The Rich History of Bailey’s Mills: From Industrial Hub to Charming Inn

Bailey’s Mills, nestled in Reading, Vermont, represents a remarkable chapter in New England’s early industrial development. Built between 1835 and 1837 by Levi Bailey, a visionary entrepreneur, this mill complex thrived during a time when small-scale, water-powered manufacturing formed the backbone of rural economies.

Early Beginnings and Industrial Innovation

Levi Bailey arrived in Reading in the late 18th century, part of a wave of settlers from Massachusetts who brought with them agricultural and manufacturing knowledge. By 1794, Bailey and his partner George Betterley constructed a dam on Mill Brook to harness water power—an essential resource before widespread steam or electrical power. This dam enabled the operation of multiple facilities, including a woolen mill, grist mill, carding plant, and linseed-oil works, effectively creating a small industrial village.

The site’s mills processed local raw materials into finished products, supplying not only Reading but surrounding communities. The industrial ecosystem included a blacksmith shop and general store, illustrating a self-sufficient community supporting workers and their families.

Social and Economic Impact

Bailey’s Mills was more than just a production site; it shaped local life. Employees were often paid in company script, redeemable at Bailey’s store—reflecting early industrial labor practices. The mill village fostered a tight-knit community, complete with housing and educational opportunities, including a mill school for children.

The mills contributed significantly to Reading’s economy, positioning Levi Bailey as one of its most influential citizens. His commitment to quality and innovation helped sustain operations even as industrialization advanced elsewhere.

The “Spite Cemetery” and Local Lore

A unique and intriguing aspect of Bailey’s Mills’ history is the nearby “Spite Cemetery,” rooted in a historic land dispute. Neighbor David Hapgood’s donation of land for a cemetery on property Bailey sought to buy is a vivid example of early American frontier rivalries. This feud, immortalized in local stories, symbolizes the complexities of community and personal relations in early Vermont settlements.

Architectural and Cultural Legacy

The Bailey’s Mills buildings are notable for their Greek Revival style, a popular architectural form in 19th-century America symbolizing progress and democracy. Their well-preserved brick construction and functional design make them rare examples of rural industrial architecture still standing in Vermont.

Over the decades, as industrial practices changed and larger factories emerged elsewhere, the mill’s operations waned. Yet, the site retained its historic character, eventually catching the attention of preservationists.

More on Bailey’s Mills Before It Became a Bed & Breakfast

After Levi Bailey’s passing in 1850, the mill complex continued to serve as a vital hub for local industry and community life in Reading. Throughout the latter half of the 19th century and into the early 20th century, Bailey’s Mills evolved alongside changing technologies and economic shifts.

Continued Industrial Activity

Following Levi’s death, ownership and management of the mills passed through several hands. The woolen mill and associated operations adapted to new manufacturing techniques, occasionally modernizing machinery to meet growing regional demands. The grist mill remained an essential service for local farmers, processing grains into flour and meal that supported the rural population.

While the scale of production never rivaled larger urban factories, Bailey’s Mills retained its importance as a reliable, locally focused industrial site. Small workshops, including the blacksmith shop and carding plant, continued operating well into the early 1900s.

Community and Workforce

The mill village was a close-knit community where work and daily life were deeply intertwined. Housing near the mills accommodated workers and their families, fostering a sense of belonging. The small mill school helped provide basic education for children, who often balanced schooling with chores and, in some cases, light labor.

Payment in company scrip remained a feature in some periods, a common practice that reflected the isolated, self-sustaining nature of rural mill towns.

Decline and Transition

As the 20th century progressed, industrial consolidation and advances in transportation led to a decline in small-scale mills like Bailey’s. Larger factories with mechanized processes outcompeted rural mills, and many local operations shuttered or were repurposed.

By mid-century, the Bailey’s Mills complex was no longer a commercial hub but retained its historical architecture and setting. Its relative isolation helped preserve the buildings from extensive redevelopment.

Preservation Begins

Interest in historic preservation grew in the 1950s and ’60s, fueled by a national movement to protect architectural and cultural landmarks. Recognizing the unique character of Bailey’s Mills, the Thaeder family acquired the property and began restoration efforts. Their vision transformed the site into an inn that honored its industrial past while offering visitors a cozy, historically rich experience.

This preservation phase saved Bailey’s Mills from potential neglect or demolition, maintaining it as a tangible link to Vermont’s industrial and community heritage.

Later Years & Conversion

Bailey’s mills continued to operate until Levi Bailey’s passing in 1850. The site transitioned to various uses over the ensuing century until the mid-1960s, when Barbara Thaeder’s family acquired the property and embarked on its rehabilitation as a historic inn.

In 2023, the property entered a new chapter when it was purchased by Tom and Nicole Dunlay. Originally from Massachusetts, Tom had a long and dedicated career as a firefighter and EMT, while Nicole built her profession as a successful HR executive. Together with their beloved dog, Ember, they relocated to Vermont—drawn by the natural beauty, deep history, and quiet pace of life offered by Bailey’s Mills. A lifelong history enthusiast who loves antiques, Tom is deeply committed to preserving the property’s historic integrity. After thoughtful renovations, they reopened the inn as a bed and breakfast in the summer of 2025, blending historical preservation with a renewed spirit of hospitality. Today, they call both the property and Vermont home, welcoming guests as neighbors and stewards of this remarkable place.

A Renaissance in Hospitality

Since its rebirth in the 1960s, Bailey’s Mills has honored its roots while embracing comfort and charm. Original hardwood floors, exposed beams, fireplaces, and antique finishes coexist with modern amenities. Guests can:

• Wander the picturesque grounds that hug the brook and overlook the cemetery and old mill foundation.

• Relax on wraparound porches that retain their 19th-century grain and detail.

• Enjoy the historical narrative woven into every aspect—from room names like “Queen’s Room” to sunroom breakfasts served above the brook.

Bailey’s Mills Bed & Breakfast isn’t just lodging—it’s an immersive experience in Vermont’s industrial past, human stories, and architectural heritage. Whether you’re drawn by the history or simply by a longing for a quiet, stately retreat, this historic property invites you into the heart of rural Vermont’s soul.