Читать книгу The Inventive Life of Charles Hill Morgan: The Power of Improvement In Industry, Education and Civic Life - Allison Chisolm - Страница 24

Carte de visite of Charles H. Morgan photographed in Philadelphia, c. 1860

IN 1852, THE YEAR Charles Morgan turned 21, married his sweetheart, and briefly supervised Erastus Bigelow’s new dye house, Francis Wolle patented the country’s first paper bag machine. Wolle, a 35-year-old Moravian minister and schoolteacher in Bethlehem, Pennsylvania, had been working on the problem shopkeepers faced in general stores everywhere: goods arrived in bulk, but sold in smaller quantities.

Wolle made his first model in April 1851, followed by a second version in August. He was awarded a patent on October 26, 1852 and promptly formed the Union Patent Paper Bag Machine Company in Bethlehem together with his brother, Augustus, and three other relatives. They were slow to profit from his new invention, however, as they had to persuade storekeepers to try the novel concept. In those days, most customers brought their own baskets or jute bags to the stores.

The initial machine was also slow. After two more patents issued in 1855 and 1858, Wolle’s machine managed to produce 1,000 bags per day. While his business foundered, his career in education flourished, as he was named vice principal of the Young Ladies Seminary in Bethlehem in 1857, then in 1861 principal. Wolle’s brother, however, would persist in his pursuit of paper bag profits.

Other inventors recognized the potential Wolle’s invention held and diligently worked to develop alternative manufacturing devices. In Clinton, Edward W. Goodale, the overseer for the Clinton Company’s shop and Morgan’s earlier traveling companion, hired Morgan, now considered an accomplished young draftsman, to work on drawings for his machine in July and August of 1855.

The nation’s patent system was not even 20 years old. Established by Congress in 1836, the United States Patent Office fulfilled the mandate of Article I, Section 8, Clause 8 of the Constitution that the Executive branch “promote the progress of science and the useful arts by securing for limited times to inventors the exclusive right to their respective discoveries.” The new law required that a patent examiner read each application to ensure that the invention in question was actually new. The first numbered patent was issued that year. Patents protected an inventor’s exclusive right to make, use or sell their invention for 14 years, with a possible seven-year extension. The standard term extended to 17 years in 1861.

Morgan spent the last months of 1855 assisting another bag machine inventor, Joseph C. Smith. Overseer of the machine shop for Lancaster Mills, Smith was a talented machinist, musician and considered “a man of considerable literary ability.” Benjamin F. Rice, also a Clinton machinist, had his own paper bag machine in the works that year. Rice’s machine must have attracted more of Morgan’s attention and interest than Smith’s invention, as Charles noted in his diary on Thursday, June 14, 1855, “B.F. Rice began to make a bag machine.” The following year, Morgan devoted most of a black-covered notebook to details regarding this machine, entitling it “Bag Machine, Clinton Oct. 1856, Description of Drawings, Specification & Claims for B. F. Rice’s Paper Bag Machine.”

Working with Morgan, Rice refined the design of his machine. He filed with the U.S. Patent Office a formal warning to competing inventors, legally known as a “caveat” to protect his rights, and completed his application in November 1856. The machine was the first to bend the paper from a roll or continuous sheet into a flattened tube, then cut it into the required lengths for various bag sizes before pasting one end closed.

Before he filed his application for a patent, however, Rice sold one half of his invention to Benjamin R. Smith of Clinton. Smith was a pattern maker at Parker & Palmer’s machine shop, run in part by Charles Morgan’s uncle, Joseph B. Parker. Morgan subsequently bought the other half of Rice’s invention, and the assignment to the new partners Smith & Morgan was recorded in Washington before the patent was issued. On April 28, 1857, the U.S. Patent Office granted patent number 17,184 to Rice “assignor to B.R. Smith and C.H. Morgan” for “Improvement in Machines for Making Paper Bags, &c.” This stood as the nation’s seventh paper bag machine patent.

First page of Rice paper bag machine patent drawing, witnessed by Charles H. Morgan, 1860

Smith & Morgan began to manufacture and sell their machines. To produce bags, however, they needed a steady supply of paper. A firm in Watertown, Massachusetts, L. Whitney Jr. & Co., owned by Leonard Whitney and Thurston Priest, made a five-year price agreement to be the exclusive paper supplier to Smith & Morgan. In exchange, they wanted the right to sell bags produced by two bag machines. To secure their market advantage, Whitney & Priest requested that for the next five years, Smith & Morgan not sell their bag machines for use in New England, except Connecticut.

The 1858 agreements between these patent owners and a paper mill provided integration which reduced risk for both parties and created a model for profitable paper bag manufacturing and distribution. L. Whitney Jr. & Co. would provide manufacturing space and offer to sell paper to Smith & Morgan at favorable prices for five years, while Smith & Morgan would make the patented machines and the paper bags, bearing all the direct costs of production, including machines, raw materials and labor. Smith & Morgan would sell 100 percent of these bags to L. Whitney Jr. & Co. for five years at agreed prices.

These arrangements gave L. Whitney Jr. & Co. the opportunity to develop the market for this new product, while avoiding significant capital outlay, since they had space in their Watertown paper facility and gave Smith & Morgan access to a production facility at no cost. The paper producers could thus control their costs by agreeing to purchase only what they could sell, so the patent holders took the risk of balancing production and sales—a relatively manageable risk, given how fast they could ramp up production. Granting exclusive distribution rights for New England to L. Whitney Jr. & Co. in 1859 protected the paper mill from competition, allowing them a stable price and thus predictable profits on the sale of paper bags.

The January 7, 1858 agreements spelled out that Smith & Morgan “agree to make all the paper bags that L. Whitney Jr. & Co. may want made for them for the term of five years from date... all sizes of bags from one lb. to five pound to ten pound bags.” They further agreed to “furnish two bag machines and run them at our own expense and make all repairs upon them at our own expense,” plus gears, shafting, and steam pipe fittings. Bags would be delivered tied up with twine.

In turn, L. Whitney Jr. & Co. “agree to furnish Smith & Morgan with wrapping paper for the term of five years from date for five and a half cents per lb. also manilla [sic] paper for eight cents per lb. for the term of five years from date. The paper is to be made in rolls the width ordered.”

Their agreement included providing room to operate the bag machines “when our steam is up and our Mill is running,” and to pay Smith & Morgan “for making what bags we may sell as fast as we sell them,” at the rate of two cents per hundred bags that would hold one to five pounds, three cents per hundred of the five to ten pound bags, and four cents per hundred of the 10 to 20 pound bags.

By October 1858, Whitney must have received a third machine in Watertown, as Morgan used all three as collateral for a $300 loan from local shoe manufacturer, John B. Plympton. He never took ownership of the machines, however, as Morgan paid him in full the following January, discharging what had been recorded with the town clerk as a “Mortgage of Personal Property.”

Bag sales proved as fast as the machines. Morgan reported to a customer, Nixon & Chatfield in Cincinnati, Ohio, that Whitney’s three machines had produced on average 70,000 bags per day during June 1859. As agreed, they tied them up in 500-bag bundles.

Bags were initially sized by the amount of weight they could hold, as boxes had been, with sizes ranging from one to 20 pounds. Later, they followed a number system which indicated the weight the bag could hold, from #½ up to #25. But it all depended on what the bags were needed for. As Morgan explained to a prospective customer, “The sizes vary in different localities, Boston, Cincinnati, New York, Philadelphia and Springfield having sizes peculiar to their respective trades.”

In assisting Rice with his initial design, Morgan ensured Rice’s patent was commercially viable. In a very practical sense, the machine could make enough paper bags to clear a profit for the machine’s owner or licensee, especially one with access to paper supplies at cost and limited competition. While payments for the machine got the business on a solid footing, licensing became the real revenue-generator for Smith & Morgan’s business. They quickly sold licenses for the right to manufacture paper bags in specific territories. New England was snapped up by L. Whitney Jr. & Co. and New York soon followed, with Charles’ brother Henry and longtime friend V. De Mont Upham controlling the territory within 100 miles of New York City, which included Philadelphia, 93 miles south.

On March 31, 1858, Smith & Morgan conveyed to Upham and Henry Morgan the exclusive right to manufacture bags on their machines “together with all the improvements which maybe hereafter made.” They agreed to pay Charles $300 per year for each machine they used, to be paid quarterly. The contract was executed in the presence of Leonard Whitney, Jr.

The new partners first set up shop in Chatham, New Jersey and then in downtown Philadelphia. In February 1859, they required financing to build two machines for a paper mill customer, and Charles Morgan, together with several of Clinton’s leading citizens, Parker’s business partner, Gilman M. Palmer, architect Joshua Thissell Jr. and Parker’s foreman (and eventual business partner) Archelaus C. Dakin, signed a note for the funds at the Clinton Savings Bank, secured by the machines.

Eighteen months after the initial license agreement, on Oct. 4, 1859, Charles Morgan bought back from Upham and Morgan for $2,000 that manufacturing license, together with two bag machines, and the next day conveyed one half to his brother Henry by verbal agreement. Henry continued the business in Philadelphia and Charles began his preparations to move there with his family.

Smith sold his half of his patent rights to Thurston Priest and Leonard Whitney on January 1, 1859, but retained the right to manufacture bags. This prompted a new agreement between Morgan and the two paper partners. By February 1, 1859, Morgan granted L. Whitney Jr. & Co. the license they had requested for all the New England states, except Connecticut, much of which would have been included in the territory within 100 miles of New York City granted to Upham and Henry Morgan. Territorial lines were thus quickly drawn for the entire Northeast corridor. Whitney and Priest agreed to pay Morgan $600 per year, quarterly, for the license to use four bag machines and $150 for each additional machine they wanted to use.

The machines could produce high volumes. Benjamin Smith in Watertown told Morgan on October 14, 1859 that “he made 187,000 bags last week on the Bag Mach. #1—in 63 hours running time, an average of 2,877 bags per hour & 48 per minute.”

By October, the paper bag business was clearly successful, with licensees as far west as Ohio and Indiana. Morgan was preparing to pursue the business full-time, leaving his position with Bigelow Carpet to move to Philadelphia. Before leaving Clinton, he drew up a summary of his assets and liabilities dated October 1, 1859. Written more for his own information than anyone else, his list of credits and debits has corrections and penciled-in totals in the margin. Many people had made small loans or extended credit to him, including his father ($6.85), partner Benjamin R. Smith ($1.85), his uncle J.B. Parker ($71.35) and a Clinton physician, Dr. George W. Symonds, for a total of $389.61. Certain items were noted as “Pd.” Assets included patent rent from three customers, payment from the Clinton Wire Cloth Company, and rent for his piano, among other sources, totaling $869.60. At least on paper, Morgan’s net worth stood at a healthy $472.40, or close to $12,000 in today’s dollars. Given that the nation was still suffering from the aftermath of the Panic of 1857, when banks throughout New York and New England suspended activity and the economy went into a tailspin, he had good reason to be optimistic about his prospects.