Launchpad Republic

5Building the Entrepreneurial Republic

Alexander Hamilton, the new Secretary of the Treasury, saw better than anyone the need for industrial development. In 1791, while working on the Report on Manufactures that he delivered to Congress that same year, he founded the Society for Establishing Useful Manufactures (SEUM) with his colleague Tench Coxe. Thanks to their connections with investors, the first stock subscription sold out immediately, and they worked quickly to develop a waterpower site near the Great Falls of the Passaic River in New Jersey. They envisioned a state‐sponsored manufacturing town and called it Paterson, in honor of the sitting governor – who returned the favor by granting the new company a state charter for exclusive access to the falls, as well as a 10‐year tax exemption. Soon a cotton spinning mill was up and running, with plans for a major complex churning out a variety of products. Meanwhile, the spies they had sent to Britain collected valuable information that would help in the endeavor. They also hired some immigrants who claimed experience in factory life and operation.

Flush with capital, cozy with the local government, and likely overconfident, the SEUM took on too much too soon, with inadequate oversight. Hamilton hired Pierre L'Enfant, future architect of Washington, D.C., to design the factory town, and the Frenchman embarked on an extravagant, costly plan. Hamilton also packed the board with financiers who lacked industrial expertise, including ...