The Society For Establishing Useful Manufactures (S.U.M.)



One of the major collections of the PCHS are the original records for The Society For Establishing Useful Manufactures (S.U.M.). This collection contains documents, court case books, glass plate negatives, and photographs covering the S.U.M. Highlights of the collection includes documents and correspondence of Alexander HAMILTON, Elias BOUDINOT, and Pierre L’ENFANT in the 1790’s and hundreds of glass plate negatives showing company projects at the Great Falls of Paterson and elsewhere.

A Brief History of The Society For Establishing Useful Manufactures

(taken from a Paterson Museum pamphlet)

It was Alexander HAMILTON’s famous “Report on Manufactures” submitted to Congress on December 5, 1791 that was the catalyst for the creation of the Society For Establishing Useful Manufactures.

Hamilton’s report is still regarded as one of the best treatises on the subject of manufactures ever written. The report emphasizes 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 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.”

So it was with the endorsement of the Secretary of the Treasury, Alexander Hamilton and with the prospect of government aid and perhaps with much patriotism, many of the leading moneyed men of New Jersey readily engaged in the enterprise known as the Society For Establishing Useful Manufactures, (S.U.M.).

The charter which had been drawn up and revised by Hamilton himself that established the S.U.M. was one of the most liberal charters of that time. The charter left the S.U.M. unrestricted as to the locality, time of commencement, or period of duration of the corporation. More specially, it allowed the S.U.M. to take a tract of land equivalent to six miles square, being the territory within which the Society might establish itself. The inhabitants with this six mile district might be at any time incorporated and formed into a municipal government, with the usual powers, privileges, and duties. The government of the town to be settled by the S.U.M. was modeled generally after the charter of New York, but with some peculiar features unmistakably Hamilton’s own.

The government was to be vested in a mayor, recorder, twelve alderman and twelve assistants, and a town clerk, who were to be appointed by the New Jersey Legislature. The mayor, recorder, twelve alderman and twelve assistants, and a town clerk were given power to “make such by-laws, ordinances, rules and regulations, not inconsistent with the laws and constitution of the United States…”

The S.U.M. could improve the site where they were going to establish themselves by the construction of canals, lakes, dams, etc. The charter allowed the S.U.M.’s property to be exempt from state tax for ten years; from local taxes, such as for the county or township purposes, forever. The S.U.M. was also granted the privilege of raising $100,000 by lottery if required. The capital stock was fixed at one million shares, but real estate and other property could be held to the extent of four million dollars. A share could be bought for $100 each. A board of directors were elected by the stockholders in November, 1791. The appointments were as follows: William DUER, John DEWHURST, Benjamin WALKER, Nicholas LOW, Royal FLINT, Elias BOUDINOT, John BAYARD, John NEILSON, Archibald MERCER, Thomas LOWERING, George LEWIS, More FURMANS, and Alexander MC COMBS. William Duer was chosen as the first Governor and Archibald Mercer as Deputy.

The charter of the S.U.M. did meet with fierce opposition and hostile criticism because members of the New Jersey legislature did not believe in encouraging American manufactures, partly because they considered the powers asked for in the S.U.M. to be extraordinary.

On November 22, 1791, the charter of the S.U.M. received the signature of Governor William PATERSON, establishing the corporation known as the S.U.M. A few days after the passage of the charter, a supplementary act was passed authorizing a subscription on the part of the State of New Jersey of $10,000 to the capital stock of the Society. This gave great prestige to the corporation, giving it the sanction of the State.

The charter having passed, it was decided at the meeting on May 17, 1792 by the Board of Directors to locate the S.U.M. at the Great Falls of the Passaic because of the abundant supply of everything needed for a great manufacturing center. The land where the S.U.M. was to be located was owned by three of the stockholders, and they would be happy to offer their lands to the S.U.M. at reasonable sale prices. At this same meeting, it was agreed to name this town “Paterson” (named after the Governor of the State.) Some of the directors insisted that the town be named “Hamilton,” after Alexander Hamilton, but to no avail.

Seventy thousand dollars was borrowed on the stock of the Society for the purpose of laying out the town. Of the $70,000, $20,000 would be appropriated for the construction of a canal or raceway, $15,000 for a cotton factory and machinery, $12,000 for the print works, $5,000 for a weaving shop and its equipment, and a purchase of nearly 700 acres of land, together with the river bed above and below the Great Falls, was made at a total cost of $8,230.

Immediately after securing the land for the site of the future city, Nehemiah HUBBARD was appointed the Engineer and Superintendent to lay it out properly. He was soon succeeded by Major L’Enfant. His magnificent and impracticable ideas were soon abandoned. L’Enfant had laid out the city of Washington, D.C., and apparently not appreciating the difference in the terrain of the Great Falls area, he proposed to run streets and avenues 200 feet in width at right angles regardless of rock, hill, or stream.

One of the first undertakings of the Society was to build a slender dam 200 yards higher up stream than the present one just above the Falls; this was at La Fontaine’s Gap, near the bend of the river, the ravine being converted into a reservoir, out of which the current passed into what is now the middle raceway. Along this it was conveyed 150 yards to the Society’s first factory, off Mill Street. The water, after turning a water wheel at the first factory, flowed away and diagonally, crossing Mill Street and entered the river near the Phoenix Mill. About seven or eight years later, this raceway was extended along the side of the hill to supply some mills about to be erected near the corner of Mill and “Boudinot” – now Van Houten – Streets.

Major L’Enfant remained in charge of the works until early in 1793, when it was decided to replace him with Peter COLT, treasurer of the State of Connecticut, at a salary of $2,500, a veritable fortune at that time.

Under Colt, construction of the cotton mill appeased the impatient directors who were eager to begin manufacturing. Since no other power was available, the cotton mill was operated by a laboring bull and this became known as the Bull Mill.

In 1794, a four story mill of stone and wood was built by Colt and this became the real home of the S.U.M. This was a printing, bleaching, and dyehouse. In the same year, some homes for expected workmen were built, streets laid out, and workers came to Paterson. But in reality, the death of the S.U.M. was in progress. The lack of capital continued, there were frequent changes of plan. Wealthy men were inclined to put their money in less risky forms of investment, and the Society could not bring enough experienced foreign workmen. In a sense, an industrial monster had been created with which Americans would not cope. Foolishly, too, the directors had sunk so much money in machinery, land, and buildings that almost nothing remained to cover the cost of operation.

Among the problems with which the Society was assailed with after its incorporation, was the dishonesty of several of its officers who occupied positions of trust. At a meeting held October 2, 1792, it was reported by a committee of investigation appointed to inquire into the dishonesty of John DEWHURST, one of the first Board of Directors, that he had been intrusted with $50,000 to purchase materials in England, including plain cloths for printing, and that he had failed. The first Governor, William Duer is said to have “lost” $10,000 of the Society’s money.

On November 24, 1795, the directors determined to discontinue the business of ginning cotton and spinning candlewicks. Two months later, the superintendent was directed to complete all work on hand and then to discontinue the manufacturing operations. Finally on April 19, 1796, the Society advertised its works for rent.

Over a period of five years (1791-1796), the Society had received and disbursed $250,000 from its stockholders toward their subscriptions. It was a vast effort, but outside of largely unused land, buildings, and machinery the company had little to show for its efforts.

During the 18 years between October 13, 1796 and April 5, 1814, minutes of the S.U.M. directors show that only three meetings of the board were held. During this period, the business of the Society was managed by the governor of the Society, Roswell COLT, son of Peter COLT, who had purchased a controlling interest in the corporation.

In 1802, the directors decided to rent all mills, mill sites, and to sell and lease lands adjoining the raceway system which they had built. By 1814, the governor of the Society reported that as a result of leasing its property, the S.U.M. was flourishing. Improvements on the dam were made, additional canals for conducting water for use in supplying power were constructed.

A group of financiers took over the S.U.M. in 1885 and it continued to enjoy great profits. In 1912, construction was started on a hydro-electric plant in the basin of the Passaic Falls, which was owned by the company. Finally in 1946, 155 years after it was formed, the S.U.M.. was purchased by the City of Paterson for the sum of $450,000.

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