Ohio History Journal


McCormick
Summer-Autumn 2001
pp. 136-152
Copyright 2001 by the Ohio Historical Society. All rights reserved.
This article is presented page by page with footnotes according to the original print version. If a sentence seems to end abruptly, scroll down to continue with the next page.

An Entrepreneurial Enterprise and the Financial Crisis of 1819: The Worthington Manufacturing Company

By Virginia and Robert W. McCormick

 


James Kilbourn. (Photo Courtesy the Worthington Hisorical Society.)


"The Worthington Manufacturing Company, James Kilbourn, Agent" advertised on March 27, 1812, that it had received from New York a large store of "European and India Goods" in 4 f addition to a great variety of domestic ' goods from Kentucky, Tennessee, and Pittsburgh. All were available at "their storehouse (late the store of James Kilbourn) in Worthington."1 It was a classic example of the characteristic American boosterism that Daniel Boorstin describes with some sympathy. Frontier newspapermen were wont to portray the mythic marvels of their particular town, but became deeply resentful if their rosy accounts were challenged simply because the objects or events had "not yet gone through the formality of taking place."2

Make no mistake. There were, in fact, a wide variety of imported and domestic goods for sale at Worthington, Ohio, and they were being advertised in the community's own newspaper, which began publication the previous summer. This was no small achievement for a frontier village on a site that only nine years earlier was

 

Virginia E. and Robert W. McCormick are Worthington historians who retired from the Ohio State University faculty. Some material in this article is included in their recent book, New Englanders on the Ohio Frontier (Kent State University Press, 1998).

1. [Worthington] Western Intelligencer, 12 Mar. 1812. Although Kilbourn spelled his name Kilbourne in the 1840s after his son Lincoln began doing so, this article uses the spelling he used consistently in this period.

2. Daniel J. Boorstin, Cleopatra's Nose: Essays on the Unexpected (New York, 1994), 192.


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Advertisement from the March 27, 1812 Western Intelligencer. (Ohio Historical Society Collections.)

 

virgin forest about to be settled by the Scioto Company, a group of New Englanders who purchased sixteen thousand acres in the Ohio wilderness. James Kilbourn was the visionary who led that group and founded the village. Although the only "Worthington Manufacturing Company" that existed in the spring of 1812 was Kilbourn's store, he already visualized a chain of retail stores that would be supported by a variety of manufacturing enterprises in Worthington.

Kilbourn was again testing his abilities to articulate a vision and persuade others to assume the risks it required. He was not only making a transition from the individual household economies of the frontier village, but taking a giant step toward the "commercial capitalism" Cayton and Onuf define as the economic and social

order in which the primary activity is the private, competitive production of goods for profit.3 Could his personal leadership skills that motivated a group of New Englanders to migrate, organized a company to purchase land, platted a village, and founded social institutions such as a subscription school and an Episcopal Church, be transferred to the establishment of a major manufacturing and retail enterprise?

A month before Kilbourn's advertisement the Ohio General Assembly had passed legislation to regulate the incorporation of manufacturing enterprises, and Kilbourn tried without success to have the Worthington Manufacturing Company incorporated.4 The problem may have been the breadth and vagueness of the company's purpose, which encompassed a wide variety of retail and manufacturing operations, or it may have involved Kilbourn's desire to include out-of-state investors and perhaps extend the

 

3. Andrew R. L. Cayton and Peter S. Onuf, The Midwest and the Nation: Rethinking the History of an American Region (Bloomington, Ind., 1990), 127.

4. "An Act for the incorporation of manufacturing companies," Laws of Ohio, Ohio Historical Society, FLM 249, 11 Jan. 1 8 12. Kilbourn's request for incorporation was entered into the Ohio House Journal 15 Feb. 1812, brought up for discussion several times in both the House and Senate, and finally rejected in the next session 2 Feb. 1813. No text of this incorporation was included since it failed to pass.


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maximum capitalization beyond the $100,000 limit imposed by the Ohio legislature. Although the incorporation was denied, the proposed articles of association were probably printed locally and circulated to local and eastern investors by Kilbourn and his representatives.5

In April, Kilbourn opened a Worthington Manufacturing Company store at Franklinton [now part of Columbus, Ohio] with an assortment of imported and domestic goods similar to the Worthington store. A chain of retail stores was not a new idea on the Ohio frontier. Marietta merchants James Backus and Dudley Woodbridge had successfully established a series of stores in towns north of their Marietta, Ohio base, and Kilbourn was undoubtedly well acquainted with these former Connecticut men.6 Within a few years the Worthington Manufacturing Company moved its Franklinton store across the river to the new state capital of Columbus and added retail stores in Delaware, Sunbury, Norton, and Sandusky, Ohio. As population expanded to the north at the conclusion of the war with England, the Worthington Manufacturing Company stores were located to serve their needs.

On May 7, 1812, "James Kilbourn, George Fitch and Associates" bought fifty-two acres, including the "lower sawmill," southwest of Worthington on the east bank of the Whetstone River, as a site for manufacturing company operations.7 This was platted by Kilbourn into forty-three lots plus a large "Mechanics Square" and a "Garden Square" on either side of Factory Street, the main road between the mill and the southwestern corner of the village.8 Kilbourn immediately advertised to hire "an active and stout Young Man, as a common laborer . . . from one to six months, one who is acquainted with making Rails & Fencing . . . ."9

By July, Kilbourn had acquired a shipment of 103 Merino sheep, the breed so prized for its fine wool that it sold for five to six times the price of

 

5. Goodwin Berquist and Paul C. Bowers, Jr., The New Eden: James Kilbourne and the Development of Ohio (Lanham, Md., 1983), 116-24, indicate the articles were printed locally and contend that Kilbourn was elected president of the company in May 1812 and reelected annually by shareholders. We have found no evidence of such company meetings, and Kilbourn always signed as "Agent" of the company, not president.

6. Ledger books, James Backus and Dudley Woodbridge, Backus-Woodbridge Family Papers, Ohio Historical Society, MSS 128.

7. Franklin County Deed Records 59:437 and 60:433. George Fitch was a resident of New York City and undoubtedly a relative of Kilbourn's deceased wife, Lucy Fitch. The wording of this deed is further evidence of the company's failure to be incorporated and able to own property in its own right.

8. This plat was not recorded until 5 Mar. 1819, when several side streets were named Mason, Temple, Arch, Mark and Hiram, probably in recognition of the role of Masonic investors Thomas S. Webb and John Snow. The plat is included in the property abstract of the modern residence at 25 Fox Lane that encompasses the Worthington Manufacturing Company boarding house, the only surviving structure from this period.

9. Western Intelligencer, 8 May 1812.


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common wool.10 Thirty-six of these were bucks and he advertised that all but three, which were retained for the Worthington Manufacturing Company flock, were available "to let to ewes for half the increase." He also promised a "manufactory in complete operation the coming year" that would pay a premium for full Merino or crossbred wool.11 Kilbourn had begun his working life as an apprentice in a Connecticut woolen mill, and he was drawing upon this early experience to establish a mill in Worthington that would produce premium cloth. He realized few farmers could pay cash for a Merino ram, but a number might upgrade their flock on shares if they had a ready market for premium wool.

It is important to realize that this enterprise was launched during the same months that the United States declared war against England, and Kilbourn was at the time a major in the Ohio militia with responsibilities for a battalion.12 That same summer he decided to stand for election to the U.S. Congress, in which Ohio's delegation was increasing from one to six representatives as a result of the population growth revealed by the 1810 census. Nevertheless, all Worthington Manufacturing Company advertisements were signed by James Kilbourn as agent, and there is every indication that he had sole decision-making authority for the company.

In January 1813, between his election and taking his seat in Congress, Kilbourn advertised for journeymen "of temperance and steady application to business" as blacksmiths, tanners, shoe and boot makers, and promised "good wages, prompt pay, and constant employment ... and opportunity to become share-holders in the capital stock of the Company, which is already very productive."13 He also advertised for apprentice clothiers to work with two weavers recently arrived from New York and anticipated that other workmen "in the various branches of the woollen department are expected on early in the ensuing season." It is probable that it was actually some time before any of these plans came to pass. The stores were still advertising imported dry goods, hardware and groceries, particularly "loaf and lump sugar, teas, coffee, plates, cups and saucers, an universal assortment of glass ware and window glass and nails of all sizes."

Years later, during a vitriolic political campaign, Kilbourn was accused of being "dispatched to Washington City with your head and your pockets

 

10. William T. Utter, The Frontier State: 1803-1825, A History of the State of Ohio (Columbus, Ohio, 1942), 166 and 250, reports that the firm of Wells & Dickinson at Steubenville was offering $2.75 per pound for Merino wool in 1814 when common wool was bringing about forty cents.

11. Western Intelligencer, 24 July 1812.

12. Major Kilbourn signed correspondence at this time, "Comdt, 1st Battn, 4th Regt., 2 Brigd., 2d Division, Ohio Militia."

13. Western Intelligencer, 20 Jan. 1813.


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Kilbourn Commercial Building, 679-681 High Street, Worthington, Ohio. (Photo by Virginia McCormick.)

full of ways and means to raise money from eastern funds to invest in your darling establishment."14 Kilbourn did in fact use his Congressional position and his time in the east to seek both craftsmen interested in locating in Worthington and investors willing to purchase Worthington Manufacturing Company stock. The political office undoubtedly provided influential contacts then as it does now. Whether Kilbourn neglected his public duties because of his private business is a question that should be considered in the context of an opponent's political rhetoric.

Early in 1814, Kilbourn wrote that Capt. Chester Griswold of Cooperstown, New York, would soon move to Worthington with his family "to join our Company and to take charge of the tanning and Shoe and Boot business."15 Kilbourn reported that "he is well recommended by Mr. Williams a member of Congress from that district and appears a very worthy man, is an Episcopalian in principle and was from Litchfield in Connecticut." There was no higher recommendation in Kilbourn's eyes than being a member of his own religious denomination from his home state. It was evidently autumn before Griswold arrived, but by December 1814,

 

14. "Richards," in Columbus Gazette, 12 Sept. 1822. Pen names were common for such political articles.

15. James Kilbourn to Matthew Mathews, 8 Feb. 1814, Kilbourn Family Papers, Ohio Historical Society, MSS 332, Box 1, Folder 2.


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nearly two years after Kilbourn's advertisement for journeymen tanners and boot makers, Griswold apparently had the tannery in operation and was advertising for four or five journeymen boot makers at his Worthington Manufacturing Company shop and also offered "CASH for hides and skins and for good Tanners Bark."16 It was ironic that for some time the war had been having a negative effect upon migration, but by the time the western borders were secure enough to entice immigrants, the army's demand for material such as boots had nearly disappeared.

Young Matthew Mathews, who married Kilbourn's daughter Lucy in 1813, became the on-site manager for the Worthington Manufacturing Company development, but Kilbourn was micro-managing everything from Washington. In February 1814, Kilbourn expressed concern for Mathews's ill health "owing to your building the dam. You must purge your blood of the impurities imbibed while at work in the river and about the old dam . . . I am glad to hear that the work on the mill is progressing, but I have not been able to obtain a bolt of cloth in all Philadelphia that I would like to purchase."17 His unsuccessful search in Philadelphia for cloth to be used as a model for the new mill's product probably explains his absence from Congressional votes for a week at a time during much of February and March.18 Clearly the woolen mill had not been built as quickly as Kilbourn hoped because of the need for rebuilding or enlarging the existing dam, but Kilbourn's sense of urgency is reflected in Mathews's endangering his health by working in the polluted waters of the sawmill dam during the coldest days of winter.

Kilbourn anticipated a busy spring at the manufacturing company site, and no detail was too small for his attention. He wrote Mathews:

Is the nail shop in operation and how is it doing? Did you get the Waggon & Guns from Mr. Avery? Did you obtain the deed from Zophar Topping? How is Capt. Barker and Mr. Weaver doing relating to finishing the rooms in the House & in preparing material for building in the Spring and Summer? I have heard that Capt. Barker has the Rheumatism is he laid by much of the time? Has Mr. Stansbery got the sheep in keeping? How is the lower saw mill doing & who attends it? Has all the iron come on from Pittsburgh yet & if not, how much & what sort has come? Is Mr. Maxfield informed as I requested him to be, that we shall want many bricks next summer? Has he examined the clay on the factory lots & how does he find it & where the best? We shall want the brick work due from Leut. A. Buttles, as soon as it can possibly be done in the Spring; of this you will advise him. Have you engaged any hands to work at making brick & if so how many? & if none, have you any in prospect?"19

16. Western Intelligencer, 10 Dec. 1814.

17. Kilbourn to Mathews, 8 Feb. 1814.

18. Debates and Proceedings ofthe Congress ofthe United States (Washington, D.C., 1854), 13th Congress, 2nd Session.

19. Kilbourn to Mathews, 8 Feb. 1814.


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In the same letter he assured Mathews that "I am not able to tell you where the notes can be found which you mention, but they are safe somewhere; present my compliments to Capt. Sage & to Mr. Case & tell them that I will find & forward them as soon as I come home." Barker was a carpenter, Maxfield operated the brickyard and Buttles was a brickmason-evidence that much of the manufacturing site including the boarding house for laborers was to be built that spring.

Kilbourn certainly had difficulty in delegating authority and his recordkeeping methods could charitably be described as "casual." He was undoubtedly a difficult man to work for, but he knew how indispensable young Mathews was to him. After Lucy Mathews gave birth to their first son that spring, Mathews expressed a desire to start farming on his own. Kilbourn responded, "if you do, I cannot think of living, or if I do, I might as well not. It will be impossible for me to go on with business without your assistance every day. Furthermore, it will be best for yourself, I am confident, however it may now appear to you." This is dramatic testimony of Kilbourn's emotional blackmail to make friends and family feel guilty if they did not accept his wishes, and at the same time it illustrates his absolute confidence in his own knowledge of what was best for his family and friends. Consciously or unconsciously, James Kilbourn played the role David Russo describes as the "patriarch-entrepreneur" of colonial Puritan society, always pooling family resources and creating family alliances in search of security.20

Family farms and businesses traditionally relied upon the labor of family members, and relatives were frequently relied upon in frontier communities for the loans necessary for capital investment in land or equipment. Mary Ryan used the term "corporate family economy" to describe such family economic networks in developing communities on the Michigan frontier.21 Kilbourn relied heavily in this enterprise upon two sons-in-law, one to oversee the manufacturing and the other the retail enterprise, but because of their inexperience or his own inability to delegate, neither had decisionmaking authority.

When Congress adjourned, Kilbourn traveled to New York City and New England to seek investors for the company and artisans interested in migrating west. In June, he wrote to Mathews in a jubilant mood from his old hometown of Berlin, Connecticut: "Have succeeded in my business here beyond my most sanguine expectation. Have obtained a very handsome

 

20. David J. Russo, Families and Communities: A New View of American History (Nashville, 1974), 224.

21. Cayton and Onuf, The Midwest and the Nation, 46, quoting research by Mary P. Ryan in Michigan.


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addition to the stock of our Company. One gentleman at whose house I was sick in Rhode Island and where I received the kindest attention has taken ten thousand dollars of our stock. I have with me a draft on New York and Philadelphia for the whole amount."22 Money in hand was welcome indeed, but Kilbourn had, knowingly or unknowingly, sold his soul to James DeWoif, a merchant and shipowner who had made a fortune after the Revolutionary War as the captain of a slave-trading ship. During the recent war with England his armed brig Yankee operated as a privateer, capturing more than five million dollars of British property. He built a cotton mill at Coventry, Rhode Island, but was left with abundant funds to seek investment opportunities.23 Kilbourn convinced DeWoif to purchase considerable land in central Ohio as well as to invest in the manufacturing company. Kilbourn's heart and soul were devoted to the development of his Ohio enterprises, but for DeWoif this was simply a far off investment that he expected to show a profit.

Land was one of the inducements which Kilbourn regularly used to attract not only investors but craftsmen who might migrate west. That summer the company advertised for apprentices: two "at the scyth & axe & other blacksmith business," two at "shoe & Bootmaking," one at "morroco shoes," one at the "Hatters Trade" and in one or two months, one at the "clothier's trade."24 There were a variety of jobs available at different levels of skill. Journeymen were wanted in the "Cabinet and Chairmaking business," and a "good brick moulder" and six "hands at common labor" were promised "good wages and prompt pay." All were assured that, "valuable land and well situated, may be had in payment for labor, if desired." The opportunity to become a land owner was still the greatest attraction the west had to offer, and among his other enterprises Kilbourn was in the lucrative surveying and real estate business.

Expansion Beyond Worthington

Kilbourn's vision for the Worthington Manufacturing Company operations extended north to Lake Erie and a site at the entrance to Sandusky Bay where he proposed a city that he hoped would become the lake's principal commercial harbor. This site was part of the "Firelands," in the western portion of the Connecticut Reserve, set aside for those who had

 

22. Kilbourn to Mathews, 10 June 1814 quoted in Emma Jones (ed.) A State in the Making: Correspondence of the late James Kilbourne (Columbus, 1913), 35-36.

23. Allen Johnson and Dumas Malone (eds.) Dictionary of American Biography, VIII (New York, 1930), 275.

24. Western Intelligencer, 13 Aug. 1814.


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suffered property losses in the Revolutionary War.25 About 1811, Kilbourn persuaded Zalmon Wildman, a Danbury, Connecticut, merchant who was one of the owners of this site, of its potential for a port city that would provide access to central Ohio and the projected state capital.26 Later in Congress, Kilbourn sought federal support for a road linking the site to Columbus, but was hampered by the fact that the city of Sandusky was no more than a plan on paper and that some of the proposed road would be forced to cross territory reserved by treaty for Native Americans. Wildman replied that, "if peace should not be obtained, the road would be indispensible, and if it goes through the land reserved for the savage enemy, I do not think that his title is so holy that I would regard it in time of war."27 Despite Wildman's cavalier dismissal of Native American claims, the peace settlement made the road less urgent and the city of Sandusky was slow to develop.

The close of the war increased the flood of migration into Ohio and Indiana, and inflation ran rampant as land speculators purchased on credit and hoped for quick profits from resales. The Worthington Manufacturing Company grew to include a variety of artisans, crowding the company boarding house near the river and bringing vigor and vitality to the local economy. In December 1816, the Ohio General Assembly extended the existing law regarding the incorporation of manufacturing companies and Kilbourn evidently gave up seeking a special consideration for his Worthington company. The "Articles of Association of the Worthington Manufacturing Company" were signed by thirteen local subscribers April 11, 1817, before the local justice of the peace and immediately filed with the Franklin County Common Pleas Court and the Ohio Secretary of State.28 It is not clear why Kilbourn waited five years to take this step or whether any changes were made from the articles the company had been informally using since 1812. There appear to have been several eastern investors who do not appear on the 1817 articles of association, whose combined investment may have been as great or greater than the local subscribers, and who would have brought the company's stock well above the $100,000 limit imposed by the Ohio legislature.29

 

25. CE. Sherman, Original Ohio Land Subdivisions (Columbus, 1925), 80-82.

26. For a more complete discussion of this enterprise see Berquist and Bowers, The New Eden, 151-71.

27. Zalmon Wildman, Danbury to Kilbourn, Washington, 12 Mar. 1814, quoted in Jones, A State in the Making, 32.

28. Re-recorded in Franklin Co. Deed Book H:33 after the original record burned. A copy is included in the property abstract of 25 Fox Lane.

29. Large eastern "stockholders" such as DeWolf, Webb, and Whittemore do not appear on this incorporation. As DeWolf's lawsuit later makes clear, he considered his investment a loan rather than a stock purchase. Webb & Whittemore may have pledged assets rather than cash and not been included by 1817.


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The first article of this incorporation defined the Worthington Manufacturing Company's purpose, to establish "an extensive Manufactory of the various kinds of Woollen Cloth; with Wool Carding and Cloth dressing; of Fur and felt Hats; Leather; and the various manufactures of which Leather is a part; Blacksmithing in its various branches; a manufactory of Pot and Pearl ashes and generally any and all kinds of manufactories which experience may advise, and the company think fit and profitable for them from time to time to establish . . . ." The structure was somewhat similar to a modern cooperative, but with very diverse products. Beyond manufacturing, the company was "to purchase, export and sell any and all kinds of the Country productions which we shall judge profitable . . . to divide into as many branches [retail stores] as we shall think expedient; and to purchase and hold, or sell, exchange and convey any property or estate real, personal or mixed which the Company or their officers and agents duly authorized may deem useful and expedient."30 Kilbourn clearly rejected any attempt to narrow the company's focus.

Other articles of this incorporation placed the company headquarters at Worthington, authorized $100,000 of capital stock in 1000 shares worth 100 dollars each, vested control in a board of five annually elected trustees who would appoint a president and secretary from their group, and specified semiannual stockholder meetings, or others called at the discretion of the president. The thirteen subscribers who signed these articles represented exactly 1000 shares worth $100,000. Of these, James Kilbourn held or represented 171 shares worth $17,100, tanner Chester Griswold eighty-three shares, carpenters Chauncey Barker and John Goodrich 147 shares between them, Matthew Mathews sixty-five shares, and the same for brickyard manager Amos Maxfield, sawmill operator Samuel Baldwin, blacksmith Levi Pinney, and cooper Moses Brown. All were local men and it is not known whether any invested actual cash or whether all of these shares were acquired in return for services rendered, as Kilbourn promised in his January 1813 advertisement. All evidence suggests that local shareholders contributed labor "in kind," and that cash for capital improvements and stocking the retail stores was obtained from eastern investors.

In his history of banking in Ohio, C. C. Huntington referred to the prosperity of this speculative period following the war with England as "the golden age of the western country."31 Under pressure from eastern banks that had suspended specie payments, Ohio banks followed suit in 1815 and

 

30. "Articles of Association of the Worthington Manufacturing Company," Franklin Co. Deed Book H:33.

31. C. C. Huntington, "A History of Banking and Currency in Ohio Before the Civil War," Ohio Archaeological and Historical Society Publications, XXIV (1915), 235-539. For further discussion of the financial disaster of 1819 see Utter, The Frontier State, 263-95.


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the legislature passed the famous "bonus law" which increased the number of bank charters dramatically and made the state a 20 percent stockholder. The Franklin Bank in Columbus, with four Worthington men on its board, was one of those chartered under this law in October 1816. The suspension of specie payments encouraged unauthorized notes by unchartered and unregulated institutions and eventually caused a complete collapse of confidence in paper money. But while the boom continued, the Worthington Manufacturing Company was one of those issuing its own notes for the payment of goods and services.

The company established "mercantile houses" in New York and Baltimore and shipped goods from New York City up the Hudson River, across the lakes, and then by wagon to its chain of stores from Sandusky to Columbus. It also used wagons to bring goods from Baltimore and Kentucky to the same stores, and advertisements boasted that customers would find "the most reasonable prices ... which have ever been offered in the state of Ohio."32 William Utter cited this as the first evidence of the opening of trade between central Ohio and New York City by way of the Hudson River, anticipating the Erie Canal.33 It was all part of Kilbourn's plan that Sandusky would be the major port on Lake Erie and would be connected to the state capital through Worthington. Geographically, it was a brilliant concept, but there was swampland between the lake and central Ohio that made the first crude roads nearly impassable.

By 1818, however, it was no longer necessary to import all of the store goods. From their own factories at Worthington, the company now advertised leather goods "such as Saddles, Bridles, Boots, Shoes, &c.; Iron Tools, of almost every description, for Farmers' and Mechanics' purposes; Hats of all sorts and sizes; Woolen Goods of almost every description, from superfine broad cloth to the most common cloth, Blankets, &c."34 It had taken only six years to convert Kilbourn's dream to reality, but with achievement in sight, the western economy crashed. In July 1818, the Bank of the United States suddenly reversed itself by restricting credit and requiring state banks to redeem their paper notes. Many of the western debts involved mortgages on inflated land values that could now not be sold at any price, and certainly not for specie. As one writer concluded, "The [U.S.I Bank was saved and the people were ruined."35

Kilbourn had already lost a $124.38 court judgment for defaulting on a note, and the incorporation of the company in 1817 may have been an

 

32. Columbus Gazette, 14 May 1818.

33. Utter, The Frontier State, 221-22.

34. Columbus Gazette, 14 May 1818.

35. Huntington, "Banking and Currency in Ohio," 291.


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attempt to divert lawsuits from himself to the company.36 Throughout 1818 and 1819 suits involving thousands of dollars were filed by several creditors of The Worthington Manufacturing Company.37 But the most serious threat was a lawsuit from its major eastern investor, James DeWolf, seeking to recover his investment.38 Kilbourn, and perhaps others, evidently persuaded DeWolf to withdraw this suit by deeding him some of the company property as surety.39

The Worthington Manufacturing Company was, in modern terms, a "highly leveraged" operation. Like all merchants of this period, its stores carried customer accounts on the books for months or even years. Its rapid growth and frequent change of young managers left its record-keeping and collection methods open to question, but money was in short supply everywhere and Kilbourn was no doubt correct in complaining that the company was owed thousands of dollars which it had not been able to collect. Many of its eastern suppliers refused to extend more goods on credit, and without specie to repay its debts or purchase goods for its retail stores, the company was forced to take the distressing step of liquidating stocks and closing stores. In January 1819, the clerk of the Columbus store announced that its stock had been sold, "must close the business there as soon as practicable," and requested that all accounts be settled.

Thomas S. Webb, a New England Masonic brother who had met Kilbourn while in Worthington on lodge business in 1816, purchased 150 shares in the company and a house and farm in Worthington with the expectation of establishing a cotton factory at the company site.40 Webb expressed approval when he learned of the retrenchment. "You know that it has always been my opinion that the business was too much scattered and that it never could succeed until many of the Branches were lopped off, and the body, roots, and limbs cleansed from the ravages of rust and sloth."41 Webb was apparently urged by some of the eastern investors to take over management of the company, and he was en route to Worthington to consider the prospects of managing both the cotton factory and the entire

 

36. John Walker vs. James Kilbourn, Franklin Co. Common Pleas Court, Complete Record 1:47-48, Nov. 1817-Mar. 1818.

37. Franklin Co. Common Pleas Court, Complete Record 1:258-280; Execution Book 6:57.

38. Berquist & Bowers, The New Eden, 142, refers to a copy of this suit in the possession of Thomas Aquinas Burke, but indicates it was withdrawn. It does not appear in the Franklin Co. record.

39. James DeWolf vs. The Worthington Manufacturing Company [WMC], Franklin Co. Common Pleas Court, Chancery Record 1:33-38, Apr. 1822-June 1823.

40. Herbert Leyland, Thomas Webb Smith, Freemason, Musician, Entrepreneur (Dayton, 1965), 325-28, 360-61, 366-82, 393-96.

41. Thomas Webb to John Snow, 22 Mar. 1819, quoted by Berquist and Bowers in The New Eden, 122, from the Snow papers in the Ohio Masonic archives in Cincinnati.


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company when he died unexpectedly of "apoplexy" at Cleveland.

But retrenchment was not enough. Another Kilbourn son-in-law, R. W. Cowles, who managed the company store in Worthington and was serving as the company cashier, wrote his father in New England quite frankly. "The times are now of the most difficult, money is so scarce that a great many are troubled to pay who owe money & perhaps have plenty property . . ."42 The majority of people in Ohio were land poor and as Cowles explained, "The Worthington Company have more debts than they can pay . . . they have a great many unsettled accounts due them . . . Col. Kilbourn is employed in closing their concerns in the best manner he can."

Each economic failure caused another, and in what must have been the irony of ironies, the Franklin Bank was forced to sue James Kilbourn and his associates—the same man who had the previous year led its slate of elected directors.43 How humiliating it must have been for Kilbourn to be sued for $4,000 by his fellow bank directors. The court sold "80 head of sheep, 4 cows and 1 waggon" but there were no bidders for real estate.44 Kilbourn was personally liable for the amount of company stock he owned or had guaranteed, and all of his assets were at risk. It was a problem afflicting all levels of western society. In Cincinnati, Martin Baum reportedly liquidated more than $200,000 in assets to meet debts, and the city's most famous physician, Daniel Drake, was forced to move into a log cabin which he dubbed "Mount Poverty."45

The Columbus Gazette, like newspapers throughout Ohio, was full of advertisements for sheriff's sales. One of them, on June 9, 1821, had a special poignancy for the village of Worthington for it included Kilbourn's farmland and lots in the village, including his 1 804 brick home and "Worthington Hotel," and the commercial building which housed his land office, central Ohio's first newspaper, and Kilbourn's store which had become the Worthington Manufacturing Company retail store.46 Fortunately Kilbourn's brother-in-law and two step-sons-in-law were prosperous enough to purchase the Kilbourn home and allow James and Cynthia and their five children still at home to continue living in their home.47

The most significant problem was a lawsuit James DeWolf brought

 

42. R.W. Cowles to Whitfield Cowles, 15 May 1820, R.W. Cowles papers, Ohio Historical Society, VFM 2015.

43. Columbus Gazette, 8 Jan. 1818.

44. Franklin Co. Court of Common Pleas, Complete Record 1:506, The President and Directors of the Franklin Bank of Columbus vs. James Kilbourn, et. al.

45. Richard C. Wade, The Urban Frontier: The Rise of Western Cities (Cambridge, Mass., 1959), 171.

46. Columbus Gazette, 17 May 1821.

47. Franklin Co. Deed Book H:30-32, and 4:52. Kilbourn never again owned real estate in Worthington.


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against the Worthington Manufacturing Company, whose only remaining assets were the land and buildings on the Whetstone River.48 The local craftsmen working there had lost the company retail stores as outlets for their products, and prices for all commodities had dropped dramatically in the cash-starved western economy. Local shareholders might have weathered the depression by depending on barter, but there were no liquid assets to repay eastern investors who had no stake in the future welfare of the community and were concerned only about recouping their investments.

By 1 822 DeWolf was angry, and his suit against James Kilbourn, Chester Griswold, Benjamin Gardiner, and Ezra Griswold was clearly aimed at the persons associated with the company who held personal property assets. His attorney argued that DeWolf had made a loan to James Kilbourn, who was personally liable "as the said W.M.Company was not incorporated . . . when the original debt was contracted." In essence, the $10,000 which Kilbourn considered a purchase of company stock was now interpreted by DeWolf as a personal loan that was long overdue. In October 1818, DeWolf had received promissory notes backed by deeds to certain manufacturing company properties, but his attorney claimed a "mistake" had been made by Justice of the Peace Ezra Griswold in drawing the deed. The suit, for a debt that now totaled $14,896.92 with interest, was satisfied by an execution against all of the company property including the woolen mill, sawmill, the dam's water rights, the company boarding house, and all of the choice lots with buildings. These were appraised at a total value of $8,760, and DeWolf's $8,000 bid was the only one received. DeWolf achieved vengeance, but the company's demise left him with vacant buildings that soon deteriorated and were an empty reward for the loss of his $10,000 investment. The only survivors of the manufacturing enterprise were the few craftsmen who were able to go into business for themselves elsewhere.

The depression of 1819 was hard on farmers, with prices a fraction of their levels two or three years earlier, but unless their land was heavily mortgaged they did not suffer as severely as those in manufacturing.49 The 1 820 census recorded 116 men engaged in manufacturing in Sharon Township, no doubt nearly all in Worthington, and 184 employed in agriculture.50 These farms, and the barter and credit systems the community

 

48. DeWoif vs WMC, Chancery Record 1:33-38.

49. Wade, The Urban Frontier, 161-62.

50. United States, 4th Census, 1820 (Washington, D.C., 1821), Franklin Co., Ohio, Sharon Twp. Readers should be aware of potential omissions and inaccuracies in this data. The published summary includes no persons in Sharon Twp. engaged in commerce, suggesting that persons such as tavernkeeper Ezra Griswold reported himself engaged in agriculture, since he received a major portion of his income from rented farm land. The Franklin County schedules were destroyed and data for known merchants such as John Snow cannot be checked.


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had employed from its beginning, sustained the village during these hard times, but many of the craftsmen employed by the manufacturing company left the community forever.51

The Worthington Manufacturing Company dominated the Worthington industrial scene during the postwar economic boom. Its collapse severely affected but did not kill individual business enterprises in the village. The situation might be compared to a modern town that attracted a manufacturing company or government defense plant which doubled its work force but was forced to close in less than ten years. If Kilbourn's dream had succeeded, the community's course would have changed dramatically. A growing industrial complex on its border would probably have subsumed and destroyed the village platted by the original New England settlers.

Historians have discussed for years the validity of Turner's concept that frontier life promoted "democratic egalitarianism." Recent interpretations suggest that although frontier communities did not produce an egalitarian distribution of wealth, most did offer reasonably good prospects for upward mobility, as well as the "possibility of going broke."52 Kilbourn was a selfmade man who came from a very modest background, invested everything he had in his move from New England to Ohio, and again placed everything he had in his Worthington Manufacturing Company venture. He was both the victim and the cause of its collapse.

In many respects it was a bold plan. Kilbourn was ahead of his time in creating an "industrial park" where a variety of small entrepreneurs could benefit from proximity to each other and share advertising and transportation costs. He was innovative in linking manufacturing production and retail marketing and thereby potentially maximizing profits. He had studied the geography and created a logical plan for utilizing the cheapest and quickest transportation routes through Lake Erie, and had designed a chain of retail stores to take advantage of the northward settlement. He had political influence at the local, state, and national levels that might have been helpful in launching this venture. Ohio's population was growing at a phenomenal rate and the Worthington community had developed an early base from which it could offer products and services.

But this was a man with a large ego and an enthusiasm for everything. Kilbourn found it impossible to eliminate any potential product or venture and focus on specific, and perhaps achievable, goals. His own ego and loose management style made it difficult to delegate authority or attract

 

51. For background on the relationship between merchants and farmers see A.J. Reiss, "The Sociological Study of Communities," Rural Sociology, 24 (1959), 118.

52. Lacy K. Ford, Jr., "Frontier Democracy: The Turner Thesis Revisited," in "A Centennial Symposium on the Significance of Frederick Jackson Turner," Journal of the Early Republic, 13 (Summer, 1993), 144-63.


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experienced managers. It is noteworthy that none of the Scioto Company members who came west with him a decade earlier became company stockholders. Perhaps they were too well acquainted with his management style. Prior to his death in March of 1812, Jedediah Norton, an uncle by marriage, had been Kilbourn's most significant financial backer, but Kilbourn was not a beneficiary of Norton's estate. It was unfortunate that Kilbourn lost this financial resource just as he launched his most expensive enterprise, but he was hopelessly over-committed—not only with his responsibilities to this company, but to his role as a Congressman, and local responsibilities such as serving as major of a militia battalion and president of the Worthington College trustees. His eastern investors in the manufacturing company were recent acquaintances who were more concerned with investments that would provide a profit than in establishing a corporation that could become the economic base of a developing region. Kilbourn naively concluded business agreements with a handshake and left the details to be worked out and signed later—sometimes, like the manufacturing company incorporation, much later.

Kilbourn's charismatic leadership was as essential to the founding of the manufacturing company as it had been to the settlement of the village a decade earlier. He exhibited all of the characteristics Max Weber attributed to entrepreneurial leaders: confidence, dominance, a sense of purpose, and the ability to articulate goals that followers were prepared to accept. Those who have researched charismatic leaders note that they are often more concerned with doing the right thing than with doing things right.53 One senses this in Kilbourn's careless attention to the details of business management even while his enthusiasm for his goal never faltered.

Of course, the timing of this business venture was unfortunate. There were factors in the national and state economy over which Kilbourn had no control. He blamed political acquaintances for encouraging him to set up an establishment to provide clothing and boots for the military, but his business experience should have enabled him to predict the time needed to reach production, and he should have realized that no war would last forever. He blamed inexpensive foreign imports for flooding the market with woolen goods after the war, and that was true. But ultimately it was Kilbourn's treatment of capital assets as operating assets that doomed the venture. The Worthington Manufacturing Company was the saga of an optimistic visionary who was unable to attract and utilize skilled management to implement his plan. When it collapsed, Kilbourn undoubtedly suffered the most severe financial loss, but some people had uprooted families to move

 

53. Bernard M. Bass, Handbook of Leadership (New York, 1990, 3rd Edition), 184; Carl F. Graumann and Serge Moscovici (eds.) Changing Conceptions of Leadership (New York, 1986).


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west, and many people who had invested significant amounts of time, labor, and money were left with nothing.

Why did this visionary entrepreneur fail so abjectly with the manufacturing enterprise when his leadership skills had been effective in founding a frontier village? The obvious answer is, of course, poor management. When Scioto Company members reached the site of their purchase in 1803, it was already under the legal jurisdiction of a state constitution, a county court, and a township justice of the peace. The administrative structure was in place for civil government and the migratory group soon incorporated a church and an academy, each with a board of trustees to hold property and make decisions. Leadership within the village was quickly and legally dispersed. But the failure to incorporate the manufacturing company left Kilbourn functioning as its sole agent with all decision-making power.

There were certainly regional and national banking practices that led to the economic disaster of 1819, but it appears that they accelerated rather than caused the collapse of the Worthington Manufacturing Company. Like many entrepreneurs, Kilbourn did not have the management skills to implement his visions and he was unable to attract competent management and delegate this responsibility. The harvest of defeat may have been external, but the seeds of disaster were internal.