Shift in Strategy
By 1796, the society's efforts to build its own mills had failed, largely because the slow profits it generated were not enough to cover its start-up costs. In 1791 the Society had brought in one Thomas Marshall, who claimed to have been superintendent of the Masson Mill in England, to take charge. However it would seem that he was unsuccessful. Nevertheless the society successfully promoted real estate development in the area, leasing sites to other private ventures to establish their own mills while maintaining control of the falls as a power source through ownership of the dams and raceways that supplied the mills. The company's management of the falls subsequently became a lucrative source of profits as the area became the nucleus for a burgeoning mill industry. By 1815, thirteen water-powered cotton mills were operating beside the falls, operated by over 2,000 workers. As a result of the society's success in promoting industry, the population of Paterson grew from 500 in the 1790s to over 5,000 by 1820.
In 1830, the society was involved in a dispute with the recently-formed Morris Canal and Banking Company, which had been chartered to build a canal connecting the Passaic River to the Delaware River. The Morris Canal Company had placed a dam on the Rockaway River and diverted water for its own purposes, thus reducing the volume of flow over the falls and threatening the society's ventures. The subsequent court decision allowed the Morris Canal to be built without disrupting the water supply to the falls.
The company's harnessing of the falls for mill operations was described in 1834 by publisher Thomas Gordon who wrote in the Gazeteer of the State of New Jersey:
- A dam of 41⁄2 feet high, strongly framed and bolted into the rock in the bed of the river above the falls, turns the stream through a canal excavated in the traprock of the bank, into a basin; whence, through strong guardgates, it supplies in succession three canals on separate planes, each below the other; giving to the mills on each, a head and fall of about 22 feet. By means of the guardgate, the volume of water is regulated at pleasure, and uniform height preserved...The expense of maintaining the dam, canals, and main sluicegates, and of regulating the water, is borne by the company.
Read more about this topic: Society For Establishing Useful Manufactures, History
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