Morgan and his approach to engineering challenges. “They were builders,” he wrote. “Neither of them would appear at their best unless they were striving to improve on the machinery of today for the benefit of tomorrow.”
Morgan succeeded together with Parker, Bigelow and the town of Clinton. As Ingalls noted, “It was not location, but genius united with executive ability that started Clinton in its orbit with a momentum that has excited the admiration or envy of other communities.”
Trained by industry leaders and his own experiences working with them, Morgan, now 29, was ready to take on his own enterprise. Letters between Charles and his brother Henry in 1859 and 1860 detail their decision to relocate their paper bag business to Philadelphia. Intending to keep the family together, and bring Hiram and Eunice with them, Charles, Hatty and little Harry started packing trunks and crates, preparing for the next phase of their lives together.
Three
The Business of Paper Bags, 1855–1868
Carte de visite of Charles H. Morgan photographed in Philadelphia, c. 1860
IN 1852, THE YEAR Charles Morgan turned 21, married his sweetheart, and briefly supervised Erastus Bigelow’s new dye house, Francis Wolle patented the country’s first paper bag machine. Wolle, a 35-year-old Moravian minister and schoolteacher in Bethlehem, Pennsylvania, had been working on the problem shopkeepers faced in general stores everywhere: goods arrived in bulk, but sold in smaller quantities.
Wolle made his first model in April 1851, followed by a second version in August. He was awarded a patent on October 26, 1852 and promptly formed the Union Patent Paper Bag Machine Company in Bethlehem together with his brother, Augustus, and three other relatives. They were slow to profit from his new invention, however, as they had to persuade storekeepers to try the novel concept. In those days, most customers brought their own baskets or jute bags to the stores.
The initial machine was also slow. After two more patents issued in 1855 and 1858, Wolle’s machine managed to produce 1,000 bags per day. While his business foundered, his career in education flourished, as he was named vice principal of the Young Ladies Seminary in Bethlehem in 1857, then in 1861 principal. Wolle’s brother, however, would persist in his pursuit of paper bag profits.
Other inventors recognized the potential Wolle’s invention held and diligently worked to develop alternative manufacturing devices. In Clinton, Edward W. Goodale, the overseer for the Clinton Company’s shop and Morgan’s earlier traveling companion, hired Morgan, now considered an accomplished young draftsman, to work on drawings for his machine in July and August of 1855.
The nation’s patent system was not even 20 years old. Established by Congress in 1836, the United States Patent Office fulfilled the mandate of Article I, Section 8, Clause 8 of the Constitution that the Executive branch “promote the progress of science and the useful arts by securing for limited times to inventors the exclusive right to their respective discoveries.” The new law required that a patent examiner read each application to ensure that the invention in question was actually new. The first numbered patent was issued that year. Patents protected an inventor’s exclusive right to make, use or sell their invention for 14 years, with a possible seven-year extension. The standard term extended to 17 years in 1861.
Morgan spent the last months of 1855 assisting another bag machine inventor, Joseph C. Smith. Overseer of the machine shop for Lancaster Mills, Smith was a talented machinist, musician and considered “a man of considerable literary ability.” Benjamin F. Rice, also a Clinton machinist, had his own paper bag machine in the works that year. Rice’s machine must have attracted more of Morgan’s attention and interest than Smith’s invention, as Charles noted in his diary on Thursday, June 14, 1855, “B.F. Rice began to make a bag machine.” The following year, Morgan devoted most of a black-covered notebook to details regarding this machine, entitling it “Bag Machine, Clinton Oct. 1856, Description of Drawings, Specification & Claims for B. F. Rice’s Paper Bag Machine.”
Working with Morgan, Rice refined the design of his machine. He filed with the U.S. Patent Office a formal warning to competing inventors, legally known as a “caveat” to protect his rights, and completed his application in November 1856. The machine was the first to bend the paper from a roll or continuous sheet into a flattened tube, then cut it into the required lengths for various bag sizes before pasting one end closed.
Before he filed his application for a patent, however, Rice sold one half of his invention to Benjamin R. Smith of Clinton. Smith was a pattern maker at Parker & Palmer’s machine shop, run in part by Charles Morgan’s uncle, Joseph B. Parker. Morgan subsequently bought the other half of Rice’s invention, and the assignment to the new partners Smith & Morgan was recorded in Washington before the patent was issued. On April 28, 1857, the U.S. Patent Office granted patent number 17,184 to Rice “assignor to B.R. Smith and C.H. Morgan” for “Improvement in Machines for Making Paper Bags, &c.” This stood as the nation’s seventh paper bag machine patent.
First page of Rice paper bag machine patent drawing, witnessed by Charles H. Morgan, 1860
Smith & Morgan began to manufacture and sell their machines. To produce bags, however, they needed a steady supply of paper. A firm in Watertown, Massachusetts, L. Whitney Jr. & Co., owned by Leonard Whitney and Thurston Priest, made a five-year price agreement to be the exclusive paper supplier to Smith & Morgan. In exchange, they wanted the right to sell bags produced by two bag machines. To secure their market advantage, Whitney & Priest requested that for the next five years, Smith & Morgan not sell their bag machines for use in New England, except Connecticut.
The 1858 agreements between these patent owners and a paper mill provided integration which reduced risk for both parties and created a model for profitable paper bag manufacturing and distribution. L. Whitney Jr. & Co. would provide manufacturing space and offer to sell paper to Smith & Morgan at favorable prices for five years, while Smith & Morgan would make the patented machines and the paper bags, bearing all the direct costs of production, including machines, raw materials and labor. Smith & Morgan would sell 100 percent of these bags to L. Whitney Jr. & Co. for five years at agreed prices.
These arrangements gave L. Whitney Jr. & Co. the opportunity to develop the market for this new product, while avoiding significant capital outlay, since they had space in their Watertown paper facility and gave Smith & Morgan access to a production facility at no cost. The paper producers could thus control their costs by agreeing to purchase only what they could sell, so the patent holders took the risk of balancing production and sales—a relatively manageable risk, given how fast they could ramp up production. Granting exclusive distribution rights for New England to L. Whitney Jr. & Co. in 1859 protected the paper mill from competition, allowing them a stable price and thus predictable profits on the sale of paper bags.
The January 7, 1858 agreements spelled out that Smith & Morgan “agree to make all the paper bags that L. Whitney Jr. & Co. may want made for them for the term of five years from date... all sizes of bags from one lb. to five pound to ten pound bags.” They further agreed to “furnish two bag machines and run them at our own expense and make all repairs upon them at our own expense,” plus gears, shafting, and steam pipe fittings. Bags would be delivered tied up with twine.
In turn, L. Whitney Jr. & Co. “agree to furnish Smith & Morgan with wrapping paper for the term of five years from date for five and a half cents per lb. also manilla [sic] paper for eight cents per lb.
