Every industry tells a story of competition: the rise and fall of companies.  Technological industries often see more “changing of the guard” than more stable businesses like food, soap, and beverages. 
One of the first high-tech industries in America was the watch business.  This pocket-sized scientific instrument was (and is) one of the wonders of the modern world.  The top watchmakers’ products were in every pocket or on every wrist for over one hundred years.  The great innovators rose to fame, becoming household words.  But today the greatest of them are long gone.  Here is a quick look at the history of the American watch industry and its leading companies.
In America before the Civil War, watches were for rich people.  Primarily imported from England and Switzerland, a decent pocket watch could easily cost $30-40 ($800-1000 in 2020 money; the cost of a high-end smartphone, which has supplanted the watch for many people).  Besides, most people did not need a watch: farm life could run on sunrise and sunset alone.  “Clock time” was not required for people’s lives.
Clock time was also extremely complex, as each city set its time by when the sun was overhead, at high noon.  When it was noon in New York City, it was 12:02 in Albany, 11:56 in Philadelphia, and 11:50 in Baltimore.
Needless to say, this made many aspects of life difficult.  High among the challenges was catching your train when you connected from one railroad to another.  The Pennsylvania Railroad, the nation’s largest, ran on Philadelphia time.  if you were headed westward, you would change trains in Chicago, where each railroad ran on its own time. 

1862 Time in US Cities

The confusion between city times was finally resolved in 1883 when the railroads led the US to adopt standardized time zones.

Map of time zones into which the US was divided after the adoption of Standard Time on 18th November 1883. Dated 19th century.

The military needs of the young nation also called for more and better timekeepers.  Few soldiers had accurate watches.  Thousands may have died in Civil War battles because troop movements could not be coordinated based on precise timing.

Throughout the 19th century, America was becoming more industrial and more urban.  No longer did people ride their horse on their own schedule; they increasingly rode scheduled trains and streetcars.  Businesses and factories required their employees to arrive “on time.”  Clock-watching increasingly became a national habit. 

These pressures led to the need for more accurate timekeeping devices and for more watches of every quality.  Watches were needed by everyone, not just the rich. 

Waltham: The First Great American Watch Company

Americans bought high quality English watches as well as Swiss watches, which covered the range from the best to lesser quality watches.  These watches consisted of hand-made parts: the core timekeeping “movement,” the watch case (sometimes gold), the dial and hands, etc.  Often the local jeweler would buy the parts and assemble them to meet the specific needs of each customer.  When parts broke, the jeweler or watchmaker would have to make new ones.  The whole process was cumbersome, labor-intensive, and thus expensive.

New England was the cradle of American industry.  Giant textile plants used the most advanced machinery.  The federal arsenal at Springfield, Massachusetts had pioneered interchangeable parts, each precisely machined.  The clock-making industry, centered in Connecticut, had gradually replaced handwork with machine-based factories.

In 1833, the twenty-one-year-old Aaron Dennison of Boston had spent three years as a jeweler’s apprentice and invented an automatic cutter to automate part of the watchmaking process.  Dennison spent the next several years learning about watchmaking and dreaming of mass-producing watches by machine.     

Finally, in 1849, Dennison was able to convince Boston clockmakers and investors to put up about $40,000 to try his idea of making watches (at least in part) by machine.  While a factory was built in Roxbury, Massachusetts, Dennison went off to England to study watchmaking.  In order to achieve his goal of machine-made watches, Dennison and his partners had to invent and make their own machines, including measuring devices that could differentiate distances down to thousandths of an inch.  The Roxbury plant was not big enough, so the factory was moved to Waltham, Massachusetts, a rural town of about 5,000 people.  In 1854, production began with ninety workers producing thirty watches a week. The company’s first product failed and the company struggled.  Dennison was better at inventing than at running a business.  By 1857, the company was broke and purchased at auction for $56,000.  The new owner, Royal Robbins, then improved the manufacturing process and increased production.  Annual Waltham watch production rose from three thousand in 1857 to eleven thousand in 1861.  This was perfect timing to help meet the needs of the Civil War.  Waltham’s “William Ellery” watch sold well at $13 ($400 in 2020 money).  Waltham produced over 70,000 watches each year in the mid- and late-1860s.  (The company operated under different names before settling on the Waltham Watch Company.) 

William Ellery Key-wound Pocket Watch by American Waltham Watch Company

Over the next twenty-five years, the Waltham Watch Company was a growing, profitable business.  The company found ways to organize production and increase their output by tenfold, then by a hundredfold.  Their American watches were more durable, more accurate, and less expensive than Swiss or English watches.  By 1875, Waltham was making over 100,000 watches each year, employing thousands of workers.  The company won awards at the 1876 Philadelphia Centennial Exposition.  But by then, another major watch company had risen to compete with Waltham.

Elgin: The Second Great American Watch Company

Former Chicago mayor Benjamin W. Raymond and other Illinois investors were approached by JC Adams of the Waltham Watch Company about starting watch production in the Chicago area.  The United States, especially the frontier west, was booming.  In 1864, this group founded the National Watch Company.  They built a plant on 35 acres of land donated by the nearby city of Elgin, Illinois (population 3-4,000).  They hired seven of Waltham’s top people, offering them $5,000 a year salary ($95,000 now), a $5,000 signing bonus, and one acre of land to build their homes on.  As the company’s watches were commonly called “Elgins” or “Elgin-made,” the company was ultimately renamed The Elgin Watch Company.

The Elgin Company built extensive factories and began production in 1867.  The first watch, the “BW Raymond,” sold for $117 ($2200 now).  Over time, the main factory in Elgin became the world’s largest watch factory.  In the early 20th century, the company built an observatory to determine perfect time by the stars and opened a watchmakers’ school.  Employment reached as high as 4,500 workers.

BW Raymond Watch by Elgin Watch Company

By 1876, Elgin was producing 100,000 watches a year, matching Waltham’s output.  That year, Elgin dropped its prices by 30-40%, requiring Waltham to lower its pricing.  The two industry giants continued to battle for leadership in a back-and-forth war for the next fifty years.  As time passed, the machinery became better and the products more accurate.  Precision tolerances fell from thousandths of an inch to ten thousandths of an inch and beyond.  With bigger production runs, costs (and prices) fell.  (A pattern repeated in almost all advancing technologies like automobiles, computers, and software.) 

Waltham and Elgin were not without competition.  In 1892, the Hamilton Watch Company of Lancaster, Pennsylvania, was created; this smaller producer was known for its railroad watches and often was ranked third largest.  Other makers included the Illinois Watch Company (which made watches for Sears, Roebuck and Montgomery Ward), Hampden, New Haven, South Bend, and several others.  All were dwarfed by Waltham and Elgin.

Challenges for the Watch Giants

Despite creating badly needed products, always making them better and cheaper, the two huge producers faced numerous and repeated challenges.

In the period between the Civil War and World War II, America faced numerous financial “panics” (recessions or depressions).  1893, 1907, and 1921 were among the worst panics.  Since watches were an expensive product, and old ones could be repaired for continued use, watch demand dropped precipitously at these times.  Production and employment at Waltham and Elgin fluctuated dramatically.  Investment capital for new machines was scarce or expensive.

For example, between 1891 and 1892, Waltham’s production dropped from one million watches to 400,000; Elgin fell from 440,000 to 120,000.  By 1903, each company was producing a million watches a year, and in 1907 Waltham made two million, a level not reached by Elgin until twenty years later, by which time Waltham had dropped back to 500,000.      

Another challenge was the Swiss.  They continued to export movements and finished watches to the US.  When tariffs were high, the Swiss watches and parts were smuggled in.  Having been almost run out of the American market by Waltham and Elgin in the late 19th century, they were back in force by the 1930s.

Yet the biggest challenge to Waltham and Elgin came from another American idea: the Dollar Watch.

Waterbury/Ingersoll: A Third Major Competitor

In 1896, the Waterbury Clock Company (dating from 1854) began manufacturing “dollar watches” for salesman Robert Ingersoll and his brother.  Dramatically increasing access to decent watches, these were an immediate success.  Eventually morphing into one company, named Ingersoll for a while, then Waterbury Clock, this company was by 1905 producing three million watches a year, toppling Waltham and Elgin in units produced but not in dollar value.  The company’s slogan became “the watch that made the dollar famous.”  Other companies also produced dollar watches, including the Western Clock Company under the brand “Westclox.”

Ingersoll teetered near bankruptcy in the Great Depression but was saved when they licensed Mickey Mouse from Walt Disney, selling huge numbers of Mickey Mouse watches.

Ingersoll Dollar Watch

Three Smaller Competitors

Among the dozens of companies making watches, a few others are worthy of mention because of their role in the industry’s later history.

Joseph Bulova emigrated from Bohemia to New York and in 1875 started his watch company on Long Island.  Bulova made his movements and key parts in Switzerland (in a plant now owned by Rolex).  The Bulova Watch Company assembled the finished watches at their US factories.  The company was an excellent marketer and may have risen to the number one US position in the 1950s as Waltham and Elgin went into decline.

German immigrant Dietrich Gruen started the Gruen Watch Company in Cincinnati, Ohio, in 1894.  Like Bulova, Gruen made his parts in Switzerland and assembled them in the US.  Gruen was famous for innovative, unique watch designs.

The Benrus Watch Company was founded in 1921 by Romanian immigrants, the three Lazrus brothers.  The company name was a contraction of BENjamin LazRUS.  Starting out as a New York City watch repair shop, Benrus evolved to assembling Swiss-made parts into finished American watches, the same system used by Bulova and Gruen.

These three companies helped improve the Swiss watch industry by sharing American ideas of mass production.  They also proved more durable in the mid-20th century than industry pioneers Waltham and Elgin.  As shown below, the smaller watchmakers differentiated their products, often through creative design.

Gruen’s 1938 “Veri-Thin” Watch Compared to a Normal Watch
The First Electric Watch: Hamilton 1957

Challenges of the New (20th) Century

In addition to Swiss competition, dollar watches, and economic cycles, the new century brought additional challenges.

The first was the wristwatch.  Initially seen as too dainty for men, that changed in World War I.  Called “strap watches” for men to differentiate them from the feminine “wristwatches,” these became popular among soldiers for their easy access and convenience.  Perhaps more importantly, they were critical for the emerging group of airplane pilots, who could not afford the time to reach into their pocket and open the case every time they needed to check the time.  Gradually, wristwatches took a greater share of the watch business.

Waltham and Elgin were still selling tons of pocket watches.  Elgin moved into wristwatches, but Waltham, which had been through multiple management changes, could not afford the new machinery to make the ever-smaller and ever-thinner wrist watches.  In 1927, Elgin produced two million watches, but Waltham had fallen to 500,000.

The smaller competitors, including those using Swiss parts, were more agile in converting to wristwatches.  Hamilton, Bulova, Gruen, and Benrus each had their turns as industry leaders, at least among the top four US companies in the seventy years of the twentieth century.

A major post-war recession in 1921 almost wiped out both Sears, Roebuck and General Motors.  It was even tougher on the watch industry, resulting in many factory closures.  The Great Depression of the 1930s was even worse, and longer lasting.

Added to these pains were those nettlesome Swiss.  In order to get machinery and other products from the Swiss, the US government lowered the tariffs on Swiss watches and parts.  The Swiss watchmaking industry also limited the sales of their advanced machinery to the US.  The Swiss and their American assemblers gained market share.

Yet perhaps the real blow to Waltham and Elgin was World War II.  For starters, the US government made them stop making watches.  All these watch companies were major defense suppliers, focusing on bomb fuses and other timing devices.

But the cruelest blow was that the Swiss, remaining neutral throughout the war, never stopped making watches and never stopped shipping them into the US. 

By wars’ end, Waltham and Elgin were no longer in shape to compete.  Their tired machines were best for making pocket watches, not wristwatches.  Their labor forces were tired and had lost their enthusiasm.  More agile competitors who were often better marketers rose to the fore.

Waltham went bankrupt in 1949.  The manufacture of consumer watches continued until 1958, when the ghost was finally given up, after 101 years.  Like other brands in this story, the name Waltham continues to be used by manufacturers, including Asian companies, which are unrelated to the Waltham Watch Company.

Emerging a bit stronger after the war, Elgin continued to make watches at its huge plant until the 1960s.  A new plant was opened at Blaney, South Carolina, which promptly renamed itself Elgin, SC.  Five years later, even this plant was closed.  Elgin was out of the watch business by 1968, lasting 104 years.

But One Company Transitioned to the New Era

In 1940, Norwegian shipping magnate Thomas Olsen and his friend Joakim Lehmkuhl fled Hitler and landed in the US.  They were looking for investments and wanted to help the war effort.  This search led them to buy the old Waterbury Clock Company (with its Ingersoll brand); Waterbury soon became one of the largest makers of timing fuses and other similar material for World War II.

After the war, under Lehmkuhl’s leadership, the company continued its interest in making affordable watches.  Now named US Time Company, this company came out with the “Timex” wristwatch.  This watch used advanced metal alloys to lower costs and increase durability.  Instead of an openable case that allowed the watch to be repaired, the case was sealed and could not be opened.  The watches were meant to be disposable, though they lasted a long time and were very accurate.

Timex was well-marketed and became a huge hit.  Famous newsman John Cameron Swayze was featured in television ads proclaiming “Timex – takes a licking and keeps on ticking” as the watches were put through punishing tests onscreen.  Millions were sold, and by the 1960s the American watch industry had a new dominant player.

Early Timex Watches

The Evolution of the Watch Industry

The history of the industry after World War II is a complex story, worthy of a future post on our part.

Major new innovations came along quickly.  In 1960, Bulova introduced the “Accutron” tuning fork watch, far more accurate than any other timepiece.  In 1970, Hamilton produced the $2100 Pulsar, the first digital watch.

The advent of digital watches, replacing the mainspring and works with a vibrating quartz crystal, gave rise to two Japanese powerhouses, Citizen Watch and Seiko.  Today Citizen is probably the largest watchmaker in the world based on units sold, though the big Swiss makers are larger in dollar terms due to their higher prices.  Citizen’s portfolio of brands includes Bulova.  Other Japanese companies, including Casio, also became significant watchmakers.

The Swiss answered the digital challenge with the “Swatch,” yet another “disposable” watch concept.  Today the Swatch Group, controlled by the children of Lebanese immigrant Nicolas Hayek, generates about $8 billion in annual revenue, including such time-honored names as Longines, Omega, Rado, and Tissot.  Swatch also owns Hamilton. 

Patek Philippe and Rolex of Switzerland and other luxury watchmakers are also billion-dollar companies. 

Good old Timex, now based in the Netherlands but still owned by the Norwegian Olsens, continues to prosper and includes the Guess, Versace, and Ferragamo brands.  In the late-1980s, their Ironman Triathlon watch was an enormous success.

Yet competitive challenges continue.  By dollar volume, the Apple Watch may now be the biggest watch in the world. The global race to make the most complex, the most beautiful, the most accurate, and the most innovative timepieces continues unabated.

One-of-a-kind Patek Philippe Grandmaster Chime that sold for $31 Million in a 2019 Charity Auction

Sources:  There is a wealth of information on the history of each of these companies, and on the history of the components and technologies involved.  Research on the Internet will lead to many collectors’ sites full of company and product history.  A good place to start is the National Association of Watch and Clock Collectors, which also operates a museum in Columbia, Pennsylvania.  For the full story of clocks, watches, and the role of time in our lives, David Landes’ Revolution in Time and Alexis McCrossen’s Marking Modern Times are both excellent.  For a detailed look at the American watchmakers before 1930, Michael Harrold’s American Watchmaking is outstanding.     

Please add your thoughts and comments here.

Gary Hoover
Executive Director
American Business History Center

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