Despite the auspicious beginning the business did not prove profitable. There were prejudices against American goods. Wool was high. The smallness of the capital and the fact that the company could not borrow on good terms added to their embarrassment. The machinery was much inferior to that of the English. Workmen and materials were scarce. And there were those who opposed the establishment because they believed it to interfere with other interests which they had. Legislative aid was again sought in May, 1790, this time by way of a loan for a year. This was refused, but in October a lottery to the extent of £1000 was granted to enable the purchase of additional machines, implements, and stock. The lottery proved a success. In September, 1791, dyeing vats were reported in excellent order, and soon after it was announced that "This manufacture, after struggling with every obstacle, begins to flourish, and bids fair to be advantageous to the proprietors as well as to the public." Henry Wansey, however, who visited the plant in the summer of 1794, "found it much on the decay, and hardly able to maintain itself." He added that the machines were inadequate and old-fashioned, the fabric poor, and further: "Ninety-three hundred dollars have been lent towards the undertaking by the State. None of the partners understand anything about it and all depends on an Englishman who is a sorter of the wool." This very year the factory suspended operations, and in 1795 its property was sold at auction to Wadsworth and its existence terminated.1

In the first half of 1789, evidently stimulated by Philadel

1 Articles of association, with list of subscribers, are printed in Maine Hist. Soc. Colls., iv (Portland, 1856), 54-56; the preliminary announcement is in Conn. Courant, April 7, 1788, mentioning persons at Middletown, Wethersfield, Farmington, and Windsor, with whom subscriptions might be left. For legislative documents see Conn. Session Laws, May, 1788, p. 361, and October, 1791; Conn. MSS. Archives (Hartford), Industry, ii, 230–231, 235. See further Peter Colt to John Chester, July 21, 1791, Elisha Colt to Chester, Aug. 20, 1791, in Hamilton Papers; Wansey, Journal of an Excursion, 60, 258-259; John Adams to Mrs. Adams, April 19, 1789; Washington's Diary, Oct. 20, 1789; and notices or advertisements in Conn. Courant, September, 1789, April, May 24, Sept. 27, Dec. 27, 1790, Jan. 3, Feb. 21, 1791; Boston Gazette, Jan. 18, 1790; American Mercury (Hartford), Sept. 19, 1791; N. Y. Journal, Oct. 19, 1791; Bagnall, Textile Industries, 100-109; and Walton, Story of Textiles, 163–165.

phia's example, The Baltimore Manufacturing Company was set on foot. A capital of "at least one hundred pounds, of ten pounds each share" was proposed; seven "of the company" were to be elected directors with full control of the funds and operations; limited liability and the transferability of shares only when they were fully paid were specified in the articles, and incorporation was to be sought. The primary object was the cotton manufacture. The project, however, encountered effective opposition, quite natural in a town so devoted to trade as Baltimore then was; incorporation was not secured, and the scheme fell to pieces.1

In 1794 the Cecil Manufacturing Company was established near Elkton, Md., for the manufacture especially of woollen yarns and cloths. Its chief promoter was Col. Henry Hollingsworth of Elkton, a prominent, enterprising man. Philadelphia and Delaware capitalists, as well as others of Cecil County, were interested. The factory was sixty feet by thirty-six, three stories high. It was burned in March, 1796, but promptly rebuilt; and the company is said to have carried on its operations for twenty years with reasonable success.2

Scattered through the states there were a good many other small unincorporated joint stock associations, generally of very minor importance. Peter Colt, writing to Hamilton's agent in July, 1791, reported the existence of several small cotton and woollen manufacturing companies in Connecticut, each with a capital "raised by Subscription, & managed by an Agent for the benefit of the adventurers." 3 A gunpowder manufacturing company was founded in Baltimore in 1790 which continued to operate until 1812. Several cotton manufacturing associations were formed. Tench Coxe, in 1792, mentioned one in Virginia; one "containing forty of the most respectable planters and farmers, in the western district of South Carolina; and

1 Constitution in Amer. Museum, v, 591 (June, 1789). Cf. White, Samuel Slater, 184 n; Bishop, Amer. Manufactures, ii, 19, 43; Walton, Story of Textiles, 188-189.

2 Bagnall, Textile Industries, 232-235; Johnston, History of Cecil County, Md., 382.

3 Letter of July 21 to John Chester, in Hamilton Papers.

4 Bishop, Amer. Manufactures, ii, 23; Mass. Centinel, April 10, Dec. 8, 1790.

one which had raised a subscription of about $25,000 in Kentucky. In 1795 a company of some fifty shareholders was organized to erect a furnace to manufacture salt at Muskingum, Ohio.2 These are random instances of what must have been a considerable group in the last decade of the century.

Such, then, were the forerunners of the manufacturing corporation. The first incorporated company for manufacturing purposes was concerned with silk. As early as March 1, 1784,

TABLE XIII. EIGHTEENTH CENTURY CHARTERS TO MANUFACTURING

CORPORATIONS

1789 1790 1791 1792 1793 1794 1795 1796 1797 1798 1799 1800 Totals

4

an act was passed by the Connecticut assembly offering a bounty of IOS. per annum for three years for planting one hundred mulberry saplings and another of 3d. per ounce for raw silk, the first act to be in force nine years, the second fifteen. Thanks especially to the efforts of one Aspinwall, some twelve thousand trees were reported in full bearing in the spring of 1788, and in Mansfield alone eighty families raised in six years some one hundred and fifty-seven pounds of raw silk. President Ezra Stiles of Yale undertook at this time to distribute to the ministers of the state a quantity of seeds, with instructions for

1 "Reflexions on the State of the Union," in A View of the United States. . ., 303, 305.

2 Bishop, Amer. Manufactures, ii, 66-67.

* Session Laws, 232-233. Cf. act of May, 1794, replacing the bounty on raw silk with one of 2d. per ounce to be paid for ten years from July 1, 1794: Session Laws, 282-283.

Peleg Sanford, in a letter to Jeremiah Wadsworth, Dec. 25, 1791, in Wadsworth Papers, refers to "Aspinwalls having devoted nearly twenty years of his life almost entirely to this business."

cultivating mulberry trees, and secured "zealous coöperators." 1 Encouraged by this progress, and "with a view of introducing among them a greater degree of neatness and perfection,” thirty-two Mansfield inhabitants solicited a charter in September, 1788, and in January, 1789, were incorporated The Director Inspectors and Company of the Connecticut silk manufacturers.

This was not a typical business corporation. It was much more like the ancient "regulated companies." The members lived near together and seem to have wished incorporation chiefly to secure power of making by-laws "for the well ordering and regulating themselves, in and about the raising and manufacturing of silk." The company was to meet annually and then to choose a director, a treasurer, and two inspectors of silk. There was also to be a clerk with an indefinite term. The director was to act as moderator of the meetings and "give such information to sd Company from time to time as he shall Judge beneficial, and for the good of the public in general, as relative to said manufacture." The company was exempted from assessments on profits for twelve years.2

The company, however, came to little. Constant Southworth, who was named in the act as the person to call the first meeting, wrote Hamilton's agent Sept. 1, 1791, that "no special advantage can be derived from this grant, however generous, until workmen can be obtained skilled at least in some one branch of the Silk manufacture." 3 The organization inspired no imitators and played no appreciable part in the rise of manufacturing corporations.

The Beverly Cotton Manufactory, second in order, was first

1 Letter from New Haven, dated July 5, in Columbian Centinel, July 25, 1789. * Bagnall, Textile Industries, 82-84, printing petition for charter; Conn. MSS. Archives (Hartford), Industry, ii, Agriculture, Manufactures, Fisheries, 1764-89, pp. 236, 237. The charter is not in the published laws of the state. Cf. Mass. Centinel, Sept. 3, 1785, referring to "the Silk Company in Connecticut.”

Hamilton Papers. Cf. Gazette of the U. S., May 11, 1791, for mention of silk culture in Northford, Conn., in 1790; Sanford to Wadsworth, Dec. 25, 1791, in Wadsworth Papers. F. Morgan, in Connecticut as Colony and State (Hartford, 1904), ii, 266, says: "The Connecticut Silk Society was incorporated in 1788, with its headquarters at New Haven. Its object was the encouragement of silk culture and manufacture throughout the State." If this society was incorporated, it probably is not to be classed as a business corporation.

established in October, 1787. It grew out of the efforts of two Englishmen, Leonard and Somers, to get a foothold in this country. They had made "various applications both publick and private" in several states for encouragement, "with no other effect than loss of time and money," and were about to leave the country when George Cabot,

"convinced of the importance and practicability of introducing a manufacture for which large sums are yearly sent out of the country, generously patronized them, and influenced a number of gentlemen in Beverly, to associate for the purpose of establishing these much wanted manufactures."

1

Early in June, 1788, the associates petitioned the legislature for an act of incorporation. They dilated upon the importance of manufactures, both because of the products and as a means of employment to a great number of women and children, many of whom would otherwise be useless if not a burden to society." They reported success in small experiments in the cotton manufacture and convictions that it would prove profitable as well as socially advantageous except for the extraordinary expenses attendant upon its introduction. As pioneers they requested a charter with such accompanying favors as might be deemed necessary to offset the initial disadvantages and expense. The petition, after consideration by a committee, was referred to the session meeting January, 1789. Then, on February 3, a simple act was passed incorporating The Proprietors of the Beverly Cotton Manufactory. Power was given to hold £10,000 real estate and £80,000 personal estate. Goods manufactured by the company were to bear a lead label impressed with seal of the corporation, and they were protected in the use of this trade mark. Two weeks later the legislature passed a resolve for "encouraging" the establishment, reciting that

"It is essential to the true interest of this Commonwealth, to encourage within the same, the introduction and establishment of such manufactures as will give the most extensive and profitable employment to its citizens,

1 Mass. Centinel, April 9, 30, 1788. In March, 1787, Somers had been granted £20 by the legislature through Hugh Orr of Bridgewater for whom Somers, after a visit to England, constructed a model or machine for carding and spinning cotton: White, Samuel Slater, 297-298. His petition to the Massachusetts legislature, Feb. 15, 1787, is in Bagnall, Textile Industries, 89-90.