The Pacolet Manufacturing Company's first mill was completed on Trough Shoals on the Pacolet River in 1883. The mill was driven by hydraulic power from the dam. A second mill, Mill No. 2 was built as an addition to Mill No. 1 in 1888. On June 6, 1903 the great Pacolet River Flood wiped out Mills No. 1 & 2 completely. Machinery and debree where everywhere on the river. Some of it was from the Clifton Mills upstream.

The old site became Pacolet Mill No. 5. Pacolet Mills No. 3 & 4 had already been constructed, Mill No. 3 downstream and Mill No. 4 in New Holland, GA.

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