Part 1

1893-1894:

Champion founded during the best of times and the worst of times

"It was the best of times, it was the worst of times," declared Charles Dickens in A Tale of Two Cities, his fiction classic about the French Revolution of the 1790s. The same could be said of the period a century later when Peter G. Thomson decided to build a coated paper mill in Hamilton, Ohio. From a technical view, it was the best of times. From a financial perspective, 1894 was a terrible time to start a business.

Thomson -- no stranger to publishing -- intended to produce the coated paper demanded by recent printing advances. But he opened his company in the midst of a worldwide financial depression as established firms reported sales declines and laid off workers. Champion not only survived, but prospered during the protracted Panic of 1893.

Prompted by the Sherman Silver Purchase Act of 1891, and fears of inflation, the economy weakened in 1892, and worsened early in 1893 with the bankruptcy of the Philadelphia & Reading Railroad and the decline of United States gold reserves to below $100 million. "European banks, which had lent most of the money to finance the western railroads, sold their American stocks and bonds, and a vast bank run followed," said The American Heritage History of the Confident Years, 1865-1916, in describing the Panic of 1893. "In the South and in the West more than 500 banks failed. Farm foreclosures soared. The harvest that year was bountiful, but farmers could not even obtain short-term loans for shipping their crops to market. Industry stagnated as the panic gave way to depression with mass unemployment."

Thomson incorporated the Champion Coated Paper Company in November 1893 as newspapers reported record business disasters. With two months remaining in the year, 4,935 businesses had failed, more than twice the number that had closed in all of 1892 and well above the one-year high during the previous decade (2,853 in 1884). Recent casualties had included some paper companies in and around Hamilton.

The opening of the city's second safe factory, the Mosler Safe & Lock Company, had attracted the native of nearby Cincinnati to Hamilton. Mosler completed its move from Cincinnati in 1891, bringing more than 200 jobs to Hamilton. The previous year, the city's first safe firm, Macneale & Urban, also had relocated from Cincinnati to a newly-built plant on 10 acres along the Cincinnati, Hamilton & Indianapolis Railroad at Millville and Edgewood avenues on the western edge of Hamilton. (The Macneale & Urban site, after World War II, would be used by Champion for pulp storage.)

Earlier industrial arrivals -- including the Niles Tool Works (1872) and the Estate Stove Company (1884) -- and older Hamilton-founded companies also were prospering as Thomson established his new real estate business.

The city of 17,565 people experienced a 44.9 percent population growth in the decade following the 1880 census.

An editorial in a local newspaper -- as Hamilton celebrated its centennial in 1891 -- boasted that "within 100 years, Hamilton has grown from a military camp to one of the most prosperous, pretty, healthy and thriving cities in the state."

Factors contributing to Hamilton's boom included an able labor force, excellent railroad connections and its location. Hamilton factories were within 100 miles of the nation's population center during the last third of the 19th century.

That central spot was 20 miles southeast of Chillicothe, Ohio, in 1860; 48 miles northeast of Cincinnati in 1870; eight miles southwest of Cincinnati in Kentucky in 1880; 20 miles east of Columbus, Ind., in 1890; and six miles southeast of Columbus, Ind., in 1900. (By the 1990 census, the population center was 80 miles southwest of St. Louis.)

Thomson knew workers moving to Hamilton would need housing. In 1891 he bought 187 acres west of the Great Miami River along Seven Mile Pike (now North B Street) and divided the former Rhea farm into two subdivisions. Hamilton City Council accepted the plats for Grand View and Prospect Hill Oct. 29 and Nov. 17, 1891, a few weeks after Mosler's Oct. 12 plant opening.

The wooded hilltop had been a popular spot for Sunday school picnics and similar outings before it was developed by Thomson. Part of the Rhea farm almost became College Hill when Hamilton leaders tried to start an academy or college in 1854. Thomas Rhea had offered four acres at the top of what became North D Street for a campus, but the plan didn't materialize.

In promoting residential lots west of the river, Thomson bucked local housing tradition. The area had not expanded much since Rossville -- a town formed in 1804 on the Great Miami's western bank -- had merged into Hamilton in 1855. For years, most industrial growth had been east of the river, and factory owners and their employees had preferred residences within walking distance of their jobs.

Thomson worked from the Woltz & Company real estate and auction office at 244 High Street (north side between Second and Third streets). Later, he moved to a small office he built on the edge of the Prospect Hill subdivision, near the present intersection of North B and Black streets. (That 14 by 18-foot structure would become Champion's first office in 1893.) Thomson promised his land buyers a bridge, the first Black Street Bridge. He contributed $15,000 for the span, which was built in 1892-93.

Prospect Hill began on the high ground west of what became the Champion mill and extended west to North F Street and north from Liberty Street, including the present Rhea, Elvin, Warwick, Cleveland, Ridgelawn and Prytania avenues. There was supposed to be a Martha Avenue, extending east from North D Street to the Black Street Bridge, and a Stillwaugh Avenue, paralleling D Street. The plat also showed Elvin Avenue continuing east from the small park at North D and Prytania to North B Street. Instead, Thomson eventually built his paper mill on what had been planned as Martha and Stillwaugh avenues and the Elvin extension.

Grand View stretched east from Eaton Avenue and North E Street almost to North D Street and Prytania Avenue. It was bounded on the south by Gray Avenue and on the north by Haldimand Avenue. It includes Cereal, Webster, Gordon, Sherman, Progress, Cleveland and Prytania avenues and North E and North F streets.

It was Mosler's move to East Hamilton that drew Thomson into real estate. But his West Side subdivisions were clearly marketed to workers employed by established factories in the northern part of the city, especially the Niles Tool Works along north Third Street (property which Champion would acquire in 1960).

"The most remote lot in Prospect Hill and Grand View Additions is less than 10 minutes walk from the mammoth establishment (Niles), employing 1,000 men, and the nearest lot is three minutes walk over the new bridge which will be constructed next year," noted a November 1891 advertisement. The same ad said lot prices started at $150 for 30-foot frontage running 125 feet deep to a 16-foot alley. To buy such a tract required "a cash payment of $5 and then $1 per week without interest or taxes."

"Nearly 150 lots sold and over 20 residences sure to be erected this year," boasted a Thomson ad in January 1892. When sales slowed during the depression, the 42-year-old entrepreneur built the paper-coating plant on some of his land, a decision obviously influenced by Thomson's 20 years as a bookseller, editor, printer and publisher in Cincinnati. Realization that the paper and printing industries were in an era of drastic change prompted his entry into the coated paper business.

Through the 1880s, illustrations in newspapers, magazines, books and other publications had been produced by wood cuts, and steel or copper engravings. These time-consuming methods yielded monotone black-and-white reproductions lacking detail. But improvement was coming, and Thomson sensed it.

Between 1852 and 1886, several enterprising men -- including Fox Talbott, Joseph Swan, Georg Meisenbach, Frederic E. Ives, Stephen H. Horgan and brothers Louis E. Levy and Max Levy -- had developed and improved the halftone.

This process broke the tonal values of a photograph or illustration into a pattern of tiny dots, reproducing images of people, places and objects with realistic variations of light and gray shadows. The halftone breakthrough came as George Eastman, a Rochester, N. Y., bookkeeper, revolutionized photography, and as Ottmar Mergenthaler, a Baltimore watchmaker, perfected the Linotype.

The independent developments coincided with the maturation and expansion of advertising in the 1880s.

For magazines, "a cluster of inventions opened new technical possibilities for a monthly publication," observed an advertising historian, Stephen Fox. "The halftone replaced the slower, more expensive woodcut and gave printers a quick, simple way to reproduce photographs. The linotype typesetting machine made hand-printing methods obsolete. Better presses and binding machines made feasible larger, quicker press runs. The net effect meant a monthly could be produced faster, with more and better illustrations, at a greater volume and less cost," Fox said in The Mirror makers, A History of American Advertising and Its Creators. "In 1885 only four general magazines had claimed 100,000 or more readers, with an aggregate total of 600,000," Fox said. "Two decades later there were 20 such magazines, with a combined circulation of 5.5 million."

"The invention of the halftone process was probably the most revolutionary development in printing and bookmaking." said John Tebbel in A History of Book Publishing in the United States.

Carl R. Greer agreed, calling the halftone "the most revolutionary of all the improvements made in illustration, for it enabled us to reproduce photographs with their infinite gradations of tone." Greer, in Advertising and Its Mechanical Production, said "modern printing and advertising may be said to date from these inventions, which have made possible the wonderful combinations of type and pictures that give so much pleasure to life and so much opportunity to business."

But the new process required improved paper with a surface suited for halftone reproductions. Existing grades of paper in the late 1880s were rough and uneven, resulting in marred images. The solution was coating paper to fill hollow spots and provide a smooth, ink-receptive surface to capture the varied shades of the halftones.

The Champion Card and Paper Company in Massachusetts "had developed a new method of coating paper, permitting the wet coating to be applied on both sides of the sheet at one time, and they had a basic patent on it," explained Reuben B. Robertson Sr., in a 1959 interview. Charles H. Gage, owner of the Pepperill, Mass., company, held the coating machine patent. According to Charlie Soule -- who had worked in Pepperell before becoming one of the first employees at Thomson's Hamilton mill -- the coating machine had been invented by Sam Coty and John Parker, who worked for Gage.

After a successful trip to the Champion Card and Paper Company at Pepperill, Thomson incorporated the Champion Coated Paper Company in Hamilton with capital stock of $100,000. Fifty percent of the stock went to the Champion Card and Paper Company in payment for the perpetual right to use Gage's patents on the coating machines.

The new Ohio corporation was to be the western branch of the Champion Card and Paper Company, and Hamilton mill's sales were restricted for five years to the territory west of Buffalo and Pittsburgh.

In March 1895, after just 10 months of operation, explained Dwight J. Thomson, a grandson of the founder, "the Champion Coated Paper Company in Hamilton bought out the interest of the Champion Card and Paper Company in the stock of the Hamilton firm for $52,920, and came into the undivided control of its original incorporators."

The success of Hamilton Champion, noted Dwight J. Thomson, "was in spite of the fact that prospects in the paper industry were not at all bright in the Miami Valley." In a 1959 speech, he said "six paper companies in the Miami Valley, two of them in Hamilton alone, folded" during the four-year Panic of 1893.

The founder of the Hamilton mill, Peter Gibson Thomson, was born Dec. 16, 1851, in Cincinnati, the first of four children of Alexander and Mary Ann Edwards Thomson. He had two sisters, Mollie and Rhoda, and a brother, Alexander, who died at 18 months.

Peter attended the Second Intermediate School (on Ninth Street between Vine and Race streets), but his formal education was shortened by family adversity. His father died in 1864, after being bedridden about seven years with rheumatic fever, and a year later his grandfather died, leaving Peter the only man in the family and assuming some of the bread-winner responsibilities.

At age 16, he paid $50 to Bryant, Staford and Company, a business college, to "pursue a full course of instruction in bookkeeping, commercial arithmetic, commercial law, practical penmanship, correspondence and the details of business."

"I went to work in 1867 for Robert Clarke in his book store," Thomson recalled in 1916. Robert Clarke and Company, then at 65 West Fourth Street, was a prestigious Cincinnati publisher and bookseller.

Thomson earned $3 a week as a shipping clerk, but the job provided Thomson with valuable insights into publishing, printing, paper and business practices. "The job was clerical and routine in character and not to his liking, except as a means of providing food and clothing," said Reuben B. Robertson Sr., his son-in-law. "Being ambitious for better things, he studied business methods as he saw them in practice in the book store. His income was meager; but by careful thrift, by giving up luxuries and costly amusements, he was able not only to support his family, but also to save money. With these savings, he took the plunge and set up his own book store." Thomson was ready to apply his "maxims for success," which, he told to Forrest Davis, a Dayton writer, in 1916, were: "Establish a good credit and then use it as much as you can. Keep constantly plugging. There is no luck connected with success, nor any secret. The surest way is to work hard."

Thomson said in 1877 he "had accumulated enough money and was able to borrow enough more to start a store of my own on Vine Street, next to the Arcade" (at 179 Vine Street). An advertisement described Thomson as a "bookseller, stationer and importer" and a "library agency for the economical purchase of books." Thomson said "there I worked for five years, and I went to work every morning at 7 o'clock and kept open until 9 o'clock every night. And I didn't have a vacation in all that time, nor a day off."

In 1880, demonstrating his scholarly interest in history, the 28-year-old Thomson published The Bibliography of the State of Ohio, a 1,285-entry reference work which he had started to compile on his own time while working for Clarke. An advertisement called the 436-page volume "a catalogue of the books and pamphlets relating to the history of the state" including "collations and bibliographical and critical notes."

Literary World, published in Boston, said "Mr. Thomson is to be congratulated upon the successful completion of a task which, in motive, plan and all the details of its execution, deserves hearty praise," noting "its preparation has been the work of eight years, and the compiler has researched nearly every public library likely to yield materials from Boston to St. Paul, and personally examined almost every publication mentioned." The review said bibliographies "of only three other states have as yet been published in book form, namely Massachusetts, Rhode Island and Minnesota." In recognition of his work, Thomson was elected in 1881 as a member of the Royal Geographical Society of France.

In 1880 Thomson sold his highly-acclaimed bibliography for $8 or $18, depending on the quality of the cover. Recently, surviving copies -- still in demand by scholars, libraries and booksellers -- were priced at $300.

In November 1882, Thomson said, "I borrowed the money and we bought some presses and type and hired some printers and commenced publishing toy books and nursery rhymes. They made an instant hit."

This was in a leased building, once a carriage factory, at Baymiller and Everett streets in Cincinnati. His important partner in this business was his wife of seven years, Laura Gamble Thomson, a native of Louisville, Ky.

"I had $10 when I was married," recalled Thomson, who said his wife "had a great gift at writing poetry, jingles and pretty little lines. And she could write the most delightful children's books and nursery tales. I owe much to her," said Thomson. Later they produced valentines. "My wife got the idea first," he said, "and she was a wonder in planning the designs and writing the lines."

A fire Oct. 8, 1884, caused about $75,000 in damage, $55,000 of which was covered by insurance. A Cincinnati Enquirer report of the fire said Thomson employed about 100 people and operated five presses in the five-story building. The newspaper described it as "Peter G. Thomson's extensive manufactory of toy books and games, the only establishment of the kind, with one exception, in the United States."

The disaster didn't stop Thomson, who found a new location and was back in business before Christmas. Dec. 1, 1884, Thomson announced he had "sold out my entire book and stationery business to the firm of Woodruff, Beard & Co., and having leased the Russell & Morgan Bldg., 258 and 260 Race Street, will hereafter give my entire attention to the manufacture of children's toy books and games, and color printing." Two years later, a price list showed Thomson selling toy books at from one cent to 25 cents each; bound books at 50 cents to $1.50; and paper dolls and soldiers for one cent to 15 cents. Meanwhile, Thomson, who since 1864 had been residing at 104 Broadway (east side, third door from Third Street between Third and Fourth streets), moved his wife and five children to College Hill in 1885.

Peter and Laura Thomson's printing business continued to prosper, especially the sale of valentines, which retailed five for a penny. Thomson said "by easy stages we worked up a big business in valentine and children's books and my wife wrote several series that had a large sale."

In fact, business was so good that Thomson became a prime competitor to a Brooklyn company recognized as the largest producer of cards. Soon a price war erupted.

In 1887, according to the Cincinnati Times-Star, "Peter Thomson made a trip to Brooklyn and called at the offices of McLaughlin & Company, offering to buy out the owners. "I want to buy this establishment," Thomson is reputed to have said. "But this establishment is not for sale," he was told. "But there must be some figure at which you will sell. Some figure up in the millions," Thomson replied. "No there isn't. We are not in the selling-out business. We are buying out, we are. We will buy you out," insisted a McLaughlin representative. "But I don't want to sell," said Thomson as the battle of words continued.

Paraphrasing a previous Thomson statement, the McLaughlin negotiator said "you must have some price, up in the thousands," to which Thomson answered "yes, I confess I have a price."

"Name it," he was challenged. "Not less than $100,000," said Thomson. "We'll take it, provided you guarantee never to re-engage in this kind of business," demanded the Brooklyn businessman.

After accepting the offer, Thomson sought a way to invest the $100,000. That search brought him to Hamilton, first to his real estate ventures (Grand View and Prospect Hill) and in 1893 to incorporate the Champion Coated Paper Company.

His original mill extended west along the south side of Elvin Avenue from Seven Mile Pike (North B Street) to Stillwaugh Avenue, which had been named for Jacob C. Stillwaugh, operator of the brick yard which had occupied the site. Stillwaugh Avenue extended south from Rhea Avenue to Elvin Avenue between D Street and the Seven Mile Pike. Elvin Avenue then ran from North D Street east to Seven Mile Pike. Another street, Martha Avenue, ran parallel to and between Elvin and Rhea from North D to the pike.

The first building -- a 14 by 18-foot wood structure which had been Thomson's real estate office -- was east of Seven Mile Pike near the present west approach to the Black Street Bridge. It was Champion's first office. (Later, when a new office was built, it was sold and turned into a saloon by its new owner.)

The newly-built mill was about 55 feet wide and 400 feet long. A wing on the south -- about 25 feet wide and extending about 50 feet east-west -- housed the boiler and engine room. The color room was in another wing on the same side, also about 25 feet deep. Roll storage and the bailer were in the same area in the main structure.

The paper coated in the first Champion mill was purchased from other Hamilton plants. There were four manufacturers in the city then: the Beckett Paper Co., also known as the Miami Paper Company, at the northeast corner of Lowell and Buckeye streets; the Fairgrove Paper Mill, on the north side of the Dayton Pike, opposite the Butler County Fairgrounds; the Fordham Paper Mill, 609 North Second Street; and the Franklin Paper Mill, at the southwest corner of North Front and Buckeye streets.

The last two -- the first sources of paper for Champion -- were owned by the Louis Snyder's Sons Company, manufacturers of fine-sized and calendered book and news paper with offices at the Franklin mill. Both mills were just east of the Great Miami River and within sight of Thomson's new coating plant. (The Fordham mill site is now within Champion's North Third Street warehouse complex and the Franklin mill is part of a parking lot at the former Mercy Hospital.)

Louis Snyder, a Bavarian papermaker, came to the United States without money and began making paper in hand molds in Brookville, Ind. In 1854 he built the Franklin Paper Mill in Hamilton, and in 1868 erected the Fairgrove Mill on the canal at the city limits. In 1868 his sons, Henry, Louis P. and Edward, and William Pfau became partners. The senior Snyder died in 1875, and five years later the surviving owners built a third plant, the Fordham Mill, which was enlarged in 1891.

By 1892, the Snyder mills had a combined daily capacity of 22 tons and the company was described as a pioneer in new processes. "To make paper of old paper which had been printed upon was long a problem in the trade and the problem seemed impossible of solution, old printed paper being looked upon as one of the waste products of the world," said a Hamilton centennial book. "But the problem was solved by the chemical research and earnest experiments conducted in these mills. A small percentage of printed paper was successfully dealt with and finally the end was reached and 100 percent of this stock was successfully employed in making white paper." But the innovative Louis Snyder Sons Company didn't survive the Panic of 1893. It was bankrupt by 1895 and that year its receivers, George P. Sohngen and Charles M. Anderson, sold the mills to the Sterling Paper Company of West Carrollton, Ohio.

Another victim of the panic was the mill of the J. C. Skinner and Company at Lowell and Buckeye streets in Hamilton. "The Skinner mill, originally called the McGuire-Klein Mill, had been the first paper mill in Hamilton and the second in Butler County," said Dwight Thomson. "This mill had the first water wheel on the Hamilton-Rossville Hydraulic canal, which had been opened to commerce in 1845."

He said "the Skinner mill made 2.5 tons of wrapping paper a day. But financial troubles beset them in the late 1880s and an attempt was made to rescue the enterprise by rebuilding to make tissue paper. Steam power was added and new equipment.

But the financial panic in 1893 was something the organization couldn't overcome and failure occurred. The property, which adjoined the Beckett Paper Co., was bought out by Beckett."

# # #