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Baldwin Locomotive Works: Evolution of the American Locomotive, 1907

Holding It Together

During and following the financial Panic of 1837, Baldwin held his company together through frank negotiations with creditors and a series of partnership arrangements that brought needed funds while freeing Matthias Baldwin to concentrate on design. The result was a further patented innovation—the flexible-beam design which improved stability and hauling power.

Still the locomotive industry languished through the early 1840s, mirroring the state of national commerce, and in the latter 1840s railroading built rapidly with increasing line operators, increasing line builders and a matching increase in the number of engine manufacturers from New Jersey to Massachusetts, expanding competition for the Baldwin Locomotive Works. Lacking an industrial loan system, it was left to the creativity of each operator to find their best financial arrangements in this highly competitive atmosphere and Baldwin struck many deals with suppliers (a Baldwin locomotive contained over 4,000 parts) and customers (a thirty-day performance guarantee) to stay solvent and operational. The early start in the business served Baldwin well and by 1846 the product line included fifteen different engine sizes or types.