Here is the story of the Winchester revolver and the myth.
The enduring myth began, so far as I can determine, with an article in the Gun Report in November, 1959. It is the tale that when Colt began to produce the Colt-Burgess lever action rifle in 1883, the president of Winchester called in the great firearms designer Hugo Borchardt, then a Winchester employee, and ordered him to begin development of a revolver superior to Colt's main product, the famous Colt single action. Once the new revolver was made, Winchester officials showed it to Colt and indicated that if Colt continued to make lever action rifles, Winchester would make revolvers. A deal was struck; Colt discontinued the Burgess model and never again made a lever action rifle, and Winchester never produced their revolver. It is a great story. Alas, it is at best only partly true; as usual, the real story is more complex.
In June 1872 William W. Wetmore and Charles S. Wells, former employees of Smith & Wesson, were hired by Winchester specifically to develop a revolver for them. Their first revolver, a solid frame single action, was ready in the fall of 1872, roughly contemporaneous with Colt's own development of the Single Action Army, and eleven years before Colt's introduction of the Colt-Burgess rifle. The impetus seems to have been the 1871 S&W contract with Russia, with the possibility of another large Russian contract, as well as prospective revolver sales to Turkey and Japan. The Russians may have been shown or even tested the Winchester revolver, but if so they continued to purchase from S&W.
Winchester apparently got a bit further with the Ottoman Empire. At least one of what has come to be known as the Winchester-Wetmore-Wells revolver, chambered for the .44 Henry rimfire cartridge then in use in Turkey, was sent to that country in 1877. There are reports of a number of test guns being made for Turkey, but this has not been confirmed. Regardless, Winchester's overture to Turkey so alarmed Colt's London agent that he passed his concerns on to Hartford. For whatever reason, there seems to have been no follow-up and Turkey purchased some 6400 revolvers from S&W. But Colt was in shock, apparently considering Winchester a more serious competitor than S&W, especially since the latter, by accepting huge foreign contracts, had effectively taken itself out of the domestic market.
A later version of the Wetmore-Wells revolver had an automatic ejector, patented by Wells [No. 133732, Dec. 10, 1872], by which the fired cartridge was ejected automatically when it reached the loading port. It was ingenious, but in practice never performed satisfactorily. The patent also included loading the cylinder from a kind of "clip", which apparently was not developed. Whether Hugo Borchardt was in the employ of Winchester at that point is not clear, but there is no evidence he had anything to do with any revolver development.
In 1876, the United States, full of vim and vinegar, opened its Centennial Exposition at Philadelphia, on July Fourth, patriotic spirits dampened only slightly by the loss in late June of an Army lieutenant colonel, a former brevet major general, named George Armstrong Custer.
Needless to say, Colt had a magnificent display. But Winchester also displayed drawings and samples of the Wetmore-Wells revolver. At about this time, another inventor enters the picture. Not Hugo Borchardt, who was now at Sharps, but Stephen W. Wood. Sometime in July 1876, the Wetmore-Wells-Wood trio began development of Woods' idea for a revolver with a cylinder that could be swung out of the frame for ejection and loading. This revolver was known as the Model 1876, and far from being secret, or made just to frighten Colt, it was tested by the U.S. Navy in December 1876. It is very unlikely that Colt was unaware of such a competitive product. An improved version was known to Winchester as the Model 1877.
Hugo Borchardt had left Winchester in 1874, worked independently for a time, then went to work for Sharps on June 1, 1876. If he was the inventor of the swing-out cylinder revolver, there is no evidence of it; the drawings and patents do not mention him. The only Borchardt patent for 1876 is in September, for what later became the Sharps-Borchardt rifle, understandable as Borchardt was by that time working for Sharps.
Now enters the fourth man in the Winchester revolver saga, William Mason, one of the Nineteenth Century's greatest firearms designers. He had worked at Colt and joined Winchester in 1882. We shall hear more of Mr. Mason later.
So did anyone at Winchester in 1883 "call in" Hugo Borchardt to invent a revolver to scare off Colt? It would have had to have been a loud call, for Borchardt left the country after the Sharps Company folded in 1881, and by 1883 was in Budapest, in what was then the Austro-Hungarian Empire.
So the whole story of the Colt-Winchester "deal" is myth? No, the story seems to be partly true, but it did not involve Hugo Borchardt, or a swing-out cylinder revolver, and it didn't begin quite the way the myth has it. Colt, stung by Winchester's apparent intention to get into the lucrative foreign revolver business, began in 1882 to develop a lever action rifle based on the Burgess patents. So Winchester was not responding to Colt competition by developing a revolver, Colt was responding to Winchester competition by developing a lever action rifle. But it was a tit-for-tat game, and Winchester developed plans to ruin Colt markets in both shotguns and revolvers, not by manufacturing, but by importing. Winchester brought in both double barrel shotguns, which it had marked with the Winchester name, and Webley "British Bulldog" revolvers, which it sold through its New York City Sales Depot.
The story that Winchester officials showed Colt their new revolver is reported in several sources and appears to be true, as is the story that Bennett did call in Mason (not Borchardt) and have him start development of a single action revolver. This was to be a totally new and different model from the Wetmore-Wells and Wetmore-Wood revolvers of the 1870's. Mason also developed a slide action rifle to compete with Colt's Lightning rifle, and patented it [No. 278,987, June 5, 1883]. Apparently only one sample of the Winchester-Mason revolver was made, unlike the Winchester-Wetmore-Wood revolvers that reached a semi-production stage.
Some writers believe that Winchester President William W. Converse and Vice-president T.G. Bennett were engaged in subterfuge, and never planned to actually produce the Mason revolver, no matter what Colt did. We will likely never know what revolver(s) Winchester showed Colt at their meeting, but with the Mason design Winchester did not seem to put its best foot forward. Perhaps Winchester also showed its swingout cylinder Wood design, or the experimental double action versions Mason and Wood had been working on. But the Mason gun appears to have been the one made specifically to show to Colt.
If the Mason design represented Winchester's best effort in 1883, it was a step backward, not an advance. The Mason revolver was both externally and internally a copy of the Colt single action; while it would have been competition for the Colt single action, Colt itself had more advanced revolvers on the market and in the planning stages by that time. The new Winchester gun was far less innovative and modern than the Wetmore-Wood revolvers of the previous decade. Had Winchester decided to combine the side swing cylinder of the Wetmore-Wood with a double action system, they might well have put a serious dent in Colt's revolver supremacy, or even put the "pony" out to pasture.
Jim