The Conestoga Steam and Cotton Mills played a major part in the advancement of the emerging industrial society in Lancaster, Pennsylvania. In the years between 1847 and 1872, an estimated 1500 people were employed by the cotton mills. During this time cotton goods was the leading manufacturing contributor to the economy in Lancaster.
The Conestoga Steam Mills were formally organized in July of 1845 under the leadership of local entrepreneurs. The stock was held by 75 Lancastrians led by 21 merchants, 11 lawyers, and 9 bankers plus the Lancaster Bank. James personally held stock valued at $1,000. The company was run by five managers: President John F. Steinman, David Longnecker, Christopher Hager, James Evans, and Edward Warren, the last being a Bostonian and resident representative of James in the enterprise. Beyond forming a company and raising capital to demonstrate the seriousness of their commitment, a delegation from the firm followed Edward Warren on a tour of Lowell, Saco , and Newburyport to learn what they could about cotton mills before officially contracting for the services of James and proceeding to build. David Longnecker revealed the delegation's sense of insecurity by noting in the Minute Book how critical it would be for both Warren and James to meet the delegation in Newburyport in order "to explain to us." The visit to New England took place in late July of 1845 and all were duly impressed. By August 2 James was offered a contract for "$2,000 during the erection and completion of our intended mill," and of course, he accepted.
The construction of what became known as Conestoga Steam Mill #1 took place during 1845 and 1846 under the immediate supervision of George D. Clarke, resident engineer, accountable to Charles James, chief engineer. It is fascinating to note that Clarke adamantly resisted pressure to let local founders and machinists Cockley and Whitehall build the engine and boilers for the mill pointing out they were incompetent to do so and he was not willing to learn them. Clarke won out and the contract was withheld from Cockley and Whitehall who ultimately had to settle for the castings and shafting contract. The life of the resident engineer was further complicated by a building contractor by the name of Flick who simply refused to follow orders. Despite these and other problems the mill was completed and began operation in early 1847 on South Prince Street, within walking distance of most everyone in town.
When James returned to Lancaster in early 1847 to inspect mill #1 he immediately made plans for the construction of mill #2 almost directly across the street. Where mill #1 had 6,000 spindles , 216 looms, and steam power rated at 225 H.P., mill #2 was to have 8,000 spindles, 288 looms, and steam power rated at 300 H.P. The second mill was built and placed in operation by 1849, and by November of that year James sold the mill to the Conestoga Steam Mills for $240,000. Expansion seemed like a reasonable of action for the local entrepreneurs in 1848 and 49 as mill #1 was running close to capacity and had paid dividends of 10 percent both years. By the time of the 1850 census mills #1 and #2 represented a capital investment of $430,000, employed 100 males and 290 females, and produced over 3,500,000 yards of cotton cloth annually valued at more than $290,000. In the face of this progress the apostle of steam power had but one advice: build another mill. Conestoga steam mill #3, constructed next to mill #1 in 1850, was the largest yet within 10,000 spindles, 264 looms, and steam power rated at 300 H.P.
The financial difficulties experienced by the firm in the second half of 1850 indicates that General James was pushing his legion to the brink. During the third and fourth quarters production levels plummeted to 30 percent of capacity as the Conestoga Steam Mills ran out of operating capital to command additional supplies of labor, raw material and fuel. Bills payable soared from $60,000 in December of 1849 to $157,000 in November of 1850, and dividends ceased. The setback, however, was temporary as local banks soon responded to the crisis enabling the mills to restore earlier production levels. This flow of credit from Lancaster banks to the Conestoga Steam Mills was, to employ a euphemism, facilitated by the fact that David Longnecker, Christopher Hager, and James Evans served as both managers of the mills and officers of local banks.
While it is was to imagine that without James someone else would have played a similar role and that cotton mills were somehow inevitable in Lancaster, such an argument is really a very weak one and ignores the distinct possibility that local capital and energy would have been committed to simply expanding what was already being done. So it is that the revolution brought to Lancaster by the cotton mills in the 1840Õs was the result of human effort and not remote or abstract economic forces.
We the subscribers being desirous to form a company under the provisions of the act of the General Assembly entitled Òan act to encourage manufacturing operations in this Commonwealth approved the seventh day of April One thousand eight hundred and forty nine and the several supplements thereto, do by these presents certify that under the Corporate name of ÒConestoga Steam Mills numbers three, Òwe intend to prosecute the manufacture of cotton goods by means of machinery propelled by steam or other power in a factory or factories erected or to be erected for the purpose and that the said manufacture with the various operations and principles necessary and proper, successfully to carry on and complete the same, and to carry the same for market and dispose there of to the best advantage, are the objects for which the said company had been formed: That one hundred and fifty dollars of Capital stock have been subscribed all of which has been actually paid into William O. Gilbert who has been appointed among other things to receive the same that the said Stock has been divided in three thousand one hundred and fifteen shares of fifty dollars each and has been subscribed by the following persons in the amounts respectively attached to their several names that is to say; by John Atlee residing in the city of Lancaster seventy shares, by Marks Wenger residing in the county of Lancaster ninety shares by Jacob Bausinaw residing in the same county, twenty shares by JR Bitner residing in the city of Lancaster five shares; by John Bear residing in the city of Lancaster five shares; by Henry Christ residing in the same city twenty shares;
Know all men by these presents that we the subscribers Citizens of Pennsylvania being desirous to form a company, under the provisions of the act of Legislature of said Commonwealth entitles an act to encourage Manufacturing operations in this Commonwealth, approved the seventh day of April 1849 and the several supplements do certify as follows: The corporate name of said company shall be the Conestoga Steam Mills Number 2. The object for which the same has been formed are the company on the manufacture of Cotton Goods, and preparing the same for market and the vending thereof. The amount of capital stock subscribed is one hundred and eighty four thousand six hundred and ninety two shares of fifty dollars each.
The chief operations of the Company are to be carried on in Lancaster County. The number of directors shall be five and David Songnecker, Henry Longnecker and Thomas Baumgartner all citizens of Pennsylvania, have been appointed directors who shall manage the affairs of the company until the next annual election.