The Downfall of the Sewing-Machine Monopoly (1877)

The following is an article from the Ohio Liberal (of Mansfield, Richland Co., Ohio)newspaper dated 23 May 1877 (Vol. 5, No. 6) …

One of the greatest patent monopolies the country ever knew has recently expired by the running out of the Batchelder continuous feed motion for sewing-machines – without which no machine had any market value.  This important patent was controlled by a combination of the four great companies of Grover & Baker, Wheeler & Wilson, Howe and Singer who fixed the scale of prices for themselves as well as the weaker companies outside the ring and were also obliged to pay a royalty of from three dollars to twenty dollars each machine made.  The combination it is estimated, have made within the twenty-five years duration of the patent a profit of no less than $50,000,000, and naturally these powerful companies did not let this wealth-producing patent expire without great effort for its extension.  A cool million, it is said, was pooled in by them for this purpose, and patent lawyers and lobbyists have been exercising their utmost ingenuity at Washington in favor of the patent, but to no purpose.  It had already been twice extended, and the law would not allow any more.  Now the parties interested have settled down to legitimate business once more, confident with the advantages at their command of still controlling the market and making a comfortable profit at half or less of the former prices.  The simple fact is that the “margin” of profit in the sewing-machine business has been so enormous as to allow manufacturers, agents and canvassers a joint profit of 400 to 500 per cent on their wares.   The actual first cost of the sixty-dollar and seventy-dollar machines sold by the leading companies is, on the confession of their own officers, from eleven dollars to fifteen dollars apiece.  The additional 500 per cent was distributed in royalties, commissions to agents, commissions to canvassers, taxes, office rent and profit to the manufacturer.  The canvasser rarely made less than twenty dollars on each machine sold and when as in the case of the Singer and other large companies, the year’s sales are computed by hundreds of thousands, the amount which the “middle-men” receive becomes enormous.  The manufacturers claim that their own share of profit is only about 80 per cent, and that a large portion of this is swallowed up in the maintenance of their immense establishments, in taxes and in constant and expensive litigation, which the protection of their respective patents entails upon them. The extent and value of the sewing-machine trade may be gathered from the fact that the Singer Company, which last year sold over 260,000 machines, has from $10,000,000 to $15,000,000 invested in its business.  The Howe Company has $7,000,000 to $8,000,000 and the Wheeler & Wilson and other large companies have amounts in proportion.  The companies admit that the business must be considerably revolutionized in the future.  The agency system must be relieved of some of its extravagances, and the practice of “lease sales” has got to be either done away with or greatly narrowed.  In short, a cash basis for the business, and, as far as may be, direct dealings with the companies, are the necessities recognized in the case.