The Thompson Submachine Gun was developed by General John T. Thompson who originally envisioned an auto rifle (semi-automatic rifle) to replace the bolt action service rifles then in use. While searching for a way to allow such a weapon to operate safely without the complexity of a recoil or gas operated mechanism, Thompson came across a patent issued to John Bell Blish in 1915 based on adhesion of inclined metal surfaces under pressure. Thompson found a financial backer, Thomas F. Ryan, and started the Auto-Ordnance Company in 1916 for the purpose of developing his auto rifle. The principal designers were Theodore H. Eickhoff, Oscar V. Payne, and George E. Goll. By late 1917, the limits of the Blish Principle were discovered: rather than working as a locked breech, it functioned as a friction-delayed blowback action. It was found that the only cartridge currently in U.S. service suitable for use with the lock was the .45 ACP round. Thompson then envisioned a "one-man, hand-held machine gun" in .45 ACP as a "trench broom" for use in the on-going trench warfare of World War I. Payne designed the gun itself and its stick and drum magazines. The project was then titled "Annihilator I", and by 1918, most of the design issues had been resolved. However, the war ended before prototypes could be shipped to Europe.
At an Auto-Ordnance board meeting in 1919 to discuss the marketing of the "Annihilator", with the war over, the weapon was officially renamed the "Thompson Submachine Gun". While other weapons had been developed shortly prior with similar objectives in mind, the Thompson was the first weapon to be labeled and marketed as a "submachine gun". Thompson intended the weapon as an automatic 'trench-broom' to sweep enemy troops from the trenches, filling a role for which the BAR had been proven ill-suited. Contemporaneously, this concept was developed by German troops using their own Bergmann MP18 submachine guns in concert with sturmtruppen tactics.  Early use
The Thompson first entered production as the M1921. It was available to civilians, though its high price resulted in few sales. (A Thompson with one Type XX 20 shot "stick" magazine was priced at $200.00, at a time when a Ford automobile sold for $400.00.) M1921 Thompsons were sold in small quantities to the United States Postal Inspection Service (to protect the mail from a spate of robberies) and the United States Marine Corps. Federal sales were followed by sales to several police departments in the United States and minor international sales to various armies and constabulary forces, chiefly in Central and South America. The Marines put their Thompson Submachine Guns to use in the Banana Wars and in China. It was popular with the Marines as a point-defense weapon for countering ambush by Nicaraguan guerrillas and led to the organization of 4 man fire teams with as much firepower as a 9 man rifle squad. The major complaints against the Thompson were its weight, inaccuracy at ranges over 50 yards, and the lack of penetrating power of the .45 ACP pistol cartridge.
Some of the first batches of Thompsons were bought in America by agents of the Irish Republic, notably Harry Boland. The first test of a Thompson in Ireland was performed by West Cork Brigade commander Tom Barry in presence of IRA leader Michael Collins. A total of 653 were purchased, but 495 were seized by US customs authorities in New York in June 1921. The remainder made their way to the Irish Republican Army by way of Liverpool and were used in the last month of the Irish War of Independence (1919–21). After a truce with the British in July 1921, the IRA imported more Thompsons and they were used in the subsequent Irish Civil War (1922–23). They were not found to be very effective in Ireland however. In only 32% of actions where it was used did the Thompson cause serious casualties (death or serious injury) to those attacked.