Oh Maurice -
"The USA and Switzerland and Luxembourg do not have that criminal mindset. "
Versions of the following events were in most junior high school history books in the United States.
I can vividily remember reading this story in school.
Part of the US History of theft of intellectual property.
Besides stealing land, people from Africa, Panama from Columbia, and a bunch of other stuff I forgot.
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Hamilton and Congress wanted to rapidly industrialize the United States and do so by whatever means necessary—a practice we now call “nation building.” America thus became, by national policy and legislative act, the world’s premier legal sanctuary for industrial pirates.
The benefits of sanctuary, moreover, were not limited to foreign tech- nicians and craftspeople willing to bring technology to America. It also worked well for those Americans bold and capable enough to steal foreign industrial secrets and bring them back to the United States. Among the foremost of these spies, and certainly one of the most influential in early American history, according to industrial espionage expert John Fialka, author of War by Other Means: Economic Espionage in America, was Francis Cabot Lowell, a cultured Boston entrepreneur.
In 1810, the thirty-five-year-old Lowell set out to steal one of the foremost industrial secrets of that age: the plans of the British textile industry’s Cartwright loom. In such locales as Edinburgh, Lancashire, and Derbyshire, textile makers were spinning cotton and wool into thread and then weaving the thread into cloth with water-powered, mechanical looms—an economic alchemy that transformed cotton and wool into gold for England. The secrets of this technology were so precious that British law forbade the export of the machinery, the making or selling of drawings of that equipment, and the emigration of the skilled workers.
Thanks to Samuel Slater, who brought the secret of England’s automated spinning machines across the ocean, America knew how to turn cotton fibers into thread mechanically. But the nation did not know how the power loom worked or how to machine-weave thread into cloth in the vast quantities that it made possible.
No Mission: Impossible adventure was better planned or executed than Lowell’s caper. First, he developed a cover story for his trip to England: his health was bad, and his doctor prescribed a foreign tour for relaxation and recuperation. While the idea of touring cold, dank nineteenth-century British mills where the air was filled with lint might seem an improbable cure for any affliction, Lowell was a major American merchant shipper, and his Boston pedigree was impeccable. To allay the suspicions of his intended victims, he took his wife and young children with him to England, stayed in the best hotels, and toured the countryside in an elegant rented carriage.
British textile producers welcomed the touring American importer, proudly showing him whatever he wanted to see in their factories— something they never did for their local competitors. The idea of a proper Bostonian, a Harvard graduate, a rich shipping merchant being an industrial spy out to steal their manufacturing processes was simply ridiculous.
What his British hosts did not realize was that Lowell possessed an almost photographic memory and that he shared their avaricious economic attitudes. Nor did they know that after each day’s tour, he would return to his room and carefully draw out what he had just been shown and record the details of his conversations. Eventually, Lowell accumulated from his British hosts all the technical information he needed to build a fully integrated textile mill—one that could take cotton bales in one end and ship finished cloth out the other. How he got the plans out of England remains unknown. His bags were searched twice, but nothing was ever found.
On returning to Boston, Lowell and his brother-in-law, Patrick Tracy Jackson, raised $100,000 in capital and created the Boston Manufacturing Company. They then bought an existing building just outside Boston near Waltham, a facility with a ten-foot waterfall, to power their first mill. Working with a hired mechanic, Lowell constructed a prototype mill and a power loom that were superior to the British versions he copied. His company was an immediate success. Lowell then built a group of mills at a village that eventually was named after him. Soon the Boston Manufacturing Company was weaving more than one-third of a mile of cloth per day, a feat that was as extraordinary then as going to Mars would be today.
By the time Lowell began to build his first factory, America was again at war with the British. Instantly, he became a hero for bringing America England’s most valuable industrial secret. After the war, the British moved to destroy their new U.S. competitors, using the old technique of selling their goods in the U.S. market for far less than Lowell’s production costs—a predatory practice called “dumping.” The British used cotton produced in India with cheap labor, brought it to England, mechanically spun it into thread and wove the thread into cloth, and then shipped it to America. The English product was not only less expensive; it was of better quality, reflecting greater experience.
Lowell and his U.S. colleagues responded as Hamilton had foreseen. In 1815, they enlisted the political help of Massachusetts Senator Daniel Webster, who was not a strong supporter of protective tariffs. But he did believe that the United States required self-sufficiency in manufactured goods if it was to prosper. That could not be if English and European producers were allowed to dump their goods on the U.S. market and kill America’s infant industries. In 1816, Webster, working with Senator John Calhoun of South Carolina, who represented a major cotton-producing state, pushed through Congress a protective tariff on cotton and woolen imports of 30 percent for two years, 25 percent for another two years, and 20 percent thereafter. This gave the infant U.S. textile industry a market all its own and the time to grow. American cotton producers were also given a market: American textile makers. And those who truly wanted foreign goods could continue buying them, but at a higher cost and with the import duties going to the U.S. Treasury. It was Webster and Calhoun’s legislation, but it was Hamilton’s plan in action.
Excerpted from Hot Property by Pat Choate Copyright © 2005 by Pat Choate. Excerpted by permission of Knopf, a division of Random House, Inc. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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