Photo of a Berkshire Fine Spinning Associates, Inc. factory in Adams, Massachusetts, from their 1944 annual report to shareholders.
amounts of power as they descended to the ocean. These rivers also provided a convenient means of transporting goods to and from the mills. The proximity to New York City, known as the fashion capital, may also have played a part, since the Northeast knew sooner which products were most popular. After all, information travelled much more slowly then.
According to The Decline of a Textile City: A Study of New Bedford,“ the New England region obtained a virtual monopoly” in textiles, with 70 % of the active spindles in the United States housed there. By 1880, New England boasted more than 80 % of active spindles. This would prove to be the height of success for New England textile manufacturing. It would only go down from there.
The oldest predecessor company with identifiable direct connections to the Berkshire Hathaway of today is the Valley Falls Company, formed by Oliver Chace in 1839. The Chace family built a textile empire that brought prosperity to the villages of Cumberland and Central Falls, Rhode Island, as the family built and expanded its mills along the river.
In 1929, five companies, including Valley Falls, merged to form Berkshire Fine Spinning Associates, Inc. The other four were Coventry Co., formed in 1864 in Coventry, Rhode Island; Greylock Mills, formed in 1880 in Pittsfield, Massachusetts; Fort Dummer Mills, formed in 1910 in Brattleboro, Vermont; and Berkshire Cotton Manufacturing Company, formed in 1889 in Adams, Massachusetts. Berkshire Cotton Manufacturing was the largest of the five, so the new entity was named Berkshire Fine Spinning Associates, Inc.
The history of the Hathaway side of Berkshire Hathaway is more straightforward. It was formed in 1888 at the height of textile manufacturing in New England, incorporated in 1889 in New Bedford, Massachusetts, and operated independently until the 1955 merger with Berkshire Fine Spinning. Hathaway was formed with $ 400,000 of initial capital from Horatio Hathaway and several partners looking for their next business venture after the decline of New Bedford’ s sperm whaling industry, according to filings with the Mass achusetts Secretary of State. One of those partners was Hetty Green, the rich heiress to a New Bedford shipping fortune.
The two Berkshire Hathaway predecessor companies, Berkshire Fine Spinning and Hathaway Manufacturing, operated on parallel tracks throughout the 1930s. They largely faced the same struggles as New England-based textile manufacturers, including the relentless march south and the growing influence of overseas competition.
The Great Depression in the 1930s acutely affected New England textile manufacturers. The mills that had survived that far had largely done so by shifting production away from coarser goods and toward the finer textiles that the South had not yet mastered. The Great Depression softened demand for these higher-priced discretionary fine goods. Many mills saw production of such fine goods fall by over 50 %, while volumes of coarser-grade staples fell less than 1 %.
Since material costs for cotton and its substitutes were largely market-driven, mill owners looked to the next largest cost: wages. Workers responded with strikes and walkouts, including the Uprising of’ 34, in which a general textile strike impacted the entire industry. During the uprising, 500,000 mill laborers walked off the job. With the implementation of the Fair Labor Standards Act of 1938, a standard uniform wage nationwide mitigated the labor differential between the North and the South. The North rejoiced, but it was bittersweet, since the legislation came too late. As described in The Decline of a Textile City, the new law could not“ bring back mills which were already liquidated, whose machinery was sold at auction, and whose buildings had been torn down.” Just in New Bedford, Massachusetts, 20 mills went out of business between 1930 and 1939.
The difficult operating conditions of the northern textile mills in the 1930s likely would have continued unabated throughout the 1940s if it weren’ t for one major event. World War II created a temporary boom for the entire textile industry and offered the remaining mills in the North a brief flash of extreme profitability. The war effort required an immense production of textiles for military use, including powder bags, camouflage cloths, ponchos and mosquito netting. The large-scale use of parachutes in the war required production of nylon, a relatively new material that was both lightweight and strong. The textile mills were initially hesitant to commit to large-scale production. It was only after Berkshire Fine Spinning made a large
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