The Linotype Company Limited 1889 - 1903
A syndicate, headed by Jacob Bright, radical politician and business man from Rochdale, had been formed to purchase the Patents for the Linotype machine, The Linotype Company Limited was created on the 15th July 1889 when an agreement was reached to purchase the Patents from the syndicate. The company later merged with The Machinery Trust Limited to become Linotype and Machinery Limited in 1903.
The Linotype Company Limited initially had found it difficult to raise the required capital, to purchase the Patents in order to manufacture the machines in the United Kingdom, from its initial prospectus. However, the Patent holders of the Linotype Machine agreed to payment with shares rather than cash. On placing the shares for purchase by the public a second time the Linotype Company managed to secure half of the original capital required and decided that they had enough in order to start manufacturing the composing machines.
The company had originally thought to have the machines made by contracting out the work but soon discovered this would be too costly and therefore found premises on Hulme Street, Oxford Street in Manchester which had originally been used as a cotton mill. The company had to rely on American Linotype machines initially while they set up the machine tools in the new factory. The American company continued to provide specialist mechanical support which was required by the British company as demand soon outstripped supply of the Linotype machines.
It soon became apparent that the company was providing a machine capable of composing type more cheaply than had been done before. This had the effect of making newspapers and books cheaper allowing more people to be able to afford to buy them to read. The proprietors of the newspapers were so taken by the cheap operating costs of the composing machines that they soon realised that owning shares in the Linotype Company was a sound investment.
The Linotype Company acknowledged that without having supplied a great number of machines to the Machinery Trust Ltd they would not have survived. The Machinery Trust leased composing machines and therefore, at times, found themselves with large numbers of redundant machines. As well as doing business with the Machinery Trust Ltd the Linotype Company also had a large number of shares in the Printing Machinery Company, a direct competitor of theirs. They could not afford to buy the company and therefore agreed to pay to the Printing Machinery Company a guaranteed income on the shares they had, in return for the Printing Machinery Company closing down their business premises and laying off their Agents.
In 1902 the Linotype Company had also begun to realise that having three companies competing in the same market did not make sense and therefore started discussions with The Machinery Trust Ltd and the Printing Machinery Company to merge into one company the Linotype Machinery Company Limited which they duly did in 1903.