The Source

by Martin Doyle

  Mills also increased the value of exports. Along the Merrimack River, the presence of a sawmill at Pawtucket Falls in Lowell meant that wood could be exported as masts or lumber rather than as timber. At the mouth of the Merrimack, demand for masts was particularly high due to the burgeoning shipping business. Similarly, all along the East Coast, gristmills allowed communities to export flour, which was easier to transport and more valuable than wheat, at downstream ports. More than any other type of infrastructure, sawmills and gristmills were the centerpiece of the colonial economy.5

  Because mills were so central to early U.S. society, they had to be regulated. In many ways, a mill was comparable to a modern water, sewer, or electrical system: it provided a necessary, widely used service in the community. A mill was also a natural monopoly; rural communities typically only needed one gristmill, and once it was built, no other mills would move into the area. Thus, unless the government intervened, the initial mill could charge exorbitant fees. And indeed, early colonial communities and states used regulation, in place of “the invisible hand” of the market, to provide the benefits that competition normally would bring.

  The government granted each authorized miller a franchise, designating them the sole provider of the service in their community. Millers with franchises were guaranteed that no other miller could block the waterway upstream or build a dam downstream that would interfere with their operations. They were also given the right to inundate upstream landowners—to build a dam whose water would be impounded on other people’s land. In return for these privileges, millers agreed to fulfill certain responsibilities. Most common was the obligation to serve the public without discrimination—the millers had to grind grain for anyone who was able to pay. They were also generally required to submit to government or community oversight to ensure some minimal standards of service. Finally, because millers had a monopoly on an essential public service, their rates were set by regulation.6 This instance of government regulating a needed public service provided by a private industry foreshadowed the role the government eventually assumed regarding public utilities; thus, gristmills have been called America’s first public utility.7

  This was the context for the humble beginnings of the Proprietors of the Locks and Canals, a small business founded in 1792 along the Merrimack River. It began as a canal company, operating a series of locks and canals to move the constant rafts of timber coming from New Hampshire around the Pawtucket Falls and send them downriver to Newburyport, then a shipbuilding center of New England. The locks and canals precisely controlled water levels in the canal to keep the logs, rafts, and boats moving up or downstream. In 1821 a group of investors more interested in power than transportation assumed ownership of Proprietors. They began assembling the land and capital necessary to build Merrimack Manufacturing Company, a textile manufacturing company that would take advantage of the potential waterpower at the site.

  Unlike many other canals, the Pawtucket Canal built by the Proprietors did not run parallel to the river. Rather, it bent away to form a half-circle meander to the south. The river and canal together created an island with the river and falls on the north and the Pawtucket Canal to the south. The effect is somewhat like a steep staircase (the waterfalls) going down to a sidewalk (the Merrimack River) at street level on one side of a park. An elevated walkway (the canal) is on the other side, with a series of elevators (the locks) that incrementally take pedestrians down to street level along the walkway so that it eventually meets the sidewalk at the far end of the park.

  This geography created an unusual opportunity: if, instead of gradually lowering the water level with locks, the water level in the canal was kept elevated all the way around the island, there would be a high and constant drop in water level from the Pawtucket Canal south of the island to the lower water level of the river north of the island below the falls (i.e., the walkway would be higher than the sidewalk for the entire length of the park). By then building smaller canals that drew off portions of water from the primary, high-elevation canal, the company could create a network of waterways that, while only marginally successful as a passage for commercial traffic, was optimally designed for producing hydropower.

  The Merrimack Manufacturing Company, which also owned the land and water rights of the original Proprietors of Locks and Canals, quickly found that it was managing two different sets of operations: textile manufacturing and power production. When a new manufacturing company proposed moving into town, it needed power that was owned by Merrimack Manufacturing—and Merrimack Manufacturing recognized that it had vastly more power than it alone could put to use. In 1825 the Merrimack directors decided to separate the firm’s operations functionally: the remaining undeveloped land, the machine shop, and the waterpower rights were owned by one company—the Proprietors of Locks and Canals—while the Merrimack Manufacturing Company owned just one of what was to become many mill complexes. In this way, the Proprietors could then supply the hydropower generated by its system directly to consumers—in this case, the manufacturers of Lowell.

  The Merrimack River and the power-generating system of canals and locks.

  This plan was a significant intellectual pivot that would establish the modus operandi for power companies of the future. Previously, manufacturers using hydropower had been obligated to provide their own power. They built their own dams, canals, and waterwheels to power the equipment, whether it was a saw to cut lumber or a spindle for the emerging industry of textile manufacturing. The Proprietors’ approach was to take care of the power part of manufacturing by managing the volume and fall of water through and across the island at Lowell. With their system of dams, locks, and canals, the Proprietors could guarantee a precise amount of energy to each manufacturer in Lowell. The manufacturers, then primarily the owners of textile mills, were still responsible for constructing the waterwheels necessary to convert this potential energy into usable power. But they no longer had to construct, maintain, and operate the dam, gates, and channels. Instead, they were able to concentrate their efforts on optimizing the use of available power specifically for manufacturing while the lock and canal company focused on greater hydraulic control of the river.8

  This arrangement was, as the historian Patrick Malone notes, one of the earliest forms of a power market—the potential energy of a river was commodified, bought, and sold in units of power rather than in units of product produced. The textile manufacturers paid the Proprietors not for a fraction of the river flow, but for a “millpower” equal to 25 cubic feet of water per second dropping 30 vertical feet. This was about the same as 85 horsepower, enough to power a mill with over 3,500 spindles and all other machinery necessary to turn cotton into cloth. Just like modern power companies supply power—electricity—for industries or individuals to then use for their own purposes, so the Proprietors supplied manufacturers in nineteenth-century Lowell specifically with waterpower, and then the manufacturers had to put that energy to work. While the location on the Fall Line made operating a mill in Lowell attractive, it was this ability to purchase a set amount of potential energy that drove the textile industry to such heights in Lowell. Following this development, other companies adopted similar approaches—first in the Merrimack valley and then more broadly in New England—severing water use from the products being made and thus turning that water into the commodity of power.9

  This change in the conceptualization of power was significant for industrializing the economy, but just as important was a change in the regulation of power. In 1833 the Proprietors sought to increase power production by increasing the height of the dam on the Merrimack by two feet. Raising that dam would back up water farther upstream, inundating upstream riparian landowners. In fact, the Proprietors’ proposed dam raising would inundate lands all the way to Nashua, New Hampshire—itself a growing hydropower-based manufacturing center. But the Proprietors had no reason to think this would be a problem. The government regulations in place favored economic development; smaller mil
ls, like those upstream in Nashua, simply had to make way for the larger and more economically productive downstream mills like those at Lowell.10

  Regulation of mills in the mid-nineteenth century had taken a distinct turn away from its original mission of ensuring minimum subsistence services and toward full-scale economic development. Private property was being sacrificed for the broader economy through the emergence of regulations known as mill acts, which gave dam builders and owners what amounted to eminent domain along rivers. The legal historian Milton Horowitz viewed this shift from protecting private property to sacrificing property in the name of economic development as one of the great transformations of U.S. law.

  Giving millers—and, eventually, hydropower companies like the Proprietors—rights of eminent domain required a substantial shift in the basic concept of property in America during the second quarter of the nineteenth century. This in turn promoted the view that government regulation should be based on considering the relative efficiencies of conflicting property uses. That is, the government should decide whether society, or the local community, would be better served by small dams and secure property rights in contrast to large dams and economic growth—and the accompanying insecure private property rights. Without such a paradigm change in interpreting and implementing regulation, the primacy of riparian property rights would have minimized opportunities in river development for hydropower. Instead, the desire for economic progress in the early nineteenth century was so strong that it shifted government regulation from favoring established property to supporting whichever use best served economic development. Thus, with the government’s encouragement, dams and mills proliferated in number, complexity, and economic output. As a result, textile manufacturing via hydropower in America quickly surpassed that in England.11

  But textile manufacturing, typically associated with nineteenth-century hydropower, was secondary to flour milling. As settlers cleared greater amounts of land for agriculture, grain became plentiful and gristmills were increasingly converted from low-power community mills into high-power merchant mills that produced thousands of pounds of flour per hour and then sold it on the broader Atlantic market. These sales were facilitated in part by geography; many of the larger mills were located at or near the Fall Line, which was the upstream extent of navigation for Eastern Seaboard rivers. Farmers upstream of the Fall Line brought their grain downstream, where the burgeoning mills processed it into flour, and then dock workers loaded it on the oceangoing ships waiting there at the head of navigation. Because a single mill could manufacture 150 barrels of flour a day, flour export expanded dramatically. And when consolidated into industrial facilities, the export market exploded: the fifty mills within eighteen miles of Baltimore kept ships moving through its harbor, as did other ports on the Eastern Seaboard that had similar ratios of mills to harbors.12

  Throughout the nineteenth century, rapid construction of water-powered mills, adoption of new technologies, and a booming population’s demand for a variety of products led manufacturers to expand their river-powered industries beyond just grain and wood. In 1826 Delaware County, Pennsylvania, counted 129 mills: 53 sawmills, 39 flour mills, 14 woolen factories, 12 cotton yarn factories, and 11 paper mills. On the Brandywine River near Wilmington, Delaware, E.I. DuPont constructed a mill for manufacturing gunpowder in 1802, became the largest producer of gunpowder by the mid-nineteenth century, and later used that success as a springboard for becoming a chemical manufacturing empire.13

  These waterpower-based industries had a lasting effect on the landscape of the United States. Typically, the cities that developed around navigable rivers or ports had businesses and settlements strewn all along the waterfront with the supporting housing clustered closely behind. But to take advantage of the potential hydropower available in the narrow valleys of rivers at the Fall Line, the businesses had to be densely located immediately next to the falls, and they were stacked right on top of each other. Yet, on a larger scale, the abundance of potential waterpower sites diffused manufacturing. The Eastern Seaboard had a continuous line of steep streams and rivers that provided a consistent supply of waterpower throughout the region. For any potential entrepreneurial manufacturer, even if one spot on a river was already taken, another was likely available on a different river just a few miles to the south or north.

  While shipping and exporting concentrated economic activity at a few central harbors or at the head of navigation at the Fall Line of major rivers, water-powered milling created smaller population centers scattered throughout the landscape. Because these nascent population centers were emerging in the hinterlands, away from the cities, housing was scarce for the thousands of workers needed in the factories. These circumstances led to the creation of what would become the quintessential mill village—a few water-powered factories at the town center, surrounded by a high-density residential area that manufacturers from New England to the Carolinas built to house their workers.

  All of this economic growth was facilitated by government regulation. The mill acts, written to encourage economic development in the early nineteenth century, proved highly effective. But the legislatures that set up regulations for mills did not anticipate just how different the use of hydropower would be through the middle and late 1800s. State governments ran into difficulty when justifying eminent domain rights for millers, who were increasingly seeking profit rather than providing a basic public service. And so the pendulum of regulation swung back toward the rights of private property.14

  Only a few decades later, state governments viewed as outright unconstitutional the same regulations that had been instrumental in allowing mills to develop basic settlements and communities in the early nineteenth century. In 1855 the Supreme Judicial Court of Maine found that under the more developed economic conditions of the mid-nineteenth century, the mill acts “pushed the power of eminent domain to the very verge of constitutional inhibition.” The Supreme Court of Vermont in 1860 likewise suggested that the mill acts “stepped to the very verge of constitutional limit, if not beyond.” When public service was no longer the sole or primary purpose, and when mills peppered the landscape, there was little justification for sustaining regulations that favored the construction of more and larger mill dams. By the 1870s, state courts throughout the United States were striking down their states’ mill regulations, and waterpower was newly placed on the same footing as all other industries.15

  The next fifty years would bring equally enormous changes in powering American society. And the government would go to extraordinary lengths to regulate the power industry, in part because power was now reaching households as well as all industries, making society dependent on the vagaries of the power industry and the emerging monopolies controlling it. Close behind all of this change was the next big technological innovation, which would transform the way power was moved through society—the grid.

  CHAPTER 10

  The Power of a River

  The closing decades of the nineteenth century marked the beginning of the movement away from using rivers for power. Using steam to power manufacturing had tremendous advantages over hydropower. The greatest effect of steam power on the landscape was to shift the geography of industrialization, uncoupling the potential of power from the hydrology of a particular location. Water-powered mills could harness only a finite amount of power from a river; the flow of water at any site was naturally limited, and so there was a hydrologic cap on the potential size of the manufacturing complex at a site. Steam power, which could do the same work as waterpower for manufacturers, not only increased the maximum potential of power available at any site but also allowed geographic flexibility. Manufacturers using steam power were not forced to cluster around specific sites or venture away from the cities and start their own villages like those companies at Lowell had. Instead, they could move their production closer to the hubs of transportation and easily export their products from there. With the rise of steam power, cities like Chicago, Cleveland, an
d Detroit, along the extremely flat margins of the Great Lakes, were able to grow into much bigger centers of manufacturing and shipping than they could have if manufacturers had remained dependent on waterpower.

  Yet the predominance of river power kept a strong, stubborn hold on American industrialization—much more so than in other countries, where the pivot from rivers to steam was almost immediate and complete. Well past the turn of the twentieth century, many U.S. industries depended on waterpower rather than switching to steam. They did so because of their investment in the basic infrastructure of dams and mills, and because waterpower was cheap and plentiful. When American industries installed steam engines, their initial goal was to provide reserve capacity—power for when river flows were insufficient to turn the turbines. England was rich in coal but poor in hydropower potential, and manufacturing in England switched almost immediately from water to steam power. However, rivers continued powering American industry throughout the nineteenth century and through the turn of the twentieth century.1

  Although American industries were slow to shift from rivers to steam for power, they rapidly adopted the use of electric power, an innovation that was outright transformative. Electric power is the conversion of mechanical energy—whether generated by a waterwheel or a turbine in a steam plant—into electrical current, which is then delivered through a circuit and expended as power, whether for light, or heat, or motion. Generating power from electricity uses largely the same process: spinning turbines. But converting that spinning motion into electric current, and powering equipment using the simple movement of electrons, has two vital characteristics. First, electrons are fully generic. Electric current generated by a turbine on a dam is fully interchangeable with current generated by a windmill or a coal-fired power plant. Second, electricity can be transmitted over enormous distances—hundreds or even thousands of miles. The combination of these crucial characteristics means the lightbulb in a house is as likely to be glowing with electrons from a hydropower dam in Georgia as from a coal-fired power plant in Ohio or a wind turbine in Massachusetts. For the consumer, it doesn’t matter because the result is the same. The electricity grid can thus integrate many generation sources along with tens of thousands of miles of transmission and distribution lines, creating a vast power network that eventually eliminated much of the geography of power.