USA > New Jersey > Passaic County > Paterson > History of Paterson and its environs (the silk city); historical- genealogical - biographical > Part 40
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Hamilton's famous "report on manufactures," submitted to Congress, December 5, 1791, is still regarded as one of the ablest treatises on the sub- ject of government encouragement of manufactures ever written. It begins with the cautious remark: "The expediency of encouraging manufactures in the United States, which was, not long since, deemed very questionable, appears at this time to be pretty generally admitted." Hamilton's writings do not show that he had ever before given much attention to the subject of domestic manufactures as an essential factor of national prosperity. But it is evident that the subject soon grew upon him, for he treats it exhaustively.
The investigations by Hamilton led to a practical result, upon which none of his biographers have touched, although it illustrates in a singular degree the great financial secretary's ability to handle practical questions quite as well as to write brilliantly upon political and economic problems. Indeed, it is one of the most interesting episodes in his career. To New Jersey it has, moreover, a peculiar local interest.
In the report to which reference has been made, Hamilton speaks with special emphasis of the practicability of extensively manufacturing cotton in the United States, and adds this important bit of information: "It may be announced, that a society is forming, with a capital which is expected to be extended to at least half a million dollars, on behalf of which measures are already in train for prosecuting, on a large scale, the making and printing of cotton goods."
For the better encouragement of the cotton manufacture he recom- mended the repeal of the duty on raw cotton, the granting of a bounty on cotton manufactured in this country, and the importation of "artisans and manufacturers in particular branches of extraordinary importance." Evi-
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dently having in view the interests of the new society, he prudently remarks, "that any bounty which may be applied to the manufacture of any article, cannot with safety extend beyond those manufactories at which the making of the article is a regular trade."
There is no doubt that the sanguine Secretary of the Treasury believed that he had conceived a project destined to be of incalculable benefit to the country. Too apt to think that great schemes for the public good could only be carried out successfully by government aid, there is reason to believe that he had in his mind's eye another indispensable undertaking in the shape of a grand national manufactory, where should be gathered together the most skilled artisans of the whole world, under whose trained eyes and hands should be produced all the supplies, "particularly of a military nature," needed to make this country independent. Such an enterprise, backed up by the government, and perhaps receiving pecuniary aid in the way of bounties from the Federal treasury, could hardly fail of being a great success in every sense, both for the public good, and for the private gain of those who might invest in it. With the prestige of the great Secretary of the Treasury, with the prospect of government aid, and, perhaps with much patriotism, many of the leading moneyed men of the day readily engaged in the enterprise. Among them may be named : Dr. Elias Boudinot, 100 shares (at $100 each) ; his brother, Judge Elisha Boudinot, of Newark, 50 shares; Archibald Mer- cer, also of Newark, 50 shares ; James Parker, of Perth Amboy, 60 shares ; General John N. Cumming, of Newark, 50 shares; Dr. William Burnet, 20 shares ; Colonel John Neilson, of New Brunswick, 10 shares ; Philip Livings- ton, of New York, 60 shares; Dr. Lewis Dunham, of New Brunswick, 50 shares ; Effingham Lawrence, 20 shares ; Elias Dayton, Jonathan Dayton and Matthias Williamson, Jr., 10 shares together; Robert Troup, 25 shares ; Richard Stockton ("the Duke"), 82 shares; General Henry Knox, at this time Secretary of the War and Navy, 20 shares, afterwards increased to 40; John Pintard, 100 shares; Henry Livingston, 120 shares; E. Boudinot & Pintard, 100 shares; William Duer, 25 shares; Matthew McConnell, 150 shares ; Brockholst Livingston, 58 shares ; Andrew Craigie, 20 shares ; Abijah Hammond, 40 shares ; Nicholas Low, 64 shares ; Herman LeRoy, 20 shares. Quite a number of shares found subscribers even in Amsterdam, partly through the commercial transactions of the house of LeRoy, Bayard & Mc- Ever, of New York, and partly through the financial dealings of the Treasury at that time with Amsterdam bankers. With much address the newspapers were enlisted in support of the enterprise, and the New York, New Jersey and Philadelphia gazettes of the day teem with articles on the subject of the "New National Manufactory," written or inspired by the enthusiastic Secre- tary of the Treasury.
He shrewdly gave out that the society's works were to be located in either of the three States of New York, New Jersey and Pennsylvania, whereby he interested capitalists of New York and Philadelphia in the project. But all the while, as is shown by his published correspondence, he had the Passaic Falls in view as the future manufacturing centre of America.
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Something like $100,000 having been subscribed towards the capital stock of the new company, application was made to the Legislature of New Jersey for leave to introduce a bill incorporating "The Society for Estab- lishing Useful Manufactures," which was granted. The charter, already prepared, was promptly introduced and pressed to passage. While there is no record of the fact, it has come down as a tradition from the earliest times of the Society that the act of incorporation was drafted by Alexander Hamil- ton himself. Of this there has never been any doubt among the officers of the society, and, indeed, a careful examination of the document itself, with a knowledge of Hamilton's interests in the society, will readily persuade any one of the inherent probability of the claim.
The charter contains some peculiar features, such as no Legislature would dream of granting in these days; but, after all, the special privileges granted proved to be of little value, and, indeed, have never been of much importance to the society.
The capital stock was limited to $1,000,000, in shares of $100 each. All the property of the society was exempted from all taxation for ten years, and thereafter from all but State taxes ; an exemption which has been materially curtailed by the courts. "All artificers, or manufacturers in the immediate service of the said society, shall be free and exempt from all poll and capi- tation taxes ; and taxes on their respective faculties and occupations." Sub- scriptions to the stock might be made in United States bonds, in which case a register of the same should be kept on the books of the United States Treasury ; or in stock of the Bank of the United States. The society was to be managed by thirteen directors, chosen by the stockholders in the usual way, and the directors were to elect from among themselves a governor and deputy governor. "The United States, or any State, which shall subscribe for not less than one hundred shares, may appoint a commissioner, who shall have a right at all times to inspect the proceedings of the corporation, and the state of its affairs." The provisions, so far as they pertain to cor- porations generally, evidently follow English precedents. It should be borne in mind that this was the first charter of incorporation of a private company enacted by the New Jersey Legislature. It may be questioned whether there was an incorporated manufacturing company in the United States at the time.
In Hamilton's report, already quoted from, he refers to "the great prog- ress which has been of late made in opening canals" in Great Britain, as hav- ing "been a benefit to the manufacturers of that kingdom." His active mind at once grasped all the possibilities in thus developing internal navigation in the United States and that feature appears prominently in the charter of 'the society, nearly one-third of the document being taken up in conferring the necessary powers to construct, regulate and navigate canals, which were to be public highways, authority being given to exercise the right of eminent domain in the furtherance of this great public work, and to open and clear the channels of rivers and to take any other water courses needed for the
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purpose. Most of these provisions have since been embraced in every rail- road and canal charter granted by the State.
Having evidently in view the recent legislation regarding the location of the Federal City, as it was called, Hamilton next provides in this remark- able charter for the incorporation of a tract equivalent to six miles square, being the territory within which the society might establish its manufactory, the society to take the initiative and survey the territory, which, unless ob- jected to by a majority of the taxpayers within sixty days after public notice, should become incorporated as "The Corporation of the Town of Paterson." The government of the town was modelled generally after the charter of New York, granted in 1730, and still in force in 1791, but with some peculiar features unmistakably Hamilton's own. The government was to be vested in a mayor, recorder, twelve aldermen and twelve assistants, and a town clerk, who were to be appointed by the Legislature in joint meeting, no limit being fixed to their terms of office, which is quite in consonance with Hamil- ton's well-known views regarding official tenure of office. The mayor, recorder, aldermen and assistants were given power to "make such by-laws, ordinances, rules and regulations, not inconsistent with the laws and consti- tution of the United States, or of this State, as to them shall appear neces- sary and beneficial to the good government of the said district, and the same to put in execution, revoke, alter and make anew, as occasion shall require." The boldness and comprehensiveness with which the powers of the munici- pality are defined evince a master mind, that dared sweep aside the tautology and petty restrictions with which municipalities always had been and ever have been tied up by the superior authority. Moreover, in this same body was vested the appointment of such other officers as they might think neces- sary, who should hold office until the appointment of their successors. The freeholders of the town were authorized to elect annually a sheriff and coro- ner. Assessors, collectors and overseers of the poor were to be elected in like manner. As in New York, the mayor, recorder, aldermen and assist- ants were given the powers of justices of the peace, and authorized to hold "a court of quarter sessions of the peace of the town of Paterson," four times in each year, with special sessions if necessary ; also to hold a monthly court of common pleas, the town clerk being clerk of both courts. "All arti- ficers and manufacturers within the said district, in the immediate service of the society," were "exempt from all military duty, except in cases of actual invasion or imminent danger." Such are the leading features of this remark- able charter as it passed the New Jersey Legislature on November 22, 1791. The town government never became an accomplished fact.
It would be interesting to have a report of the debates on this bill in the Legislature. That it met with fierce opposition and hostile criticism is cer- tain-partly because members did not believe in encouraging American manu- factures, partly because they considered the powers asked for extraordinary, somewhat because of political animosity towards Hamilton and his friends interested in the project, and largely because of a jealousy lest other than
P-21
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their own sections of the State should derive the benefits contemplated by the enterprise. Two of the most amusing objections to the charter were urged by a gentleman from Middlesex county in a letter to a friend in the Legislature. He thought the capital proposed altogether too large-one mil- lion dollars-a sum, he said, equal to the combined capital invested in Ameri- can manufactures at that time; by authorizing a single corporation to invest so much capital, it would give them a monopoly of the manufactures of the country, and would ruin the mechanics everywhere. Then, again, he urged there was that general power to make canals. Suppose the society should think fit, as some lunatic had actually proposed, to construct a canal from Raritan bay to the Delaware river, what would become of it? All the fertile farms in that section would be ruined, by being cut in two, and the farmers would be put to great inconvenience to get from one part of their bisected farms to the other ; orchards would be destroyed and there would be general devastation. Forty years afterwards that very canal was constructed, although not by the society, but followed by none of the direful consequences predicted.
The charter having passed, it was decided to name the town after Wil- liam Paterson, then governor of the State. William Paterson was a native of the North of Ireland and came to this country in 1745, when he was two years of age. The family lived at Trenton, then at Princeton and afterwards at Somerville. Paterson, having been graduated from Princeton in 1763, studied law with Richard Stockton, one of the signers of the Declaration of Independence. In 1775 he was elected to the Provincial Congress and chosen 'secretary. In the following year he was appointed Attorney-General, but resigned in 1783. He was one of the first United States Senators from New Jersey and was elected Governor of the State in 1790. In 1793 Washing- ton appointed him to be one of the justices of the Supreme Court of the United States. He died at Albany, New York, September 9, 1806.
A few days after the passage of the charter a supplementary act was passed, authorizing a subscription, on the part of the State, of $10,000 to the capital stock of the society. This gave great prestige to the corporation, giving it the sanction of the State. Moreover, it was of great importance pecuniarily, inasmuch as the total amount of stock subscribed never exceeded $243,000, including the State's subscription ; $15,000 was never paid for and was forfeited. The first meeting of the society was held in New Brunswick, on the last Monday in November, 1791, when Isaac Smith and Joseph Bloomfield were appointed judges to look after the election of a board of directors. At a meeting held in New Brunswick on December 9, these judges reported the election of the following directors: William Duer, John Dewhurst, Benjamin Walker, Nicholas Low, Royal Flint, Elisha Boudinot, John Bayard, John Neilson, Archibald Mercer, Thomas Lowrey, George Lewis, More Furman and Alexander McComb. William Duer was elected governor and John Bayard deputy governor. Duer was a relative of Hamil- ton's by marriage and his election was doubtless due to the suggestion of the Secretary of the Treasury. He was a leading merchant and daring
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speculator in New York. Madison calls him the "prince of speculators," while generous old John Adams intimates that he was a controlling influ- ence in the Treasury Department.
At this meeting the following letter was received from Alexander Ham- ilton :
Gentlemen :- PHILADELPHIA, December 7, 1791.
In consequence of powers vested in me by the agents named in the in- strument of subscription towards the Society for Establishing Useful Manu- factures, I have made contracts on behalf of the Society with
William Hall, as superintendent of the printing business ; with
Joseph Mort, as an assistant in the manufactory, in such way as his services may be thought most useful. This gentleman, I understand, has had opportunities of being acquainted both with the making and printing of cot- ton goods ; with
Thomas Marshall, to superintend the cotton mill.
The contracts with these different persons are transmitted herewith.
There is a William Pearce, who has been employed by me in preparing machines for the use of the Society; and with whom I have advanced pretty far in an agreement, but without having reduced it to definite form. He pretends to a knowledge of the fabrication of most of the most valuable machines now in use in the cotton manufactory and his execution hitherto, as far as he has gone, confirmed his pretensions. Among other machines he has prepared a double loom to be worked by one person. Of this he gives himself as the inventor and has applied for a patent, which he will probably obtain. It is certain that the machine, if in use at all in Europe, is quite new ; and, as far as without seeing it worked, it can be judged of, promises to answer the expectations it gives.
With (Geo.) Parkinson as foreman or master of a room in the cotton mill. This appears to be an ingenious mechanic, who has obtained a patent for a flax mill, which he alleges his having improved. How far these im- provements may be of real utility, or the mill itself capable of answering it's end, ought to be considered as uncertain : since it is a question whether the spinning of flax by mills, which has been for some time a desideratum in Great Britain. is practicable. The object of engaging this man was to secure to the Society an ingenious mechanic and securing to them whatever advan- tage there may be in the patent.
All the contracts leave to the society the power of dismissing at pleasure, if on experiment, they find it their interest.
I thought it advisable in the first instance to secure persons of whose usefulness there was occasion to entertain a favorable opinion tho' upon terms which may appear high, that the business might be early put in motion.
It is a point understood between Mr. Mort and myself, that if desired by the Society, he is to go to Europe, to bring over workmen, at his own ex- pense in the first instance ; but with the assurance of reimbursement and in- demnification. To engage such a person as Mr. Mort for this purpose ap- peared to me a point of some consequence.
I have the honor to be
with great consideration, Gentlemen, Your obdedient ser't
A. HAMILTON.
The contracts referred to in the letter were approved.
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At a meeting of the directors held on December 10 it was "Resolved that the governor do frame and publish an advertisement inviting all persons in New Jersey to make any proposals they think proper to this Board, rela- tive to the positions of the manufactories." At a meeting on January 17, 1792, the following letter was received from Alexander Hamilton :
I certify that Mr. Mort and Mr. Hall, who have been engaged on behalf of the Society for Establishing Useful Manufactures, informed me, while the subscriptions were pending, that they wished to become subscribers, the one in the sum of eight, the other of five thousand dollars; but that it would probably not be convenient to advance the first payment, at the time re- quired : To which I answered, that I did not doubt the directors of the Society would, if they should respectively subscribe the sums, be perfectly disposed to accommodate them on the subject of the payment in question, and that I was persuaded they might freely subscribe on that supposition. I was willing to encourage their subscription, conceiving it for the interest of the Society that they should be concerned in its success as proprietors.
Whereupon the directors resolved "that the said Messrs. Mort and Hall hold their subscriptions agreeably to the said certificate and that they be charged in the books of the Board with the amount of their shares without paying the same for one year."
At a meeting held on January 18, committees were appointed to investi- gate propositions : relative to the manufacture of tobacco, from William Hankart; and relative to the manufacture of paper, cards, etc., from Burrel and Edward Carnes. At the same meeting the committee appointed on Mr. Hankart's propositions reported favorably and the directors agreed to go into the manufacture of tobacco.
At a meeting held on January 19, a committee reported that "they learn that it will be necessary to procure a number, forty or fifty at least, of hands, skilled in the cotton and printing branches ; that this will be attended with very considerable expense and ought to be conducted in the most confidential manner : the committee are of opinion that a sum of money not exceeding twenty thousand dollars be appropriated to this object; and that the whole business of procuring such hands be committed to the direction and manage- ment of the Governor, subject to the advice of the Secretary of the Treas- ury." The committee also reported that the superintendent wanted "several articles" and the directors appropriated $50,000 to be used by the Governor and Colonel Hamilton in securing the hands and the several articles.
At a meeting on January 20, 1792, the Deputy Governor, in behalf of the committee for receiving applications and proposals for fixing the seat of the manufactories, reported :
That in the opinion of the committee the rivers Delaware, Raritan and Passaic afford eligible positions for fixing the principal seat of the town and factories. That the communications laid before the Board do not enable them at present to determine on the merits of the respective positions: They therefore submit the following resolutions to be entered into, viz. :
Ist. That six members be chosen by ballot, who, with the concurrence of the Governor, shall be authorized to fix the position of the principal seat
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of the manufactories of this Society; and to enter into and conclude such contracts and engagements, either for the purchase of lands, or for other purposes relative to this subject, as they shall find most conducive to the interests of the Society, keeping in view the necessity of obtaining a quan- tity of lands not intersected with private possessions, sufficient for the estab- lishment of the town and factories of the Society.
2d. That the faith of this Society be pledged for fullfilling the engage- ments entered into on behalf of the Society in pursuance of the foregoing resolution.
The recommendations of the committee were approved and Messrs. MacComb, Dewhurst, Walker, Mercer, Lowrey and Boudinot appointed the committee called for, John Hills, of Philadelphia, and Christopher Colles, of New York, being selected to "make surveys and take the levels which they may conceive necessary."
At a meeting held on January 21, 1792, Messrs. MacComb, Flint, Walker, Boudinot and Dewhurst were appointed a committee "to form and carry into execution a plan for raising by lottery or lotteries the sum of $100,000, granted to the society by the act of incorporation, in such mode as they shall judge most conducive to it's interest." On the same day Nehe -. miah Hubbard was elected superintendent-general of the works of the soci- ety at an annual salary of $2,000.
On April 3. 1792, the directors reconsidered their action in connection with the proposition of Mr. Hankard and agreed not to go into the business of manufacturing tobacco.
On April 20 the project of raising money by means of lotteries was abandoned.
Hamilton attended meetings of the board at Newark on May 16 and 17 when it was agreed to limit the choice for a seat for manufacturing to the Passaic, Raritan and Delaware rivers. On May 18, Hamilton also being present, it was unanimously resolved :
That the town of Paterson be located upon the waters of the River Pas- saick at a distance not more than six miles from the same on each or either side thereof between the seat of Mr. Isaac Gouverneur near the town of Newark and Chatham Bridge.
That Mr. Low, Mr. Bayard and Mr. Boudinot, or any two of them be and they are hereby authorized to locate the said town within the limits in the foregoing resolution and to make purchases of such lands as they shall deem requisite for the purposes of the Society, and to employ such surveyor and other persons under them as they shall deem proper and necessary.
At a meeting held on July 4, 1792, at the house of Abraham Godwin at the Great Falls, the following report was presented :
The committee appointed for the purpose of fixing upon a proper place on the waters of the Passaick for the seat of the factory, for fixing the town of Paterson and making the necessary purchases of land, Report :
That on the 29th of May last, they went to the Great Falls of Passaick accompanied by General Schuyler and several other gentlemen well acquainted with the country and the nature of water works in general. That they
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went over the ground for some miles round, employed proper persons to make surveys and levels. That they found it practicable to take the water from above the Great Falls, carry it by canals across the country and empty it again into the river at several places between the Falls and Acquackanack, particularly at two places, viz: at Vreeland's brook, which empties into the river about three miles below the Great Falls, and at Garrison's brook to Vreeland's Point, which is about seven miles below the Falls and at the head of the navigation, which point Colonel Duer had in contemplation for erect- ing the works, and directed Colonel Ogden to make a purchase of the lands for that purpose, but as the canals in all probability would cost more than the funds of the society would at present warrant-upon consulting with Col. Hamilton, they judged it most prudent to fix the principal seat of the factory at the Great Falls and accordingly made a purchase of certain lands described in a map marked A hereunto annexed. The price of which amounts to the sum of three thousand two hundred and ninety-three pounds eight shillings and three pence. The committee therefore advised Colonel Ogden to get clear of the purchase if he could, which he has done as appears by a letter from him which they submit to the Board. They also caused the bounds of the Township of Paterson to be surveyed and it is contained in the map marked B also herewith annexed. The expenses attending the said business as far as has been received are contained in certain accounts hereto annexed.
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