Wednesday, January 6, 2010

Miller and Whitney: Early Innovation

"An invention can be so valuable as to be worthless to the inventor."
- Eli Whitney

Every child knows (or maybe every kid used to know) that Eli Whitney (1765 - 1825) invented the cotton gin.  Like most stories of the Hero Inventor, this one is a much-distilled and over-simplified version of the truth.  Cotton gins had been around for a long time before Eli Whitney came along. These earlier gins squeezed cotton between rollers and the friction pulled the seed from the cotton fibers.  The roller gins did a good job on long-staple cotton but there were a couple of limitations.  First, long-staple cotton only grew in the rich soil found near the coast, and secondly, while the roller gins worked, they were slow and favored good fiber over production output.

Eli Whitney was a Yale-educated son of a Connecticut farmer.  He seems to have been quite mechanically inclined from a young age.  After Whitney graduated from Yale, the president of the college, Ezra Stiles, arranged for Whitney to take up a tutoring position in the South.  Stiles put him in touch with another young Yale man, Phineas Miller, who had graduated a few years earlier.  Stiles had previously arranged for Miller to be a tutor in the South at the plantation of the Revolutionary War General, Nathaniel Green.  The general had died around this same time and Miller became not only the tutor to Green's five children but also the plantation manager for Green's widow, Catherine Green.

Whitney traveled with Miller and Mrs. Green from New York City to Savannah and stayed with them for several months.  The story goes that once there, Whitney turned down the tutoring job because of a dispute over the pay and stayed on at the plantation to invent his cotton gin. The exact order of events was deliberately obscured by Whitney and his new business parter, Phineas Miller, in order to facilitate getting a patent and to get a head start on manufacturing machines.  The partnership that was formed was always known as Miller and Whitney (not the other way around).  Once again, we see the indispensable role of the entrepreneur (Miller in this case) in moving an invention towards the market.  Miller not only had more business savvy, he had the deep pockets of Catherine Green's money.  Miller had married her at about this same time.

Miller conceived of a business plan in which their company would manufacture the gins in Connecticut and build service locations throughout the South where farmers would bring raw cotton for ginning.  The ginning mills would also have cotton seed presses to capture this source of revenue as well.  The company would be paid for their services, not in cash (which was very scarce), but by keeping one third of the ginned cotton output.  It seemed like such a great idea but like most great ideas, there were problems.

First, while Whitney's cotton gin did a good job of stripping out the seeds, it left the cotton fibers entangled in little knots called neps which created problems for the subsequent spinning operations to make cotton thread.  Spinning companies in England complained bitterly about the poor quality of the fiber from Whitney's gins.  The second problem was that Whitney's gin was elegantly simple and hence easy to pirate and there was a strong incentive to do so because of the high output of the gin. Many Southerners made copies or improved on Whitney's gin, ignoring Whitney's patent of 1793.  Miller and Whitney fought back in over 60 lawsuits but the number of infringers and the bias of the Southern courts towards helping local plantation owners proved to be too costly to continue.  While they lost most of the cases, Miller and Whitney were eventually awarded some compensation by the legislatures of the states of North and South Carolina (Georgia never did recognize their claims).

Whitney's gin galvanized local mechanics to come up with their own ideas on how to improve his design.  In this way, it was a tremendous spur to Southern innovation. The most common approach was what was called the saw gin in which the individual wire teeth of Whitney's gin were replaced by teeth mounted on a circular saw blade.  Eventually, the designs were improved to the point where the problems with fiber neps were reduced to an acceptable level.  Cotton production exploded because the short staple, green-seed cotton could be grown in much poorer soil conditions in the upland South. With the expansion in cotton production came a massive increase in the number of slaves to work the land.

What became of Miller and Whitney?  Miller died in 1803 having poured most of his money (or rather Catherine Green's money) into the venture. He never recovered his investment.  Whitney, penniless from his cotton gin venture, turned his back on the South and in 1798 went into the business of manufacturing firearms for the U.S. government at a factory in New Haven, Connecticut.  He didn't do as well financially as he had hoped with his new business but he did cement a name for himself as having had a crucial role in the development of manufacturing using interchangeable parts.

Whitney would never have been remembered for the cotton gin had it not been for the motivation and resources of Phineas Miller.  I find this interesting because in most cases in our culture it is the entrepreneur who gets the credit for an inventor's ideas.  Perhaps Miller would have been the one remembered had the company of Miller and Whitney been financially successful.  When it failed and Miller died, Whitney lived on until 1825 to continue to remind people of his patent and his inventions.  Miller was to become only a minor footnote in Whitney's later retelling of the story.

It helps to be the one to write the history of a venture.  You can give yourself all the credit you think you deserve. But I, for one, think that Phineas Miller ought to be up there as the Hero Entrepreneur as much as Eli Whitney was the Hero Inventor.  Invention is a necessary but not sufficient requirement for innovation.  That takes money, business savvy, and often more than a little good fortune.

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