Philadelphia was the most important centre of machine building in mid nineteenth-century United States. What set Philadelphia apart from the rest of American mechanical engineering was the fact that its builders chose to specialise not in light machinery, often labelled the 'American System', but in heavy, custom-made machines. Big machines required large workshops, and the owners of these shops exerted a powerful influence over local and national environments. Textile machinery and steam engines led the way in the first phase of machine building. Competition from New England and Lancashire badly affected textile machinery, but steam engines thrived, making Philadelphia America's 'steam city'. Firms generated insufficient capital and, as a result, larger builders forged close business, social and familial ties with finance capital. Digby Baltzell and Philip Scranton claim that the city's merchant capitalists were reluctant to invest in local manufacturing, but such was not the case.