My thesis at North Carolina State University was titled “Smith & Wesson: America’s First Modern Firearms Enterprise,” and I focused on how Smith & Wesson fit (and didn’t fit) into Alfred D. Chandler Jr.‘s theory of the modern enterprise.
Chandler’s book The Visible Hand: The Managerial Revolution in American Business is arguably the most definitive text on the rise of the modern American enterprise, and the role that the professional manager played in that. Chandler believed that the rise of the railroads, the telegraph and anthracite coal were foundational to mass-production and mass-distribution. As businesses increased in size and as the scope of their operations widened, it became necessary to employ professional managers.
In some ways, Smith & Wesson’s rise fits into Chandler’s model nicely. During the company’s first three years of operation on Market Street (from late in 1856 through to early 1860), it operated as most small manufactories did; through a combination of the putting-out system (which subcontracted specific job functions to independent contractors, who may or may not have worked on site) and hired laborers. As Smith & Wesson became more successful, it became more difficult for the company to grow and expand—especially while maintaining consistency and quality.
The Stockbridge Street factory that Smith & Wesson opened in 1860 was revolutionary. Not only did it combine all of the gunmaking operations under one roof, but it placed each of them under a different manager. The company’s grew explosively during the 1860’s, fueled in part by the demand for firearms throughout the Civil War, and also because of the growing appetite in an increasingly urban America for small, concealable handguns.
Smith & Wesson’s first gun, the Model 1, is well-known to collectors, and the company produced over 250,000 of them during the gun’s 26 year production run. A close study of that gun shows the rise of another professional that historians haven’t paid much attention to: the production engineer. During the Model 1’s long production run, it underwent numerous changes. Many of these changes had to do with being able to manufacture the gun more efficiently; an obstacle that manufacturers had never, up until the 1850’s, been faced with.
The patent that allowed Smith & Wesson to maintain a virtual monopoly over the cartridge-load revolver was actually owned by Rollin White. An inveterate inventor and fairly unsuccessful businessman, White’s patent was discovered by Daniel Baird Wesson shortly before the Model 1 was to go into production. Wesson and White agreed on a licensing arrangement; White was paid a one-time royalty of $500, and 25 cents on every gun sold.
One condition of the license agreement was that White would incur the cost of defending the patent in court against violators. The Model 1’s runaway success (and Smith & Wesson’s refusal to sublicense the patent) led to several companies producing guns in flagrant violation of the patent. The resulting lawsuits (in which Smith & Wesson prevailed) bankrupted Rollin White.
Insomuch as this relates to the topic of big business, it’s an interesting and early example of how large companies were beginning to wield patents to maintain monopolies. This was probably not the intention of intellectual property laws (Zorina Khan argues in her book The Democratization of Invention that patents were originally a tool to help individual inventors capitalize on, and profit from their inventions), but it very much became the case as large enterprises took root in America in the late 19th century.
Chandler gave the firearms industry scant attention in his writing, and it’s somewhat understandable given that he was focused on America’s largest industries (AT&T, DuPont, General Motors, etc.), which the entire arms industry was a mere fraction of. Nonetheless, the American firearms industry is an exemplar of the collision between mass-production, modern enterprise and intellectual property law, and my research is a novel look at an industry that has received far too little scholarship.