One of the most important subjects of discussion at these meetings with Mr. Pease was the establishment of a manufactory at Newcastle for the building of locomotive engines. Up to this time all the locomotives constructed after Stephenson's designs had been made by ordinary mechanics working at the collieries in the North of England. But he had long felt that the accuracy and style of their workmanship admitted of great improvement, and that upon this the more perfect action of the locomotive engine, and its general adoption, in a great measure depended. One principal object that he had in view in establishing the proposed factory was to concentrate a number of good workmen for the purpose of carrying out the improvements in detail which he was from time to time making in his engine; for he felt hampered by the want of efficient help from skilled mechanics, who could work out in a practical form the ideas of which his busy mind was always so prolific. Doubtless, too, he believed that the manufactory would prove a remunerative investment, and that, on the general adoption of the railway system which he anticipated, he would derive solid advantages from the fact of his establishment being the only one of the kind for the special construction of locomotive engines.
Mr. Pease approved of his design, and strongly recommended him to carry it into effect. But there was the question of means; and Stephenson did not think he had capital enough for the purpose. He told Mr. Pease that he could advance £1000--the amount of the testimonial presented by the coal-owners for his safety-lamp invention, which he had still left untouched; but he did not think this sufficient for the purpose, and he thought that he should require at least another £1000. Mr. Pease had been very much struck with the successful performances of the Killingworth engine; and, being an accurate judge of character, he believed that he could not go far wrong in linking a portion of his fortune with the energy and industry of George Stephenson. He consulted his friend Thomas Richardson in the matter, and the two consented to advance £500 each for the purpose of establishing the engine factory at Newcastle. A piece of land was accordingly purchased in Forth Street, in August, 1823, on which a small building was erected--the nucleus of the gigantic establishment which was afterward formed around it; and active operations were begun early in 1824.