For several reasons the aspect of management decisions that has interested most business historians has involved the innovating function. For one, the main responsibility for introducing innovations in a capitalist society, without which the economy would tend to stagnate, is undertaken by the business executives. Secondly, the fortunes of individual companies are closely related to the capacity of the managements to undertake and cany through changes. While it is true that a passive policy may be sufficient to establish a new firm or to maintain a going concern, the rewards in the form of prestige, income, size or position in the market, and the like, are more likely to go to those organizations whose managements take an active role, who pioneer changes or are quick to see the applications to their own organization of innovations developed outside.

Many will think it strange that the textile machinery industry should have been chosen to point up a discussion of innovation, especially technological innovation. No industry in America has been more consistently singled out as an example of technological backwardness. About a decade ago the Honorable Henry Wallace, while on a lecture tour of New England, voiced the opinion that the American textile machinery industry was a hundred years behind the times. That Mr. Wallace based his statement on information so insubstantial as to be almost meaningless is of little importance. What is important is that all with eyes to see are likely to agree with him. Anyone who is familiar with the modern spinning frame and who, on visiting the Smithsonian Institute, chances to see on display there the spinning frame built by Samuel Slater in 1790 is inevitably struck by the similarity between the two machines.

America's indebtedness to Europe in the nineteenth century as a source of industrial ideas and technique is well-known. Our purpose, however, is to show that the transfer of technological knowledge was by no means one way, from Europe to America. In fact at least one important exception exists in the rubber manufacturing industry, the foundations of which were laid in the first half of the nineteenth century. The origins of this industry in the United Kingdom and throughout the Continent of Europe, including European Russia, show a marked dependence of the Old World on the New, not only in terms of technique but in the establishment of American business houses in Europe.

This study is an exploration, on a limited scale, of the part played by businessmen in early railroad construction and operation. The business history of railroading is significant not only for that industry but also for the leadership that the railroads maintained among the large business units in the nineteenth century and the consequent influence on organization, management methods, and policies of big business. In this paper we are concerned only with a sample, the beginnings in the decades of the 'thirties and 'forties, in order (1) to see wherein our knowledge of early railroad history needs enlarging and (2) to demonstrate the type of information that can be gleaned from the manuscript minutes, reports, and correspondence of early railroads.