Niles Tool Works, 609 North Third Street, helped establish Hamilton as one of the nation's leading centers of machine tool production. Niles traced its history to two brothers, James and Jonathan Niles, who had moved to Cincinnati from their native Connecticut. Sources vary on the starting date, usually listing 1843 or 1845. The brothers began by repairing steamboats on the Ohio River, but expanded to other products. After designing their own power plant, they built steam-powered sugar mills for plantations in Louisiana. Most accounts say the Niles Works entered the machine tool business by accident.
During the Civil War, when their boat building and rebuilding business boomed, the shop needed another lathe, but none was readily available. Instead, two young employees, George A. Gray Jr. and Alexander Gordon, assumed the task.
Their success led to formation of a new Niles department devoted to machine tools. In 1866, with the Civil War ended, the Niles brothers sold their business to Gray and Gordon who formed a partnership with James Gaff, a wealthy businessman in Aurora, Ind. Gordon provided the technical expertise, Gray the business skills and Gaff the capital. Gray, Gordon and Gaff purchased the Niles name, calling their venture the Niles Tool Works to emphasize the firm's main business, the manufacture of machine tools. Their success encouraged expansion, but it had to be in a different location. The Cincinnati factory occupied land that was a logical site for a new railroad station. Hamilton civic leaders -- with initiative from Job E. Owens and William Beckett -- offered incentives, including land, stone and locally-made bricks for factory construction and free water power from the Hamilton & Rossville Hydraulic canal for a few years. In 1871 work started on a new factory facing North Third Street and extending west to North Second Street along Mill Street (north of Vine Street). A year later the Niles Tool Works began operating in Hamilton.
The firm was incorporated in 1874 with Gaff as president, Gordon as secretary and Ray as treasurer and superintendent. Expansions, changes and reorganizations followed as the company built a national and then an international reputation for quality work while surviving periodic national business slumps, called panics in the 1800s. New and expanding American industries and the westward extension of railroads were customers for Hamilton-made machine tools in the 1875-1900 period. The U. S. Army and U. S. Navy also relied on Niles for large guns and naval equipment. In 1882 Niles opened an office in Philadelphia, and others followed in New York, Chicago and Pittsburgh. Alexander Gordon, who directed operations, was a constant during several management changes and additions. Gray withdrew from the company in 1877, replaced by R. C. McKinney. Gaff died in 1878. He was succeeded by his son, James W. Gaff, also an Aurora businessman, who died in 1889. Other additions in the late 1870s were James K. Cullen in sales and George T. Reiss in engineering. McKinney, Cullen and Reiss became leading civic citizens in Hamilton as well as a strong management team for Niles Tool Works. Niles acquired companies in other cities in the U. S. and Canada, built a healthy export business and in 1899 became part of a national conglomerate, Niles-Bement-Pond Co., which became the largest machine tool company in the world. Alexander Gordon also directed the building of machine tool works in Berlin, Germany, and St. Petersburg, Russia, Machine tools include lathes, planing machines, drilling machines, slotting machines, boring machines, gear cutters and other machines designed for operating on cold metals. "Wherever machinery of any kind is built, machine tools are employed in doing the work," said Hamilton's 1891 centennial publication. "The accuracy and low cost of any kind of manufacturing in metal must therefore find its foundation in the accuracy and efficiency of the machine tools employed in the work."
In 1928, George A. Rentschler merged his Hooven, Owens, Rentschler Co. and Niles to form the General Machinery Corp. In a series of post-World War II mergers, GMC was transformed into Lima-Hamilton and finally Baldwin-Lima-Hamilton before completing relocation to Eddystone, Pa., by January 1960. (See General Machinery Corp. and Lane-Hooven House.)