History of Proctor-Silex, 1788 to 1972
By Arthur L. Redstone
PART I - JAMES SMITH CO. - 1788-1883
1788, the year of Washington's first election and the ratification of the constitution! Little note would be taken of the birth of another Smith, named James, in Rutland, Mass., or of twelve year old Peter Proctor an apprenticed merchant sailor, eventually to become a sea captain, yet James Smith would found a firm, later to be absorbed by Peter's grandson Josiah Proctor. This firm, expanded in 1890, by Charles Schwartz and later by his brother Walter, forms the background for our history of Proctor and Schwartz and Proctor Silex.
Up until 1800, the miniscule quantities of domestic fabric produced by hand carding and the quaint spinning wheel, made the Colonies dependent on Britain as the main source of their cotton and woolen cloth. The mother Country, jealously protected her textile monopoly, based on powered machinery by refusing to permit export, not only of textile machinery and machine design, but even emigration of the craftsmen with "know how." To thwart the Royal Navy's "Search Sieze," these men resorted to disguise, augmented by incredible feats of emory of details about gears, cams, frames and shafting speeds.
Gradually, the burgeoning American demand created powered mills along the swift New England streams, and these mills required machinery and replacement parts. To help supply this demand, Col. Denny (Mass. Dragoons), prominent citizen of Leicester, backed Winthrop Earle and John Woodcock in a plant to make hand cards, reeds and bobbins, in 1802. The frame building (once a barn) in the rear of the Denny home, housed seven workers employing hand tools. When Earle died in 1807, his widow married Alpheus Smith of nearby Rutland, who, in 1810, brought his brother James in. Now, twenty-two, James trudged into Leicester with six dollars in his pocket, and all his belongings wrapped in a large handkerchief. The young man must have been endowed with charm, for two years later he married Col. Denny's only daughter, Maria.
Shortly after this, Alpheus Smith left the firm and John Woodcock passes away, leaving James Smith in control. When in 1812, the concern moved into larger quarters, the move was exquisitely timed to meet the exploded demand for domestic fabrics creased by the cessation of British imports during the War of 1812-15. (This timing would be repeated in 1916 and 1940.) James Smith's courage in meeting this demand backed by Denny credit, enabled the company to triple in size by 1815. The war surge lasted until 1816 when the flood of British imports shut down many plants and created the panic of 1817-1819. American textile production dropped from $18 million to $3 million, and the young company what five generations to follow would have to relearn, that the chart of business activity never follows a straight line for long.
Such was James Smith's foresight however, that he used the lull to prepare for future development, a policy to which the company would adhere for 150 years. They equipped their shop with steam power and redesigned their line for power operation. As in all depressions, the upsurge following the depression reached new high levels. Inflation also spiralled, and wages rose from thirty cents a day in 1790 to eighty cents a day by 1820. With thirty employees, shipments stood at $15,000 per year. Business again was excellent and, at ten per cent net (no taxes) the company's worth could double in ten years. James Smith was really sitting "on top of the world!"
However, by 1834, he felt the need for a major move. With the population doubling every twenty years, facing complete redesign of machinery from wood to iron construction, he decided on an expansion and relocation. His resolve, no doubt, firmed with the knowledge that the tariff would protect him from British competition. He sensibly reasoned that the textile industry would no longer be bound by a 100 mile radius from Leicester. There were too many people west of it, and too much fiber south of it and the new steam railroads would expand the shipping range to 1000 miles. Philadelphia, with its central location and abundance of skilled help seemed the answer. So he located there in 1836 in a two story brick plant at 7th and Cherry Sts. They located the office at 2nd and Market Sts., complete with the counting house bench and the clerk's high stool.
The constant grind on the card points in daily operation wore out the cards so quickly that their replacement became a major operation, and James Smith, the largest supplier of cards in the U.S. By 1850, they occupied a three story half block square building of 150,000 square feet, beautifully equipped. The Philadelphia Advertizer described their automated operation in which leather strips are cut to length, punched, pins inserted and bradded, all automatically and at top speed. Three men operated 57 punches in 1851. The company, at this time broadened their product line into grates, stove parts and steam pumps, employing 300 men, and as the firm prospered, the James Smiths moved to a four story home on prestigious Franklin Square complete with stable, carriage, and the usual jockey boy hitching post.
During the Civil War, Smith supplied pumps for Farragut's ships. This writer recalls a retiree who ran an engine lathe, turning pistons at that time. In 1869, over eighty years old, childless and recently widowed, James Smith sold the business to a group of key employees for $100,000. Remaining active until his death at ninety-one in 1879, he left an estate of $88,000 dedicated to church funds and Congregationalist colleges. The administration of the concern from 1870 to 1903 remained in the hands of these men from New England who had come to Philadelphia with James Smith. Chief of these, Thomas Cunningham, retained the presidency for thirty-five years. Those around him held but one policy, Never Risk! Here again was the eternal problem of industry, growth risk vs. consolidation security. From this time on, the status of James Smith slowly declines as lines were dropped, without developing new items to offset the attrition. No risk dare be taken.!!
Eventually, management had to realize the urgency of reversing this decline. Then in 1878, the burning of their factory (well insured) supplied funds for a brand new plant at 4th St. below Race St. To infuse modern plant management into the organization, the board selected as superintendent, a handsome twenty-nine year old New Englander, Josiah Proctor. This very well groomed young man, luxuriously sideburned, had already made a name for himself as an effective supervisor with the knack of developing new machinery that worked. His activity dominates this story for the next twenty-five years.
The sea captain Peter Proctor, had retired to a firm in Chelmsford where his grandson Josiah was born in 1848 during the Polk administration. The death of his father when Josiah was but nine, restricted his formal education to the three "R's," but with constant reading and a disciplined mind, he developed excellent powers of expression. His entire personality and dress stamped him at once as a New England gentleman. Josiah indentured himself at thirteen to C.G. Sargent of nearby Granville, Mass. A year later he joined up as a drummer boy in Battery K of the 2nd mass, heavy artillery. On his return to Sargent, he quickly acquired a foremanship at only 20. His fourteen dollar per week salary, while quite good, did not satisfy his ambition, so in 1870 he struck out for Philadelphia. There he formed a partnership with Charles Lindsay to operate a speciality machine shop at 13th and Vine Sts. Josiah used this location, he developed his new deburring machine, and also the first American garnett, neither of which did he have enough capital to produce and market.
At this time, 1878, the Smith Co., desperate for new markets and new management blood, paid Proctor $20,000 for his garnett patent, and also retained him as plant superintendent for $1500 per year. Up until this point, garnetting machinery had to be purchased from England. The J. Smith Co. recapitalized in 1879 as the James Smith Woolen Machinery Co. with T. Cunningham as president, Frank Pendleton as treasurer, Hamilton Moulton as sales, and J. Proctor works manager and engineer. Cunningham held thirty percent stock, and three others, including Proctor, twenty percent each ($100,000) paid capital. Their first full year of operation netted nineteen per cent investment. Proctor's pay increased to $2,000, compared to seventeen cents for the average worker. Business was good.
By the end of 1881, the cycle began to change. Sales fell off, and profits declined, due to an inaccurate cost system. Proctor, on request of the board, set up an entirely new cost system, that included such modern devices as job descriptions, time study and a procedure for utilizing the customer's standard order sheet as a basic document for processing through the entire shop. It could be used today. However, the drastic drop in sales, combined with the extra time and cost of new projects produced a major loss. The board blamed Proctor for the excess development charges and slashed his research costs. Apparently, they had originally thought that, in Proctor, they had acquired a sort of human "investor's mix" which, when shaken three times, comes up with a finished, marketable product. Not so! Josiah Proctor never claimed this ability. He did have a keen, logical mind plus patience to work out the details if given time. He was to prove this ability later.
As sales continued to droop and losses continued, the board more sharply restricted Josiah's research privilege, a form of suffocation that he could not tolerate. So, in 1883, J. Proctor severed his connection with J. Smith, and sold his stock for $20,000. How could he have guessed that in twenty years he would become president of the company?
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