Behemoth Page 7
The Boston Manufacturing looms were crude, requiring course yarn—much coarser than what was being used in England—to avoid excessive breakage. As a result, the mill could only produce basic, heavy cloth. Initially the company turned out yard-wide white sheeting, of the sort then being imported from India, a product popular in the growing Western settlements, where home spinning and weaving were less common than in New England and durability was valued. Some of the cloth was sold in the South to make clothing for slaves. The company distributed all of its output through a single agent, paid on commission, rather than by the consignment system other mills used. Lowell cleverly protected his market by lobbying to have the 1816 Tariff Act place a higher duty on cheap imported textiles than on higher-priced goods of the sort that the Rhode Island mills were producing, effectively locking out foreign competition.12
The Waltham mill, completed in late 1814, proved almost immediately profitable. In 1817 Boston Manufacturing paid out its first dividend, 12½ percent. By 1822, the company had fully repaid its initial investors, with a cumulative dividend of 104½ percent. In 1816, the company built a second mill, close to the first, somewhat larger at 40 feet by 150 feet. A small separate building was erected for picking, the breaking up of the raw cotton bales that produced highly flammable cotton dust. Like the first mill, the second had towers on the outside of the main structure to hold stairs and toilets (which dumped their waste into the Charles River).13
With the completion of the second Waltham mill, a template for the northern New England textile industry was in place. Somewhat as had occurred a century earlier at the Lombe mill, a new model of production came together rapidly, followed by a long period of replication and incremental improvements, but no radical shifts. Nathan Appleton, an original Waltham investor, noted in 1858 “how few changes have since been made from the arrangements established . . . in the first mill built at Waltham.”14
What made the Waltham system different and important? First, the integration of production within a single space and a single firm. Raw materials went into a mill and finished products came out. All the problems and costs associated with coordinating and transporting materials in various stages of production to and from different factories or outworkers and ensuring their quality were eliminated. Having all processes under one roof allowed productivity gains, such as spinning weft directly onto bobbins used in subsequent weaving.
Second, the Waltham model mills concentrated on making standardized products at high speed. Most Waltham-style mills produced only a single type of cloth or at most a few and ran their machinery at higher speeds than equivalent equipment in England. Innovations introduced by Lowell and Moody traded off flexibility for speed. Their “double speeder” roving frames, for example, were costly to reconfigure for different types of yarn, encouraging long production runs of the same product. Moody later introduced other changes to speed up equipment, including using leather belts rather than shafts to transmit power to individual machines and making main shafts out of wrought iron rather than wood. But the high-speed equipment could only produce relatively simple fabrics, not complex weaves, like ginghams, that had colored patterns, or other “fancy goods.”
Third, the Waltham system automated as many processes as possible to reduce the need for skilled labor. Many Waltham-style machines had “stop-motion” features, which halted the equipment if a thread broke or another problem developed, reducing the needed skill of operatives and increasing the number of machines they could monitor.15
Fourth, the Boston group, in pioneering the use of the corporate form for manufacturing, linked big capital to goods production. The corporation would not become the norm for manufacturing outside of textiles for decades to come, but the advantages it brought eventually made it standard for large-scale industrial enterprises. With heavy capital investment in plant and equipment and large reserves, Boston Manufacturing and the companies modeled on it could build larger, more efficient factories and were better able to withstand the vicissitudes of the economy than smaller companies modeled on the Slater mills.
Fifth, the use of a single selling agent rather than multiple jobbers created a close identification between particular products and particular companies, a step toward what would later be called branding. Sometimes it was the selling agent rather than the mill that decided what products should be made, much like how, nearly two centuries later, brand-name companies and giant chain stores would tell clothing, shoe, and electronics manufacturers precisely what to produce. The sales agent, rather than the manufacturer, felt the pulse of the market.16
Finally, the Waltham model mills developed primarily as domestic, not international, enterprises. Much of the recent literature on the cotton industry stresses its global character. This certainly was the case in Britain, which imported raw cotton and exported cotton goods, a hub of world commerce. But the Waltham-Lowell mills used cotton grown in the United States and sold their products primarily within the nation’s borders. In 1840, exports accounted for less than 8 percent of U.S. cotton cloth production, in 1860 still less than 10 percent, a nice source of profit and a safety valve for excess output, but not central to the industry.17 The rich array of natural resources in the United States and its large, growing domestic market meant that American industry would develop primarily as a domestic enterprise, engaged with international markets but not dependent on them.
Lowell
Waltham established the model, but it was Lowell that became famous. The Boston Manufacturing Company founded the city to expand its capacity. After erecting a third mill in Waltham, the company directors decided to build a new complex to produce calicoes. Without enough water power in Waltham for additional mills, company leaders found a site twenty-three miles north of Boston, in what was then East Chelmsford, Massachusetts, where at Pawtucket Falls the Merrimack River dropped thirty feet, unleashing enormous energy.
Years earlier, a company called the Proprietors of Locks and Canals on the Merrimack had built a canal around the falls to permit navigation. Quietly, Boston Manufacturing bought up the stock of the older company and land along the river. To launch the new enterprise, in 1822 it created the Merrimack Manufacturing Company, offering shares to its investors. Using Irish laborers, the new company widened and deepened the existing canal and rebuilt the locks to create mill sites with adequate power. At a time preceding power equipment and dynamite, the infrastructure work, along with building and equipping new mills, proved extremely expensive. Only an assemblage of some of the richest men in New England could have financed industrial development on this scale.18
The mills built at the new site—and others later modeled on them—were much larger and more substantial than the early Rhode Island factories. Handsome, durable brick structures, without much ornament, they bore at least a superficial resemblance to the Lombes’ mill, by then already a century old.19 Technical considerations dictated their size and shape. The wooden shafts used to convey power from waterwheels could be extended only so long before breaking, no more than one hundred feet. Even after builders began centering mills over their waterwheels, allowing horizontal shafting on both sides, building length was limited. The need to bring in light from perimeter windows restricted mill width. So floor plates could not be very big, in the case of the Merrimack mills, 156 feet by 44½ feet. To create more space and fully utilize the power of the waterwheels, mills were built up, in the Merrimack model five stories high, including an attic and a basement. For greater capacity, Merrimack and other textile companies built multiple mills in clusters, sometimes arrayed around a central yard.
New England textile firms did not make much use of iron structural elements until the 1840s. Cast iron was expensive in the United States, while large wooden beams were readily available, familiar to local construction workers, and capable of supporting heavy weights and absorbing vibrations. Like the British, the Americans worried about the danger of fire, but they adopted a different approach to minimizing it, not attempting f
ireproof construction by replacing wood with iron and brick but instead seeking to retard the spread of flames by using very heavy timbers, not only for beams but also for flooring, which would be slow to catch fire and capable of continuing to support weight even if charred.
By 1825, Merrimack had completed five virtually identical mill structures and additional buildings for bleaching and calico printing. Each mill was self-contained, with both spinning and weaving equipment, capable of turning raw cotton into woven cloth.20 As in Waltham, the new mills proved quickly profitable; within two years of commencing production, Merrimack paid its first dividend. To further expand, its directors came up with a strategy of creating additional firms, each of which would have its own stockholders and directors, with heavy overlap in ownership from company to company. The structure facilitated raising capital from new investors, while allowing existing stockholders to withdraw money from older companies to invest in new ones.
To advance the corporate metastasis, Merrimack transferred the land and water power it did not need to a reconstituted Locks and Canals company, which also took over the machine-shop operation of Boston Manufacturing. Like the William Fairbairn’s company in England, Locks and Canals could provide what today would be called a turnkey facility. When new companies were formed—starting with Hamilton Manufacturing in 1824, followed by Lowell Manufacturing, Appleton Company, Lawrence Manufacturing, Boott Mills, Suffolk Manufacturing, and Tremont Mills—Locks and Canals sold them mill sites and machinery and provided water power (usually for a per spindle fee).
Figure 2.1 An engraving of Lowell, Massachusetts, in the 1850s, featuring a bucolic setting in the foreground.
The owners carefully orchestrated the proliferation of companies. Rather than have firms compete with one another, each new company specialized in a different product: Merrimack, calicoes; Hamilton, twilled and fancy goods; Lowell, carpets as well as cotton cloth; and so on. Many of the companies shared the same selling agent and routinely exchanged cost information. Eventually there were ten major firms in Lowell operating a total of thirty-two mills.21
Merrimack and its progeny built more than mills; they built a whole city in what had been nothing but a thinly populated farming area. At the initiative of Merrimack, the mill sites and surrounding land were spun off from Chelmsford as a separate town, named for Frances Cabot Lowell, who died in 1817. With nowhere near a large enough local population to staff the factories that were rapidly going up, the first priority was to build housing for workers to be recruited from afar.
The feature outside observers usually focused on when they wrote about Lowell, the company boardinghouses full of lively young women, did not come from Waltham. Boston Manufacturing owned some housing in Waltham, but apparently rented it largely to male workers. Unmarried female workers either lived with their own families, if they were local, or with families not connected to the company. The boardinghouse model developed elsewhere. Shortly after Boston Manufacturing had its first mills up and running, it began selling machinery and patent rights to others setting up textile factories, who generally used the second Waltham mill as a template for their buildings. In New Hampshire, the Dover Manufacturing Company built two mills housing Boston Manufacturing machines and a new town, complete with street grid, company store, bank, commercial buildings, and boardinghouses for its female employees. The company rented the boardinghouses to housekeepers to manage, detailing rules for the residents. A similar complex in Great Falls, New Hampshire, likewise included boardinghouses for female workers. Apparently it was from these complexes that the builders of Lowell adopted the boardinghouse model.22
The Lowell boardinghouses were not uniform in design. The early structures, made out of wood, generally rose two stories high; later units, made of brick, three stories. By 1830, Merrimack owned, in addition to its production facilities, twenty-five wood tenements, four brick tenements, twenty-five cottages, a house for its agent, a church and parsonage, storage buildings, and a “Fire Department,” along with a store and two warehouses in Boston. As Lowell grew, the textile companies helped finance a library, reading room, and lecture hall. By 1840, Lowell housed eight thousand textile workers, with a total population exceeding twenty thousand, making it the eighteenth-largest city in the United States.23
Figure 2.2 Merrimack Mills and Boarding Houses, an 1848 engraving by O. Pelton depicting boardinghouses at Lowell lined up and leading to a mill at the end of the street.
Scaling Up
Even as the core group of textile investors—what economic historian Vera Shlakman dubbed the “Boston Associates”—expanded their production in Lowell by forming multiple corporations, they expanded beyond Lowell by founding new mill towns across northern New England. In Chicopee Falls, on the edge of Springfield, Massachusetts, they helped launch four textile companies, mimicking the Lowell pattern of having an additional company to control land and water power and manufacture machinery. Other complexes arose in Taunton and Holyoke, Massachusetts; Nashua and Manchester, New Hampshire; and Saco and Biddeford, Maine. In the mid-1840s, when Lowell itself ran out of mill sites, a group of Boston investors developed a new town, Lawrence, nearby on the Merrimack River, which became a major wool and cotton center. In a few instances, the Boston group took over mills others had founded, like the complex in Dover.24
The Boston Associates companies were genuinely Boston companies. Their owners consisted largely of Boston residents who had made their fortunes before their textile investments. Most rarely visited their mills. Even companies with distant factories were run by a treasurer who lived in Boston, operating through an on-site agent. Selling and banking were done in Boston as well. The combination of absentee ownership and workers largely recruited from afar meant that the mills and mill towns often had few local roots. Industrial capitalism—which in the United States, as in England, had the textile industry at its lead—did not develop organically out of existing communities but was implanted, fully formed, by outside merchant capital.25
The textile complexes built by the Boston group dwarfed contemporary factories. An 1832 federal survey found that of the thirty-six manufacturing enterprises reporting more than 250 employees, thirty-one were textile companies. On the eve of the Civil War, manufacturing establishments in the United States employed on average only 9.34 workers. By contrast, Merrimack, the largest Lowell company, in 1857 had 2,400 workers, while six other companies in the city had over 1,000.26
Continuing growth, however, did not mean continuing innovation. After an initial burst of inventiveness, the Boston-based mill owners and managers proved a conservative lot, not introducing major technological changes for decades. Until the mid-1840s, individual mill buildings rarely exceeded by much the dimensions of the second Waltham mill, each housing 250 to 300 workers. The companies increased production by speeding up existing equipment and building new mills using their well-established template. Able to make a good return on their money by doing more of the same, the Boston investors felt little need for novelty.27
The question of power provides a good illustration. With plentiful water power, and coal farther away and more expensive than it was for British mills, New England mill owners did not widely adopt steam power until after the Civil War, long after it had become common in England. As a result, New England mill towns had none of the black smoke and soot so characteristic of British industry. When the growth of Lowell and the planning of Lawrence presented the possibility that companies on the Merrimack would run out of water power, instead of installing steam engines the mill owners bought real estate and water privileges at the outlet of Lake Winnipesaukee in New Hampshire, over sixty miles away, to direct more water into the river (outraging Ralph Waldo Emerson for what he saw as arrogance).28
The corporate arrangements adopted by the Boston textile investors allowed expansion on a scale unprecedented for manufacturing. In 1850, the mills they controlled accounted for about a fifth of all the cotton spinning in the United States. In Lowell alone, in
1857 the ten mill companies, the Lowell Bleachery, and the Lowell Machine Shop (spun off from Canals and Locks) together employed over thirteen thousand workers.29
But the Lowell model did not take full advantage of potential efficiencies that came with size. Within firms, running each mill building as a self-contained production unit meant that while there were some shared functions that no doubt lowered costs—most importantly buying raw cotton and selling finished goods—in other respects each building operated as a separate, modest-sized enterprise. The idea of a fully integrated, rationalized, multisite company still lay in the future. The Lowell mills did not begin to even calculate unit costs until the 1850s, so they had no way to know the advantages and disadvantages of different arrangements, sticking by habit to the system Lowell had introduced in the first Waltham mill. Even after the companies began connecting once-freestanding mill buildings to one another and completely ringing mill yards with buildings—to the dismay of workers who could no longer look out at town and country scenes—they continued to treat each mill as a separate entity. And because each cluster of four or five mills was organized as a separate corporation, other savings that might have accrued in purchasing, sales, and management were not realized.30
Amoskeag Manufacturing Company was the exception that suggested there might be greater efficiencies in a different organizational structure. Set up in the late 1830s to develop a new textile center on the Merrimack River in New Hampshire, along with a town grandiosely named Manchester, the company at first replicated the Lowell pattern, expanding through the creation of new corporate entities. But unlike in Lowell, eventually the separate companies began to consolidate under one management, until all the mills in Manchester were controlled by Amoskeag. The consolidated corporate structure facilitated expansion. At its peak in the early twentieth century, Amoskeag had 17,000 workers in thirty mills and many associated buildings, bordering the river for over a mile on one side and a half mile on the other. Its size allowed the company to be almost completely self-sufficient, using its own workers for even major construction projects and building most of its own machinery.31