Читать книгу The Inventive Life of Charles Hill Morgan: The Power of Improvement In Industry, Education and Civic Life - Allison Chisolm - Страница 27

Once the business was equally divided between the two Morgan brothers, Henry moved from Chatham, New Jersey to Philadelphia sometime in late 1859, ready to start up their new enterprise on January 1, 1860. Charles followed with his family about nine months later, as Morgan’s last letter from Clinton is dated September 15, 1860. Their father Hiram also made the move south, sharing his significant mechanical skills as the new business’ first employee.

The move from busy but small-town Clinton to the metropolis of Philadelphia must have required a few adjustments for the Morgan family. Harriet had left her family behind in New England, but Hiram lived with them, and Charles’ younger brother Cyrus was already in nearby Camden, New Jersey, helping Henry settle in.

Morgan Brothers described themselves on their letterhead as “Manufacturers of all kinds of Patent Machine Made Paper Bags for Grocers, Tea Dealers, Druggists, Confectioners, &c.; and Carte Envelopes for Photographers.”

Morgan Brothers letterhead

The paper bag manufacturing business was still young. Three of Morgan’s patent infringers were located in Philadelphia, but none claimed to be a paper bag manufacturer. Armstrong was listed in the stationery business, Lewars was an agent of the Philadelphia & Germantown Railroad, and Pettee was simply described as “inventor.”

The 1860 Census counted two paper bag manufacturers in the city of Philadelphia. Between them, they employed five men and nine women, paid them $2,460, spent $12,200 on raw material, had $11,000 in capital invested and produced products valued at $21,500. Given that Henry had moved to the city just before the census was taken, and his only employee was his father, it is safe to assume that Morgan Brothers’ unnamed competitor had a far larger enterprise. It may well have been the company noted in Pettee’s patent reissue listing, the North American Paper Bag and Envelope Manufacturing Company, although that was not listed in the city business directory.

The brothers launched their company hoping to capitalize on the growth potential of a profitable business using superior technology. Morgan Brothers was the only paper bag manufacturer listed as such in the 1861 Philadelphia City Directory, within a list of 17 paper box manufacturers. Morgan Brothers was not listed among the six envelope makers.

Before Charles moved to Philadelphia, Henry had written, asking about offering a 25 percent discount for volume purchases. Charles’ reply offers a window into their early business plans:

The matter of 25% discount is difficult for me to decide without processing all of the necessary facts. I think we estimated the product of our business [annual sales] would be about $18,000. And on this we estimate that the profits would be $3,000 or so ....

Still I think it better for us to make a discount of 20% for cash and deliver the goods at our door, than to deliver them in New York at 20% off and take a four months note, for taking a four month note is making a discount of 2%. And the extra bailing, cartage and shipping will nearly equal 3%.

25% off will make the profit on #1 and #2 [bags] pretty well and about 50% of our bags are about those sizes. Another question comes up, will not the price of paper run higher on account of the prospects of dry weather? but as your acquaintances are more favorable for judging of this matter I shall cheerfully commit to your decision. By all means hike up the quantity of our goods.

To prime the market pump, they were willing to offer a substantial quantity discount to attract customers willing to make large purchases, pick up at the factory or pay freight charges, and pay cash on delivery. This analysis suggests they would not sacrifice profits on smaller orders, choosing to reinvest those funds back into the business.

To secure their supply chain and control costs, it is very likely Morgan Brothers extended their paper bag business to include a paper mill. Several of Charles Morgan’s obituaries refer to operations outside Philadelphia.

Paper was in short supply in the mid-nineteenth century, as it had to be made from flax fiber, rags or linen. The cheaper and faster wood-pulp process of paper making did not become commercialized until the late 1860s, and the brown “Kraft” paper associated with today’s paper bags still later. A proprietary paper mill would have enabled Morgan Brothers to control their raw material costs and ensure a greater profit, as Leonard Whitney had done. Before they invested in a paper mill, Morgan told his brother about inquiries he had made regarding straw paper, available at far lower prices than the cost of paper they had agreed to with Whitney in Watertown three years earlier.

The brothers eventually established a manufacturing facility outside Coatesville, about 35 miles west of Philadelphia in the Chester Valley. They selected a good location. The unincorporated town, known as Valley before 1867, sat along the Brandywine River and had two rail lines passing through it, the Pennsylvania Railroad and the Wilmington and Northern, as well as the nation’s first turnpike, the Philadelphia to Lancaster Turnpike. The machinery to make paper bags did not require a large footprint—three machines and the shafting to drive them required a space of 40 feet by 60 feet—so they could manufacture bags in either a city or countryside facility with steam power. But it is more likely they established a paper mill to supply their own bag machines. Chester Valley also would have provided the space and resources for a paper mill. The town had a healthy industrial base, with the Lukens Rolling Mill, flour mills, cotton and woolen mills and other iron and paper producers.

As the letterhead indicated, Morgan Brothers expanded their product line to include “carte envelopes.” In July of 1862, Morgan’s friend Edward L. Wilson assigned his patent for “picture envelopes” to Charles. A drafting tools salesman, Wilson had his own business, Wilson & Hood, in Philadelphia.