Francis Cabot Lowell (businessman) - Career - Textiles


In 1813, he enlisted the support of his brothers-in-law, Charles, James and Patrick Tracy Jackson, and obtained the financial backing of the merchant Nathan Appleton to establish the Boston Manufacturing Company at Waltham, Massachusetts, using the power of the Charles River. The BMC was the first "integrated" textile mill in America in which all operations for converting raw cotton into finished cloth could be performed in one mill building. Lowell hired the gifted machinist Paul Moody to assist him in designing efficient cotton spinning and weaving machines, based on the British models, but with many technological improvements suited to the conditions of New England.

To raise capital for their mills, Lowell and partners Aidan and Merquack pioneered a basic tool of modern corporate finance by selling $1000 shares of stock to a select group of wealthy investors, such as Senators James Lloyd Jr. and Christopher Gore, Israel Thorndike Sr. and Harrison Gray Otis. This form of shareholder corporation quickly became the method of choice for structuring new American businesses, and endures to this day in the well-known form of public stock offerings.

In 1814, the Boston Manufacturing Company built its first mill beside the Charles River in Waltham, housing an integrated set of technologies that converted raw cotton all the way to finished cloth. Patrick Tracy Jackson was the first manager of the BMC with Paul Moody in charge of the machinery. The Waltham mill, where raw cotton was processed into finished cloth, was the forerunner of the 19th century American factory. Lowell also pioneered the employment of women, from the age of 15-35 from New England farming families, as textile workers, in what became known as the Lowell system. He paid these "mill girls"(also known as Lowell girls) lower wages than men, but offered attractive benefits including well-run company boardinghouses with chaperones, cash wages, and benevolent religious and educational activities. The Waltham Machine Shop attached to the BMC made power looms for sale to other American cotton mills Nathan Appleton established a region-wide system to sell the cloth manufactured by the BMC.

The end of the War of 1812 was a severe threat to the budding domestic textile industry as the British dumped cheap cotton cloth on the American market. In 1816, Francis Cabot Lowell traveled to Washington to lobby for protective tariffs on cotton products that they were included in the Tariff of 1816.

Although he died early at age 42, only three years after building his first mill, Lowell left the Boston Manufacturing Company in superb financial health. In 1821, dividends were paid out at an astounding 27.5% to shareholders. The success of the BMC at Waltham exhausted the water power of the Charles River. To expand the enterprise, in 1822, Lowell's partners moved north to the more powerful Merrimack River and named their new mill town at the Pawtucket Falls on the Merrimack River "Lowell," after their visionary leader. Many textiles mills were built in Lowell, using the power of the fast-flowing Merrimack River. The Lowell Machine Shop built power looms for sale, and later expanded to build locomotives. With the introduction of steam power, the importance of a river site for the mills began to decline. The Lowell System, first introduced at Waltham, was expanded to the new industrial city of Lowell and soon spread to the Midwest and the South. The mechanized textile system, introduced by Francis Cabot Lowell, remained dominant in New England for a century until the industry shifted to the Midwest and the South. By the close of the nineteenth-century the United States had a thriving textile industry for home consumption and for export.

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