Manufacturing paper and paper-related products was a primary industry during the second half of the 19th century in Holyoke. Some companies experienced many successful years, such as the Holyoke Envelope, later U. S. Envelope Company. Others, such as the Purcell Envelope Company, had visions of success; however, success eluded them due to mismanagement and the legal system.
From 1874 to 1894, the highly lucrative government contract for producing envelopes for the federal government was awarded to the Plimpton Company, a large envelope producer with a factory in Hartford, Connecticut.
The twenty-year hold of the Plimpton Company was about to change, yet briefly. The Purcell Envelope Company significantly underbid competitors and was awarded the 4-year, $3 million contract. The existing contract with Plimpton was set to expire on September 30, 1894. Within four months, the company needed 300 pieces of equipment and to find a facility to produce the envelopes. It also had to reduce its anticipated costs to make money on the contract.
The company estimated it could save $50,000 per year by moving from Albany, New York, where it was formed, to Holyoke. Money would be saved on freight, cartage, paper manufacturing, packing, etc. The plant would be located below the Third Level Canal, north of Cabot Street, and the train bridge at Riverside.
On August 28, 1894, construction of the new plant began. On the same day, the Connecticut River Paper Co. started the process of removing the paper-making equipment from its plant, so that Purcell would temporarily have space for its equipment while its new plant was being constructed. Time was growing short, as the government contract would soon take effect.
On September 19, 1894, it was estimated that the plant was producing 1 million envelopes per day, warehousing them until the contract's commencement. The factory employed 350 people.
The plant's superintendent was Henry E. Townsend, who resided at 47 Fairfield Ave. Registry of Deeds research indicated he didn't own any real estate in Holyoke during the 1890s or the first decade of the 1900s.
One and a half months into the contract, the work was subcontracted to the Plimpton Company in Hartford in mid-November 1894. The Purcell Envelope Co. could not fulfill the requirements of the contract. 350 local jobs were lost. Purcell Envelope Company negotiated a commission with Morgan Plimpton Envelope, which yielded a commission of $7,000 each year for four years.
In 1895, the Purcell Envelope Company was organized for the production of commercial envelopes. The company ordered several machines that could produce 2,250,000 envelopes daily. It is not known whether the company received this equipment. Henry E. Townsend moved from Holyoke to New York in 1896.
In 1898, it was again time for bidding on the four-year federal government envelope contract. If the scenario in 1894 was a setback due to poor organization, the legal and political environment in 1898 resulted in a debacle for the company.
The bids were opened in March 1898, and Purcell Envelope Company was the low bidder at nearly $1.9 million, less than $800,000 from its bid made four years previous. An award letter was sent to the company officials once the company was vetted to determine if it had the necessary facilities and ability to fulfill the contract. The company sent back the signed contract to the Postmaster General for his signature.
On May 12, 1898, L.J. Powers of the Connecticut River Paper Company, who had an interest in Purcell Envelope Co., received a telegram from Washington saying that the contract had been signed.
All was looking well. However, Postmaster General James Gary abruptly resigned before signing the contract. A new Postmaster General, Charles Emory Smith, succeeded Mr. Gary. The Morgan Plimpton Envelope Company was looking to have the contract set aside. Politicians on both sides attempted to sway the decision to their favored companies.
In June 1898, Postmaster General Smith annulled the award and ordered readvertising for new bids. He would not specify a reason why he made the decision.
In early August 1898, the Purcell Envelope Co. sought an injunction in the U.S. District Court of Washington, D.C., against Mr. Smith's action in voiding the contract. Several days later, Mr. Smith reissued the bid advertisement. The Court denied Purcell's injunction request, indicating that although acknowledging this was a valid contract, the Purcell company should seek monetary relief for damages through other court action.
The Purcell Envelope Co. did not submit a new bid for the 1898 contract, which was awarded to the Morgan Plimpton Company. A foreclosure notice against the Purcell company appeared in the Holyoke Transcript on October 20, 1898.
Lawsuits kept the corporation in existence, as there was no indication that it continued to manufacture envelopes after subcontracting its postal contract in 1894.
The Purcell Envelope Co. sued Connecticut River Paper Co. for $23,000, which it said was due. The company also sued the U.S. Government for $650,000 in damages for the bid disaster. The latter suit, initiated in 1898, resulted in a favorable outcome for the Purcell Envelope Co., as it was awarded $165,000 in 1911. However, this is not the end of the story.
The U.S. Attorney General appealed the decision, which was elevated to the U.S. Supreme Court. On March 31, 1919, the Supreme Court rendered its decision in favor of the Purcell Envelope Company. The award was paid out to the Purcell heirs, some twenty-one years after the contract fiasco erupted.
Citations:
Newspapers.com (paid subscription): Citations: Holyoke (Massachusetts) Transcript & Transcript-Telegram; Springfield (Massachusetts) Republican; Fall River (Massachusetts) Globe; Hartford (Connecticut Courant; Evening World (New York City, New York); The Morning Journal-Courier (New Haven, Connecticut); Evening Star (Washington D.C.); Buffalo (New York) Review; Washington (D.C.) Post; Brooklyn (New York) Daily Times; Pittsburgh (Pennsylvania) Daily Tribune; Fall River (Massachusetts) Daily Evening News; Great Falls (Montana) Leader; The Sun (New York City, New York); The Times (Washington, D.C.); Indianapolis (Indiana) Journal; The Kansis City (Missouri) Times; publication dates and pages are shown.
Ancestry.com (paid subscription), Price & Lee City Directories, Holyoke, Massachusetts.
Registry of Deeds, Hampden County, Springfield, Massachusetts
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