The company went through a series of bankruptcies and restarts under new ownership, with watches and clocks bearing the Waltham name still being made and marketed today.Picture of the Ellery Model 1857, produced when Waltham was still named Boston Watch Company.

Prior to 1850, watches in America were generally supplied either from England or Switzerland. The idea for the Waltham Watch Company came from watchmaker Aaron Lufkin Dennison. Dennison was the son of a shoemaker, born in Maine in 1812.^[He served as an apprentice to a jeweler for three years as a youth and had come to Boston in 1833. In 1833 he became a journeyman watchmaker with the firm of Currier & Trott in Boston, leaving in 1839 to go into business for himself.

Mass production of clocks had come on line during the first quarter of the 19th century in the United States, moving from a handicraft to a factory basis; the forward-thinking Dennison hoped to apply the same principles and techniques to the making of pocket watches. This would not be his first venture, however. In 1844 Dennison started the firm that would later emerge as the Dennison Manufacturing Company, a paper box business. He found this enterprise distracted him from his dream of industrial production of watches and turned the company over to brother Eliphalet Dennison in 1849 so that he could turn his full attention to horology.

In 1849, Dennison approached Edward Howard, a clock and scale maker from Boston. Howard initially wanted to build locomotives but instead went into business with Dennison making watches. Joining Dennison and Howard in establishment of the company were fellow Bostonians David P. Davis, experienced in manufacturing, and financial angel Samuel Curtis. Initial funding of $20,000 was raised and the American Horologe Company was born. The name was quickly changed to Warren Manufacturing

Dennison, paid $1,200 a year to head the project, was sent to Great Britain by his partners to learn trade secrets and purchase supplies for the American effort. Dennison observed that the watch industry in England was not highly mechanized and believed the new American firm by he and his partners could make an impact in the watch industry.

The company began with construction of a 100-foot long brick building on land in Roxbury, Massachusetts already owned by partners Howard and Davis. Specialized machinery was designed and the flow of daily operations perfected. "The firm attracted an able staff well versed in the field of watchmaking and willing to experiment with new methods," one historian of the firm later observed.^[1]h Swiss and American watchmakers were employed.

Unfortunately, the company's first offering, an innovative model which ran for eight days without winding, was a commercial failure, being too expensive to make economically, with about 19 pieces produced. A second, more conventional model with a 36-hour power reserve was put into production and met with success in the marketplace.

In 1853 the name of the company was changed to the Boston Watch Company.

The Roxbury factory was soon deemed to be too small for efficient mass production. Dennison sought a rural locale for the new facility and the town of Waltham, Massachusetts was chosen Local residents contributed funds for land and improvements through a development company established by Dennison, the Waltham Improvement Company.^[6] One hundred acres of land were purchased and a building constructed, with operations commencing in 1854. There were 90 workers at the factory at the time of its inception, with total output of 30 watches per week.

The economics of production on this scale proved untenable. To cover the deficit in watch company operations in 1856 $6,000 in notes guaranteed by the Waltham Improvement Company were issued. The situation further deteriorated with the coming of an economic crisis in the third quarter of 1856. As the economy stalled, Waltham's watch sales plummeted. The partners contributed their personal savings in an effort to save the company, with an additional $20,000 raised by selling exclusive selling rights to Waltham watches to a large wholesale jeweler in New York City. This effort was insufficient and at the end of February 1857 the Waltham Improvement Company foreclosed on the mortgage it held for the Waltham factory. Assets were distributed in a sheriff's auction, with the Waltham property purchased by Royal E. Robbins for $56,000.

Although founder Dennison remained as superintendent of the Waltham facility until 1862, the initial phase of the Waltham Watch Company had come to an end.

New owner Royal Robbins was an experienced New York watch importer who worked a partnership with his brother Henry Asher Robbins and Daniel F. Appleton in an effort to make the Waltham Watch operation a success. All three members of this troika had extensive experience in the watch sales and the jewelry trade. Administration of the company was measured and prudent and the economic crisis of 1857 was survived.

With the coming of the American Civil War in 1861, the demand for watches expanded markedly, with soldiers in particular eager to obtain a reasonably-priced timepiece for their personal use. To meet this demand, Waltham Watch unveiled a comparatively inexpensive $13 model called the "William Ellery." This watch was a "fad" among Union soldiers and sales blossomed. By the end of the Civil War the Ellery represented fully 45 percent of Waltham's annual sales.

After the Civil War, the company became the main supplier of railroad chronometers to various railroads in North America and other countries. In 1876, the company showed off the first automatic screw making machinery and was awarded the first gold medal in a watch precision contest at the Philadelphia Centennial Exposition.

In 1885 the company name changed to the American Waltham Watch Company (AWWCo).

Waltham's profitability was greatly impacted by the Panic of 1907, which brought a rapid fall of sales and earnings. This downturn not only did not abate but actually accelerated in 1908 and 1909, leading the sons of Royal Robbins to liquidate their holdings in the company as quietly as possible, with the brothers selling nearly all of the Waltham stock which they had inherited from their father. Stockholders became aggrieved by the company's flagging fortunes and voted to terminate an existing sales relationship with the company Robbins & Appleton, an independently owned wholesale arm which contracted to dispose of the entire output of Waltham on a 6% commission. Four longtime members of the company's board of directors resigned and new directors appointed.

Board member Augustus P. Loring became the effective leader of Waltham's majority shareholders in 1910. In an economizing measure a vice-presidential position was cut and executive pay generally reduced by the new board majority. A further effort was made to infuse new blood into Waltham's management corps in an effort to break up a privileged and lethargic executive bureaucracy, although this change was met with only limited success.

The company attempted to diversify its output. Seeing a great demand in Europe as a result of the outbreak of World War I, Waltham introduced production of mechanized time fuses to control the burst of artillery shells in 1915, as well as automobile speedometers in 1916 and blood pressure gauges in 1917. Wholesale sales were taken in-house rather than being contracted out.

Waltham found itself pouring time and effort into the task of developing and improving a timing device which could absorb the shock of being fired from heavy artillery and its ability to design and manufacture conventional timepieces consequently suffered. By 1917 the American economy was booming, demand for watches was high, but Waltham was operating at full capacity, with the United States War Department calling for increased production of artillery fuses. Other American watchmakers were content limiting themselves to production of ordinary chronometers; with no experience making artillery fuses, contracts and production fell overwhelming upon Waltham's shoulders.

In the short term, Waltham prospered through its emphasis on military contracts, with sales nearly doubling between 1915 and 1918 and earnings soaring by 156%. However the easy money of military contracts papered over what one historian has characterized as an era of "wanton extravagance, gross inefficiency, and a marked lack of business foresight." With the end of the war came the Depression of 1920–1921, drying up military and consumer sales alike.

Waltham was a bloated behemoth, divided into watertight departments operated with a minimal eye to coordination and cooperation. A panel of consultants employed by management were shocked to discover 25 rival departments within the company, with "each foreman operating his department as though it were a plant in itself," determining its own production and hiring its own personnel. The company was massively overstaffed, with the consulting engineers indicating that 4,000 people were currently employed to do the work that 2,000 efficiently used workers were capable of achieving Unsold inventory ballooned to $11 million, while the company racked up $8 million in debt, while being forced to pay dividends on a substantial quantity of stock.

With the coming of price deflation in 1921, banks tightened their credit policies. Lending banks came to realize that Waltham's loans were not adequately covered by current assets. Information about Waltham's inefficient model of organization also undermined lender confidence. Waltham's external financiers worried that shutting off credit entirely might force Waltham into liquidation and default upon their original loans. A period of negotiation was begun, in which lenders successfully demanded that Waltham's management be brought under their own direct control

Regarding Waltham's management as incompetent, the First National Bank of Boston and other creditors took effective control of the company late in 1921, selecting one of their own directors, Gifford K. Simonds of Fitchburg, Massachusetts as new chief executive officer. The manager of a mid-sized family-owned sawmill for a decade, Simonds threw himself into learning the watch business, visiting every part of the plant and working three months behind a retail counter to learn about consumer preferences and expectations.

Fighting for freedom of action against entrenched interest groups, including bankers, stockholders, managers, and workers, Simonds sought to instill discipline, speed up the production process, and lay off superfluous workers, cutting payroll by 1,000. He believed that unsold inventory was severely overvalued on the company's books, leading to a write-down assets by $3 million and a dumping unsold inventory on the market. Cutting benefits and speeding up production norms, Simonds managed to reduce the production cost by 25% and to eliminate $800,000 of the company's debt by January 1923. This proved insufficient for troubled lenders, however, and in February 1923 creditors had found a new underwriter and Simonds' brief tenure drew to a close.