The Company Town

Postrevolutionary America had no shortage of rivers ripe for industrial exploitation. The first to be utilized for textile production were in Rhode Island, beginning in the 1790s. One observer found: "The manufacturing operations of the United States are carried out in little hamlets, which often appear to spring up in the bosom of some forest, around the water fall which serves to turn the mill wheel."³

Americans were determined to go their own way in creating models for industry and society, just as they had created their own political system. But there were two powerful British influences.

First, the Rhode Island mills employed technology appropriated from the Brits by this country's most famous intellectual-property pirate, Samuel Slater. Apprenticed as a lad in England to the firm of Arkwright and Strutt and rising to the rank of overseer, Slater made a careful study of that company's innovative equipment. Then, in 1789, he boarded a ship for America—he concealed his textile experience from the ever-watchful British port officials and traveled in the guise of a simple country fellow. Once in the United States, Slater gained employment at the mercantile firm of Almy and Brown, where he and his assistant built a working water frame, similar to the one that spun yarn in the Arkwright factory. Establishing the template for Rhode Island mills, Slater's first operation was on a small scale, a factory in a rented building next to the Blackstone River at Pawtucket. His workforce: seven boys and two girls, ages seven to twelve.⁴

Another key British influence was negative. The creators of the U.S. industry repeatedly invoked images of the foreign city that embodied all they wished to avoid: Manchester, England.

Francis Cabot Lowell, a wealthy Boston merchant visiting Britain in 1811, wrote to a friend that "we found the manufacturing towns very dirty" and later remarked on "the great corruption of the highest and lowest classes, and the great number of beggars and thieves."⁵ Manchester drew numerous visitors, some perhaps seeking a squalor-induced frisson like what draws today's tourists to New York and Mumbai. Others, such as Friedrich Engels—whose descriptions written a few years after Lowell's still have the power to startle and repel—had reform in mind. To Engels, the city seemed to be "an outgrowth of accident" rather than the result of any plan. Amid the "knotted chaos of houses," he found himself repeatedly subjected to "filth, ruin, and uninhabitableness, the defiance of all considerations of cleanliness, ventilation, and health." Engels provides his readers with a tour of various working-class neighborhoods in the city. His conclusion: "In such dwellings, only a physically degenerate race, robbed of all humanity, degraded, reduced morally and physically to bestiality, could feel comfortable and at home."⁶

Manchester's size multiplied tenfold between 1760 and 1830, by which time it housed 180,000 citizens. Aside from the slums, few could help noting the "hundreds of five- and six-storied factories, each with a towering chimney by its side, which exhales black coal vapour."⁷ Another report described "an inky canopy which seemed to embrace and involve the whole place."⁸

None of this was right for the New World, concluded the founders of America's textile industry.

New England workers, its magnates decreed, would be youth drawn from rural soil—borrowed for a short time from their pastoral lives, not destined to become a permanent and degraded proletariat. By 1815 there were 170 small-scale factories in Providence alone. Hundreds more would sprout in the 1820s and '30s. The typical southern New England mill village—Slatersville (Rhode Island), Phoenixville (Connecticut), or Ware Village (Massachusetts), for example—contained only one mill employing one hundred or fewer workers, primarily children, and these hands and their managers probably supplemented their factory work with agricultural labor.⁹

But more ambitious capitalists saw that larger scale enterprise could mean greater profits—without requiring the immiseration of the worker. Unlike Manchester, larger developments could be bright and airy, marked by stately brick factories and dormitories built alongside sturdy and inspiring churches. Nor would the skies be dark—America, which had an ample supply of coal, as yet lacked the transportation network necessary to bring it to the East Coast. Of necessity, New England's mills would run on the ultimate renewable resource: kinetic energy from falling water.

Even a less-than-torrential river might do. The group of Boston capitalists who became known as the Boston Associates demonstrated this by building a fully integrated factory at Waltham, Massachusetts, its water wheel and machinery driven by the gently rolling Charles River. All steps of production, from "bale to bolt," could be carried out at the Boston Manufacturing Co.'s facility, avoiding the inefficiencies of the Rhode Island "putting out system," in which storekeepers arranged "outwork" on cottage industry handlooms. Waltham's labor force consisted of young women fresh from the farm, housed in company boardinghouses, and the superintendent's mansion was close by.

Despite these differences in scale and organization, the Waltham mill-works shared one striking similarity with Rhode Island: intellectual piracy. It was with an eye to constructing an American textile industry that Lowell made his pilgrimage to Manchester, where he studied the machinery. Britain prohibited the export of its manufacturing technology and kept a sharp lookout for any sketches or representations of it. Twice the authorities searched Lowell's luggage—but he had strong powers of memorization. By 1814, he and Massachusetts mechanic Paul Moody had produced a version of the Manchester power looms for Waltham.¹⁰

The three Boston capitalists behind the Waltham development were Lowell, Nathan Appleton, another wealthy merchant, and Appleton's brother-in-law, Patrick Tracy Jackson, who would become the on-site superintendent. In contrast to many other mills, which were owned by individuals, this and the later enterprises of the Boston Associates were structured as limited-liability corporations. Lowell and Jackson put up the greater part of the outfit's initial capitalization of $400,000. According to Appleton, Lowell (who died in 1817) was "the informing soul, which gave direction to the whole proceeding."¹¹

Although U.S. textiles prospered during the War of 1812 embargo, the peace of 1815 saw the return of foreign products to the U.S. market, proving ruinous to many Rhode Island manufacturers. But the Waltham operation prospered, thanks to the productivity of its power looms. By 1820, three mills were operating at Waltham, producing a half-million yards of cloth. Within its first seven years—by 1819—the operation earned back its initial capitalization. Dividends averaged over 19 percent a year between 1817 and 1821 and rose to more than 27 percent in 1822.

The third mill exhausted the water power available at Waltham. In search of another place where a similar operation could be erected, Appleton traveled to New Hampshire, where he inspected a falls on the Souhegan River. Shortly thereafter, he learned through Moody of a site at East Chelmsford, Massachusetts, with a falls of thirty feet on the Merrimack River.

In November 1821, with a light snow covering the ground, Appleton, Jackson, Moody, and three others traveled to that sparsely settled location, where no more than a dozen houses stood. But there was some infrastructure development, particularly two canals: the Pawtucket, which circumvented the falls to make the river navigable, and the Middlesex, through which horse-drawn barges pulled freight down to the Mystic River and Boston beyond. The visitors "perambulated the grounds and scanned the capabilities of the place," as Appleton recalled. They quickly arranged for a quiet purchase of the available, surrounding lands and of the company that owned the canals, the Proprietors of the Locks and Canals. They also immediately petitioned the Massachusetts legislature for an act of incorporation in the name of the Merrimack Manufacturing Co., with shares held by Appleton, Jackson, Moody (rewarded for "his agency in the discovery" but also key to the enterprise due to his proven mechanical ability), and John Boott and his brother Kirk, who was appointed treasurer, the title the Associates gave those who functioned as chief executive officers, with an annual salary of $3,000. The company's initial capitalization of $600,000 eclipsed that of Waltham.¹²

Such was the beginning of America's first large-scale planned industrial community: Lowell, Massachusetts.

As foreign as the idea of founding a town in addition to a business may sound today, to the generations of early Americans, such a notion did not seem so outlandish. In 1791, for example, the nation's first Treasury secretary, Alexander Hamilton, was among the founding members of what would now be called a startup backed by venture capital: the Society for Establishing Useful Manufactures (SEUM). Hamilton and his colleague Tench Coxe believed that a purely agrarian America, as championed by Thomas Jefferson and others, would always remain subordinate to Europe, easy prey for Continental bullying and manipulation. Spawning manufacturing in America, Hamilton believed, would require various tactics, including pilfering Britain's technological advances. Another key ingredient: the construction of a manufacturing hub—a town where goods from sailcloth to stockings, blankets, and beer might be produced. Investors in the town's enterprises would benefit from both the sale of such goods and the rising value of the town's real estate. Looking for a site that combined affordable land, water power, and proximity to existing urban centers, the Treasury secretary and his colleagues decided upon an area near the Great Falls of the Passaic River in New Jersey. It would be named Paterson, in honor of that state's governor.

In little over a year, Paterson had begun to take shape, with the SEUM's directors giving the go-ahead to construction of a textile mill and textile-printing plant, spinning and weaving operations, and worker housing. The founders retained Pierre Charles L'Enfant, the architect who had just laid out the plans for the nation's new capital, to compose a similar plan for Paterson. But the stars were not favorably aligned: The spinning, weaving, and printing operations commenced, but L'Enfant's plan proved both too ambitious and somewhat misguided, and soon he withdrew from the field. By 1796, the New Jersey project had been abandoned. But it was a workable idea—as the revival of the development in the 1840s would prove, after which Paterson became an industrious mill town.¹³

The period was also rife with technical and engineering marvels that seemed to encourage the most high-flown visions of what was possible. The stream of inventions ranged from Eli Whitney's cotton gin and weapons made with interchangeable parts to Oliver Evans's highpressure steam engine and Robert Fulton's steamboat. The Erie Canal, completed in 1825 and linking the Great Lakes with the Hudson River, seemed to demonstrate that no geographic hurdle was too great to defeat modern engineering prowess.