Thursday, April 27, 2017

The Granite Industry, Part 4 of 6 - Capital

Capital goods come into being through human effort but unlike raw materials they are not used up in the production process. A company's facilities and an individual's tools form part of the capital investments in their enterprises. 

Hammers, drills, and a hand-powered derrick--
the capital stock of a small quarrying operation 1
Nonrenewable resources of nature such as the land and the granite itself do not count as capital assets for the quarrymen, but their equipment and transportation systems do. 

A steam-powered drill and derrick--
the tools of a highly capitalized quarrying company 1
Large-scale operations depend on pooling the capabilities of many people to increase both physical capital and intangible capital such as talent, training, and management. Cultural attitudes form a part of social capital. The recognition and optimization of these factors in part define the modern economic era. 

Rudimentary shipping facilities at Halibut Point in the late nineteenth century 1

Economic advancement began with the cooperation of artisans, entrepreneurs, and workers in specialized trades and alliances. The flourishing of the Cape Ann granite industry during the century 1830-1930 coincided not only with technological developments but with evolving concepts of the organization and reward of capital by means of corporations. The rising power of financial capital and the nature of government's mandate received increasing attention both practically and philosophically.

Signatures of the incorporators of the Rockport Granite Company of Massachusetts, 1864

In founding of the Rockport Granite Company (RGCo) in 1864 local quarrymen Ezra Eames and John Stimson leveraged their physical and experiential capital with the financial capital of Stimson's brother J. Henry Stimson and his worldly associates/stockholders on State Street, Boston. Together they chartered the first granite corporation on Cape Ann. An important aspect of corporate structure is that it limits the liability of any investor to the sum of his own investment, while concentrating joint resources for business operations.
Rail and shipping facilities developed at Halibut Point in the early twentieth century 1
The corporate acumen of the Rockport Granite Company enabled it to capitalize extensive quarrying operations, railways, and shipping facilities. By 1915 it had bought up all the other significant companies and reigned supreme in Cape Ann granite production. 2

The Rockport Granite Company brought the locomotive Nella by barge to Babson Farm Quarry, Halibut Point in 1911 after the liquidation of the Cape Ann Granite Company founded by
Col. Jonas H. French. The Nella had been named for French's wife. 1
A certificate for 10 shares of stock in the Rockport Granite Company
The stockholders of the RGCo occasionally financed opportunities for expansion through the offering of new shares of equity stock to investors. Each share represented a fraction of ownership in the business. Shareholders gained the right to vote on corporate matters such as election of the board of directors and proportional distributions in the company's income as dividends.
While the corporate office of the RGCo shifted to Boston, John Stimson continued in a hands-on capacity to manage local operations as its agent and treasurer until 1881. Subsequently his nephew Charles Stimson Rogers held the office of treasurer, then president of the corporation. 3
Charles Stimson Rogers, c. 1913 4
Insofar as the minutes reveal proceedings, annual shareholder meetings of the RGCo tended to be perfunctory gatherings to approve major decisions of the board of directors, the elected trustees of the corporation. Prominent among the directors were the officers of the corporation, especially members of the Rogers family. The salaried officers made the day-to-day operational decisions as well as guiding corporate direction and welfare. Over the decades of its existence the RGCo did grapple with significant issues of scope and identity in response to the economic climate and the inclinations of major stockholders. 

Promotional material from a RGCo brochure,
reproducing advertisements from The Architectural Record in the 1920s 1
The Rockport Granite Company achieved the expertise to sell both rough and finished stone products on the national market.

RGCo's locomotive Vulcan shuttling stone between its quarries and wharves 1
At a pivotal point in its growth the company took the visionary capital step of tunneling under the highway to link its principal quarries directly to the shipping wharves. It funded and constructed an arched bridge for the public thoroughfare.
The mysterious fate of the corporation, 1930 5
The Cape Ann granite industry, especially suited to durable construction purposes and ocean transport, struggled to survive the twentieth-century popularity of concrete, smooth roads for automobiles, and softer stone for monuments and veneers. Fair labor demands from immigrant workers, as they became established, added cost pressures to the business. The national economy suffered the Crash of 1929. 

By this time the RGCo had come under control of a never-identified stockholder(s) represented by a New York attorney, who acquired a controlling share of the capital stock. The calculations of the new owner(s), whether vindictive, competitive or naïve, remain known. The directors found themselves powerless to function. The Rockport Granite Company ceased its corporate existence in 1931. C. S. Roger's son Louis Rogers formed a short-lived Paving Block Corporation and devoted the next fifteen years to selling off the extensive acreage of the RGCo that had devolved to a mortgage holding company.

1. Photos from the Sandy Bay Historical Society.
2. I am indebted to Leslie Bartlett for pointing the way to Rockport Granite Company archives conserved at the Baker Library, Harvard University School of Business Administration.
3. Unpublished notes of 1953 interview with Louis A. Rogers by Barbara Erkkila, Cape Ann Museum archives.
4. Portrait from Arthur Wellington Brayley, History of the Granite Industry of New England, Volume 2, 1913.
5. Boston Globe, January 22, 1930.

1 comment:

  1. Historical history sharing. This post was too much lovely and knowledgeable.