Amoskeag Company History

Company History:

Amoskeag Company is a holding and operating company, whose main revenue (98 percent) is derived from its control of approximately 81 percent of the common shares of Fieldcrest Cannon, Inc. In an unusual twist, Fieldcrest Cannon and Amoskeag came to an agreement in mid-1993 to merge the two companies and allow a Fieldcrest Cannon subsidiary to purchase all of Amoskeag's outstanding stock for $40 per share. This would, in turn, make Amoskeag a wholly owned subsidiary of Fieldcrest Cannon. Although Amoskeag was incorporated in its present form in 1965, its roots go back to the end of the 18th century. When it was incorporated in 1831, the Amoskeag Manufacturing Company was already an important player in the American Industrial Revolution.

In 1793 Judge Samuel Blodgett began constructing locks and canals on the Merrimack River just south of Concord, New Hampshire, at the Amoskeag Falls to utilize the river's power to operate textile mills. The first actual mill was built on the site in 1804 by Benjamin Pritchett. This was taken over by the Amoskeag Cotton and Wool Manufactory in 1810. Several other mills were built around that time, but the entire project foundered in 1825, partly because of its inaccessibility to markets.

In 1822 Francis Cabot Lowell effectively harnessed the Merrimack at Lowell, Massachusetts. Using plans he had brought back from Manchester, England, he and his partners turned Lowell into the cutting-edge textile manufacturing town in the United States. The 25-mile Middlesex Canal&mdashtually completed in 1804--connected Lowell with the port city of Boston. These events in Lowell, just a few miles downstream from Amoskeag, helped reenergize the Amoskeag undertaking. Several investors from Boston took over the mills in 1825, and Samuel Slater applied the technology he had learned in Manchester to the mills. By 1831 the ownership of the mills was reorganized, and the Amoskeag Manufacturing Company was incorporated on July 1 of that year. Control of the mills remained in Boston, as was true of almost all the large textile mills in New England. The directorates interlocked to a remarkable degree; directors of seemingly competing mills sat on each other's boards.

Manufacturing at Amoskeag was not restricted to textiles, although that was their main business. Guns and rifles, locomotives, fire engines, and even the rotating gun turret for the Civil War ironclad Monitor were manufactured there. Amoskeag's manpower needs increased to the point that starting about 1838, the company built a company town, Manchester, New Hampshire, on the site. By the 1880s, the Amoskeag textile mills were the largest in the world, extending one and one half miles on both sides of the Merrimack. The mills were also very profitable. When Thomas Jefferson Coolidge became treasurer in 1876, he reported to the shareholders that "you have received in dividends for forty-two years an average of 11 per cent a year, and if to that is added the increase of the quick capital, the Company has earned 15 per cent per annum, without taking into consideration the money spent on the plant." Coolidge, who was treasurer of the company for a total of 16 years between 1876 and 1898, went on to become president of the board of directors until 1911. He is credited with more than tripling Amoskeag's industrial capacity. In 1883 there were 171,000 spindles used in cloth production; by 1912 that number had risen to nearly 670,000. The total output at that time came to about 470 miles of cloth per day.

From about 1906 on, much of the day-to-day direction of the company was placed in the hands of Frederic C. Dumaine, who was treasurer of the company until 1939 and then served as president from 1939 to 1946. He was also chairman of the board from 1946 until his death in 1951. Dumaine was a financial strategist who guided Amoskeag through the economic downturn that hit the textile industry around 1925 and through the Depression, including the eventual closing of the mills. In 1939 Dumaine's son, F. C. "Buck" Dumaine, replaced his father as treasurer. Buck had started work at the mills in 1914 and retired from his position as director of Amoskeag in 1992.

With the exception of a few years before the United States' entry into World War I, Amoskeag continued to be extremely profitable. During the war, it was a major supplier of uniforms, barracks bags, and other textiles to the military. Immediately after the war, company income soared, due to pent-up consumer demand and steep price increases. The mills employed almost 18,000 workers in 1921, and the company piled up sizable financial reserves during this period. In the mid-1920s, however, there was a marked decline in sales, particularly of ginghams--an Amoskeag mainstay. This decline affected mills throughout New England, although companies in the South continued to see modest gains in output. Dumaine foresaw a long period of decline and reported his prediction to the directors. The company realized that it could either use its reserves to ride out hard times or begin the painful process of closing the mills.

Under Dumaine's leadership, Amoskeag Manufacturing Company reorganized as a holding company, or trust, and changed its name to Amoskeag Company in 1925. The new company established a trust, Amoskeag Manufacturing Company, to operate the mills. According to economist Alan R. Sweezy in a 1938 issue of Quarterly Journal of Economics, a large part of the reserves that had been built up over the years were then transferred to the holding company and were withheld from operation. The mills had just enough money to operate, but there were no funds for maintenance of the plant and little for upkeep and replacement of machinery. Spare parts were taken from machines that had been shut down. Gross sales slid from $33 million in 1926 to $10.2 million in 1932, the worst year of the Depression. At the same time, Amoskeag was able to get tax abatements from a panicked Manchester, and the company cut wages until they almost matched those in Southern textile mills. By 1935, with losses mounting, the trustees recommended that the mills be liquidated.

A bankruptcy court in Boston decreed that the liquidation could take place. Arthur Black, the master appointed by the federal court to oversee the bankruptcy proceedings, noted, "The Trust was rich and had no creditors. It was under no obligation to stand idly by while the accumulation of a hundred years was eaten up in a losing operation. It was right to set the plant on its own legs to win or lose. It was right to withdraw $18,000,000 from the risks of mill operation." Nonetheless, several criticisms were leveled at the Amoskeag Company in the aftermath of its pullout. According to critics, the company refused to change with the times. While gingham was going out of style, Amoskeag clung to this traditional part of its line. The possibility of moving production into sheets and bedding was turned down. In addition, employees who demonstrated that the factories could easily expand its small rayon production and regain profitability were ignored.

The effects of the Amoskeag pullout would have been devastating to the economy of Manchester, and all of southern New Hampshire, therefore business leaders and citizens of the city collected $5 million in pledges to buy the factories in late 1936. The slogan of their door-to-door campaign was "say it with subscriptions." Despite the poor condition of the mills, newly formed Amoskeag Industries, Inc. attracted diverse industries to the factories, which were 60 percent leased by September, 1939. According to Tamara K. Hareven in her book Amoskeag: Life and Work in an American Factory City, until the mills shut down, Manchester had been in many ways a company town. Virtually no new industry could be established in the city without Amoskeag's cooperation since the company controlled most of the industrial land. Control over the city's economic life also gave it influence over politics; company officials and managers often served as aldermen.

Even though Amoskeag Company had exited the textile business, it was cash rich. Added to the money already in Amoskeag Company, there was the $5 million from the sale of the mills. Beginning in the late-1940s and 1950s, Amoskeag Company began to invest in transportation, particularly railroads. The company's aim during that period was to consolidate the fragmented New England railroad system. Investments included the Bangor and Aroostook Railroad Company; the Boston and Maine; the Delaware and Hudson; the Maine Central; and the New York, New Haven, and Hartford railroads. Amoskeag also invested in the Middlesex and Boston Street Railway, the Springfield Street Railway, and the Worcester Bus Company. Because of competition from trucking and the deindustrialization of New England, the plan to consolidate railroads in the region proved unrealistic. Most of Amoskeag's rolling assets were sold up until 1981 when it divested itself of the Springfield operation.

Only Bangor and Aroostook Railroad Company, of which the company took control in 1969, was still owned by Amoskeag in the mid-1990s. The railroad, founded in 1891, owns and operates about 420 miles of road running north from Searsport to Madawaska on the Canadian border. It mainly services lumber, paper, and pulp mills in the area. The line does not transport passengers. In 1992 its revenues, including warehousing and distribution business of its subsidiary, Logistics Management Systems, Inc., came to $27.5 million.

Amoskeag also owned Avis, Inc. from 1958 to 1965 and Fanny Farmer from 1962 to 1984. In 1953 Amoskeag bought Fieldcrest Mills from Marshall Field & Co., marking its reentry into the textile business, and in 1965 Amoskeag Company became incorporated under Delaware law. By the early 1990s, Fieldcrest Cannon (Cannon Mills were acquired in 1986) accounted for 98 percent of Amoskeag Company's sales revenues. However, because sales of bedding and related products and carpeting are sensitive to economic conditions, the company experienced decreased revenues in three out of five years from 1987 to 1992. Most of Fieldcrest Cannon's customers are department, chain, specialty, and other stores dealing in domestic goods. In 1992 Wal-Mart Stores, Inc. was Fieldcrest Cannon's largest single customer, accounting for about 13 percent of sales. Of the company's 17,300 employees, 16,950 work for Fieldcrest Cannon. While Amoskeag Company lacks diversity, Fieldcrest Cannon, its main component, has proved profitable. There is no apparent reason why that should not continue to be the case. Both companies should benefit from their forthcoming reversed relationship.

Principal Subsidiaries: Fieldcrest Cannon, Inc. (81%); Bangor and Aroostook Railroad Company; Logistics Management Systems, Inc.

Further Reading:

• "Amoskeag Comeback," Business Week, September 2, 1939, p. 21.
• "Amoskeag: Court Imposes Death Sentence on Huge Textile Plant," Newsweek, August 1, 1936, p. 30.
• Hareven, Tamara K., and Randolph Langenbach, Amoskeag: Life and Work in an American Factory City, New York: Pantheon, 1978.
  One Hundred Fiftieth Annual Report: 1831-1981, Boston: Amoskeag Company, 1981.
• "Payroll Rescue," Business Week, April 17, 1937, p. 29.
• Sweezy, Alan R., "The Amoskeag Manufacturing Company," Quarterly Journal of Economics, May 1938, pp. 473-512.
• "Taps for Amoskeag," Business Week, July 25, 1936, p. 36.

Source: International Directory of Company Histories, Vol. 8. St. James Press, 1994.