In 1825 he formed a partnership with David Mason, a machinist, for the manufacture of bookbinder tools and cylinders for calico printing. Their first shop was in a small alley running north from Walnut Street above Fourth. Afterwards they moved into a shop on Minor Street, where they also began to manufacture machines of Mr. Baldwin’s invention.
The first such invention was a small upright engine adapted to the motive power of a small factory. From this success the manufacture of stationary steam engines took a prominent place in the establishment.
The plant now employed a number of young men. Baldwin felt that these needed some place where they could get instruction in science and mechanical art, so that they might become more intelligent and inventive. He talked over the matter with many other employers, and the result was the founding of Franklin Institute, the cornerstone of which was laid with Masonic ceremonies, June 8, 1824. This is still one of the active and valuable institutions of the country.
About this time Mr. Mason withdrew from the firm, Mr. Baldwin continuing the manufacture of engines.
It was in 1829–30 that steam, as a motive power on railroads, began to attract the attention of American engineers. George Stephenson had produced a successful locomotive in England. In 1830 the Camden and Amboy Railroad Company brought across the ocean a locomotive, which was kept hidden from the public eye until it should be used.
Franklin Peale, who owned the Philadelphia Museum, where up-to-date novelties were shown, wished to have a small working model of a locomotive to exhibit, and he turned to Matthias Baldwin.
The two men found out where the locomotive was kept, and visited the place. Baldwin was already familiar with the published description and sketches of engines which had taken part in the Rainhill competitions in England, but he now had an opportunity to see and measure for himself an actual engine.
Baldwin made the model, completing it January 8, 1831. It was taken to the museum and on April 25 was put in motion on a circular track made of pine boards, covered with hoop-iron. It drew two small cars, each holding four persons, and attracted great attention from the crowds who saw it. Both anthracite and pine-knot coal were used as fuel, and the steam was discharged through the smokestack to increase the draught.
The success of the model obtained for Mr. Baldwin an order for a locomotive for the Philadelphia, Germantown and Norristown Railroad Company.
This engine when completed was called “Old Ironsides” and left the shop November 23, 1832. It stood on the rails like a “thing of life.” Its light weight, between four and five tons, did not give it that tractive power necessary to draw a loaded train on wet and slippery rails, hence the newspapers of that day termed it a “fair weather” locomotive, because the notices specified that “the locomotive built by Mr. M. W. Baldwin, of this city, will depart daily, when the weather is fair, with a train of passenger cars. On rainy days horses will be attached.”