Library of Congress

By Adam J. Mead

Warren Buffett has been the public face of Berkshire Hathaway for six decades, and Omaha has long since become the company’ s spiritual home. But the name on the letterhead, and the history underneath it, belongs to Massachusetts. Long before it was an insurance and investment conglomerate, Berkshire Hathaway was a New England textile company, and its predecessor mills trace back to the earliest days of American manufacturing.

What gave rise to those textile companies and the industry itself is fascinating and instructive. Samuel Slater brought the first water-powered textile mill to the United States in 1789. Slater snuck out of England with the know-how to build a viable water-powered mill and did so with financial backers in Pawtucket, Rhode Island. By 1809, there were 27 Slater-type mills in New England.

The next major innovation was financial

Textile worker in the Berkshire Cotton Mills, 1916. and operational. Francis Cabot Lowell, a wealthy Boston merchant, used a jointstock corporation to create the Boston Manufacturing Company in 1813. He was the first to integrate his mills, the first of which was in Waltham, Massachusetts. It housed all operations needed to turn raw cotton into finished cloth. The mills were profitable almost immediately. Lowell had thus discovered the optimal combination of size and integration to generate economies of scale out of the cotton mill. Not surprisingly, this innovation spread rapidly.

Having wrested all the power they could out of the Charles River in Waltham, the investors in the Boston Manufacturing Company, sometimes referred to as the Boston Associates, turned their sights on a new location. They chose a site on the Merrimack River in what was East Chelmsford, Massachusetts, and formed the Merrimack Manufacturing Company. In Lowell, the company was more than just mills; it was a company town that by the 1840s employed more than 8,000 people. They used the surrounding farmland to build boardinghouses, churches, company stores and other infrastructure for the many workers required to operate the mills. Many of the workers were women.

The early mills in the United States were thousands of miles from cotton fields, which raises a key question: why develop the textile industry in the North? In short, the South did not find it immediately economical to do so, and the North had some distinct advantages, at least at first. Two initial northern advantages were access to capital and a cheap power source.

Availability of capital was possibly the deciding factor as to why the textile industry first took hold in the Northeast. When Lowell formed the Boston Manufacturing Company, he was already a successful businessman. He and his Boston Associates had access to capital from the whaling business. By the mid-1800s, a large store of capital accumulated during the boom times of whaling was unleashed as whaling declined and the textile business grew.

Other early advantages of the North were geographic. New England has many strong-flowing rivers that unleashed vast

16 FINANCIAL HISTORY | Fall 2026 | www. MoAF. org