisbury/Morganton through the mountains to Asheville.
Subscriptions were made by private (non-state) investors for 3,080 shares: Milton S. Littlefield (2,000); Hugh Reynolds of Statesville (1,000); and 80 shares to various smaller investors. As was usual with respect to railroad ventures, the state subscribed to two-thirds of the shares and authorized bonds to finance the purchase. The bonds would not be sold by the state to generate cash but would actually be transferred to the Western Division, which would then sell or hypothecate (use as collateral for loans) the bonds to raise cash.
While not entirely clear, private interests apparently subscribed to 3,080 shares, and the State of North Carolina subscribed to some 6,000 shares. However, the state was not required to invest (transfer bonds to the Western Division) until 5% cash had been tendered by the subscribers of the 3,080 privately owned shares and the whole of the Western Division project was contracted for construction. The owners of the 80 shares did indeed pay cash, but Littlefield and Reynolds only gave their drafts (checks), payable to George W. Swepson, who, at a meeting of shareholders October 15, 1868, in Morganton, had been elected president of the Western Division.
But, there was a problem. The act authorizing the Western Division and financing by the state did not include a special tax levy to pay interest on the bonds.
1"Caswell County's flirtation with railroads was of long duration and little success. Between 1835 and 1903 the General Assembly passed exactly twenty acts pertaining to railroads that might offer service to the county and not one of them was effective. The extremely limited rail service that finally came to Caswell was the result of initiative in Virginia." Powell, William S. When the Past Refused to Die. Durham (North Carolina): Moore Publishing Company, 1977, p. 498.
2Hamilton, J. G. de R. History of North Carolina Since 1860. Chicago: Lewis Publishing Company, 1919.
4What brought George W. Swepson to Caswell County, North Carolina? The earliest record of his presence there is the November 23, 1842 (bond date) marriage to Virginia Bartlett Yancey. A tribute to him upon his death states that he moved to Caswell County in 1840, forced to enter the business world by the death of his father. Historian William S. Powell also states, but without supporting documentation, that Swepson "had moved to Caswell County by 1840." Some claim he was a school teacher, but no record supporting that occupation has been found. Swepson purportedly was scheduled to attend Randolph Macon College, but never matriculated.
Was he a person of financial means before relocating to Caswell County, or did this wealth come to him by marriage into the Yancey family? At the time of the 1850 US census, Swepson presumably would have been living in Caswell County for at least 8 years. Census records for 1850 shows him with real estate valued at $9,000, described as a farmer, and owning 24 slaves. How did he obtain this real estate and these slaves? Swepson's father was wealthy, owning 32 slaves at the time of the 1830 federal census. The father, William Mallory Swepson, died in 1835, and his will left all assets to his wife, but with the following provision: "with the privilege of giving off to my children as they marry or become of age such property as she may see cause . . . ." The will also provided: "[I]t is my will and desire at the death of my beloved wife Ann E Swepson, or upon marrying again, that my lands, stock, household and kitchen furniture and every thing lent her, except what she may have given off to her child or children, shall be sold except the negroes and the money arising from the sale and the negroes shall be equally divided between my children: Charity Ann Swepson, George W Swepson, Robert R Swepson, Martha A Swepson, and Mary E Swepson.
George Swepson's mother, Ann E. Swepson died the following year, 1836. Thus, George W. Swepson may have inherited substantial cash. Was this the financial basis of his various business ventures? But, why did take his cash to Caswell County? Geographically, Mecklenburg County, Virginia, is not far from Caswell County, North Carolina.
How did George W. Swepson go from being a Caswell County "farmer" in 1850, to being president of a Raleigh bank in 1865?
Even after George W. Swepson moved to Alamance County, he apparently maintained interests in Caswell County.
Did Albion Tourgee have NC railroad interests? His connection to Caswell County is not as direct as some of the other railroad fraud participants.
Trivia: Late in life, George W. Swepson found the Lord. His pastor was Thomas E. Skinner. The Reverend Skinner ran the blockade during the Civil War, among other things, to purchase Bible plates in England. He did this on the blockade runner "Advance." Guess who served on the "Advance"? Yes, the person was from Caswell County: John Baptist Smith.
Query why the Holts of Alamance County, North Carolina, textile mill fame, were less than friendly with George W. Swepson. Edwin Michael Holt had at least one legal conflict with Swepson, and Swepson's lawyer, Rufus Yancey McAden. See: E. M. Holt vs. George F. Bason, 72 N.C. 308 (1875) [concerning a 1869 land sale]. Note that Swepson killed Adolphus Moore. Adolphus G. Moore was a one-third owner of the Granite Cotton Factory in Haw River. His partner and two-third's owner was his brother-in-law, Thomas Michael Holt (1831-1896), who invented "Alamance Plaids," and served as North Carolina's Governor in the 1890s. This Holt family had many Caswell County connections. By virtue of Moore's will, his sister and wife of Thomas Michael Holt, became owner of one-third of the Granite Cotton Factory, thus consolidating ownership between husband and wife. Thomas Michael Holt is the son of Edwin Michael Holt. Beatty, Bess. Alamance: The Holt Family and Industrialization in a North Carolina County, 1837--1900. LSU Press: Baton Rouge, 1999.
Judge Thomas Settle, Jr., ND Florida, was a nephew of Calvin Graves. Settle's mother, Henrietta W. Graves, being a sister of Calvin Graves.
Few have focused on the role North Carolina Governor William W. Holden played in the Swepson/Littlefield scandal or, more generally, how Reconstruction politics allowed the swindle to happen. Note that one of the Holden articles of impeachment was based upon this railroad matter.
"On 9 February the house voted a ninth indictment, charging Holden with conspiring with George W. Swepson to defraud the state in connection with railroad bonds. This article was never presented to the senate, nor mentioned in the press, for fear of implicating Conservative leaders who were active in the Holden trial. No legitimate claim could ever be made that Holden was personally dishonest or that he had used his office for personal gain. The defense based its arguments on the fact that the violent activities of the Klan required stringent enforcement regulation, that the governor was authorized under state law to use such force, and that any maltreatment of prisoners was done contrary to orders. After a highly partisan trial, the senate—on 22 March—rendered a guilty verdict on the last six charges (the minor ones insofar as constitutional rights were concerned), and ordered that Holden be removed from his post and denied the right to hold office again in the state." Source: "William Woods Holden, 24 Nov. 1818-2 Nov. 1892," Dictionary of North Carolina Biography, William S. Powell, Editor. 1979-1996. www.uncpress.unc.edu [Accessed 1 June 2017].
Arthur, J. Preston. Western North Carolina: A History from 1730 to 1913. Raleigh: Edwards and Broughton Printing Company, 1914. Arthur devotes Chapter XIX to "Swepson and Littlefield."
Beatty, Bess. Alamance: The Holt Family and Industrialization in a North Carolina County, 1837-1900. Baton Rouge: Louisiana State University Press, 1999.
Daniels, Jonathan. Prince of Carpetbaggers. Westport (Connecticut): Greenwood Press, 1958.
Fenlon, Paul E. "The Notorious Swepson-Littlefield Fraud: Railroad Financing in Florida, 1868-1871," The Florida Historical Quarterly, Vol. 32, No. 4 (April 1954), pp. 231-261.
Hamilton, J. G. de Roulhac. History of North Carolina, Volume III, North Carolina Since 1860. Chicago and New York: The Lewis Publishing Company, 1919. [https://play.google.com/books/reader?id=YZY-AAAAYAAJ&printsec=frontcover&output=reader&hl=en&pg=GBS.PP1; accessed 5 June 2017].
Markovich, Jeremey. "Carolina Rails." Our State (August 2011).
Osment, T. (2008). Railroad's in Western North Carolina. [http://digitalheritage.org/2010/08/railroads-in-western-north-carolina/]
Railroad Cos. v. Schutte, 103 U.S. 118 (1881).
Shipp, W. M., Batchelor, J. B., Martin, Jas G., Commissioners. Report of the Commission to Investigate Charges of Fraud and Corruption, Under Act of Assembly, Session 1871-72. Raleigh: James H. Moore (State Printer and Binder), 1872. Generally referred to as the Shipp Fraud Commission. [https://archive.org/details/reportofcommissi00nort; accessed 5 June 2017].
Weaver, J. (1998). History of Western North Carolina-Chapter XX-Railroads. [http://www.newrivernotes.com/nc/wnc20.htm].
Western North Carolina Railroad Company. Proceedings of the General Meeting of Stockholders of the Western North Carolina Railroad Company. Salisbury, N.C.: The Banner Office. 1855. http://digital.ncdcr.gov/u?/p249901coll22,28096.
Western North Carolina Railroad Company. Second Annual Report of the Presidents and Directors to the Stockholders of the Western North Carolina Rail Road Company Together with the Proceedings of the Stockholders. Salisbury, N.C.: The Watchman Office. 1856.
Development of the railroad west of Salisbury (into the mountains) was interrupted by the Civil War, although some work had been done on extending the line toward Morganton. However, when westward expansion plans resumed after the war, Caswell County again played an important, if somewhat infamous, role.
Source: http://www.carolana.com/NC/Transportation/railroads/home.html [Accessed 31 May 2017]
After the Civil War plans were adopted to extend the railroad from Morganton to Old Fort and on to Asheville. In 1866, the Western North Carolina Railroad was funded by the State of North Carolina to the tune of $4 million in bonds. This allowed competion of the line to Morganton, but additional funds were needed for further westward expansion. This is where George W. Swepson and Milton S. Littlefield entered the picture. In 1868, the State of North Carolina issued $6.4 million in bonds to the Western North Carolina Railroad. Swepson and Littlefield "purchased" 2,000 of the 3,080 bonds/shares issued, thus attaining control of the Western North Carolina Railroad. Swepson and Littlefield never actually paid the State of North Carolina for the bonds, which they sold on the open market to raise cash.
The railroad did not reach Asheville until 1880. And, eventually it was extended the 116 miles to Murphy.
Oddly, Swepson apparently had placed a financial bet on development in western North Carolina, owning a half interest in Asheville's Eagle Hotel and thousands of acres in the area. But, these investments probably were made with funds embezzled from the Western Division of the Western North Carolina Railroad.
Editor's Note: Descriptions of the creation of the Western North Carolina Railroad are confusing. Railroads generally were created by authorizing the subscription of shares, not bonds. Shares convey ownership, while bonds only evidence debt. The simple answer is that the State of North Carolina purchased shares of stock with bonds.
"In 1868, or 1869, the State of North Carolina granted to the Western Division of the Western North Carolina Railroad Company $6,000,000 of North Carolina state bonds, the state taking a large portion of the capital stock of the company. George W. Swepson, the president of the company, co-operating with Milton S. Littlefield, who succeeded him as president, disposed of these bonds in New York, and fraudulently used a large part of their proceeds in purchasing a controlling interest in the Florida railroads above mentioned. The companies owning these roads were in default in the payment of former issues of bonds, which had been guaranteed by the internal improvement fund of Florida, and under a law of the state, the Florida Central Railroad was sond in 1868, and the Jacksonville, Pensacola & Mobile, consisting, originally, of two roads, was sold in 1869, and new companies were organized by the purchasers to carry them on. Swepson and Littlefield, with the North Carolina funds of which they acquired the possession in the manner above stated, purchased a large majority of the new stock of the Florida Central Railroad Company, and furnished the means for purchasing the Jacksonville, Pensacola & Mobile road, when it was sold in 1869; that is, they bought up and furnished the old bonds with which the purchase money was paid by the nominal purchasers, amounting to $960,300 of said bonds. The North Carolina Company alleged that this fraudulent appropriation of its money was not discovered for a long time, and that a resulting trust arose in its behalf to recover and have the property procured thereby. . . ."
Source: Norther District of Florida Federal Court Case No. 17,434 (1879), which apparently eventually went to the US Supreme Court.
The Western North Carolina Railroad (WNCRR) was established in 1855. The WNCRR eventually was split into two divisions, and each division formed after that was to be organized into a new company. This raked in capital stock in the amount of nearly $850,000 (Blackburn, 1980, 392).
In 1867 George W. Swepson, a native of N.C., gained political favors from Governor Holden and through his influence was able to attain presidency of the Western North Carolina Railroad. As a banker and an opportunist, he used the WNCRR as well as eastern lines, to funnel money directly into his pockets (Blackburn, 1980). Over $333,000 from the illegal sale of bonds was intrusted to Swepson during this time. Swepson headed the Western Division of the North Carolina Railroad for 2 years starting in 1867, but during his presidency, he failed to complete hardly any work on the roadbeds of the Western Division. In 1869, he resigned as president of the division having only established a grading on the Ducktown and Paint Rock stretches. Thankfully, however, extensive work had been completed on the Eastern Division and in 1869, the freight “Iron Horse” puffed its way along the railways from Morganton to Old Fort (Blackburn, 1980, p 383-390). Although this achievement had been made, the WNCRR had too many financial burdens.
In 1876, the Western North Carolina Railroad was put up for sale and was purchased by the state by Augustus S. Merrimon. Through a quick change of hands, a new ownership gave hope to the citizens of North Carolina once again that the Western North Carolina Railroad would finally be able to stretch across the mountains and into the Tennessee border (Blackburn, 1980).
Source: http://wncrr.weebly.com/owners-and-operators.html [Accessed 31 May 2017]
As late as 1905, holders of these railroad bonds were still attempting to collect from the State of North Carolina. See: https://www.newspapers.com/US/North%20Carolina/Charlotte/The%20Charlotte%20News_2155
William Hutson Abrams Jr., "The Western North Carolina Railroad" (M.A. thesis, Western Carolina University, 1976).
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Hugh T. Lefler and Albert R. Newsome, North Carolina: The History of a Southern State (1963).
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A Bill to Incorporate the Western North Carolina Railroad Company. Raleigh, N.C.: Seaton Gales. 1852. http://archive.org/stream/billtoincorporatewester#page/n1/mode/2up (accessed August 1, 2012).
The Select Committee. "Report of the Select Committee to Inquire into the Expediency of Selling the State's Interest in the Western N.C. Railroad." 1866.
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Western North Carolina Railroad Company. A record of the acts and charter, (original and amended,) of the Western Division of the Western North-Carolina Railroad. Asheville, N.C.: The "Pioneer" Office. 1869. http://archive.org/stream/recordofactschar00west#page/n3/mode/2up (accessed August 1, 2012).
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