The Last Days of the South Bend Watch Company

South Bend Watch beat a monopoly that was supposed to be unbreakable. The Great Depression was a different story.

BY AARON HELMAN // POSTED FEBRUARY 17, 2026

It had taken less than 20 years for the men in charge of South Bend Watch to beat the odds and build a successful company, even in the face of massive competition. Unfortunately, it was only going to take a few wrong decisions to end it.

When soldiers came home from Europe after the First World War, they came home wearing wristwatches. The military had issued them as standard equipment, and the men who wore them in the trenches were not about to give them up. Overnight, the pocket watch — the thing that South Bend Watch had spent two decades perfecting — became an artifact. A relic. Something your grandfather wore.

The company's leadership looked at this and decided it was a fad. Pocket watches would reclaim their rightful place. They just had to wait it out.

They were wrong, of course.

But that's not what killed the company.

In 1902, two companies — Waltham and Elgin — had effectively cornered the American watch market through shared patents, aggressive litigation, and exclusivity contracts that forced jewelry stores to carry their brands or none at all. It was a monopoly in everything but the legal definition, and it had withstood even the federal government.

A Chicago jeweler named Elmer Bazzett had felt the squeeze firsthand. Blacklisted by the Watch Trust for selling competing brands, he went to South Bend and started making phone calls. The investor group he assembled reads like a local hall of fame: Clem Studebaker Jr. as president, with money flowing in from Studebaker, South Bend Lathe, Sibley Machine Tool, and a handful of other names still visible on buildings and streets around the city. One investor's son would go on to found Macy's.

The company was good from the start and brilliant before long. It encased one of its watches in a block of clear ice and displayed it outside a downtown jewelry store — crowds gathered to watch it tick. Two watches that survived the San Francisco earthquake went on display, scorched and dented and still keeping perfect time. They mailed envelopes all over the county with no address, just a sketch of a pocket watch frozen in ice. Every single one found its way home.

By 1910, South Bend Watch had released its Studebaker line of railroad-grade watches — the most precise timepieces money could buy — and sales jumped 20 percent. Jewelers locked into Trust exclusivity contracts started breaking them. The Watch Trust, which had crushed competitors for years, finally bent. South Bend Watch had done what the Sherman Act couldn't.

By 1916, workers were pulling 55-hour weeks to keep up with demand. When other South Bend factories shut down between Christmas and New Year's, South Bend Watch stayed open. In 1917, the company became the best place in town to work — generous bonuses, life insurance, a garden where workers could take food home, and unilateral hour reductions with no pay cuts. That is the kind of loyalty you don't manufacture.

 

 

Then came the wristwatch, the miscalculation, and the plan that was supposed to save them.

With pocket watch sales eroding, the company launched the Studebaker Mail Order Company — a catalog operation that started with watches and quickly ballooned to more than 1,200 products: golf clubs, screwdrivers, cookware. It was, not subtly, an attempt to become Sears & Roebuck, right down to opening a retail department store inside the unused factory space. By 1928, the watches weren't selling, but the mail order business had kept the company in the black. They opened two more retail stores in spring 1929, in Highland, Illinois and Cape Girardeau, Missouri.

Six months later, the stock market crashed.

The Great Depression didn't just slow the business down. It triggered a collapse that had been quietly building for years. Throughout the 1920s, the Studebaker Mail Order Company had extended credit to its customers — buy now, pay later, we'll collect the interest. When the Depression hit and those customers stopped paying, the company was insolvent almost instantly. There was no returning to watchmaking. Gold pocket watches were precisely the kind of purchase that vanished from household budgets in 1929 and didn't come back.

The factory closed on November 27, 1929, with a promise to reopen the following year. On January 1, 1930, the company's sales manager gave an interview to the South Bend Tribune and said it was difficult to see why anyone should be pessimistic about business conditions in 1930.

The factory never reopened. The company went into receivership in January 1932. The retail store held a going-out-of-business sale in March, and by October the assets were fully liquidated. The employees who had once shoveled snow from the factory roof out of gratitude were out of work, in a city and a country that had very few jobs to offer.

The factory building lingered for another quarter century, cycling through uses — mattress factory, drum corps rehearsal space, aircraft manufacturing facility — before it burned to the ground in 1957. Thousands came to watch.

In its time, South Bend Watch had broken a monopoly the federal government couldn't touch, built one of the finest manufacturing operations in the country, and earned a loyalty from its workers that money alone can't explain. It sold nearly a million watches. Plenty of them are still out there, still keeping time.

It just couldn't survive the debt it had built chasing a business it had no business being in.

Aaron Helman is an author, historian and adventurer from South Bend. You may have seen him around South Bend drinking coffee. Learn more about his work or check out his books at aaronhelman.com.