THE DEVELO PMENT OF BRITISH

INDUST RY AND FOREIG N COMPE TITION

1875-1914
 THE DEVELOPMENT OF
BRITISH INDUSTRY
AND
FOREIGN COMPETITION
1875-1914

Studies in Industrial Enterprise

EDITED BY
DEREK H. ALDCROFT
University of Glasgow

TORONTO: UNIVERSITY OF TORONTO PRESS

 FIR ST PUBLISHED IN 1968

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First published in Canada 1968 by University of Toronto Press

Reprinted in 2018
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 PREFACE

All the essays in this volume are original in the sense

that they have not been published before. I should like
to thank all the contributors for their kind co-operation
with this project. I would also like to express my gratitude
to Professor D. J. Robertson, the General Editor of the
series in which this volume appears, for his kind advice
and guidance during the course of preparing the book
for publication.

D.H.A.
 CONTENTS

PREFACE page 1

1. Introduction: British Industry and Foreign Competition, 11

1875-1914
by D. H. Aldcroft, Lecturer in Economic History, University of Glasgow

2. The Coal Industry 37

by A. J. Taylor, Professor of History, University ofLeeds

3. Iron and Steel Manufactures 71

by P. L. Payne, Senior Lecturer in Economic History, University of
Glasgow
4. The Cotton Industry 100
by R. E. Tyson, Lecturer in Economic History, University of Aberdeen

5. The Woollen and Worsted Industries 128

by E. M. Sigsworth, Reader in Economic History, University of York
and J. M. Blackman, Lecturer in Economic History, University of Hull

6. Boots and Shoes 158

by P. Head, Principal Planning Officer, Staffordshire County Council

7. The Engineering Industry 186

by S. B. Saul, Professor ofEconomic History, University ofEdinburgh

8. Electrical Products 238

by I. C. R. Byatt, Lecturer in Economics, London School ofEconomic
and Political Science
9. Chemicals 274
by H. W. Richardson, Senior Lecturer in Economics, University of
Aberdeen
10. The Glass Industry 307
by T. C. Barker, Professor ofEconomic History, University ofKent

11. The Mercantile Marine 326

by D. H. Aldcroft

BIBLIOGRAPHIES 364
INDEX 373
 CHAPTER 1

INTRODUCTION:
BRITISH INDUSTRY AND FOREIGN
COMPETITION, 1875-1914

IN the last few years the period 1870-1914 has become as popular
as the classical industrial revolution as a field for scholarly study.
This has resulted in a flood of literature, more especially in article
and monograph form, on various aspects of the late nineteenth
century economy of Britain. Much of the new work is quantitative
and analytical rather than descriptive in character and it is devoted
largely to examining movements in, and the interaction of, key
economic variables. In effect it provides a new or more dynamic
approach to the study of economic history and to a large extent it
has developed logically from the increasing attention devoted to
problems of long-term growth in the past few years. 1 Yet although
it has provided a much clearer picture, in aggregate terms, of the
pattern or course of development of the British economy in these
years, the studies themselves have thrown up many new problems
as to the particular causes or factors which determined the pattern
of development which took place.
In fact, most scholars would agree that we are now much better
acquainted with the dimensions of Britain's growth in the later
nineteenth and early twentieth centuries than we are with the factors
which determined it. 2 There is no question that in absolute terms
Britain's economic growth was quite substantial throughout this
period. Even during the so-called Great Depression most of the
major economic indices moved upwards. 8 Moreover, in the service
1 The literature is too extensive to list here and in any case many items will
be cited later on in the text.
1 Though even in this respect there is still room for disagreement. See D. J.
Coppock, 'British Industrial Growth during the "Great Depression" (1873-96):
a Pessimist's View', Economic History Review, December 1964, and ••.• a
Balanced View' by A. E. Musson in the same issue.
• A. E. Musson, 'The Great Depression in Britain, 1873-1896: A Reappraisal',
Journal of Economic History, June 1959, p. 199.
11
 THE DEVELOPMENT OF BRITISH INDUSTRY

sector, particularly in banking, insurance, shipping and distribution,

developments were probably more spectacular than they had ever
been. 1 On the other hand, recent writers have drawn attention to
the fact that rates of growth of the major economic variables were
declining in this period and that in comparison with those of other
industrial countries (more especially Germany and America) our
performance appears somewhat unsatisfactory. Certainly growth
rates were probably lower than in the first half or so of the nine-
teenth century but it would be difficult to make out a case for
continuous deceleration in economic growth during this period. 2
Rates of growth do fall off as Table I shows but the retardation or
deceleration is by no means continuous or identical for all the main
variables. For example, between the 1870s and 1880s rates of growth
of industrial production and productivity turned down whereas
total output per man-hour and real income per head rose quite
sharply. Even in the early twentieth century (1900-13), when most
of the growth rates show a decline compared with the 1890s, exports
staged a remarkable recovery. It has also been suggested that
Britain's rates of growth were lower than those of her chief com-
petitors, namely the United States and Germany. International
comparisons are difficult in this respect because of the obvious
limitations of the data, but the evidence available does tend to lend
support to this conclusion. From Table II it can be seen that in
every case Britain's long-term rates of growth were lower than those
of either America or Germany, and in some cases below those of
France.
It is incorrect therefore to speak of a continuous or steady
decline in the rate of economic growth during this period though
it is clear that there was a break in trend or climacteric in Britain's
growth rates during the later nineteenth century. The exact timing
of the break is somewhat debatable though most commentators
would probably agree that it occurred either in the 1870s or in the
1890s. This point is, however, the subject of far less dispute than
are the actual causes of the climacteric or retardation in growth.
In recent explanations of the climacteric considerable attention has
been paid to British industry and exports since these appear to have
1 The retail trade in particular was subject to vast changes in this period com-
parable to those which had taken place in manufacturing production during the
industrial revolution. See W. Ashworth, An Economic History of England, 1870-'-
1939 (1960), p. 137.
1 Cf. H. W. Richardson, 'Retardation in Britain's Industrial Growth, 1870-

1913', Scottish Journal of Political Economy, June 1965, p. 128.

12
 INTRODUCTION
TABLE I: Average Annual Rates of Growth of Selected Economic Indices
(UK)
Total
Output Real Industrial
Per Income Industrial Produc- Exports
Man-hour Per Head Production tivity
1850-60 5·1
18~70 2·5 2·9 1-1 3·2
1870-80 0·9 0·8 2·3 1·2 2·8
1880-90 3·8 3·5 1·6 0·5 2·9
1890-1900 1-3 1·2 2·8 0·2 0·4
1900-13 0·6 0·4 1·6 0·2 5·4
18~1913 1·5* 1·6 2-1 0·7 2·8
*1870-1913.
Sources: A. Maddison, Economic Growth in the West (1964), p. 232; B. R.
Mitchell and P. Deane, Abstract ofBritish Historical Statistics (1962), pp. 367-8;
K. S. Lomax, 'Growth and Productivity in the United Kingdom', Productivity
Measurement Review, August 1964, p. 6; E. H. Phelps Brown and S. J. Handfield-
Jones, 'The Climacteric of the 1890s: A Study in the Expanding Economy',
Oxford Economic Papers, October 1952, pp. 294-5; A. H. Imlah, Economic
Elements in the Pax Britannica (1958), pp. 96-8.

TABLE II: Long-term Rates of Growth, 1870/71-1913

(per cent per annum)
Total Output Per Industrial Industrial Exports
Output Man-hour Production Productivity (1880-
1913)
UK 2·2 1·5 2·1 0·6 2·2
us 4·3 2·3 4·7 1·5 3·2
Germany 2·9 2·1 4·1 2·6t 4·3
France 1·6 1·8 3·1* n.a. 2·6
• 1880--1913. t Rough estimate only.
Sources: Output and export data based on A. Maddison, Economic Growth in
the West (1964), pp. 201, 232, and 'Growth and Fluctuation in the World Eco-
nomy, 1870--1960', Banca Nazionale de/ Lavoro, June 1962, p. 185. Industrial
production and productivity data calculated from: (for UK} K. S. Lomax,
'Growth and Productivity in the United Kingdom', Productivity Measurement
Review, August 1964, p. 6, and E. H. Phelps Brown and S. J. Handfield-Jones,
'The Climacteric of the 1890s: A Study in the Expanding Economy', Oxford
Economic Papers, October 1952, pp. 294-5; (for us) J. W. Kendrick, Productivity
Trends in the United States (1961), p. 465; (for Germany) P. Jostock, 'The Long-
term Growth of National Income in Germany', Income and Wealth, ed. S.
Kuznets, V (1955), p. 103, and D. J. Coppock, 'The Climacteric of the 1890s:
A Critical Note', The Manchester School, January 1956, p. 24; (for France) S. J.
Patel, 'Rates of Industrial Growth in the Last Century, 1860--1958', Economic
Development and Cultural Change, April 1961, p. 319.
13
 THE DEVELOPMENT OF BRITISH INDUSTRY

been the weakest components of the economic structure, though it

may be that this merely reflects the fact that more is known about
these particular sectors of the economy. Phelps Brown and Hand-
field-Jones, for example, in their pioneering article in 19521 attri-
buted the check to real income to the falling off in the rate of
growth of industrial productivity, which in tum they argued was
due to the ending of the massive application of one or two major
innovations, notably steam and steel. A similar line has been taken
by Richardson, who argues that a 'discontinuity in the flow of
major innovations' was the chief causal factor in the retardation in
industrial growth. 2 Meyer and Coppock on the other hand focus
their attention on the export trade. Meyer has argued that the
decline in British export growth in the last quarter of the nineteenth
century was more than sufficient to account for the slower rate of
growth in these years. 3 Coppock's argument is basically similar
though slightly more complex. The sequence runs as follows: if
exports are regarded as an autonomous variable then the decline in
the rate of growth of exports explains a decline in the rate of
production and in the required rate of investment. And given a
reduction in the rate of investment, a decline in the rate of growth
will follow. In short he says the decline in productivity in the UK
after the 1870s and its low level compared with the United States
and Germany is to be found in the low rate of capital accumulation
in industry brought about by a check to the growth in exports. 4
Not all would agree, however, with the causal sequence of this
argument. Kindleberger, for instance, maintains that the hypothesis
is incorrect since it assumes that the pattern of exports would
remain unchanged, and concludes that the line of causation runs
from the economy to exports rather than the other way round. 6
Yet other writers have stressed the slowing down of technical
progress.in industry and the shortcomings of British entrepreneurs}'
1 E. H. Phelps Brown and S. J. Handfield-Jones, 'The Climacteric of the 1890's:
A Study in the Expanding Economy', Oxford Economic Papers, October 1952.
2 Richardson, foe. cit., p. 148.
1 See 'An Input-Output Approach to Evaluating British Industrial Production
in the Late Nineteenth Century' in A.H. Conrad and J. R. Meyer, Studies in
Econometric History (1965).
'D. J. Coppock, 'The Climacteric of the 1890's: A Critical Note', The Man-
chester School, January 1956.
5 C. P. Kindleberger, 'Foreign Trade and Economic Growth: Lessons from

Britain and France, 1850-1913', Economic History Review, 1961, pp. 293-8.
• See D. H. Aldcroft, 'The Entrepreneur and the British Economy, 1870-1914',
Economic History Review, August 1964, and 'Technical Progress and British
Enterprise, 1875-1914', Business History, July 1966. See also D. S. Landes,
14
 INTRODUCTION

The above by no means exhausts the list of possibilities and, of

course, the debate still continues. 1 It would be inappropriate, how-
ever, to try and resolve the arguments here. But it is important to
draw attention to them since they cover problems or aspects of the
British economy which were not unfamiliar to informed contem-
porary observers. After all, the Victorians themselves began the
debate about the late nineteenth century economy; and although
contemporary spokesmen were never in a position to make the
sophisticated statistical analysis performed by economists and eco-
nomic historians of today, they were nevertheless acutely aware of
the fact that the British economy was not functioning as smoothly
or dynamically as it had done in earlier decades and that economic
progress appeared to be somewhat slower than in either Germany
or America. Again, however, it was British industry and the export
trade in particular which provided the chief centre of attention.
In fact, contemporaries saw the shortcomings of the British
economy largely in terms of industry and trade, and as a result
British businessmen and traders bore the brunt of the critical
attacks made by writers in the national press, in the trade journals
and in the flood of books and articles devoted to matters of trade
and industry. Even industrialists who sat on official government
committees or commissions signed reports which made derogatory
remarks about their business colleagues. The backsliding of the
economy, it was argued, could be ascribed largely to the fact that
British industrialists lacked the drive and energy of their fore-
fathers, and as a result, foreign rivals were stealing a march over
them. 2 Particular attention was paid to the way in which the
Germans and Americans were encroaching upon Britain's overseas
markets and even, for that matter, upon the domestic market. It
was realized, of course, that as new industrial powers matured
Britain's former commercial monopoly was bound to come under
'Technological Change and Development in Western Europe, 1750---1914', esp.
p. 458 et seq. in Vol. VI of The Cambridge Economic History of Europe, ed. H.J.
Habakkuk and M. M. Postan.
1 There is a useful summary of the current debate in C. Wilson, 'Economy
and Society in Late Victorian Britain', Economic History Review, August 1965.
1 One example will suffice. Shadwell, concluding his two-volume survey on
Industrial Efficiency, wrote: 'England is like a composite photograph, in which
two likenesses are blurred into one. It shows traces of American enterprise and
of German order, but the enterprise is faded and the order muddled. They com-
bine to a curious travesty in which activity and perseverence assume the expres-
sion of ease and indolence. The once enterprising manufacturer has grown slack,
he has let the business take care of itself, while he is shooting grouse or yachting
in the Mediterranean.' A. Shadwell, Industrial Efficiency, Vol. II (1906), p. 453.
15
 THE DEVELOPMENT OF BRITISH INDUSTRY

attack; nor were contemporary observers wholly uncritical of the

so-called sharp practices of the foreigner. Such captions as the
'German Peril', the 'German Menace' or the 'American Invaders'
were hardly meant to be laudatory. Yet at the same time there was
in this country a sneaking admiration for the apparent ability and
dynamic qualities of the foreign businessman and a general feeling
that our industrialists fell short of his standards of performance
and achievement. 1
If foreign industrialists were admired they were not, however,
liked by the British public who sought in an indirect way to avenge
their animosity by attacking the British industrialist for not match-
ing up to his rivals across the water. In other words, the literature
which was written was basically self-critical and was meant to act
as a warning to the industrialist that if he did not wake up Britain
would soon become a second rate economic power. Stinging attacks
were launched in books such as E. E. Williams's Made in Germany
(1896), McKenzie's American Invaders (1902) and Shadwell's Indus-
trial Efficiency (1906) and in numerous articles in the national press
and journals, the most famous of which was the 'Crisis in British
Industry' published in The Times in 1902. Even foreign writers
joined in the campaign, the most notable being the economist
Thorstein Veblen, whose book Imperial Germany and the Industrial
Revolution (1915) contained a section devoted to examining the
deficiencies of British businessmen. Much of the writing was
journalistic in style and not without a certain amount of prejudice
since many of the authors were bent on pressing home their par-
ticular points of view. Yet their judgments were by no means
entirely inaccurate since even the more scholarly and analytical
accounts contained similar conclusions. For example, Alfred Mar-
shall in his Industry and Trade (1919) expressed disquiet about
certain features of British industry and issued judgment against the
British businessman.
There could hardly fail to have been an element of truth in what
was said at the time since informed opinion was almost unanimous
on the question. Wherever one looks-be it in the national press,
the trade journals, consular reports or government committee
reports-the same comments can be found. Industrialists sought to
defend themselves from these attacks though not always very suc-
cessfully. In some respects, however, it was perhaps a little unfair
1 See D. E. Novak and M. Simon, 'Commercial Responses to the American

Export Invasion, 1871-1914: An Essay in Attitudinal History', Explorations in

Entrepreneurial History, Winter 1966.
16
 INTRODUCTION

that the burden of responsibility for the apparent shortcomings of

the British economy should have been placed entirely on the indus-
trialists' shoulders since it was not always clear exactly what they
were being blamed for. Critics confined their attention largely to
trade issues since they were alarmed at the way in which Britain
appeared to be losing customers and markets to foreign rivals. But
at the same time no one could say precisely what our overall losses
were in relation to the gains of other countries. Nor was it possible
to state in aggregate quantitative terms how the British economy
was making out in comparison with the performance of other
industrial economies. Even contemporary economists, whose atten-
tion was focused on marginal analysis and value theory, which,
with its assumptions of static technology, tastes and resources, did
not depend on economic time series for its content, found, as
Kendrick has observed, that they were sometimes handicapped or
misled by the lack of precise quantitative data in an aggregative
form. 1 Yet though much of the raw material for making the neces-
sary calculations was available, economists made little attempt to
fill the statistical gap. It is not surprising, therefore, that in the
absence of such numerical data judgments made about the working
of the economy tended very often to be impressionistic rather than
analytical, and statistical data, what there was of it, was smothered
by a welter of literary verbiage.

II

Was foreign competition in industrial and manufactured products

as severe or as extensive as contemporaries often alleged? It is
difficult to obtain a balanced view of the situation from the rather
impressionistic accounts of the Victorians, though in some respects
their assessment of the position was not very wide of the mark.
They were correct, for example, in assuming that competition
prevailed in most markets, including the domestic market, and that
America and Germany were Britain's most powerful and successful
rivals in the commercial field. The following comments are intended
to give some idea of the dimensions involved.
As far as British exports were concerned there was little ground
for undue complacency. Although the export component of the
British economy still remained substantial in these years, the growth
of manufactured exports was less rapid than that of either Germany
or America or the average for the world as a whole. These two
1 J. W. Kendrick, Productivity Trends in the United States (1961), p. 4.
17
 TABLE 111: Exports from UK and Other Industrial Countries, 1899-1913
(million dollars at 1913 prices)
Exports from: Exports to: -,J
Industrial Semi-Industrial :r:m
Countries Countries Rest of Worldt Total
Manufac- All Manufac- All Manufac- All Manufac- All t,
Exports tures Exports tures Exports <m
tures Exports tures
m
t"-
UK 1899 479 912 477 544 371 522 1,327 1,978 0
1913 624 969 810 927 526 660 1,970 2,556 ."ej

Per cent increase 30·3 6·3 69·8 70·4 41·8 26·4 47·7 29·2 a::
m
z-,J
- Germany 1899 437 691 75 84 270 346 782 1,121
1913 925 1,285 227 238 574 882 1,726 2,405 0
>!j
00
Per cent increase 111-7 86-0 202·7 183·3 112·6 154·9 120·7 114·5
=
....
:.0:,
United States 1899 272 1,366 83 113 68 182 423 1,661
1913 535 1,850 137 246 174 388 846 2,484 ....-,J
V,
Per cent increase 96·7 35·4 65·1 117·7 155·9 113·2 100·0 49·6 :r:
....
Total• 1899 1,923 4,660 732 863 1,021 1,483 3,677 7,006 z
t,
1913 3,248 6,761 1,456 1,723 1,793 2,746 6,497 11,230 c:::
Per cent increase 68·9 45-1 98·9 99·7 75·6 85·2 76·7 60·3 V,
-,J
~
,<
• Includes UK, us, Canada, Japan, India and the major West European countries. t Includes Russia.
Source: A. Maizels, Industrial Growth and World Trade (1963), pp. 428-9, 432-3.
 INTRODUCTION

countries accounted for a large proportion of the increase in world

trade in manufactured products. Between 1899 and 1913, for
example, America and Germany accounted for nearly one-half of
the increase in exports of manufactured products from the major
industrial countries (see Table III). It is true that the absolute
increase in the volume of British exports of manufactured goods
was quite substantial, but as Table III shows, the percentage
increase in Britain's exports to the three main groups of markets
was far less than either the American or German. Britain's per-
formance in the markets of industrial countries was particularly
disappointing, especially in comparison with Germany. The latter
more than doubled her exports of manufactured products to this
group of countries (as against an increase of less than one-third for
Britain) and by 1913 her total exports to these markets exceeded
those of Britain by nearly one-third. The comparison is even more
invidious to Britain if all exports are taken as the basis of measure-
ment.
Clearly Britain was finding it difficult to penetrate the rich and
rapidly expanding markets of industrial Europe and America. In
part this could be explained by the spread of tariff protection in
these countries, but the chief factor was undoubtedly the increasing
competition British goods faced from both domestic and foreign
producers. In the American market, for example, Britain's com-
petitive losses were substantial especially between the 1870s and
1890s when exports in almost every major category of manufac-
tured goods fell substantially. Only part of this loss can be attri-
buted to competition from American producers since over the
period 1872-74 to 1911-14 exports from industrial Europe to
America rose by over 80 per cent. 1 Moreover, the fact that other
industrial countries were able to increase their share of the
American market suggests that it was competition rather than
tariff protection that was the major cause of Britain's trade losses
in these markets.
Britain's trade setbacks were by no means confined to the richer
markets. In the more underdeveloped areas of the world Britain's
export performance was weakening under the impact of foreign
competition. Some of Britain's traditional customers were beginning
to produce the goods they had once bought from Britain; the most
notable example was the growth of cotton textile mills in many
primary producing countries. But to a large extent it was the sale
1 S. B. Saul, 'The Export Economy, 1870--1914', Yorkshire Bulletin of Econo-
mic and Social Research, May 1965, p. 6.
19
 THE DEVELOPMENT OF BRITISH INDUSTRY

of German and American products rather than the growth of

domestic production which presented the major competitive chal-
lenge in these markets. Germany, in particular, was extremely
successful and by 1913 she was exporting more than Britain to the
primary producing countries (Rest of World, see Table III). Only
in the markets of the semi-industrial countries did Britain continue
to maintain a substantial lead and even this was being challenged
by the early twentieth century. The Germans and to a lesser extent
the Americans were, it would appear, just as adept at gaining entry
to the more underdeveloped countries where traditional goods were
most in demand as they were in exploiting the protected markets
of Industrial Europe and America.1 Thus in a group of fifteen
manufactures, British exports to protected foreign markets in-
creased by 44 per cent between 1895 and 1907 whilst those of
Germany and America rose by 125 and 500 per cent respectively.
The same exports to identical markets in the British Empire regis-
tered an increase of 91 per cent for Britain as against 129 and 359
per cent for Germany and the United States. During this period
American manufactured exports secured a firm foothold in some
of the Empire countries, and by 1913 America was slightly ahead
of Britain in the West Indian market whilst her exports to British
North America were nearly three times greater than those of this
country. 2 Similarly, whilst German exports to Europe rose faster
than those of Britain from the early 1890s onwards, and by 1913
Germany was selling more to nearly every European country and
to America than Britain, she was also expanding her trade more
rapidly with many underdeveloped countries, e.g. Russia, Rou-
mania, Serbia, Greece, Spain, Portugal, Turkey and Latin America. 3
Here Britain found it increasingly difficult to compete not only with
Germany's liberal credit-loan arrangements but also with the
latter's ability to introduce inexpensive merchandise to meet local
demands.
The penetration of foreign competitors into the markets of the
British colonies or Empire countries is significant since it was here
that British goods were accorded some degree of preference. The
extent of foreign competition should not be exaggerated, however.
1 A pioneering work by Hoffman in the early 1930s showed how extensive
German competition was in some of the underdeveloped countries. See R. J. S.
Hoffman, Great Britain and the German Trade Rivalry, 1875-1914 (1933).
• R. H. Heindel, The American Impact on Great Britain (1940), pp. 143, 164,
167.
1 Hoffman, op. cit., p. 130 et seq.

20
 INTRODUCTION

True, the colonial territories were steadily increasing the proportion

of their imports which came strictly from foreign markets during
this period. Even as early as 1894 one-third of the total colonial
imports were said to be of non-British origin as against one-quarter
ten years earlier. Moreover, by the end of the nineteenth century
38 per cent of all colonial imports were affected by foreign com-
petition to some degree. 1 But in actual fact, apart from one or two
exceptions such as America's domination of the Canadian market,
the share of colonial imports derived from any one of Britain's
chief commercial rivals was generally fairly small. Even Germany,
reckoned to be the most serious rival in these markets, contributed
only a very modest proportion, the value of her export trade to the
British Colonial and Dominion countries being less than 5 per cent
of the UK's at the end of the nineteenth century. In many colonial
areas German competition was very slight indeed, and even in
those areas where it was important, such as Australia and the Cape
Colony, the volume of trade was still well below that of the British.
Of course, foreign participation was increasing all the time, but
even by 1914 it could hardly be said that Britain had lost a great
deal of her Empire trade to foreign competitors.
It is clear then that British exporters found trade conditions
much less favourable in the later nineteenth and early twentieth
century than they had been earlier. The degree of competition in
manufactured exports varied a great deal between products and
regions but the overall effect was to reduce Britain's share of world
trade substantially. By 1913 her share of world exports in manu-
factured goods had fallen to 29·9 per cent as against 41 ·4 per cent
in 1880. Over the same period the German share had risen from
19·3 to 26·5 per cent and the American from 2·8 to 12·6 per cent.
Moreover, in nearly every major commodity group except drink
and tobacco and other :finished goods Britain's share of exports fell,
in some cases substantially, over the period 1880-1913. 2 One
should be careful not to exaggerate the position, however. In 1913
Britain was still the largest exporter in the world, though only by
a small margin, whilst her share of total world exports fell much
less dramatically in this period than that for manufactured com-
modities. 3
1 Ibid., p. 198.
2 For details see Saul, Toe. cit., pp. 12-13.
• From 16.7 to 13.9 per cent, 1885-1913. See A. Maddison, 'Growth and
Fluctuation in the World Economy, 1870--1960', Banca Nazionale de! Lavoro
Quarterly Review, June 1962, p. 161.
21
 THE DEVELOPMENT OF BRITISH INDUSTRY

The evidence suggests that Britain's relative trade losses were

largely due to competitive factors rather than to shifts in the com-
modity and area composition of trade. According to Maizels's
calculations Britain lost $380 million worth of trade in manufac-
tures between 1899 and 1913 nearly all of which could be attributed
to changes in market shares. On the other hand, most other indus-
trial countries increased their market shares in this period. Germany
in particular gained $330 million of trade through an improvement
in her competitive position. 1 Given the industrialization of new
nations and strengthening of tariff barriers especially in the richest
markets, it was partly inevitable that Britain should lose the pre-
dominant position she had held as a trader in the 1860s and 1870s.
But the inevitability argument can be stretched too far. It is highly
improbable, for example, that tariffs were a major factor in Britain's
trade losses. Certainly they created less favourable trading oppor-
tunities and at times, as with the McKinley tariff in America in the
early 1890s, they caused a sharp drop in the exports of certain
commodities. But overall tariffs had only a marginal effect on the
volume of British trade since they were rarely raised to prohibitive
levels. In any case the restrictive effect of tariffs was considerably
modified by virtue of the fact that Britain concluded a whole series
of trade agreements with foreign countries, nearly all of which
contain the most favoured nation clause. 2 Moreover, the fact that
other industrial nations, particularly Germany and America, were
able to cope more successfully with tariff barriers suggests that
there is more to the argument than this. It is true, of course, that
tariff protection provided some countries with a useful bargaining
weapon and allowed them to discriminate in their pricing policies
in favour of exports. But the evidence on this matter is far too
slight and fragmentary for it to have been anything other than a
minor factor in Britain's trade losses. 8
On the other hand, ignoring the question of tariffs for the
moment, it might be questioned whether all Britain's trade losses
can be attributed simply to the emergence of new industrial com-
petitors. Obviously this was a powerful factor, but this is no reason
1 A. Maizels, Industrial Growth and World Trade (1963), p. 200, Table 8.5.
1 By 1914 eighty British trade treaties were in force, all of which contained an
unconditional most favoured nation clause. F. Benham, Great Britain under Pro-
tection (1941), p. 5.
1 Price discrimination between products sold in the home and export markets
was used most extensively in Germany but even here the proportion of exports
affected was quite small, and only in a few cases were high tariffs necessary to
prevent reimportation of very low-priced exports.
22
 INTRODUCTION

to ignore completely any possible alternative explanations. There is

much to commend the suggestion that in part Britain's trade diffi-
culties were self-generated, that is they stemmed from internal
deficiencies within her own industrial structure. A country whose
industrial structure is narrowly based on a few traditional industries
is obviously going to be more restricted as regards trading oppor-
tunities, especially if the pattern of demand changes, than a country
whose structure is diversified over a wide range of industries. There
is no question that Britain falls into the first category. In 1907
three industries, coal mining, iron and steel and textiles, accounted
for 46 per cent of the net industrial output and supplied 70 per
cent of all exports. Moreover, initially at least the exports of these
industries had accounted for a very high proportion of the world
market in these products. Given such conditions, Britain's rate of
export growth was almost bound to decline, for as Kindleberger
has pointed out 'an exporter with 75 per cent of the world market
in a commodity, as the British had at various times in cotton tex-
tiles, iron rails, galvanized iron, tinplate, locomotives, ships, coal,
can have no expectation of maintaining it'. 1 Even within individual
industries the export base was sometimes extremely narrow. In the
iron and steel industry, for example, galvanized and tinplate sheets
accounted for 40 per cent of the growth of iron and steel exports
in the decade prior to the first world war. 2 This structural over-
commitment might not have been so bad had it not been centred
on industries whose export growth potentialities were beginning to
wane or had there been a more vigorous growth of newer industries
with promising export prospects. The result was that in comparison
with Germany and the United States, a higher proportion of
Britain's trade in manufactures was concentrated in declining
export sectors with a correspondingly lower proportion in the
most rapidly expanding groups. 3 This imbalance was paralleled in
the market structure of Britain's exports. In 1913 roughly two-
thirds of Britain's total exports went to what were essential primary
producing countries. This market concentrrtion might, of course,
be attributed to the fact that Britain was seeking salvation in
Empire countries where tariffs favoured British goods. But the fact
that the share of Britain's exports to Empire countries remained
1 Kindleberger, loc. cit., p. 295.
• Saul, foe. cit., p. 15.
• I. Svennilson, Growth and Stagnation in the European Economy (1954), pp.
294-5. Also H. Tyszynski, 'World Trade in Manufactured Commodities, 1899-
1950', The Manchester School, September 1951.
23
 THE DEVELOPMENT OF BRITISH INDUSTRY

fairly stable in this period, apart from the 1870s, and was the same
in 1913 as it had been in the 1850s when foreign competition was
far less acute, would seem to negate this hypothesis.
Nor were structural defects the only internal factor affecting
Britain's weakening export situation. It can be argued that the
export position could have been strengthened had some of the
traditional export-orientated industries improved their efficiency.
This is not to suggest that the latter industries could in any way
have compensated fully for the lack of a more diversified industrial
structure for, as we have already pointed out, there was clearly a
limit to the volume of exports which could be squeezed out of any
one industry. Nevertheless, there were cases where an improve-
ment in efficiency and a concomitant reduction in costs might well
have brought about an expansion of the market. The steel industry
provides a good illustration of this point. Temin has argued that
had costs of production in the British steel industry been lower
(that is lower than the German)-and this is certainly a feasible
proposition given the technical backwardness of the steel industry
at this time1-it would probably have increased the production of
steel in Britain by roughly 20 per cent of the world trade in steel,
or about 2·4 million tons. One half of this amount would have been
derived from an increase in Britain's share in exports to markets in
which Britain and Germany competed and the remainder from a
reduction in British imports. 2 This, of course, makes no allowance
for that part of the American steel trade Britain might have cap-
tured had costs been lower. Even with this improvement the steel
industry's growth would have been less rapid than that of the
German and American; nevertheless it does suggest that export
growth was not conditioned solely by external factors. Whether
there was the same scope for other industries to raise their exports
by lowering costs is difficult to say, but the example of steel does
lead one to suspect that there were possibilities for improvement in
this direction. 3
Whilst not wishing to deny that the growth of foreign competition
1 A useful international comparison of costs, prices and techniques in steel is
given in T. Orsagh, 'Progress in Iron and Steel, 1870-1913', Comparative Studies
in Society and History, January 1961.
1 P. Temin, 'The Relative Decline of the British Steel Industry, 1880-1913',
p. 148, in H. Rosovsky, Industrialization in Two Systems (1966, New York).
1 Or alternatively export selling methods could possibly have been improved.
There is certainly much contemporary evidence to suggest that British indus-
trialists and traders were deficient in this respect, though exactly what effect this
had on our ability to compete is anybody's guess.
24
 INTRODUCTION

was the chief factor responsible for Britain's trading difficulties it

would be pointless to ignore the fact that internal weaknesses in the
industrial structure were also partly to blame. Whatever their
relative importance there is no doubt structural overcommitment
together with a delay in some cases in introducing cost reducing
innovations were factors which affected British industry's ability to
compete. There is a third relevant possibility, namely the slow
growth of the domestic market. Saul has recently questioned the
independent role often ascribed to exports and suggests that more
emphasis ought to be placed on the impact of growth upon exports
on the grounds that a buoyant home market provides the basis for
a flourishing export trade. 1 Not all theorists will agree with this
line of reasoning and in practice conditions do vary a great deal.
In the short term at least it is more than probable that a vigorous
demand at home will retard the growth of exports. But it is cer-
tainly feasible to suggest that in some cases, particularly where the
development of new products is concerned, a slowly growing home
market may retard the development of the export sector. It is quite
possible, for example, that the domestic market for electrical pro-
ducts was insufficient to provide the industry with an adequate
basis for exports in this period. A much more debatable proposi-
tion is the question whether the home market as a whole was in
any way responsible for the slow export growth. In effect this brings
us back to the causal relationship between growth and exports
discussed earlier and we make no claim to be in a position to
provide a definite answer to this problem.
A brief glance at the growth of foreign competition in the home
market does, however, provide some clues as to the relative strength
or weakness of British industry as a whole. Between 1870-74 and
the early years of the twentieth century the share of imports of
:finished consumer goods in the total consumption of finished goods
rose from 9·5 to 20 per cent whilst manufactured imports accounted
for an increasing proportion of the total import bill.2 The most
intense phase of competition occurred in the 1890s and early 1900s
during which time Britain probably received a greater increase in
foreign manufactures than any other industrial nation. To contem-
poraries these were the years of the real American and German
commercial invasions when increasing quantities of iron and steel
1 Saul, Joe. cit., pp. 11-12.
1 Based on data in J.B. Jefferys and D. Walters, 'National Income and Expen-
diture of the UK, 1870-1952', in Income and Wealth edited by S. Kuznets, Vol.
V (1955), p. 27.
25
 THE DEVELOPMENT OF BRITISH INDUSTRY

goods, sugar, chemicals, textiles, paper, shoes, glass, china and

earthenware and cereals to name only a few, flooded into the
British market. If contemporary emotions led to an exaggerated
view of the extent of foreign competition, there was no question as
to its existence.
Admittedly the British market was a relatively easy one to
conquer given the free trade policy, whilst some foreign suppliers
no doubt employed discriminatory pricing policies and other unfair
commercial devices to boost their sales abroad. Moreover, not all
imports were pure substitutes for goods manufactured in Britain.
Some goods were imported, e.g. certain classes of machine tools
and electrical products, simply because, for one reason or another,
they were not made in this country. But it is unlikely that these
factors alone can account for the rapid expansion in the volume of
imported manufactures. By far the larger part consisted of basic
goods such as textiles, iron and steel, chemicals and engineering
products all of which were or could have been produced at home.
Under certain circumstances imports of manufactures may serve a
useful function insofar as they indicate the scope or extent of the
market which remains untapped by domestic manufacturers. But in
an advanced economy such as Britain's they served little useful
purpose except that of satisfying consumer demand and in essence
they merely reflected the weakening position of home producers
vis a vis their foreign rivals.
It does not follow, of course, from what has just been said that
Britain's trade losses can be attributed simply to the deficiencies of
British businessmen. This may well have been an additional factor
aggravating the situation, but undoubtedly the major cause was
the emergence of new and powerful industrial nations with an
increasing propensity to export. In addition, many smaller less
industrialized countries, e.g. Japan, were becoming self-sufficient in
certain fields of economic activity and thereby ousting British goods
from their markets. But it is important to realize there is more than
one side to the problem and that undue reliance on the forces of
inevitability may be at times somewhat misleading.

III

The above comments have only provided a very general picture of

the main economic trends in the period from the early 1870s to the
outbreak of the First World War and to a large extent attention
has been focused on the question of competition. Naturally any
26
 INTRODUCTION

overall view of this nature is bound, at times, to be somewhat mis-

leading or unrepresentative in terms of particular industries, pro-
ducts and regions, but its chief purpose has been to provide a brief
sketch of the economic framework within which industrialists
operated and to outline some of the issues which have been the
subject of debate both among contemporaries and later observers.
If we have raised certain questions without always providing the
final answers, this is not altogether unintentional since it would be
improper to prejudice the reader's mind before he has had a chance
to consider carefully the individual studies in this volume. The
remainder of this Introduction, therefore, will be devoted to making
some general observations based on the findings of the contributors.
No attempt will be made, however, to summarize the developments
in each industry separately.
First, however, it would seem to be appropriate to say a few
words about the scope and aims of the project as a whole. The
range of industries covered in this volume is a fairly wide one and
collectively the studies may be regarded as a reasonably representa-
tive sample of British industry as a whole. Obviously many indus-
tries have been excluded from the survey, not necessarily because
they were of no importance but largely because it would have been
impracticable to include every industry within one single volume
whilst at the same time allowing contributors to discuss their par-
ticular subjects in any reasonable depth. The basis of selection was
not entirely arbitrary however. Clearly the most obvious starters
were the basic industries such as coal, cotton and iron and steel,
together with the more important of the newer, potential growth
industries as, for example, chemicals and electrical manufactures.
Ultimately, however, it was the general theme of the volume which
tended to determine which industries should be included. Thus it
was those industries which were affected in some way by foreign
competition or industrial developments abroad in the period 1875
to 1914 that provided the chief criterion for selection. Hence on
these grounds alone such industries as building and the railways
could easily be excluded whilst for the same reason the engineering,
footwear, glass, woollen and shipping industries secured representa-
tion. The most significant omissions are the paper industry, timber
products (especially furniture) and agriculture.
Each contributor has surveyed the main developments in his
particular industry within the context of the general theme of
foreign competition. In most cases reference has been made to a
number of key issues; these include (a) the extent of foreign com-
27
 THE DEVELOPMENT OF BRITISH INDUSTRY

petition in both home and overseas markets, (b) the effect of this
competition on the industries in question and the reactions of
British industrialists and (c) the wider question as to whether foreign
competition revealed any weaknesses in the competitive ability of
British industry, or in short whether British industrialists were as
efficient as their foreign counterparts. Obviously it was impossible
for all contributors to adhere rigidly to these particular aspects
since in the first instance it was the particular characteristics of the
industries and the availability of material relating to them which
usually determined the way in which the subject matter was treated.
Nevertheless, there is sufficient common ground in the way in
which each industry has been approached to enable some general
conclusions to be drawn on the issues listed above.
Generally speaking, foreign competition increased throughout
this period in most industries, though it was probably most intense
between the early 1890s and the turn of the century, whilst in the
years prior to War I it tended to slacken off. They were, however,
considerable variations in the degree to which each industry was
affected. For the boot and shoe industry foreign competition was
predominantly, though not entirely, a domestic problem associated
with the American invasion of the home market in the late nine-
teenth and early twentieth centuries. On the other hand, as far as
the coal, cotton and shipping industries were concerned, the
domestic market was hardly affected by foreign competition and
even abroad it was rarely very serious except in one or two mar-
kets. In contrast the iron and steel, glass and woollen industries
faced severe competition from foreign producers both at home and
abroad. Britain lost her former pre-eminence in iron and steel
during this period. Her share of the world's output and trade in
iron and steel manufactures declined sharply and by 1913 Britain
had become the world's largest importer of these products. At that
date imports of iron and steel were equivalent to 45 per cent of
her exports compared with 8 per cent in 1875. Yet in comparison
with the glass industry the iron and steel manufactures probably
did not fare too badly. Even as early as the 1870s imports of glass
exceeded exports by a substantial margin and by the early twentieth
century the unfavourable balance had increased to over £1 million.
The value of exports in 1907 amounted to roughly one half the
works value of glass produced whilst the value of net imports was
equivalent to nearly two-thirds of the home production.
Industry-wide generalizations are apt to be somewhat misleading
however, since the impact of foreign competition often varied con-
28
 INTRODUCTION

siderably between different sectors of the same industry. The flint

branch of the glass industry, for example, was affected much more
severely than either the fiat or bottle glass sections. Similarly in
the woollen and worsted industry it was the latter sector which was
particularly vulnerable to foreign competition both in the home
and overseas markets. In fact, Britain's overall export performance
in woollen products was better than that of her closest rivals and,
to a large extent, this was because the setback in worsted exports
was compensated for by an improvement in the woollen branch
especially in the latter half of the period.
Sectoral differences were equally sharp in the chemical and
engineering industries. Although for most of the period chemical
exports grew more slowly than total exports and national income
whilst chemical imports rose faster than total imports and national
income, the chemical industry had its dynamic sectors and on
balance it remained a net exporter. Britain's main strength lay in
fertilizers, soap and heavy inorganic chemicals in which she was
often an equal match for her main competitor Germany. But in
most organic chemicals such as dyes, perfumes and photographic
chemicals British producers were easily outclassed by German com-
petition. The position is somewhat more complex with regard to
the engineering industry on account of the fact that it consists of
so many virtually independent branches. Electrical engineering was
probably the weakest and most vulnerable sector though even here
some branches, such as cable making, were fairly competitive. For
most of the period Britain maintained a favourable balance of
trade in electrical products though it should be emphasized that
this was thanks largely to the efforts of the foreign firms located in
Britain. Essentially the British electrical industry was an offshoot
of the American and German industries with an important fringe
of domestic manufacturers producing the less sophisticated types of
equipment for the home market and for export to the under-
developed countries. It is much more hazardous to generalize about
non-electrical engineering. Most sectors of engineering were cer-
tainly affected to some degree by foreign competition both at home
and abroad though Britain continued to remain fairly competitive
in the older branches such as textile machinery, railway locomotives
and rolling stock. The main source of weakness lay in the newer
branches of engineering though the dramatic success of Britain's
bicycle industry again emphasizes how careful one must be when
drawing general conclusions.
A discussion of the engineering trades raises in an acute form
29
 THE DEVELOPMENT OF BRITISH INDUSTRY

not only the question of differentiating between particular branches

of an industry but also the need to distinguish the forces of com-
petition in particular markets. Britain's hold over Empire markets
remained fairly strong in most engineering products except machine
tools and sewing machines. But in certain European and South
American markets her superiority was less marked owing to fierce
competition from American and Germany though again there were
particular fields, notably agricultural machinery, railway rolling
stock (South America), textile machinery, boilers and bicycles in
which British manufacturers continued to do well. For most of the
other industries covered in this survey the strength of foreign com-
petition varied a great deal from one market to another. The boot
and shoe manufacturers, for example, faced their biggest challenge
in the domestic market whilst in cotton, coal and shipping foreign
competition occurred mainly abroad. In the latter cases serious
competition was often confined to specific areas : in cotton mainly
to the Far East, in coal to the markets of Belgium, the Netherlands
and Austro-Hungaria and in shipping to North Atlantic and
African waters. Finally the iron and steel and chemical industries
faced acute competition in both home and overseas markets though
in both cases competition tended to be more severe in the advanced
industrial countries than in the markets of the Empire and under-
developed territories.
The chief source of foreign competition undoubtedly came from
America and Germany. It was these two countries which presented
the biggest threat to the iron and steel, boot and shoe, engineering
and chemical industries. Even in shipping and coal, where com-
petition was much less serious, Germany was the chief potential
threat. But Germany and America were by no means the only
competitors. French competition was the main problem in the
woollen industry whilst the glass manufacturers had Belgian pro-
ducers to contend with in addition to competition from other
continental countries. In the case of the cotton industry Japan and
India were the major competitors. Most industrialists were, of
course, faced with the growth of competition from domestic pro-
ducers in their export markets though probably the Lancashire
cotton industry was most seriously affected in this respect on
account of the relative ease with which the industry's technology
could be absorbed by the less developed countries.
The rise of tariff barriers especially in the major industrial
countries certainly made trading conditions more difficult for many
British industrialists. The German tariff of 1879 and the American
30
 INTRODUCTION

McKinley and Dingley tariffs of the 1890s hit British exports fairly
hard, especially those of the iron and steel, engineering, woollen
and chemical industries. Moreover, the tendency for many manu-
facturers to turn their attention to Empire markets suggests that
tariffs were becoming restrictive. Yet there is little evidence to
suggest that tariff barriers were the major factor responsible for
Britain's long-term trade losses. Probably a more important reason
for the slowing down of Britain's export growth was, as in the case
of the chemical industry, the growth and improvement in efficiency
of industrial production abroad which enabled foreign manufac-
turers to compete more effectively. Occasionally tariffs actually
assisted British exports. The 1890 McKinley duty, for example,
encouraged American manufacturers to import British fine yarns
which were then made up into finished goods.
Although most industries were affected in some way by foreign
competition, it is clear that its impact varied a great deal from one
industry to another and between branches of the same industry.
Likewise the response of industrialists to the new challenge was by
no means uniform. There were, of course, a number of possible
alternatives. A common approach, though a purely negative one
which produced few positive results, was either to demand tariff
retaliation or adopt some form of restrictive practice. A second
alternative was to move out of those markets where competition
and tariffs were making things difficult and concentrate on the
Empire markets where Britain's competitive advantage was greatest.
Essentially, however, this was only a short-term solution of the
problem since it was really a way of avoiding rather than solving
the issue. In any case the Empire markets were by no means free
of foreign competition, and as time went on the threat of foreign
intervention became more real in these areas. Thus the only really
effective long-term solution was to take some positive action which
would enable British manufacturers to compete more effectively
with their foreign rivals. This line of approach generally involved
the adoption of new techniques or improved methods of produc-
tion and marketing, the development of new products and an
appreciation of the benefits to be derived from scientific research.
Many manufacturers were, of course, concerned about short-
term considerations and often they failed to grasp the significance
of finding a long-term solution to the problem of foreign com-
petition. But this was not universally true since some were clearly
prepared to extend their time horizons into the future. The detailed
studies suggest, moreover, that those industries or sectors which
31
 THE DEVELOPMENT OF BRITISH INDUSTRY

were prepared to innovate and improve their performance stood a

better chance of withstanding foreign competition than those which
did not. The boot and shoe industry, for example, had by 1913
successfully met the American challenge largely because of its
willingness to shift to factory production with powered machinery.
In many respects, however, the industry was fortunate in that its
mechanical revolution occurred just at the time when foreign com-
petition became really severe. Similarly the massive application of
new techniques in shipping and shipbuilding enabled the industry
to remain highly competitive down to 1914. The history of the glass
and woollen industries illustrates the way reactions varied between
different sectors. The glass industry was vulnerable to the com-
petition of cheap skilled continental labour and it could only hope
to compete providing it reduced its costs of production by technical
innovation. The two branches of the industry-bottle and flat glass
-in which major technical developments were possible can claim
a fairly creditable record. Unfortunately it was the flint glass
section which was most prone to competition and here technical
advances were very limited indeed. The woollen industry staged a
remarkable revival in the early twentieth century by developing a
cheaper product through the use of 'adulterated' raw materials
(that is blending re-manufactured wool with the virgin material).
On the other hand, the worsted sector, faced with a change in
women's fashions favouring all wool worsteds in place of mixed
fabrics, was unable to find a suitable technical solution to combat
French superiority.
Technical backwardness was perhaps most noticeable in the iron
and steel and chemical industries, both of which were subject to
severe competition. A formidable list of technical deficiencies can
be assembled for the steel industry including a lag in scientific
research and a failure to employ enough technically trained man-
power. It is clear that this industry could have reduced costs and
become more competitive had technical progress been more rapid,
though it would be a mistake to attribute the relative decline of the
industry to technical factors alone. The main problem in chemicals
was the lag in structural diversification. The strength of the industry
was based on a very narrow range of chemicals and little concerted
effort was made to diversify into newer products the market for
which was expanding rapidly. In 1901 five product groups accounted
for no less than two-thirds of Britain's chemical exports.
A similar overcommitant is evident in engineering. Britain
remained strongest in the older established heavy engineering
32
 INTRODUCTION

sector and was slower than her main competitors in moving into
new areas or branches of manufacture based on mass production
techniques. There are, of course, as in the case of chemicals, some
notable exceptions to the general rule. With the electrical manu-
facturers it was not so much a question of overcommitment as a
failure to retain their position in the heavy engineering field which
had been established in the 1890s, together with the neglect in
developing either traction or power equipment. The result was
that the market for the more advanced type of electrical equipment
was captured by the American and German firms and domestic
producers were left to produce the less sophisticated products.
The most obvious question is whether the reaction of indus-
trialists was commensurate with the severity of foreign competition.
In some cases it clearly was not. Where competition was severe as
in iron and steel, worsted goods, flint glass and certain sections of
the chemical and engineering industries, the manufacturers were
never able to mount a successful counter-attack. The main excep-
tion is the boot and shoe industry since it was fairly successful in
dealing with the American challenge. On the other hand, in those
fields in which foreign competition was less severe, e.g. cotton,
shipping, heavy engineering, woollen goods and plate and bottle
glass, British industrialists appear to have been able to hold their
own reasonably well. Of course, there is no way of telling whether
these latter industries would have shown up so well had they been
faced by a more violent challenge from abroad. It should be noted
moreover that the coal industry has not been placed in this second
category since throughout this period its efficiency and competitive
capacity in relation to its nearest rivals was tending to decline. It
could be argued that this industry lacked the invigorating influence
of really effective competition.
How efficient was British industry in this period? This is obviously
a very difficult question to answer since the lack of quantitative
data on industrial productivity makes proper inter-country com-
parisons impossible. But the absence of quantitative information
should not be used as an excuse for evading the question. At times
like these the economist and economic historian are forced to adopt
a more subjective approach and make the best use of whatever
information is available. 1
Although foreign competition exposed certain weaknesses in
British industry it would certainly be wrong to conclude that British
industrialists as a whole were less efficient or less enterprising than
1 CT. E. Penrose, Theory of the Growth of the Firm (1963), p. 185, note 1.
B 33
 THE DEVELOPMENT OF BRITISH INDUSTRY

their foreign counterparts. Some industrial sectors, notably ship-

ping and boots and shoes and certain branches of the glass and
woollen industries, showed remarkable powers of resiliency in this
period. Likewise certain branches of the iron and steel, chemical
and engineering industries were prepared to adapt to changed con-
ditions. Some of the developments in the heavy engineering sector,
especially in ring spinning machinery, steam engines and heavy
machine tools hardly convey the impression that manufacturers
were unwilling to accept changes. Moreover, the fact that some
industrialists were slow to adopt new techniques does not neces-
sarily mean that they were inefficient or lacked enterprise. One
might, for example, criticize cotton manufacturers on the grounds
that they ignored the ring spindle and automatic loom. But this
was not due to conservatism on their part but rather to the fact
that the new machinery was not really suitable to English conditions
of manufacture.
On the other hand neither must one adopt an unduly complacent
attitude when discussing the performance of British business in
this period. As we have already seen there was considerable room
for improvement in many branches of British industry. Thus in
both the chemical and engineering industries manufacturers were
slow to diversify their range of products and in some cases new
processes were neglected, e.g. the Solvay process for soda produc-
tion. A number of new technical opportunities were missed by the
iron and steel and coal industries. Moreover, the ease with which
the flint glass and worsted manufacturers succumbed to foreign
competition suggests that there might have been some scope for
improvement.
The comparative backwardness of certain sectors of British
industry cannot be attributed to any one single factor. That new
products were neglected in the chemical industry can be explained
largely by the fact that the industry failed to appreciate the long-
run benefits of research and development expenditure. But this
factor is much less important in explaining the deficiencies in iron
and steel and engineering. Here adverse market conditions were
partly to blame. The domestic market was far less buoyant than
that of the United States and after the 1870s the rate of growth of
the economy was slowing down. Hence the incentive to invest
heavily in new techniques was reduced. It has been argued in the
case of steel that the technical lag was the result of the relatively
slow rate of growth in demand for the industry's products. The
engineering industry was also affected adversely by unpromising
34
 INTRODUCTION

market conditions though one must be careful not to stress this

point too much since it could also be argued that the relatively
profitable nature of the market (particularly the export side) for
heavy engineering products was one reason why the industry was
fairly slow in shifting into newer lines of production. Furthermore,
the overattachment to outdated methods of recruiting and training
labour and the dominance of the consulting engineer (particularly
in electrical engineering) which tended to inhibit product stan-
dardization and limit the market power of individual firms, were
additional factors in the situation.
This by no means exhausts the list of possibilities. Several
reasons can be put forward to explain the delay in using mechanized
techniques in coal mining. These include unfavourable geological
conditions, the relatively high costs of reorganization involved and
the existence of a fairly plentiful supply of cheap labour which
made the cost advantage of machinery far from clear-cut. But the
problem was not always simply one of a failure to innovate on the
part of industrialists; in some cases new technical opportunities
were not readily available when they were most needed. The flint
glass manufacturers, for example, were short of a large-scale cost-
reducing technique which would have enabled them to compete
with the cheap skilled labour of the continental glass producers.
Worsted manufacturers faced a somewhat similar problem when
fashions changed in favour of the French. It is true that a number
of measures were taken to try and combat competition but most of
them proved unsuccessful. In the absence of any revolutionary new
technique probably the only solution was to compete with the
French on their own ground by adopting the mule (in place of the
frame) for yarn spinning. But this would have necessitated heavy
reinvestment, a policy which might well have proved disastrous
had fashions changed suddenly again.
This brief commentary has shown clearly that any sweeping
generalizations regarding the experience and performance of British
industry in this period are bound to be somewhat misleading since
the impact of foreign competition and the subsequent reactions to
it varied considerably from one branch of industry to another. In
fact, probably the most significant feature was the wide diversity of
experience between industries or sectors though there were of course
a number of common characteristics, notably the apparent strength
of many of the older established branches of industrial activity and
the tendency towards concentration on Imperial markets. It would
be inaccurate moreover to argue that British industry as a whole
35
 THE DEVELOPMENT OF BRITISH INDUSTRY

was uncompetitive and inefficient since there were some impressive

achievements in these years of increasing international competition.
The comments presented here, however, do no more than raise
some of the more general points made by the contributors in their
essays. The individual studies cover a wide range of territory and
deal with many developments in Britain's industries which it would
be impossible to summarize in the space of a few pages. Thus,
rather than attempting to provide an extensive resume of all the
changes and developments which took place, the Introduction has
been designed as an opening move in the debate on British industry
which follows in the subsequent chapters.

36
 CHAPTER 2

THE COAL INDUSTRY 1

BY A. J. TAYLOR

'WHEN war was declared in 1914 there was no industry in Great

Britain more essential to the nation's existence. From 3,100 mines
with an invested capital at £135,000,000 came a product worth
£136,000,000. From these mines more than 1,118,000 men were
deriving a livelihood. . . . From these same mines, too, 3,800
royalty owners were securing an annual income of approximately
£6,000,000, and some 130,000 investors were receiving a profit of
£13,000,000. An industry with wages substantially higher than in
most others in Great Britain; with unemployment almost negligible;
with conditions constantly improving and an accident rate con-
tinually decreasing-an industry which, for almost three-quarters
of a century, had been enjoying the fruits of uninterrupted growth
and progress-such, in short, was the picture of British coal mining
in the year preceding the outbreak of the World War .' 2

It is both pertinent and salutary to preface an appraisal of the

development of the British coal industry in the forty years before
the First World War with these eulogistic observations of two
American economists. Already in the 1920s when Lubin and
Everett were making their study of British coal mining, it was
becoming common to view the pre-war industry wholly in terms
of bitter post-war experience. Such an approach, though it had
undoubted value in revealing the insecure foundations of the
industry's earlier prosperity, often tended to minimize that pros-
perity's real substance. Lubin and Everett, themselves, were not
unaware of the pre-war industry's weaknesses, made evident in
declining labour productivity, increasing costs and troubled labour
relations, but they saw these against a background of expansion
1 This essay incorporates material from an earlier article on 'Labour Produc-
tivity and Technological Innovation in the British Coal Industry, 1850-1914',
Econ. Hist. Rev., 2nd ser., XIV (August 1961), pp. 48-70 (hereinafter referred to
as 'Labour Productivity and Technological Innovation').
• I. Lubin and Helen Everett, The British Coal Dilemma (New York, 1927),
p. 29.
37
 THE DEVELOPMENT OF BRITISH INDUSTRY

and progress; and it is against such a background of achievement

that any critical appraisal of the industry must be set.

Between 1875 and 1913 the output of coal from British mines rose
from 133 to 287 million tons. This increase was achieved without
any major interruption. Temporary recessions, most notably in the
years of general depression in industry and trade between 1884 and
1887 and in the strike years of 1893 and 1912, were overcome and
each decade saw a substantial advance in the industry's productive
achievement. Moreover, the rate of growth tended to accelerate as
the following output statistics indicate:

TABLE 1: Growth of British Coal Output 1875-1913 1

Output Decennial Growth Average % Increase
(m. tons) (m. tons) Per Annum
1875 133
1885 159 26 1·95
1895 190 31 1·95
1905 236 46 2·42
1913 287 51 (8 years) 2·70 (8 years)

Not every coalfield contributed equally to this notable record of

expansion. The older, longer-worked coalfields of the North-East,
Lancashire and the Black Country increased their output less rapidly
than the more recently developed areas of South Yorkshire, the
East Midlands and South Wales. Thus, while in the Lancashire
district output in 1913 was no higher than it had been fifteen years
earlier, South Wales and Yorkshire showed increases of 50 and
70 per cent respectively over the same period. This contrast between
areas of stagnation or contraction on the one hand and areas of
growth and development on the other is of considerable significance
in any final assessment of the industry's achievement.
The expansion of the coal industry was a reflection of the more
general growth of British and European industry. In the half cen-
tury before 1914 coal had not only enjoyed a position of virtual
monopoly in supplying the fuel requirements of Britain but had also
played a major role in meeting the needs of Western Europe. The
1 Output statistics in R.C. on Coal Industry (Sankey Commission), P.P. 1919,
XI-XIII, Vol. III (Cmd. 361), p. 29. See also B. R. Mitchell and Phyllis Deane,
Abstract of British Historical Statistics (1962), pp. 115-16.
38
 THE COAL INDUSTRY

age of the water wheel was past, that of the petrol engine still lay
largely in the future. Demands on the coal industry, therefore, came
from all sides: from the domestic consumer and from general
manufacturing industry; from iron and steel producers; from rail-
ways and coasting-steamers; and from gas and electricity under-
takings. From each of these the demand was increasing rapidly as
the following table makes strikingly clear:

TABLE 11: Quantity of British Coal Consumed Domestically

(million tons) 1
Consumer 1869 1887 1913
Gas Works 6·3 9·5 18·0
Electricity Works ? 5·0
Railways 2·8 6-2 13·6
Coasting Steamers 1·2 1·5 2·5
Coal Mines (Engine Fuel) 6·7 10·9 18·0
Iron and Steel Works 14·0 15·3 21·2
Domestic Households 18·5 28·3 35·0
General Manufacturing 44·9 58·7 75·8

Great and continuous as was the growth in domestic consump-

tion, however, it was eclipsed by the demand from overseas. Down
to the third quarter of the nineteenth century the export trade had
only been of limited importance to the coal industry and the share
of coal in the value of Britain's total exports had been negligible.
As late as 1860 exports, including bunker-coal, represented little
more than one-tenth of Britain's coal output and little more than
one-fortieth of the value of her total exports. 2 From this point,
however, advance was not only continuous and rapid, but the
tendency to accelerated growth observable in the industry at large
was here most marked. In 1869 British coal exports amounted to
13 million tons; by 1887 this figure had risen to 31 ·7 millions; and
twenty-six years later in 1913 exports, including bunkers, amounted
to 98·3 million tons and accounted for more than one-third of the
annual output of coal. By this time coal was responsible for more
than one-tenth in value of Britain's export trade. 3
The greater part of these shipments went to continental Europe.
In 1875 Britain's best customers had been France and Germany-
each taking more than two million tons of coal annually-and,
1 Colliery Year Book and Coal Trades Directory, 1962, p. 462.
2 Mitchell and Deane, op. cit., pp. 121, 283, 303.
a Colliery Year Book, 1962, p. 462. Mitchell and Deane, op. cit., pp.

39
 THE DEVELOPMENT OF BRITISH INDUSTRY

following them, Italy, the Scandinavian countries, Russia and Spain,

each consuming upwards of half a million tons. 1 Outside Europe
demand was smaller but there were important growth points in
Egypt-largely for bunkering purposes-the British East Indies, the
Caribbean and Latin America. By 1913 the pattern had changed
little, though in almost every direction growth had been prodigious. 2
France now took 13 million, and Germany 9 million tons. Italy had
overhauled Germany as Britain's second best customer with an
import of 10 million tons. Russia consumed 6 million, the Scan-
dinavian countries collectively 10 million and Spain 2½ million tons.
Outside Europe there were major consumers in Egypt (3 million),
Argentina (2½ million) and Brazil (2 million). Only in the Carib-
bean and eastern Asia had small markets shrivelled in face of the
pressure of more advantageously placed competitors. Moreover,
much of this growth was recent. The fifteen years from 1898 to
1913 had seen a trebling of British coal exports to Russia and a
doubling of those to France and Italy. Even Germany, Britain's
greatest European rival in the export of coal, was in 1913 importing
almost twice as much British coal as she had done fifteen years
earlier. It was inevitable that with the development of the great
mineral resources of Germany and the United States, Britain's share
in the world export trade in coal would diminish, but, so long as
the overall demand for coal retained its early twentieth century
buoyancy and Britain was able to maintain a strong hold on mar-
kets so strategic and rewarding as those of Italy and Latin America,
there was justification for satisfaction and optimism even if hardly
for complacency about the future of the export trade.
The growing strength of the German coal industry was made
evident both in its rapidly growing output and its mounting export
achievement. By 1913 Germany had become the major exporter of
coal to the Netherlands, Belgium and Austro-Hungary. But France
and Russia each took three times as much coal from Britain as
from Germany. British ascendency, and corresponding German
inferiority, was even more marked in Scandinavia, where Germany
had established no more than a precarious foothold, and in Italy
where every ton of coal coming from Germany was met by ten
exported from Britain. The shape of wartime political alliances was
already foreshadowed in the international economy of coal. Outside
Europe Britain's only significant rival was the United States, but
1 R.C. on Coal Supplies, P.P. 1905, XVI (Cd. 2363), pp. 90-2.
• R.C. on Coal Industry (Samuel Commission), P.P. 1926, XIV (Cmd. 2600),
Vol. III, pp. 94-6.
40
 THE COAL INDUSTRY

as yet the threat had little substance. To the important markets of

Latin America Britain sent fifteen times as much coal as did the
United States in 1913.
Britain's dominance of the world's export trade in coal had its
basis in the facts of commercial geography. Although the cost of
mining coal was increasing more rapidly in Britain in the quarter-
century before 1914 than in Germany or the United States-or
indeed than in any other country-British coalowners were able to
maintain their firm grip on European and South American markets
because of the enormous advantage which easy sea communication
gave to the coal of South Wales and North-east England. This
blessing conferred upon Britain's coal industry by a seemingly
beneficent providence had been reinforced by the skill of her inven-
tors and ship builders. Over the half-century before 1914 the
development of the steamship had produced a substantial decrease
in freighting charges. Rates from Cardiff to Bordeaux, Lisbon,
Genoa and Kronstadt had been more than halved, while to more
distant ports, among them Port Said, Singapore and Buenos Aires
the reduction was even greater. 1 The German and still more the
American coal producer, dependent to a large extent on railway
haulage to reach his foreign customers, was thus placed in a position
of often insuperable disadvantage. It was only in those markets in
immediately adjacent territories where the possibilities of sea com-
munication could not be exploited that Germany was able to com-
pete with Britain on terms of advantage or equality; and coal could
be carried more cheaply over the long sea-haul from Cardiff to
Buenos Aires than by rail and sea from the nearer inland coalfields
of the United States.
With demand growing and competition thus contained, Britain's
export trade in coal prospered in the years before 1914 as never
before in the industry's history. This achievement, moreover, not
only benefited those in the industry-royalty owners, shareholders
and miners alike-but contributed substantially to the country's
favourable balance of payments. Unlike the textile industries, also
considerable earners of foreign exchange, coal was not dependent
on an imported raw material and the income which it brought from
overseas was almost all pure gain. As if this were not enough, the
export of coal also provided outgoing bulk cargoes which helped
to reduce significantly the freighting cost of the nation's essential
imports. 2 If there were some, like Alfred Marshall, who argued that
1 H. S. Jevons, The British Coal Trade (1916), pp. 692-3.
• See Lubin and Everett, op. cit., pp. 359-61.
41
 THE DEVELOPMENT OF BRITISH INDUSTRY

to export coal to the foreigner was to sacrifice the future to the

present, 1 this was the opinion of a minor~ty, and, it now seems,
possibly a mistaken one.
Although the growth of the coal industry in the forty years
before 1914 had been largely continuous, it had not been wholly
without fluctuation. The year 1875 marked the end of a period of
unprecedented prosperity for the industry. The average declared
value (FOB) of coal exported from the country, which in 1871 had
stood at 9s 8d-itself within sixpence of the highest price reached
for half a century-increased to 15s 6d in 1872 and to 20s 6d in
1873, the 'famine' year. 2 By 1875 the peak had been clearly passed
though not until 1878 did the price of coal return to the level of
the 1860s. Over the next decade the industry, not without much
discomfort, assimilated the large accessions of capital and man-
power which had come to it in the years of high prosperity between
1871 and 1875. Some pits, new as well as old, were closed; there
was a decline in manpower persisting until 1879; output stagnated
and profits were low or even nonexistent. Between 1880 and 1883
the industry recovered its forward momentum, and growth was
renewed in terms both of employment and of output; but a further
severe interruption came with the general depression of the mid-
'eighties. Over the next ten years the cycle of recovery and sharp
check-this time coincident with the industrial strife of 1893 and
1894-repeated itself.
The two decades following 1875, therefore, while characterized
by undoubted growth-in output from 133 to 190 million tons and
in manpower employed from 535 to 700 million-were not years
of notable prosperity for the industry. Between 1878 and 1889
the FOB price of coal never reached 10s per ton-for the three
years 1886-88 it averaged only 8s 3d-and the relative affluence of
the years between 1890 and 1893 marked this as a brief oasis of
prosperity in a desert of low returns to both capital and labour. In
the five years after 1892 the industry found itself in the throes of
depression for the third time in a generation: once again prices fell
1 'The position which Britain will hold in the world some centuries hence will
depend largely on the care with which she has husbanded her stores of it [i.e.
coal]: any generation which exports it, in order to pay for those manufactures,
in the production of which Britain should hold her own, will inflict an injury on
coming generations.' A. Marshall, Industry and Trade (1919), p. 628. Marshall,
of course, could not foresee the coming of atomic power. Like most of his con-
temporaries he also does not appear to have appreciated the potentialities of oil.
2 Colliery Year Book, 1962, p. 411. Export prices are used in preference to pit

head prices as no satisfactory national averages for the latter existed before 1893.
42
 THE COAL INDUSTRY

and with them the level of profits and wages. But this was virtually
the end of the pre-war industry's frustrations. For twenty years
there had been growth but little permanent prosperity. Hence-
forward, though there were to be isolated years of adversity, pros-
perity would be the keynote. Prosperity, of course, is a relative
term and Sir Josiah Stamp regarded the 10 per cent return of capital
which the industry produced in the immediate pre-war years as no
more than a modest dividend ;1 but the industry has rarely if ever
known such a prolonged measure of financial success as it enjoyed
in these pre-1914 years.
The evidence for this prosperity in terms of increased output and
employment and in the maintenance of a high level of prices has
already been indicated. Evidence on profits and wages is more
elusive but sufficiently clear to make the general tenor of advance
unmistakable. Gross profits in the industry (i.e. with no allowance
made for redemption of capital, a factor of particular importance
in coal mining) averaged some £3¼ million annually in the 1880s,
£6 million in the 1890s and £12½ million in the first decade of the
twentieth century. These figures represent perhaps a net return of
3, 5 and 8 per cent on the capital invested in the industry in the
three decades. 2 For the four years immediately preceding the war
of 1914-18 the return was higher and may have averaged 10 per
cent. The accuracy of these estimates must be suspect but the trend
they indicate is less open to doubt. The movement of money wages
was also sharply upward, earnings being fully one-third higher in
the years after 1900 than in the 1880s and 50 per cent higher in
1913 than in 1880.3 No other major industrial group showed so
substantial an advance-although equally none experienced such
intense fluctuation in earning power-and by 1914 the miner was
among the best paid of British workers.

II
There was therefore much in the achievement of the early twentieth
century coal industry to justify the optimism which runs through the
1 Sankey Commission, Vol. I (Cmd. 359), Q. 788. 'I think the return on capital
in the coal industry before the war was extraordinarily low.'
2 Estimates based on tax inspectors' returns. See J. C. Stamp, British Incomes

and Property (1916), pp. 220-1; also Stamp, The National Capital (1937), pp.
253-64. A primary difficulty in estimating the profits of mining is the determina-
tion of the changing amount of capital employed in the industry. For this reason
any assessment of the return on investment in percentage terms must be extremely
tentative.
2 Samuel Commission, Vol. III, p. 38.

43
 THE DEVELOPMENT OF BRITISH INDUSTRY

writings of such shrewd and informed contemporaries as D. A.

Thomas and H. S. Jevons. Thomas concluded his survey of the
export trade by expressing the conviction that while Britain might
lose her more distant markets to geographically better placed rivals
she could confidently expect to secure more than adequate recom-
pense in retaining her firm grip of the larger markets of Western
Europe and the Mediterranean, together with those on the east
coast of South America and the west coast of Africa. The trade in
coal would thus 'show in the aggregate an increase . . . for years
to come'.1 Jevons was no less sanguine. 'My own view,' he stated,
'is that our [coal] exports are likely to go on increasing in the future
at nearly the same percentage rate of increase as they have grown
at during the past few decades.' 2 He saw no threat in the immediate
or more distant future from the advance of oil as a competing fuel
and, with the expanding home market also an unbroken area of
monopoly for British coal, believed the future of the industry to be
assured.
The confidence which coal owners felt in their ability to meet the
challenge of foreign competition rested in the last resort on an
appreciation of the advantages which geographical accident had
conferred upon the British industry, but it was also based on a
belief in the competitive efficiency of British mining. There was
some justification for this confidence. In the years immediately
preceding 1914 British coal was delivered at the pithead more
cheaply than in any other part of Europe. Table III compares the
value of coal raised in the main coal-producing countries.
m: Value of Coal Raised•
TABLE
Yearly Average 1909-13 1913
Tonnage of Value of Coal Average Earnings Per
Country Coal Raised Per Ton Shift
(m. tons) (s) (s d)
Belgium 23 12·8 4 1·20
France 38 12·7 4 3·38
Ruhr 5 5·79
Germany 162 10·5 Up. Silesia3 9·14
L. Silesia 3 6·66
United Kingdom 270 8·74 6 5·75 (1914)
USA (Anthracite) 77 9·3
USA (Bituminous) 381 5·3
1 D. A. Thomas (later Lord Rhondda), 'The Growth and Direction of our
Foreign Trade in Coal during the last half century', Journal of the Royal Statis-
tical Society, !xvi (1903), p. 501.
• Jevons, op. cit., p. 749.
8 Samuel Commission, Vol. ID, pp. 161-74.

44
 THE COAL INDUSTRY

In Europe at least the British lead was clear-cut and significantly it

owed nothing to an economy of low wages. Earnings per shift were
half as high again in Britain as in Belgium or France and almost
20 per cent higher than in the Ruhr, and this notwithstanding the
fact that the working shift was shorter in Britain than elsewhere.
Wage costs were, in fact, higher in the United Kingdom than in
either France or Germany but overall costs were impressively lower.
Over the forty years before 1914 Britain was able to show a
marked superiority in labour productivity over all her European
rivals.1 In relation to Belgium, France, Russia and Austria-Hungary
this distinct advantage persisted down to 1914 even though the
margin of superiority tended to diminish, Output per miner in
Britain in 1909-13 was 30 per cent higher than in France and
Austria and 60 per cent higher than in Belgium and Russia. In the
1880s Britain had also enjoyed a notable ascendency over Germany
amounting in terms of output per head to 20 per cent, but in the
course of a generation this advantage had been steadily eroded
and by 1914 the German miner was producing as much coal as his
British counterpart.
The advance of Germany, exemplified in these statistics, was the
phenomenon most disturbing to British complacency and optimism.
Its immediate implications were limited, suggesting at most the
further advance of German coal into the French, Belgian and Dutch
markets where she already held a preponderant share, but it was
also indicative of a more general deterioration in Britain's relative
efficiency as a coal-producer-an interpretation substantiated by
the returns of production and labour productivity.
Table IV prompts certain immediate observations. All of the
four major Western European coal-producing nations experienced
a decline in labour productivity in the quarter century after 1890.
For France and Belgium decline did not come until the turn of the
century and in neither case was it severe. Germany reached her
high point of productivity before 1890 but thereafter her industry
showed notable resilience and the decline in labour productivity
between 1884--88 and 1909-13 amounted to only 6 per cent. Britain
alone among the coal-producing nations actually lost ground in
output per man-year over the whole period between 1875 and 1913.
Productivity was at its highest level in the 1880s when, averaging
319 tons per man employed in the industry over a full decade, it
reached a peak of achievement not approached by any other
European nation at any point before 1914. Thereafter, however,
1 See Table IV below.
45
 TABLE 1v: Production and Productivity in Coal Mining 1874-19131 --l

Country 1874-78
Output Per Man-year of Miners Employed Below and Above Ground (tons)
1879--83 1884--88 1889-93 1894-98 1899-1903 1904--08 1908-13
=
t!1
i:::,
t!1

163 173 168 174 169 162 159 <

Belgium 135 t!1
t"'
0
France 154· 187t 196 201 208 198 194 195 "O
a::
Germany 209 257 269 257 262 247 251 265 [258]t t!1
z--l
283 257
.;.. United Kingdom 270 319 319 282 287 289 ..,0
°'
--
(Anthracite) 323 374 340 349 336 370 423 449 to
USA :.a
USA (Bituminous) 341 505 449 503 511 616 617 698 --l

-z
C l}

• Years 1876-78 only. t Years 1882-83 only. t Adjusted to basis of statistics for previous years. =
i:::,
1Based on statistical material in Samuel Commission, Vol. III, pp. 161-74. c::
Attention is drawn to the detailed qualifications attaching to the figures. For a Cl}
--l
general comment on the limitations of statistics of this kind, see 'Labour Pro- :.a
ductivity and Technological Innovation', pp. 48-9, 67. -<
 THE COAL INDUSTRY

decline, if not continuous, was severe. Decline was particularly

noticeable between 1889 and 1892, 1899 and 1901, and 1907 and
1910. All these, significantly, were years when coal was in heavy
demand and when therefore the fall in productivity cannot be
attributed to lack of employment opportunities available to those
engaged in the industry. The productive efficiency thus most severely
lost in the years of prosperity was not recovered in the less pros-
perous years which followed, and as a result over the quarter-
century between 1884-88 and 1909-13 the industry sustained a loss
of 20 per cent in output per man employed within it.
Differences in labour productivity provide at best crude indica-
tions of differences in costs of production among producers of coal,
but the relative movement of such statistics over periods of time
provides a useful guide to changing relationships in productive
efficiency between competing nations. By 1914 coal was being won
in the United States at fully one-third less cost than in Britain,
though as yet ease of access to her markets in South America gave
the British producer a countervailing advantage more than sufficient
to offset this handicap. Likewise in Europe, Britain's lead over her
competitors was noticeably diminishing, yet in terms of cost she
was still in 1914 advantageously placed in relation to both France
and Belgium and she continued to hold a position of real if pre-
carious ascendency even over Germany.
The increasing relative cost of British coal, therefore, had as yet
little effect on the growth of her markets or indeed on the size of
the industry's profits. Nevertheless, the rising cost of mining coal
was not without its immediate effects on the national economy.
Declining productivity in coal mining brought with it a rise in
general industrial costs, not least in industries like iron and steel
whose need for coal was prodigious. Dear coal also brought in-
creases in living costs to every British household: and diminished
labour productivity in mining meant that the industry was claim-
ing an increasing share of the nation's labour force. Employ-
ment in coal mining increased by 220 per cent between 1881 and
1911 over a period in which the total occupied male population
was expanding by less than 50 per cent. 1 Notwithstanding the
notable contribution which the coal industry was making to the
nation's economic wellbeing in many directions, there was room
for disquiet that the country was committing so much of its
resources of manpower to an industry so patently declining in
productive efficiency.
1 Samuel Commission, Vol. III, p. 37. Mitchell and Deane, op. cit., p. 60.
47
 THE DEVELOPMENT OF BRITISH INDUSTRY

III

The term efficiency, so frequently used in this essay, has been

employed in an objective and statistical, not in a pejorative sense.
Coal, like all extractive industries, is in the long run subject to its
own law of diminishing returns. The longer a coalfield is worked
the more necessary does it become for operators to resort to the
mining of both deeper and thinner seams. Conditions of working,
therefore, increase in difficulty, and, given unchanging units of
application of labour and capital, productivity in terms of both
factors will tend to decline. On this premise the history of the
nineteenth-century coal industry in Britain can be readily explained.
Coal was extensively worked in Britain long before it was similarly
exploited elsewhere. As late as 1870 half of the world's total coal
production of 210 million tons was mined in Britain. 1 In the earlier
decades of the nineteenth century British mining had itself been
characterized by extensive rather than intensive exploitation. Pits
were shallow, working was largely confined to the thicker seams
and the area worked from each pit was relatively small. In addition,
in many coalfields coal mining was a seasonal occupation and the
miner, therefore, not in full yearly employment. By the third
quarter of the century, however, the situation was changing rapidly.
Coal was being won in increasingly deeper pits-in a few instances
at depths approaching 4,000 feet-thinner seams were being ex-
ploited and the area worked from each shaft was being significantly
extended. The part-time miner was by this time an anachronism
in the industry. Some areas of virgin coal still remained, including
the as yet unbroken Kent coalfields and, more important, the con-
cealed extensions of the South Yorkshire and East Midlands coal-
fields, but in general the industry had now reached maturity. The
best pickings were gone: there was still much coal to be won but
every ton would be obtained with greater difficulty and at increasing
cost. The tendency for productivity to decline and production costs
to rise could, moreover, be expected to accelerate as the consump-
tion of coal increased. Each additional demand on the industry
meant not only that the more accessible seams were more quickly
exhausted but that at any given time resort had to be made to the
working of less productive seams and collieries. Each annual
increase in coal consumption, therefore, was pressing the industry
nearer to its margin in a double sense. The coal industries of con-
tinental Europe were, of course, not immune from the effect of
1 R.C. on Coal Supplies, P.P. 1905, XVI (Cd. 2363), pp. 52-3.
48
 THE COAL INDUSTRY

similar influences, but, since development had come later in both

France and Germany, maturity and the decline in productive
efficiency which followed it could be expected to be delayed; and
this more particularly in the case of Germany whose reserves of
workable coal were greater than those of either Britain or France.
The validity of this thesis is attested by the varying experience of
different British coalfields between 1875 and 1914. Whereas the
country as a whole reached the high point of labour productivity
in the mid-1880s, the long intensively worked coalfields of Lanca-
shire and Durham had passed their peak somewhat earlier, and
Derbyshire and Leicestershire, areas of relatively late intensive
development, only attained their pre-war summit of labour produc-
tivity at the turn of the century or later. The contrasting experience
of these four coal counties is clearly shown in Table V.

TABLE v: Coal Raised Annually Per Person Employed Above and Below
Ground (tons) 1
Percentage Increase ( +)
County Average 1884-88 Average 1909-13 or Decline(-)
Durham 371 258 -30·5
Lancashire 319 226 -29·2
Derbyshire 303 296 - 2·3
Leicestershire 249 277 +11·6

The effect of increasingly difficult conditions of working could

be felt at many points of the productive process, but more parti-
cularly at the face, where more effort was required to produce each
ton of coal, and along the underground haulage-ways, where
increasing distance was the principal factor. Even at the surface,
however, forces of a different kind were operating which could
adversely effect the level of labour productivity. The desire of
consumers for improved preparation of coal before delivery made
demands on a colliery's resources not only underground but also
at the pithead. In general such demands could be met, and only
met, by the installation of machinery but even under these con-
ditions the labour requirements of the colliery tended to increase.
In the years between 1875 and 1914 there was little change in
the relative proportion of surface and underground workers engaged
in the industry. In 1909-13, 19·3 per cent of the industry's workers
were employed on the surface compared with 20·2 per cent thirty-
five years earlier. 2 The decline in labour productivity was, therefore,
1 Sankey Commission, Vol. III, pp. 122-3.
• Samuel Commission, Vol. III, p. 3.
49
 THE DEVELOPMENT OF BRITISH INDUSTRY

almost as great among surface as among underground workers, but

this loss was offset at least to some extent by an improvement in
the quality of the product. Unfortunately no similar body of
statistical material exists on which a comparable assessment can
be made of the changing efficiency of face-workers and haulage-
men. Over the five years from 1913 to 1918 the proportion of
hewers in the underground labour force declined by more than
one-twelfth from 40·8 per cent to 37·7 per cent. 1 It would be unwise
to make any extensive retrospective projections from these figures,
but insofar as they may represent a continuing trend they suggest
a possible justification for the view expressed by the Samuel Com-
mission that the causes for declining productivitywerenot to be found
primarily in the performance of the hewer at the face. 2

IV

To assert that the explanation of declining labour productivity is

to be sought fundamentally in the environmental conditions of the
coal industry's existence is in no way to suggest that other factors
were not involved or to exonerate miners or coal owners from
responsibility for the industry's deteriorating efficiency. Indeed the
record of deterioration, with its pattern of sharp decline followed
by short-term stabilization at the new lower level, is immediately
suggestive of a different explanation. It provides initial and power-
ful evidence in support of the view, advanced vehemently by many
coal owners, that declining productivity was a direct consequence
of the failure of the individual miner to pull his full weight in the
industry.
One plea in mitigation of the miner's alleged failings may be
entered immediately. As a result of the rising demand for coal,
employment in coal mining increased rapidly. Every year between
1898 and 1913 witnessed an addition to the industry's labour force
and the overall growth in these fifteen years was from 687 to 1,107
thousand. 3 In consequence, the personnel of the industry was con-
stantly changing and there was always within it a large body of
inexperienced workers. At the end of 1907, for example,-a year
1 Sankey Commission, Vol. III, p. 63.
1 Samuel Commission, Vol. I, p. 119. This is a view also supported by evidence
relating to the Govan Collieries collected by A. Slaven, Coal Mining in the West
of Scotland in the Nineteenth Century: The Dixon Enterprises (Glasgow B.Litt.
thesis, 1966, 1-5 ff.; Appendix A, Table 25).
• For statistics of output, productivity, etc., see 'Labour Productivity and
Technological Innovation', pp. 67-9.
50
 THE COAL INDUSTRY

which saw a sharp fall in output per manshift in the industry-

there were at a conservative estimate 80,000 workers, or one-twelfth
of the total labour force, who had not been employed in coal
mining at the beginning of the year. Similar large inflows of labour
occurred in 1900 and 1908. Even with an unchanged attitude to
work on the part of the individual miner, this persistent heavy
addition of inexperienced recruits to the industry's labour force
could not but have an adverse effect on the quality of mining
labour and lead to a decline in its productive efficiency.
The criticism levelled against the miners by their employers,
however, was directed as much at the seasoned pitman as at the
new recruit. In its more general form the charge amounted to a
simple complaint of lack of effort on the part of the individual
miner: in its more extreme expression it carried the accusation that
men were conspiring together to secure a general restriction of
output. 1 Some support is lent to this second and more severe charge
by a consideration of the coincidence which exists between the
decline in labour productivity and the growth in strength and
militancy of miners' trade unionism. The emergence of the Miners'
Federation at the end of 1889 was followed by a year in which
labour productivity declined sharply by 6 per cent. Again, in 1900,
a further reduction in productivity of 5 per cent coincided with an
increase in the membership of the Federation from 238,300 to
363,335. Finally, in 1908 an even more marked fall in productivity,
on this occasion reaching 7 per cent, was accompanied by a rise
in Federation membership from 458,300 to 590,235 and this
ushered in a period of low productivity and of trade union mili-
tancy culminating in and extending through the intense industrial
strife of 1911-14.2
Yet though it is possible to offer some basis for charges of
ca'canny against the miners' unions, the validity of this accusation
is extremely dubious. Policies of deliberate restriction of output
were not wholly alien to the miners' tradition, but in the conditions
of expansion and full employment which the industry experienced
in the first two decades of the twentieth century, such policies had
little relevance to the miners' immediate needs. It was only when
1 See the evidence given before the Sankey and Samuel Commissions (Index
refs. Sankey Commission, Vol. III, p. 299; Samuel Commission, Vol. III, p. 450).
Note especially the evidence of W. A. Lee, Secretary of the Mining Association,
Samuel Commission, Vol. III, Q. 5681, 6310-69, 6589-604.
• Federation membership figures are given in R. P. Arnot, The Miners, Vol. I
(1949), p. 393. For certain reservations attaching to the productivity figures see
'Labour Productivity and Technological Innovation', pp. 67-9.
51
 THE DEVELOPMENT OF BRITISH INDUSTRY

demand fell behind supply and coal stocks mounted, as in the

depressed conditions of the 1880s, that the advocates of restriction
could hope to win a favourable hearing. So well-informed and
unprejudiced a witness as Sir Richard Redmayne testified before
the Sankey Commission his belief that no deliberate policy of
restriction existed among the miners. 1
The more general complaint that miners as individuals were
lessening their effort is easier to accept in principle but no less
difficult to assess in detail. As early as 1894 R. H. Hooker2 had
noted an interesting correlation between the number of men
employed and the level of wages paid in the coal industry. Sub-
sequent observers have added to this, evidence of a no less signi-
ficant inverse correlation between the level of wages and the pro-
ductivity of the miner. 3 Years of relative prosperity gave added
employment opportunities to the miner and in the short run tended
to raise productivity. But once prosperity began to approach boom
proportions the incentive to extra effort, particularly on the part
of the piece-working hewer, diminished and the miner began to
seek his share of the industry's prosperity not solely in higher
earnings but in terms of reduced effort and greater leisure.
A preference for leisure expressed itself in the form of increased
voluntary absenteeism. For the years before 1914 no continuous
series of returns of absenteeism is available for the industry as a
whole, but data exist from which it is possible to review the
changing incidence of absenteeism among the hewers in the Durham
coalfield over a period of thirty years. This series is particularly
valuable in that it relates to a group of skilled and experienced
workers operating in a long-established and slow-growing coalfield.
This group, therefore, had strong traditions and the turnover of
labour was appreciably slower than among off-hand workers in
newer and faster-growing coalfields. The returns of absenteeism,
therefore, may be said to offer some indication of changing attitudes
to work among the deeper-rooted elements in the coal industry.
The returns show both the coincidence of high prices and wages
and high rates of absenteeism, and the general tendency for absen-
teeism to rise sharply after 1898. Lest too much should be read
into this Table, however, it should be noted that increased absen-
1 Sankey Commission, Vol. II (Cmd. 360), Q. 27747, 27847-50. See also
Redmayne's evidence to the Samuel Commission, Vol. II, 2598-600.
1 'On the relation between wages and numbers employed in the Coal Mining
Industry', J. Roy. Stat. Soc., )vii (1894), 627--42.
1 See e.g. 'Labour Productivity and Technological Innovation', pp. 51-3.

52
 THE COAL INDUSTRY

TABLE VI: Absenteeism Among Hewers in the Durham Coa[fie/d 1

Percentage Shifts
Years Lost through Absenteeism
1879-83 7-81
1884-88 7·65
1889-93 8·62
1894-98 7·90
1899-1903 10·60
1904-08 9·80
1909-13 11-70

teeism at the face in itself can account for no more than twenty of
the 156 tons by which the annual output of the underground
worker in Durham fell in the thirty years before 1914. The statistics
are significant more for the general indication which they give of
diminished effort than for the specific loss of tonnage which can
be attributed through them to voluntary absenteeism. 2
In the troubled years of the 1920s critics of the British coalminer
were apt to compare his efforts unfavourably with those of his
European and more especially his German counterparts. Such
criticisms had rarely if ever been voiced a quarter of a century
earlier. A Foreign Office observer reporting on conditions in the
Ruhr coalfields in 1898 expressed a view common on both sides of
the North Sea when he said, 'I think it will still be found on the
average that the working effort per coal hewer and shift is only
about half what it is in England, for the following reasons, because
the English pitman lives better, works with more judgment and
skill, and once he has made his conditions, gives his greater labour
power more freely.' 3 Little more than a quarter of a century later,
in 1925, a different point of view was being implied in evidence
given before the Samuel Commission by Frank Hodges. 'The
German's attitude to his work,' he maintained, 'is wholesome and
good. In short, he is prepared to do his whack, because he can only
live by his work. ' 4 The inference that the British miner was less
1 Sankey Commission, Vol. III, p. 42.
1 Not all absenteeism was, of course, voluntary. Some estimate of the possible
levels of voluntary absenteeism may be obtained from an examination of returns
collected by the Board of Trade in 1913-14 (Sankey Commission, Vol. III, p. 35).
In Yorkshire, the area with the highest return, absenteeism for the four quarters,
September 1913-June 1914, averaged 13.6 per cent. In West Scotland, at the
other extreme, it was 6.4 per cent. The national average was 10.6 per cent, and
it may, therefore, be reasonably assumed that voluntary absenteeism at the
national level averaged at least 4.2 per cent and in Yorkshire 7.2 per cent.
1 S. J. Chapman, Work and Wages, Vol. I (1904), p. 46.

'Samuel Commission, Vol. II, Q. 9850.

53
 THE DEVELOPMENT OF BRITISH INDUSTRY

hard-working and conscientious needed no underlining. Between

these two conflicting statements lies not only the passing of a
quarter-century but the devastating consequences of a World War.
Profound, however, as were the implications of the war of 1914--18
for the coal-mining industries of Europe, it would be unwise to
see the changing attitudes of the British and German miner as the
product solely of the disrupting impact of war. Longer-term trends
were operating on both sides of the Channel, on the one hand
tending to lessen the stimulus to effort on the part of the British
miner and on the other enhancing the work-effort of his German
counterpart. As a result the advantage which the skill and experi-
ence of her mineworkers had given to the British coal industry
throughout the Victorian era was now being steadily diminished.
Although, as has been said, the charges of diminution of effort
had substance, mineowners found difficulty both before and after
the war of 1914--18 in pressing them home. It was more easy to
demonstrate that the statutory reduction of the leqgth of the
working day by the Eight-Hours Act of 1908 had reduced the
annual output of the miner. The Act came into force in 1909 and
to this extent its operation is not strictly coincident with the sharp
downturn in labour productivity which came a year earlier. The
decline in productivity which occurred in 1908, however, was
directly attributable to the onset of conditions of recession pro-
ducing underemployment in the industry in the later months of
the year, and it is significant that when output began to revive a
year later, productivity showed no inclination to move in the same
direction. 1
When consideration has been ·given, therefore, to relevant data
and to the conflicting, subjective and often prejudiced evidence of
contemporaries, it would seem valid to conclude that in the quarter
century before 1914, and more particularly from 1900, there was
some falling-away in the basic efficiency of the average miner-
attributable in part to a reduction in hours of work, in part to a
continuing dilution of the skilled labour force, but also in some
1 Between 1904--08 and 1909-13 labour productivity in British mining declined
by 9.2 per cent. In the same period the decline in Belgium was 1.9 per cent.
France, Germany and the USA all showed an increase in labour productivity in
these years, in France of 0.5 per cent, in Germany 2.8 per cent and in the USA
(bituminous sector) 13.1 per cent. If the strike year of 1912 is excluded the decline
in British productivity is reduced to 7.7 per cent. It is arguable that a large part,
and perhaps the whole, of this reduction is attributable to the Eight-Hours Act;
but see the contrary view argued by Sir Richard Redmayne (Sankey Commission,
Vol. III, Q. 5133-41).
54
 THE COAL INDUSTRY

measure to a diminution in the effort of the individual miner which

stemmed from the conditions of general prosperity in which the
industry was working.

If, however, there was a disposition on the part of the owners to

lay charges against the men, there was equally no inhibition on
the side of the men to make counter-charges against their em-
ployers; and in due time these strictures were reinforced by criti-
cisms from outside the industry. Put in its most general terms, the
accusation against the owners was that, in a situation where profit-
making was relatively easy, they had failed to make use of the
opportunities which new techniques and practices were offering
the industry. So long as demand ran ahead of supply, as it seem-
ingly did in most years between 1898 and 1914, the British coal
owner was content to leave well alone and simply ride the tide of
the industry's success.
Spelt out in fuller detail, these general accusations can be broken
down under two heads of complaint: those touching the conduct
of operations in individual collieries and those belonging to the
organization of the industry as a whole. Under the first head are
to be found the problems which relate primarily to management-
the general organization and direction of a colliery's development,
the deployment and control of labour, the provision of supplies,
and the application of capital, particularly in the form of machinery,
to reinforce the efforts of labour. On all but the last of these,
direct as distinct from inferential evidence is sparse almost to the
point of nonexistence. Perhaps because of this, attention has been
largely concentrated by critics of the industry on the provision or
nonprovision of mechanical appliances, principally in the form of
coal-cutters and conveyors, as a yardstick of managerial efficiency
and progressiveness. Such emphasis may well be exaggerated for
two reasons. On the one hand it can overestimate the benefits
which the intensive application of machinery could confer upon
the industry under the conditions in which it was operating before
1914, and on the other hand it may exaggerate the importance of
the coal-cutter and face-conveyor in comparison with the machinery
used at other points in the cycle of mining operations. Furthermore
overemphasis on the significance of mechanization may serve to
divert attention from more fundamental sources of entrepreneurial
and managerial weakness in the industry. Yet in a discussion of
55
 THE DEVELOPMENT OF BRITISH INDUSTRY

managerial efficiency it is logical as well as prudent to proceed

from the relatively known to the largely unknown and it is therefore
with the evidence relating to the employment of machinery that a
first approach can best be made to the assessment of entrepreneurial
efficiency.
An awakening interest in mechanization, particularly at the face,
is manifest in the coal trade newspapers and professional society
journals at the turn of the century. The Transactions of the National
Institute of Mining Engineers and of the National Association of
Colliery Managers both frequently printed communications on the
use of machinery, describing new machines and discussing the
problems to which their use gave rise. The Colliery Guardian pub-
lished, first in its own columns and then in book form, collections
of essays by Sydney F. Walker on Coal-Cutting by Machinery in the
United Kingdom and by A. S. E. Ackermann on Coal-Cutting by
Machinery in America. 1 The second of these was intended to bring
home to British mineowners the comparative backwardness of
mining operations in the United Kingdom. By 1900, it was asserted,
one-fifth of the output of 240 million tons produced from mines in
the United States was machine-cut. At this time less than one-
fiftieth of the British output of 225 million tons was undercut
mechanically 2 and the productivity of the British miner was little
more than half that of his American counterpart. Too much, how-
ever, can be made of this contrast. Geological conditions in the
bituminous coalfields of the United States, not least in the great
eastern Appalachian coalfields and in the Central coalfield of
Illinois and Indiana, were well-suited to the development of
machine-mining, offering advantages of stable floor and roof con-
ditions and freedom from faulting rarely available in Britain. In
these respects Britain in her turn was better placed than her con-
tinental neighbours and mechanical coal-getting made greater
progress before 1914 in Britain than in any country of continental
Europe. 3
The principal advantages claimed for the coal-cutter by its
advocates in the early twentieth century were that the cutter made
possible the economic mining of coal in seams where hand-holing
1 Colliery Guardian Series of Handbooks, Nos 15 and 16 (both 1902).
• A. S. E. Ackermann, Coal Cutting by Machinery in America, p. 6.
1 In the Ruhr 2 per cent of coal was mechanically cut in 1913 (Technical Tri-
partite Meeting on the Coal Mining Industry (Geneva, 1938), Part I, p. 106). By
1926, 66 per cent of Ruhr coal was mechanically cut (cf. Great Britain's 20 per
cent), largely as the result of the use of percussive picks.
56
 THE COAL INDUSTRY

was impossible or prohibitively costly, that it enabled a greater

proportion of large coal to be obtained and that it increased labour
productivity at the face. The validity of the first two of these claims
was soon established. In the opening years of the century the
advantage given by the machine in the working of their seams was
of particular interest to mineowners in the long-developed fields of
West Scotland and Northumberland. In an era of high prices, such
coal owners had an especial incentive to exploit their thinner seams
and at many collieries the coal-cutter offered the prospect of an
extended and profitable life to pits otherwise condemned to early
extinction. In years of relative prosperity, on the other hand, the
prospective availability of an increased proportion of large coal
was less attractive than it might have been in times of depression
when the price differential in favour of large coal was at its greatest.
For the majority of coal owners, however, these were not decisive
factors. It was the third major contention, that the coal-cutter was
cost-reducing in thick seams as well as thin, which, if its validity
could be established, was likely to win most converts to the use of
the new machinery. Almost without exception, those who per-
severed with coal-cutters in the early years of the twentieth century
spoke of obtaining an increase in output per man.1 Yet in spite of
this the progress made by the coal-cutter and its handmaid, the
conveyer, before 1914 was slow and their use was largely confined
to the working of thin seams. In 1913 only 7·7 per cent of Britain's
coal was mechanically cut and of this all but 2·9 per cent came from
seams less than 42 inches thick. Of 170 million tons of coal obtained
from Britain's thicker seams only 5 million tons-less than 3 per
cent-were cut by machine. 2
To observe this is not in itself to condemn the vast majority of
British coal owners as unprogressive and unenterprising. A wide
variety of factors combined to inhibit or discourage the coal owner
from adopting machine-methods at the face. Most fundamental was
the existence of unfavourable geological conditions. Lancashire, for
example, a long-worked coalfield now reaching for its thinner
seams, was a district seemingly ripe for the extensive employment
of the coal-cutter, but the prevalence of faulting and the difficulties
presented by steeply pitching seams set up insurmountable barriers
to enterprise. To these natural obstacles were added others in the
technological field, more particularly those relating to the supply
1 See the evidence given before the Royal Commission on Coal Supplies,
1901---05, summarized in P.P. 1905, XVI (Cd. 2363), pp. 44-6.
1 Based on Samuel Commission, Vol. Ill, p. 184.

57
 THE DEVELOPMENT OF BRITISH INDUSTRY

and servicing of machinery and the provision of power. 1

Almost as intractable as these material impediments were diffi-
culties that might arise in the field of labour relations. It would
indeed have been surprising if the advent of machinery at the face
had not at the least aroused suspicion in the mind of the working
miner. The coal-cutter seemed to present a direct threat to both
the craft and the livelihood of the hewer, and the efficient large-scale
use of cutters and conveyors demanded a reorganization of activity
not only where the coal was hewn but throughout the cycle of
operations from face to surface. It raised in acute form questions
of shift-working which had already produced dissension in many
coalfields. And even when suspicion had been overcome and fears
allayed the coal owner faced problems of retraining his labour
force and of determining getting-prices in conditions in which the
bargaining scales seemed loaded on the side of the men. Although
there is little evidence of organized resistance to mechanization
and though by 1905 observers could already speak of the passing
of such opposition as had earlier existed, 2 past experience coun-
selled caution. In face of such difficulties and at a time when
mining was profitable, the coal owner required a firm conviction
of the financial benefits which investment in machinery would
bring. The immediate commitment might not be large-a coal-
cutter could be bought for as little as £75-but the consequential
cost of reorganization throughout the colliery could be consider-
able. 3 Only the fear of bankruptcy felt by the thin-seam operator
or the prospect of substantial gain was likely to tempt the coal
owner into costly innovation in the conditions which existed in
British coal mining in the early years of the twentieth century. Such
evidence as was provided, for example, before the Royal Commis-
sion on Coal Supplies in 1901-05 and in the technical journals
suggests that, more especially in the thin seams, the coal-cutter was
1 For a fuller treatment of this subject see 'Labour Productivity and Techno-
logical Innovation', pp. 57-62.
1 R.C. on Coal Supplies, P.P. 1905, XVI (Cd. 2363), p. 46.
a An 'Ingersoll' machine could be bought for £75 (R.C. on Coal Supplies, P.P.
1904, XXIII (Cd. 1991), Q. 17105, G. E. Stringer's evidence). Stringer also
stated: 'I think the chief disadvantage I have experienced is the capital expendi-
ture required to install the machines, the cost of renewals and repairs and the
cost of maintenance' (Q. 17099). N.B. also the statement of W. A. Lee before
the Samuel Commission (Vol. II, Q. 5771): 'One of the most serious considera-
tions in the matter of expenditure when coal-cutting machinery or conveying
machinery is introduced is that of the supply of power which results in a con-
siderably greater expense than that merely represented by the cost of the cutting
machinery itself.'
58
 THE COAL INDUSTRY

able to reduce the labour-cost of coal-getting, but the extent to

which this offset the capital charges involved in the operation was
uncertain. Enthusiasts like W. E. Garforth and A. S. E. Acker-
mann1 were convinced that cutters amply repaid their users but
others, no less well disposed in principle to mechanization, were
more cautious. George Stringer, who like Garforth had behind
him some twenty years of direct experience of machine-mining in
West Yorkshire, in 1905 saw the future of the coal-cutter primarily
in terms of the working of thin seams and its increasing use as
stemming from the inevitable resort to such seams that the future
of the industry demanded. 2 Even twenty years later, in 1925, the
considered view of the mineowners' official representative before
the Samuel Commission was that, 'Generally speaking, the saving
in labour charges at the face is absorbed by the capital charges on,
and the running cost of, the machine.' 3
So long as labour could readily be attracted into coal mining at
wage-rates which did not eat into the margin of profit, the coal
owner had little incentive to resort to radical innovations in labour-
saving machinery. Although in a boom year like 1900 the share of
wages in the production cost of coal tended to increase, in general
the rise in prices which the industry experienced in the two decades
before 1914 was the result rather of the pressures of consumer
demand from above than of the demands of wage-labour from
below. When the demand for coal was particularly high, as in 1900,
1907 and 1913, prices and profits rose even more sharply than
wages; and, although it was at such times that coal owners began
to contemplate the advantages of mechanization, there was nothing
in their economic condition to compel them to translate thought
into early action.
Too much, therefore, can be made of the failure of the pre-1914
coal industry to press forward with the adoption of machine-
techniques at and about the face. It is indeed arguable that insofar
as coal owners preferred-there is no indication of the extent to
which they in fact did so-to lay out capital on improvements in
road-haulage and winding equipment rather than on face-machi-
nery, they may well have been making the wiser choice. The more
rapid introductions of the coal-cutter and conveyor would, no
doubt, have helped to check the fall in labour productivity in the
1 R.C. on Coal Supplies, P.P. 1903, XVI (Cd. 1725), Q. 2717 ff. Ackermann,
op. cit., 109 ff.
1 R.C. on Coal Supplies, P.P. 1904, XXIII (Cd. 1991), Q. 17111.

• Samuel Commission, Vol. 11B, p. 955.

59
 THE DEVELOPMENT OF BRITISH INDUSTRY

twenty years before 1914 and might have limited the rise in produc-
tion costs, but, in the economic and technological conditions in
which the pre-war industry was set, the gains would probably not
have been substantial. The significance of the failure to make use
of the coal-cutter does not lie primarily in its immediate con-
sequences for the efficiency of the industry but in the extent to
which it indicates the presence of attitudes of mind that might
affect the conduct of the industry at more general levels. Insofar
as unwillingness to persevere with the coal-cutter was symptomatic
not of a rational assessment of its potentialities but of the operation
of conservative tendencies in the industry, its consequences could
be far-reaching. 1 The roots of such conservative tendencies are to
be sought both in the manager's office and the boardroom.

VI

Systematic study of the history of management in British industry

is still in its infancy, 2 Evidence is elusive to the point of making
generalization hazardous; and this is particularly the case in the
coal industry. The varying conditions under which coal is worked
in different coalfields-variations, for example, in the quality of
coal, the depth and thickness of seam and the ease of working-
have led to considerable diversities not only in the techniques of
mining but in the size of collieries and colliery companies. These
differences have had inevitable effects on the problems of manage-
ment and have brought significant differences of emphasis in the
mine manager's duties from colliery to colliery as well as from
coalfield to coalfield. For much of the nineteenth century the
majority of mine managers had controlled collieries which even by
the standards of the early twentieth century were small in size and
output. In such undertakings the manager was very largely his
master's factotum, expected to possess a knowledge of the seams
he mined and the skills required to work them and to be able no
less to organize and direct the men under his control. Many
managers had risen from among the ranks of the common pitmen.
Some were of high intelligence, others came close to illiteracy.
From the 1870s, however, several factors combined to enhance
1 See the references to 'British conservatism' and the existence of 'a sort of vis

inertiae' in evidence given before the R.C. on Coal Supplies, as quoted in 'Labour
Productivity and Technological lnnovvtion', p. 61.
2 See S. Pollard's important pioneer study in this field, The Genesis of Modern

Management (1965).
60
 THE COAL INDUSTRY

both the qualifications and the status of the mine-manager. Legis-

lation, aimed principally at securing the safety of the mineworker,
necessitated the raising of the educational standards demanded in
mine-management; the size of collieries increased, bringing addi-
tional responsibilities to the manager; and the introduction of new
machinery and methods created new demands and opportunities.
Although these changes provided scope for some devolution of
duties, their overall effect was to widen the average manager's
range of activities and to increase his already onerous responsi-
bilities. This development was well described by T. E. Forster
Brown in 1903 :1

'The colliery managers of today have to grapple with very different

things from what they had to grapple with forty years ago. . .. A
successful colliery manager of the present day needs to be a first-
rate organizer, not only as regards labour, but in other ways, and,
in fact, he is an entirely different person from his predecessor of
thirty or forty years ago. The ideal colliery manager ought to be a
scientific philosopher, with a thorough practical knowledge of
mining, of men and of applied mechanics; he ought to have great
firmness of purpose and . . . a good digestion.'

Not every manager came close to this ideal. All, through the
demands of the law and the form of their training, were well-
versed in the practice of mining and the requirements of safety
legislation, but the ability to handle men and even more to organize
the development of a colliery were more fortuitous by-products of
the manager's training. The emphasis throughout was on empiri-
cism, the acquisition of a working knowledge by apprenticeship
and experience rather than by a formal course of systematic study.
By the early years of the twentieth century, converts were being
won for the view that the interests of the industry might well be
served by recruitment of managers trained, as in Germany, in the
universities and in schools of mines; but the facilities for such a
development were limited, especially when compared to those
existing in Germany and the United States. 2
The preference for the pragmatic rather than the theoretical and
for proficiency in mining engineering rather than in the broader
field of mines organization and management is apparent in the pub-
lished transactions of the National Association of Colliery Mana-
1 Trans. Nat. Ass. of Colliery Managers, I (1903--04), p. 28.
1 Ibid., I, p. 29.
61
 THE DEVELOPMENT OF BRITISH INDUSTRY

gers. The establishment of this organization in 1887 was in itself

an indication of the enhanced status and self-consciousness of the
colliery manager, but the activities and concerns of the Association
as revealed in its Transactions were almost indistinguishable from
those of the longer-established National Institute of Mining
Engineers. The published papers and communications were almost
exclusively concerned with problems in the field of mining engineer-
ing and geology. Only rarely were the broader issues of policy
raised, usually through the medium of the presidential address. In
1904, for example, Mr Isaac Hodges used the occasion of the
annual dinner of the Yorkshire branch of the Association to
attempt a comparison between the practice of mine-management
in Germany and Great Britain.1 He referred particularly to

'the immense sums expended on modern power plants and on the

duplication of the most expensive engines in Germany, their lavish
expenditure on experienced engineers and staffs of assistants'

and observed further that

'The pride of the German Colliery Manager was good to see-his

certainty that his mining methods were unequalled and his know-
ledge beyond comparison and his undoubted confidence in himself.
This confidence arose largely from the strength of the Westphalian
Coal Syndicate, which ensured him peace and quietness in which
to work out his engineering problems and enabled him to put his
perfected schemes into operation. He was assured of full work in
summer and winter, and this made possible many economies not
possible with us.'

Hodges's observations provoked critical comments from members

of his audience, not all of whom were prepared to accept his
implied disparagement of British managerial methods and achieve-
ments; but more significant than this predictable reaction was the
character of the address which occasioned it. Speakers, when they
strayed away from narrow technological subjects, were normally
content to restrict themselves to less controversial and more
parochial themes.
The method by which managers were recruited and trained for
their duties was the factor principally responsible for the general
character of the profession-its commendable toughness and prag-
1 Ibid., II (1904-05), p. 113.
62
 THE COAL INDUSTRY

matism on the one hand, and its limitations of vision and organizing
power on the other-but this primary factor was reinforced by
others. The material rewards of mine-management were not so
great as to attract to the profession-ambitious and able young men
from outside the industry. In 1913 three-quarters of Britain's mine
managers were receiving a salary (inclusive of allowances of coal
and housing) of no more than £400 per year and more than half
were earning less than £300. 1 Only three could command a salary
of over £1,000. It is not possible to provide comparable information
for any large manufacturing industry, but the Sankey Commission
in 1919 obtained detailed returns of the salaries paid to postmasters
at head post offices throughout the United Kingdom. 2 These show
variations ranging from the £155 earned by the postmaster of
Inveraray to the £1,000 received by the head postmasters of Birming-
ham, Glasgow, Liverpool and Manchester. Among smaller towns
whose postmasters earned upwards of £400 per annum were
Altrincham, Bangor, Bridgwater, Dewsbury, Grantham and Weston-
super-Mare. It is perhaps invidious to attempt to weigh the merits
of different professions, yet it is at least arguable from this com-
parison that, considering his long training, burdensome duties and
onerous responsibilities, the mine manager was indifferently
remunerated.
Behind the mine manager stood the coal owner. The pre-war
coal industry in Britain was characterized by the large number of
undertakings of which it was composed. In 1913, 3,289 collieries
were being operated by 1,589 separate undertakings, 3 each colliery
employing on average 340 men and producing annually 87,000 tons
of coal. There was, however, great variation of size among the
country's collieries. In 1924, when the number of collieries had
been reduced to 2,481, largely by the elimination of many small
pits, almost one-third of those still operating employed less than
fifty men and in total provided no more than I per cent of the
nation's coal output. At the other end of the scale 118 collieries,
each employing upwards of 2,000 miners, were producing almost
one-quarter of Britain's coal. 4
In a consideration of the industry's efficiency it is convenient and
justifiable to disregard the large group of small collieries. Their
1 Sankey Commission, Vol. III, p. 198.
1 lbid., pp. 200-2. The return relates to 1919 but excludes war bonuses and
therefore is comparable to the mine managers' salary statistics for 1913.
• Samuel Commission, Vol. III, p. 176.
'Ibid., p. 177.
63
 THE DEVELOPMENT OF BRITISH INDUSTRY

influence on the industry's prosperity and development, whether

for good or ill, was negligible and their survival or disappearance
could have no significant effect on its future. Outside this constella-
tion of small pits, the great majority of British collieries employed
between fifty and 1,000 miners. Measured in terms of labour
productivity, these relatively small collieries were in general as
efficient as larger collieries employing up to 2,500 men. It was
above this point, in the largest collieries producing on average
upwards of 600,000 tons of coal annually, that the advantages of
scale began to show themselves, and this was most notably the
case in the more recently developed coalfields of South Yorkshire
and the East Midlands. In 1924 only fifty-seven collieries fell into
this category and among them they produced rather less than one-
sixth of the nation's coal.
No less significant than the size of pits in conditioning the
efficiency of the industry was the size of the undertakings control-
ling them. Many of the 1,589 undertakings which made up the
British coal industry in 1913 were very small, but even as late as
1924 there were still at least 572 undertakings employing upwards
of 100 men. While on average each such undertaking produced
400,000 tons of coal annually, the majority were supplying less-
many considerably less-than this quantity. The advantages held
by the large undertaking were many and important. Its capital
resources were great; it could conduct its operations with a view
to developing its more productive pits and running down its less
profitable ones; it could afford to experiment, not least in the intro-
duction of new methods and machinery; it could command the
services of able managers and offer them both opportunities and
rewards commensurate with their abilities; and it could build up
reserves to ride the storms of difficult years.
In the early years of the twentieth century the number of under-
takings in the British coal industry was decreasing; but the decline
was slow. Between 1900 and 1913 the number of firms fell from
1,787 to 1,589, but by 1921 it had risen again to 1,673. 1 In this
respect the Americans, with their 12,122 separate concerns in the
bituminous section of the industry alone, 2 had little to teach the
British, but in Germany concentrative tendencies were strongly at
work. By the early twentieth century the Ruhr coal industry was
coming to be dominated by some dozen concems3 and the move-
1 lbid., p. 176.
1 E. E. Hunt, F. G. Tryon and J. H. Willits, What the Coal Commission Found
(Baltimore, 1925), p. 70.
1 N. J. G. Pounds, The Ruhr (1953), p. 102.

64
 THE COAL INDUSTRY

ment towards vertical integration was reinforced by equally power-

ful forces of horizontal integration effecting a fusion between the
steel and coal activities of the region. At the same time the Rhenish
Westphalian Coal Syndicate had fully established itself and this
cartel was controlling the output and sale of fully six-sevenths of
the coal produced in the Ruhr basin. Similar tendencies were to
be found in Britain but their progress was by German standards
both limited and slow. By 1913 a few large firms had emerged in
the industry. Some, like the Fife Coal Company in East Scotland
and the Powell Duffryn Company in South Wales, employed as
many as 10,000 miners and produced more than 2 million tons of
coal annually. 1 Others, like Guest, Keen and Nettlefolds, were both
highly productive and combined interests in coal and steel. But
small or medium-sized producers were still the major force in the
industry. In 1925 almost half of Britain's coal was still being mined
by private companies. 2 Although the public company had reached
a position of ascendency in the more rapidly expanding coalfields
of East Scotland, South Wales, South Yorkshire and the East
Midlands, the private-and normally smaller-firm retained its
advantage in the long-worked fields of Northumberland, Durham,
Lancashire and the West Midlands. This continuing affection for
the private firm explains in part the limited recourse which the
industry had to the open capital market in the pre-1914 era. It has
been calculated that between 1899 and 1913 issues on behalf of
pure colliery companies amounted in total to £10·2 million and
that only in four of the fifteen years was a figure of £1 million
attained. 3
Just as Britain lagged behind Germany in making the large
concern the predominant business unit in coal mining, so in her
approach to cartelization she never passed beyond the flirtation
stage. Twice in the difficult years between 1893 and 1896 leaders in
South Wales mining put forward schemes for the fuller integration
of the industry, but neither Sir George Elliot's ambitious project of
1893 for the establishment of a national coal trust4 nor D. A.
Thomas's more modest South Wales proposals5 three years later
came within reach of acceptance. In 1914, indeed, integrative ten-
dencies of this kind were less evident in the British coal industry
1 Based on Home Office List of Mines 1911.
• Samuel Commission, Vol. III, p. 180.
• A. M. Neuman, Economic Organization of the British Coal Industry (1934),
p. 61.
'J. H. Clapham, Economic History of Modern Britain (1938), Vol. III, p. 220.
6 J. V. Morgan, Life of Viscount Rhondda (1918), pp. 167-79.

C 65
 THE DEVELOPMENT OF BRITISH INDUSTRY

than they had been even seventy-five years earlier when the north-
eastern Regulation of the Vend was still vigorously alive.
It is tempting to see in this survival of the small firm and colliery
powerful evidence of that predisposition to individualistic conser-
vatism which has been held to be a characteristic of much of
British industry in the present century and to have contributed so
substantially to its deficiencies. Yet the explanation of the limited
progress towards integration is not to be sought wholly in the
failings of its entrepreneurs. Ths continued preference for small-
ness was at least encouraged, and in part dictated, by facts of
geology and geography and by institutional forces outside the
industry; and to these factors were added others arising out of the
legacy of the industry's past.
Geography, which in so many respects had proved the industry's
ally, at this point played her false. The high cost of land transport
which enabled British coal owners to resist the competition of rival
coal producers in Mediterranean and South American markets also
gave protection to inefficient units of production in Britain itself.
The multiplicity of coalfields in Britain enabled high-cost pits and
concerns to preserve a substantial immunity in face of the com-
petition of more efficient rivals. Although, for example, coal might
be produced more cheaply in South Yorkshire than in the western
reaches of the county or in neighbouring Lancashire, proximity to
the textile mills gave the longer-established producer of the west
all the protection he needed. This survival of the relatively unfit in
its turn hindered the growth of the larger and potentially more
efficient units in the industry. By contrast the geographically more
highly integrated Ruhr coalfield was able to achieve a rational
structure in which productive efficiency rather than the accident of
location was the key to the survival and growth of each enterprise.
The disintegrative influence which geographical forces exercised
in the organization of the British industry was reinforced in at least
two respects by institutional factors. The system of private owner-
ship of minerals in Britain had not in general been conducive to
the establishment of large-scale units of production and its per-
sistence raised barriers to any attempt at latter-day rationalization.
In a different field the failure of British joint-stock banks to estab-
lish direct links with industry of the kind developed in imperial
Germany meant the denial to the coal industry-as to other British
industries-of an influence which gave powerful encouragement to
the integration and cartelization of the industry of the Ruhr. 1
1 Cf. Neuman, op. cit., pp. 61-3.
66
 THE COAL INDUSTRY

No less influential than the forces of geography and institutions

were those that derived from the history of the industry itself. The
coal industry in Britain had grown to maturity largely under the
influence of normal market forces. This circumstance had tended
to produce an uneven pattern of growth in which short bursts of
intensive investment following the appearance of boom conditions
were succeeded by longer periods of relative quiescence in the
investment field, when the resources of the industry were rarely if
ever extended to their full limits. Capacity tended to be particularly
stretched and investment stimulated in times of war. Thus one
period of boom had come at the time of the Crimean War, a second
with the Franco-Prussian War in the early 1870s, and a third with
the war in South Africa at the turn of the century. Of these the
second had been most potent in its creative consequences and the
developments of 1871-75 had gone far to determine the shape of
the industry over the next half century. Only in the concealed deep
coalfields of South Yorkshire and the East Midlands was there
scope for continued large-scale initial investment in the early
twentieth century. As a result certainly more than half and possibly
as much as two-thirds of the coal produced in 1914 came from
collieries which had been projected before 1875.1 The consequence
of this both at the operational and the financial level was to per-
petuate forms of organization which belonged rather to the mid-
nineteenth than to the early twentieth century. As Jevons expressed
it in 1915: 'Most of the pits sunk forty or fifty years ago were not
planned and equipped to deal with an output of more than 500 tons
per day; and it is pretty obvious that the overhead costs of all
kinds, when reckoned per ton of coal, will be much higher than
for a modem colliery equipped to wind 5,000 tons a day.' 2 It was
not only their smallness which made such collieries relatively
inefficient. Because of their age they also offered little inducement
to coal owners to make even the minor investments that would
have marginally increased their efficiency, and the incentive to
experiment with multiple shifts, which operated strongly in the
case of the large colliery, was almost wholly absent from the
calculations of the owner of the older, smaller pit.
There is much, therefore, which can explain-and even excuse-
the limited development of integrative tendencies in the pre-1914
coal industry. But to explain is not to explain away. Failure to take
full advantage of the economies of scale both at the entrepreneurial
1 Based on Samuel Commission, Vol. III, p. 175.
• Jevons, op. cit., p. 758.
67
 THE DEVELOPMENT OF BRITISH INDUSTRY

and operational level reduced the industry's overall efficiency and

in so doing also restricted its competitive capacity in relation to a
German rival who not only saw the advantages of integration but
was quick to make use of them.

VII

The decade and a half which followed the First World War brought
to the British coal industry a depression as pronounced as had
been the prosperity of the immediate pre-war years. Demand and
output declined, prices and profits sagged-the latter to the point
of nonexistence-the wages of miners fell both absolutely and in
relation to those of workers in other industries and unemployment
became heavy and endemic. It is easy to see in this sudden change
of fortune a visitation of the failings of the pre-war generation on
their unfortunate post-war successors. Many of the disorders of
the post-war coal industry, however, derived directly from the
stresses of the war itself. Outside the industry a number of factors
were combining to reduce the demand for coal, notably economies
in the use of fuel, the impoverishment of Europe, the advent of
new overseas competitors and the advance of oil into markets
previously dominated by coal. These were forces over which the
British coal industry had no control and whose appearance, except
in the single instance of the rapid rise of oil, it could hardly have
anticipated: and even in the case of oil British coal owners in their
lack of foresight were by no means alone. 1 Within the mining
industry itself the war years had brought into play a variety of
forces inimical to productive efficiency, not least a massive dilution
of the skilled labour force, an overworking of the industry's more
productive seams and a retardation of long-term development
work. All these factors contributed to the industry's post-war
inefficiency and through it to the chronic depression of the inter-
war years.
Moreover, it would be wrong to assume that what was tried and
found wanting in the conditions of the post-1918 years had been
necessarily unsuited to the different needs of an earlier era. The
performance of the pre-war industry was compounded of a multi-
tude of decisions made by miners, managers and coal owners, each
1 Cf. Jevons, op. cit., ch. xxv, esp. 707; and note also that as late as 1925 it
was said in the United States, 'Already the output of gas has begun to wane.
Production of oil cannot long maintain its present rate.' (Hunt, Tryon and
Willits, op. cit., p. 25.)
68
 THE COAL INDUSTRY

taken in the belief that it best served the interests of the individual
who made it. There was no doubt much error of judgment, lack of
foresight and weakness of will, and it might well be that that which
furthered the interests of the individual was not always equally
advantageous to the interests of the industry as a whole. The
miner's preference for leisure over earnings, the mine manager's
reliance on hand-hewing rather than machine-cutting, the small
coal owner's unwillingness to yield place to his larger competitor
might all be selfish decisions, each militating against the achieve-
ment of a stronger and more competitive industry, and so they
certainly came to seem in the economic conditions in which coal
mining found itself after 1920. But this was not so obviously the
case before 1914 when the need to lighten the miner's toil was
evident, the advantages of the coal-cutter by no means wholly
proven and the problem of coal was seen less in terms of cost than
in conserving the reserves of a fast diminishing national asset.
Yet when perspectives have thus been rightly adjusted it is still
valid to speak of a hard core of recognizable inefficiency existing in
the pre-1914 coal industry. The measurement of this inefficiency
presents insuperable difficulties, not least when comparisons are
attempted with other national coal industries or with the industry's
own past and future. At one level it is possible to measure increasing
inefficiency in terms of an increase in real costs, amounting between
1880 and 1914 to upwards of 25 per cent. 1 At another, inefficiency
may be defined, if not measured, in terms of diminished labour
effort, unwillingness to accept innovation and the failure to provide
a structure for the industry suited to the opportunities and needs
of the twentieth century. In the fields of management and organiza-
tion what was involved was not so much a falling-off in application
or skill as a failure to match progress in mechanization and struc-
tural adaptation to the exacting needs of a rapidly changing situa-
tion. In the case of labour, however, there is evidence of a more
positive deterioration, a relapse in effort, which, however explicable
or excusable, made for a level of performance inferior to that of
an earlier generation; and this failing was the more significant in
view of the high proportion which labour costs bore to total
production costs of coal mining throughout this period.
In all this the experience of coal was no doubt symptomatic of
trends which were widely operative in British industry, more par-
ticularly in its older and deeper rooted sectors. The case of coal
1 Based, in the first instance, simply on a computation of the decline in labour
productivity.
69
 THE DEVELOPMENT OF BRITISH INDUSTRY

has added importance, however, both because of the industry's

large share in the overall national product and because of the part
which coal played in British industry generally. It was because of
this that in the chapter of industrial disasters which overtook the
British economy between the wars, the failings of the coal industry
came to loom so large. There was, no doubt, exaggeration in the
condemnation which was heaped on the industry in the depression
years, just as there had been blindness to its shortcomings in the
era of relative prosperity; but if it is just to recall the laudatory
appraisal of Lubin and Everett which prefaced this essay, it is no
less a matter of equity to match it with a final clear-cut note of
criticism from the same unprejudiced American source. 1

'So long as the demand for the industry's product was such that
"the coal owner only had to reckon his cost, add a reasonable
profit and sell his coal", 2 the pressure of increasing costs presented
no problem to the British industry. There was no need to offset
the disappearance of the better coal seams by the adoption of
modem technique. As a result the standards of efficiency in the
British mines failed to keep pace with the best engineering prac-
tices. And when, finally, abnormally favourable conditions dis-
appeared in Great Britain's markets, her coal industry found itself
unable to adjust to new conditions.'

1 Lubin and Everett, op. cit., pp. 127-8.

2 Colliery Guardian, February 4, 1927, p. 274.

70
 CHAPTER 3

IRON AND STEEL MANUFACTURES

BY P. L. PAYNE

IN the early 'seventies the iron and steel industry contributed

roughly 10-11 per cent of the national income. Its blast furnaces,
iron-mills and foundries absorbed about 25 per cent of the steam
power generated in the nation's factories and workshops and about
40 per cent of their adult male labour force, and its profits accounted
for over 17 per cent of the gross assessments under Schedule D.
Admittedly, the industry was never again to attain such a prominent
position in the national accounts but even by the tum of the century
it has been tentatively estimated that direct incomes earned in all
branches of the iron industry still amounted to something like 5 per
cent of the British national income. 1 It is not this diminution that has
been the subject of past debate, however, but the reasons for the
decline in Britain's share of the world's iron and steel output and
trade. 2
Of Britain's loss of pre-eminence in the production of iron and
1 These data are derived from P. Deane and W. A. Cole, British Economic
Growth, 1688-1959 (Cambridge, 1964), pp. 225-7.
2 Of the formidable collection of books and papers that demonstrate and

explain the relative decline of Britain's iron and steel industry in the decades
before the First World War the following deserve special mention: Duncan
Burn, The Economic History of Steelmaking, 1867-1939 (Cambridge: Cambridge
University Press, 1961); T. H. Burnham and G. 0. Hoskins, Iron and Steel in
Britain, 1870-1930 (London: Allen & Unwin, 1943); J.C. Carr and W. Taplin,
A History of the British Steel Industry (Oxford: Blackwell, 1962); T. G. Orsagh,
'Progress in Iron and Steel: 1870-1913', Comparative Studies in Society and
History, Vol. III (1960-61), pp. 216--30; David S. Landes, 'Entrepreneurship in
Advanced Industrial Countries: The Anglo-German Rivalry', in Entrepreneur-
ship and Economic Growth, Papers presented at a Conference sponsored jointly
by the Committee on Economic Growth of the Social Science Research Council
and Harvard University Research Center in Entrepreneurial History, Cambridge,
Massachusetts, November 1954; Peter Temin, 'The Relative Decline of the
British Steel Industry, 1880-1913', in Industrialization in Two Systems: Essays
in Honour of Alexander Gerschenkron, ed. by Henry Rosovsky (New York:
Wiley, 1966). The author's debt to these writers will be apparent in the sub-
sequent discussion, which is, in effect, a synthesis of the existing literature. It
remains to add that all recent work in this field has been heavily dependent on
the pioneering studies by Burn (first published in 1940) and by Burnham and
Hoskins.
71
 THE DEVELOPMENT OF BRITISH INDUSTRY

TABLE 1: Production of Pig Iron in Various Countries Expressed as

Percentages of World Production
Period UK Germany-Saar United States Belgium
1875-79 46·0 12·7 15·6 3·9
1880-84 40·8 14·2 21 ·3 3·5
1885-89 34·7 15·8 27·4 3·4
1890-94 28·5 16·7 31 ·7 2·9
1895-99 26·1 17·7 32·1 2·9
1900-04 20·4 18·4 38·6 2·5
1905-09 17·5 18·9 41 ·7 2·5
1910-13 13·9 21 ·0 40·2 3·1
Source: Calculated from data given in the Iron and Coal Trades Review,
Diamond Jubilee Issue, 1927, p. 131.

TABLE II: Production of Steel in Various Countries Expressed as

Percentages of World Production
Period UK Germany-Saar United States Belgium
1875-79 35·9 16·6 26·0 3·7
1888-84 32·7 17·7 28·4 3·0
1885-89 31·8 17·8 31·4 2·4
1890-94 24·6 21 ·4 33·7 2·2
1895-99 19·8 22·5 35·4 2·8
1900-04 15·1 22·3 41 ·0 2·4
1905-09 12·4 22·1 43·5 2·8
1910-13 10·3 22·7 42·3 3·4
Source: Calculated from data given in the Iron and Coal Trades Review,
Diamond Jubilee Issue, 1927, p. 130.

steel there is no dispute. From producing over half the world's total
production of pig iron in 1870, the United Kingdom's output was
exceeded by the United States in 1890 and Germany in 1904.1 The
figures 'in the case of steel are, if possible, even more striking . . .',
gloomily reported the Tariff Cominission in 1904. 'In the period
1876-80, the quantity of steel annually produced in the United
Kingdom was one-third of the total quantity produced by all
countries; it is now less than one-seventh. The United States on the
other hand has increased its share of the total production of steel
from about one quarter to two-fifths; and Germany from one-sixth
to more than one-fifth.' 2 In terms of physical volume of output,
1 See Table 1 and Chart 1.
• Report of the Tariff Commission, Vol. I. The Iron and Steel Trades (London,
1904), para. 40. For the Tariff Commission, a private body set up in 1903 by
Joseph Chamberlain as an integral part of the Tariff Reform campaign, see E.
Halevy, History of the English People, /895-1905 (London: Benn, 1929), Book
III, pp. 327 ff.
72
 100

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CHART 1: Pig Iron Production by the United Kingdom, United States,

Germany and Belgium, 1875-1914
Sources: United Kingdom, USA: British Iron and Steel Federation, Statistics
of the Iron and Steel Industries (London: BISF, 1935), pp. 4, 43. World, Germany
and Saar, Belgium: Iron and Coal Trades Review (Diamond Jubilee Issue), 1927,
p. 131.
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CHART 11: Steel Production by the United Kingdom, United States, Germany and Belgium, 1875-1913
Source: Iron and Coal Trades Review (Diamond Jubilee Issue), 1927, p. 131.
 IRON AND STEEL MANUFACTURES

Britain had been surpassed by the United States in 1886 and by

Germany in 1893. By 1914, Britain was producing less than half as
much steel as Germany and less than one quarter as much as the
United States.1
The decline in Britain's share in the world trade in iron and steel
was almost equally depressing to contemporary observers. From
dominating the export trade in the early 'seventies, Britain was
supplying less than one-third of the international market in iron and
steel in 1913, and, more significantly, less than one-quarter of the
steel that was traded internationally. 2 Moreover, whereas in 1875
Britain had imported but 150,000 tons of iron and steel, a quantity
equivalent to about 8 per cent of her exports of iron and steel at that
time, by 1913 her imports, amounting to 2,231,000 tons, were
equivalent to 45 per cent of her exports. 3 Almost incredibly, on the
eve of the First World War, Britain had become the world's largest
importer of iron and steel.
The supremacy of the United Kingdom in iron and steel, once so
overwhelmingly clear and apparently permanent, had been irre-
trievably lost in the space of four decades. To some extent, of course,
it was inevitable: 'Half a continent is likely in the course of time ...
to make more steel than a small island, though the fact still surprised
people between 1890 and 1910',4 but need Britain have lost its premier
position to the United States quite so quickly? And need Britain have
fallen behind Germany at all in the period under discussion? Critics
of the industry suggest that 'to an indefinable but considerable extent
leadership was not wrested from Britain, but fell from her ineffectual
grasp' ;5 that with more enterprise and energy and a better system of
technical education, Britain's decline need not have taken place with
such dramatic speed.
How far are these criticisms justified? To answer this question, it is
imperative to understand the context within which the iron and steel
industry operated. The prime factor in Britain's relative decline was
the comparatively slow rate of growth of her home and overseas
markets. In the period 1876-80, the average annual consumption of
pig iron-'which generally is regarded as an index of the condition of

1 See Table 2 and Chart 2.

• See Chart 3 and Tables 4 and 5.
a For the ratio of British iron and steel imports to exports, see Burnham and
Hoskins, op. cit., p. 31.
• Sir John Clapham, An Economic History of Modern Britain, Vol. III (Cam-
bridge: Cambridge University Press, 1951), p. 122.
6 Orsagh, /oc. cit., p. 230.

75
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I
0
t- ..·····•...............: I

GERMANY
........•
.............: ··.\ .....:
·••\
u..
l•O
0
......_.....·
_

0•7S
"'
z
0
BELGIUM
...J
...J
O•S

:I:

0•2S

CHART III: Exports of Iron and Steel and Manufactures Thereof by

United Kingdom, USA, Germany and Belgium, 1875-19/3
Sources: United Kingdom: Iron and Coal Trades Review (Diamond Jubilee
Issue), 1927, p. 134. United States, Germany and Belgium: Burn, op. cit., pp. 78,
81, 84, 93, 330.
 IRON AND STEEL MANUFACTURES

the iron and steel industry in any country'1-of the United Kingdom
was estimated at 5,430 thousand tons, compared with Germany's
2,210 thousand tons and the United States' 2,200 thousand tons.
By the end of the century the figures (in thousands of tons) were
7,880 for the United Kingdom, 7,650 for Germany and 10,490 for the
United States, and on the eve of the First World War, 8,102, 15,656
and 26,627 respectively. In per capita terms, Britain's consumption of
pig iron had increased by only 12 per cent, compared with Germany's
470 per cent and America's 633 per cent. 2 Furthermore, whereas the
per capita consumption of steel in the United Kingdom quadrupled
between the late 'seventies and the opening years of the twentieth
century, that of Germany and of the United States had increased
more than tenfold. 3 Whatever the imperfections of these statistics,
they do indicate-as would several alternative measures-the
relatively slow growth of the British home market for iron and steel
products.
What alarmed contemporary observers even more, however, was
that while the British home market was sluggish, those of her rivals
were growing enormously. Indeed, as Temin has emphasized, 'the
growth of demand in the United States and Germany was more
rapid than the rest of the world combined. 4 At the beginning of the
period under consideration, this might have been a cause for some
elation for at that time the United Kingdom could count on satisfy-
ing a significant proportion of these mounting demands. In the
'seventies about 40 per cent of British output was sold in export
markets and by far the biggest importers were the United States and
Germany. By the end of this decade, however, tariff barriers in these
two countries were fast becoming prohibitive. The most expansive
markets in the world were being closed to British manufacturers and
if they were to sustain their export trade, they were forced to develop
new markets in the Empire, the Far East and in South America. 5
Considerable success attended these efforts, in spite of certain
disadvantages. First, these geographically dispersed markets were not
growing at anything like the rate of the home markets of Britain's
1 Tariff Commission Report, para. 27.
2 See Table III.
• Report of the Tariff Commission, paras. 38-9.
• Temin, op. cit., p. 142.
• As Thomas Brassey told an Edinburgh audience, 'Excluded from the prin-
cipal manufacturing countries by a protectionist policy, it is to the colonies and
to the half-civilized countries that we must look for the expansion of our trade.'
Ross J. Hoffman, Great Britain and the German Trade Rivalry, 1875-1914 (New
York: Russell, 1964), p. 26.
77
 TABLE m: Average Annual Consumption of Pig Iron, 1876-1912
United Kingdom Germany United States
Total Per Capita Per Total Per Capita Per Total Per Capita Per
Consump- Consump- Capita Consump- Consump- Capita Consump- Consump- Capita
Period tion tion Growth tion tion Growth tion tion Growth >-l
::i:
(000 tons) (cwts) (000 tons) (cwts) (000 tons) (cwts) t,:J

t,
1876-80 5,430 3·2 100 2,210 1·0 100 2,200 0·9 100 t,:J
<
t,:J
1881-85 6,690 3·8 117 3,330 1·5 143 4,430 1·6 182 t"'
0
"1:1
1886-90 6,700 3·6 112 4,180 1·8 173 6,300 2·1 233 ~
t,:J

1891-95 6,270 3·3 101 5,010 2·0 193 8,320 2·5 279
z>-l
....:i 0
00 1896-1900 7,880 3·9 121 7,650 2·8 277 10,490 2·9 319 'r.l
tl:I
1904--08 8,292 3·8 117 11,360 ·3.7 370 21,490 5·0 555 ....~
....v.,>-l
1911-12 8,102 3·6 112 15,656 4·7 470 26,627 5·1 633
::i:
....
Sources: 1876-1900: Report of the Tariff Commission, paragraphs 26--30. 1904---08, 1911-12: Return on Iron and Steel, 1912 z
(c. 284), 1914, pp. 48-52. t,
C:
v.,
NOTES: >-l
1. The report of the Tariff Commission gives the consumption per capita in lbs. These figures have been converted to the ~
nearest cwt to make them consistent with the Board of Trade Return. The indices of growth are, however, based on lbs per capita. ><
2. The imperfections of the statistics cited in the Tariff Commission Report are freely acknowledged (see especially para. 30)
and are the subject of comment by Burn, op. cit., p. 82 n. For a careful estimate of British consumption of iron and steel during
the period 1870-1914, see A. K. Cairncross, Home and Foreign Investment, 1870-1913 (Cambridge: Cambridge University Press,
1953), pp. 159---64.
 IRON AND STEEL MANUFACTURES

chief rivals; and second, Germany and the United States, assured of
their home markets, were able to employ a discriminatory pricing
policy where it was profitable for them to do so. 1 The importance
of 'dumping' in any explanation of Britain's difficulties may well
have been somewhat overstated in the Report of the Tariff Com-
mission, 2 but there is no question that selling below average cost gave
both German and American exporters a very real competitive
advantage in world markets. The constant refrain of witnesses before
the 1904 Tariff Commission was that British manufacturers were
inhibited from pursuing a like policy because of 'the openness' of the
home market, in which American, German and Belgian manu-
factures were making growing inroads by 'unfairly' undercutting
domestic producers. If the home market-relatively stagnant though
it was-wasn't reserved for native manufacturers, it was no wonder
that they were slowly demoralized by being placed in a disadvan-
tageous position in overseas trade. The bitter rejoinder of the British
ironmaster to Andrew Carnegie's somewhat smug advice to 'Seek
ye first the home markets and all others shall be added unto you', 3
might have been 'from him that hath not shall be taken away even
that which he hath'.
1 See S. B. Saul, Studies in British Overseas Trade (Liverpool: Liverpool Uni-
versity Press, 1960), pp. 142-3. The delegation, organized by the British Iron
Trade Association, which visited many continental iron and steel works in 1895
reported that 'No doubt both Germany and Belgium have taken many orders
which might have been executed in this country; but both countries have customs
tariffs which preserve their home markets to their home producers. Germany
has two sets of prices-one for home consumption, and the other for export;
and we have further evidence that, in some cases, at any rate, the export trade is
carried on at a Joss, which is recouped by the better prices obtained for home
consumption.' Report of the Delegation organized by the British Iron and Trade
Association on the Iron and Steel Industries of Belgium and Germany (London:
King, 1896), p. 22 (subsequently referred to as Report of the Delegation). For
examples of discriminatory prices see ibid., p. 27; The Times, November 30, 1878;
The Times, November 23, 1880.
1 It is important to recognize that dumping contributed to the growth of the
German iron and steel industry-and hence to Britain's long-run difficulties-
not because a conscious attempt was made to expand production in order to
profit from dumping but because German manufacturers knew that if demand
fe11 off in their guaranteed home markets they could always export surpluses by
undercutting competitors. This was clearly recognized by the Royal Commission
on the Depression of Trade and Industry, 1886, Majority Report, section 67. See
Landes, op. cit., section III, p. 19, and Report of the Tariff Commission, para.
536.
a Andrew Carnegie's words are quoted by Sir Frederick Mills, 'Iron and Steel
Economics and Costs with Special Reference to the Subject of Protection', Iron
and Coal Trades Review, Diamond Jubilee Issue, 1927, p. 150.
79
 THE DEVELOPMENT OF BRITISH INDUSTRY

The very basis of the previous strength of the British exporter of

iron and steel was being eroded. From relatively minor neutral and
protected overseas markets, possessing a buoyancy markedly inferior
to those of Germany and the United States, came a stream of reports
from consuls and manufacturers' agents emphasizing the weakening
of Britain's position as multilingual, adaptable German salesmen
and indefatigable American drummers blandishing price lists with
which British agents could not compete, captured an ever increasing
share of the available trade, trade which once lost it was difficult if not
impossible to regain. 1 Yet strenuous efforts were made to meet this
competition. Firms appointed agents to represent them in markets
previously neglected or ignored because they seemed to possess such
limited potential; 2 every attempt was made to manufacture plates
and sections to unusual specifications; pressures were brought to bear
on the Crown Agents for the Colonies, consulting engineers,
contractors for overseas bridges, railways, piers and docks to specify
British iron and steel-any difference in prices unfavourable to
British manufacturers being explained in terms of the inferiority of
the products of foreign mills. 3
Where details are available of the activities of individual firms,
there is little evidence of that apathy in marketing which is conveyed
by consular reports. The energy was there although the methods
were not as perfect as they might have been. Certainly, the practice
of appointing as resident agents in overseas markets firms which also
held commissions from other concerns and for other (perhaps un-
related) products may well have resulted in less energetic 'pushing'
than the use of a salaried sales force devoted to marketing a limited
range of articles produced by an employing firm might have done, but
in the circumstances confronting British iron and steelmakers selling
1 See Bum, op. cit., p. 79; Report of the Tariff Commission, paras. 309-59; the
Report of the Delegation, p. 21. Hoffman, op. cit., makes very extensive use of
consular reports in his study, but Landes's comment is to be noted: 'The consuls
reporting were less interested in the aggregate of British exports, or even the
total of exports to their own areas, than in the fortunes of specific commodities,
the outcome of given contract negotiations, the success of a particular business
man or syndicate. Their accounts tended to emphasize the unfavourable news,
to become in the course of these decades a compendium of derogatory informa-
tion on British trade.' Landes, op. cit., section II, p. 26. See also Bum, op. cit.,
p. 295 n.
• The nineteenth-century records of the Steel Company of Scotland and David
Colville & Sons abound with references to the appointment of agents throughout
the world. A study of the growth of the Colville Group of Companies is in
progress.
• See, for example, Trade of the British Empire and Foreign Competition, 1897
(C. 8449), p. 577.
80
 IRON AND STEEL MANUFACTURES

through manufacturers' agents might have possessed advantages

that more than compensated for weaknesses on this score, 1
In the long run, producing qualities of open-hearth steel and angles
and sections to ever more complex specifications might have en-
hanced costs of production to such an extent2 that overseas buyers
were eventually induced to adopt and purchase a more standardized
and cheaper product made in Germany or the United States. An
interesting point is raised by this question of the multiplicity of
qualities and shapes designed to satisfy the special desires of potential
customers. Burn quotes H. J. Skelton's discovery in 1900 that while
English makers produced 122 sections in the ordinary run of business,
Americans made 33 and Germans 34. 3 Considerable inefficiency
resulted from manufacturing this 'really appalling' number of
sections, yet, in doing so, were not British steelmasters trying to meet
customers' demands? Were they not taking heed of the warning given
by Joseph Chamberlain when he said 'It seems to be a theory with
some of our manufacturers that consumers were sent into the world
by Providence in order to take the things which they [the manu-
facturers] make, and that there was no corresponding obligation at
all upon the manufacturer to make the goods that the consumers
wanted?' 4 On this issue at least the British iron and steelmasters
cannot be criticized on both technical and commercial grounds. 5
Similarly, it is not sufficient to deprecate Britain's high exports of
pig iron on the grounds that this raw material should have been
processed at home. If overseas customers wanted this commodity
why should not Britain rather than, say, Germany, have supplied it? 6
1 On this point see Thomas A. Straudt's monograph for the United States
Bureau of the Census, entitled The Manufacturers' Agent as a Marketing Institu-
tion (Washington, D.C.: U.S. Government Printing Office, 1951), especially
pp. 115-20.
• Mills, op. cit., p. 150.
• Burn, op. cit., pp. 198-200; see also H.J. Skelton, 'Iron and Steel and Export
Trade', Iron and Coal Trades Review, Diamond Jubilee Issue, 1927, p. 173.
• Quoted in the Economic Journal, VI (1896), p. 633.
• As Landes tends to do; see his paper, op. cit., section III, compare pages 5
and 17. See also the point made by H. J. Habakkuk, American and British Tech-
nology in the Nineteenth Century (Cambridge: Cambridge University Press, 1962),
pp. 210--11.
6 See the similar point made by S. B. Saul, 'The Export Economy, 1870--1914',

in Studies in the British Economy, 1870-1914 (a special number of the Yorkshire

Bulletin of Economic and Social Research, Vol. 17, No. 1, May 1965, edited by
John Saville), p. 17. Nevertheless, British manufacturers were perhaps unwise to
bow to the 'erratic or originally-disposed engineer' to such an extent. See Report
of the Tariff Commission, para. 1037, and P. L. Payne, Rubber and Railways in the
Nineteenth Century (Liverpool: Liverpool University Press, 1961), p. 82.
81
 THE DEVELOPMENT OF BRITISH INDUSTRY
TABLE 1v: Exports of Iron and Steel and Man,ifactures Thereof
EXPORTERS
1880 1884-85
IMPORTERS UK Germany' Belgium UK' Germany' Belgium
BRITISH EMPIRE
1 Australia 210,422 600 N/A 360,902 28,000 7,039
2 Canada 208,611 N/A N/A N/A N/A 1,017
3 India 290,771 400 N/A 455,820 2,400 4,045

EUROPE
4 Austria-Hungary N/A 100,000 N/A 18,792 83,000 N/A
5 Belgium 116,628 166,000 65,152 123,000
6 France 117,170 120,000 42,700 131,762 84,000 9,478
7 Germany 269,728 N/A 355,099 578
8 Italy 52,775 37,000 27,100 143,605 79,000 26,086
9 Netherlands 210,382 150,000 52,500 251,541 119,000' 43,620
10 Russia 204,107 105,000 21,800 207,531 110,000' 4,172
11 Scandinavia 7,392 N/A N/A N/A N/A 7,321
12 Spain and Portugal 26,889' 38,0001 25,3001 134,338 48,000 6,423
13 United Kingdom 75,000 60,600 79,000 54,950

Saum & CENTRAL AMERICA

14 Central America 3,426 N/A N/A 2,404 N/A N/A
15 Mexico 32,550 N/A N/A 2,443 N/A N/A
16 Argentina 36,428 N/A N/A 152,783 N/A 5,682
17 Brazil 54,732 N/A N/A 50,774 N/A 1,254
18 Chile 19,174 N/A N/A 25,497 N/A N/A
19 Uruguay 19,520 N/A N/A 38,018 N/A N/A
20 Venezuela 1,329 N/A N/A 4,566 N/A N/A
21 S. America 139,5571 6,600 15,200 287,069 1 40,000 N/A
NOR'IH AMERICA
22 USA 1,355,582 144,000 55,000 463,260 66,000 3,688

FAR EAST
23 China 25,915 3,500 N/A 38,671 12,000 30,126
24 Japan 28,137 500 N/A 40,295 11,500 N/A
ALL CoUNTRIES 3,549,000 772,000 363,000 3,045,000 948,000 225,505

NOTES:
With the exception of British exports to individual Latin American countries in 1880, no attempt has been
made to give details of British exports to countries or areas for which no comparable German or Belgian
figures are available. 'N/A' indicates that comparable statistics are unavailable.
1 Exports to European countries, figures for 1881.
• Spain and the Canaries.
• Includes Argentina to Venezuela as above plus Bolivia, Columbia and Ecuador.
• Exports to European countries and USA, figures for I 884.
• In transit.
'Doubtful.
7 Includes Hong Kong and Macao.
• Sweden and Denmark.
• 'South America (Chief Markets)'.
10 South and Central America.
11 Spain only.

SOURCES:
United Kingdom
1880: British Empire, Europe and USA, British Iron Trade Association (BITA), Report for 1880, p. 63.
South and Central America and Far East, Annual Statement of Trade.
1884-85: Annual Statements of Trade.
1895: BITA, Report for 1896-97.
1900: Bum, op. cit., p. 91, and Annual Statement of Trade.
1905: Annual Statement of Trade.
Totals ('All Countries'): 1895, as above; the remainder are from the Iron and Coal Trades Review, Diamond
Jubilee Issue, p. 134.
82
 IRON AND STEEL MANUFACTURES
(Excluding Machinery) to Mqjor Markets (In thousands of tons)
EXPORTERS
1895 1900 1905
UK Germany Belgium UK Germany Belgium UK Germany

218,275 32,055 2,226 348,000 43,000 N/A 224,792 N/A

105,480 8,147 N/A 79,000 400 N/A 197,482 N/A
314,306 38,361 66,774 346,000 31,000 43,938 555,459 88,600

29,945 121,305 60 13,688 N/A 46,844 6,754 68,900

47,900 112,668 91,081 499,000
55,262 62,075 22,997 181,093 N/A 67,952 76,833 98,400
297,510 N/A 215,250
160,898 87,885 9,219 169,000 71,000 N/A 136,701 144,700
140,691 103,445 60,128 417,711 N/A 46,844 141,067 330,700
185,956 200,064 22,289 68,226 49,200
161,485 53,367 12,411 175,()()()1 83,0001 N/A 144,6581 199,8001
63,871 17,032 14,837 20,11011 13,80011
130,133 59,627 711,600

)"·"'
} 31,033 } 4,981

}"••M• }~"'
} 341,196 } 205,700

232,()()()1 90,000' 40,34610

315,801 31,009 2,181 134,000 10,000 N/A 262,879 58,100

} 160,823'
l 54,279 } 46,207 } 197,000'
l 60,000' N/A } 264,788 ) 120,100

2,835,541 1,499,034 481,020 3,447,000 1,525,000 416,000 3,721,000 3,297,000

Germany
1880-81: Europe and USA, DITA, Report for 1882, p. 79; British Empire, South America, Far East and total
('All Countries'), Burn, op. cit., p. 79.
1884-35: Burn, op. cit., pp. 7S-9.
1895: DITA, Report for 1895--96, p. 76.
1900: Burn, op. cit., pp. 91, 93.
1905: Journal of the Iron and Steel Institute, 1906 (No. I), p. 525; total, Burn, op. cit., p. 330.
Belgium
1880: DITA, Report for 1882, p. 87.
1885: Ibid., Report for 1887, p. 93.
1895: Ibid., Report for 1895--96, p. 76.
1900: Ibid., Report for 1900, p. 58; total, Burn, op. cit., p. 93.

TADLB JV A: Value (In Dollars) of Exports of Iron and Steel and Ma,uifactures Thereof (Including
Machinery) From the United States In 1905
To Europe 37,679,956
To North America 56,887,006
To South America 12,317,128
To Asia 16,063,414
To Oceania 8,042,766
To Africa 3,738,093
TOTAL $134,728,363
Source: us Department of Commerce and Labour, Bureau of Statistics, Analysis of the Foreign
Commerce of the United States (Washington: Government Printing Office, 1906), p. 144.
83
 THE DEVELOPMENT OF BRITISH INDUSTRY

Here again, the critics cannot have it both ways.

The sum of all this endeavour in world markets was impressive.
Nineteenth-century consular reports on Britain's relatively declining
position as German, American and Belgian iron and steel served
markets previously taken for granted by British manufacturers-
those, for example, in Australia, Japan and South America-create a
somewhat erroneous impression.1 For most of the nineteenth century
British sales of iron and steel continued to be far greater than those
of competitors in such markets, and in the closing years of the
century British exports rose even more rapidly than those of her
greatest rival, Germany. 2 Indeed, as Saul has observed:
'Britain held her share of world trade in iron and steel reasonably
well to 1909 and during the boom in world demand in 1906 and 1907
actually raised her share slightly. The most disappointing period was
to come when, from 1909 to 1913, ... (Britain's) share of world
exports fell from 40 per cent to 33.8 per cent and in 1912 and 1913 for
the first time German exports exceeded British',3
a major factor in Britain's worsening relative position being the rapid
decline of the pig iron trade after the boom year of 1907.
Yet, even in 1913,4 despite bitter competition from the United
States, Germany and Belgium, Britain was supplying the bulk of the
iron and steel requirements of the Empire excluding Canada, whose
market had become dominated by the United States in the 'nineties. 5
It is true that the Belgians had made great inroads into the Indian
market in many categories of iron and steel goods, particularly steel
bars, in which item Germany too had overtaken the United Kingdom
in the opening decade of the twentieth century :6 but in Australia and
South Africa Britain maintained her lead. 7 The aggregate position
1 As Burn has observed, 'A complete statistical picture of the Continental
advance into the new markets is probably not obtainable' (op. cit., p. 79), but
some idea of the comparative importance of the principal exporters in various
markets can be gathered from Tables 4 and 5.
• See Chart III and Landes, op. cit., section II, p. 28.
• Saul, 'The Export Economy', p. 15.
'For obvious reasons 1913 is the year traditionally chosen for such inter-
national stocktakings. It is interesting to speculate on what modifications the
critics of the British iron and steel industry might be prepared to make if the
date were to be, say, 1908. It is all too easy to exaggerate Britain's relative
decline from the vantage point of 1913.
6 For the Canadian position, see Saul, British Overseas Trade, p. 176; Report

of the Tariff Commission, paras. 198-9.

• Saul, ibid., pp. 198-9, 202-3.
• Report of the Tariff Commission, paras. 188-9, 191, and Tables 4 and 5.
84
 IRON AND STEEL MANUFACTURES
TABLE v: Exports of Semi-Finished and Finished Steel Products by
United Kingdom, United States, Germany and Belgium, 1913
(in thousands of metric tons)
Exporters
United United
Importers Kingdom States Germany Belgium
BRITISH EMPIRE 1,514·1 1,440·3 416·7 250·6
Australia 422·0 153·8 107·7 43·0
Canada 118·9 1,223·0 68·9 14·4
Ceylon 21·2 1·2 0·8
India 551·8 22·4 195·4 134·5
New Zealand 110·6 7·0 1·6
South Africa 172·1 18·1 34·2 44·3
Rest 117·5 16-0 7·7 13·6
EUROPE 373·0 297·7 2,613·9 644·6
Belgium-Luxembourg 28·8t 20·4t 249·6t 0·7t
France 38·8 1·3 59·1 48·8
Germany 60·4 5·0 9·4
Italy 30·2 3·7 114·2 21-1
Netherlands 62·2 10·4 446·5 101-5
Russia 54·9 0·6 56·4 11·9
Scandinavia* 78·7 16·6 389·6 39·6
Switzerland 19·0 0·9 243·2 3·1
United Kingdom 238·8 1,055·3 408·5
LATIN AMERICA 310·2 421·2 465·5 247·5
Argentina 186·6 77·7 282·4 113·1
Brazil 68·0 65·4 94·2 87-8
Chile 34·4 58·8 61·6 19·6
Cuba 3·0 102·0 0·6 8·5
Mexico 13·2 97·9 13·5 6·3
Uruguay 5·0 19·4 13·2 12·2
NORTH AMERICA
USA 48·0 32·0 6-6
FAR EAST 171·8 168·7 269·5 98·9
China 43·2 25·4 43·6 44·9
Japan 128·6 143-3 225·9 54·0
MIDDLE EAST
Egypt 36-8 1-7 18·9 37·8

(a) TOTAL OF ABOVE 2,453·9 2,329·6 3,816·5 1,286·0

(b) 'ALL COUNTRIES' 2,744·8 2,543·2 4,520·5 1,457·2

(a) expressed as per-
centage of (b) 89·4 91·6 84·4 87·2
• Denmark, Finland, Norway and Sweden. t Belgium only. t Luxembourg only.
Source: United Nations, Economic Commission for Europe, Statistics of
World Trade in Steel, 19/3-1959 (Geneva: United Nations, 1961), pp. 2-13.
85
 THE DEVELOPMENT OF BRITISH INDUSTRY

was that Britain was supplying 63 per cent of the steel purchases of
the Empire and colonies (excluding Canada) in 1913, the bulk of the
remainder of the market being supplied by Germany (16 per cent),
Belgium (11 per cent), and the United States (10 per cent). 1 But in
the colonial market Britain was obviously in a favoured position. 2 In
Latin America Britain's competitive strength is more easily seen,
since the 'neutral' markets of Argentina, Brazil and Chile were more
TABLE VA:Exports of Pig Iron, 1913
(in tons)
By United Kingdom 1,124,815
By United States 277,648
By Germany 782,911
By Belgium 16,760

Source: Iron and Coal Trades Review, Vol. 88 (1914), pp. 65, 198, 240, 355.

equally accessible to all the major exporting countries. Here there is

no question that Britain's share of the available market for steel was
steadily exceeded by Germany in all these countries, by Belgium in
Brazil and by the United States in Chile. But if Britain's share
declined, her tonnage of exports showed no diminution. 3 This was
no mean performance, but to many observers in 1913, particularly
those who pondered on the detailed figures provided in the Annual
Statements of Trade which revealed the relatively narrow compo-
sitional base of British iron and steel exports, it presented a dismal
picture.4 Despite certain bright spots, 6 and despite the wider geo-
1 Temin, op. cit., Table 2, p. 148, based on United Nations, Economic Com-
mission for Europe, Statistics of World Trade in Steel, 1913-1959 (Geneva:
United Nations, 1961), pp. 2-13.
• Similarly, Germany was in a favoured position on the continent (see Burn,
op. cit., pp. 79, 331) and the United States in North and Central America.
3 The Japanese position is similar.

'As Burn (op. cit., pp. 330--1) subsequently emphasized, 'If the pig-iron trade
.•• be left out of account, the growth of the sheet trades between 1904 and 1913
accounted for 40 per cent of the whole growth in the British iron and steel in
these years. Of the remainder of the increment, over one-third was composed of
other re-rolled products-hoops, tubes, wire, etc.-while the only heavy steel
trades which expanded, those in structural steel and plates, accounted for no
more than one-sixth..• .' In this latter buoyant group America's exports 'were
more than double those of Britain in 1913 and Germany's four tintes as great'.
See also Saul, 'The Export Economy', p. 15.
6 The overall picture would certainly be more favourable to Britain if account

could be taken of the indirect exports of steel in the form of ships. Burn (op. cit.,
p. 334 n.) points out the great difficulties of even hazarding a guess at the int-
portance of this factor, but some indication of the very large export of home-
produced steel embodied in ships built on the Clyde is given by T. J. Byres, 'The
86
 IRON AND STEEL MANUFACTURES

graphical distribution of British trade, 1 it appeared that, however the

statistics of world trade in iron and steel were manipulated, Britain
had been overtaken by Germany, was fast being overhauled by the
United States and was being challenged by Belgium.
Perhaps even more disquieting were the statistics of British imports
of iron and steel products. On the eve of the First World War the
United Kingdom had become the greatest iron and steel importer in
the world. There poured in steel blooms, billets and slabs (mainly
from Germany, Belgium and the United States), and steel bars and
tinplate bars (mainly from Germany); pig iron (mainly from Sweden
and Germany); wrought iron bars, angles, rods and sections (mainly
from Sweden and Belgium); wire rods, plates and sheets, and girders,
beams, joists, and pillars (mainly from Germany and Belgium). 2 The
total volume of this diverse collection was, in 1912, nearly two
million tons, valued at nearly £13 million, the rate of increase of such
imports being particularly spectacular after 1895. 3
To some industrialists this trend did not portend disaster. Certainly,
it was not a situation that necessitated protection. They argued, with
some justice: 'By all means let us import cheap foreign angles and
plates in order that we may build ships, which, the moment they are
launched, have a free port of delivery ... let us import cheap foreign
steel bars so that we may manufacture corrugated sheets for export ...
let us import cheap foreign billets so that we may manufacture the
thousand and one articles of which they are the raw material, in
order that we may export to the world.' 4 But others were more
deeply concerned. In the space of little more than a generation
Britain had lost its domination of the world's iron and steel industry
and trade. To suffer vast encroachments on overseas markets was
bad enough, this could be explained by unfair competition on the
part of the upstarts, by the machinations of trusts and kartells, by
the weakness and shortsightedness of government policy, 5 but to
Scottish Economy during the "Great Depression", 1873-1896, with special refer-
ence to the Heavy Industries of the South-West' (B.Litt. thesis, University of
Glasgow, 1962), pp. 439, 445-8.
1 Burn (op. cit., pp. 332-3) qualifies this fact in a manner which seems unduly
critical of the British export effort.
1 See Return on Iron and Steel, 1912 (C. 284), 1914, p. 14.
• Burham and Hoskins, op. cit., pp. 31, 280.
' Sir Frederick Mills, paraphrasing the arguments of the free traders, op. cit.,
p. 150. An example of this attitude can be seen in the British Iron Trade Asso-
ciation's Annual Report for 1900, p. 8.
6 See the emphasis placed on the role of syndicates by the Delegation of 1895

(Report, p. 21), and see also Hoffman, op. cit., pp. 116-17, and the Report of the
Tariff Commission, para. 60.
87
 THE DEVELOPMENT OF BRITISH INDUSTRY

import large quantities of iron and steel which should 'for the most
part be the bread and butter trades of our own industries' 1 necessitated
less superficial analysis.
The essence of the problem was costs. If British costs could be
reduced, selling prices could be lowered and the displacement of
British by foreign goods would never have taken place to such a
startling degree. Witnesses before the Tariff Commission repeatedly
emphasized 'the appearance on the British market of [foreign iron
and steel] products . . . at prices which the British manufacturer
cannot touch'. 2 These relatively low prices were explained with refer-
ence to dumping and lower transport charges, 3 but there are some
indications that they also reflected a lower average cost per ton
achieved by foreign rivals. 4 In part these lower costs were achieved
by the policy of 'continuous running' or 'rapid driving' made possible
by operations behind 'prohibitive' tariff walls. Another factor
touched upon was the advantageous position enjoyed by German
and American manufacturers in regard to ore supplies and fuel, but
both the Delegations of 1895 and the later Tariff Commission tended
to play down the importance of the cost of raw materials, and they
appear to have been justified in so doing. The character of the evidence
on this point is somewhat contradictory and tended to vary with the
witnesses' proximity to iron ore and fuel supplies: some were
satisfied that 'neither in the United States nor in Germany [were]
they in a better position as regards cheapness of extraction than we
are ... [though] the ore mined in the United States is very much
richer than ours, containing a greater percentage of iron'; but others
were convinced that even with considerable capital outlay on im-
proving iron mining plant, the Americans could get ore delivered at
considerably lower prices than they could, an opinion apparently
borne out by figures compiled from replies to a questionnaire
inquiring on this point. 5 Yet, as has often been emphasized, the
1 Mills, op. cit., p. 150.
• Report of the Tariff Commission, para. 58.
3 The Delegation of 1895 found, for example, that 'the Belgians can send their

iron 100 miles to Antwerp by rail, and thence by sea to London, for considerably
less than is charged by rail from Staffordshire to London', Report, p. 23.
• Report of the Tariff Commission, paras. 56, 62-6.
• Report of the Tariff Commission, paras. 48, 554-5, 732, 1126; Report of the
Delegation, pp. 8-9. The Delegation felt that the Belgians 'stood at a positive
disadvantage ... as far as fuel at the mine's mouth was concerned', though in
both Belgium and Germany 'excellent by-product recovery plant was an im-
portant fact in permitting fairly cheap coke to be charged to the furnace' (ibid.).
In this connection see the seething denunciation of the British coking and by-
product industry by A. M. Middleton, 'The Progress and Prospects of the
88
 IRON AND STEEL MANUFACTURES

question of ore is complicated by the diversity of its chemical content

and the problems related to its transportation.1 It seems to be
unanimously agreed that the British manufacturer was at a sub-
stantial relative disadvantage with regard to freight rates-though
we need not go so far as the 1895 Delegation which stated it to be
'undoubtedly the greatest factor in favour of the foreign producer'. 2
From a careful assessment of the evidence, it would appear that
in the opening decade of the twentieth century Britain, Germany,
Belgium and the United States could assemble the raw materials for
making iron and steel at costs that were approximately comparable.
Certainly, Burnham and Hoskins found 'no prima facie evidence
[that Britain suffered from any] natural disadvantage' on this score. 3
The fact is, however, that British manufacturers might have been
able to lower costs had it not been for their 'amazing neglect of
British basic ores ... adaptable to the Thomas process'. By exploiting
these cheap phosphoric ores it is probable that pig iron suitable for
the basic open hearth process might have been produced at a lower
price than the pig iron being used, making possible cheaper iron and
steel products. The reason for this neglect is complex. Duncan Burn,
who can never be accused of undue sympathy towards entrepreneurial
weaknesses, had isolated certain forces which partially explain, if they
do not completely justify, the laggardly utilization of these Midland
ores, i.e. their unfavourable location in relation to both existing
producers and consumers of pig iron and steel ingots and the
unreliable character of much of the early basic steel. 4 A factor which
almost certainly deserves greater emphasis than Bum has accorded
to it is the heavy investment made by several steelmasters (e.g.
Consett, Dowlais, Dorman Lang, John Brown, Bolckow Vaughan)
Coking and By-Product Industry', Iron and Coal Trades Review, Diamond Jubilee
Issue, especially p. 75.
1 For example, Orsagh, op. cit., pp. 227-8; Temin, op. cit., pp. 145-6; Burnham

and Hoskins, op. cit., pp. 296-7; Report of the Tariff Commission, para. 1131.
• Report of the Delegation, p. 23. This factor was probably of greater impor-
tance in shipping finished goods than the assembly of raw materials. It was found
that British manufacturers at this time were paying railway companies 'about
three times the average ton-mile rates of Belgium and Germany for the export
trade' and that Continental manufacturers were enjoying favourable discrimina-
tory shipping freights which they were granted even by 'the British subsidized
P. & 0. Steamship Company' (ibid., pp. 14-16). See also Trade of the British
Empire and Foreign Competition, 1897 (C. 8449), pp. 317, 328.
3 See Temin, op. cit., p. 146, and the discussion by Burnham and Hoskins,

op. cit., pp. 112-35.

• Burn, op. cit., pp. 172-82; and the discussion by Landes, op. cit., section Ill,
pp. 2-4, which is based on Burn.
89
 THE DEVELOPMENT OF BRITISH INDUSTRY

in acquiring extensive foreign hematite ore interests, particularly in

Spain. 1
But even had these obstacles and inhibitions been overcome, there
is no certainty that the utilization of phosphoric ores would have
reduced costs sufficiently to frustrate foreign competition. Sir Thomas
Wrightson, a director of the North Eastern Steel Company, Middles-
brough, whose firm made nothing but Thomas steel from its founda-
tion in 1884, told the Tariff Commission that while his business had
been reasonably profitable until the end of the century, substantial
losses were later incurred 'due to the heavy dumping of steel [of all
descriptions] from Germany and America at a price sold in this
country considerably below the cost price at which steel could be
made here'. 2 It is fair to assume that works situated nearer the
Midland area than Wrightson's company would have fared some-
what better for somewhat longer, but this is by no means certain. This
is not to excuse the slowness of the British iron and steel masters but
simply to indicate that hopes of significant cost reductions to be
achieved by more intensive use of phosphoric ores might have proved
illusory, if for no other reason than that with the greater demand for
such ores, their market price might be expected to have risen.
Be that as it may, one feels that Burn and other critics are surely
correct in emphasizing the cost-reducing potentialities of an improve-
ment in British technical and higher education generally. 3 But this is
a subject which is hardly susceptible to quantification. It appears
indisputable that the proportion of technically trained men in what
might be called middle management in British iron and steel concerns
was below that of continental works, 4 though the significance
1 See M. W. Flinn, 'British Steel and Spanish Ore: 1871-1914', Economic His-
tory Review, 2nd Series, Vol. VIII (1955-56), pp. 84--90; J. H. Clapham, op. cit.,
p. 147; Carr and Taplin, op. cit., p. 191. For the case of Consett, see H. W.
Richardson and J.M. Bass, 'The Profitability of Consett Iron Company Before
1914', Business History, Vol. VII (1965), pp. 75, 82--4.
2 Report of the Tariff Commission, paras. 578-85.
8 For example, Orsagh, /oc. cit., p. 228.

• The Delegation of 1895 reported that 'We must not neglect to mention that
[technical education] was spoken of as one of the chief causes of the success of
[Belgium and Germany] ..•. Special attention appears to be given to the tech-
nical instruction of the boys and young men who are coming forward as mana-
gers, foremen, etc., and for this purpose schools are in many cases carried on in
the works in the evenings, at which the head engineer, or some other competent
instructor, gives lessons in drawing, machine design, etc. In this way the young
men are instructed in the engineering of iron and steel works in a degree and
manner that is but little cultivated in this country' (Report, p. 20). Elsewhere the
Report spoke of the importance of having 'direct management and superintend-
ence being confined to men who have proved their worth and ability by rising in
90
 IRON AND STEEL MANUFACTURES

of this fact in hindering cost-reducing innovation is impossible to

measure. It is arguable that the conclusion of the Tariff Commission
that 'in the higher branches of the iron and steel trade, i.e. where
scientific training is most important . . . British manufacturers are
most efficiently served', 1 was well founded. What was more important,
if the fundamental inventions of the few (of which Britain may be
said to have possessed more than her fair share) were to be tested and
exploited, was, as Burnham and Hoskins have remarked, that those
'fuel experts, plant engineers and metallurgists [that were employed]
should have occupied positions where their voices could be heard'. 2
The records of those British concerns that have been subjected to
detailed analysis do not indicate a complete neglect of the technically
qualified, rather was it that works' chemists, metallurgists and
specialized engineers were not accorded the respect or status which
they deserved, and their influence on the directorate was accordingly
insubstantial. 3 Not surprisingly, 'the practical, hard-working foremen
of works' usually attached 'little importance' to the reports and advice
which emanated from improvised laboratories, for between 'the
practical man and the chemist' there existed 'a sort of mutual
antagonistic reaction'. 4 On the shop floor too, a paucity of workmen
who had received a rudimentary technical training was said to have
been responsible for the fact that some potentially valuable machines

the ranks of industry, supplemented by the additional advantage of a special

scientific and technical education' (ibid., pp. 16--17). At one German works the
Delegation was told, for example, that 'We can compete and make profits,
because of the scientific basis of our workpeople. Our workpeople are well
educated, and every one of our foremen and managers has had a two years'
special education at the cost of the firm-a technical and scientific education.
We send them to ... technical schools, and we send men who have proved their
capacity by rising to be foremen' (ibid., p. 49). See the very useful discussion by
Landes, op. cit., section III, pp. 8-11.
1 Report of the Tariff Commission, para. 49. Emphasis .supplied. H. R.
Schubert's considered judgment is that 'Britain's reduced share in total [iron
and steel] production ... was in no way a result of technical inferiority'. See his
paper, 'The Steel Industry', in Charles Singer et al (eds.), A History o/Technology
(Oxford: Oxford University Press, 1958), Vol. V, p. 67.
2 Burnham and Hoskins, op. cit., p. 248.

a Mr J. E. Stead, FIC, member of the Council of the Iron and Steel Institute,
'knew that in some of our works, and many important works too, the head
chemists actually did not receive £100 a year ... [they] were overworked [and
were given] little encouragement to study'. Journal Iron and Steel Inst., XLIX
(1896), p. 119. See also the valuable study by Charlotte Erickson, British Indus-
trialists: Steel and Hosiery, 1850-1950 (Cambridge: Cambridge University Press,
1959), especially pp. 71-2; and Carr and Taplin, op. cit., pp. 151-2.
'John Parry, Journal of the Iron and Steel Inst., XLIX (1896), p. 129.
91
 THE DEVELOPMENT OF BRITISH INDUSTRY

were ignored or abandoned. 1

It is true, of course, that a formidable list of cases of technological
sluggishness can be compiled. As Orsagh, drawing on Bum's telling
indictment, has argued, the British were 'at least ten years behind in
utilizing the by-products and waste gases of the coking process.
Years after the successful demonstration of the economy of the gas-
driven engine and its exclusive adoption on the Continent, new
British works were not installing these engines. Nor was the con-
version from steam to electric engines any more prompt. The British
lagged in cheapening the cost of transport and in mechanizing the
handling of coal and ore. They lagged in exploiting the "direct
process" (the charging of the converter or open-hearth furnaces with
pig iron brought in its fluid state directly from the blast furnace),
which can result in considerable fuel economy. Their rolling mills,
too, were less advanced. And, looking at steel-making technology in
a wider perspective, one finds the United States especially, and both
the us and Germany, applying labour-saving machinery at all stages
of the productive process, re-organizing plant lay-out and building
new plant on the most advanced principles. Here again, the British
lagged.' 2
But has Orsagh been partly mislead by Bum's bias towards the
Bessemer section of the industry, which was described in 1895 by no
less a journal than the Iron and Coal Trades Review as being 'in a
semi-moribund condition. Year after year, it has not only ceased to
make progress, but it has absolutely declined'. 3 Certainly, detailed
investigation of the open-hearth section fails to reveal any marked
technical or organizational inferiority in this branch of the industry
in the last quarter of the nineteenth century. 4 For all their admiration
of what they saw of Bessemer plant in Belgium and Germany, 5 and
their comments, explicit or implicit, on the backwardness of the
British Bessemer industry, the members of the 1895 Delegation felt
obliged to emphasize that 'this will not equally, if at all, apply to our
open-hearth steel industry, which is now ahead of the Bessemer
1 See Habakkuk, op. cit., p. 154, quoting John James, 'Technical Education in
Connection with the Iron Trade', Journal of the Iron and Steel Institute, 1876,
pp. 343-4, and Report of the Tariff Commission, para. 558.
• Orsagh, lac. cit., pp. 228-9.
8 W. A. Sinclair, 'The Growth of the British Steel Industry in the late Nine-

teenth Century', Scottish Journal of Political Economy, Vol. VI (1959), quoting

Iron and Coal Trades Review, April 19, 1895.
• See particularly Sinclair's article, loc. cit.
6 See Report of the Delegation, pp. 12-13, and the statements of James Cox

and James Patchett, pp. 43, 47.

92
 IRON AND STEEL MANUFACTURES

industry in regard to output, and in which our practice is perhaps the

bestthat exists' .1 Moreover, at least some of the principals of the open-
hearth section appear to have made every effort to maintain this
leadership. In the years before the First World War, David Colville,
Jr, of the Dalzell works, Motherwell, having been responsible for the
erection of his company's steel plant in 1880, visited America,
Germany and France to acquaint himself with new methods and
make himself thoroughly conversant with every development at home
in order to adopt anything that seemed likely to improve the manu-
facture of Siemens's steel, while George Ainsworth's major recon-
struction of the Consett Iron Works in the first decade of the
twentieth century, which cost £750,000, was undertaken only after a
thorough inspection of new works overseas. 2
This is not to argue that Orsagh's verdict concerning British
technological failings is false, simply that because it is heavily
dependent on Bum's analysis it reflects Bum's own bias. To obtain
a more balanced view it is necessary to distinguish between Bessemer
and open-hearth practice. Nevertheless, even the latter section of the
industry appears to have lost some of its early dynamism in the early
years of the twentieth century, 3 and it seems plausible that in
ascribing this and the continued decay of the Bessemer section to
'lack of trained personnel', Orsagh is substantially correct.
But whose fault was it that the expertise of such qualified men who
were employed was not fully exploited'!4 And why were so few
1 Ibid., p. 66.
• See Transactions of the Institute of Engineers and Ship-Builders in Scotland,
1915-16, pp. 401-2, cited by Byres, op. cit., p. 829, and Richardson and Bass,
loc. cit., pp. 76, 81.
• More research on this period is necessary. See Byres, op. cit., pp. 767 ff., and
the frightening list of innovations which M. L. Simpson found had 'not been
adopted in Scotland' in his paper, 'Steel Works-A Twenty-One Years' Review',
delivered before the West of Scotland Iron and Steel Institute in 1913. (Journal
of the West of Scotland Iron and Steel Institute, Vol. XXI (1913-14), pp. 45-55.)
Sinclair's analysis is confined to the nineteenth century. See the point made by
David S. Landes, 'Technological Change and Industrial Development in Western
Europe, 1750-1914', in H. J. Habakkuk and M. Postan (eds.), The Cambridge
Economic History of Europe (Cambridge: Cambridge University Press, 1965),
Vol. VI, Part l, p. 491, and the same author's 'Factor Costs and Demand: Deter-
minants of Economic Growth', Business History, Vol. VII (1965), p. 25.
• Compare with the German situation: 'German industry believed in scientific
training and recruited accordingly; Germany's plants conducted research pro-
grammes and introduced innovations on the basis of scientific experiment; her
managers, themselves trained engineers, not only accepted the union of science
and industry, but believed in it as a matter of faith. The result was a sort of
systematization of innovation. There was no assurance of major discoveries-it
93
 THE DEVELOPMENT OF BRITISH INDUSTRY

officials given, or subjected to, specialized training? Professor

Sexton's presidential address to the West of Scotland Iron and Steel
Institute indicates the answer. Speaking of the existence of the
Glasgow and West of Scotland Technical College, where he himself
held a chair, he said, 'When I look back on the record of this
institution I can only wonder at the extreme apathy of the manu-
facturers of the district, expecially the ironmasters, with reference to
it. ' 1 Thus even when educational facilities were available they were
not intensively utilized. If this case is typical, the blame shifts to
where Burnham and Hoskins placed it:
'If a business deteriorates it is of no use blaming anyone except those
at the top, and if an industry declines faster than unfavourable
external and uncontrollable factors lead one to expect, the weakness
can only be attributable to those who are in control of its activities.
There is, in fact, good evidence to believe that the British iron and
steel industry would not have declined relatively so fast or so far
during the period reviewed [1870-1930] had the men at the head
possessed greater vision and a bolder more energetic capacity for
organization, direction and administration. ' 2
This entrepreneurial weakness is traced to the fact that 'the
ultimate control of the British iron and steel industry has been in the
past largely a family matter, which, together with an unduly acute
individualism, accounts for men without any special training attempt-
ing to manage large industrial concerns and for a loose works
management. The sense of security from inherited wealth explains an
inherent conservatism, and a marked tendency to retain aged
directors led to a love of compromise, a hesitant development of
policy and opposition to change except when driven', and, one might
add, growing wealth led to the diversion of entrepreneurial energies
to non-business pursuits. 3
is worth noting, for example, that the great advances in metallurgy in the second
half of the century were English (Bessemer, Siemens, Thomas-Gilchrist), French
(Martin, Carves) or Belgium (Coppee). But there was some assurance that inven-
tions of whatever origin would be tested and exploited; and there was within
industry itself a steady flow of small improvements which cumulatively con-
stituted a technological revolution.' Landes, 'The Anglo-German Rivalry', loc.
cit., section Ill, pp. 10--11. See also the examples of major innovations conceived
in Great Britain and first adopted or developed abroad provided by Schubert,
op. cit., pp. 63, 69.
1 Journal of the West of Scotland Iron and Steel Institute, 1896, p. 22. Emphasis
supplied.
• Burnham and Hoskins, op. cit., p. 271.
• Ibid., p. 248. And see Byres, op. cit., pp. 802-20, and his 'Entrepreneurship
94
 IRON AND STEEL MANUFACTURES

To make any assessment of just how much the relative decline of

the British iron and steel industries was due to these entrepreneurial
failings is impossible. It is fair to argue, however, that familial control
was a major factor in inhibiting the growth of the large unit in the
iron and steel industry and considerable cost-reducing potential was
lost thereby. 1 Burn maintains that the structure of the British capital
market presented an obstacle to the emergence of new high-capacity
plants in Britain, but firms with sound reputations who possessed the
will to combine or to acquire other well-known concerns would
appear to have been able to tap the necessary sources, if not in
London then locally. It was the will to combine, not the capital that
was significantly lacking. 2 Before 1914 a tendency towards combina-
tion and vertical integration is clearly evident but it was not as
marked as several commentators had anticipated at the turn of the
century. 3 Dorman Longs made the attempt. By gaining control over
raw materials, by diversification of output, by the absorption of
competitors and by the reconstruction of works, this firm grew in
in the Scottish Heavy Industries, 1870-1900', in P. L. Payne (ed.), Studies in
Scottish Business History (London: Cass, 1967), pp. 250-96; H.J. Skelton, op.
cit., p. 173; and for an extended discussion of this point P. L. Payne, 'The Emer-
gence of the Large-Scale Company in Great Britain, 1870-1914', to be published
in the Economic History Review. It is perhaps significant that the most consist-
ently profitable steel company before 1914 was Consett Iron which 'was never,
in a real sense, a family firm'. Richardson and Bass, loc. cit., p. 89.
1 See Payne, 'The Emergence of the Large-Scale Company .. .'.
1 Burn, op. cit., pp. 186-7, 201 n., 252-7; Lance Davis, 'The Capital Markets
and Industrial Concentration: The U.S. and U.K., A Comparative Study', Eco-
nomic History Review, 2nd Series, Vol. XIX, No. 2 (1966), p. 266. 'Section XXIII
-Capital Expenditure' of the Report of the Delegation is of some significance in
this respect: 'We think we are justified in pointing out that Continental works
appear to generally have a smaller nominal capital in relation to the extent of
their operation than English establishments of the same size or a similar charac-
ter. To take only one case in point-which, however, is typical-the Gutehoff-
hungshutte Company at Oberhausen have a capital of only some £800,000,
although they give employment to about 10,000 workmen, produce over 300,000
tons of pig iron a year, and have very extensive coal mines, coking and washing
plants, large Bessemer works, and rolling mills that produce about 180,000 tons
of finished iron and steel a year, in addition to very extensive machine and engine
works, foundries, bridge building and forge works at Sterkrade. There are only
two, or at the most three, works in Great Britain that can compare in extent
with this establishment, and we believe that a comparison of the nominal capital
would not prove favourable to the English works. The same feature is apparent
in the large Belgian establishments, such as that of the Societe Cockerill, which
employs 9,753 men, and has a capital ofless than £1,000,000' (p. 20). The impor-
tance of avoiding the burden of over-capitalization is emphasized by Richardson
and Bass (loc. cit., p. 84) in their study of the Consett Iron Company.
1 See, e.g. The Engineer, June 23, 1899, p. 817.

95
 THE DEVELOPMENT OF BRITISH INDUSTRY

both size and efficiency and with three plants produced about
450,000 tons by 1904. But stability in profits was not attained and
other firms were not encouraged to emulate them. 1 Indeed, even as
late as 1907, there were still, 'after allowing for associated companies,
some 101 blast furnace companies with an output exceeding 9,000,000
tons of pig iron ... [and] about ninety-five steel-making concerns .. .'. 2
Thus, Burn tells us, the amalgamations in the British iron and steel
industry at the turn of the century failed to create a single firm 'with
appreciably more than half the capacity of the Illinois Steel Co.',
which, when it was established in 1889, 'became for a few years the
biggest American heavy steel firm'. 3
Of course, growth by amalgamation and absorption did not
necessarily mean greater efficiency, particularly if, in order to attract
the potential investor or to secure a connection with another trade
through which orders might be obtained, it involved appointing
'guinea-pigs' or 'ornamental' directors to the board. 4 Amalgamation
was evidently regarded as a risky proposition and one which almost
inevitably involved the loss of absolute control on the part of one or
more families. But the reluctance to merge cannot be explained
solely in terms of the supercession oflong-established familial power.
Behind this was the belief that the market was not buoyant enough
to make vast concerns a success. This bred a hesitancy towards
amalgamation, vertical integration and the purchase of new capital
equipment embodying technological innovation. It was better to
tinker with old plant than to embark on costly reconstruction. As
one witness before the Tariff Commission put it: 'a sense of in-
security with the British manufacturer prevents him from laying
down new plant. We are so alarmed and disheartened at the approach-
ing foreign competition that we fear to spend money.' 5
1 Burn, op. cit., p. 273 n.; H. W. Macrosty, The Trust Movement in British

Industry (London: Longmans, 1907), pp. 24-31. Another markedly successful

backwardly integrated concern was Consett. The considerable contribution made
towards economies in raw material and fuel costs by this firm's extensive produc-
tion of coal, coke and ore is discussed by Richardson and Bass, loc. cit., pp. 81-2.
• Macrosty, op. cit., p. 24.
• Burn, op. cit., pp. 228-9. I am undecided just how fair this comparison is.
For example, the capacity of the Republic Iron and Steel Company, one of the
concerns that was to be a 'giant' in the United States, was about 600,000 tons
in 1904 and before 1908 Bethlehem's capacity was below 300,000 tons. For the
ingot capacities of several major American steel companies, see Gertrude G.
Schroeder, The Growth of Major Steel Companies, 1900-1950 (Baltimore: Johns
Hopkins, 1953), Appendix Tables 1-12, pp. 216--27.
'Burn, op. cit., pp. 256--7; J. B. Jeffreys, Trends in Business Organization in
Great Britain since 1856 (Ph.D. thesis, University of London, 1938), p. 424.
6 Report of the Tariff Commission, para. 678. See also Walter Isard, 'Some

96
 IRON AND STEEL MANUFACTURES

This may well be a culpable attitude but it is understandable.

Peter Temin has recently made an attempt to determine what might
have happened had this demoralization been overcome and a
vigorous and successful drive been made to lower costs, and hence
prices, in the British steel industry. 1 His reasoned conclusion is that
'lower British costs could have increased the production of steel in
Britain by approximately 20 per cent of the world trade in steel, or
about 2·4 million tons'. Of this 'half [10 per cent] is assumed to come
from a reduction of British imports by two thirds ... [and the] other
half is the result of increasing Britain's share in exports to various
neutral markets', mainly in Latin America and the Far East, at the
expense of Germany's export trade. The significance of this estimate
is that even had these hypothetical changes taken place after 1890 the
average annual growth rate of the British steel industry would still
only have been increased from the actual figure of 3·4 per cent to
4·6 per cent per year and the German rate reduced from its actual
9·6 per cent to 9·0 per cent per year. In other words, 'Even if the cost
of steel production in Britain had been lower than in Germany, the
rate of increase of British steel production would only have been
one-half the rate in Germany, and the volume of British production
in 1913 would only have been two-thirds of the volume of German
production. It was not possible, therefore, for the British steel
industry to match or even approach the growth of the German and
American industries.' 2
The corollary of this argument is that

'this slower rate of growth in Britain produced a technological lag,

relative to the German and American industries, which may have
been large enough to account for the observed differences in costs.
High costs in Britain appear, therefore, as a result of slow growth not
its cause. And the explanation of this rate of growth is found in the
nature of resource costs and tariff policies in the three large steel-
producing countries, rather than in the condition of competition
in Britain or the competence of British steel makers.' 3
Locational Factors in the Iron and Steel Industry since the early Nineteenth
Century', Journal of Political Economy, Vol. LVI (1948), pp. 211-12, 217;
Landes, 'Anglo-German Rivalry', section III, p. 17.
1 Costs might also have been reduced by lower transport charges and lower
royalties payable on coal and ore. See above, pp. 88-9; Hoffman, op. cit., p. 89,
and Report of the Delegation, pp. 19-20.
1 Temin, op. cit., pp. 148-9.

• Ibid., p. 151. This is essentially Habakkuk's argument (op. cit., pp. 207-8,
212-15), and see lngvar Svennilson, Growth and Stagnation in the European
D 97
 THE DEVELOPMENT OF BRITISH INDUSTRY

Tem.in's basic argument is extremely convincing. Despite the

relative paucity of its statistical underpinnings, it is difficult not to
believe that a massive counter-factual explanation would result in
any substantial modification. It rests primarily on the fact that the
growth of demand for iron and steel products in the United States and
Germany was more rapid than that for all the rest of the world and
that Britain was prohibited from such markets by a 'Chinese Wall' of
tariffs (which could and probably would have been heightened had
British entrepreneurs been more efficient than they were). Given this
situation Britain's relative decline was inevitable.

We would hesitate, however, to conclude with a single factor

explanation. Enough has been said about the waning of entrepreneur-
ial energy to indicate that Britain's iron and steel manufacturers were
partly responsible for their own decline. Where contemporary
observers and later critics have erred is in believing to a greater or
lesser degree that 'given the great lead which the British iron and steel
industry had over all other countries, there was no reason . . . why
that lead should not have been maintained'. 1 Many comments on the
state of the British iron and steel industry betray an implicit belief
that British supremacy in the industry before the m.id-'seventies was
somehow normal and her accelerating relative decline thereafter,
abnormal. Rather was it that the whole complex of circumstances
that produced British pre-eminence before 1873 was fortuitous, 2 and
that as the United States and Germany caught up and eventually
surpassed the United Kingdom, and as other countries began to
supply their own requirements, the British iron and steel industry
Economy (Geneva: United Nations, Economic Commission for Europe, 1954),
p. 10. It is interesting to note that J. Stephen Jeans, Secretary of the British Iron
Trade Association, stated to the Tariff Commission in 1904 that 'Manufacturers
in this country are blamed by outsiders, and often by their own countrymen,
because they do not show greater enterprise in laying down large capacity plants,
such as are now common in the United States, and are now being laid down to
some extent in Germany. Some American furnaces produce 200,000 to 220,000
tons of pig iron a year, whereas the average annual output of British furnaces
is not more than 28,000 tons .... The truth is that the British manufacturer
would not at present know what to do with such a vast product if he had it.
Our own home market does not absorb more than 3 to 3½ million tons of steel
a year, whereas the American market consumes nearly 15 million tons, and the
German market finds an outlet at home for about 5 million tons.' Report of the
Tariff Commission, para. 1024.
1 Report of the Tariff Commission, para. 48.

• See W. A. Lewis, Economic Survey, 1919-1939 (London: Allen & Unwin,

1949), p. 76.
98
 IRON AND STEEL MANUFACTURES

assumed, in the debates before the First World War, a relative

position more appropriate to its resource base, to the size of its home
market and to the share of the export market which it might justi-
fiably expect to supply.

99
 CHAPTER 4

THE COTTON INDUSTRY 1

BY R. E. TYSON

THE British cotton industry2 in 1913 has been described as 'highly

developed, technologically stagnant, competitively fragile'. 3 Cer-
tainly in the period 1870 to 1913 it no longer played such a leading
role in the British economy as it had in the first half of the nine-
teenth century. The net output of the industry in 1907 amounted
to only half that of coal mining and was surpassed by that of the
engineering trades. Nevertheless, cotton was still a major industry,
employing about 620,000 people in 1912, or one in ten of those
engaged in manufacturing. Moreover, it exported three-quarters of
what it produced and even as late as 1913 accounted for nearly a
quarter of Britain's domestic exports.
Because of its heavy reliance upon the export market those
within the British cotton industry had always been sensitive to
developments abroad. In many countries cotton textiles were the
main feature of the early stages of industrialization. Little skill was
required to produce cotton yarns and cloth with power-driven
machines. The capital investment necessary was modest compared
with that for most industries, and there was a ready demand for
cotton goods. By 1830, cotton industries had been established in
the USA and a number of European countries, and in the following
decades most of these industries grew rapidly.
This growth, however, seemed quite compatible with continued
expansion and prosperity in Lancashire. Although the Continent
and the USA supplied a far larger proportion of their own require-
ments in cotton manufactures, there was little or no decline in the
volume of British exports to these areas and British merchants
1 I wish to thank the Carnegie Trust for a grant which covered expenses in-
curred while carrying out research for this essay.
• Defined as the spinning of cotton yarn and the weaving, bleaching, dyeing
or printing, and finishing of cotton cloth.
3 C. P. Kindleberger, Economic Growth in France and Britain, 1851-1950 (1964),

p. 296.
100
 THE COTTON INDUSTRY

were able to find new outlets for their yarns and piece goods,
particularly in India, South America and the Levant. Moreover,
despite some complaints from British manufacturers, 1 neither the
Continent nor the USA entered into foreign trade in cotton textiles
on any scale.
In the fifty years before 1913, however, the rise of cotton indus-
tries abroad became more threatening. Mills were rapidly being
established not only in the traditional centres, but also elsewhere,
especially in India, Japan, Brazil and China. By 1913 nearly 20 per
cent of the world's cotton industry lay outside Europe and the
USA, compared with only 5 per cent thirty years previously. 2 Britain
was overtaken by the Continent as a consumer of raw cotton in
1888 and by the USA in 1897, while her share of world consumption
fell from 37 per cent in the early 1880s to 20 per cent in 1913.3
Nevertheless, Britain, because of her greater concentration on
medium and fine yarns, still had more spindles than either the
USA or the Continent down to 1913. 4
These changes posed serious problems for the British cotton
industry, dependent as it was upon exports, and there was an
increasing number of complaints about foreign competition both
in the home and overseas markets. Contemporaries, however, were
divided about the extent or importance of this competition, about
whether, in fact, foreign competition was the main problem facing
the industry from the 1870s onwards. This essay may be regarded
as an attempt to resolve these divisions.

II

From the 1870s onwards the British cotton industry experienced a

marked slowing down in its rate of growth. During the first half of
the century the rate of growth, measured by the consumption of
raw cotton, averaged over 5 per cent a year, whereas in the last
quarter it was l ·1 per cent a year, rising to 1·6 per cent between
1900 and 1913. 6 The industry was badly hit by the onset of
depression in the late 1870s, and for the next twenty years it
1 See A. Redford, Manchester Merchants and Foreign Trade (1956), II, pp.

96-7.
1 R. Robson, The Cotton Industry in Britain (1957), p. 3.
3 Tariff Commission, Report of the Tariff Commission, II, Part 1 (1905).

• In 1913 Britain had 55.7 million spindles, compared with the Continent's
43.4 million and the usA's 30.6 million.
6 Output, however, was increasing faster than input as there was a tendency

for consumption of cotton per spindle to fall as yarns became finer.

101
 THE DEVELOPMENT OF BRITISH INDUSTRY

experienced a period of shrinking margins, particularly in spinning.

Between October 1875 and July 1879, for example, the margin on
30's twist yarn fell from 5-id a pound to 2¾d; it rose to 5¾d in
April 1880, but for the rest of the nineteenth century it never again
reached 5d and in 1896 was as low as 2½d. Producers of coarse
goods, whether in spinning or weaving, suffered more than those
in the medium and fine sections. On the whole, weaving was more
profitable during the boom years but did worse in periods of
depression as competition was fiercer than in spinning. Recovery
set in after 1898, but only with the boom of 1905-07 did margins
take a definite turn upwards. 1
Contemporaries in the industry often regarded pressures of
supply as the main factor in determining margins. The USA was
the dominant source of raw cotton, supplying at least three-
quarters of Britain's requirements. The only other important source
of supply was Egypt whose cotton was used by the fine spinning
section of the industry. Thus the coarse and medium sections were
absolutely dependent upon the American crop; India never sup-
plied more than IO per cent of raw cotton imports and after 1890
less than 5 per cent. 2 In the last quarter of the nineteenth century
there were occasional sharp upward movements in the price of
raw cotton as a result of bad harvests or speculation in the cotton
market, but in general the long-term price levels suggest that the
supply of cotton was fairly elastic. Between 1873 and 1896 the
price of American Middling Upland fell by 52·4 per cent. 3 Towards
the end of the century, however, prices began to rise and were
particularly high in 1903-04. The shortage of these years was
caused primarily by a poor crop but was aggravated by the attempt
of a group of American speculators to corner the market. 4 But
although the price of raw cotton fell as a result of the excellent
harvest of 1905, it never again reached the lowest level of the
mid-1890s and in 1911-13 surpassed that of 1903-04. The increase
1 R. Smith, 'The Lancashire Cotton Industry and the Great Depression, 1873-

1896' (unpublished Ph.D. thesis, University of Birmingham, 1954), pp. 114-19,

121; R. Robson, op. cit., p. 336. The margin in spinning is the difference between
the price of raw cotton and the price of yarn and in weaving that between the
price of yarn and the price of cloth. This value added margin contains all costs
of production, including wages and profits.
• Tariff Commission, op. cit., para. 22.
8 R. Smith, 'An Oldham Limited Liability Company, 1875-1896', Business

History, IV, No. l, December 1961, p. 48.

'J. Arthur Hutton, The Cotton Crisis (1904), pp. 5-8 (paper read before the
Economic Section of the British Association, August 22, 1904, and reprinted by
the British Cotton Growing Association).
102
 THE COTTON INDUSTRY

in price was the result of more permanent causes than poor crops
and speculation; particularly important were the rapid expansion
of the American cotton industry and the shortage of plantation
labour in the South.1 Thus only after 1900 did the supply of cotton
pose any serious problems for the industry. In the long term,
pressures of demand were far more powerful in determining trends
in the industry, particularly foreign trade. Nevertheless, the home
trade was of importance too.
Until 1860 cotton clothing had been increasingly worn in
Britain, but during the Cotton Famine there was a movement
towards other textiles. Consequently the consumption per head of
cotton goods in Britain in 1860 was never surpassed until after the
First World War. The actual proportion of cotton goods produced
which was taken by the home market fell until about 1880 and
then rose from 15·7 per cent in value in 1881-85 to 20·7 per cent
in 1896-1900. During the next quinquennium it fell sharply to
16·8 per cent and remained at about this level until 1913. 2 The
home market was particularly important to the producers of high
quality goods (goods sold at home were 33 per cent higher in price
than those exported). 3
The home trade fluctuated less violently than the export trade,
but it was more subject to the vagaries of fashion and could be
severely affected in time of depression, as in 1878-79. But its main
drawback was its relative inelasticity. Although growing more
rapidly than exports in the period 1880-1900, it was incapable of
any great expansion and was never a decisive factor in promoting
output.
Within the home market foreign competition increased quite
rapidly from the 1880s onwards, except in yarns, but it never
presented any serious difficulties to the British manufacturer.' The
Tariff Commission, in its report on the cotton industry, devoted
considerable attention to the problem but concluded: 'The com-
petition of foreign countries has hitherto been only slightly felt in
the British home trade, except in the case of certain classes of
finished goods. ' 5 These consisted mainly of prints and dyed goods,
1 R. Robson, op. cit., p. 336; A. Redford, op. cit., p. 77.
1 W. Hoffmann, British Industry 1700 to 1950 (1955), pp. 88-9; Tariff Com-
mission, op. cit., para. 40.
• Messrs Ellison and Company, Annual Review of the Cotton Trade, 1872, p. 8;
ibid., 1885, p. 3.
'Imports of cotton manufacturers rose from £1,119,810 in 1870-74 to
£8,228,760 in 1910--13 (Trade and Navigation Accounts).
6 Tariff Commission, op. cit., para. 111.

103
 THE DEVELOPMENT OF BRITISH INDUSTRY

hosiery, lace and fancy goods, nearly all from the Continent. The
Saxon cotton industry, for example, captured the cheap trade in
cotton hose from the 1880s onwards while France was always
successful in the higher class of printed muslins. 1 In 1913 almost
two-thirds of imports were of manufactures other than piece goods
and in many cases were manufactured from British fine yams.
The Departmental Committee on the Textile Trades, surveying
imports before the First World War, stated that 'the trade appears
to have been to some extent a "speciality" trade in goods which
for some reason or another British manufacturers did not find it
worth their while to make'. 2 What proportion of the home trade
these goods supplied is difficult to tell. The only year for which it
is possible to obtain reasonably precise figures is 1907, when the
first census of production was carried out. In that year imports of
piece goods were 10.4 per cent in value of those consumed in
Britain, while all imports of cotton manufactures, excluding hosiery
and lace, made up about 12 per cent of the total home trade, com-
pared with a probable 8 per cent in the early 1870s.3

III

Any rapid expansion of the cotton industry rested upon success in

overseas markets. Between 1870 and 1913 there were considerable
changes in the composition of cotton exports and in their destina-
tion. Perhaps the most obvious change was the decline in the
volume of yam exports from the late 1880s onwards despite some
recovery after 1904 (see Table I). The proportion of yarn produced,
however, which was exported in the form of yarn, as opposed to
piece goods and other manufactures, had been falling from 1840
onwards, while the decline in the value of yarn exports dates from
the early 1870s. 4
Europe remained the most important market for yam until 1913,
taking nearly 50 per cent in volume in 1870 and over 60 per cent
1 S. J. Chapman, A Reply to the Report of the Tariff Commission (1905), p. 104;
F. A. Wells, The British Hosiery Trade (1935), p. 179.
• Report of the Departmental Committee (on) the Textile Trades after the War,
Par/. Papers, 1918, XIII, p. 49.
• Calcula'ed from Final Report of the Census of Production (1907), Par/.
Papers, 1912-13, CIX, p. 291; M. Blaug, 'The Productivity of Capital in the
Lancashire Cotton Industry during the Nineteenth Century', Economic History
Review, 2nd ser., XIII (1961), p. 376.
• Committee on Industry and Trade (Balfour Committee), Survey of Textile
Industries (1928), p. 146.
104
 TABLE 1: Exports of Cotton Yarns from the United Kingdom to the Principal Regions of the World, 1870-1911
(Annual Averages)
Europe Turkey and British China, Japan, Other
(ex-Turkey) Egypt East lndies Java, etc. Countries Total
Year million million million million million million
lb. % lb. % lb. % lb. % lb. % lb.
1870 93·7 49·9 14·2 7·6 31·0 16·5 20·8 11-1 28·0 14·9 187·7
1880--84 126·9 50·7 18·8 7·7 46·0 18·6 40·1 16·3 17·1 6·9 248·9
1890--94 114·7 48·7 33·2 14·0 46·2 19·5 30·0 12·7 11·8 5·1 235·9 =
""'
l:!:I
(")
1900--04 82·4 50·9 19·7 12·2 31·8 19·6 9·2 5·1 18·9 11-7 162·0 0

0 1910--11 128·2 61-7 11·0 5·3 33·8 15·1 2·6 4·2 33·2 16·0 207·8 ""'""'
0

-
V, z
Source: Committee on Industry and Trade (Balfour Committee), Survey of Textile Industries (1928), p. 146.
z
0
c:::
TABLE 11: Indian Consumption and Exports of Yarn, 1900-14 (Annual Averages) "'
(million lb.) ""'~
Net Consumption ~
Years Retained Indian Mill Exports of of Indian Mill Total Indian
Imports Production Indian Yarn Production Consumption
1900/01-1904/05 27·6 532 234 298 325
1905/06-1909/10 34·7 652 251 401 436
1910/11-1913/14 34·6 651 193 458 493
Source: Committee on Industry and Trade (Balfour Committee), op. cit., p. 100.
 THE DEVELOPMENT OF BRITISH INDUSTRY

just before the First World War. The weight of yarn exported to
Europe, however, remained more or less stationary apart from a
sharp fall in the years 1900-04. This was a considerable achieve•
ment, considering the rapid development of Continental spinning
industries protected by high tariffs, but was made possible only by
changes within the European market. Yarn exports to a number of
countries, particularly France, Italy and Russia, fell drastically,
but the loss of trade here was compensated by an increase to others,
particularly Germany and the Netherlands. In the years immedi-
ately before the First World War Germany alone took 33 per cent
in value and 24 per cent in volume of all British yarn exports. As
most European countries were quite capable of satisfying their
own demands in coarse counts, trade with the Continent was
predominantly in fine yarns, that is 60's and upwards. 1
India remained next in importance as a market for British yarns,
despite a decline in volume after 1888. She was also the world's
second largest exporter of yarns by 1913 when the proportion of
her yarn exported was 75 per cent compared with only 15 per cent
in the 1870s. This paradox is explained by the concentration of the
Indian cotton industry on coarse counts; in 1899-1900 nearly
80 per cent of the yarn produced consisted of 20's or under. 2
Britain thus supplied India with most of her requirements in
medium and fine counts, although there was some competition
from Germany and Switzerland. In 1913 India took just under
90 per cent of her yarn imports from Britain, but at the same time
exported over five times as much yarn as she imported (see Table
II).
The rise of India as a yarn exporter inevitably damaged Britain's
trade in the Far East, particularly with China. But Britain and
India also met fierce competition from Japan. As early as 1875,
less than a decade after the first cotton mill had been erected, the
British Consul in Osaka reported that 'native weavers prefer
Japanese yarns which suit their looms better than foreign yarns'. 3
By the early 1890s Japan was more or less self-sufficient in coarse
yarns, imports from India, which in 1889 had surpassed those from
Britain in weight, falling quite dramatically. In 1913 Japanese
1 R. Smith, 'The Lancashire Cotton Industry and the Great Depression', op.
cit., p. 25; Report of the Departmental Committee (on) the Textile Trades, op.
cit., p. 46.
1 S. B. Saul, Studies in British Overseas Trade 1870-1914 (1960), p. 189; Tariff
Commission, op. cit., para. 55.
• Quoted in R. Smith, op. cit., p. 29.
106
 THE COTTON INDUSTRY

imports were just over 500,000 pounds compared with 68 million

pounds in 1888.1
The main market for Japanese yarn exports, which first exceeded
imports in 1897, was China. Here Britain had a virtual monopoly
in 1870, but Indian yarn imports began to compete from the early
1870s onwards, overtaking those from Britain in 1878-79. By the
mid-1880s India had captured the coarse yarn trade in all counts
up to 24's. 2 When Japanese yarns first appeared in China during
the mid-1890s Indian yarns dominated the market, but by 1898
Japan supplied 24·8 per cent of China's imports compared with
India's 71 ·6 per cent and Britain's 3·4 per cent. Moreover, China
was developing its own cotton spinning industry and yam imports,
after reaching their peak in 1898, were more or less stationary
until 1913. 8
As in the Far East, the trade with the Near East (Turkey and
Egypt) was predominantly in coarse counts. Here British yam
exports declined from the 1890s onwards and by 1913 were facing
heavy competition, particularly from Italy and India. Whereas
Britain had supplied over 90 per cent of the yam imports taken by
this area in the early 1890s, by 1911-13 she accounted for only
45 per cent of Egyptian and 42 per cent of Turkish imports.'
Thus the decline in yam exports was essentially in coarse counts
rather than all types of yam. Although there was no distinction in
the various counts until after the First World War, the proportion
of medium and fine yams exported almost certainly rose. But the
demand for these was confined mainly to Europe and the USA
where high tariff barriers often made the successful importation of
coarse and medium British yams impossible. The Italian tariff of
1887 was particularly severe, imports of British yarns falling from
10·9 million pounds in 1886 to 200.000 pounds in 1900. 5
On the other hand, fine yarns were able to overcome any grada-
tion in duties against them, as in the case of exports to Germany,
while the McKinley tariff of 1890 actually assisted British yam
exports as American manufacturers imported fine yams to produce
1 K. Seki, The Cotton Industry of Japan (1956), pp. 304-5.
• T. Ellison, The Cotton Trade in Great Britain (1886), p. 320; Manchester
Chamber of Commerce, Bombay and Lancashire Cotton Spinning Inquiry (1888),
Qts. 533, 794; D. A. Farnie, 'The English Cotton Industry, 1850--1896' (unpub-
lished M.A. thesis, University of Manchester, 1953), p. 387.
• H. D. Fong, The Cotton Industry and Trade of China (1932), I, p. 1.
'Diplomatic and Consular Reports, No. 5355, Cd. 7048, 1914, p. 20; ibid.,
No. 5374, Cd. 7048, 1914, p. 17.
6 Tariff Commission, op. cit., para. 64; S. B. Saul, op. cit., pp. 149-50.

107
 THE DEVELOPMENT OF BRITISH INDUSTRY

finished goods previously imported. Even without tariffs the

demand for imported coarse yams in Europe, the USA, Brazil and
other countries, where cotton industries were firmly established,
would have declined as they became increasingly self-sufficient,
although in the Netherlands, where yam duties were abolished,
imports of British yams were maintained at a high level until 1913. 1
Tariffs, however, were hardly a problem in India, the Far East
and the Levant, and it was here that British spinners met their
fiercest competition. The success of India and Japan in the neutral
market of China (and to a much lesser extent of Italy in the Near
East) showed that in the coarser counts Britain was unable to
meet the low costs of her competitors. Nevertheless, she was still
the leading exporter of yams up to 1913, supplying 33·6 per cent
in weight of yams entering world trade, compared with India's
30·2 per cent and Japan's 17·5 per cent. 2
The decline of yam exports posed serious problems for spinners,
particularly during the 1890s, which they attempted to solve in a
number of ways. Increasing emphasis was placed upon yam for
hosiery and lace and upon the production of finer counts. Although
this was partly offset by the development of the flannelette trade,
using very coarse wefts, and of ring spinning, the consumption of
cotton per spindle between 1890 and 1903 fell by 2·6 per cent,
equivalent to a change from 30s to 32s. Perhaps more important,
there was a rapid expansion of exports of sewing thread, which
trebled between 1876 and 1903. Although there was a decline
between 1904 and 1913, Britain still dominated world trade in this
commodity, having erected mills in those countries where tariffs
were high. But the chief compensation for the decline in yam
exports came from the increased demands for the products of the
weaving industry. 3

IV

Exports of piece goods suffered no diminution in quantity although

they were more or less stationary during the 1880s and early 1890s.
They declined in value between 1880-84 and 1895-99, but increased
much more rapidly in value than in quantity from 1905 onwards
(see Table III).
1 S. B. Saul, op. cit., p. 149; Tariff Commission, op. cit., paras. 156, 279.
1 G. W. Daniels and J. Jewkes, 'The Post-War Depression in the Lancashire
Cotton Industry', Journal of the Royal Statistical Society, XCI, 1928, p. 155.
3 D. A. Farnie, op. cit., pp. 421-2; Tariff Commission, op. cit., paras. 28 and

65; S. J. Chapman, A Reply to the Tariff Commission, p. 8.

108
 TABLE 111: Exports of Piece Goods from the United Kingdom 1870-1913 (Annual Averages)
Volume Value
=
~

Index of Growth Index of Growth t'1

Years Thousand Linear Yards (1870--74 = 10(),()()) £000 (1870--74=100·00) 0
0

-55
1870--74 3,445,510 100·00 54,885 100·00 ~
--i
0
1880--84
1890--94
4,492,964

4,974,957
130·40

144·39
55,330

50,569
100·87

92·19 -z
z:
t::,
c:::
(I>,
1900--04 5,295,375 153·69 56,689 103·34 --i
:,ct·
1910--13 6,672,737 193·66 89,774 163·64 o<

Source: Committee on Trade and Industry (Balfour Committee), op. cit., p. 146.
 TABLE IV: Principal Markets for Exports of Piece Goods from the United Kingdom 1870-1911
(percentage shares by volume)
Turkey, N. ands.
Year Europe Egypt and America USA British China, Japan, Other
(ex-Turkey) Africa (except USA) East Indies Java, etc. Countries
=
>i

1870 9·1 20·6 18·3 3·2 28·4 14·7 5·8 t,:l

t:,
t,:l
1880-84 8·6 12·8 16·2 1·5 39·3 14·0 7·6 <
t,:l
t""
1890-94 6·2 13-8 16·1 1·2 42·3 15·0 5·3 0
"d
1900-04 5·3 15·7 13·9 1·2 41·6 15·8 6·5 ti::
t,:l
z-,I
-
.... 1910-11 6-4 11-7 12·0 1·0 38·7 15·5 14·3
0
0 Source: Committee on Trade and Industry (Balfour Committee), op. cit., p. 149. "I'.!
to
....-,I
::i:i
TABLE v: Indian Consumption and Production of Piece Goods 1900-14 (Annual Averages) ....rn
(million yards)
=
Years Retained
Indian Production
By Hand Total Indian Production z
Total Indian t:,
Imports By Mills Looms Production Retained Consumption c::
rn
1900/01-1904/05 1,992 545 846 1,391 1,271 3,262 -,I
::i:i
1905/06-1909/10 2,174 801 1,070 1,871 1,752 3,962 -<
1910/11-1913/14 2,579 1,141 1,015 2,156 2,029 4,608
Source: Committee on Industry and Trade (Balfour Committee), op. cit., p. 100.
 THE COTTON INDUSTRY

The main market for British piece goods until 1913 was India,
exports rising from under 1,000 million yards in 1870 to 3,000
million yards in 1913, the first and last time this figure was
achieved. But the Indian market presented many problems. Im-
ports from Britain were heavily dependent upon the state of the
harvest; the failure of the monsoon, excessive rains, or abnormal
heat produced famine and a sharp fall in imports of piece goods
at frequent intervals, particularly 1876-77, 1896-97 and 1899-1900.
Moreover, there were no marriages among Hindus every twelfth
year, which inevitably hit Lancashire as wedding clothes were
usually made from imported piece goods. These factors were the
cause of cyclical rather than of secular fluctuations. The more
important long-term factors were the rise of the Indian cotton
industry and changes in the terms of trade. 1
As Table IV shows, the percentage of total British piece goods
imported by India remained at about the same level from 1880 to
1913. But there were also a marked slowing down in their rate of
growth from the early 1880s until the end of the century. Between
1881 and 1890 exports of piece goods averaged just under 2,000
million yards a year and in the following decade less than 2,100
million yards. Many blamed the fall in the silver exchange from
1873 onwards which was alleged, not altogether convincingly, to
have reduced the purchasing power of the Indian consumer. 2 The
rise of the Indian cotton industry was undoubtedly a more impor-
tant cause of the slowing down of imports from Britain. The
India Office estimated that in the absence of competition from
Indian mills, trade in Lancashire grey piece goods would have
been at least 10 per cent higher in 1890--91. 3 Such competition,
however, was probably exaggerated. Even at the beginning of this
century Indian mills supplied only about 13 per cent of the cloth
consumed in the sub-continent, whereas imports made up 61 per
cent and the native hand loom industry 26 per cent (see Table V).
Perhaps the main reason for the stagnation in imports of piece
goods from Britain was the extremely slow growth of Indian
general exports during the 1880s and 1890s. Between 1874-77 and
1894-97 these increased from £60 million a year to only £65 million.
On the other hand, when exports expanded rapidly from the end

1 D. A. Farnie, op. cit., pp. 401-2; S. D. Mehta, The Cotton Mills of India 1854
to 1954 (Bombay, 1954), pp. 76, 96.
• A. Redford, op. cit., pp. 34-40; S. B. Saul, op. cit., p. 190.
• R. Smith, op. cit., p. 49.
111
 THE DEVELOPMENT OF BRITISH INDUSTRY

of the century onwards, reaching £171 million in 1913-14,1 it is

significant that imports of piece goods did likewise. Such was the
consumer demand resulting from increased purchasing power that
the Indian mill industry supplied only 22 per cent of the cloth
requirements in the years immediately before the First World War,
although its production of piece goods more than doubled between
1900 and 1913 (see Table V).
The decline of British exports of piece goods to India after 1918
was foreshadowed by the rapid growth of the Indian cotton
industry. But competition from the latter between 1870 and 1913
was primarily in plain cloths; only in 1912 and 1913 did imports
of these from Britain rise sharply, while those of printed and dyed
goods rose continuously, despite some competition from the
Netherlands and Italy. Coarse cloths were also imported from
Germany and Austria-Hungary, though Britain still supplied well
over 90 per cent of imported piece goods down to 1913. 2
British piece goods were not quite so dominant in the Far
Eastern market, although this was second only to India in impor-
tance. In Japan, imports from Britain fell from 106 million yards
in 1896 to 50 million in 1913, but the decline was almost entirely
the result of the expansion of the Japanese weaving industry. More
than 90 per cent of Japanese cloth imports came from Britain.
There was an even more violent drop in exports to the Philippines,
which after increasing from 9 million yards to 94 million yards
between 1873 and 1889 fell to only 17 million yards in 1913. In
1891 Spain had doubled the duties on imported British cottons,
and when in 1898 the islands passed from Spanish rule, they were
eventually absorbed into the customs system of the USA, whose
piece goods captured the market. 3 Decreasing British exports to
Japan and the Philippines, however, were more than compensated
by the enormous growth of trade with the Netherlands East
Indies after the IO per cent protective tariff in favour of Dutch
imports was lifted at the beginning of 1874. In 1873 imports from
Britain were only 18 million yards; forty years later the figure was
304 million yards, equivalent to 45 per cent of total imports.
Nevertheless, it was the Chinese market upon which Lancashire
1 R. Dutt, The Economic History of India (1960 ed.), II, p. 248; S. B. Saul,
op. cit., p. 190.
2 Committee on the Textile Trades, op. cit., p. 54; Committee on Industry

and Trade (Balfour Committee), op. cit., p. 102.

• R. Smith, op. cit.; Committee on Industry and Trade (Balfour Committee),
op. cit., p. 102; A. Redford, op. cit., pp. 80, 84, 88; K. Seki, op. cit., pp. 306--7.
112
 THE COTTON INDUSTRY

placed most reliance in the Far East and which seemed to offer
most hope for the future. 'I think that that is a trade which is
capable of expansion to an enormous extent, if only we could
open up the country [with railways].' 1 The main customers, how-
ever, were not the great mass of peasantry but the wealthier classes
of the towns. Moreover, it was an extremely unstable market,
subject to increasing internal taxation, fluctuations in the rate of
exchange, civil war, famine, flood and plague. Cotton imports were
more or less static between 1868 and 1884, before rising steadily
until 1895. There was then a rapid increase between 1896 and 1905
(apart from 1900, the year of the Boxer Rising) followed by a sharp
fall until 1913, when they regained the level of 1905. 2
British exports of piece goods to China (including Hong Kong)
increased from 448 million yards in 1880 to 716 million yards in
1913 although there was a definite slowing down after 1885 as a
result of increasing foreign competition, particularly American.
This became serious by the turn of the century; in 1905 Britain
supplied 56 per cent of Chinese imports of piece goods and the
USA 36 per cent.

'But each of the two countries has a special field in which its
influence predominates and in which the demands are for certain
special kinds of cloth. American shirtings and drills control the
market in Manchuria, whereas English shirtings and light sheetings
hold sway in Southern China.' 3

By 1913, however, America's share of the Chinese market had

dropped to less than 8 per cent as a result of competition from
Japan and from Chinese manufacturers. Japan now supplied
18 per cent of imported piece goods while Britain's share had
risen to just under 66 per cent. There was some competition from
India, Germany and Italy in coarse goods, but not of any signi-
ficance and 'mainly in articles which British manufacturers do not
care to make so long as they can keep their looms occupied on
finer cloths'. In these, whether bleached, dyed or fancy woven,
Britain had no rival in China before 1913, although the success of
1 Royal Commission on the Depression in Trade and Industry (Second Report),
Part. Papers, 1886, XXI, Q. 5297.
1 A. J. Sargent, Anglo-Chinese Commerce and Diplomacy (1907), pp. 133--4;
H. D. Fong, op. cit., pp. 247-50.
1 M. T. Copeland, The Cotton Manufacturing Industry of the United States
(1912), p. 224.
113
 THE DEVELOPMENT OF BRITISH INDUSTRY

Japan in ousting the USA was noted with considerable apprehension,

as was the rise of the Chinese cotton mill industry.
The Near East, like China, the Dutch East Indies and Japan,
was an area of low or nonexistent tariffs where Britain could
compete on equal terms with other cotton industries, whether
native or foreign. Turkey occupied third place among the world's
markets for British piece goods, although the quantity taken
declined in the last two decades of the century from a peak of
383 million yards in 1883. By 1913, however, exports had recovered
to 360 million yards (well over half Turkish imports) despite a
heavy loss of territory in Europe and increasing foreign competi-
tion. Britain's main competitor was Italy, particularly in dyed
goods and grey cloth, but Germany, Austria and Switzerland com-
peted in velvets, plushes and blankets. Egypt, too, imported more
piece goods from these countries, although Britain still supplied
nearly 82 per cent in 1913.1
The South American market increased rapidly until 1895, when
it took 689 million yards, and then suffered a small but gradual
decline until 1913. But within this area, as in the Far East, there
were important changes in the distribution of British piece goods,
Brazil, Peru and Columbia all taking smaller quantities. 2 The main
reason for this was the rise of native cotton mills. Until the early
1880s Brazilian mills, situated mostly in the Southern Central
provinces, had supplied purely local needs. Thereafter their pro-
ducts began to be sold in the national market and were helped by
heavy tariff protection. In consequence, British exports to Brazil
fell from 231 million yards in 1880 to 96 million yards in 1913,
although in the latter year they still comprised about 70 per cent
of Brazilian imports of piece goods. 3
The loss of trade with Brazil, however, was compensated by
increased exports to Argentina and Uruguay, particularly the
former, whose imports from Britain increased from 51 million
yards in 1873 to 199 million yards in 1913. Nevertheless, it was a
market in which Britain met fierce competition, particularly from
Italy in dyed goods which were more suited to the taste of the
large Italian colony. Even in the early 1880s Britain supplied only
1 A. Redford, op. cit., p. 80. Tariff Commission, op. cit., para. 169.
• R. Smith, op. cit., p. 39; G. W. Daniels and J. Jewkes, 'The Post-War
Depression in the Lancashire Cotton Industry', Journal of the Royal Statistical
Society, XCL, 1928, pp. 156--7.
8 S. J. Stein, The Brazilian Cotton Manufacture (1957), pp. 66, 68, 70; Com-

mittee on Industry and Trade (Balfour Committee), op. cit., p. 119.

114
 THE COTTON INDUSTRY

60 per cent of Argentina's imports and in 1910-13 the proportion

had fallen to 55 per cent. 1
The market for piece goods which caused the most trouble was
undoubtedly Europe. In 1820 this had been the most important
customer, taking half of total exports, but there was then a sharp
fall to 9 per cent in 1870 and only 6 per cent in 1913. Such a relative
decline, however, was quite compatible with a greater volume of
trade, particularly after 1900, imports to this area rising from
292 million yards to 430 million yards between 1900 and 1913. But
the European market was more important than the quantity of
piece goods taken would indicate as it took the finest qualities.
Consequently, it was only a little less valuable than the South
American market.
Changes in the destination of piece goods within Europe followed
a similar pattern to yarn exports. During the 1870s and early
1880s France and Italy had between them taken 50 per cent of
British exports to Europe. The imposition of tariffs, particularly
the Italian tariff of 1882, helped to reduce their importance, so
that by 1913 France took only 3 per cent while exports to Italy
were not even recorded in the Trade and Navigation Accounts. The
Netherlands, Germany and Switzerland all increased their imports,
although a good deal of the cloth was re-exported after finishing. 2
The USA, like Europe, was primarily a market for high quality
goods, imports of coarse cottons having almost ceased before the
Civil War. British exports declined sharply from 1872 until the
McKinley tariff of 1890, which by imposing high duties on woollen
goods caused demand to shift to other fabrics. There was an
increase in imports until 1908, but they then declined down to
1913, when the USA took only 44 million yards from Britain. Never-
theless, Britain supplied nearly 79 per cent of American imports,
compared with less than 14 per cent from France and Germany
combined. The trade in piece goods, however, was far less com-
petitive or valuable than that in other cotton products, particularly
lace, in which Switzerland dominated. 3

The varying fortunes of the export trade in piece goods, yarns and
1 Royal Commission on Depression in Trade and Industry, Final Report, Par[.
Papers, 1886, XXIII, Appendix D; Committee on Industry and Trade (Balfour
Committee), op. cit., p. 120.
1 R. Smith, op. cit., pp. 36--7; S. B. Saul, op. cit., pp. 148-50.
a Ibid., pp. 146--8; M. T. Copeland, op. cit., p. 234.

115
 THE DEVELOPMENT OF BRITISH INDUSTRY

other cotton manufactures attracted considerable comment through-

out the period 1870 to 1913. Manufacturers and merchants, par-
ticularly when giving evidence before the Royal Commission on the
Depression of Trade and Industry, had many theories to explain
the bad trade prevailing in the late 1870s and 1880s; fluctuations in
the price of cotton, bad harvests at home and in India and China,
the decline in the silver exchange, strikes and lock-outs, excessive
production and overtrading. Their views on foreign competition
were often conflicting, but few placed particular stress on it. 1
During the 1890s, however, the Manchester Chamber of Com-
merce became more alarmed abbut the growth of cotton industries
abroad. In 1895 the President of the Chamber declared that in the
past decade the number of spindles in Britain had increased by
only 5 per cent, compared with 20 per cent in Europe and America
and 70 per cent in India. There were periodic demands for protec-
tive tariffs, which could be used as a bargaining weapon to reduce
high duties abroad, and for Imperial Preference although the
Dominions market took under 6 per cent of piece goods exported
in 1913. The views of the Tariff Commission, however, were not
generally supported; Lancashire had little to gain from Imperial
Preference which might lead, in fact, to a tariff war with foreign
countries that were much better customers than the colonies would
ever be. 2
Moreover, the challenge from foreign countries did not develop
as rapidly as many thought it would. There had been a constant
fear of American competition from the 1870s onwards. 3 The rise of
India and Japan as exporters of yarns and piece goods was noted
with alarm, whilst in the years immediately before 1913 Germany
appeared to have become the main competitor. But there was no
serious challenge from any of these countries before the First
World War. In 1909-13 Britain supplied 69·9 per cent in weight of
the piece goods entering world trade. Her nearest rivals, France,
Germany and Italy, together contributed 16 per cent and the USA
4·4 per cent. 4 The boast of S. Hinrichsen, a Manchester merchant,
'Is there any country that can compete with us? None, at least in
1 A. Redford, op. cit., pp. 88-90; see in particular statement of Albert Simpson,
Royal Commission on the Depression of Trade and Industry (Second Report), Par/.
Papers, 1886, XXI, Appendix A (9).
1 A. Redford, op. cit., pp. 99-108.
8 See series of articles on American competition commissioned by The Textile

Manufacturer which appeared in the October, November and December issues,

1879.
'G. W. Daniels and J. Jewkes, op. cit., p. 155.
116
 THE COTTON INDUSTRY

the staple goods,' was almost equally valid thirty years after he
made it in 1886.1 A number of countries had certain specialities.
Where colour, design and finish were important, French and
German cottons were able to compete and sometimes surpass those
of Britain, while Italy with dyed cloths and the USA, in coarse and
lightly sized fabrics, were successful in a few limited markets. But
none of these countries were in a position to compete with the
great staple products of British manufacturers, dyed and bleached
piece goods. Grey goods, however, faced some competition from
India and Japan, which was partly responsible for their diminish-
ing role in exports from the 1890s onwards. Dyed piece goods
increased from 12·3 per cent of total cloth exports in 1890-94 to
20·4 per cent in 1910-13, while grey goods fell from 43·5 per cent
to 32·4 per cent. 2
More concern was felt about the increasing ability of a number
of countries to satisfy their own requirements in piece goods with-
out necessarily entering into foreign trade in them. Many of these
countries had high tariff duties, which could be particularly severe
against piece goods (see Table VI).

TABLE VI: Duties (ad valorem) Levied by Foreign Countries on British

Cotton Goods, 1905
Piece Goods Thread Yarns
% % %
Russia 169 to 207 39 70 to 76
USA 68 to 88 375 45 to 48
Austria-Hungary 47 to 65 14 14 to 17
France 36 to 51 197 14 to 20
Italy 29 to 52 18 14 to 19
Germany 38 to 49 14 9 to 15
Belgium 22to 28 8 6 to 7

Source: Tariff Commission, op. cit., para. 560.

Although, as we have seen, tariffs undoubtedly retarded exports

to a number of markets, especially Italy and Brazil, their impor-
tance must not be exaggerated. They undoubtedly hit coarse goods,
although exports of these had been declining before protective
tariffs became general from the late 1870s onwards, but had little
1 Royal Commission on the Depression in Trade and Industry (Second Report),
Par/. Papers, 1886, XXI, Q. 6056.
1 D. A. Farnie, op. cit., pp. 424-5; S. J. Chapman, A Reply to the Tariff Com-
mission, p. 15; Committee on Trade and Industry (Balfour Committee), op. cit.,
p. 144,
117
 THE DEVELOPMENT OF BRITISH INDUSTRY

effect on fine cottons. Exports of the latter to Germany and the

USA increased despite the gradation in tariff duties, while the
Meline tariff of 1892 did not greatly intensify the decline in exports
to France, which had been falling for nearly a decade. The pro-
portion of yarn taken by the principal protected markets actually
rose from 48·8 per cent in 1895 to 68·7 per cent in 1907, while
that for piece goods remained more or less stationary. 1
Britain's share of international trade in cotton goods fell from
82 per cent in 1882-84 to 58 per cent in 1910-13, but this was
quite consistent with an increase in the volume of exports. The
real problem is why the 1880s and 1890s should have been a period
of relative stagnation in exports and the years between 1900 and
1913 ones of rapid expansion. Foreign competition was much more
intense and tariffs were higher during the latter period. Many
countries were becoming more self-sufficient in cotton textiles. The
proportion of these produced in the world which entered inter-
national trade fell from nearly 40 per cent in the early 1880s to
28 per cent in 1910-13. 2 The experience of India, in particular,
suggests that the answer lies in the fall in the price of primary
products during the last twenty years of the nineteenth century.
Countries producing these were Lancashire's main customers and
could not afford to increase their imports of cotton textiles as
rapidly as before. Samuel Andrew, Secretary of the Oldham Master
Cotton Spinners' Association, perhaps best summed up the main
problem facing the British cotton industry in this period: 'There is
no doubt that our trade is suffering very greatly from overproduc-
tion, but it is not that we are producing more than the world really
requires, but that we are producing more than the world can really
afford to pay for.' 3 With the increase in the price of primary
products from the mid-1890s onwards and the general revival of
world trade and activity, there came the rapid expansion of exports
which foreign competition and increasing self-sufficiency could not
prevent.

VI

To retain its predominance, the British cotton industry had to

maintain 'a superiority in efficiency over all other countries in a
1 S. B. Saul, op. cit., pp. 145-50; Tariff Commission, Memorandum No. 40,

p. 18.
2 R. Robson, op. cit., p. 2.

• Royal Commission on the Depression in Trade and Industry (Second

Report), op. cit., Appendix C.
118
 THE COTTON INDUSTRY

vast range of cotton goods differing in nearly every respect in

which it is possible for cotton goods to differ' .1 This was partly
achieved by the industry concentrating within a relatively small
area and practising a high degree of specialization.
By the end of the nineteenth century, 83 per cent of the industry's
operatives were in Lancashire and neighbouring Cheshire. 2 On the
Continent there was no similar concentration; the German cotton
industry, for example, was scattered across the entire country except
the north and north-east, while France had three main areas (the
North, the Vosges and Normandy). 3 In the USA there were two,
New England and the South, each many times larger than Lanca-
shire. Within this small area, any natural advantages (cheap coal,
a humid climate, soft water and easy access to a major port) were
augmented by the economies arising out of geographical specializa-
tion. Southern Lancashire, together with the adjoining areas of
Cheshire and Derbyshire, concentrated on spinning and doubling,
northern and eastern Lancashire on weaving, while Manchester
was the great finishing and marketing centre. Within each of these
areas the process of specialization was carried out even further.
Oldham and its neighbourhood produced mainly coarse and
medium counts, Bolton and Manchester fine yarns, many mills
spinning only a narrow range (such as 30's to 42's or 50's to 70's).
Many weaving towns had their own particular specialities; Preston
and Chorley manufactured fancy cloths, Colne and Nelson coloured
fabrics, Blackburn and Bury heavily sized shirtings and dhooties. 4
Throughout this period there was an increasing tendency for spin-
ning and weaving to be carried out in separate establishments. In
1884 the combined firms still had 57·3 per cent of the looms and
39 per cent of the spindles in Lancashire, but by 1911 these shares
had fallen to 33·7 per cent and 20·5 per cent respectively. 5 In most
other countries spinning and weaving were usually carried out
under the same roof.
Such a specialized system, however, had its disadvantages. A
1 G. W. Daniels and J. Jewkes, 'The Comparative Position of the Lancashire
Cotton Industry and Trade', Transactions of the Manchester Statistical Society,
1926--27, p. 83.
1 S. J. Chapman, The Lancashire Cotton Industry: A Study in Economic Develop-
ment (1904), pp. 148-50.
• M. T. Copeland, op. cit., pp. 276--84; R. M. Dehn, 'I'he German Cotton
Industry (1913), Chapter 2; R. B. Forrester, The Cotton Industry in France (1921),
pp. 10--21.
'S. J. Chapman, op. cit., pp. 156--7; M. T. Copeland, op. cit., p. 277.
6 Ibid., p. 326; D. A. Farnie, op. cit., p. 137.

119
 THE DEVELOPMENT OF BRITISH INDUSTRY•

pound of cotton, it was estimated, 'will pay tribute to two Liverpool

brokers, to a yam agent and merchant, to a cloth agent, converter
and merchant, and finally to a wholesaler and retailer. During its
course it may also have been the property of a spinner, a doubler,
a weaver and a printer, ' 1 which in some circumstances may have
outweighed the reduced costs of production arising out of concen-
tration by each firm on a narrow range of yams or cloths.
There was no doubt, however, about the superiority in skills of
the Lancashire operatives, 'who are accustomed to the mule and
loom from childhood and are brought up in the atmosphere of the
cotton mill, so that for them spinning and weaving are almost
second nature'. 2 Although the older Continental centres, too, had
highly skilled operatives, the new centres, especially India and
Japan, had very few indeed. A survey of nearly 63,000 mill hands
in Japan in 1898 showed that 54,000 had been employed for three
years or less and only 160 for more than a decade. 3 During the
1880s and 1890s the superior skills of the British cotton worker
more than compensated for the lower wages of those in most other
countries. Thus The Bombay and La.ncashire Cotton Spinning
Enquiry of 1888 revealed that Lancashire could produce 20's yam
at between 0·25d and 0·45d per lb cheaper than Bombay, where
the wage for an eighty-hour week was only a fifth of that paid in
Britain for 56½ hours. 4
The most comprehensive examination of costs of production
and efficiency before 1900 placed great emphasis on the skill of
British operatives; three spinners could attend 1,000 spindles in
1887, whereas in 1891-92 it required 5·8 in Alsace, 6·2 in Switzer-
land, 7·2 in Saxony and 16·6 in Russia. In Britain the length of
traverse (the distance travelled by the self-acting mule carriage
when the yam is being drawn out fine) and the speed of the spin-
ning machine were both greater. In weaving, too, the looms ran
considerably faster (about 30 per cent faster when producing plain
calico than those in Germany) while the time lost through break-
ages was only about 16·6 per cent compared with between 20 and
30 per cent in Alsace, where weavers were the most skilled on the
Continent. Thus, despite higher wages and shorter hours, the
English operative usually produced cloths more cheaply than those
on the Continent, although 'where it depends upon designs, colour-
1 M. T. Copeland, op. cit., p. 371.
1 Ibid., p. 287.
8 S. D. Mehta, op. cit., pp. 78-9.

'S. J. Chapman, Work and Wages, Part I, Foreign Competition (1904), p. 150.
120
 THE COTTON INDUSTRY

ing and finishing the Germans are capable of exporting in the

world's markets'. 1 This supremacy over Continental countries was
maintained until 1913.
It was the American cotton industry, however, that was regarded
as Britain's main rival in efficiency. Most comparisons between the
two industries lay particular stress on the greater use of the ring
spindle and the automatic loom in the USA and the resulting higher
output per operative. In 1870, the American industry had 3·7 million
ring spindles and 3·4 million mule spindles; in 1914, 27· 1 million
and 3·9 million respectively. 2 In Britain, however, the self-acting
mule was always predominant. Although first introduced here from
the USA in 1867, there were only 6·3 million ring spindles in 1903
(when there are the first reliable statistics) compared with 37·6
million mule spindles. 3 The automatic loom made even less head-
way. The leading make, the Northrop loom, was first marketed in
the USA in 1894 and was widely adopted, particularly in the South.
By 1909 there were nearly 200,000 in the USA, compared with only
8,000 in Britain. 4 Elsewhere, particularly in India and Japan, ring

TABLE VII: Mule and Ring Spindles Installed, 1913

(millions)
Percentage
Mule Ring Total of Ring
UK 45·2 10·4 55·7 18·7
USA 4·1 27·4 31-5 86·0
Germany 5-1 6·1 11·2 54·5
France 4·0 3·4 7·4 45·9
Italy 1·1 3·5 4·6 76·1
Austria-Hungary 2·5 2·4 4·9 49·0
Russia 3·8 5·4 9·2 58·7
India 1·7 4·4 6·1 72·2
Japan 0·1 2·2 2·3 95·7
Other Countries 3·7 7·0 10·7 65·4
World 71·3 72·2 143·5 50·3
Source: R. Robson, op. cit., p. 355.

1 G. von Schulze-Gaevernitz, The Cotton Trade in England and on the Continent

(1895), pp. 91, 96, 107-8, 162. See also Frederick Merttens, 'The Hours and
Cost of Labour in the Cotton Industry at Home and Abroad', Transactions of
the Manchester Statistical Society, 1893-94, pp. 133-45.
2 M. T. Copeland, op. cit., p. 70; us Department of Commerce, Census of

Manufactures (1914), II, p. 37.

3 Return of Cotton Factories, Par!. Papers, 1903, LXIV, p. 5. (The figure for

ring spindles also include throstle spindles, but these were very few in number.)
• D. A. Farnie, op. cit.; F. Nasmith, 'Weaving Appliances', Transactions of the
Manchester Association of Engineers, 1909-10, p. 512.
121
 THE DEVELOPMENT OF BRITISH INDUSTRY

spindles occupied a much larger share of total spindleage than in

Britain, although only the USA had more ring spindles (see Table
VII).
The continued supremacy of the self-acting mule in the British
cotton industry was not the result of any failure by the textile
machine makers to supply the ring frame. Howard and Bullough,
for example, produced more than 3½ million ring spindles between
1878 and 1885, over half of them for export. Nor was it conserva-
tism. The mule, in fact, was particularly adapted to the needs of
the British spinning industry. It was better suited than the ring
frame for medium and fine counts and produced fewer breakages
in the short staple cotton and waste used in Britain (but not the
USA) for coarse counts. Moreover, British manufacturers required
coarse mule warp yarn for certain heavily sized cloths. The separa-
tion of spinning and weaving in Britain also meant that the use of
the ring frame increased the cost of moving the yarn, which was
on heavy wooden bobbins and not on paper tubes. The ring frame,
on the other hand, was much more suited to conditions in the
USA, particularly the South, and the new countries of cotton textile
production. Because it spun continuously and not intermittently as
did the mule, it produced at least a third more yarn per spindle,1
thus reducing labour costs. Even more important, it could be
worked with unskilled labour as it was a less complex machine and
produced fewer breakages in the yam when spinning. 2
The automatic loom offered similar advantages and disadvan-
tages. One weaver could attend between sixteen and twenty-four
automatic looms, compared with 3·5 plain looms. 3 At the same
time less skill was required to operate the automatic loom. But it
was more suited to the production of coarse cloth of a single
design and because of its speed needed better quality yarn. The
plain loom could manufacture cloth from yarns of all qualities and
was particularly suitable for medium and fine quality cloths in
which Lancashire specialized. Moreover, the automatic loom cost
twice as much as the plain loom and its installation often required
the redesign of the weaving sheds. 4
1 One estimate put the weekly output per spindle on 32's warp yam at 1.4375

lb. with the ring spindle and 1 lb. with the mule (J. Nasmith, Recent Cotton Mill
Construction (1894), p. 152).
• M. T. Copeland, op. cit., pp. 66--73.
3 In the USA one weaver usually attended 6 plain looms, but their speed was

between 10 and 20 per cent lower than in Britain (M. T. Copeland, op. cit.,
p. 303).
'M. T. Copeland, op. cit., pp. 91-2; D. A. Famie, op. cit., pp. 38-9; M.

122
 THE COTTON INDUSTRY

The mule and the plain loom, however, were not capable of the
same degree of improvement as the ring frame and the automatic
loom. There were, it is true, technical developments resulting in
increased production. The average number of spindles per self-
acting mule increased from between 720 and 960 in 1870 to 1,080
in 1910 and the average speed from 7,000-8,000 revolutions per
minute to 8,000-9,000. Consequently, the number of hanks of 32's
produced per spindle rose from 22½ per sixty-hour week in 1866
to 27 per 56½-hour week in 1880 (an improvement equal to 27 per
cent in quantity and 8-10 per cent in quality); by 1893, 31 hanks
were being produced but this level did not increase before 1913.
Similarly in weaving, the average number of picks per minute rose
from 175 in 1873 to 200 in 1906. 1 But the period from 1870 to
1886 was 'productive of greater and more fundamental improve-
ments (of the mule in particular) than any corresponding period
since that time'. By 1900 the mule and the plain loom had been
more or less perfected, whereas the ring frame and automatic loom
were constantly being improved. 2
The greater use of these two inventions was a major factor in
the much more rapid increase in efficiency in the American cotton
industry. Despite the improvements to the self-acting mule and
plain loom, the great developments in opening, cleaning and card-
ing, and the increases in the size of firms and localization, efficiency
in the Lancashire cotton industry, measured by real costs, rose by
only 20 per cent in the sixty years between 1850 and 1910. The real
costs of manufacturing grey cloth, including spinning, apparently
fell from 111 in 1873 (1850 = 124) at the rate of½ per cent a year
until 1882, rose to 108 in 1890 before falling again to 102 in 1900;
there was then an increase to 107 in 1910. 'The reasonable con-
clusion seems to be that a large proportion of the economies reaped
from technical progress have been offset by the high cost of meeting
the demands of the workers as regards hours and conditions of
work.' 3
Frankel, 'Obsolescence and Technological Change in the Maturing Economy',
American Economic Review, XLV, 1953, p. 313.
1 D. A. Farnie, op. cit., p. 42; G. H. Wood, A History of Wages in the Cotton
Trade (1910), pp. 142-3.
1 Textile Manufacturer, Jubilee Number 1875-1925, December 1925, p. 49.
This issue has extremely comprehensive accounts of developments in textile
machinery and in dyeing.
3 G. T. Jones, Increasing Returns (1933), pp. 116-19. See also E. H. Phelps

Brown and S. J. Handfield-Jones, 'The Climacteric of the 1890s', Oxford Eco-

nomic Papers, N.S. IV, 1952, pp. 294-5, for output per operative.
123
 tltE DEVELOPMEN1' 0:F BRITISH 1NDUS1'R Y

In Massachusetts real costs fell almost continuously from 209 in

1862 to 99 in 1900 before finally settling at 101 in 1908-10. The
efficiency of the Massachusetts industry, therefore, increased nearly
four times as rapidly as Lancashire's between 1850 and 1900. 1
Nevertheless, Lancashire continued to produce yarns and, to a
lesser extent, piece goods more cheaply than the American industry
throughout the period. A survey by the United States Tariff Board
in 1912 concluded that for the counts which constituted the bulk
of American output, the lowest British cost, exclusive of raw
materials, was about 73 per cent of the lowest American; when the
raw materials were included, the cost of producing yarn in the
United States was still between 3·8 and 11 ·9 per cent higher. 2 The
Tariff Board was unable to give a detailed comparison of weaving
costs, but simply compared selling prices of similar cloths in each
country. Of seventy-eight staple fabrics of plain construction
examined, only twenty-eight sold at lower prices in Britain. No
comparison, however, was made of the finer types of cloth (or of
medium and fine yarns) where British prices would have been
lower than in the USA. 3 The main threat to British supremacy in
world trade in cotton textiles came not from the USA but from
India and Japan, where the combination of the ring spindle and
cheap labour (together with the proximity of their principal mar-
kets) gave them an advantage over both Britain and the USA in
producing coarse yarns and piece goods. 4
Lancashire's success in overseas markets did not rest simply
upon efficiency in manufacturing. The export of yarn and piece
goods was dependent upon the Manchester merchant. He bought
the grey unfinished cloth from the manufacturer or agent, had it
bleached, dyed or printed, and finished, and then packed and
shipped it abroad, financing every stage until the final sale to a
foreign import house or dealer. Most merchants, except those
trading with the colonies and dominions, were foreign born,
1 Ibid., p. 212. A comparison of real costs in producing finer cloths would
have been rather more favourable to Lancashire.
• The us Tariff Board compared the figures from the mill in each country
which showed the lowest costs for each type of yarn examined. In British mills,
however, the variations in costs of production were much less than in the United
States; for No. 28 warp yarn the cost of spinning in twelve American mills varied
from 2.9 to 4.5 cents per pound, while in British mills the cost rarely varied
more than one half cent per pound.
1 M. T. Copeland, 'Report of the Tariff Board on Cotton Manufactures',
American Economic Journal, 1912, II, p. 561.
• For the rapid adoption of the ring frame in India see S. D. Mehta, op. cit.,
pp. 43-4.
124
 THE COTTON INDUSTRY

Greeks, Syrians and Germans being particularly prominent. 1 One

witness before the Royal Commission of 1886, J. C. Lee, estimated
that at least three-quarters of Lancashire's trade was handled by
foreign merchants. 2 Trade with the colonies and dominions was
largely controlled by British merchants, the forty or so home trade
houses playing an important role by about 1900. But the develop-
ment of the telegraph and fast steamships allowed overseas buyers
to deal directly with manufacturers in Britain, while a few Indian
and foreign houses such as Marshall Field and Co. of Chicago had
their own offices in Manchester. Few British manufacturers entered
into foreign trade directly. 3
No other cotton industry was served by such an efficient mar-
keting system. 'The tentacles of the Manchester trade reach out to
all corners of the world, and whatever form of manufactured cotton
is sought, whatever accommodation is desired, someone can be
found in Manchester ready to accept the commission. Of all the
assets which make it possible for the cotton industry to attain its
largest dimensions in a country which does not produce the raw
material, and which consumes only 10 or 20 per cent of the yarn
and cloth manufactured in its mills, none is more significant than
the adaptability of the commercial organization.' 4

VII

Although unable to check the growth of foreign competition, the

British cotton industry maintained its domination of international
trade in cotton textiles, particularly piece goods. The home market
remained relatively unaffected by imports and if, as shown in
sections III and IV, there was strong competition abroad from
India and Japan in yarns and from some Continental countries in
piece goods, it was only in certain markets. Even in these markets
there was seldom any absolute decline in the volume of British
exports, except in yarns, as a result of such competition. Japan, for
example, had considerable success with piece goods in China after
1 D. A. Farnie, op. cit., pp. 355-7; E. Helm, 'The Middleman in Commerce',
Transactions of the Manchester Statistical Society, 1900----01.
• Royal Commission on the Depression in Trade and Industry (Third Report),
Par/. Papers, 1886, XXIII, Q. 8320.
• J. Slagg, 'The Cotton Trade and Industry', in T. H. Ward (ed.), The Reign
of Queen Victoria (1887), II, p. 195; M. T. Copeland, The Cotton Manufacturing
Industry, p. 370.
' M. T. Copeland, op. cit., p. 371.
125
 THE DEVELOPMENT OF BRITISH INDUSTRY

1900, but at the expense of the USA, not Britain, whose exports
expanded down to 1913.
The main problem facing Lancashire was not foreign competi-
tion, although it obviously affected the level of exports, but the
decline in the proportion of cotton goods entering world trade as
more and more countries supplied a greater percentage of their
own requirements. Such a trend was apparent long before 1870.
But the problem became far more severe after that date, particu-
larly with the adoption of high tariffs in Europe, the USA and Brazil,
and was accentuated by the fall in the price of primary products
which hit Lancashire's main markets during the 1880s and 1890s.
Once purchasing power increased again, as it did after 1900, any
loss of trade through foreign competition or increasing self-suffi-
ciency was more than compensated by a rising world demand.
The reaction of manufacturers and merchants to these difficulties
was generally vigorous. New markets were developed, such as
Argentina and the Dutch East Indies. There was also a greater
concentration on fine yarns, particularly for the European market,
and on dyed and printed piece goods. Less successfully, the industry
tried to improve its efficiency. Despite an increase in the size of
firms and improvements to machinery, real costs do not appear to
have moved significantly downwards. Technical innovations such
as the ring spindle and automatic loom were more beneficial to
Britain's rivals. Even so, what evidence there is suggests that, except
in coarse cloths and yarns and certain high quality goods, British
cotton textiles were fully competitive with those of any other
country in overseas markets.
It may be argued, quite convincingly, that the industry practised
too high a degree of specialization, that not enough attention was
paid to the design of goods destined for the more sophisticated
markets of Europe and the USA, that too much reliance was placed
upon India. Nevertheless, no other cotton industry manufactured
such a wide range of textiles or exported such a high percentage of
its products to so many different markets.
Those responsible for this achievement are for the most part
anonymous figures. The only one perhaps comparable in stature
with Richard Arkwright or Samuel Oldknow was 0. E. Philippi,
architect of J. and P. Coats's success in cotton thread. 1 A German-
born chief salesman of a Scottish firm, however, is hardly represen-
tative of the British cotton industry in this period. But Lancashire
had its dynamic elements, particularly the Oldham limited liability
1 J. H. Clapham, An Economic History of Modern Britain (1938), III, p. 231.
126
 THE COTTON INDUSTRY

companies and those great combined firms such as Horrockes,

Crewdsen and Co. and Tootal, Broadhurst, Lee and Co.
They and others in the industry were well aware of the potential
threat from Japan and India in particular. Although the pessimism
of the last two decades of the nineteenth century gave way to the
qualified optimism of the years after 1904,1 there were those who
asked what would happen if the vital Indian market were lost.
The replies that they received were confident. More reliance would
be placed on Africa, China, the Balkans and Asia Minor; there
would be even greater concentration on finer finished goods. None
foresaw that after the First World War the volume of cotton tex-
tiles entering world trade would decline absolutely for the first
time and that the British cotton industry would never again
experience the prosperity it enjoyed between 1905 and 1913.

1 For a description, if a somewhat exaggerated one, of the vitality of the

British cotton industry in the years before 1913, see B. Bowker, Lancashire Under
the Hammer (1928), pp. 12-16.
127
 CHAPTER 5

THE WOOLLEN
AND WORSTED INDUSTRIES
BY E. M. SIGSWORTH AND J. M. BLACKMAN

I. THE SURVIVAL OF FIRMS

THE complex structure of the wool textile industry, in particular

its division into the woollen and worsted sections, and their further
fragmentation into groups of firms specializing in different produc-
tive processes, presents considerable difficulties to the historian
examining the extent to which this industry was affected by foreign
competition. There are also statistical difficulties: for example,
changing product classification in the relevant foreign trade returns,
and the more fundamental problem of estimating the proportion of
the total output exported and retained for the home market, and
the variations in this proportion which may have occurred. With
these we deal below.
Before attempting to do so, however, we wish to draw attention
to a problem of interpretation which must face the historian who
wishes to test hypotheses relating to entrepreneurial performance
and reactions in this industry and, indeed, any other sector of the
economy, and that is, with whose experience are we concerned?
Too often, generalizations about the historical manifestations o
entrepreneurship seem to rest upon individual case histories based
upon the fortunate chance survival of the records of firms which
maintained their existence not only during the period under
scrutiny, but which also managed to survive until the present day.
If the immediately following evidence has validity for the wool
textile industry and, following from that, any wider validity for
other British industries, then the records of such firms would
appear to be untypical of historical experience of the period
1870-1914.
In the absence of other data we used contemporary directories
for 1870, 1875 and 1912 comparing for each of these years the
names and locations of wool textile firms which were listed in the
West Riding. It would be additionally fruitful, but a formidable
task, to undertake a similar analysis for the years intervening
128
 THE WOOLLEN AND WORSTED INDUSTRIES

between 1875 and 1912, partly as a further check upon the relia-
bility of the evidence so far obtained, but more importantly as a
means of locating more precisely when those firms which appar-
ently developed between 1875 and 1912 did so and when new
arrivals into the industry made their appearance. Trade directories
are a gift horse which has so far remained unridden. The perils of
the ride attendant upon the reliability of this source of information
are considerable. Throughout most of the nineteenth century the
West Riding appears to have been well served by its compilers of
directories. The evidence which they offer seems to be consistent
with the delineation of trends in the structure of the wool textile
industry which can be inferred from other sources, particularly
foreign trade returns, Factory Inspectors' Reports and the evidence
of the 1907 Census of Production. Nevertheless, we would not
wish the statistics we present here to be interpreted with quite that
reverence for numerically expressed quantities in the nineteenth
century which is sometimes apparent amongst economic historians
and economists. We have tried to avoid errors which may arise as
a result of, for example, double-counting, where a firm was listed
more than once in a directory because it had offices and manufac-
turing premises in more than one geographical location. Any case
where the name and location of a firm in 1912 suggests that it is
in a lineal descent from a comparably named and located firm in
1875 has, where possible, been checked and the numbers of firms
which are listed as having survived throughout the period are
therefore as reliable as we can make them and err, if in any direc-
tion, towards generosity. It must, of course, be borne in mind that
the continuity thus apparent in the name, location and function of
a firm listed in the directories is only a limited indication of con-
tinuity of the entrepreneurial functions exercised within the firm.
It tells us nothing of changes internal to the firm, e.g. changes in
its control and in the leading entrepreneurial personalities within it.
Therefore, our figures for the continuity of a firm's existence exag-
gerate the extent to which there was continuity of entrepreneurship.
There is clearly further scope here for more detailed investigation
of the leading personnel in those firms which survived, along the
lines which Dr Erickson pioneered in her study of the British steel
and hosiery industries.1 We have concentrated upon the major
recognizable sub-divisions of the industry defined functionally. 2 In
1C. J. Erickson, British Industrialists, Steel and Hosiery (Cambridge, 1959).
2We have excluded shoddy and mungo merchants, scribblers, and hurlers and
menders.
E 129
 THE DEVELOPMENT OF BRITISH INDUSTRY

terms of the exercise of entrepreneurial functions it must again be

remembered that a firm which remained nominally, say, a firm of
'woollen manufacturers' throughout the period may well, in a
multi-product industry, have changed very radically the nature of
its product 'woollens' during the period.
The results of our analysis are as follows: in Table I column 1
we present the number of firms existing in 1870; in column 2, the
number of firms which, having been present in 1870, survived to
1875; in column 3, the number of firms which, having been present
in 1870, still remained in 1912, and in column 4, the total number
of firms existing in 1912.
TABLE I
1 2 3 4
No.of No. No. No.of
Type of Firm firms in surviving surviving firms in
1870 1870-75 1870-1912 1912
Finishers 108 50 2 40
Dyers 134 87 15 124
Merchants 518 207 32 337
Woollen manufacturers 1,572 798 139 439
Worsted spinners and
manufacturers 278 173 42 184
Worsted spinners 131 68 23 204
Worsted manufacturers 270 100 19 237
Worsted combers 33 16 4 53
Worsted top makers 19 7 0 20
Totals 3,063 1,506 276 1,638

TABLE II
1 2 3
Percentage of Percentage of Percentage of
Firms in 1870 Firms in 1870 Firms in 1912
Surviving Surviving Surviving
to1875 to 1912 from 1870
Finishers 46·3 1·8 5
Dyers 64·9 11·2 12·1
Merchants 40 6·1 9·5
Woollen manufacturers 50·7 8·8 31·6
Worsted spinners and
manufacturers 62·2 15·1 22·8
Worsted spinners 51·9 17·5 11·2
Worsted manufacturers 37·0 7·0 8·0
Worsted combers 48·4 12-1 7·5
Worsted top makers 36·8 0 0
Total 49·1 9·0 16·8
130
 THE WOOLLEN AND WORSTED INDUSTRIES

In the second table we indicate for each type of firm, firstly the
percentages of those which survived from 1870 to 1875 and secondly
from 1870 to 1912. Finally we show the percentage of those firms
which existed in 1912 and which could trace their origins back to
1870. The differences between the percentages recorded in columns
2 and 3 of Table II are, of course, accounted for by the difference
between the numbers of firms which in each section left the industry
between 1870 and 1912 on the one hand and the number of new
entrants on the other.
The analysis of contemporary directories we have begun here for
the wool textile industry suggests drastic changes occurred in the
business units in the industry between 1870 and 1912 so that the
population of firms in 1912 bore little resemblance to that in 1870.
The most remarkable reduction in the number of firms in the first
half of the 1870s was, according to these figures, amongst woollen
manufacturers. Woollen manufacturing at this date was still carried
on by a considerable number of small handicraft firms which had
not yet undergone the technological changes which had completely
transformed the worsted industry. The disappearance of these very
small production units in the 1870s and 1880s-often no more than
one-man firms for whom in the Huddersfield woollen district a
maker of hand looms still worked in 1875-helps to account, there-
fore, for the large absolute reduction in the number of woollen
manufacturers over the whole period and between 1870-75. As far
as these first five years of the period are concerned, however, the
point is worth making that for the woollen manufacturer, as for
the whole industry, 1870 was a remarkably buoyant year of high
activity, while 1875 by contrast was a year of deep depression
which also accounts for the swingeing rate of mortality amongst
wool textile firms over these five years.
Although we have only made a detailed analysis of the directorie8
for the early 1870s and then for 1912, it would appear from this
evidence that some sections of the industry did not in the inter-
vening period replace the firms which went out of business in the
depression of the 1870s. These were especially the finishers, woollen
manufacturers, and those who combined worsted spinning with
manufacture. A further analysis of the directories between 1875
and 1912 may reveal new firms coming in and out of these trades,
but by 1912 there were about the same number of business units
as in 1875 after the first major depression, and in the case of
woollen manufacturers there was a further reduction. Other sections
of the industry more than regained by 1912 the number of business
131
 THE DEVELOPMENT OF BRITISH INDUSTRY

units lost between 1870 and 1875, especially the worsted spinners
and combers. Again there may have been fluctuations with new
firms moving in and out of these trades between the beginning and
the end of the period.
With the reservations we have already made, this material from
the West Riding directories suggests two conclusions. First, that the
experiences of different types of firms in the woollen and worsted
industries varied considerably, and secondly, that for all sections of
these industries the turnover of firms was high. We would not wish
at this point with our liinited evidence to specify the causes of the
latter, to what extent, for instance, the disappearance of firms was
accounted for by their going bankrupt, although bankruptcy was a
fainiliar experience for the late nineteenth century entrepreneur in
the wool textile industry. There is supporting evidence for this in
the contemporary trade journals. At the beginning of a downturn
in trade after the buoyant conditions of the early 1880s the Textile
Manufacturer, in a review of various sections of the industry, com-
mented on the state of the woollen and worsted trade of Wakefield.
Profits had not been nearly as large as in previous years with the
result that there 'have been seventy-three petitions for liquidation
and six in bankruptcy filed during the year, but there have been
few commercial disasters of any magnitude' .1 In Bradford, the
number of bankruptcies and liquidations between 1875 and 1883
was given in the Bradford Observer in 1883 as follows: 2

1875 165 1880 247

1876 256 1881 260
1877 279 1882 216
1878 351 1883 171
1879 417

A high rate of mortality would seem to be consistent with the

existence of a multitude of small firms which was still a feature of
these industries at the time of the Balfour enquiry. 3 We turn now
to our first conclusion from the evidence of the trade directories-
the varying experiences in this period of different types of firms in
the wool textile industry.
Between the years 1870-74 and 1909-13 the average annual
1 The Textile Manufacturer (1883), IX, p. 27. See also infra, p. 36.
1 E. M. Sigsworth, Black Dyke Mills, A History (Liverpool, 1958), p. 77.
• Committee on Industry and Trade, part iii: Survey o/Textile Industries (1928),
pp. 175-8.
132
 THE WOOLLEN AND WORSTED INDUSTRIES

amount of retained raw materials used by the wool textile industry

-that is, the amount which was available for consumption by the
industry-almost doubled. Moreover, with the exception of the
years 1900--04, this increase in consumption of raw materials was
continuous in each successive five-year period.

TABLE 111: Total Quantity of Wool, Mohair, Recovered Wool, etc.,

Retained in the United Kingdom
Annual Averages Annual Averages
(million lb.) (million lb.)
1800-19 110 1870-74 435·5
1820-24 140 1875-79 477-5
1825-29 153·3 1880-84 496·5
1830-34 171-1 1885-89 539·4
1835-39 177·9 1890-94 622·2
1840-44 188·0 1895-99 686·4
1845-49 209·5 1900-04 655·6
1850-54 241 ·0 1905-08 744·2
1855-59 262·6 1909-13 845·9
1860-64 312·3
1865-69 374·3
Source: Tables compiled by Bradford Chamber of Commerce.

It is impossible to say how this raw material was distributed

between the two main branches of the industry, woollen and
worsted. In the woollen industry the consumption of recovered
wool, i.e. shoddy and mungo which it alone used, rose from an
annual average of 89 million lb. per annum in 1870-74 to 209·4
million lb. in 1909-13, an increase of 139 per cent, but the extent
to which this augmented or was a substitute for virgin wool used
in the woollen industry is unclear. The rate of increase in the con-
sumption of wool textile raw materials was particularly marked
between 1860 and 1874 (see Table III), and while consumption
continued to grow during the next fifteen years, the rate of increase
was considerably reduced.
Between 1860-64 and 1870-74 the average annual consumption
rose from 312·3 million lb. to 435·5 million lb. (i.e. by 39·4 per
cent); consumption during the comparable period between 1875-79
and 1885-89 rose from 477·5 million lb. to 539·4 million lb. (i.e.
by only 12·9 per cent), with the years 1880-84 being particularly
marked with only a 3·9 per cent increase over the preceding quin-
quennium. The 1890s proved much more buoyant, but the years
1900-04 actually witnessed an absolute decline in raw material
133
 THE DEVELOPMENT OF BRITISH INDUSTRY

consumption. In view of the depths of that gloom and the extent

to which the misfortunes of the wool textile industry were attributed
to foreign competition, it is ironical that the remaining years
1905-13 witnessed larger absolute increases in raw material con-
sumption by the wool textile industry than had ever been achieved
during the nineteenth century even though the rate of increase was
still rather less than between 1860-74. In general, a number of
features emerge from the statistics of raw material consumption.
Firstly, over the whole period the amount consumed vastly increased
in absolute terms. Secondly, the rate of increase of consumption
was generally lower between 187~1913 than it had been between
1860-74. The entrepreneurial activity of these years culminating in
the hectic boom of the early 1870s provided unusually high stan-
dards against which to compare subsequent experience. Thirdly,
that the early 1880s and especially the opening years of the present
century appear to have been exceptionally poor. Two of the most
important and publicized· enquiries into the wool textile industry-
the Reports of the Royal Commission on the Depression of Trade
and Industry and the Tariff Commission-appeared respectively in
1886 and 1905, that is, immediately following quinquennia of
exceptionally poor trading conditions which would be inclined to
colour the views of witnesses in unusually sombre shades. In general,
over the whole period with which we are concerned the British wool
textile industry almost doubled its consumption of raw materials
and displayed increasing rather than diminishing activity during the
last eight years of the period. We shall return later to this question
of the supply and consumption of raw materials which may indicate
entrepreneurial response to market conditions, especially in the
first decade of the twentieth century.

II. THE EXPORT TRADE

There is no way of estimating the proportion of the output of the

woollen and worsted industries which was exported and retained
for the home market until the 1907 Census of Production which
suggested 47 per cent of woollen and worsted tissues were exported.
Four years later, the 1912 Census showed a reduction to 40·5 per
cent, while just under a half of the total yarn production was
exported. The extent to which this apparent growth of the domestic
market for woven wool textiles between 1907 and 1912 was a con-
tinuation of an earlier trend must remain conjectural. Estimates by
witnesses before the Royal Commission on the Depression of Trade
134
 THE WOOLLEN AND WORSTED INDUSTRIES

and Industry in 1886 put the proportion of worsteds exported at

one-third and 46·58 per cent,1 though three years earlier the
Bradford Observer stated that only one-sixth of the worsted indus-
try's output was exported. 2 Clapham, on the other hand, in 1907
thought that about one-third of the products of the wool textile
industry were exported. Obviously none of these particular esti-
mates can be relied upon. What is clear, however, is that throughout
the last quarter of the nineteenth century and the period down to
the First World War, contemporaries were agreed that home
demand was increasing in relative importance. 3 Direct comparison
between the weight of raw materials consumed by the industry and
the exports of wool textile products is impossible because of the
differing units of measurement involved. As against the rising
quantum of raw materials consumed, however, the following repre-
sents the export experience of the wool textile industry:

TABLE 1v: Average Annual Exports of Woollen and Worsted Goods

Tissues Yarn Tops
(000 linear yds) (000 lb.) (000 lb.)
1853-54 143,622 14,849
1855-59 149,528 23,864
1860-64 176,862 29,447
1865-69 255,483 35,202
1870--74 323,970 37,744
1875-79 252,753 30,824
1880--84 243,803 32,158
1885-89 245,592 43,457
1890--94 190,253 46,092 9,543
1895-99 174,755 60,578 22,403
1900--04 153,900 54,511 35,163
1905--08 172,933 53,485 36,143
1909-13 174,345 61,854 41,851
Source: Trade and Navigation Returns.

From these export statistics it is clear that exports of woven

fabrics, which reached their nineteenth-century peak in the early
1870s, fell by some 46 per cent by the end of the century, and in
the early years of the present century reached a nadir from which
recovery only took place to the level which had hitherto been
attained in the early 1860s. For this decline in the export trade in
1 Royal Commission on the Depression of Trade and Industry, Part ii (1886),
pp. 124 and 246.
2 Bradford Observer, December 20, 1883.
8 J. H. Clapham, The Woollen and Worsted Industries (London, 1907), p. 273.
135
 THE DEVELOPMENT OF BRITISH INDUSTRY

fabrics there were compensations in the export of yarns, over-

whelmingly the produce of the worsted industry and, after the
1890s when export statistics became available, a rapidly increasing
export of worsted tops. In Table I the considerable recovery in the
number of firms specializing in worsted yarn, combing and tops
can be seen by 1912 as we might expect from this export perform-
ance. The increases in the exports of semi-manufactured worsted
products compensated for the greater contraction in the exports of
worsted than in woollen fabrics.
The reclassification of export statistics in 1882 suggests that the
division between exports of woollens and worsteds before that date,
though attempted, was not very meaningful. From 1882 onwards,
however, the distinction was made clearer. As the following break-
down indicates the two branches of the industry, woollen and
worsted, underwent divergent experiences:

TABLE v: Annual Average Exports

(000 linear yards)
Woollen Tissues Worsted Tissues
1885-89 85,730 159,862
1890-94 50,224 140,029
1895-99 53,057 125,698
1900-04 52,075 101,824
1905-08 78,197 94,736
1909-13 95,621 78,724

Source: Trade and Navigation Returns.

Exports of worsted fell steadily over the period and by 1909-13

were about one half of what they had been in the early 1890s.
Woollen exports, on the other hand, whilst falling heavily after the
1880s to a level about 40 per cent below their former quantity,
recovered after the early years of the present century to reach by
1909-13 a higher level than in the years 1885-89. Thus the com-
pensation which the worsted industry as a whole received from
rising exports of yarns and tops was eventually paralleled in the
woollen industry by a resurgence of exports of woven fabrics. It
must, however, be emphasized for both branches of the industry,
that the fall in the linear yardage of their exports was somewhat
less serious than at first sight appears, for during this period there
was a shift towards the weaving of broader fabrics. Whereas in the
woollen industry between 1890--94, 25 per cent of the linear
yardage of exports had been classed as 'narrow', by 1909-13 the
136
 THE WOOLLEN AND WORSTED INDUSTRIES

proportion was 14 per cent. Similarly, in the worsted industry over

the same years the proportion of 'narrow' fabrics in worsted
coatings (worsted skirts were not classified as between 'broad' and
'narrow') fell from 25 per cent to 5 per cent. This movement
towards broader fabrics, which was thus revealed by the further
reclassification of the export statistics in 1890 and which puts a
more favourable gloss on the statistics of exports as returned in
linear yards, probably began earlier in the period. As far as the
worsted industry is concerned, one of its largest firms, John Foster
& Son, began to reduce the number of their narrowest looms after
1880, having begun to increase their wider looms in 1878. 1 Subject
to the qualification about changing fabric widths, the breakdown
of the worsted export statistics after 1890 indicates that the full
force of the decline in exports fell upon 'mixed stuffs', that is
worsted fabrics which combined a worsted weft with a cotton
warp.

TABLE VI: British Exports of Woollen and Worsted Tissues, 1890-1913

(Annual Averages, 000 linear yards)
1890-94 1895-99 1900--04 1905--08 1909-13
Woollen Tissues:
Heavy,
Broad, all wool 8,582 9,328 10,736 17,673 22,418
mixed 14,093 15,645 14,706 19,223 25,964
"
Narrow, all wool 1,254 795 433 513 559
mixed 711 475 551 431 539
Light,"
Broad, all wool 6,369 6,900 6,413 9,306 11,100
mixed 8,771 11,430 10,602 17,858 22,106
"
Narrow, all wool 3,220 3,008 3,045 3,794 4,611
mixed 7,224 5,476 5,589 9,399 8,324
"
Total 50,224 53,057 52,075 78,197 95,621
Worsted Tissues:
Coatings,
Broad, all wool 14,532 16,036 9,543 11,886 14,715
mixed 4,423 4,779 6,330 6,281 7,656
"
Narrow, all wool 2,704 1,256 636 643 442
mixed 3,872 1,614 1,106 1,235 763
Stuffs,"etc., all wool 14,821 15,130 11,458 9,619 8,190
mixed 99,677 86,883 72,751 65,072 46,958
"
Total 140,029 125,698 101,824 94,736 78,724
Source: Balfour Committee on Industry and Trade, Survey of Textile Industries,
p. 277.
1 Sigsworth, op. cit., p. 207.

137
 THE DEVELOPMENT OF BRITISH INDUSTRY

In sum then, it would appear that the worsted industry, especially

that section ofit which specialized in making 'mixed stuffs', suffered
a considerable contraction in its export trade in woven fabrics, but
with compensating increases in the export of worsted yams and
tops. The woollen industry, on the other hand, with no compensa-
tion in exports of semi-manufactured products, suffered a decline
in its export trade down to the early years of the present century,
but then enjoyed a revival of its export demand for woven fabrics.
It is important to remember when relating changes in export
markets to industrial experience that there were marked differences
in the organization of the two branches of the wool textile industry.
In the woollen industry the vertically integrated firm was much
more characteristic than in the worsted industry where it was
common for firms to specialize in the production of tops, or yams,
or fabrics.

'What is probably the commonest type of woollen mill, does not

merely combine carding, spinning and weaving. It combines all
processes, from opening the new wool or rag wool on a willey, to
dyeing the cloth-when it is piece-dyed-and finishing it. . .. The
worsted industry, on the other hand, is marked by specialization
• . spinning and manufacturing, as well as spinning and combing,
are still often found in combination, but the specialized system
may be regarded as the typical one, and it has been gaining ground
of late at the expense of the combined system. ' 1

This trend in favour of greater specialization in the worsted industry

had been apparent since 1856 but especially so after 1874, and was
in itself partly a response within the industry to changing external
market opportunities with growing foreign demand first for worsted
yams and then for worsted tops. 2 This encouraged the tendency to
treat worsted spinning as an end in itself and not only as part of
the production of woven fabrics. 3 In Table I our analysis of the
directories of the West Riding illustrates this point; the firms who
combined worsted spinning and manufacture declined while those
specializing in spinning or weaving recovered in numbers by 1912.
Thus, whereas the bulk of woollen firms might be expected to be
affected by the changing trends in piece goods exports, in the
1 Clapham, op. cit., pp. 135-9.
1 Sigsworth, op. cit., pp. 120-4.
• Clapham, op. cit., p. 144.
138
 THE WOOLLEN AND WORSTED INDUSTRIES

worsted industry the specialized spinning, combing and weaving

firms enjoyed different market situations.

III. COMPETITION IN THE HOME MARKET

During the late nineteenth century there was growing competition

in the home market from foreign imports. The import statistics
were expressed in linear yards and they too were likely to be
affected by increasing width; the import of woollen and worsted
fabrics moved as follows from 1882 when the returns are expressed
in yards:
TABLE v11: Annual Average Imports
(000 linear yards)
Woollens Worsteds
1882-83 848 35,066
1884-88 1,873 56,182
1889-93 2,439 75,208
1894-99 4,827 80,963
1899-1903 4,789 68,152
1904--08 3,698 80,495
1909-13 2,420 63,881
Source: Trade and Navigation Returns.

Again, it would appear that the worsted branch of the wool

textile industry underwent the more severe experience. Compared
with the volume of exports, imports of woollen fabrics were running
at about 2 per cent during the late 1880s and rose to 10 per cent at
their absolute peak between 1894 and 1899. Thereafter they slumped
heavily, falling to half their absolute size by 1909-13 and back to
2·5 per cent of the quantum of exports. On the other hand, imports
of worsted fabrics, rising to an absolute peak in the late 1890s and
then fluctuating, were, since the volume of worsted fabric exports
fell steadily, constantly rising when expressed as a proportion of
fabric exports from one-third in the late 1880s to two-thirds a
decade later, and four-fifths by 1909-13. There was thus good
reason for entrepreneurs in the worsted industry to view with alarm
the rising volume of imports arriving in their domestic market,
especially when, as was frequently alleged, competition between
British firms in the home trade was increasingly severe. That the
great bulk of these imported fabrics came from France underlined
a problem with which the worsted industry had long been familiar.1
1 Report of the Tariff Commission (London, 1905), Vol. ii, The Textile Trades,

Tables 22 and 31.

139
 THE DEVELOPMENT OF BRITISH INDUSTRY

The woollen manufacturers had much less cause for dismay;

imports never amounted to a severe problem at their highest level
and fell by half between the mid-1890s and the First World War.

IV. BRITISH PERFORMANCE IN NEUTRAL MARKETS

Having thus indicated the varying performances of the woollen

and worsted industries in the export markets and their differing
experience of foreign competition at home, we tum to consider the
performance of their main competitors in neutral markets in which
British goods were faced with rival importers and, in many cases,
emergent domestic industries. The arguments about British entre-
preneurial performance are, in general, twofold: firstly, that it
declined in relation to what it had been earlier in the nineteenth
century, and secondly, that it was inferior to that of competing
entrepreneurs abroad. Comparison of export performances is, there-
fore, relevant to the second line of argument. The export statistics
relating to the total value of wool textile exports from our principal
competitors were presented by the Tariff Commission. They show
the following picture:

TABLE vm: Value of Exports of Wool Textiles (Excluding Yarns)•

(Annual Averages, £m.)
Austro-
UK Germany France Belgium Hungary
1875-79 19·03 12·37 1·44 1·93
1880-84 20·27 9·00 14·68 1-13 2·30
1885-89 22·62 8·75 13·92 1·01 2·04
1890-94 20·75 8·00 12·28 ·92 1·56
1895-99 20·28 7·80 10·88 ·70 1·62
1900--04 20·75 8·82 8·79 ·58 1·89
• Figures for the UK. are taken from Table 22, para. 1536, of the Report of the
Tariff Commission (London, 1905); the figures for all the other countries are
from Table 31, para. 1546, of the same Report.

The Tariff Commission, however, did not present their statistics

in this form, and bearing in mind the nature of the Commission,
this is not surprising since it suggests that British export perform-
ance hardly compared unfavourably with that of those countries
which were our main competitors, none of whom appeared to
make any headway during the period down to 1904. Indeed, in
aggregate value terms, only Britain exported more at the end of
the period compared with the beginning:
140
 THE WOOLLEN AND WORSTED INDUSTRIES
Percentage, Plus or Minus, of Exports• in 1900-04 Compared
with Exports in 1875-79
UK + 9·0
France -28·0
Germany - 2·0t
Belgium -59·0
Austro-Hungary - 2·0
• Excluding yarns. t Compared with 1880-84.

It may, of course, be argued that this is not an entirely fair

comparison since the exports of foreign countries include those
which were destined for Britain and that a truer comparison would
be between the value of British exports and those of other countries,
excluding their exports to Britain. Belgian exports were, in fact,
almost exclusively to Britain and had a negligible impact in other
markets. 1 For France and Germany the picture now becomes as
follows: 2
TABLE IX: Annual Average Value of French Woollen Exports (£m.)
Total Exports Exports to UK Balance
1885-89 13·92 5·53 8·39
1890--94 12·28 5·82 6-46
1895-99 10·88 5·89 4·99
1900-04 8·79 5·23 3·56
Annual Average Value of German Woollen Exports (£m.)
Total Exports Exports to UK Balan<-e
1885-89 8·75 ·36 8·39
1890-94 8·00 ·72 7·28
1895-99 7·80 1·06 6·74
1900-04 8·82 1·20 7·62
Thus, French exports to the rest of the world, excluding Britain,
fared far worse than British exports, a decline of 57 per cent com-
paring 1900--04 with 1885-89, while German exports over the same
period fell by 9 per cent and British exports fell by 8·2 per cent.
Insofar as British wool textile entrepreneurs could be accused of
failing in their overseas markets during this period, then it would
seem that their foreign competitors were even less successful. The
only areas of foreign competition which was persistent and success-
ful was the continued import of French worsteds into the domestic
1 Statistics of Austro-Hungarian imports to the UK not available.
1 Report of the Tari.ff Commission, Tables 26 and 31. N.B. the observation in
the Tariff Commission's Report, para. 1382: 'In foreign, neutral and Colonial
markets French competition is increasing, though it is not as severe as that
experienced from other countries'! !
141
 THE DEVELOPMENT OF BRITISH INDUSTRY

markets. Otherwise our principal export competitors in wool tex-

tiles fared worse when facing the same problems in overseas
markets-domestic competition, tariff barriers, etc. Unfortunately,
the statistical evidence does not permit the breakdown of foreign
experience as between the woollen and worsted branches of the
industry. In aggregate terms Britain's overall export performance
was better than that of her closest rivals, the setback in worsted
exports being more than compensated by the performance of the
woollen industry. The whole industry's weak spot lay in the export
of worsted fabrics, especially the mixed cotton warp fabrics on
which the Bradford trade had expanded so vigorously earlier in the
century. 1

V. REACTIONS TO FOREIGN COMPETITION

Two points of special interest would thus appear to arise when

considering the situation facing entrepreneurs in the wool textile
industry and their responses. Firstly, what were the reactions of
worsted manufacturers to the secular decline in their export trade
and the competition to which they were exposed within their own
home market? Secondly, what entrepreneurial factors may have
contributed to the revival of the woollen industry's export trade?
The immediate cause of the worsted industry's difficulties was a
change in women's fashions. Henry Mitchell told the Royal Com-
mission on the Depression of Trade and Industry:

'Q. . .. as regards the main class of worsted stuffs for female

wear, the bright stuffs of alpaca and mohair, and those made from
lustrous wools, have been under a cloud as regards fashion, I
suppose?
A. Yes, they have for many years.
Q. Has that operated unfavourably upon the relative position of
Bradford?
A. Very much.
Q. In favour of France?
A. Yes.'

He went on to say that all-wool worsteds had displaced the mixed

fabrics to the advantage of the French, whose competition Brad-
ford was unable to meet;
1 Sigsworth, op. cit., chapter 2.
142
 THE WOOLLEN AND WORSTED INDUSTRIES

'there are general causes which have affected the Bradford industry
for some years past, failing harvests, and other causes, but those
are the two special causes which have affected the Bradford trade:
the change in fashion from bright lustre fabrics to all-wool fabrics,
and from that cause our manufacturers have been unable to com-
pete with the manufacturers of France in those all-wool goods as a
rule.'1

French superiority in making all-wool worsteds had long been a

favourite topic in Bradford. It had been noted in 1851. Sir Titus
Salt had reported on the problem to the Bradford Chamber of
Commerce in 1856 and a further deputation from the Chamber in
1867 regretted the 'remarkable hold in the English market' of
French all-wool worsteds and the ineffectiveness of Bradford com-
petition in this field. The main reason for French success was said
to be that their yarns were mainly spun on the mule, while Bradford
yarns were spun on the frame. As long as fashion continued to
smile on Bradford's products, the sale of French worsteds in the
home market was regrettable, but as they catered for more expen-
sive tastes than the product of Bradford's looms, the repeated
reports on the reasons for French success inspired no emulation.
When, however, fashion changed and the quantity of French
imports rose rapidly while the demand for Bradford's fabrics
slumped, the situation became really serious. What then was done
to meet it? In the first place one must note that the method of
production, especially in the preparation and spinning of yarns,
was very different for all-wool fabrics compared with mixed
worsteds, so that to meet the new requirements of the market the
entrepreneur was faced with the task of re-equipping his plant.
Two things must be noted here. First, that while this particular
change in fashion proved to be long-lived, changes in women's
fashions are, generally speaking, more ephemeral and it is not,
therefore, surprising that when fundamental re-equipment was
necessary, entrepreneurs might be reluctant to act in the face of
what might prove to be a caprice. Secondly, while it is possible for
the historian to discern by hindsight long-term trends in funda-
mental economic variables-national income, prices, output, ex-
ports and imports-this was not the view presented to the entre-
preneurs at the time. Short-run considerations-the fact that the
depressions of the 1870s and 1880s were, after all, repetitions of
depressions which had always been part of the economic climate-
1 Royal Commission on Depression o/Trade and Industry, Part ii (1886), p. 128.
143
 THE DEVELOPMENT OF BRITISH INDUSTRY

doubtless cluttered up the picture which an entrepreneur had of the

situation in which he found himself. Clearly the actual response of
an entrepreneur would depend upon his reading of the situation
and his ability to discern long-term trends. To do this with reason-
able accuracy would warrant a different response to that which
would emerge from a short-term diagnosis of the problem. What
happened in the worsted industry must therefore be seen against
this background.
It was admitted, for example, in 1883 that the Bradford worsted
industry had been 'slow to move' in replacing its frames by spinning
machinery more suited to yams meeting the new fashion, precisely
because it was still hoped that fashion would once again swing
back in favour of fly and cap frame spinning. 1 What, however, may
have been an understandable reluctance to gamble on the per-
manence of a fashion change which had endured for about eight
years, 2 looks very much like pig-headed obstinacy and excessive
caution when in 1903 the Bradford Chamber of Commerce, in yet
another and by now agonized appraisal of enduring French com-
petition in the home market, appointed a Committee which con-
cluded that 'the worsted machinery we use in this district is not
adapted for producing yams similar to that used in the manufacture
of the bulk of dress goods made in France'. 3 What appears to have
happened, however, is not that the worsted manufacturers did
nothing, turning out in disastrous profusion the unfashionable
fabrics of yesteryear, but that they tried to compromise by modi-
fying existing machinery and by trying to produce products which,
while not all-wool worsteds in the French manner, would find a
better market than the traditional mixed worsteds:

'Speaking broadly, the change which has taken place ... is that
the rollers have been very much reduced in diameter and the
various parts of rollers have been brought nearer together. There is
thus no change of principle whatever, but the change has necessi-
tated numberless modifications of other parts of the spinning frame
and also of every other machine. . . .'

in the pre-spinning processes. In the cap frames greater adapta-

bility had been achieved by enlarging the size of the caps and to
take larger bobbins holding four times the amount of yam, thereby
1 Bradford Observer, December 8, 1883.
• Bradford Observer dated the change at c. 1875.
3 Bradford Chamber of Commerce, Minute Books, December 4, 1903.

144
 THE WOOLLEN AND WORSTED INDUSTRIES

ensuring that with the same speed of running, a machine could

operate for four times as long without doffing, economizing on
time, not only in spinning but in weaving, winding and warping
where the same larger bobbins brought similar economies. 1
It is possible that more recently established firms were more
reluctant than older firms to turn over to new machinery because
the capital value of their existing equipment had not been written
off. A discussion in the Textile Manufacturer in 1883 on the way in
which depreciation of machinery, as opposed to buildings, should
be calculated may suggest some awareness of this sort of problem. 2
On the other hand, given the rapid turnover of firms, there must
have been a considerable stock of machinery available second-hand
which might have been an attractive proposition to new and as yet
financially weak firms rather than new machinery. This may have
perpetuated the instability of these new firms operating old ill-
adapted machinery. But this must remain no more than a hypo-
thesis.
An additional response to the problem posed by French com-
petition lay in improvements in dyeing and design. Adverse com-
parisons between Bradford and French dyeing had been made as
far back as 18673 and the problem again arose from the different
methods of spinning; Bradford spinners, producing a tighter spun
type of yarn, used more oil than the French, which affected the
quality of the colours obtained when the material was subsequently
dyed. Again, however, the response seems to have been incomplete
and slow, since the Bradford Chamber of Commerce in 1903 was
still exhorting 'all the Bradford combers and spinners to use only
such oils as can be thoroughly eliminated in the dyeing process, as,
otherwise, perfect dyeing is almost impossible'. 4
It was, of course, a commonplace that, quite apart from the
ability to achieve better dyes, the French were innately superior in
fabric designing and were the fashion leaders not only in all-wool
worsteds but indeed in mixed worsteds. Worsted manufacturers
had, at least since the mid-nineteenth century, commonly purchased
French designed fabric patterns, 5 and the fitful attempts which had
been made to improve the quality of design in the worsted industry
had had little effect as late as 1889:
1 Bradford Observer, December 8, 1883.
1 The Textile Manufacturer, Vol. ix, May 15 and November 15, 1883.
1 Bradford Chamber of Commerce, Report on Paris Exhibition (1867),

'Ibid., Minute Book, December 14, 1903.

6 Bradford Observer, March 11, 1852.

145
 THE DEVELOPMENT OF BRITISH INDUSTRY

'For inspiration we are still beholden to the French and German

designer ... and however we may congratulate ourselves upon the
recent advances we have made in Bradford during recent years, a
glance through a French pattern book is enough to leave one sick
with envy and to make it clear that while we are going forward,
others are not standing still.'1

Problems arising from design and dyeing, the spur of French

competition at home and the dawning recognition that both the
French and Germans possessed superior systems of technical educa-
tion, brought a flurry of activity intended to emulate their example.
The point had been stressed by Henry Mitchell in 18752 and in the
following year the Bradford Technical School was founded, 'the
first institution in England solely for the technical education of
employers and employed in the worsted, woollen and allied indus-
tries'. 3 Hitherto, it was commented,

'only here and there was any attention given to the lessons desired
to be taught, for trade was prosperous and the superiority of
English skill, industry and enterprise was regarded as an inimitable
fact and all technical education schemes as the myths and fancies
of theorists. Revulsions in trade led subsequently to other con-
clusions. ' 4

The first impetus had come from the Bradford Mechanics Institute
which had established a weaving school in 1877. The Clothworkers'
Company had provided £2,000 and the Mayor of Bradford had
launched an appeal raising a further £10,000. The Clothworkers'
Company had similarly made donations in other West Riding tex-
tile towns, founding a weaving school in Leeds (1874) and con-
tributing to the new technical school in Huddersfield. 5 Bradford
Technical College was opened by the Prince of Wales in 1882.
1 lbid., December 30, 1889.
1 Report of Henry Mitchell upon the Paris Exhibition (Bradford, 1878). Ear-
lier in 1861, James Kitson of Leeds had noted that the improvement of French
woollen machinery was due 'to the technical education which many French
firms made obligatory for their workmen'. M. W. Beresford, The Leeds Chamber
of Commerce (Leeds, 1951), p. 92.
• Textile Manufacturer, Vol. vi, July 15, 1880.
'Ibid.
6 Halifax Mechanics Institute was reported to be trying to start a weaving

school in 1881, Textile Manufacturer, January 15, 1881, and July 15, 1881.
146
 THE WOOLLEN AND WORSTED INDUSTRIES

In Bradford, as elsewhere in the West Riding,1 the founding of

technical schools, primarily catering for the wool textile industry,
was a response to the severe depression of the mid-1870s. It could
hardly be claimed, however, that technical education, hailed as a
panacea for the industry's ills in the 1870s, proved itself to be as
successful in this role as had been hoped. There were those, of
course, who had never been wildly enthusiastic, 2 especially if state
intervention might be involved, although attitudes here were some-
what ambivalent. The Textile Manufacturer, deploring in 1881 the
prospect of state aid to technical education for the woollen and
worsted industries on the grounds of expense and the danger of
'control and inspection which manufacturers would not like',3 two
years later supported the extension of technical education in
primary and elementary schools, because it would both stop chil-
dren from thinking above their station in life and at the same time
raise the status of manual labour by having technical education
taught alongside literary studies. 4 The years of indifferent trade
brought scepticism about the results of technical education. 'How,'
asked one witness in 1906, 'can any degree of technical education
or enterprise overcome such a tariff as we have to face in the
United States ... ?' 6 Others went so far as to say:

'All applications from young men who apply to me with their gold
medal certificates and so on, I put into the waste paper basket....
If they would teach the commercial idea more and try to make
students think more commercially and less about the intricacies of
a fancy weave, it would be far better.'6
'It is no weapon at all to combat foreign tariffs.' 7
'All this talk about technical education is downright nonsense in
the face of prohibitive tariffs.' 8

By 1909, the Textile Manufacturer, which had been very critical of

the Tariff Commission's report, in which the foregoing comments
1 The Leeds Chamber of Commerce had in 1867 resolved that 'technical
schools are necessary to the maintenance of our manufacturing superiority',
Beresford, op. cit., p. 92.
1 E.g. Leeds woollen manufacturers, Textile Manufacturer, December 15, 1880.

• Textile Manufacturer, March 15, 1881.

'Ibid., July 1883.
6 Tariff Commission Report; W. H. Mitchell's evidence, para. 1618.

'Ibid., para. 1696, evidence of Joe Benn, Bradford.

7 Ibid., para. 1837, evidence of C. J. Wilson, Hawick.

'Ibid., para. 2155, witness not identified; a woollen manufacturer.

147
 THE DEVELOPMENT OF BRITISH INDUSTRY

are typical about technical education, was itself taking a gloomy

line:

'In this country at least, technical education is at a discount. It

must not, however, be inferred that technical education is a failure.
The fact is that as regards the textile industry, the value of technical
education is doubtful. It is quite true that we have splendidly
equipped textile colleges and armies of students, but unless there is
some outlet for the finished product, the net result is small.'1

Disillusion with the results of technical education amounted in

effect to complaints that its benefits were incapable of enabling
British wool textile manufacturers to overcome foreign tariff
barriers and it was against these that the wrath of the businessman
was most vocally expressed. Of these the most damaging were the
American duties of the 1890s since the USA was the biggest export
market for wool textiles. The McKinley Tariff of 1890 cut the value
of exports from the Bradford Consular district to the USA by more
than half. Exports revived to higher than pre-McKinley levels
between 1895-97 under the more liberal Wilson Tariff, but the
imposition in 1898 of the Dingley Tariff reduced them to levels
lower than even under the McKinley Tariff. 2 The ad valorem duty
had been 101 per cent in 1892-94, 53 per cent in 1895-97 and
109 per cent in 1898-1900. It was not only the high levels of the
McKinley and Dingley tariffs which were regarded as so out-
rageous, but the added difficulties of the sudden alterations in
tariff policy which had so upset businessmen's calculations.
As our main export markets became increasingly hedged round
by prohibitive tariffs, the wool textile entrepreneurs began to
question the wisdom of continuing a free trade policy. In 1880, the
Bradford Chamber of Commerce voted on a resolution by Lister
that,

'as at the present time, the Worsted trade of this district is suffering
very severely from the importation of French wool goods, this
Chamber urges ... Reciprocity in the new Treaty (with France)
and, failing that, to place counteravailing duties upon all French
manufactures imported into this country'. 3
1 Textile Manufacturer, January 15, 1909.
8 Sigsworth, op. cit., p. 100.
8 Bradford Chamber of Commerce, Minute Book, January 20, 1880.

148
 THE WOOLLEN AND WORSTED INDUSTRIES

With a collective shudder at such fiscal unorthodoxy, the Chamber

voted. Lister's was the only vote in favour. By 1904, when the
Chamber again voted on the question of tariff retaliation, a further
quarter century of French competition, dwindling exports and the
recent memories of American iniquity produced a very different
result: 1
For Against
Piece merchants 28 15
Spinner/manufacturers 19 16
Manufacturers 19 14
Wool merchants 18 10
Spinners 9 21
Yarn merchants 5 13
Piece and yarn merchants 0 4
Dyers 3 9
Combers 0 5
Solicitors, bankers 14 13
115 120

It is not simply the narrowness of the voting against retaliation,

compared with 1880, which is worth noting, but the fact that those
sections upon which the brunt of the export decline had fallen,
were on balance pro-retaliation, while those whose export trade
had risen, spinners, yam merchants and combers, were against.
The evidence given to the Tariff Commission repeatedly suggests
that wool textile manufacturers, in desperation, had set up branches
abroad to avoid tariff barriers, but the witnesses are vague and
sometimes contradict each other.

'We have one house which is leaving us now for America

they have shipped their looms out to America.... I know manu-
facturers in France who went there before my time when the duties
were put on. I know one manufacturer very well who still lives in
Yorkshire but has his factory in Germany. He has done very well
there. He went there about twenty years ago to get the tariff. . . .
Some years ago four or five manufacturers went over to Germany
and perhaps the same number to France... .' 2
1 Bradford Chamber of Commerce, Minute Book, February 24, 1904. Leeds
Chamber of Commerce, where textile interests were much less dominant, voted
in 1910 that the country should 'release itself from the rigid system of so-called
free trade': 164 pro, 71 con, 91 neutral, 66 no reply, in a postal ballot. Beresford,
op. cit., p. 119.
1 Report of the Tariff Commission, para. 1683, evidence of J. K. Empsall,
Bradford.
149
 THE DEVELOPMENT OF BRITISH INDUSTRY

On the other hand, another witness from the same town ..•

'I have known a number of manufacturers who went to foreign

countries and established factories there in consequence of tariff
charges. In a great many cases the result was unsatisfactory, partly
on account of too small a capital. A good many went over to
Germany ... but as far as my recollection goes, not one has been
successful. Manufacturers leaving for the United States have in
some cases been very successful. ' 1

In only one case, that of Alfred Sykes of Huddersfield, did a

witness adinit to taking so drastic a step 'commencing business in
America now, for no other reason than that the duties are so
high' ;2 otherwise the references remain tantalizingly vague and
difficult to substantiate. While some firms may have established
branches abroad, or einigrated entirely, it seems doubtful that
many in fact did so, or that this, the penultimate entrepreneurial
response where the alternative is taken to be going out of business
altogether, was important.
So far, the various responses to difficult trading conditions in the
worsted industry were not particularly impressive: technological
tinkering to try to combat French competition, an initial but
apparently waning enthusiasm for technical education, a growing
demand for tariff retaliation which produced resolutions but
nothing else, and a few cases of einigration. Other responses which
seem to have emerged were, firstly, a search for new products and,
secondly, in certain sections of the industry, the emergence of
combines.
With fashion set firmly against mixed worsteds and the French
difficult to combat in the production of all-wool dress goods, the
worsted industry turned to worsted coatings and linings or 'Italian
cloths', both of which were woven on broad looms. In 1883 it was
noted that 'as a source of employment during the transition period
in the trade of Bradford, its aid has been most valuable'. 3 Macintosh
cloths for men's and women's wear, with consequent innovations
in waterproofing, cloths to compete with flannels 'in what come to
be known as the athletic trade', 4 umbrella cloths, plushes, furnish-
1 Ibid., para. 1716, evidence of B. Nathan, Bradford.
1Ibid., para. 1765.
3 Bradford Observer, December 20, 1883.

'Ibid., December 31, 1888.

150
 THE WOOLLEN AND WORSTED INDUSTRIES

ing fabrics, were all taken up to try to fill the gap. By 1910, the
commentator on the Bradford worsted industry wrote:

'Every year finds us leaving further behind the old meaning of the
"Bradford trade". It used to cover bright goods.... For the most
part it was a black trade but it was essentially a "stuff" trade. Now
it is well nigh impossible to say what does not belong to the
Bradford trade.' 1

Towards the end of the nineteenth century there were some

combinations into larger trading concerns, but this was primarily
in the one-process sectors working on commission, especially
dyeing and wool-combing. The most successful of these was the
Bradford Dyers' Association. 2 Clapham found 'no single com-
pelling motive for their creation ... though there was, of course, a
universal desire to limit the discomforts of a too free competition'. 3
It was the impact of this free competition on prices and profits
which prompted combinations in dyeing, and probably in wool-
combing. The response of the dyeing industry to complaints about
the quality of their work was to draw attention to the level of prices
in the industry; 'in some cases the dyer had been tempted to slip
his work because of the merchants keeping down the price so
much'. 4 This had resulted in a considerable number of bank-
ruptcies amongst dyers and finishers. 6 The dyers' attempt to com-
bine to fix more remunerative prices in 1883 perished in the face of
allegations of monopolistic price-fixing and hostile scrutiny by the
Bradford Chamber of Commerce, 6 but was replaced in 1898 by the
Bradford Dyers' Association. This type of combination was very
largely a defensive reaction, especially to low prices and profit
margins. 7 The unsuccessful combination of wool combers was
probably attempted for the same reason when the pressure of their
customers lowered or depressed commission working charges during
a period of general difficulty. In contrast to these trade associations,
1 Ibid., December 29, 1910.
• Clapham, op. cit., p. 151.
8 J. H. Clapham, An Economic History of Modern Britain (Cambridge, 1932),

m, p. 213.
'H. W. Ripley, of Bradford, Bradford Observer, December 1, 1875.
6 Bradford Observer, December 31, 1883.
1 Bradford Chamber of Commerce, Minute Book, December 20, 1894.
7 See a recent discussion of this point in L. Davies, 'The Capital Markets and

Industrial Concentration: The U.S. and U.K., a Comparative Study', Economic

History Review (August 1966), xix, No. 2, especially pp. 263--8.
151
 THE DEVELOPMENT OF BRITISH INDUSTRY

the woollen industry in particular was made up of many small

family businesses, so that in 1890 the Royal Commission on Labour
was told that there was 'not a particle of organization amongst
Yorkshire woollen manufacturers'.
There was some increase in the number of firms who adopted
limited liability, but did not necessarily become public companies.
From the directories of the West Riding the following details of
firms adopting limited liability were taken:

TABLE X
Percen-
1870 1912 tage
No. of Limited No. of Limited Limited
Firms Liability Firms Liability Liability
Finishers 108 2 40 8 20
Dyers 134 0 124 58 46·8
Merchants 518 3 337 19 5·6
Woollen manufacturers 1,572 2 439 153 34·8
Worsted spinner/
manufacturers 278 1 184 36 19·5
Worsted spinners 131 0 204 54 26·4
Worsted manufacturers 270 1 237 48 20·2
Worsted combers 33 0 53 15 28·7
Worsted top makers 19 0 20 2 IO

In a period in which probably the most important characteristic of

entrepreneurship in the wool textile industry was the ephemeral
nature of the firm, it is hardly surprising that an increasing propor-
tion of firms should adopt limited liability-what is surprising is
that by 1912 the proportion generally should have been so low.
It was certainly the case in the wool textile industry that, unlike
the cotton industry,

'It is never possible, for example, to gauge the general prosperity

of worsted spinning by comparing the balance sheets and dividends
of scores of limited mills.... Worsted weaving and woollen manu-
facturing are in the same situation as worsted spinning.'1

The family business continued to be the prevalent type of firm

down to the First World War though its replacement by limited
liability firms which had begun during the 1890s had become
increasingly apparent. In this respect there was not a great deal to
distinguish woollen from worsted, though the movement towards
1 Clapham, Woollen and Worsted Industries, op. cit., p. 153.
152
 THE WOOLLEN AND WORSTED INDUSTRIES

limited liability amongst woollen manufacturing firms had clearly

been stronger than amongst worsted firms.

VI. REVIVAL OF WOOLLEN EXPORTS

We have still to explain the very important distinction between the

two branches that whereas the exports of worsted cloth continued
to decline throughout our period, those of the woollen industry
recovered. The woollen industry did not have to face the same
traumatic experience which the worsted industry had undergone at
the hands of fashion, nor the same degree of competition in the
home market. It suffered the same dislocations arising from Ameri-
can tariff policy and underwent comparable competition abroad.
The reactions of woollen manufacturers to the questions of tech-
nical education and tariff reform are difficult to compare in intensity
with those of the worsted industry, but is clear that they at least
reacted initially in much the same way by founding technical
schools. The factor which seems likely to explain the woollen
industry's export recovery is a response to price changes. It is
important to remember that an essential part of a woollen manu-
facturer's skill consists of the blending of his raw materials, the
proportions of virgin wool to shoddy and mungo. It is on this skill
that an important part of his ability to make profits resides and
each woollen manufacturer guards jealously the secrets of his own
blends. The ability to blend remanufactured wool with virgin wool
is confined to the woollen manufacturer; it is not a possibility open
to the worsted manufacturer, whose main opportunity to reduce
fabric costs is to clothe a cotton warp with a worsted weft when
the price of cotton relative to wool is favourable, and indeed it was
in exactly this way that the great Bradford dress goods trade had
grown in the nineteenth century until it was halted in the 1870s.
With cotton warp, or 'mixed' stuffs clearly out of fashion, the
worsted manufacturers who had specialized in this trade did not
have, as the woollen manufacturer continued to have, the same
opportunity to respond to a market situation by lowering costs via
the use of cheaper raw materials than virgin wool.
Furthermore, while it was true that wool prices rose after 1899
and remained high during the remainder of the period, cotton
prices rose to an even greater extent.1 While, in certain circum-
stances, it might still pay the worsted manufacturer to use cotton
1 B. R. Mitchell, Abstract of British Historical Statistics (Cambridge, 1962),
pp. 491 and 496.
153
 THE DEVELOPMENT OF BRITISH INDUSTRY

warp in place of wool, given the wide ranges of types and prices of
wool, the range of possibilities was considerably narrowed when
the price of cotton was rising faster than that of wool, even had
there been a strong demand for mixed cotton/worsted fabrics. The
opportunities for cost reduction by worsted manufacturers were
therefore limited, but for the woollen manufacturer there was an
additional alternative, one with which he had long been familiar
and which now increased in attractiveness as both wool and cotton
prices rose, and this was to blend increasing amounts of rag wool,
i,e. shoddy and mungo, with virgin wool, thereby keeping down
his costs and product prices, or, if he would maintain or increase
prices, raising his profit margins. That this is likely to have hap-
pened is suggested by the quantities of 'recovered wool' consumed
in the United Kingdom which, after showing no discernible trend,
suddenly began to increase in the late 1890s as wool prices rose
and reached record levels in the subsequent period.

TABLE XI: Estimated Quantity of Recovered Wool Consumed in UK

Annual Averages (m. lb.)
1870--74 89
1875-79 104
1880--84 123
1885-89 101
1890-94 118
1895-99 132
1900--04 145
1905-09 190
1910--13 209
Source: Report of Tariff Commission.

It is impossible to compare this increased quantity of recovered

wool with the quantity of virgin wool consumed by the woollen
branch of the wool textile industry, since all one has are aggregate
figures for raw wool consumption covering both branches of the
industry. Taking this second form of comparison, for what it is
worth, Clapham noted in 1907 that the estimated annual consump-
tion of 180 million lb. of rag wool compared with a total con-
sumption of new wool of 450 million lb. was 29 per cent of the
total fibres consumed, whereas in 1899 the proportion had been
19 per cent ... 'the scarcity of wool of late years has brought the
two figures much nearer together' .1
There is ample testimony in contemporary trade reports about
1 Clapham, op. cit., p. 121.
154
 THE WOOLLEN AND WORSTED INDUSTRIES

the course of events and the growing importance of the rag wool
trade in the early twentieth century. In 1904 the Bradford Observer
noted that cotton was being substituted for wool:

'Whether high prices for wool can be maintained will depend

partly upon the spending power of the masses . . . but still more
on the competition which wool will have to meet from cotton and
other possible wool substitutes.'1

The trade in low price worsteds had been replaced by woollens

and woollen-cotton mixtures and the woollen manufacturers had
profited at the worsted industry's expense. 1905, too, was a
'woollen year', with mixtures of woollen and cotton, and wool
and shoddy selling well 'though even here quality is falling in face
of dearer raw materials'. 2 The same theme continued in 19063 and
in 1907 the 'competition of substitutes' for wool was again the
cause for lament. 4 In 1910 the complaint was of high retail prices
due to rising costs and 'adulteration' was offered as the answer to
the problem, advice which the worsted manufacturer was much
less able to follow than his woollen counterpart. It seems clear
that from 1900--13 the woollen industry was able to benefit from
its ability to 'adulterate' its raw materials in a period of rising
prices, especially in the manufacture of the lower quality goods
with their higher proportion of non-virgin wool content. It was
therefore a response to high raw material prices, and one which
the British woollen manufacturer was especially well-equipped to
make, given that the use of rag wool, though not entirely confined
to this country, was heavily concentrated there.
We have seen in Table VI (supra, p. 137) that in contrast to the
contraction of British exports of 'mixed stuffs' in the worsted
industry, exports of mixed woollen tissues, especially the broad
weaves, made a considerable recovery in the years immediately
before the First World War. How did this shift towards the use of
cheaper raw materials help to explain the resurgence of the woollen
industry's export trade? In the first place it made woollens more
competitive with worsteds. In the second place it gave the British
woollen manufacturer an advantage over his foreign competitors
because of his greater experience in this type of skilled manipula-
1 Bradford Observer, December 29, 1901.
2 Ibid., December 28, 1905.
"Ibid., December 31, 1906.
'Ibid., December 30, 1907.
155
 THE DEVELOPMENT OF BRITISH INDUSTRY

tion of the fibre content of his product. This, however, is not the
whole story. Insofar as this development made British woollens
more price competitive with foreign products, the favourable
margin between the two would help British woollens as against
other woollens facing the same tariff barrier, especially where the
tariff was an ad valorem tariff as in the United States. Where such
a barrier, however, was very high, and there was a well-established
domestic woollen industry, again as in the United States, it is
unlikely that this advantage was sufficient to make imported British
woollens significantly more price competitive. On the other hand,
in markets where tariff levels were low, nonexistent, or gave im-
ported British woollens preference, as for example in Canada, then
Britain's price-advantage was all-important in competing with
foreign rivals and domestic industries. It was in such export mar-
kets that British woollen fabrics made most headway in the early
years of this century.
There was little increase in our trade in the United States in any
type of fabric. Similarly with our woollen trade in French and
German markets where increases in exports of one type of fabric
were cancelled by decreases in others. The real progress was made
in Canada where British woollens enjoyed imperial preferences, and
in Australia, India, and to a lesser extent in Japan, China and
South America, especially the Argentine. Generally speaking, the
share of British woollens exported to imperial markets rose.

TABLE x11: Exports of Woollens(%)

Heavy Broad All Wool:
1896 97 98 99 1900 1909 JO 11 12 1913
British possessions 17 14 21 23 21 25 23 24 27 30
Foreign 83 86 79 77 79 75 77 76 73 70
Heavy Broad Mixed:
British possessions 9 9 16 20 21 35 38 29 41 43
Foreign 91 91 84 80 79 65 62 61 59 57
Light Broad All Wool:
British possessions 38 44 47 45 41 30 29 32 34 33
Foreign 62 56 53 55 59 70 71 68 66 67
Light Broad Mixed:
British possessions 22 21 30 35 37 54 56 54 51 54
Foreign 78 79 70 65 65 46 44 46 49 46
Source: Report of Tariff Commission.
156
 THE WOOLLEN AND WORSTED INDUSTRIES

The growth in demand for British mixed woollens from the Empire
was particularly marked. By the eve of the First World War the
imperial markets absorbed over half our exports of light broad
mixed woollens and 43 per cent of heavy mixeds, underlining the
advantages Britain enjoyed in these markets for cheaper woollen
products. The ability of woollen manufacturers to exploit these
imperial markets by sharpening their price competitiveness through
careful attention to the raw material content of their fabrics would
therefore seem to be a reasonable explanation of the revival of
this section of the woollen industry's export trade in the first
decade of this century. In turn this was also another contribution
to the continued embarrassment of the worsted industry after 1900.
The woollen industry was thus able to reverse the downward
trend in its export trade in fabrics of the past twenty to thirty years
before the turn of the century, unlike the worsted industry. The
whole wool textile industry's main weakness in this period was the
continued decline in the export of worsted fabrics, especially the
mixed cotton warp cloths of Bradford. We have considered some
of the ways in which the entrepreneurs attempted to counter this
setback in the face of increasing foreign competition in our foreign
and domestic markets. That they considered this to be a consider-
able depression is not surprising as the export trade in worsted
'mixed stuffs' alone was still nearly double that of the whole
woollen tissue trade, measured in linear yards, in the early 1890s
(see Table VI). By 1909-13 the positions of the two industries were
reversed; the exports of woollen fabrics were now greater, in linear
yards, than the total export trade in worsted tissues. In terms of
the entrepreneur it is possible that many of them did not them-
selves survive this switch in the leading sectors of the industry. In
general the wool textile industry adapted itself to the new trading
conditions by extending the worsted spinning and top sections of
our export trade and by developing lower cost mixed woollen
fabrics. In these trades we were more successful in exploiting world
markets, especially those of our Empire, than our foreign com-
petitors.

157
 CHAPTER 6

BOOTS AND SHOES 1

BY P. HEAD

IN 1875 Britain exported 462,840 dozen pairs of boots and shoes

produced at home and imported 84,733, re-exporting 12,498: the
net balance at this time was thus a favourable one of 390,605
dozen pairs. By 1914, exports had risen to 1,435,134 dozen pairs,
imports were 170,522, with re-exports 11,269: the excess of exports
had therefore risen to 1,275,881 dozen pairs of boots and shoes
during the forty-year period, an increase of 227 per cent. At the
end of the period British boot and shoe manufacturers were
exporting their product to the value of 4¼ million pounds. 2
Here, on the face of it, is a story of successful endeavour by one
industry at a time of increasing foreign competition, and there is
no doubt that during the years immediately preceding the First
World War British boot and shoe manufacturers were remarkably
successful both at home and abroad. However, it was really only
during this period after the turn of the century that they were able
to demonstrat(: that they had faced up to the reality of the produc-
tion and sale of boots and shoes by other countries. Before the
'nineties the trade had been steady but had remained compara-
tively unchallenged by foreign manufacturers; during the 'nineties
it had been considerably affected by increasing competition,
particularly from the United States.
Between 1875 and 1880 the volume of exports fluctuated around
an annual level considerably less than a half million dozen pairs,
and thereafter, still experiencing considerable annual fluctuations,
they increased during the next fifteen years in the manner sum-
1 This account is concerned with boots and shoes made wholly or mainly of
leather, as described in Part 1 of the Census of Production, 1935; it is not con-
cerned with footwear made of rubber, as described in Part 3 of same.
1 Description of the United Kingdom trade in boots and shoes is based, unless
otherwise noted, upon Annual Statements of the Trade of the United Kingdom,
1875-1882 and Accounts relating to the Trade and Navigation of the United
Kingdom, 1883-1914.
158
 BOOTS AND SHOES

TABLE 1: United Kingdom Trade in Boots and Shoes (Leather) 1875-1914

Annual Averages by Quantity-Dozen Pairs (000 omitted)
Exports Imports Excess of
Period (Home Products) (Net)• Exports
1875-79 441 81 360
1880-84 530 66 464
1884--89 604 90 514
1890-94 685 99 586
1895-99 661 157 504
1900--04 710 224 486
1905--09 790 180 610
1910-14 1,304 179 1,125
• Total imports less exports of foreign and colonial produce.
Sources: Annual Statements of the Trade of the United Kingdom, 1875-82;
Accounts Relating to the Trade and Navigation of the United Kingdom, 1883-1914.

marized in Table I. There was a decline in the late 'nineties, but a

recovery after the turn of the century and, following a temporary
setback in 1904, exports exceeded one million dozen pairs for the
first time in 1910 and also exceeded this figure during each year
up to 1914. Imports during the same period included a fluctuating
volume of foreign and colonial produce for re-export mainly to
Australia. Apart from this trade, imports for home consumption
began to rise from the late 'eighties, exceeding 100,000 dozen pairs
for the first time in 1887. Foreign competition really began to
threaten the home market from the mid-'nineties and was inten-
sified from 1899; the maximum annual figure was reached in 1901
when 275,172 dozen pairs (retained) were imported. After 1904-05
imports declined but were still maintained at a comparatively high level.
TABLE 11:Destination of United Kingdom Exports of Boots and Shoes
(Leather) 1875-1914
Annual Averages by Quantity-Dozen Pairs (000 omitted)
Austra- South West East Else-
Period Total• lasia Africa Indies Brazil Indies where
1875-79 441 IM " 31 n ~
1880-84 530 225 130 37 44 16 78
1885-89 604 283 120 43 49 28 81
1890-94 685 267 197 60 56 33 72
1895-99 661 195 246 55 37 36 92
1900--04 710 162 361 37 6 53 91
1905--09 790 157 328 43 75 187
1910-14 1,304 270 381 41 150 462
• i.e. total exports of home products.
Sources: Annual Statements of the Trade of the United Kingdom, 1875-82;
Accounts Relating to the Trade and Navigation of the United Kingdom, 1883-1914.
159
 THE DEVELOPMENT OF BRITISH INDUSTRY

The traditional overseas markets for British manufacturers were

British possessions, particularly in Australasia, South Africa and
the West Indies, as well as Brazil and, from the 'eighties, the East
Indies. Much of the prosperity of established centres of the industry
at Northampton and at Stafford and Stone had been founded upon
such markets; so great had been the demand for the products of
the home country after the Australian gold rush and so ineffective
was foreign competition at this time, that British manufacturers
had been able to realize enormous profits from the export of
unpriced goods for sale by auction. 1 The Australian trade increased
up to the early 'nineties, but declined considerably thereafter, and
although there was some recovery after 1910, when exports were
booming, the increased demand from Australasia at this time came
in fact largely from New Zealand. Exports to South Africa in 1875
were only half those with Australia in both volume and value, but
they increased considerably in the late 'nineties, taking over first
place from Australia in 1896, and increased dramatically again in
1901, exceeding £1 million in value in 1902 and annually between
1910 and 1914. South Africa was clearly the major overseas market
for British boots and shoes after 1896. Exports to the West Indies
were always important, reaching their peak in the early 'nineties
and falling off somewhat afterwards. The trade with Brazil, which
was of equivalent proportions to that with the West Indies until the
late 'nineties, declined rapidly each year after 1896 from an export
of 51,667 dozen pairs to a mere 2,186 dozen pairs by 1905, when
separate identification of this trade in the published trading accounts
ended abruptly. Conversely, steadily growing exports to the East
Indies resulted in their holding third place behind South Africa and
Australasia before the tum of the century and right up to the end
of the period.
An important development associated with the very substantial
increase in exports after 1910 was a successful invasion by British
boot and shoe manufacturers of the European market. Happily,
the growth of trade with the countries of Europe coincided with
the provision of official :figures more detailed than hitherto, and
the relative importance of Empire and European markets can be
established.
Until 1905 the average annual export of boots and shoes to all
countries other than those already identified in Table II varied
between 72,000 and 92,000 dozen pairs; in 1914 the figure was
1 Victoria County History of Northamptonshire, Vol. II (1906), pp. 327-8;

Staffordshire Advertiser, December 31, 1881; December 30, 1882.

160
 BOOTS AND SHOES

TABLE 111: Destination of United Kingdom Exports of Boots and Shoes

(Leather) 1914
By Quantity-Dozen Pairs
Australia and New Zealand 360,155
South Africa 346,289
East Indies 164,321
France 123,832
Netherlands 47,178
Belgium 40,463
Argentine 38,523
West Indies 37,596
Egypt 27,716
Germany 22,917
Italy 15,826
Elsewhere 210,318

Total 1,435,134
Source: Accounts Relating to the Trade and Navigation of the United Kingdom,
1914.

462,000 dozen pairs. It is clear that a considerable share of this

increased trade was now going to France, the Netherlands and
Belgium and, less importantly, to Germany and Italy. These coun-
tries received 11 per cent of the total export of boots and shoes in
1914.
The major countries from which boots and shoes were imported
into Britain were in Continental Europe-France, Germany, Hol-
land and Belgium. There was also a small import from Canada
and, periodically and ominously, from the United States. But
during the first twenty years of the period the level of imports did
not constitute a threat to the home product and there was no
notion that it would ever do so. From the mid-nineties, however,
rising imports from the United States were viewed with increasing
alarm in this country and there were gloomy forebodings of im-
pending disaster. Consistent statistical evidence is unfortunately
lacking,1 but it is clear that a determined bid to invade the British
home market was being made by American manufacturers at this
time. Shipments from the United States increased in value from
£532 in 1890 to £472,822 in 1903.2 In 1902 total exports of boots
and shoes from the United States were 330,000 dozen pairs, of
1 Because of lack of analysis in the trade accounts of the growing category
'other countries' or, where imports from the United States are identified, of the
category 'leather manufactures'.
1 Economist, May 3, 1913.

F 161
 THE DEVELOPMENT OF BRITISH INDUSTRY

which 86,000 dozen pairs reached the British market. 1 Imports

from the United States of all leather manufactures, including boots
and shoes, stood at £25,013 in value in 1894, or less than 8 per cent
of the value of imports of boots and shoes from France, Germany,
Belgium and Holland; by 1902 the value was £477,046, considerably
in excess of the value of boots and shoes imported from Europe. 2
How did the British industry meet the challenge?

II

The history of the industry at home between 1875 and 1914 is one
of increasing output, of geographical concentration and a changing
organization based upon mechanization and specialization of the
methods of production. In a word, the industry produced increasing
quantities of footwear, and it achieved this by finally adopting, in
the years around the turn of the century, the production of foot-
wear by powered machinery inside factories, located at a few major
centres.
In 1875, the organization of the British boot and shoe industry
was in a state of flux. 3 Production was carried out partly by
machinery and partly by hand; the place of work was sometimes
a factory, sometimes a workshop and sometimes the home. Rem-
nants of domestic industry coexisted with an extensive system of
putting-out and with an incipient factory system, in which the
unpowered workshop was the dominant form of establishment.
The reasons for this apparent backwardness of the industry at the
beginning of the last quarter of the century were partly technical
and partly economic and social. As the next twenty years passed
on, with a relatively slow emergence of the powered machine and
the factory, the reasons for tardiness were less and less attributable
to technical factors and increasingly to a reluctance or inability to
innovate on the part of those who exercised, and sometimes failed
to exercise, the entrepreneurial function in this industry.
By 1875, in fact, the major technical obstacles to the mechaniza-
tion of a considerable sector of the industry had been overcome.
Traditionally, and up to the middle of the nineteenth century, all
1 Encyclopedia of Trade between the USA and France (London, 1904), p. 614.
1 Memo. by Board of Trade, British and Foreign Trade and Industrial Condi-
tions, Par/. Papers, 1903, Cd. 1761 and 1904, Cd. 2337.
a For an analysis of the organization of the industry in Leicester see P. Head,
'Industrial Organization in Leicester, 1844--1914', unpublished Ph.D. thesis,
University of Leicester, 1960.
162
 BOOTS AND SHOES

of the processes involved in the manufacture of a pair of boots or

shoes had been performed by hand, without the aid of machinery.
Before the machine, both 'clicking'-the cutting out of uppers and
their linings-and 'skiving'-the slicing of the upper leathers to the
required thickness-were performed by the operative, standing at a
table, using a knife to cut the leather or 'stuff' laid on a wooden
board. The 'closing' operation-the sewing together of the various
parts of the upper-was achieved by the closer, sitting in a chair,
holding between the knees two clamps in which were held the
pieces of upper to be joined; holes were stabbed in these with an
awl and the thread passed through. 'Lasting' and 'making'-in
which the closed upper is shaped on a last and the sole attached
-were similar to closing, except that the uppers, when 'lasted up',
were held across the knee instead of between clamps. After 'heel-
ing', the hand finisher sat at a low stool to perform 'staking', or
burnishing with an iron, and other tasks. 1
It can be seen that the major assembly processes in the production
of an item of footwear are 'closing' and 'making'. By 1875 sewing
machines to perform these processes had been invented in the
United States and introduced into this country; the most important
of these were the 'Thomas' closing machine (about 1854) and the
'Blake' sewer for use in the 'making' process (1858-59) followed
by the improved Blake-McKay machine (1867) and the Goodyear
welt-sewing machine and chain stitcher (1872-73). 2 The welt-sewing
machine, it was said, was fifty-four times faster than sewing by
awl and thread and produced the first exact replica of the hand-
sewn boot. 3 These were the major inventions, which were always
connected with the name of their particular inventor or developer.
But other important inventions had also been made before 1875.
A machine for rolling sole leather had been introduced in the mid-
'forties, doing in a minute what had formerly taken 1½hours for
an operative with a hammer. 4 And before 1860, machines for sole-
cutting had appeared, followed in the 'sixties and early 'seventies
by machines for making wire screws and for attaching soles to

1 4th Report of R.C. on Employment of Children and Young Persons, Par/.

Papers, 1865 (3548), XX, pp. 124-5.
1 T. Wright, The Romance of the Shoe (London, 1922), pp. 124, 227; R. T.
Wilcox, The Mode in Footwear (New Jersey, 1947), p. 139; E. M. Hoover, Loca-
tion Theory and the Shoe and Leather Industries (Cambridge, Mass., 1937), pp.
162-4; Stead & Simpson Centenary, 1834-1934 (unpaginated).
8 J. A. Schumpeter, Business Cycles (London, 1939), Vol. I, p. 391.

'Hoover, op. cit., p. 162.

163
 THE DEVELOPMENT OF BRITISH INDUSTRY

heavy boots, and also by improved heel building and attaching

machines. 1
In 1875, therefore, the only important processes whose intricacies
liad not been overcome by the genius of the inventor were lasting
and skiving. It was maintained by contemporaries that these, the
most difficult operations in the industry, could never be performed
by machinery. But a lasting machine was invented in 18822 and,
during the 'nineties, clicking was the last major process to be
mechanized, substituting metal dies for the flat patterns which had
guided the cutting knife of the hand clicker. The difficulty for the
inventor, at its most acute in the case of clicking, had been to
imitate by machinery what were after all fairly complicated motions.
Thereafter, the application of power, although involving at first the
frequent stopping and starting of the new machinery, nevertheless
presented no major difficulties. And throughout the period the
progressive introduction of improved machinery was taking place.
In the late 'eighties, for example, new machines introduced into
this country from the United States included improved versions of
the Goodyear welter and chain stitcher, together with improved
finishing machinery. 3 It was said in the late 'nineties that the latest
Goodyear machine could perform in eighteen seconds what had
formerly taken one hour. 4
A changing industrial organization was dependent upon the
state of invention, and also upon the development and marketing
of the various machines involved. In these activities the United
States was already supreme by 1875. The successful adaptation and
commercial exploitation of boot and shoe machinery was largely
carried out by Americans. Sewing machines had been offered in
this country by the Singer Company of New York in the 'fifties, 5
and the Blake sewer had been invented by an American, Lyman
Blake, perfected as the McKay sole-sewing machine and patented
by Blake and McKay in the early 'sixties. 6 Similarly, Charles Good-
year, who had succeeded in adapting for practical manufacturing a
machine invented in 1862 by Destouy, was an American. 7 The
Blake and Goodyear Company had opened an agency in North-
1 Ibid. J. H. Clapham, An Economic History of Modern Britain, Vol. II (Cam-
bridge, 1932), p. 94.
2 Hoover, op. cit., p. 165.
8 V.C.H. Northants, Vol. II, p. 329.

'Wright, op. cit., p. 248.

6 Hoover, op. cit., p. 162.
6 Ibid. Wilcox, op. cit., p. 139.
7 Hoover, op. cit., p. 164.

164
 BOOTS AND SHOES

ampton in 1874,1 and other agencies and showrooms were being

opened in the other major centre of the British industry, Leicester.
By 1891, the various American firms in Leicester included the
Union Boot and Shoe Company and the American Special Machine
Co. Ltd, and all the boot and shoe machinery in use by the various
factories owned by the Co-operative Wholesale Society in Leicester
were supplied by the Campbell Machine Company. 2 By far the
most important of these premises were those of the United Shoe
Machinery Company of America, representing a sales organization
for marketing the machinery of a large group of American firms.
It was an amalgamation of this company with others which formed
the British United Shoe Machinery Company in 1899.3 Although
its headquarters were in Leicester and it was partly British in
origin, the voting power of this Company lay wholly in the United
States.' It grew in dramatic fashion and already in 1900 some two-
thirds of the footwear manufactured in this country was made on
its machinery. 6 Machinery was leased, rather than sold, to manu-
facturers, as indeed the Blake sewer and the machines of the
Goodyear Company had usually been leased. 6 The adoption of
this policy on all types of machine by the 'British United' meant
that most of the British boot and shoe industry was dependent
upon it; and through the expedient of tying clauses, which virtually
gave a manufacturer the choice of taking the whole of a particular
line or none at all, the Company retained control over essential
machines long after the patent rights had expired.
In 1875 certain processes had not been successfully adapted to
the machine and there was as yet no BUSMC to supply those machines
1 V.C.H. Northants, Vol. II, p. 328.
1 G. T. Rimmington, 'The Historical Geography of the Engineering Industry
in Leicester', unpublished M.Sc. thesis, University of Leicester, 1959, p. 108;
Leicester (Illustrated) in 1891 (London, 1891), pp. 83-5.
1 More precisely, it was formed by an amalgamation of the local engineering
firm of Pearson and Bennion with the British interests of the International Good-
year Shoe Machinery Corporation and of the Consolidated and McKay Lasting
Machine Company, in alliance with the United Shoe Machinery Company of
America. The British United Shoe Machinery Co. Ltd. (London, 1937), p. 5.
'Clapham, op. cit., Vol. III (1938), p. 183.
6 H. A. Silverman, Studies in Industrial Organization (London, 1946), p. 218.

By 1944 this proportion was nine-tenths.

8 Hoover, op. cit., pp. 200-1; B. E. Hazard, The Organization of the Boot and

Shoe Industry in Massachusetts before 1875 (Cambridge, Mass., 1921), pp. 121 tr.
McKay, who had bought the patent rights and commercialized the Blake machine
in the 'sixties, had realized that here was a method of readily placing machines
and of retaining servicing and the provision of spare parts in the hands of the
McKay Company.
165
 THE DEVELOPMENT OF BRITISH INDUSTRY

which did exist; but machines were available in this country for
closing, making and various other processes. The progressive
manufacturer was adopting them. But the evolution of the factory
system was to take most of the next quarter of a century. Indeed,
as recently as the 'sixties a growing preference for putting-out had
in many places been reversing the move towards centralized pro-
duction which a few manufacturers had made.
The putting-out system in the boot and shoe industry at this
time may be summarized as the performance of closing, making
and finishing in the homes of the operatives or in workshops. It
was altogether a less complicated system of working than that in
the contemporary hosiery industry, for example, and there had
been no important intrusion of middle-men. It was usual for the
uppers and soles to be cut on the premises of the employer; the
various parts of the upper were then put out to be closed on sewing
machines, and on completion the upper was returned to the work-
shop or factory. Uppers and soles were then put out, usually in
quantities of up to two dozen pairs, to be 'made'. Finally, after
return to the employer's premises, the boots or shoes were put out
once more to be finished.
It was this system, together with sporadic production by machi-
nery, sometimes powered, which typified the organization of the
industry in 1875. Manufacturers as a whole were undecided whether
or not to support the new machinery, and even those that did, also
continued to employ outworkers. 1 It seems impossible to state the
exact number of either factories or workshops at this time; the
factory inspectors found that 'there are so many changes . . . that
it is impossible to give an accurate list of factories and workshops'. 2
The size of the various boot and shoe establishments ranged from
those in which a mere handful of operatives worked to those
1 There had for some time been a contrast between, on the one hand, North-
ampton, Norwich and the growing centre of Leicester-where centralized pro-
duction was at least being considered and begun-and London on the other
hand, where the question was not even being debated in the 'sixties and where
small 'garret masters' dominated the industry to a greater extent. 2nd and 4th
Reports of R.C. on Employment of Children and Young Persons, Par/. Papers, 1864
(3414), XXII, and 1865 (3548), XX, passim.
• Report of Commission on Factory and Workshops Acts, Par/. Papers, 1816,
Minutes of Evidence (C. 1443-1), XXX, Vol. I, App. C, p. 79. Their task was
not made any easier by the difficulty of determining whether a particular estab-
lishment was powered or not. The position was further complicated by the con-
temporary habit of referring to all establishments employing fifty hands or more
as 'factories' and to all others as 'workshops'-an arbitrary and confusing dis-
tinction introduced by the legislature in 1867.
166
 BOOTS AND SHOES

employing up to 300 workers; a considerable number, as a result

of legislation introduced in 1867, housed just under fifty employees. 1
The majority of workshops housed :finishers and riveters, and it was
common practice for house owners or occupiers to let 'what they
call a sitting, and gas for heating the irons that are used for finish-
ing the shoes'. 2 Those working in these small shops and houses
:finished the work made in the larger workshops and factories, and
in this sense, as a contemporary put it, they 'help to feed them'
rather than compete with these larger establishments. 3 Closing was
gradually finding its way into factories, in some cases back into
factories, as the sewing machine was increasingly being driven by
power, but few other machines were regularly power-driven, except
the heaviest type of equipment for cutting soles and the like. Where
machinery existed, much of it was still operated by the hands and
feet of the operatives.4
This then was the state of the British industry at a time when its
counterpart in the United States had an established factory system.
Already, in the 'forties and 'fifties, the American industry had
responded to the demands of an expanding market for the prompt
delivery of large orders, and the need to produce a reliable, stan-
dardized product, by adopting centralized production in work-
shops. 5 Genuine factories had been introduced in the late 'fifties
and the factory system was the prevailing type of organization
during the Civil War, when the demand for army boots and the
general scarcity of labour both urged the adoption of powered
machines. 6
However, in Britain during the period up to the early 'nineties,
small workshops, often small partnerships with the partners work-
ing in their own back yard, remained typical of the organization of
the industry. Even comparatively large businesses used small work-
shops, sometimes widely scattered, sometimes in the yards of their
own premises. The utilization of powered machinery inside factories
had proceeded so slowly that even in Leicester, in the vanguard of
1 Ibid., Qq. 7425-6. As a result they were subject to the theoretical control of

the Workshops Act, 1867, rather than the factory acts.

• Ibid., Q. 7534.
a Ibid., Qq. 7575-6.
' Thus contemporary advertisements depict machinery with treadles and
handles. Clapham, op. cit., p. 95; and local directories and guides.
6 Hazard, op. cit., p. 123.

• Ibid., p. 124. In particular, the practicability of the McKay machine run by

steam power was effectively demonstrated and it was widely adopted during the
'sixties.
167
 THE DEVELOPMENT OF BRITISH INDUSTRY

factory production when it came, the greater proportion of boot

and shoe operatives still worked 'out of doors' in 1891.1 In Leeds
'nearly half the work' of finishing heavy boots was still done at
home. And the bootmaking villages of Northamptonshire were still
full of outworkers. 2
Undoubtedly, a powerful motive for the continued existence of
putting-out was the availability of cheap labour, particularly that
of women and children. It was this which had resulted back in the
'sixties in many manufacturers, particularly in the counties of
Northampton and Leicester, making the deliberate decision to put
out the closing operation to families working at home. Certainly,
the putting-out of closing work was not dictated by technical con-
siderations; the application of power to the sewing machine pre-
sented no particular difficulty. Similarly, the mechanization of the
finishing processes provided no insuperable obstacles. In the case
of clicking, the last process to be mechanized, the work had never
been put out and, although performed by hand, it had invariably
been carried out on the premises of the employer, whether this
was a factory or not. Since 1867 the legislature had unwittingly
played its part in discouraging production in factories in the boot
and shoe industry. Two acts passed in that year relating to 'fac-
tories' and 'workshops' applied laxer regulations to the latter than
to the former. Although the definitions adopted in this year did
not correspond with those generally understood, that is powered
and unpowered establishments, the less stringent provisions relating
to the smaller places of work, coupled with the fact that their
administration was almost impossible, encouraged putting-out. 3
Factory owners felt that they were placed at an unfair disadvantage,
and took every opportunity to put-out to workshops, which often
meant private houses and small rooms. 4 In 1878-except in the
case of 'domestic workshops' and those employing women only-
workshops in the industry were brought into line with factories, 6
1 Report of R.C. on Labour, Par!. Papers, 1893 (C. 6795-VI), XXXVI, Minutes
of Evidence, Group C, Vol. II, Q. 16019.
1 Clapham, op. cit., Vol. III (1938), p. 181 and n. 6.
1 The Factory Extension Act, 1867, 30 & 31 Viet., C. 103, extended the fac-
tory acts to include all premises employing fifty or more persons in any manu-
facturing process. The Workshops Regulation Act, 1867, 30 & 31 Viet., C. 146,
laid down less stringent provisions relating to the working hours and compulsory
schooling of women and children. These formed an important part of the labour
force in the boot and shoe industry.
'Report on Factories and Workshops, 1876, Qq. 7125-6, 7140, 7142, 7180.
6 Factory Act, 1878, 41 & 42 Viet., C. 16.

168
 BOOTS AND SHOES

so that one reason for continuing the putting-out system was

removed. But it continued. The availability of capital was, no
doubt, a decisive factor in many instances. It was the larger manu-
facturers who first adopted factory production; others were very
often men of straw, seeking to establish themselves in the industry,
for whom putting-out and its comparatively small capital require-
ments was an ideal means of starting business. Even if they had the
necessary capital to centralize their business, like many contem-
porary hosiers they had 'no sufficient reason' for doing so. 1 For
those who were turning to factories were doing so in a very partial
manner, and others who relied wholly upon putting-out were able
to compete for many years. It was as if the British industry as a
whole was not alive to an expanding demand for its products. Of
course, the onus was to a great extent upon the industry to provide
the public with greater quantities of a comparatively cheap and
acceptable product, to stimulate an effective demand. If British
manufacturers would not do so, there were others who would.

III

The industry had not, in the early 'nineties, yet begun to encounter
much competition in Europe from American manufacturers. But
the Americans were already competing effectively in many of the
traditional overseas markets of British manufacturers, particularly
the British possessions, to the extent that they were taking the
lion's share of an increasing demand. The Massachusetts industry
had for many years been supplying boots and shoes to the Southern
States, California and the West and also to South America, the
West Indies and Australia. Now they were expanding these markets
at the expense of British manufacturers. 2 Thus, imports of boots
and shoes from the United States into Jamaica jumped from £4,450
in value in 1884 to £21,353 in 1895; the increase was attributed to
the 'advance in civilization of the masses and to the cheap rates at
which the goods are imported and sold'. Canada's main source
was the United States by the early 'eighties; American imports
continued to increase while those from Britain declined so that
Canada fell rapidly from the position of third major market for
1 A number of hosiers had used just this phraseology before a commission of
enquiry some twenty years earlier.
1 The following summary is based upon Report on Trade of the British Empire
and Foreign Competition, Par/. Papers, 1897 (Cd. 8449), replies to despatch
from Mr Chamberlain to Governors.
169
 THE DEVELOPMENT OF BRITISH INDUSTRY

British products, which she had been in the early 'sixties. 1 In

Australia, too, American manufacturers were increasingly catching
the eye of a more discerning public. In Victoria, where most boots
were home-produced, Britain still retained most of the trade in
fancy products and children's shoes as late as 1894, but within two
years the United States had captured a third of this market. The
reasons were the quality and cheapness of the American products.
Mass production and the large orders made possible by a large
and expanding home market in the States enabled manufacturers
to undercut competitors abroad. 'In this colony, the American
manufacturers relax their conditions to secure the trade, and sell
in small quantities to retailers at nearly the same price as they sell
in the United States to the factors. For this reason an American
retailer probably pays more for his boots than does a Victorian
retailer.' 2 As to quality, it was said that men's boots made in the
United States were more comfortable and made of softer leather
than the British equivalent, and the attraction of the women's boots
and shoes was their attractive shape and excellent finish. It was the
same in the other states of the Commonwealth, and imports from
the United States into Queensland and into South Australia in-
creased rapidly after 1894, largely because of their attractive style
and finish. It was these factors which also led many customers to
prefer the products of other countries; it was not just the superiority
and cheapness of the American boot and shoe which caused them
to turn away from British exporters, but a general dissatisfaction
with the product they were receiving from Britain. While the heavy
men's boot from Britain may have held its own, light boots and
shoes for ladies were being increasingly imported into Australia
from France, Germany and Austria. Again, the reasons were price,
fashion, appearance and finish. Importers complained of the British
manufacturers' comparative lack of taste, lack of attention to
detail, and of the poor fit, appearance and finish of their products.
All this requires to be put into proper perspective, and Table IV
shows the overwhelming importance of imports from Britain into
three of the Australian states under discussion up to 1894. American
competition was only just beginning to make itself felt and from
this time British exports to Australia decreased. However, the
British share of the footwear trade with Australia, as with other
possessions, remained by far the largest. What was happening in
the late nineteenth century was that foreign countries, particularly
1 Trade and Navigation Accounts, 1863.
• Report on Trade, etc., pp. 401-2.
170
 BOOTS AND SHOES

the United States in the 'nineties, were capturing a larger propor-

tion of the trade in light and fancy footwear, notably women's.
And, of course, a general decline in imports into countries such as
Australia is to be accounted for in terms of increasing home
production, often protected from competition.

Commonwealth of Australia (Three States) Imports of

TABLE IV:
Leather Boots and Shoes by Value
(£-thousands)
State Imports 1884 1889 1894
New South Wales:
Imports from United Kingdom 548·5 489·3 264·8
France and Germany 32·0 92·4 28·5
" " United States 0·7 1-1 3·8
" " Elsewhere 0·6 1·7 0·7
" "
Total 581·8 584·5 297·8
Victoria:
Imports from United Kingdom 97·5 129·6 31·0
France and Germany 2·5 17·3 1-6
" " United States 0·2 0·2 0·3
" " Elsewhere 0·3 0·6 0·1
" "
Total 100·5 147·7 33·0
South Australia:
Imports from United Kingdom 123·2 79·9 64·2
Elsewhere 3·2 1·9 2·1
" "
Total 126·4 81·8 66·3
Source: Report on Trade of the British Empire and Foreign Competition, 1897,
Cd. 8449.

It was not long before United States manufacturers turned

greater attention to Europe and to the British home market.
Certain insignificant quantities of the American product had for
many years been imported, but it was about 1896 that the real
invasion began. So successful was it that only eight years later it
could be said, dramatically, that the United States industry had
spread throughout the world; certainly there were American boot-
shops throughout England, Germany, Austria and France. 1
It was this situation which the British industry had to face at the
beginning of this century-increasing competition from the United
1 Encyclopedia of Trade, pp. 611-12.
171
 THE DEVELOPMENT OF BRITISH INDUSTRY

States and parts of Europe, based upon cheaper products and, at

least in certain types of product, a superior and more attractive
article. The industry was able to meet the challenge successfully,
and for several definite reasons.

IV

The fundamental reason was that a considerable change in the

organization of the industry had largely been completed by the
early years of this century. Various factors had combined to speed
the change to centralized production, which enabled closer super-
vision of the various processes of manufacture and permitted a
rudimentary quality control, and to speed the change also to the
adoption and efficient use of machinery, which made for lower
costs of production and a cheaper product. The shift of emphasis
was reflected in a changing geographical distribution of the indus-
try. In the days of domestic industry, bespoke shoemakers had
been widely scattered and were to be found in almost every settle-
ment worthy of the name. As the capitalist wholesale industry had
developed, important centres of the trade had become established
in the London area and in the counties of Northampton and
Stafford in particular, and in such towns as Northampton, Leeds,
Norwich and Kendal. Now, in the last quarter of the nineteenth
century, the future was with those centres which adapted them-
selves to the factory and the machine. Already in the late 'eighties
places like Wellingborough, where manufacturers consistently put
out the 'making' operation, were losing trade to more progressive
centres such as Kettering. 1
The town and county of Northampton, where production was
largely men's footwear, was clearly one of the centres to adopt the
new technology and organization and so did Norwich which
specialized in quality women's footwear, 2 but a dramatic new
centre of the industry became established in Leicestershire, tending
to specialize in women's but also producing men's boots and shoes.
The town of Leicester, indeed, where there were 1,400 shoemakers
in 1851 compared with 13,000 in 1881 and 27,000 in 1901, rapidly
established itself as the new focal point of the industry, the head-
quarters of the National Union of Boot and Shoe Operatives and
1Clapham, op. cit., Vol. III, p. 182.
1For the Norwich industry see W. L. Sparks, The Story of Shoemaking in
Norwich (Northampton, 1949).
172
 BOOTS AND SHOES

TABLE v: Regional Distribution of Employment in the Boot and Shoe

Industry, 1881-1911
Percentage Distribution•- England and Wales
Regiont 1881 1891 1901 1911
South Midlands 15 18 21 22
Northampton 5 5 7 6
North Midlands 12 15 18 18
Leicester:!: 6 10 12 11
London and South East 23 20 18 17
West Midlands 13 11 11 11
North West 8 9 9 9
Yorkshire 9 8 8 8
East 6 6 6 7
South West 7 7 3 3
North 3 3 3 2
Wales and Monmouth 4 3 3 3
100 100 100 100
Sources: Census Reports, 1881-1911 viz: 1881, Vol. III, 1883, C-3722; 1891,
Vol. III, 1893, C-7058; 1901, Summary Tables, 1903, Cd. 1523; 1911, Vol. x,
Occupations and Industries, 1913, Cd. 7019, Part 2.
• Percentage figures are necessitated because of the non-comparability of the
Census figures. In 1881 and 1891 they include substantial numbers of dealers in
boots and shoes and these are excluded in 1901 and 1911. The 1881 tabulation
includes persons aged 5 and upwards; aged 10 and upwards in 1891, 1901, 1911.
(In 1881, 7,269 children between the ages of 5 and 14 were enumerated as
employees of the industry.)
t Regional analysis of geographical counties as adopted in the Census Report
1881, viz:
South Midlands counties: Northants, Herts, Bucks, Oxford, Huntingdon,
Bedford, Cambridge.
North Midlands counties: Leicester, Rutland, Lines, Notts, Derby.
London and South East counties: Middlesex, Surrey, Kent.
West Midland counties: Staffs, Gloucester, Worcester, Warwick, Hereford,
Salop.
North West counties: Lanes, Cheshire.
Eastern counties: Essex, Suffolk, Norfolk.
South Western counties: Somerset, Wilts, Dorset, Devon, Cornwall.
Northern counties: Durham, Northumberland, Cumberland, Westmorland.
:j: This figure of 12 per cent = 26,561 persons; contrast 1831 Census, when
comparable figures were 0·38 per cent = 425 persons.

of the boot and shoe machinery industry, including the BUSMC. 1

Meanwhile, the importance of other centres declined, including
London, the traditional home of the 'garret master'. The quality
industry of Stafford, in particular, failed to make a successful
1 The headquarters of the National Union of Boot and Shoe Operatives from

1876 and of the British United Shoe Machinery Company from 1899.
173
 THE DEVELOPMENT OF BRITISH INDUSTRY

transition from putting-out to factory production, in spite of

attempts to do so by the installation of new machinery and the
adoption of American styles. 1 Of course, the yardstick of employ-
ment gradually became less reliable as a measure of the relative
importance of various areas. The fact that there were still con-
siderable numbers of boot and shoemakers in certain parts of the
country at the end of the period was often a measure of the in-
efficiency of a particular local industry. Indeed, in Northampton
and Leicester the number of employees declined between 1901 and
1911 as more efficient use was made of the new machinery. There
was another factor, too, particularly in Leicestershire, as employers
to some extent reversed the move towards geographical concentra-
tion in the county town by building new factories in the surrounding
countryside, ostensibly to escape the growing wage-bargaining
power of the NUBS0. 2 Nevertheless, between 1881 and 1901 the
trend is clear enough and bears further analysis.
The differential rate of growth of employment in the industry
had escaped the notice of the Registrar-General and his comments
in the Census Reports between 1871 and 1891 sought vainly for
an explanation of the slow rate of growth in employment in the
industry as a whole. 3 But in 1901,

'the small rate of (overall) increase now shown ... has caused us
to make further enquiry ... we now find that it was not a general
growth but one occurring mainly in the counties of Northampton-
1 Staffordshire Advertiser, December 28, 1901. The decline of Stafford and
Stone was more marked after 1914. In 1913, there were eighty-nine boot and shoe
'plants' of all sizes in Stafford and district; by 1939 these had fallen to twenty-
eight. The explanation appears to be that the traditional specialization on
women's welted shoes was more suited to older processes than the newer
methods used to manufacture the lighter modern product. Silverman, op. cit.,
pp. 205, 209. At the present time there is only one firm in both Stafford and
Stone.
2 In 1891 the industry's arbitration board in Leicester had resolved that the

agreed prices should be paid 'wherever the goods are made'. However, in the
next year the board passed an innocent-looking resolution to confine its activities
to the borough of Leicester, and this was subsequently used by the manufac-
turers to claim that discussion of basket work in the surrounding countryside
was outside the scope of the board's agreed activities. Minutes of Leicester Boot
and Shoe Trade Arbitration Board, July 6 and 21, 1891; February 22, 1892, and
passim.
8 The figures which were puzzling the Registrar-General were those of

total employment in the industry 1851-1901, viz: 243,935-255,791-224,559-

224,059-248,789-251,143. Figures adjusted by Registrar-General to permit
comparison.
174
 BOOTS AND SHOES

shire and Leicester and in the County Boroughs of Norwich and

Leeds-centres for machine goods.'1
TABLE v1:Employment in the Boot and Shoe Industry, 1881-1901
Percentage Change
Location 1881 1891 1901 1881-91 1891-1901
Northamptonshire 24,377 36,134 41,989 +48·2 +16·2
Leicestershire 16,714 30,513 35,230 +82·6 +15·5
Norwich 5,069 6,384 7,600 +25·9 +19·0
Leeds 5,896 7,662 7,546 +30·0 - 1·5
52,056 80,693 92,365 +55·0 +14·5
Elsewhere 172,003 168,096 158,778 - 2·3 - 5·5
England and Wales 224,059 248,789 251,143 +11·0 + 0·9
Source: Census Report, 1901, General Report, 1904, Cd. 2174, p. 124.
Figures for 1881 are as corrected in Census Report, 1891, Vol. iv, General
Report, 1893, C-7222, p. 53. Figures include dealers in boots and shoes.

It was mainly in these centres, but also in other parts of the

country where isolated firms often survived, 2 that the industry
adapted itself to changing conditions. It was here that the National
Union of Boot and Shoe Operatives from its headquarters in
Leicester played an important part in speeding the move to cen-
tralized production in the industry. The Union was itself a creature
of changing methods of production, for it was only when men
were gathered together, working in close proximity, that a powerful
trade union could become a reality. 3 However, an agreement
reached with the NUBSO in 1891 bound the manufacturers of
Leicester, to be followed by others, to provide central workshops
and this was clearly an important factor in speeding the move to
genuine factory production. One of the major objectives of the
Union had always been the 'establishment of healthy and proper
1 Census Report, 1901, General Report 1904 (Cd. 2174), p. 124.
2 See, for example, (ed.) L. H. Barker, Clarks of Street, 1825-1950; 'History
of Lotus Ltd', m/s. in possession of the firm, Stafford.
3 The NUBSO had originated in a breakaway in 1874 from the Amalga-

mated Society of Cordwainers on the part of workers in the new factories; they
formed the National Amalgamated Union of Operative Boot and Shoe Riveters
and Finishers, which later changed its name. This aspect of the industry's history
has been well documented; see A. Fox, History of the National Union of Boot
and Shoe Operatives, 1874-1957 (London, 1958); E. L. Poulton, Fifty Years: the
History of the NUBSO (London, 1924); J. Walton, 'A History of Trade
Unionism in Leicester to the end of the 19th Century', unpublished thesis,
University of Sheffield, 1952.
175
 THE DEVELOPMENT OF BRITISH INDUSTRY

workshops-the employers to find Room, Grindery, Fixtures, Fire

and Gas, free of charge' .1 The aim was to abolish 'sweating' in the
industry by putting an end to work in makeshift rooms and sheds.
The movement to urge manufacturers to provide the place of work
had begun in London, 2 but in 1890 the Leicester branches of the
Union began agitation. Whether or not they expected much opposi-
tion to their demands is not clear, but in the event it was discovered
that most manufacturers agreed with the proposition that they
should provide workshops. The Union proposal was brought before
the Manufacturers' Association and a sub-committee of the Arbitra-
tion Board was formed to consider the whole question. After con-
siderable argument and discussion the Board passed a resolution
which was formally accepted by both sides on March 20, 1891.
This stated that the manufacturers were to provide workshops and
most working materials free of charge. 3 Leicester thus became the
first centre in the industry officially to adopt 'indoor working'.
It was claimed by the Union in 1892, perhaps in exaggerated
fashion, that there were now less than 5 per cent of the labour
force working out of doors in the town of Leicester. 4 There is no
doubt that firms were now comparatively rapidly turning to cen-
tralized production, although many found great difficulty in com-
plying with the 'workshops agreement' as promptly as the Union
wished. Seventeen were granted time extensions by the industry's
Arbitration Board, and there were still eight firms at the beginning
of 1892 who had not complied. 5 But this represented an extremely
rapid transition to centralized production. It is true that the manu-
facturers had made a proviso which permitted the continued
existence of putting-out; thus, 'any Manufacturers having made
provision, they shall be at liberty to employ any of their workmen
who refuse to come indoors'. 6 Some 'basket work' therefore con-
1 Rules of the National Union of Operative Boot and Shoe Riveters and Finishers,
as amended 1886, in pamphlets collection, Leicestershire Room, Leicester City
Reference Library, ref. 01, Vol. xviii; Rules of the NUBSO (Leicester, 1892),
quoted in S. & B. Webb, Industrial Democracy (London, 1902), p. 147.
• Report of R.C. on Labour 1892, Q. 16003; evidence Wm Inskip, General
Secretary of NUBSO.
3 While finishers were to find their own grindery, manufacturers were to pro-

vide 'blue light and sitting room free of charge'. The Board affirmed 'the necessity
of proper regulations and pledges itself to support the manufacturers in carrying
out the same'. Arbitration Board Minutes, December 9 and 15, 1890; March 17,
1891.
'Report of R.C. on Labour, 1892, Qq. 16020, 16022.
6 Arbitration Board Minutes, July 1891 passim, January 13, 1892.

• Ibid., March 17, 1891.

176
 BOOTS AND SHOES

tinued, in spite of the fact that union members were fined for
accepting work at home. 1 However, the move was towards cen-
tralization, and indeed the 1891 agreement had virtually achieved
this at one single stroke, and although the provision of workshops
did not necessarily mean powered factories, these were in fact
being increasingly acquired by manufacturers. Of thirteen Leicester
firms, employing some 3,000 operatives, of whom definite informa-
tion is available for 1891, ten had powered factories-five using
gas engines, four using steam and one factory being equipped with
both. Two firms, employing under 300 operatives between them,
used both powered machinery and hand labour, and one small
firm worked almost wholly with the aid of hand labour. 2 Typical
of the new thinking was the firm which, back in the 'sixties, had
been decentralizing their business: 'we . . . have some young
women from a country village learning the use of the (sewing)
machine; when they are proficient they will be able to have their
work at home, and bring or send in every week or so.' 3 Now, in
the early 'nineties, 'accommodation is found for all within the
factory', which housed 700-800 workpeople, together with an
extensive array of machinery for cutting and sewing, rolling, nail
cutting, cutting linings, heeling, skiving and for many other opera-
tions. Most of this machinery was power driven by steam and gas
engine. But lasting and finishing were still performed by hand. 4 A
small manufacturer advertised: 'I beg to inform you that I have
removed to New and more Commodious Premises ... and having
put down the latest improvements in machinery, I shall now be
able to execute all orders entrusted to my care with promptitude
and despatch.' 5 Another announced that 'all work such as finishing
and making-previously executed outside-will, in future, be done
on the premises, by virtue of an agreement with the Trades
Union'. 6
The movement to full mechanization and genuine factories con-
tinued during the 'nineties. The first clicking presses were installed
1 Minutes of NUBSO (Leicester No. 2 Branch), passim. Many who worked
in factories also took work home in the evenings; as late as 1902, it was com-
plained that 'some of our members were still taking homework as overtime,
under the pretence of their wives doing it'. Ibid., May 30, 1902.
1 Leics. Illustrated, 1891, pp. 51-64.
• 2nd Report on Employment of Children etc., 1864, p. 165.
'Leics. Jllustrated, 1891, p. 51.
6 Notice of Removal, October 1891, loaned to me by the present director of

the firm concerned.

• Leics. Illustrated, 1891, p. 54.
177
 THE DEVELOPMENT OF BRITISH INDUSTRY

around the turn of the century,1 and, although clicking in particular

was still performed by hand in many premises, from this time the
manufacture of boots and shoes became a fully mechanized indus-
try, in which many types of machine imitated all the various
processes formerly performed by hand. Hand work and putting-
out in the wholesale industry were practically dead. The 'team
system' of production rapidly gained ground in the new factories
during the 'nineties and the first decade of the twentieth century.
This system, developed in the USA during the late 'sixties and
'seventies, involved the use of teams of machines, each machine in
the team performing its own particular process in the making of a
shoe. 2 The factory was accompanied by an extreme sub-division of
processes and division of labour, which had dominated the industry
by the end of the period. 3 Putting-out was by this time a mere
remnant of the industry which, during the greater part of the
preceding fifty years, had been spreading into the homes and
workshops of the major towns and beyond. 4
If the NUBSO and the manufacturers had been in general agree-
ment over the principle of central workshops being provided by
the manufacturer, there were many other issues having their roots
in a changing industrial organization and changing conditions of
employment which led to increasing friction. The question of
wages, in particular, led to endless disputes, for the constant intro-
duction of new machinery caused continual disruption of existing
agreements over wage rates. These and other matters came to a
head in the notorious dispute of 1895, 5 but they were not resolved
by the settlement of that dispute, and argument connected with the
1 It has been said that the first clicking press in Leicester was installed in 1902
and supplied by the BUSMC. Shoe and Leather News, October 9, 1952, Suppl.,
p. xliii. But in 1901, 'the manager of the Equity Society having suggested the
purchase of a clicking press, both he and our members desire to know to what
extent they are in use'. It was found that three firms used presses for cutting
linings, and four used them for tennis shoes. Some months later it was reported
that the Gimson Engineering Co. was supplying clicking presses to the trade.
NUBSO Minute Books, January 18 and 25, 1901; April 12, 1901.
• Clapham, op. cit., Vol. II, p. 95.
8 The number of specialist workers increased, and in addition to those per-

forming the more major operations, there appeared occupations such as fitters-
up, splitters, rangers, lift choppers, channellers, sluggers, preparers and rubbers-
down. In 1911 the Registrar-General listed more than 400 different occupations
under the heading 'boot and shoemaker'. Census Report 1911, Vol. x, Appendix,
1915 (Cd. 7660).
'However, remnants of putting-out remain even today: a few women, using
electric sewing machines in their own homes, are still employed by some firms.
6 This has been much discussed and indeed has been the subject of a separate

178
 BOOTS AND SHOES

introduction of machinery continued. The NUBSO always maintained

that it did not oppose the introduction of machinery in itself, but
it did oppose the deductions from recognized piece rates which
occurred when machinery was introduced. 1 The method of re-
muneration was also at issue. The traditional method of payment
in the industry had always been piece rates, but as the rates
regarded as fair in the early workshops and factories had soon
become useless in the rapidly mechanizing factories, the employers
came to favour a switch to time rates. The NUBSO sought the con-
tinuance of piece rates. These were regarded not only as a tradi-
tional right, but as the only method of safeguarding the worker,
in an industry being constantly affected by technological change,
from doing more and more work for the same payment. And the
introduction of the team system meant that the pace of work could
be dictated by a leader. The Union's answer to time rates, where
they were introduced, was the restriction of output, and members
were fined for producing more than their allotted output. This
came to be the major grievance of the manufacturers who, anxious
to exploit the new machinery and facing American competition,
complained that their aims were being thwarted by the Union's
policy. There is much to be said for the employers' point of view
that, although the Union did not openly refuse to work with
machines, it was opposed to them, and used more subtle methods
of belittling them and making their use as expensive as hand
labour, only to retain public sympathy. As an employers' organ
put it: 'It is no use to mince words.... The Unions are engaged
in a gigantic conspiracy to hinder and retard the development of
labour-saving appliances in this country.'2 To this the Union reply
study: E. Brunner, 'The Origins of Industrial Peace: the Case of the British Boot
and Shoe Industry', Oxford Economic Papers, new series, Vol. i, 1949.
1 Report on Labour, 1891, Qq. 16111-16126; evidence of lnskip.
2 Shoe and Leather Record, February 19, 1892. The Record compared English

shoe factories unfavourably with their American counterparts, where the men
worked. In England, 'if they run a machine for five minutes at full speed, they
seem to think it necessary to stop it and see that no breakage has occurred. Then
they walk about the shop, and borrow an oil-can or a spanner, wherewith to do
some totally unnecessary thing. This occupies anywhere from five minutes to an
hour, and then the machine is run on again for a few minutes; and if the operator
is questioned, he says, "machines are no good; I could do the work quicker and
better by hand". And so he could, for he takes care not to allow a machine to
beat a shop mate working by hand on the same job, and in short, does all he can
to induce manufacturers to abandon mechanical devices and go back to hand
labour and not to earn as much money as possible per week, but as much as pos-
sible per job, in other words, to keep the cost of production as high as possible.'
179
 THE DEVELOPMENT OF BRITISH INDUSTRY

was that piece rates would have removed the whole difficulty. But
the employers saw piece rates as the surrender of too large a
share in the greater productivity of the industry; the Union, of
course, regarded time rates in a similar manner. And so the argu-
ment continued beyond the turn of the century. 1 The Webbs had
summed up the position with typical perception:

'We have here an industry which is being incessantly revolutionized

by an almost perpetual stream of new inventions and new applica-
tions of the old machines. The workmen are noted for their tur-
bulence, want of discipline and lack of education. The employers,
themselves new capitalists without traditions, exposed to keen
rivalry from foreign competitors, are eager to take the utmost
advantage of every change. The disputes are endless. ' 2

It is clear, therefore, that during the 'nineties and in the early

years of this century, the boot and shoe manufacturer faced human
as well as technological problems. Both tended to be reflected in
terms of economics, and there were many unfavourable com-
parisons drawn at this time of transition and of American com-
petition between the British and American workman. In spite of
this, the British manufacturer found at the end of the period that
he could, after all, compete effectively.
An important contribution to the increasing output and produc-
tivity of the boot and shoe industry in the late nineteenth century
was made by the small firm. Even during and after the transition
to factories, small-scale production was possible. 3 Those who had
formerly put-out, and also new entrants to the industry, were able
to exist side by side with larger firms when factory production
became the norm. Numerous factors made this possible. In the
first place, the manufacture of boots and shoes was not an
industry which, because of technological or production require-
1 One can hardly turn a page of the Union or Arbitration Board Minutes
without reading of some dispute over wage agreements arising from the intro-
duction of machinery.
1 Webbs, op. cit., pp. 396--7.
8 Small-scale production is still a feature of the industry today, despite the

comparative giant or two, such as the International Shoe Co. in the United
States or the Bata organization in Europe. Demand variations, such as fashion
changes and seasonal fluctuations, and various supply factors such as the varia-
bility in quality and value of the raw material, differentiation of types of product,
the team system, the renting of machinery and the general ease of entry to the
industry, all combine to militate against large-scale production as the norm.
Silverman, op. cit., pp. 199-200.
180
 BOOTS AND SHOES

ments, was necessarily large-scale. It had been physically possible

for its various processes to be put-out, and it was physically
possible for the small producing unit or factory to exist. Second,
small factories could compete, for there were no overwhelming
economies of large-scale production. Perhaps the very small unit,
as found in the contemporary hosiery industry, for example, was
at a greater competitive disadvantage: as so many operations are
involved in the manufacture of footwear by machinery, maximum
economies are derived from balanced teams of machines, and even
if only one team was employed, this implied a fairly large under-
taking. But by the tum of the century, a third factor-the produc-
tion, particularly by the British United Shoe Machinery Company,
of comparatively small teams with well-balanced output capacities
-helped the small firm to surmount this difficulty. 1 In the fourth
place, the policy of the BUSMC, in leasing rather than selling its
machinery, not only reduced the capital requirements of manu-
facturers but further reduced the economies to be derived by the
large manufacturer. For the royalties on this machinery were fixed
at a certain sum per 1,000 revolutions performed by each machine;
payments thus varied according to the use of the machinery, and
machine costs per pair of shoes were identical in the smallest and
largest factory. 2 Whatever may be thought by some of the manner
in which 'the eu' exercised its virtual monopoly, 3 its leasing policy
certainly enabled firms to enter and remain in the industry on a
small scale, and was an important stimulus to modem production
methods in the industry. Many manufacturers 'would not have
1 H. C. Hillman, 'Size of Firms in the Boot and Shoe Industry', Economic
Journal, 1939, p. 282. Thus the NUBSO exaggerated the position in 1903,
when it was said that, 'year by year it becomes plainly evident that the days of
the small manufacturer in the shoe trade are numbered. The continued introduc-
tion of labour-saving machinery, and the consequent sub-division of labour, is
slowly but surely diverting the trade into the hands of the large employers or
limited companies, and with these the little man has but very slight chances of
successfully competing in either the home or foreign markets'. Monthly Reports
of the NUBSO, June 1903, p. 8.
1 Hillman, foe. cit. One authority, however, doubts whetller the equality of
rent and royalty charges, as distinguished from the existence of machine renting,
means much in practice. 'The item for rent or royalty is but a small percentage
of the total cost in the manufacture of footwear; if the larger firms were to gain
anything at all from a system of graduated charges, the added fraction would
be inconsiderable.' Silverman, op. cit., p. 213; and 'An Industrial Survey of
Leicestershire', Nu/field College Social Reconstruction Survey, August 1943, pp.
30-1.
• In particular, some manufacturers object to what they maintain are excessive
charges for the provision of spare parts and the like.
181
 THE DEVELOPMENT OF BRITISH INDUSTRY

been in the business were it not for the BU', and, indeed, the firm
was criticized in its early years by employers and Union alike for
making entry to the industry too easy. 1
Nor had the small firm been at so great a disadvantage before
1899 as might be supposed. Certain machines could be hired, and
in addition there had grown up from the 'sixties, alongside putting-
out, a few small manufacturing establishments devoted solely to
machine closing-the closing of uppers by sewing machines. This
development is important in the present context for two reasons :
it was in itself an easy means of entry to the industry and resulted
in the growth of a number of small centralized establishments-at
the time it was said that 'one room and a five pound note were
sufficient to start boot manufacturing' 2-and the premises of these
and other 'sewers to the trade' were available for use later in the
century by those manufacturers who were turning to factory
production. Production could continue in these shops 'whilst the
important question of laying down a special plant is under con-
sideration. Hence the transition from one grade to another was
made by easy stages.'3
For various reasons, then, small-scale producers could enter the
industry. They were always encouraged by the hope that they
might establish a sheltered comer of the market for themselves.
Thus, at the end of the period it was even judged to be,

'a mistake to build big factories .... Specialization is going on all

the time, and the factories today making the most money and
having the steadiest run of business are those of a moderate size .
• . . The fewer the styles and grades the easier the plant is run.' 4

The development of the factory system in the British boot and

shoe industry was also encouraged by innovations in the marketing
of footwear. From the 'sixties, growing demand and increasing
production of footwear was accompanied by the growth of specialist
boot and shoe retailers in the place of the general dealers who had
helped the individual bootmaker to dispose of his product. These,
however, proved to be inadequate outlets, and already in 1875
1 Silverman, 'Industrial Survey', p. 31. Latterly, machinery is not supplied
unless a sufficient guarantee of capital is provided.
a E. Bordoli, Old Friends (Northampton, 1934), p. 40.
• M. W. Wright, 'Boot and Shoe Trade', Leicester Chamber of Commerce Year
Book, 1911, p. 59.
'Hoover, op. cit., pp. 204-5 (quoting F. L. Small, Organizing a Shoe Factory
(Boston, 1910), p. 3).
182
 BOOTS AND SHOES

multiple shop retailing was becoming an important feature of the

footwear trade. 1 Some of these retailing organizations were manu-
facturing concerns too, representing the most powerful and best-
known organizations involved, although so profitable did retailing
prove that some abandoned manufacturing as a result.
The job which these multiple shops had to do was to provide a
regular outlet for the mass distribution in the home market of
increasing quantities of factory-made boots and shoes. But the
quality of the product which they distributed was generally poor.
Nineteenth-century footwear, whether the product of the wholesale
putting-out system or of the early factory, was often badly made
and rarely distinguished between left and right; the range of fittings
was limited, and in the absence of nationally accepted standards,
each manufacturer had his own sizes. 2 At its best, the industry
produced a durable boot, of ugly design and rough leather, having
tops of thick leather which ridged easily. A deputation of manu-
facturers to the United States at the beginning of this century was
surprised to find that the industry there manufactured in half-
sizes, as well as producing a generally superior article. 3 It was not
surprising that, during the 'nineties and early part of this century,
many customers at home and abroad turned to the superior product
of the American and sometimes the European industries. Well into
the twentieth century, if the consumer at home, buying British,
required anything more than an ill-fitting, uncomfortable black
boot, elastic-sided or hobnailed, he turned to the bespoke shoe-
maker.' However, having learned the lesson from competitors,
British manufacturers rapidly put their house in order and around
the turn of the century they increasingly adopted improved machi-
nery and refined techniques of production, supplying wider ranges
of fittings and paying greater attention to style and the appearance
of their product. As a result, the market for the factory product
widened at home and, soon, also abroad. By 1913, The Economist
could exult in the 'Victory of British Boots', comparing the trade
figures for 1890--1903 with 1903-12 to good effect. 6 It has been well
said that, 'free traders who congratulated their country and them-
1 J. B. Jefferys, Retail Trading in Britain, 1850-1950 (Cambridge, 1954), pp.
354-6, 370. The footwear trade was the first in Britain, apart from railway book-
stalls and sewing machine trade, to adopt multiple shop retailing on an important
scale.
1 Ibid., p. 354.
a Economist, May 3, 1913.
'Jefferys, op. cit., p. 354.
1 Economist, May 3, 1913.

183
 THE DEVELOPMENT OF BRITISH INDUSTRY

selves on this outstanding instance of the stimulating effect of free

competition on a resolute industry were entirely in order' .1

However, after the First World War exports of boots and shoes
declined; they had already done so by the mid-twenties and
declined further after the world depression and the adoption of
extreme nationalist economic policies by many countries after
1931.2 British possessions, as well as foreign countries, were deter-
mined to develop their own resources and protected industries.
Before the Second World War, exports had dwindled to such an
extent that they were having little effect upon the structure of the
industry at home. 3 Recently, while exports have fluctuated at a
much lower level than that reached in 1914, imports have increased,
and the expectation is that they will continue to do so; in 1959,
imports exceeded exports for the first time. 4 The manufacturers of
the Edwardian age would not have believed it.
Thus, the chronicling of a successful fight back by the industry
during the early years of this century must be qualified by the fact
that it was something of a temporary phenomenon, because between
the wars and up to the present time increasing foreign competition
has nibbled away at the British export trade in boots and shoes
and has also successfully invaded the home market. But this is not
to deny the success of earlier years, a success which was directly
related to important changes which had been taking place in the
structure of the industry at home. Nor was it to be expected that
the high-water mark reached by 1914 would be long maintained.
Although contemporaries considered the future to be bright, hind-
sight would have permitted the judgment that Britain's customers
would eventually seek to develop and protect native industries,
including the manufacture of boots and shoes. In these circum-
stances, the inevitability of a decline in exports must be accepted.
What gives cause for considerably less complacency is the pheno-
menon of increasing imports, and the suspicion that the boot and
shoe manufacturers of today may have to relearn the lesson that
1 Clapham, op. cit., Vol. III, p. 182.
1 Board of Trade Working Party Report: Boots and Shoes (London, 1946), pp.
114-15.
• Silverman, op. cit., p. 225.
'OEEC, 'Statistical Survey of the Footwear Industry in Europe and North
America' (t/s. for International Conference, Madrid, 1961), p. 63. Imports from
Italy, France, Netherlands, Belgium, Switzerland, Ireland and Hong Kong.
184
 BOOTS AND SHOES

effective competition in the industry includes attention to the type,

style and appearance of their product in a world increasingly
preoccupied with fashion.

185
 CHAPTER 7

THE ENGINEERING INDUSTRY

BYS. B. SAUL

I. THE INDUSTRY IN THE 1860s

BRITISH engineering in the 1860s was still dominated by those
sectors which had emerged from the industrial revolution earlier
in the century-textile machinery, railway rolling stock, steam
engines and boilers of all kinds, and the relevant, mostly heavy,
machine tools. During the third and fourth decades of the century
the industry had begun to develop away from the earlier pattern,
whereby all manner of metal jobbing was undertaken, into more
specialized organizations. Complete specialization was still rare,
but makers of locomotives, textile machinery and heavy machine
tools came closest to it, though there was little or no concentration
within a particular field of activity. A firm such as Platts of Oldham
made all kinds of machinery for the cotton trade-preparatory,
spinning, weaving and finishing. Machine tool makers worked
largely, though not entirely, to order and most of the largest
engineering establishments still made machine tools for their own
use and often for sale too. The older locomotive firms such as
Stephenson, Hawthorn and Sharp Stewart still did considerable
business in machine tools, steam engines for all uses, and civil
engineering, though newer firms such as Neilson and Dubs were
very much more specialized. Of course, the small general jobbing
shop was still to be found everywhere and some, such as Gilkes
Wilson of Middlesbrough, employing 1,000 men in 1863, were
among the major establishments of their time, though they were
not destined to survive long on the old pattern. Other engineering
firms outside the textile and locomotive engineering fields that
achieved a similar size, did so only by undertaking a considerable
range of activities, though they were in no sense jobbing engineers.
Greenwood & Batley of Leeds, Ruston & Proctor of Lincoln,
Ransomes of Ipswich, were cases in point.
Comparative figures of size for any one date are difficult to
obtain and we have to be content with a spread some years either
side of 1870. The largest firm was undoubtedly Platts of Oldham
186
 THE ENGINEERING INDUSTRY

with 7,000 men employed in two works in 1875. Other textile

machinery firms included Dobson & Barlow of Bolton, the oldest
founded in 1790, with around 2,000 employees, and Curtis of
Manchester with 1,000 in 1864 and 1,400 in 1875. The manufac-
turing and repair establishments of the railway companies were,
as a group, probably the most important of all-Swindon with
4,000 in 1875, Crewe 2,200 in 1859 and 6,000 in 1877, Doncaster
2,400 in 1863, Wolverton 2,000 in 1861 and in 1886, Cowlairs
1,300 in 1869, and several others for which detailed figures are not
available, though Derby with 4,300 in 1895 may well have been
of a size comparable with the others in 1870. The largest private
builders of locomotives, Neilson, Stephenson, Hawthorn and Sharp
Stewart, all employed well over 1,000 men, though only the first
concentrated solely on locomotives. 1 The Patent Shaft & Axle-
Tree Company of Wednesbury, making axles, wheels, rails, points,
employed possibly 3,000 in 1871; the largest rolling stock maker,
Metropolitan Carriage of Birmingham, in the region of 1,200. 2 At
Elswick, Armstrong employed 3,000 men in his gun and ammuni-
tion establishment in 1863 and another 800 in the general machinery
works. Whitworth at that time had scarcely begun to develop away
from his machine tool business, and employed only some 650 men.
There were, too, several large firms undertaking various forms of
structural engineering but usually operating over a wide range of
activity, sometimes with their own plant for casting and puddling,
and later for steel making. Perhaps the most famous was the Hawks
Crawshay works at Gateshead, founded in 1748 and the oldest
major engineering firm in existence in 1870. In 1863 they employed
1,500 men. 3
1 Details of these and other statistics of employment in this chapter are given
in my article in Economic History Review, April 1967, 'The Market and the
Development of the Mechanical Engineering Industries in Britain, 1860-1914',
pp. 111-30.
• F. W. Hackwood, Wednesbury Workshops, Wednesbury, 1889, p. 76.
3 British Association, The Industrial Resources of Tyne, Wear and Tees, New-

castle, 1863. See also Tyneside, Newcastle, 1889, p. 170. Hawks Crawshay went
out of business in 1889. A senior employee writing later commented: 'The cause
of the firm's misfortune was that it was engaged in too widely diversified branches
of manufacture, each of which had become the highly specialized manufacture
of more modem competing firms, the layout of whose works was co-ordinated
to secure minimum costs, whereas in the case of the old established Gateshead
firm, department had to be added to department as new branches of engineering
requirements arose, in conditions that made it impossible to secure economical
layout of plant.' This letter was kindly made available to me by the Gateshead
Borough Librarian.
187
 THE DEVELOPMENT OF BRITISH INDUSTRY

The two most renowned works of the age technically were those
of John Penn at Greenwich and of Maudslay Sons and Field in
Westminster Road, London. Both employed about 1,500 men and
concentrated on marine engines, being in the mid-1860s easily the
foremost in the world in that line, though they fulfilled special
orders for other types of machinery too. Penns was considered by
many the finest place in Britain to serve an apprenticeship in view
of the quality of workmanship achieved there. Their engines at the
1862 Exhibition were described as 'unsurpassable in delicate pro-
portions and refinement of workmanship': Maudslays were past
their peak and their engines were praised more cautiously as
possessing 'the utmost degree of solidity and security of workman-
ship and strength'.1
In the eastern counties there were a number of firms principally
concerned with agricultural machinery but making a wide range of
other products too. Ransomes, much the oldest and largest, began
as ploughmakers in Ipswich, moved into general engineering and
about 1830 began to concentrate on agricultural implements, lawn-
mowers and steam engines of various kinds. They also were involved
in railway work, manufacturing switches, crossings, chains and
ironwork for stations. In 1869 this side of the business was trans-
ferred to a separate company, Ransomes & Rapier. As early as
1843 the firm was employing 1,000 people. 2 Several others followed
similar lines-steam engines, threshers, rollers, boilers: Ruston &
Proctor and Clayton & Shuttleworth of Lincoln, Garrets of Leiston,
Marshalls of Gainsborough, Richard Hornsby of Grantham, all
employing 600-1,000 men in 1870, were the most important.
Locomotives, textile machinery, steam engines and boilers,
machine tools, dominated the machinery section of the 1862
Exhibition, but there was much more too. Several kinds of special-
ized machinery for food processing, paper making and so forth
were shown. The collection of woodworking tools indicated that
considerable progress had been made since the Americans had
shown their superiority at the 1851 Exhibition. This was largely
the work of Thomas Robinsons of Rochdale, who took first prize
in 1862 and repeated the success at the next four international
exhibitions. Employing 1,200 men in 1877, they claimed to be the
largest such firm in the world. 3
1 P. Barry, Dockyard Economy and Naval Power, London, 1863, pp. 261 ff.;

and D. K. Clark, The Exhibited Machinery of 1862, London, 1864, p. 356.

1 See generally Ransomes 'Royal' Records, 1789-1939, Ipswich, 1939.
1 D. W. Povey and H. Clayton, 'A History of T. Robinson & Son Ltd.', Roch-
dale Literary and Scientific Society, February 22, 1962, p. 7.
188
 THE ENGINEERING INDUSTRY

There was, too, a considerable collection of hydraulic machinery.

This sector had made great strides during the previous decade or
so. Early progress owed much to the work of Bramah and sub-
sequently of Murray and Nasmyth, the first uses being mainly
presses and jacks, but the real maturity of the industry derived
above all from the work of William Armstrong at Elswick. He took
over management of the works in 1847 and proceeded to develop
hydraulic machinery of every kind-cranes, lifts, capstans, bridges,
lock gates, pumps. An American visitor in 1867 noted the marked
superiority of British over American iron rolling mills because of
the use everywhere of hydraulic cranes to lift and carry the iron. 1
A centrifugal pump was exhibited in 1851 by James Stuart Gwynne,
and soon after, as a result largely of improvement in machining
techniques, it became possible to make them quite cheaply. 2
Hydraulic passenger lifts appeared at much the same time and
much publicity was given to the use of hydraulic jacks when such
machinery, made by Tangyes of Birmingham, was used to launch
the Great Eastern in 1858. In the decades before the advent of the
electric motor, the need to replace the work of men by power-
driven machines, often at places relatively remote from where it
was economic to generate power, led to ever greater use of hydrau-
lics. Water under pressure was delivered by steam-driven pumps
through pipe networks, each installation normally being served by
a self-contained system of pumps, accumulator and piping, though
in cities central stations were built and power was made available
literally 'on tap'. Shipbuilding above all was to benefit from the
arrival of the hydraulic riveter and later from other hydraulic
machines for punching, bending and shearing plates.
The full development of hydraulics-and the beginning of its
half-century eclipse after the arrival of electric power-was to come
after 1870. So too was the flowering in England of what was almost
the first consumer durable, the sewing machine, though one must
put in that category the mangles and domestic washing machines
also extensively shown in 1862.3 The manufacture of sewing
machines on any scale began in the United States between 1850
1 P. Temin, 'Labour Scarcity and the Problem of American Industrial Effici-
ency', Journal of Economic History, XXVI (1966), p. 291.
1 L. E. Harris, 'Some Factors in the Early Development of the Centrifugal
Pump', Newcomen Society Transactions, XXVIII (1951-53), p. 193. Bessemer too
exhibited a pump at the 1851 exhibition. Firms in the eastern counties, such as
Clayton & Shuttleworth and Ruston & Proctor, quickly took up their manu-
facture after mid century.
1 The history of the domestic wringer industry, which, for some reason not

189
 THE DEVELOPMENT OF BRITISH INDUSTRY

and 1852, but in this country it was slow to get under way. By the
end of the decade such machines as there were in Britain were
almost entirely for commercial use: British machines were said to
be twice the price of the American and too costly for ordinary
people. Difficulties over patents inhibited imports, though by the
middle of 1862 Singers were reported to have made 60,000 machines
altogether and sold 8,000 in Britain.1 However, in 1867 that com-
pany established a factory in Glasgow, first of all assembling
American-made parts, and three years later beginning manufacture
on their own account. By 1880, 5,000 sewing machines a week were
being made in what was by that time one of the best equipped
factories in the country. 2 Nor was this all: Bradbury's of Oldham,
the oldest European sewing machine makers, adopted similar
methods. Visitors to their works in 1875 commented 'the sewing
machines are made with the whole of the parts constructed upon
the interchangeable system, and exact duplicate work is ensured by
a number of special tools'. 3 It was developments of this kind which
forced companies manufacturing in a less advanced manner to
abandon the trade altogether-the transfer of the Coventry Sewing
Machine Company to become the first makers of cycles in Britain
is the most outstanding example.
Apart from the introduction of modem methods of rifle manu-
facture at the Government Enfield factory in the 1850s and the
reorganization and re-equipment of the private sector of the indus-
try shortly afterwards, the sewing machine industry brought about
the first striking reorientation of British engineering in the second
half of the nineteenth century. There were other lesser examples,
of course. One was to be found in Birmingham where the manu-
facture of wood screws was completely revolutionized by the firm
of Nettlefold & Chamberlain. Again the initial technological break-
through came in the United States as a result of the work of
Whipple and Sloan during the 1840s. The rights to Sloan's auto-
matic machinery were acquired by John Stuart Nettlefold in 1854
and ten years later his firm was responsible for almost three-
quarters of total British output. 4 Small but specialized machine
tool firms were emerging to introduce the machining techniques
entirely clear, was concentrated in Keighley, Yorkshire, is described in four
articles in Edgar Allen News, June, July, August, September, 1966.
1 See Mechanics Magazine, July 8, 1859, p. 22; June 24, 1859, p. 406, and
August 8, 1866, p. 77.
• Great Industries of Great Britain, c. 1880, Vol. 3, pp. 226 ff.
• Transactions of the Institution of Mechanical Engineers, 1875, p. 308.
'J. L. Garvin, Life of Joseph Chamberlain, London, 1932, I, pp. 51 and 171
190
 THE ENGINEERING INDUSTRY

developed on the other side of the Atlantic for these embryonic

mass production industries, though they received little support from
some of these pioneer firms who manufactured for themselves most
of the machine tools they required.
This, then, was the pattern of the engineering industry in 1870.
It has been argued that 'relative to the United States and Germany
we were on the technological decline very early'. One may even
date the event. 'It was somewhere between 1851 and 1867.'1 Such
a view is entirely mistaken however. Certainly the reports on the
international exhibitions of that period emphasized the develop-
ment of engineering in other countries, but, as the observers rightly
pointed out, this was only to be expected in view of the immaturity
of their industry in 1851. A virtual monopoly could not long
persist, especially when the advantages of industrialization were so
widely publicized. What is important to remember is that these
same observers were impressed by the alacrity with which firms of
the second rank in Britain sought to bring themselves up to the
levels of the leaders in the 1851 Exhibition. This was particularly
true of machine tools. Certainly there were areas where others
were beginning to lead the way, but this could in no sense be
described as a surprising or undesirable development. The more
foreign companies came to grapple with engineering problems, the
more they could be expected to establish technological advantages
in particular fields. The critical question is to ask in what sectors
Britain continued to lead the way and how ready was she to follow
up the innovations of others. This is the main issue facing us in
the rest of this chapter.

II. THE OLDER ENGINEERING TRADES

(a) Textile Machinery

So far as textile machinery was concerned there is no doubt that
Britain managed to maintain a remarkable technological and com-
mercial superiority right to 1914, and in that year it remained the
largest single branch of the engineering industry outside the opera-
tions of the railway workshops-see Table I.
Approximately 40,000 men were employed, fully three-quarters of
those by six large firms in Lancashire. Platts, employing 12,000
workers (including 1,000 in associated collieries) had an output
equal to that of the whole American textile machinery industry
1 Lord Snow, 'The Place of the Engineer in Society', Electronics and Power,

XII (1966), p. 153.

191
 THE DEVELOPMENT OF BRITISH INDUSTRY
TABLE I: Gross Output of Selected Branches of the Engineering Industry in
Britain, 1907
(£m.)
Textile Machinery 13·0
Railway Locomotives:
Private Builders 4·5
Railway Companies 7·9 12·4
Railway Carriages and Wagons:
Private Builders 8·2
Railway Companies 7·6 15-8
Steam Engines (excluding locomotives and agricultural
steam engines) 6·9
Cycles, Motor Cycles and Parts 5·6
Motor Vehicles and Parts 5·2
Boilers 4·1
Machine Tools 2·9
Agricultural Machinery 1-1
Agricultural Steam Engines 1·3 2·4
Internal Combustion Engines (except Motor Vehicles) 2·1
Hydraulic Machinery 1·3
Source: First Census of Production 1907.

together, embracing mules, ring frames, looms, carding engines

and many other ancillary machines. 1 Dobson & Barlow, with 4,000,
Asa Lees with 3,000, were other giants with a long history. Hether-
ingtons of Manchester, established in 1837, had long possessed a
monopoly of the Heilmann combing machine and were responsible
for the only major amalgamation in the industry when in 1892 they
bought out Curtis & Sons, makers of the finest self-acting mule
on the market. Hetheringtons also had a separate section of their
works devoted to machine tool making, and in 1895 their factories
employed 3,500 men altogether as well as 1,500 engaged on work
put-out. 2 To these were added several brilliant newcomers-above
all, Brooks & Doxey of Manchester and Howard & Bullough of
Accrington employing 4,000 and 6,000 men respectively. Both of
these firms made their reputations through the manufacture of ring
spindles. Though Lancashire spinners were relatively slow to adopt
1 The Platt family formed an important element in nineteenth-century engin-

eering through the firms Platt Brothers of Oldham, Mather & Platt of Man-
chester and Fielding & Platt of Gloucester. The founders of the first two firms
were second cousins to each other and to John Platt, father of the founder of the
third firm. Mather & Platt made textile machinery, pumps, fire-fighting apparatus
and later electrical equipment, being one of the largest firms in the city. Fielding
& Platt became primarily makers of hydraulic tools.
1 D. A. Farnie, The English Cotton Industry, 1850-1896, Manchester M.A.

thesis, 1953, p. 59, and Manchester Today, 1888, p. 145.

192
 THE ENGINEERING INDUSTRY

this new technique, this did not prevent the machinery makers from
exploiting the Rabbeth spindle when it appeared in the late 1870s.
Lancashire ring frames quickly came to dominate the world market
and were even sold in the United States where the invention origi-
nated. Platts followed the newcomers and by the early 1890s each
was producing about 500,000 ring spindles per annum, with
Tweedale & Smalley of Rochdale, founded only in 1892, moving
up to that level by the end of the century. With total ring spindlage
in England standing at 6½ million in 1907, it is obvious that a high
proportion of output went overseas.
This was the supreme triumph of the industry, though one
must never forget the constant and, indeed, far-reaching im-
provements made after 1870 to the mule and other forms of
cotton machinery. The large home market was an obvious advan-
tage though, as the development of ring spindles showed, not an
indispensable one. By 1907 about a half of total output was
exported and, after India, most trade was done in Europe. One
observer noted that even in the east of France in 1914, despite its
close connection with Alsace, four-fifths of the machinery was
English, and in Normandy and the north the proportion was
higher still.1 As late as the second half of the 1870s a quarter of
the textile machinery installed in American mills was British, and
a decade later American millowners were still showing a clear
preference for British products. 2 The tariff, the growing efficiency
of the American makers, plus their willingness to cater for special
needs of the customer so as to get orders for the new southern
mills-something the British makers with their economical stan-
dardized designs would not consider-gradually edged British firms
out of the market, though no American machinery was exported
prior to 1914.3 Howard & Bullough countered by setting up a
1 R. B. Forrester, The Cotton Industry in France, Manchester, 1921, pp. 31 and

123. In Germany, though local firms provided machinery for the finishing pro-
cesses and for special purposes such as stocking and glove making, in staple
machinery for cotton spinning and weaving British makers were almost un-
challenged. See R. M. R. Dehn, The German Cotton Industry, Manchester, 1913,
p. 35. Similar comments were made about the Swiss and Italian industries so far
as spinning machinery was concerned. See S. L. Besso, The Cotton Industry in
Switzerland, Vorarlberg and Italy, Manchester, 1910, pp. 16 and 142.
1 G. S. Gibb, The Saco-Lowell Shops, Cambridge, Mass., 1950, pp. 209 and
255.
• M. T. Copeland calculated that in 1912 the American textile machinery
industry enjoyed protection amounting to 45 per cent from the tariff and 25 per
cent from the extra cost of shipping machinery from Britain. The Cotton Manu-
facturing Industry of the United States, Harvard, 1912, p. 317.
G 193
 THE DEVELOPMENT OF BRITISH INDUSTRY

branch manufactory there in 1894 and, though a fifth of the size

of their main competitors, were highly successful on account of
their reputation, backing from home and ability to offer a full
range of cotton spinning mill equipment, something only one native
American firm offered. 1 Even so, there remained areas of British
pre-eminence. Platts held an almost complete monopoly of cotton
hard-waste machinery in the United States throughout the whole
period: three-quarters of the mules used were British though their
number was small: combing machines and revolving flat cards
were also heavily imported. 2
Worsted machinery makers were brilliantly successful, too. Firms
such as Prince Smith & Son and Hall & Stells did an enormous
business with the United States at the end of the nineteenth century
as the American wool textile industry grew under the impetus of
the McKinley and Dingley tariffs. Around the tum of the century
Lowells sought to take advantage of long delivery dates by copying
the Keighley machines and offering them to customers as copies,
but it proved a profitless enterprise. If the production methods of
some of the firms were crude-Hall & Stells used no blueprints
until 1910, for example-the 'superb work of English fitters' was
too serious an obstacle for American manufacturers, though it is
probably true to argue that the total American market for worsted
machinery was too small to offer American mass production inter-
changeable manufacturing techniques a real chance of success.
Whatever the reason, except for carding machines where the
American share was a half, in 1910 between 85 and 95 per cent of
worsted machines were of foreign origin-overwhelmingly British. 3
The industry's manufacturing techniques were not always very
advanced but apparently effective enough; selling was certainly
outstandingly good.' There were weak features, however. Observers
1 J. R. Navin, The Whitin Machine Works since 1831, Cambridge, Mass., 1950,
p. 245.
1 U.S. Bureau of Foreign and Domestic Commerce, The Cotton Spinning
Machinery Industry, Misc. Series No. 37, Washington, 1916, p. 79, and Navin,
op. cit., p. 245.
1 Gibb, op. cit., pp. 271 and 345, and A. H. Cole, The American Wool Manu-
facture, Harvard, 1926, ii, p. 82 n.
'See S. B. Saul, 'The Market and British Engineering', p. 127. The criticism
expressed there should be modified to refer particularly to the extensive use of
modem machinery in some sectors. A firm such as Brooks & Doxey certainly had
160 modem milling machines in use in the mid-1890s ranging from 2 cwts. to
10 tons (Transactions of the Manchester Association of Engineers, 1896, p. 146)
and an American machine tool expert declared himself amazed by the quality of
work in the Oldham machine shops at this time. American Machinist, July 14,
1898, p. 524.
194
 THE ENGINEERING INDUSTRY

of the cotton industries of Europe invariably pointed out that

Britain enjoyed nothing like the pre-eminence in weaving as in
spinning machines. 1 There were many specialist loom makers, small
in size, catering to district needs and making only the feeblest
attempts to standardize. Weaving in Lancashire was, of course,
generally on a much smaller scale than spinning. The failure to
adopt the Northrop loom may have owed much to the conservatism
and special needs of weaving firms, but it almost certainly owed
much, too, to the highly decentralized and specialized nature of the
loom-making industry. The British Northrop Loom Company was
established in 1904 largely on the basis of American capital, and
sold a standardized product from the first. 2 In 1914 they employed
about 350 workers. Woollen machinery manufacture was also
subject to considerable criticism for much the same reasons-a
lack of standardization.
Although there were these areas of weakness, the industry
remained highly competitive right to 1914. Exports of textile
machinery in 1913 were three times those of the nearest and only
serious competitor, Germany, and as Table IV shows (page 227)
were much the largest single area of export of engineering products.
This was achieved largely-though not entirely, as the experience
of the Keighley firms shows-by half-a-dozen or so very large
firms producing standardized products and marketing them with
great efficiency. The coming of the ring spindle was certainly a
blessing to the industry, for it provided a means of entry for new
firms which were able to grow in a remarkably short space of time,
largely on the basis of this product, to rival the older makers in
size and, perhaps, to surpass them in entrepreneurial vigour.

(b) Railway Locomotives and Rolling Stock

The locomotive industry was considerably more complicated on
account of its unusual structure. There were, in fact, two industries,
the railway workshops and the private locomotive builders. The
railway companies inevitably required extensive establishments for
the repair and maintenance of their engines, carriages and wagons,
and this was always their prime function. But unlike those in
almost every other country, the companies in Britain also manu-
factured engines for their own use. At first, as elsewhere, they
1Forrester, op. cit., p. 34, and Besso, op. cit., pp. 34 and 160.
1Of the initial capital of £150,000, two-thirds was taken by the American
makers as payment for the rights and a further £25,000 was also in American
hands. Farnie, op. cit., p. 37.
195
 THE DEVELOPMENT OF BRITISH INDUSTRY

bought from private firms, but the inability of these firms to satisfy
all demands as to quality and quantity, and the existence of repair
shops, encouraged the companies to build for themselves. The
North British Railway turned out its first locomotive at Cowlairs
in 1844, the South Western at Vauxhall possibly even earlier. 1
Crewe followed in 1845, Swindon in 1846. By 1914 there were at
least fifteen company works building new locomotives. Already by
1870, as we have seen, several were among the largest engineering
works of the time. In 1914 Swindon, with 14,000 employees, was
certainly the largest single engineering establishment in Britain,
and five others employed between 7,000 and 4,000 men. 2 Produc-
tion of carriages and wagons was just as important as locomotives,
and at Wolverton the L. & N.W. Railway owned the largest works
in the country devoted solely to carriage building-employing
4,500 men in 1906. Such works became virtually practical univer-
sities of mechanical engineering and many who later achieved fame
served their apprenticeships in them. Some were outstandingly fine
-Horwich under Aspinall, Gateshead under Worsdell, Doncaster
under Stirling, all in the late 1880s and the 1890s. But such was the
prestige of the chief engineer that they could equally be cut off
from outside influences and develop highly conservative traditions
-Derby under Matthew Kirtley and Crewe under F. W. Webb.
The relative size of the private and company sectors is shown in
Table I. In 1876 the private builders obtained an injunction con-
fining the company workshops to production for their own use,
but the loss of such a large part of the home market was a serious
handicap. Engineers all over the country tried their hand at loco-
motive building, but from an early date the advantages of large-
scale production became apparent and a few larger firms came to
dominate the home and especially foreign trade even in the 1830s.3
Stephensons, employing 600 men in 1832, was the largest: the
Vulcan Foundry, Hawthorn, and Sharp Roberts were other early
exporters. 4 During the 1850s several of the more important makers
1 C.H. Ellis, The North British Railway, London, 1955, p. 54, and The South
Western Railway, London, 1956, p. 33.
2 Crewe Stratford Derby, Doncaster, Horwich.
3 One authority lists over 170 builders of locomotives in Britain. See The Loco-

motive, April 14 and May 14, 1927.

'J. G. H. Warren, A Century of Locomotive Building, Robert Stephenson &
Co., 1823-1923, Newcastle, 1923, p. 81. Of the 120 locomotives exported to the
USA between 1828 and 1841, fifty-four were supplied by Stephenson. See 0. E.
Fisher, 'The Early Engines that came to America', Railway Locomotive and His-
torical Society Bulletin, XX (1929), pp. 37-43. Of 143 engines exported from
196
 THE ENGINEERING INDUSTRY

either went out of business or dropped locomotive-making-W.

Fairbairn, Jones & Potts, E. B. Wilson, Rothwell, Hick Hargreaves,
Longridge-leaving a relatively small number of private builders.
By 1870 there were some nine or ten important builders of large
locomotives and a similar number for smaller engines. Manchester,
Leeds and the North East remained important centres of produc-
tion, but the really significant changes came in Glasgow. Neilson
& Company had been building railway and industrial locomotives
sporadically since 1838 when in the late 1850s they suddenly
blossomed forth on the basis of home (mainly Scottish) and exten-
sive overseas orders. Walter Neilson was widely travelled and had
a great respect for American railway practice. In 1861 he moved
the works to a site half a mile from the railway workshops at St
Rollox and a quarter of a mile from those at Cowlairs. Three years
later the manager of the new works, Henry Dubs, left to set up his
own locomotive works south of the Clyde. In 1886 Neilson quar-
relled with the replacement manager, now partner, James Reid,
and set up his own Clyde Locomotive Works just across the line.
The enterprise failed for want of orders and was only rescued by
the fortunate coincidence that Sharp Stewart were looking for new
premises on the expiry of their lease in Manchester. 1 Three of the
four largest makers in Britain were now concentrated in Glasgow
-the fourth was Beyer Peacock of Manchester-and in 1903 they
amalgamated to form the North British Company. In this way
they paralleled the formation of the American Locomotive Com-
pany, a combination of nine works none of which was any larger
than Neilson or Dubs. 2 Though the total resources of the American
organization were greater, they were too dispersed geographically
to achieve the degree of rationalization possible between three works
in one city. What could not be matched was the capacity of the
Baldwin Locomotive Works, able to turn out 900 locomotives a year
in the 1890s and 2,700 by 1907.3 Borsig of Berlin, too, having stuck
at an annual output of around 100 engines for most of the second
half of the nineteenth century, trebled and quadrupled this after
Britain to Prussia in 1854, sixty were made by Stephenson and sixty-one by
Sharp Stewart. P. Benaerts, Borsig et /es Debuts de la Fabrication des Loco-
motives en Allemagne, Paris, 1933, p. 57. Of the first 150 engines made by Sharp
Stewart, sixty-nine were exported.
1 See generally J. Thomas, Springburn Story, Dawlish, 1964.
• In 1900 Neilson was making about 200 and Dubs about 150 locomotives a
year: the North British combine between 1904 and 1913 averaged 450.
• History of the Baldwin Locomotive Works, 1831-1907, Philadelphia, 1907,
p. 104.
197
 CHART I
Sa !es of Locomotives
by Nine Major British Private·constructors
Sales
1860 - 1913
1100
-TOTAL
1000 ---- OVERSEAS
•••••••• HOME
900

800

-
1 ,0
00
700

600
• ,,
500 /
"
I I
I
I I
I I
A

/ I I
/ I I
I
400 ,...1
I
:1 \. I
./\
I .... I
: ' '-' A :"• I ' I
:·.f \ /1 \ f '\ :
I
300
~
I

/, A! ,,.,~.. ,,-,,_,,-:,.,....•-,L:, 'I I

1
/

200
,,,~
1/·'
7
..... .... :
... •··./ ..;,:" :
-
"_:I,' "' \ Ii •
., \_/ ,J \ ......//\ ...·••·· i ·: ·•.
100 ·····. .............,/··...•.. ,/\..
1860 1865 1870 1875 IB80 1885 1890 1895 1900 1905 1910
 THE ENGINEERING INDUSTRY

1900. 1 This growth in capacity presented a threat to export pros-

pects which deserves closer analysis.
Chart I indicates the growing dependence of the largest
private makers on overseas orders. 2 Until the late 1870s the home
and export trades were roughly similar in magnitude, but there-
after, except for a boom around 1900 which was accompanied by
some imports of locomotives, home demand was a serious de-
pressant. As exports became more dominant, so the cyclical pattern
became more pronounced and the overall rate of growth slackened.
The first major expansion of exports from 1875 to 1885 was based
largely on Indian orders; the second to 1908 derived from South
American and South African demand as well as Indian.
Table II analyses the individual demand pattern of these same
companies. For an old established concern such as the Vulcan
Foundry, the switch between home and export orders over the
two periods was most marked; for a latecomer such as Nasmyth
Wilson home orders were largely unobtainable. Stephensons were
heavily committed at home and in Europe as might be expected,
and as this trade faded, the company went through a particularly
lean period for two decades after the mid-1880s. Hawthorns were
left even more high and dry by the loss of home orders. Both of
these firms suffered from cramped and difficult sites, poor places to
build the very powerful engines often required for export, and
though Hawthorn built for some years at a branch works in Leith,
they came more and more to concentrate on industrial locomotives. 3
In general, the huge orders from India dominated the industry.
From 1884 to 1888 Neilsons alone sent 662 engines there; sub-
sequently some of the largest orders went to the Vulcan Foundry
which became precariously dependent on this one market for two-
thirds of its business. On the other hand, a big firm such as Beyer
Peacock sold very few engines in India and concentrated on South
1 JOO Jahre Borsig Lokomotiven, 1837-1937, Berlin, 1937, pp. 100-2.
2 These figures show only numbers of engines supplied to public railways and
excludes all industrial locomotives. The power of the engines naturally increased
markedly: as a rough guide the tractive effort of the average types of engine built
approximately trebled between 1860 and the end of the century. (Calculations
by Wray Vamplew, assistant lecturer in economic history, Edinburgh.) The Avon-
side Company of Bristol was also an important exporter until it was taken into
new ownership in 1878 and concentrated on industrial locomotives. Between
1860 and 1881 it made 255 for home railways and 584 for overseas markets,
especially India and New Zealand.
• Journal of the Stephenson Locomotive Society, 1960, pp. 32-5. In twelve of
the years between 1886 and 1902 Stephensons made less than ten engines per
annum.
199
 TABLE II: Sales of Locomotive Engines
1860-89
Rest of Central
Home Overseas India Europe British and South Other Total
Railways Railways Empire America
1,291 239 55
Neilson 1,800 1,227 170 109 3,091
=
>-l
Dubs 866 1,553 817 159 343 156 78 2,419 m
Sharp Stewart 865 1,430 380 732 31 164 123 2,295 t:1
Beyer Peacock 918 1,708 60 870 451 250 78 2,627 m
Kitson 608 928 439 158 150 136 46 1,536 <
m
R. Stephenson 595 744 103 200 210 100 131 1,339 I:"'
Vulcan Foundry 419 404 285 33 44 14 28 823 0
"d
Hawthorn 302 175 53 35 19 65 3 477 s::
Nasmyth Wilson 27 235 54 54 45 43 39 252 m
Total 5,891 8,979 3,418 2,480 1,463 1,037 581 14,870 z
>-l
Iv
0
8 1890-1913 "lj
Rest of Central t=
Home Overseas India Europe British and South Other Total :,:,
....
Railways Railways Empire America ....r,:,>-l
Neilson 814 1,678 775 52 676 44 131 2,492 (1890-1903)
Dubs
Sharp Stewart
461
621
1,469
846
393
369
80
183
556
87
135
152
305
55
1,930 ( ,,
1,467 ( ,,
" ) =
....
" ) z
North British 342 4,028 1,655 84 645 1,213 431 4,370 (1904-13) t:1
Beyer Peacock 476 2,001 98 314 493 816 280 2,477 C:
r,:,
Kitson 439 1,186 567 11 252 330 26 1,625 >-l
:,:,
R. Stephenson 174 446 216 - 55 139 36 620 ><
Vulcan Foundry 331 1,380 1,179 - 70 115 16 1,711
Hawthorn 7 275 34 4 103 113 21 282
Nasmyth Wilson 46 580 256 42 79 33 170 626
Total 3,711 13,899 5,542 770 3,016 3,090 1,471 17,600
Source: Calculated from lists supplied by the Stephenson Locomotive Society.
 THE ENGINEERING INDUSTRY

America and Australia. The South African market was dominated

by the North British group and huge orders were obtained there
after 1900. Other Empire markets were not so encouraging, how-
ever. There was severe competition from local builders in Canada,
where American competition was strong too. Even so, some 200
engines were sold by British makers there over the period, and
from the mid-1880s to 1900 Dubs made locomotives from a works
they owned in Kingston. 1 More disappointing was the experience
in New Zealand where British makers sold few engines after the
mid-1880s, and the market was taken over by Baldwins and by
local private and company builders. 2
Beyer Peacock and Sharp Stewart retained the biggest stake in
Europe, though very few engines were sold there after 1900 except
in Holland where the former remained almost the only suppliers
right to 1914. There were very large exports to Russia during the
decade after 1865 (465 engines) in which Kitsons, Dubs and Neil-
sons played a large part, and also some surprising sales to France
(157 engines) around 1880. Competition in Europe came from local
and from German builders. The scare over American competition
in Europe around the turn of the century, 'the American invasion',
was entirely artificial. A peculiar combination of circumstances-a
dearth of home orders in the United States and booming order
books for British makers-saw British railways buying American
engines for the first and only time since the 1830s.3 Some sales
were made at this time on the Continent too, but normally very
few American locomotives were exported to Europe. This is
not to deny that American competition elsewhere was important
and serious. The American locomotives generally were cheaper in
first cost but marginally more expensive to run, easier to service
but unlikely to last as long. The American locomotive also employed
lighter and cheaper materials-iron instead of brass tubes, steel
instead of copper fire boxes, and thinner boiler shells-but with no
1 0. S. A. Lavallee and R. R. Brown, 'Locomotives of the C.P.R. Company',
Locomotive and Historical Society, LXXXIII (1951), p. 9, and R. R. Brown,
'British and Foreign Locomotives in Canada and Newfoundland', Locomotive
and Historical Society, XLIII (1937), pp. 6-23.
1 T. A. McGavin, 'Steam Locomotives of N.Z. Government Railways', Loco-
motive and Historical Society, LXXXI (1950).
• The Midland Railway which bought forty American engines had ordered
170 in Britain, the first to be delivered in July 1898, and a year later not one had
been received. So great was the demand that engines coming in for repair were
being returned to service unpainted. Commercial Relations of the US, 1899,
Vol. II, pp. 833-4.
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 THE DEVELOPMENT OF BRITISH INDUSTRY

permanent loss in performance or reliability. Where a track was

roughly laid the looser articulation of American engines was a
clear advantage. It was less a question of which was the better
engine: each was built for specific requirements. 1 The British were
unable to mass produce stock patterns in the American manner
because their bulk orders at home and overseas came from lines
with superintending engineers who designed precisely what they
wanted. Each order was different: the locomotive builders were
contractors more than they were designers. Attempts were made
to achieve some standardization of orders from Indian railways
after 1900, for example, but essentially the position was not
changed. At this kind of job for which the highest quality of work-
manship was insisted upon the British were unsurpassed. 2 Unfor-
tunately for them, more and more countries began to wonder if
this was the kind of engine that suited them best. This was so in
New Zealand, and Table III shows the development of competition
in another important market.

TABLE 111: Country of Origin of Locomotives on Japanese National

Railways
Great Britain United States Germany Japan
1887 95 2
1892 240 26 28
1897 484 282 55 11
1907 966 908 160 95
1912 983 995 226 162
Source: H. Rosovsky, Capital Formation in Japan, New York, 1961, p. 94.

Similarly in certain parts of South America Britain was losing

ground, though in Argentina, where British firms maintained con-
trol of the lines and British engineers bought in the traditional way,
her position remained strong. German competition was particu-
larly serious in this area. Their engines were highly praised techno-
logically and the producing firms had the advantage of large home
orders. The twenty-one German makers were grouped in a cartel
1 Railroad Gazette, September 1901, p. 623; The Engineer, January 1890, p. 34;
The Times, June 10, 1903, p. 13.
• European makers, too, were constrained by specifications which called for
the highest engineering standards in design and finish. As an American report
put it, 'the requirements in Europe and the United States are not the same'.
us Bureau of Manufacturers, The Machine Tool Trade in Austria, Denmark,
Russia and the Netherlands, Special Agents Series 34, p. 38.
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 THE ENGINEERING INDUSTRY

and the State Railways made a practice of dividing orders for

locomotives (about 1,300 per annum) among them in proportion
to the export trade done by each in the previous year. 1 In 1913
German exports were by value only slightly less than the British.
British exports enjoyed booming conditions just prior to the First
World War and from 1909 to 1913 averaged £2¼ million per annum.
All the same, the sales were becoming more and more narrowly
based geographically, and the institutional structure at home and
overseas certainly put the industry at a disadvantage in an increas-
ingly competitive environment.
The manufacture of railway carriages and wagons was even more
important than that of locomotives-see Table I-and was divided
in a similar way between private and company builders. Many
small men, often coach builders, began constructing rolling stock
for the first railways in the 1830s; subsequently the railways began
building for themselves. A feature of the two decades after 1845,
however, was the emergence of a number of large specialist private
builders. The industry was centred upon Birmingham and the sur-
rounding district. 2 Although no locomotive building went on in
that area apart from the Great Western shops in Wolverhampton,
the existing coach building and metal industries provided a firm
basis for a carriage and wagon trade, supplemented by railway
equipment firms such as the Patent Shaft and Axle-Tree in Wednes-
bury. Of the firms surviving into the twentieth century, Brown
Marshalls was the oldest; they began as coachbuilders in 1842 and
specialized in work of a particularly luxurious character. By 1884
they were employing 1,200 workpeople. 3 The largest firm was that
founded by Joseph Wright in 1845, later becoming the Metro-
politan Railway Carriage & Wagon Company. Construction was
carried out on a large scale by these very specialist firms from the
first. By the late 1860s five firms in the Birmingham area were
employing 3,000 men and their output totalled over £1 million, of
1 Committee on Industry and Trade, Survey of Industries, Vol. IV, p. 177.
1 One of the earliest carriage and wagon makers in Birmingham was Thomas
Worsdell in whose works both Richard Tangye, founder of the works of that
name, and the proprietor's nephew, Thomas W. Worsdell, later locomotive
superintendent of the Great Eastern Railway, served apprenticeships in the
1850s. The firm ceased building rolling stock on change of ownership in 1869.
C.H. Ellis, Twenty Locomotive Men, London, 1955, p. 140; R. Tangye, One and
All, London, 1899, p. 52, and P. Payne, Rubber and Railways, Liverpool, 1961,
p. 56.
1 Much of the detailed information in this section has been obtained from the
companies concerned.
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 THE DEVELOPMENT OF BRITISH INDUSTRY

which a third was exported. 1 Wright alone employed 800 men as

early as 1853 and 1,200 at the end of the next decade.
Other wagon and carriage companies worthy of mention were
the Midland, founded in Birmingham in 1853, moving to Shrews-
bury in 1864 and back to Birmingham in 1912; the Oldbury Works
opened in 1854; the Ashbury of Manchester also dating from the
1850s; the Gloucester (1860); the Lancaster (1863); the Bristol
(1866); Cravens of Sheffield (1867), and the Leeds Forge Company
which was founded in 1873 to make steel and fourteen years later
pioneered the manufacture in Britain of rolling stock of pressed
steel construction. Most of these firms began making wagons for
private owners and only later moved to building coaches for home
railways and above all for export. Their capital needs were high,
partly because as one of the first, if not the very first, true assembly
industries, the advantages of scale were considerable. They also all
adopted the practice of both selling the wagons through a system
of deferred payments spreading over several years and hiring them
out. Bradshaw annually listed throughout this period some nalf
dozen or so finance companies simply engaged in this activity. The
Gloucester Company did it in the United States as an adjunct to
its main business; at home its annual report for 1889, for example,
showed a stock of wagons consisting of 5,458 let on simple hire
and 3,148 being sold on deferred purchase. Generally the manu-
facturers agreed to maintain the wagons for a fixed annual sum
and organized large numbers of repair depots at home and abroad.
It was, therefore, business on a very considerable scale. The Metro-
politan works in 1910 alone employed 3,000 men and none of the
others mentioned fell significantly below 1,000. The railway com-
pany carriage and wagon departments were of equally large pro-
portions-5,000 employees at Swindon, 4,500 at Wolverton, for
example. As for capital, all were public companies and it is signi-
ficant that the Gloucester company, for example, found it necessary
to raise as much as £500,000 in the first five years of its existence
in the 1860s. 2 The Midland Company in 1913 had a similar level
of subscribed capital, whilst the Metropolitan group, mentioned
below, was capitalized at £2 million.
In 1902 the industry became the subject of one of the largest
amalgamations of the time. The Metropolitan Amalgamated Rail-
way Carriage & Wagon Company was formed, based on the largest
1 The Engineer, May 1869, p. 351.
,. History of the Gloucester Railway Carriage & Wagon Company, London,
1960, p. 7.

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 THE ENGINEERING INDUSTRY

works, those of the Metropolitan company at Saltley, Birmingham

and incorporating Brown Marshalls, the Oldbury, Lancaster and
Ashbury companies. Nor was it simply a defensive move typical of
so many of the amalgamations of that period. By 1908 the second
Birmingham and the Lancaster works were closed to concentrate
production, and backward integration was achieved by purchasing
the Patent Shaft and Axle-Tree company, thus providing a source
of plates, switches and crossings, wheels, axles, and so forth. 1
Though this trade was less spectacular and is less well documented
than that in locomotives, its organization was similar. It was cer-
tainly less at the mercy of the whims of its customers, and it is
worth noting that in 1913 exports of railway carriages and wagons
were considerably in excess of those of locomotives.
(c) Steam Engines and Turbines
If Britain had a high reputation for building locomotives, its
steam engines were much less highly regarded. Peter Temin has
recently pointed out that the concentration in Britain on low-
pressure engines for the first four decades of the nineteenth century
was not necessarily mistaken, though the invention of the Corliss
valve in the 1840s subsequently gave a great advantage to the
American industry with its emphasis on high-pressure work. 2 Even
so, reports of the international exhibitions of the 1860s and 1870s
were full of complaints of shoddy workmanship, poor design and,
above all, deplorable fuel economy. 3 On the other hand, British
boiler makers were outstanding and firms such as Adamsons, and
Galloways of Manchester and Babcock & Wilcox of Glasgow
dominated world trade right to 1914. It is significant, too, that a
firm such as Greens of Wakefield, manufacturing an economizer
to save heat in boilers, did a very large export trade especially to
mills in Eastern Europe. In 1913, employing 1,000 people, they
were unusually large for so highly specialized a business, owning
also branch factories in the United States and Germany. 4 There
1 Further amalgamations took place after the First World War leaving Cravens
and the Gloucester Company as the only significant independents.
• P. Temin, 'Steam and Waterpower in the Early Nineteenth Century', Journal
of Economic History, XXVI (1966), p. 196.
• D. K. Clark, op. cit., p. 297; Reports on the Vienna Universal Exhibition, 1873,
Part II, Parliamentary Papers, 1875, LXXIII, p. 27; Engineering (August 9, 1878,
p. 115) commented: 'Our steam engine practice is not uniform and in the most
important type of all, common stationary engines for driving mills and factories,
not till the last five years have we compared well with American practice. . . .
We lack boldness and rapid adaptation.'
'Waste Not, E. Green & Son, Wakefield, 1956, pp. 92 and 113.
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 THE DEVELOPMENT OF BRITISH INDUSTRY

were exceptions among the steam engine makers. Hundreds of

engines were supplied to Lancashire by the Bolton firm, Hick
Hargreaves, who took up manufacture of the Corliss engine in
1867. Nevertheless, those same observers who reported so enthusi-
astically on the use of English textile machinery in Europe were
quick to point out that English engines were less favourably
regarded. 1 But it was during this period, when Lord Snow purports
to see so clearly the beginnings of British decline, that marked
advances were made. British marine engineers in the north con-
solidated the reputation established by Penns and Maudslays, especi-
ally with the development of the triple expansion engine in the
1870s. At about the same time very striking progress was made in
the manufacture of high-speed engines. Brotherhoods of Chippen-
ham first exhibited such an engine in 1873, and in the next twenty
years some 7,500 were sold for powering hydraulic capstans, force
pumps, blowing engines, air compressors and so forth. 2 The coming
of electricity posed the technical problem that the optimum speed
of the dynamo was much above that of any reciprocating engine,
and Brotherhood, Willans, Bellis and others successfully produced
high-speed engines for direct drive. Not only that, but they manu-
factured them in quantity with a degree of standardization and
interchangeability which was superior to anything known in the
United States. Almost all of these pioneers were first generation
firms, creating for British steam engineering an entirely new com-
petitive advantage during this period-it is not without significance
that Willans's ideas were turned down by John Penn. The most
remarkable advance of all also came from a new source and in
response to the same technological problem. Charles Parsons,
working for Clarke Chapman, ships' and dock machinery makers
of Gateshead, developed a practical steam turbine for driving a
dynamo directly, and at the same time produced an almost equally
revolutionary generator to match the high speed of the turbine. Sub-
sequently Parsons developed the turbine for much larger generating
purposes and finally for ship propulsion.
The Parsons patents lasted until 1903 and subsequently Parsons-
type turbines were made by several firms including Willans &
Robinson, who licensed their own engine to Allis Chalmers of
Milwaukee. Overseas the two major licensees were Westinghouse
in the United States and Brown Boveri of Switzerland, and Parsons
did far more business in this way than through direct overseas
1 For example, M. T. Copeland, op. cit., p. 315.
2 S. A. Leleux, Brotherhoods Engineers, Dawlish, 1965, p. 51.
206
 THE ENGINEERING INDUSTRY

exports. The comprehensive nature of the Parsons patents forced

others to look in other directions, and his monopoly was broken
by the development of the impulse turbine. (The Parsons reaction
type used the pressure of the steam as it expanded in passing
through the blades, whereas the impulse type used the velocity of
steam escaping from a nozzle.) By 1914 most of the turbines made
in Britain were of the latter kind. British Thomson Houston con-
centrated on the Curtis engine, first produced by their parent com-
pany, the American General Electric Company. The Metropolitan
Vickers Electrical Company switched from the Parsons to the
Rateau type in 1909. Similarly, James Howden of Glasgow first
took a Parsons licence and then turned to the Zoelly turbine
developed by Escher Wyss of Zurich, as also did Mather & Platt.
The Brush company of Loughborough also moved away from
Parsons to what in the end proved expensive experiments with the
Swedish Ljundstrom turbine. Even so, Parsons had led the way to
the culminating triumph of the steam age, and the eagerness with
which other firms in Britain took up other types of turbine or
modified the Parsons type is perhaps the finest indication of all of
his contribution to the country's engineering progress, drawing
steam engineering finally out of a fifty-year stagnation.
There was, however, one other area of steam pre-eminence
during these years, the production of portable steam engines largely
for agricultural use. By 1894 it was estimated that some 5,000 were
being produced annually in Britain for sale at home and abroad. 1
This trade, which was largely carried out by the engineering firms
of the Eastern Counties, went along with the production of agri-
cultural machinery-threshers above all-but also of steam tractors,
steam excavators, pumps, boilers. Some-Marshalls, Clayton &
Shuttleworth, Rustons-were new firms created about the middle
of the century: others, such as Hornsby and Ransomes, were con-
siderably older, but between them they dominated world trade in
their particular types of agricultural machinery right to 1914. The
size of firm was high-the average employment of twenty-nine
companies engaged in agricultural implement making in 1914
was 950-and Marshalls with 5,000 at that time were one of the
giants of British engineering. Rustons at Lincoln employed a
similar number spread over three works, and Hornsby slightly
fewer, though these last two firms covered a considerably wider
range of activities, as we shall see later. A high proportion of their
1 D. Pidgeon, 'The Evolution of Agricultural Implements', Journal of the
Royal Agricultural Society of England, 1892, p. 252.
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 THE DEVELOPMENT OF BRITISH INDUSTRY

output went overseas: of 100 threshing sets produced weekly in

1913 only two on average were sold at home, and approximately
70 per cent of all output was exported. 1 Well over a half of all
exports went to Europe and approximately one-third to Russia
alone. Clayton & Shuttleworth and one or two other firms by
1900 were also operating successfully from branch plants in Vienna
and Pesth. Success may be attributed to a combination of well
equipped works, vigorous selling methods with direct representa-
tion in the major centres, extensive agencies elsewhere, sophis-
ticated credit arrangements and willingness to adapt machinery to
local conditions. 2

(d) Machine Tools

Finally, these industries, mostly engaged in relatively heavy engi-
neering, were supported by a machine tool industry of the highest
calibre. Some of the classical toolmaking firms of the industrial
revolution period, such as those of Murray and of Fox, had dis-
appeared by 1870, and others-Maudslay, Sharp Roberts, Nasmyth
-were showing more interest in other developments. Whitworth,
tom between his growing interest in armaments and his egotistical
conservatism, did little to further the industry in the second half
of the century. Nevertheless, new firms arose to maintain the estab-
lished superiority-Hulse and Muir in Manchester both founded
by senior men in the Whitworth works; Langs of Johnstone, the
first in Britain to specialize in one branch of machine tool making;
Cravens of Manchester, perhaps the most renowned of them all,
and several others. New techniques such as milling, though origi-
nating elsewhere, were most effectively developed in Britain insofar
as heavy work was involved. In forging, a firm such as B. & S.
Massey, also of Manchester, took over from Nasmyth pre-eminence
in the making of steam hammers. Their exhibit at the Philadelphia
Exhibition of 1876 was described by the New York Times as 'not
only of a very high character but far more extensive than anything
1 Survey of Industries, IV, p. 160.
'Ibid., p. 162; 'Reports on the Agricultural Features of the Vienna Exhibition
1873', Journal of Agricultural Society, 1874, pp. 64-5. Note the comments of the
President of the Institution of Mechanical Engineers on an agricultural machi-
nery works: 'We noted the extended use of stamping machinery, hydraulic
flanging and riveting, of multiple punching and drilling, of milling tools and of
manifold woodworking machinery, sawing, planing, shaping and holing the
various pieces of wood so as to require hardly anything but putting together.'
Mechanical Engineers Transactions, August 1886, p. 278. See also my article in
Economic History Review, 1967, mentioned above.
208
 THE ENGINEERING INDUSTRY

of the kind exhibited even by the machine tool makers of the us'.
Twenty years later the second generation Massey in a remarkably
perspicacious report on a visit to thirty-three of the major engineer-
ing works in the United States, noted: 'Our own firm is in an
exceptionally good position as nobody in our line is specially
vigorous over there. . . . In steam hammers we may learn a thing
or two but we are still on top.' 1 An American observer in 1911
confirmed the continued strength of British industry in these direc-
tions, indicating incidentally the progress in hydraulics mentioned
earlier; 'in power and hydraulic presses, welding and brazing
equipment, cranes, power plant machinery, pressure pumps, and
nearly everything for the foundry Europe leads'. 2 It is an important
feature of the situation: the emphasis given by most writers to
differences in machine shop work should not be allowed to distract
attention from other aspects of engineering work where American
practice was less advanced.
It has been necessary to study these older branches of engineering
at some length in order to establish their relative importance in
British engineering and their continuing vitality. Certainly not all
sectors were equally successful: it would be strange if they were,
but in the development of ring spinning machinery, steam engines
and heavy machine tools, there is evidence of a readiness to accept
change and innovation which is most impressive. It is true that
some of these sectors were to lose their importance during the
inter-war period, but it is an improper use of hindsight to criticize
for this reason sectors which made a major contribution to the
economy both as regards their productive efficiency and export
capacity right to 1914. All the same, it is obviously equally impor-
tant to study the emergence of new sectors of engineering, and this
we do in the section which follows.

III. THE NEW INDUSTRIES

In general terms the most important new developments in engineer-

ing to emerge in the second half of the nineteenth century were,
first of all, those connected with the internal combustion engine,
and secondly the use of new types of machine tools for the mass
production by interchangeable techniques of articles such as guns,
watches, sewing machines, light agricultural machines, office machi-
nery, cycles and motor cars. These two trends were interlinked, as
1 H. Janes, Sons of the Forge, London, 1961, pp. 41 and 66.
2 American Machinist, August 10, 1911, p. 257.
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 THE DEVELOPMENT OF BRITISH INDUSTRY

the engines themselves came to be made by interchangeable methods

and the demands of the new industries-especially the motor car-
called for ever greater sophistication of machine tool techniques.
They were, too, inextricably linked with the growth of the electrical
engineering industry which itself made great calls on machining
techniques. Few of these new ideas originated in Britain, but this
is not a matter of great concern. After all, the United States made
almost no contribution to the early development of the internal
combustion engine or of the motor car itself. The question is to see
how willingly these ideas were exploited in Britain once they became
known.

(a) Grain Milling and Harvesting Machinery

There were, of course, other significant developments not fitting
into this pattern. Considerable strides were made in various branches
of food processing, especially refrigeration, but most spectacular
was the revolution in flour milling. Experiments in the use of metal
rollers in place of stones dated back to at least 1820, but the system
was perfected in the huge Pesth mills where, in 1867, 210 pairs of
rollers were in use. Mills were equipped with rollers in Liverpool
in 1868, but the real change came after the display of modem
milling shown at the Vienna Exhibition in 1877. It was a difficult
time for millers in Britain owing to the growing imports of flour,
but even so, in twelve months 350 mills were equipped, and though
from 1879 to 1887 the total number of flour mills fell from 10,450
to 8,814, 460 new roller mills were erected during that period.1 At
first most of the machinery came from Hungary; in 1885 the Presi-
dent of the Institution of Mechanical Engineers commented on the
large quantity of Hungarian milling machinery seen at Grimsby
en route for our mills. 2 But gradually manufacture developed here.
Some of the imported machinery, made largely of wood at that
time, was sent to Robinsons of Rochdale for repair, and they
turned to manufacture on a large scale for both home and overseas
markets, setting up a special office at Odessa to meet the demand.
E. R. & F. Turner of Ipswich, who made drilled iron rolls for a
variety of industries-rubber, soap, paper, chocolate-found the
demand so great that in 1908 they concentrated solely on flour
mill equipment. It was not a major industrial revolution but the
1 History of Thomas Robinson & Son Ltd., p. 7; R. G. Burnett, Through the
Mill, London, 1945, p. 52; R. Bennett and J. Elton, History of Corn Milling,
Liverpool, 1900, III, Appendix B.
2 Mechanical Engineers, 1886, p. 278.

210
 THE ENGINEERING INDUSTRY

response to the new opportunities was impressive both from users

and makers.
When it comes to machinery for harvesting the grain, the picture
is less flattering. In 1900 the total British output of harvesting
machinery was not a tenth of that of McCormick alone in America.
So poor was the situation that at the Maidstone Agricultural
Exhibition of 1899 an observer commented that the number of
American machines on show 'gave the impression that some of
our leading firms were becoming implement agents rather than
implement makers'. 1 It was not always like this. At the Paris
Exhibition of 1855, for example, though the McCormick reaper
was given the Grand Medal of Honour, reapers from five British
makers were given Medals of Honour. So skilled were British firms
in the use of iron and, later, steel that American makers preferred
to have their reapers made here and draw a royalty. Indeed, in the
use of reapers made largely of metal Britain led the us by some
twenty years. By 1860 Hussey had three or four factories in Britain
making his machine and McCormick was employing a firm of
engineers in Essex. 2 At the Royal Agricultural Show at Manchester
in 1869 it was a Hornsby reaper that won the major prizes. It was
during the next decade, however, that improved American models
made at home and shipped over the Atlantic began to drive out
the British product in Europe and made huge inroads in markets
further afield. British makers unwisely assumed that the American
machines were too light for European conditions, whereas in fact
they were quickly and intelligently adapted to local requirements.
Nevertheless, market conditions greatly favoured the Americans,
and French and German makers were little more successful in
meeting the challenge. In Britain the lower labour costs, the mixed
pattern of farming, the drastic fall in grain prices and in the arable
acreage all made the home market particularly weak. There was little
opportunity of following the Americans into mass production methods
which were in themselves a reflection of favourable home market
conditions. British firms were content with small jobbing orders,
and by their very nature these made it impossible for the firms
supplying castings to use up-to-date moulding machinery on the
American pattern. As in so many areas of mass production, an
advantage, once created, became cumulative. It was unfortunately
not the only weakness in the agricultural machinery sector, for an
1 The Times, June 7, 1900. Journal of the Agricultural Society, 1899, p. 522.
1 Reports on the Paris Exhibition, Parliamentary Papers, XXXVI, Part 1, 1856,
p. 201. W. T. Hutchinson, Cyrus Hall McCormick, II, New York, 1935, p. 410.
211
 THE DEVELOPMENT OF BRITISH INDUSTRY

almost unbelievable lack of standardization on the part of British

makers lost to German, American and Canadian firms most of the
world's trade in ploughs.

(b) Sewing Machines and Bicycles

The use of interchangeable manufacturing techniques by both
Swiss and American makers almost destroyed the British watch
trade, centred on Coventry and Prescott in Lancashire. Office
machinery made in the United States by the same methods domi-
nated the market until branch plants were opened here around
1900. Sewing machines were, as we have seen already, a remarkable
exception to this gloomy picture. In the mid-1880s the huge Singer
factory in Glasgow was turning out more machines than the parent
factory in New York, and by the end of the century output had
jumped by another 50 per cent. Nevertheless, though the plant was
marvellously well equipped, it was very much self-contained, making
most of its own machine tools, for example, and had relatively
little impact on engineering methods in Britain generally. Other
firms such as Bradbury of Oldham and Jones of Guide Bridge used
similar methods of production but on a very much smaller scale. 1
In the United States the joint manufacture of sewing machines and
machine tools was also followed but in a far more effective form:
Wilcox and Gibbs sewing machines were made under licence by
Brown & Sharpe, who were also one of the most renowned manu-
facturers of machine tools for the market in the United States. 2
The breakthrough of American interchangeable mass production
methods came with the maturity of the cycle industry in Britain,
though the better works were employing them some time before
this-most of all the leading makers of small and high speed steam
engines such as Tangye and Winans. Much was accomplished in
spreading knowledge both of the new techniques and of the work-
shop practice going with them by agents of American machine tool
firms such as Charles ChurchiII and Buck & Hickman and by the
most advanced machine tool makers such as Smith & Coventry of
Manchester. Nevertheless, both a wider understanding of the new
1 Bradbury's output of 500 a week in the early 1890s was less than 5 per cent
of that of Singer. Jones, now (1967) the only surviving English makers, founded
in 1859, produced only two million machines in a hundred years. In 1900 alone
Singers made approximately 650,000.
1 See D. M. McDougall, 'Machine Tool Output, 1861-1910', in Output Em-

ployment and Productivity in the United States after 1800, National Bureau of
Economic Research, Studies in Income and Wealth, Vol. 30, New York, 1966,
p. 497.
212
 THE ENGINEERING INDUSTRY

methods and the ability to produce the machine tools in quantity

in Britain had to wait upon demand from a sizeable sector of the
engineering industry.
Though the first bicycles in Britain were made in Birmingham
and Wolverhampton, as an industry it can be said to have begun
with the formation of the Coventry Machinists Company in 1869
to fulfil an order for 400 cycles for sale in France. The venture
succeeded. By 1879 there were some sixty firms making cycles. The
most important of them were in Coventry, several established by
former employees of the Coventry Machinists, and in Birmingham,
but there were also notable concerns elsewhere such as Humber in
Nottingham and Rudge in Wolverhampton. Nevertheless, it was
still a minor industry turning out small numbers of machines: in
1881 only 700 persons altogether were engaged in it in Birmingham
and Coventry. 1 The change came as a result of a number of factors:
design was largely stabilized with the introduction of the 'safety'
model with wheels of equal size and the diamond frame in 1885:
three years later came the pneumatic tyre. At the same time the
availability of cheap steel made possible the machining and stamp-
ing of small standardized parts. The new frame required a greater
length of tubing of the lightest possible weight. A specialized indus-
try grew up producing weldless tubes from high quality Swedish
charcoal steel, the billet being pierced when hot and the short thick
tube so produced passed through a series of grooved rolls: the tube
was then drawn down to size when cold. 2 Demand increased rapidly
and makers of both cycles and components felt justified in installing
initially expensive mass production machinery. Imports of American
machine tools bounded upwards: machine tool makers in England
switched their efforts to meet the demand from cycle makers. New
firms such as Alfred Herberts and H. W. Ward were established:
Herberts employed twelve men in 1887, 500 a decade later. 3 Firms
engaged in other forms of standardized manufacture now moved
into the cycle trade. Bradburys, sewing machine makers of Oldham,
were one: the Birmingham Small Arms Company, which had trifled
with cycle manufacture some years before another, now turning to
the manufacture of components on a large scale and selling 2,000
sets a week by 1896. George Accles, manufacturer of Gatling guns
1 G. C. Allen, Industrial Development of Birmingham and the Black Country,
London, 1966, p. 294.
2 Birmingham Post, May 7, 1896.

a S. B. Saul, 'The American Impact upon British Industry', Business History,

III (1960), p. 25.
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 THE DEVELOPMENT OF BRITISH INDUSTRY

in Birmingham, switched entirely to bicycles seeking to produce

everything himself, even erecting his own steel tube mill-a curious
aberration for one brought up in the more specialized American
tradition. His firm went into liquidation in 1899. 1
By 1891, 8,300 men were employed directly on bicycle making.
The industry had already experienced its first major amalgamation
when Dan Rudge of Wolverhampton joined with a Coventry firm
in 1880. Fourteen years later Rudge was taken over by the newly-
formed and highly successful Whitworth concern, concentrating
staff and assembly at the Birmingham works and component manu-
facture in Coventry. Several firms were employing in the region of
1,000 men by the mid-1890s. The New Premier Company of
Coventry claimed an output of 40,000 cycles in 1897, the Coventry
Machinists (now the Swift Cycle Company) 700 a week in 1896,
Humber 1,000 a week and 1,300 men employed in 1898; Raleigh
employed a similar number in that year. 2 William Bown, a pioneer
of ball-bearing production and now making complete cycles too,
was also employing about 1,000 men in 1894. The New Premier
Company had factories near Nuremburg and in Bohemia, and the
Austrian Small Arms Factory manufactured cycles under licence
from the Coventry Machinists. Many firms had exporting depots
overseas. 3
The boom attracted the interest of financiers. The Raleigh Com-
pany, a small workshop employing fifteen men, was given a large
injection of capital in 1889 from a retired businessman who had
taken up cycling for health reasons. More spectacular was the work
of Ernest T. Hooley and Harry J. Lawson, who took advantage of
the climate of optimism by buying up companies and reselling them
to the public at a considerable profit to themselves. In three years
they promoted twenty-six companies with a nominal capital of
£18·6 million, giving a gross profit of approximately £5 million.
Dunlop was acquired for £75,000 and resold to the public for
£3 million, for example. Rudge Whitworth, Rover, Swift, Humber
all suffered from these manipulations. In 1897 there came the in-
evitable slump and most of these boom companies required financial
reconstruction. Raleigh, having built a new factory costing £80,000
1 Warley News, July 1, 1965, p. 6. The tube mill was taken over by a new firm
Accles & Pollock, and continued to supply the cycle trade. George Accles no
longer had any connection with the firm, however.
• I am indebted to Mrs Barbara Smith and Mr W. B. Stephens for several of
the statistics of employment and production in the cycle industry.
• A Descriptive Account of Birmingham, W. T. Pike & Co., 1894; Mechanical
Engineers, 1891, p. 427.
214
 THE ENGINEERING INDUSTRY

in 1896, were as badly hit as any. Several sought to diversify into

motor cycle and motor car production: many went out of business
altogether. The boom had not been entirely speculative, however.
Much greater capacity was now available and so were the rows of
the most up-to-date machinery which had been installed. The press-
ing need was to get costs down, to use this machinery to the full,
to standardize design and to extend the market. Raleigh, Humber
and, above all, Rudge Whitworth led the way. Rudge cut the price
of their basic model from £24 to £13 to meet American competition:
in 1900 Raleigh marketed a good strong machine selling for £10
and at last the cycle was coming in reach of the working classes.
Rudge Whitworth increased output from 9,000 in 1895 to 75,000
in 1906 when they were employing 2,700 workpeople. 1 The total
output of the industry in 1907 was 628,300 cycles. Exports rose
from £660,000 in 1899 to over £2 million in 1911: in 1913 Britain
exported 150,000 cycles, Germany 89,000 and the rest of the world
hardly any at all.
An industry which had suffered the indignities of the 'invasion'
of clumsy American bicycles dominated world markets a decade
later. The British income pattern and geographic environment
obviously helped. From an engineering point of view too, though
new machinery was eagerly accepted in an area free from the tradi-
tions of the older engineering centres, bicycle production was simple
enough not to require a drastic rethinking of the whole industrial
process. As G. C. Allen has pointed out, the small metal trades of
the district and the tube manufacture, which had long been carried
out in the area, provided the ideal background for cycle making.
That the industry contained many shrewd entrepreneurs cannot be
doubted from the enthusiasm with which it marketed its product
through exhibitions, trials, cycling journals and the creation of easy
payment systems. The response to the challenge of financial collapse
in 1897 is noteworthy too. Apart from the industry's own success,
the wider implications for British engineering must not be forgotten.
Its role in popularizing new techniques of milling and grinding and
the production of weldless tubing has already been mentioned. To
some the greatest single contribution in technology the industry
made was the development of machinery for manufacturing ball
bearings which previously had been forged or moulded like bullets
and then ground into shape. 2 Finally it proved a jumping off ground
1 American Machinist, December 7, 1899, p. 1164. Birmingham Gazette and
Express, April 23, 1907.
1 A. Herbert, The Development of Machinery in Coventry, Coventry, 1930, p.
17; F. H. Colvin, Sixty Years with Men and Machines, New York, 1947, p. 88.
215
 THE DEVELOPMENT OF BRITISH INDUSTRY

for some of the most important motor car manufacturers-Swift,

Singer, Riley, Rover, Humber, Star, Sunbeam-many making motor
cycles too.

(c) Gas and Oil Engines

However, before discussing the evolution of the motor car it is
necessary to look to the emergence of new types of power units
generally, and to follow through their development in Britain. By
1870 the steam engine was supreme in the provision of power to
industry, but already there was a clear need for an engine more
suited to supplying small and intermittent power. The first tentative
approach to this problem came with the gas engine, the subject of
many experiments during the nineteenth century, but none of them
of any real commercial importance until the Otto 'Silent Engine'
appeared in 1876. Although almost all the original work was carried
out on the Continent, British firms were particularly active in
following up those developments. Even the inefficient Lenoir engine
of 1860 was made in some numbers by the Reading Iron Works, 1
but the vital link was that created between the Manchester firm of
Crossley Brothers and the German inventors of the Otto engine.
Chance played its part here, for one of the Crossley brothers was
on his honeymoon when he met Dr Otto in Cologne and acquired
the world patents for the Otto-Langen engine of 1866. A surprisingly
large number-1,400-of these noisy and unreliable engines was
sold; the importance of the firm at that time may be realized from
the fact that only 5,000 of these engines were made altogether,
2,650 of those by Deutz of Cologne, the company created by Otto
and Langen. In the summer of 1876 Francis Crossley, on a visit to
Deutz, saw a prototype of the famous four-cycle Otto engine and
immediately telegraphed Manchester to stop all work on the old
engine and concentrate on the new. 2 Crossley's research department
succeeded in matching the efforts of continental firms, and greatly
improved the engine over the next few years. Their productive
efficiency was high too; in 1891, for example, 220 workers at Man-
chester turned out 559 engines compared with the 423 made by
Deutz with 256 men. 3 The result was that the engine came into
wide use, especially by small industrial establishments in the main
1 'Gas Engine'. Encyclopaedia Britannica, XI Edition.
1 G. Goldbeck, Kraft fur die Welt, Dusseldorf, 1964, p. 220; E. Diesel et al.,
From Engines to Autos, Chicago, 1960, pp. 61-2, and information from Crossley
Brothers Ltd.
• Goldbeck, op. cit., p. 75.
216
 THE ENGINEERING INDUSTRY

urban centres. Several firms developed gas engines along other

lines, but when the Otto patents ran out, almost all turned to the
Otto principle and by the mid-1890s at least twenty-five firms were
engaged in their manufacture in Britain.
By 1913 Crossley and the National Gas Engine Company at
Ashton-under-Lyne were turning out 100 engines a week.1 Never-
theless, fuel supply imposed severe limitations on the gas engine,
and from an early date experiments were made with various forms
of lamp oil engine. The first to have any commercial impact was
produced by Priestmans of Hull, who initially worked to foreign
patents with no success and then developed their own type. How-
ever, it ran into technical difficulties and was quickly replaced by
the Ackroyd Stuart engine which was in some ways a truer proto-
type of the modern oil engine than that designed by Diesel himself. 2
From the early 1890s, it was marketed by the agricultural machinery
makers, Richard Hornsby of Lincoln. It is an interesting point that
Ackroyd Stuart and Diesel after him turned their engines over to
experienced firms to make a success of them, whereas Priestman
tried to do everything himself and was beaten by the inadequacy
of his resources. The Hornsby engine was simple to construct and
very reliable, but it could not run for long periods under no load
nor stand for long not working. It was ideal, therefore, when run
for a long period with a steady load. The engine was used for
innumerable purposes, providing electric power in country houses
and churches, for Marconi's first transmission across the Atlantic,
for blowing organs, in lighthouses, for pumping in mines, to actuate
bridges and canal locks, for refrigeration and for many agricultural
uses. By the time the basic patents expired in 1904 Hornsby had
sold over 10,000 engines, including a large number abroad. The
American rights were sold to the De La Vergne Company in 1893,
and the engines found their major use in the United States for oil
pumping, though in 1898 one was installed in the Statue of Liberty
for lighting. 3 Other firms made oil engines, of course. At the Cam-
bridge Agricultural Show in 1894, for example, Fielding & Platt,
Crossley, Clarke Chapman and several other firms had engines on
trial. Eventually, the Hornsby engine was superseded by the semi-
1 D. Clerk and G. A. Burls, The Gas, Petrol and Oil Engine, 1913, II, p. 1.
• G. K. King, 'How the Oil Engine Became Efficient', Chartered Mechanical
Engineer, January 1962, p. 15.
a G. Lieckfeld, Oil Motors, London, 1908, p. 34; T. Hornbuckle and A. K.
Bruce, 'Ackroyd Stuart and the Development of the Heavy Oil Engine', Diesel
Engine Users' Association, Publication No. 157 (1940); Electrical Magazine, IV
(1904), p. 18.
217
 THE DEVELOPMENT OF BRITISH INDUSTRY

diesel which was a combination of the Ackroyd and Diesel prin-

ciples. The manufacture of land semi-diesels was more advanced in
Britain than anywhere else since in Scandinavia, the other major
centre of semi-diesel production, the demand was for marine use.
They were ideally suited to standardized interchangeable manu-
facture as the number of parts was not large. Most firms built for
stock though the demand was such that few ever went there.
In both of these cases, therefore, the performance of British
industry was strikingly good both as regards development and
production. In contrast, the heavy oil engine made progress very
slowly indeed, for reasons which are not altogether obvious. Cer-
tainly there was no question of a late start. The representatives of
the Glasgow firm, Mirrlees, Watson & Yaryan, makers of sugar
machinery, were in touch with Diesel at Augsburg as early as 1894,
before the engine had been fully developed. Diesel later visited
Scotland, sought the advice of Lord Kelvin and signed a licensing
contract for only 20,000 marks annually, Mirrlees agreeing to build
a pilot model within three months. 1 Unfortunately, Mirrlees pos-
sessed neither the resources nor the technical ability to improve
and exploit the engine at that stage. It could be argued that it was
unfortunate a small firm got control of something that was too
sophisticated for them-a similar mis-sale by Diesel occurred in the
United States, where the rights went to Adolph Busch, a Milwaukee
beer magnate-but it is significant that when a new company, the
Diesel Engine Company, succeeded to the British rights, they found
that major firms such as Vickers, Armstrong Whitworth, Crossley
and others expressed a complete lack of interest. 2 The company,
therefore, bought diesels from M.A.N. in Germany, Sulzer in
Switzerland, Carel in Belgium and sold them all over the Empire.
Indeed, both Sulzer and Carel started diesel work on the basis of
orders from the Diesel Engine Company and to 1913 Sulzer cal-
culated that nearly 20 per cent of their diesel output went to
Britain. 3 Meantime, besides M.A.N. and Krupp who had the main
German rights, many continental firms had obtained a watching
brief to build under royalty if they so wished-Borsig, Deutz and
1 W. R. Nitske and C. M. Wilson, Rudolf Diesel, University of Oklahoma
Press, 1965, p. 120. The American rights were sold two years later for one million
marks.
2 lnternal Combustion Engineering, October 15, 1913. Mirrlees reorganized

their management in 1900 and supplied engines to the Admiralty for pinnaces
in 1906, this being the first non-land use of diesels in Britain. Gas and Oil Power,
October 1937, p. 253.
a Engineering, April 1912, p. 573.

218
 THE ENGINEERING INDUSTRY

Gorlitzer in Germany, Ganz in Hungary, Burmeister and Wain in

Denmark. The Stockholm Enskilda Bank purchased the Swedish
rights and also subscribed with Nobel for the Russian rights.1
To be sure, there was a great deal of antagonism towards the
diesel among engineers if not among users in general. 'From its
first introduction here it met with a hostility so deeply rooted that
a decade failed to establish it in the favour of our engineers. ' 2 This
was true, above all, over the use of diesels in marine engineering.
It was in some ways unfortunate that the diesel appeared just as
the Parsons steam turbine began to be used for marine propulsion
and the position was worsened by Parsons's own selfish efforts to
decry the diesel on every possible occasion. The diesel was not
without its teething troubles and British shipowners, with their
narrow time horizon, were apparently more concerned with the
initial high cost than with the longer-run economies in operation
and space. British owners were, as they said, proud 'to continue
that conservative policy which has served them so well in the
past'. 3
But conservatism lay not only with the shipowners; Motor Boat
commented in 1912, 'when in the spring of this year there came
what . . . we may call a boom in diesel engines, inquiries were
launched forth from all quarters, and the ship-owning community
was surprised to find such difficulty in getting firms to undertake
the construction of marine diesel engines on reasonable terms and
with any degree of guarantee' :1 Few shipbuilders had taken any
deep interest in diesel power. For what orders they had received
they were content to build to foreign design or to buy foreign
engines. Consequently they had little direct experience with the
engine, and were unable to supply anything out of the ordinary.
As one writer put it, 'If British firms had been more prominent in
the improvement of the diesel engine, it would undoubtedly have
gone further ahead because of the extra fame that would have
accrued as a result.' 5 For a time in Britain there was a vicious
circle, therefore. With a boom in shipbuilding to 1913, such diesel
men as existed were full of orders-for 5,000- to 10,000-ton vessels
the delivery date was twelve-fourteen months compared with half
1 0. Gasslander, History of Stockholm's Enskilda Bank to 1914, Stockholm,

1962, p. 221.
1 Internal Combustion Engineering, November 27, 1912.
• Transactions of the North East Coast Institution of Engineers and Shipbuilders,
XXX (1913-14), p. 131.
'Motor Boat, August 15, 1912, p. 121.
6 Internal Combustion Engineering, May 14, 1913.

219
 THE DEVELOPMENT OF BRITISH INDUSTRY

that for steam-and owners, even if interested in diesels, settled for

steam. 1 The diesel needed the resources of a large organization as
well as very high technical skill to see it through its initial difficul-
ties, and neither was forthcoming in Britain. This is in striking
comparison with the industry in Sweden, where the Stockholm
Enskilda Bank was not only willing to provide financial support,
but also actively created a market through its other industrial
interests in Scandinavia and also through subcontracts from the
Russian Diesel Motor Company in which it also held shares.
By 1914 three major shipbuilding firms, Harland and Wolff, John
Brown and Cammell Laird were still completely ignoring diesels,
and only Doxford were developing a marine diesel to their own
design. Experimental work began in 1910 and a new type of engine
was successfully demonstrated late in 1914, though not produced
commercially until after the war. This unhappy cumulative condi-
tion of backwardness and inaction spread across into the stationary
diesel sector, though there demand, as opposed to production, was
quite active. Because for them it was only a half-hearted sideline,
even where they turned to diesels many makers consequently failed
to appreciate the needs of the new engine. They thought diesels
could be manufactured in an odd corner of shops intended properly
for the construction of steam engines and by men accustomed to
the relatively low degree of accuracy steam machinery required.
Many hoped for quick profits, and on realizing the complex nature
of the problems involved in diesel production, they switched back
hastily to steam engines. The drive, therefore, came more often
than not from unexpected quarters such as Hick Hargreaves of
Bolton, builders of the Corliss engine, from the brilliant high speed
steam engine and new steam turbine makers, Willans and Robinson
of Rugby. The latter began in 1906 supplying diesels through the
Diesel Engine Company under that company's licence but found
themselves limited by the few orders given, and in 1910 placed
their own line of engines on the market and pushed them vigor-
ously. 2 Mirrlees also set up a plant at Stockport-Mirrlees Bickerton
& Day-simply for the building of land diesels. In 1912 a new com-
pany, the Consolidated Diesel Engine Manufacturers Ltd, was
formed to take over the shares of the Diesel Engine Company, and
also 50 per cent of the shares of Carels of Ghent. Rudolf Diesel
himself was on his way to visit the new works being erected at
Ipswich when he was lost overboard on the night Harwich ferry.
1 Motor Boat, April 24, 1913, p. 352.
1 Electrical Review, October 1910, p. 63.
220
 THE ENGINEERING INDUSTRY

The enterprise was wound up in November 1914, however. For

marine work Barclay Curle took the initiative in creating, in asso-
ciation with other firms, the North British Diesel Engine Works on
the Clyde in 1913. Rothschilds and Calouste Gulbenkian provided
a considerable proportion of the £500,000 initial capital.
One may well ask why Britain took up some types of engine,
becoming a power in world trade in them and at the same time
neglected another. One point is that the diesel clashed directly with
the steam tradition, intensified so recently by the turbine, whereas
the gas and Ackroyd engines created entirely new possibilities. It
clashed not only in usage, but also as regards techniques of manu-
facture. Where the gas engine did this, it failed to attract wide sup-
port too. Large gas engines of 1,500 h.p. and more were developed
from the mid-1890s onwards, but all the pace was made by con-
tinental firms. Most of those built in Britain were under foreign
licence, and even so, the total output did not compare with that
overseas. One reason was the unwillingness of British steel firms to
take up the possibility of using blast furnace gases to drive an
engine, though the idea was first launched in Britain. In 1910,
23 per cent of blast furnace and coke oven gas was utilized in
Germany compared with only 1½per cent here. British gas engine
makers were consequently forced to mill driving as an outlet for
their products, a field considered by German engineers to be the last
they would look to for this kind of power unit. 1 The low first cost
of small gas and Ackroyd engines appealed to British businessm1>.n,
but above all they could be produced by relatively small firms in a
way that the diesel obviously could not, and improvements could
be made successfully with relatively modest research establishments.
The diesel required very substantial investment and a determination
not to be deterred by the inevitable early setbacks. The high first
cost did not endear it to British shipowners: fuel cost was important
too. The thermal efficiency of the diesel was not so great an advan-
tage where the alternative fuel was cheap. It should be remembered
1 The first engine to be worked by blast furnace gas was built in Glasgow for
the Glasgow Iron and Steel Works at Wishaw in 1895. One explanation sug-
gested for this slow development of large gas engines was that Crossleys had a
virtual monopoly of gas engine development until 1890 as the Otto patents were
upheld in Britain. Elsewhere they were not and gas engine construction and
development got a wider base at an earlier date. Liverpool Engineering Society,
XXX (1908--09), p. 302; Manchester Association of Engineers, 1896, p. 210, and
1910--11, pp. 370--1. The Brunner Mond Company was much to the fore at an
early stage in pushing the use of their 'Mond' gas for working large gas engine&.
J.M. Cohen, Life of Ludwig Mond, London, 1956, pp. 176--7.
221
 THE DEVELOPMENT OF BRITISH INDUSTRY

that a firm such as Hick Hargreaves built diesels not for sale in
Lancashire, but for export to textile makers located away from coal
supplies and eagerly taking up this alternative source of power. It
is worth noting, however, that two of the traditional bastions of
conservatism helped break down the prejudice against diesels. First
the Navy, through its demand for engines offering higher speeds
and for lighter diesels to drive generators in ships, and later for
submarine purposes; second Lloyds, where the chief engineer sur-
veyor did much to publicize their advantages in ships and to
facilitate their acceptance by the Registrar.

(d) Motor Cars

The petrol engine was almost entirely pioneered on the Continent
of Europe. Professor Habakkuk has attributed this to a lack of
initiative on the part of British firms, but the explanation seems too
simple. 1 The petrol engine was the child of individual inventors,
not of firms as such. British inventors showed considerable interest
in gas and oil engines as we have seen, but for some reason the
petrol engine did not attract them. It may possibly be that the
quality of internal transport was such in Britain as to deter them
from taking any great interest in that particular problem. This
apparent lack of facility with petrol engines spread over to the
aircraft industry which at the outbreak of war possessed a dozen
airframe makers but only one heavy and unsuitable engine. A
French aero engine had a big lead in a market which was as yet
too small to encourage new entry. However that may be, when one
turns from invention to innovation the French lead arose in the
first place from purely private links between Daimler and the
French firm Panhard & Levassor and in turn from their selection
of Peugeot as carriage builders. 2 Certainly these two firms seized
the opportunity that the Daimler engine offered with great vitality
and by the end of the century the French motor industry was well
launched. In 1899 Panhard & Levassor sold 450 cars, Peugeot 300
and Rochet-Schneider, only one year old, sold 120. Only Daimler
in Britain could in any way match these levels with 150 cars pro-
duced in 1900. The largest output at that time-572 in 1899-was
that of Benz, the other great individual pioneer.3 The French indus-
1 H. J. Habakkuk, British and American Technology in the 19th Century, Cam-
bridge, 1962, p. 203.
1 For the detailed story see R. Sedillot, Peugeot, Paris, 1960, p. 77.
a J. M. Laux, 'Rochet Schneider and the French Motor Industry to 1914',
Business History, VIII (1966), p. 79; S. B. Saul, 'The Motor Industry in Britain
to 1914', Business History, V (1962), p. 24; F. Diesel, op. cit., p. 165.
222
 THE ENGINEERING INDUSTRY

try certainly capitalized on its somewhat fortuitous early start most

effectively, gaining an excellent export market. In 1904 half the
industry's output of 12,000 cars was exported, a third of total
output going to Britain.1 French engines and parts-De Dion &
Aster in particular-were heavily exported to this country, and the
French influence on design was of major importance in the early
years of the British industry. Even in 1913 Britain still imported
1,351 complete vehicles and 5,601 chassis from France. Darracq,
building some twelve to fourteen cars a day in the parent factory
at Suresnes in 1914, was also sending chassis to his factory at
Fulham where all the bodywork was carried out and fifty finished
vehicles produced each week. The firm was British owned, how-
ever, for there was considerable British investment in the French
industry. 2
Nevertheless, after 1900 the British industry began to make good
its late start and by 1913 its total output of 34,000 vehicles was
approximately three-quarters of that of the French makers. The
first British motor company was launched in 1896 by the same
group of financiers who had speculated with the cycle industry,
and to the end of the century little progress was made, as com-
panies such as Daimler and Humber struggled to overcome the
burden of over-capitalization. Even so, by 1900 there were fifty-
three concerns making cars-two-fifths of which were to survive
right to 1914: they included important firms of the future such as·
Belsize, Riley, Star, Sunbeam, Swift, Singer and Albion. The indus-
try expanded most quickly over the next five years, which saw the
emergence of Rolls Royce, Rover, Vauxhall, Standard and Talbot.
By 1907 total output was 11,700 cars and chassis, and possibly five
firms were producing more than 500 cars a year-Humber and
Argyll nearer 1,000. The depression beginning late in that year kept
output stagnant during 1908 and 1909, but then it moved up
quickly and in 1913 alone achieved an increase of almost 50 per
cent. By then eight firms were producing between 1,000 and 2,000
cars per annum, Humber 2,500, though most of them consisted of
the small Humberette, and Wolseley 3,000. Daimler with 5,000
workers and Wolseley with 4,000 were already among the really
large engineering works in the country. 3 The Dunlop tyre works
also employed 4,000 men. These figures are important, for there is
a tendency to underrate the importance of the industry. Table I
1 Laux, toe. cit.
• Motor, March 24, 1914, p. 319, and Saul, 'Motor Industry', pp. 31-2.
a See generally Saul, 'Motor Industry'.

223
 THE DEVELOPMENT OF BRITISH INDUSTRY

shows that already by 1907 its output had become a significant part
of all engineering output, and in the next six years production
clearly grew faster than that of engineering as a whole. Its wider
impact in continuing the development of the machine tool industry
already set under way by the cycle trade was possibly even more
important.
Firms with many different kinds of engineering experience tried
their hand at motor cars as so many had done with locomotives
seventy years before-gas and oil engine makers, marine engineers,
electrical engineers, armament makers. Not surprisingly, a con-
siderable number moved to motor car manufacture from bicycles
-sometimes turning to motor cycles too on the way. The motor
cycle industry really began with the Singer model and the Starley
Show of 1899, though the main boom in output came from 1908
onwards. Value of output (including tricars) rose from £139,000 in
1907 to £1,631,000 in 1912 and exports from 880 to 16,850 motor
cycles between 1907 and 1913. 1 Some left cycle manufacture to
escape from the difficulties brought about by the crash of 1897 and
the fierce competition offered by the reorganized makers such as
Rudge Whitworth and Raleigh. Individuals such as Lawson and
Harvey du Cros invested heavily in both industries. Finally there
was a very large number of firms with no pre-motor car history at
all-Albion, Austin, Argyll, Daimler, Hillman, Lanchester, Morris,
Standard, and it is among these that one finds many that were to
be most successful in the long run. The location of the industry
inevitably in part reflected that of the cycle industry, a tendency
which was reinforced by the fact that two of the most successful
makers settled in the Midlands purely by accident. Other important
companies operated successfully in other areas, however, and it
seems unlikely that there were any serious economic advantages in
manufacturing in Birmingham and Coventry, especially at a time
when some of the major firms were making relatively little use of
bought-out components.
Yet, although the industry came near to matching the French
achievements, both were completely overshadowed by the American
industry with its output of 485,000 cars in 1914. The basic problem
was the inability of the British industry-and indeed of the French
for that matter-to free itself from the older traditions of engineer-
ing. Some cycle makers made really imaginative progress to be sure,
though the industry had to wait until after the First World War
1 E. W. Walford, Early Days in the British Motor Cycle Industry, Coventry,

1931, p. 85, and Survey of Industries, IV, pp. 225 and 230.
224
 THE ENGINEERING INDUSTRY

for Edmund Crane of the Hercules company to produce the truly

cheap but reliable mass produced cycle. In any case, though the
machine tools used were similar and assembly techniques funda-
mentally the same, the car with its engine, chassis, body, wheels
and many other special components besides, was an infinitely more
complex engineering product than the cycle. The tooling costs and
the much higher unit cost of the vehicle made mass production an
entirely different order of risk. The continued technical advances in
the motor car contrasted sharply with the stagnation in fundamental
design of the cycle. The economic and engineering challenges were
infinitely greater and to 1914 proved to be too great for those in
the industry. Of course, the market situation was less favourable
than in the United States, but the point can be exaggerated since
the British industry clearly did not seize what market opportunities
there were. Arguments have been made about class hostility to the
motor car in Britain before 1914, but these are clearly belied by
the success of the Ford Model T assembled from American-made
parts in Manchester-over 6,000 of them in 1913.
There are in any industrial context potent factors inhibiting the
adoption of new manufacturing techniques. In this instance the
most crucial weakness was the inability to realize that the new
engineering industries called for a complete change from the old
ways of mechanical engineering so as to make full use of the new
techniques of production engineering. The unwillingness to rethink
the whole of the production process was well nigh fatal. It is easy
to pick out the absurd in the industry. There was the Argyll com-
pany that spent a huge sum lavishly equipping a vast works, talked
endlessly of producing in mass and yet in practice subjected their
cars to endless testing, built engines by hand, gave the bodywork
thirty to thirty-five coats of paint and varnish and generally manu-
factured in a completely bespoke manner. 1 There was the Star
company of Wolverhampton that survived somehow amidst a jungle
of back street slum workshops. But more significant were those
firms controlled by men of great ability, their shops packed with
rows of the latest machine tools but still used without comprehen-
sion of what modern engineering implied. Numerous models were
made and changed frequently. The large firms made almost every-
thing themselves in the old tradition, and only the small assembled.
Sunbeam alone by 1914 had started to move the chassis during the
assembly process and developed the idea of one man, one job.
Parts were still fitted in the old way with liberal use of the file and
1 Veteran Car Club Gazette, Autumn 1955, pp. 221-5.

H 225
 THE DEVELOPMENT OF BRITISH INDUSTRY

by no means only by makers of top quality cars. The industry

watched incredulously as Cadillac engineers performed the famous
experiment in 1908 of importing three cars into Britain, stripping
them down, jumbling the parts, assembling them again and driving
away quite happily. The old engineering fetish for weight and
quality obsessed the trade and only commercial geniuses such as
Claude Johnson of Rolls Royce realized what was really required.
Royce, who constantly held up the flow of production to make
trifling improvements, was banished to a research workshop and
the crucial decision was made at an early date to concentrate
production on the famous Silver Ghost.
This problem had little to do with nepotism and third-generation
decline, nor even of the lack of technical education. These were
first-generation men, trained engineers for the most part, men of
drive and enthusiasm but men who found it hard to break with the
past all the same. For all his skill, to 1914 Herbert Austin owed
more to his financial backers than to his vision of the future. In
variety of models he was the worst offender of all, and it required
the concentrated purpose of war production to change his ways. It
is noteworthy that much of the driving force came from men with
foreign backgrounds-the Breton, Louis Coatalen, who brought
Sunbeam to such excellence, the brilliant American engineer, Martin,
who controlled the Daimler company, and Thomas Pullinger, who,
though British, learned the motor trade in France. Training played
a major role here. Few engineers received a theoretical education;
an apprenticeship was the almost inevitable starting point even for
boys from wealthy families, and a remarkable number served them
in the highly traditional atmosphere of the railway workshops. A
machine tool industry pre-eminent on the heavy side but immature
as far as mass production tools were concerned meant that there
were few practical engineers in industry able to think in terms of
the production methods applicable to modern machine tools-
interchangeability, flow production, Taylorism. In this sense, the
industry fell behind. In their own speciality of medium priced cars
costing £300 and more, British makers were surpassed by only one
or two American firms in size of output, and in technical quality
and value for money there was little to choose between them. At
the lower end, however, the British response took the form of a
cheap, undersized, underpowered vehicle which was to have no
future at all.

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 THE ENGINEERING INDUSTRY

IV. THE COMPETITIVE POSITION OF THE INDUSTRY BY 1914

In the concluding section of this chapter we are obviously faced by
the question, how far had British engineering fallen behind its
competitors and why? Our detailed study has shown how compli-
cated the answer to this question inevitably is. Table IV may give
some guide, though care must always be taken in interpreting
export figures. Exports are in themselves no more important than
production for the home market: they are just more easily measured.
The size and rate of growth of the American home market inevitably
made exports less important to her industries, so that her pre-
eminence in agricultural machinery is particularly noteworthy. The
same must be said of America's exports of machine tools. Although
there are no detailed statistics, it may be assumed that Britain
exported mainly heavy machine tools. One must remember, too,
that with a heavy concentration of world demand in Europe,
German firms were ideally placed for expanding exports of both
heavy machine tools and of the medium types in which, un-
doubtedly, they were in advance of the British makers. German
exports of locomotives went primarily to Europe too. Indeed,
78 per cent of all German machinery exports went to Europe: the
market advantage of her close geographical connections with the
world's largest single importing area for machinery was of immense
importance.

TABLE 1v: Exports of Mechanical Engineering Products in 1913

(£ millions)
UK USA Germany
Agricultural Machinery 3·0 6·7 2·5
Boilers 1·8
{ 1·9
0·8
Prime Movers 5·2 4·7
Machine Tools 1·0 2·9 4·0
Locomotives (Rail and Road) 3·4 1·2 3·9
Sewing Machines 2·4 2·4 2·8
Textile Machinery 8·3 0·3 2·8
Miscellaneous 9·7 14·2 15·7

34·8 29·6 37·2

Source: Survey of Industries, IV, pp. 138-206.

NoTE: The table excludes cars, cycles, firearms and railway carriages and
wagons. The miscellaneous section probably is largely made up of cranes,
pumps, mining, hydraulic, sugar, grain milling, paper making and woodworking
machinery.
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 THE DEVELOPMENT OF BRITISH INDUSTRY

These market and product differences are shown in Table V.

TABLE v: Imports of Engineering Products into Selected Areas from
UK, Germany and USA-1912
(£000)
To To To
France, Italy, Argentine, Brazil,
Russia British Empire and Chile (1913)
UK Germany UK Germany UK Germany USA
Road and rail
locomotives 50 896 1,281 96 657 410 569
Pumping
engines 79 181 230 18 49 43 75
Other engines 626 2,143 1,299 293 178 119 236
Agricultural
machinery 1,073 1,295 368 46 204 132 1,014
Boilers 241 162 642 1 195 35 6
Machine tools 209 1,621 271 105
Mining
machinery 37 82 697 12
Sewing
machines 901 944 329 151 108 212 541
Textile
machinery 1,792 1,095 1,431 28 26 9 0
Typewriters 11 118 8 7 4 23 117
Motor cars 436 1,666 2,153 137 226 443 403
Cycles and
motor cycles 306 313 1,384 266 53 24 18
Implements
and tools 304 1,077 1,216 134 523 308 428
Railway
carriages
and wagons 5 184 1,120 59 1,242 323 870
Arms and
ammunition 205 211 2,048 201 265 1,027 388
Unenumerated
machinery 1,032 3,022 3,589 257 946 1,274 596
7,307 15,010 18,066 1,811 4,650 4,372 5,261
Source: Report on the Engineering Trades after the War, Parliamentary Papers,
1918, XIII.

The British hold over the Empire market was very striking: only in
machine tools and sewing machines did German exports approach
those from Britain. One significant point is the importance, even at
228
 THE ENGINEERING INDUSTRY

this stage, of exports of the new cycle and motor car industries.
In the selected European markets German superiority was distinct
but far less pronounced. The figures show the British ahead
in textile machinery and boilers, and competitive in agricultural
machinery, sewing machines and cycles. The German superi-
ority was most marked in locomotives and other prime movers,
machine tools for which of course the market was large, and motor
cars, as well as the large unenumerated group. It is worth noting
how small was the total trade in rolling stock and arms which were
typically manufactured locally by European countries. In South
America, a market where geographical and political advantages
were much more evenly distributed, these two products marked the
greatest differences between Britain and Germany, the former
leading in rolling stock, the latter in arms. The importance of the
export trade in carriages and wagons compared with that in loco-
motives in markets with little local manufacturing capacity is
apparent. Britain's largest exports of rolling stock went to Brazil
where her exports of locomotives were considerably less than those
of Germany. The American advantage in South America lay in
agricultural machinery, typewriters and sewing machines. It must
be remembered, however, that export markets in sewing machines
were shared by British and American Singer, the United States
taking most of the American continental markets, Singer at Clyde-
bank most of the Empire markets. In Europe where Britain com-
peted freely with other companies, she took a reasonable share of
the market. Britain did well in boilers as in all parts of the world,
in cycles, implements and tools, though the very low absolute level
of textile machinery imports deprived her of much advantage there.
If we examine trade between Britain and Germany in 1913 in the
goods shown in Table IV, Britain exported roughly £2·5 million and
imported £3 million. Britain had a clear surplus of exports in textile
machinery, agricultural machinery and boilers, and surprisingly
exported twice as many machine tools by value to Germany as she
imported. She had a surplus of imports from Germany in motor
cars, much the largest single item of total British imports of
engineering goods in 1913. Curiously enough, Germany also ex-
ported cycles heavily, and she exceeded her imports from Britain
in implements and tools, arms and above all in unenumerated
machinery. This last was a major item in Britain's total engineering
imports, and since her exports in this category were low too, it
may be reasonable to argue that this indicates an inability to
diversify into what in many cases were relatively new areas-
229
 THE DEVELOPMENT OF BRITISH INDUSTRY

pneumatic tools, office machinery, boot and shoe machinery, cranes

and hoists and so forth, though there is no way of telling how
important these were. 1 The figures emphasize the complex pattern
of success and weakness of British engineering. Clearly there were
sectors where her supremacy still remained unchallenged. True,
some of them were destined to be far less important after the war
than before: perhaps in that broad sense our engineering structure
was overcommitted to the past, but it must be stressed that there
were no grounds at all for diverting resources away from these
areas prior to 1914 since activity, exports and profitability all
remained buoyant.
But there was overcommitment too in a more important and
more alarming sense-an undue attachment to forms of engineering
training, institutions and methods which did not fit well into the
needs of the last part of the nineteenth century. Too often this
problem is seen largely in terms of technical education, but in fact
it went much deeper than that. This is not to deny the importance
of education. British engineering had a deep practical bias with a
working apprenticeship the normal form of training. The largest
works naturally produced the greatest number of trained men, and
a remarkable number of engineers received their instruction in
railway workshops or other giant establishments of the steam age.
In the United States a trainee got pay from the first, saw what went
on in the works though was not required to become unnecessarily
manually dextrous, and when trained went into the drawing office
with an increase of pay. In Britain he was obliged to pay for tuition,
did routine manual work for far too long, and advancement there-
after might well depend on his skill with tools; no wonder engineer-
ing as a profession stood low in the social scale. The British system
was, of course, by no means entirely bad. It could be, and not
infrequently was, combined with a more theoretical training at
home or abroad. It has been argued, for example, that the higher
level of formal training in Germany made it more likely that the
internal combustion engine would be developed there rather than
in Britain. The explanation is unconvincing, however, in view of
the equally brilliant breakthroughs made by British engineers in
other fields at that time. What more theoretical discovery was there
than the steam turbine and who better trained than Parsons? The
development of the high-speed steam engine too was the product
of brilliant minds. One American student of engineering has written
1 In 1913-14 exports of typewriters from the us to Britain came to $2.9 million
with another $670,000 for cash registers and adding machines.
230
 THE ENGINEERING INDUSTRY

of Willans as the leading figure in a new school of engineers in

Britain in the 1880s-men having an adequate knowledge of mathe-
matics and mechanics, familiar with the laws of thermodynamics
and adept at applying theoretical principles to practical problems. 1
The problem lay less in invention and innovation of this kind
where Britain was in no way behind, than in the standard of practice
of the ordinary shop where rule of thumb ideas persisted to an
undue extent. But the difficulties went deeper still. The practice had
grown up in certain major sectors of using a consulting engineer to
do the design work. He was an intermediary between customer and
builder. It was in civil engineering, locomotive work, and later
electrical engineering, that his presence was most felt. There were
clear advantages in having an objective expert to supervise the
carrying out of a major undertaking and the best consulting
engineers built up a huge reservoir of experience. But the dis-
advantages were formidable. The consulting eogineer all too often
was deprived of the opportunity of combining his theoretical know-
ledge with a deep practical understanding. The industrialist, for his
part, called in the consulting engineer whenever calculations had to
be made-fixing the proper thickness of wall for a hydraulic cylin-
der, or determining the strains in a simple lattice girder or work-
shop crane. Things had so fossilized that if the poor consultant
tried to give the manufacturer a free hand, there was a chorus of
protest of 'what does he get his fees for?' 2 There is little point in
arguing that German locomotive makers were more advanced in
ideas of design than were the British, for by and large the use of
consulting engineers meant that the British maker was concerned
with organizing his works to the best of his ability, not with design.
The consultant's aim tended to be to design a product of high
technical quality which would do him credit in his profession.
Executing the work in the most economical manner was not the
prime object by any means. Not being in close contact with any
one firm, he failed to design in a manner which fitted in with any
particular manufacturing facilities. Standardization was extremely
difficult to achieve and the method inhibited continued develop-
ment work on plant when it was in operation. The absence of this
rigid demarcation of function was a major element in the remarkable
progress made in electric supply and engineering in the north-east
of England. There the guiding light was Charles Mertz. Officially
1 E. Cressy, A Hundred Years of Mechanical Engineering, New York, 1937,

p. 43.
• Engineering, September 1896, p. 34, and February 1900, p. 160.
231
 THE DEVELOPMENT OF BRITISH INDUSTRY

he described himself as consulting engineer so as to be free to

undertake other work if he wished. In practice he maintained close
links with the main supply company itself, and also co-operated
closely with manufacturers, often inviting tenders on very broad
specifications or merely consulting firms he thought could build
what he wanted. 1
The origins of the consulting engineer are vague but generally
they are thought to have originated in civil engineering with Telford
and Rennie. Certainly in that field their influence was most pro-
found. The principal discoveries in regard to cement, for example,
were well exploited in Britain from the second quarter of the
nineteenth century onwards. This was a matter for normal com-
mercial enterprise, however. The use of reinforced concrete in
building met much deeper conservatism partly because of very
rigid building regulations, but above all it sprang from the actions
of consulting engineers and architects who undertook responsibility
only for design and felt they had little to gain from using new and
untried methods for permanent structures, for which use of brick
and stone had set high standards of durability. On the Continent
where the technique spread more quickly, projects were carried out
under the auspices of contractors who were prepared to take full
responsibility for both design and construction and consequently
were more prone to experiment in new building techniques. 2 The
organizational problem was brought most forcibly to public notice
around the turn of the century when several important bridge
contracts in British colonial territories were awarded to American
firms. The consultants were criticized for designing different bridges
for each contract, whereas in the United States many bridges were
constructed to pattern as multiples of a given span. The builder,
being responsible for his own design, could achieve a high level of
standardization and be in a position to offer much shorter delivery
dates. The ponderous inflexibility of a system found only in Britain
and deeply rooted in her past undoubtedly hindered the growth of
several major sectors of industry.
Labour, too, posed problems of its own. In skill intensive indus-
tries early innovation gave lasting advantages because of the fund
of special knowledge built up which was not easily acquired theo-
retically. Textile machinery building is the outstanding example of
this, and it is important to remember that this kind of practical
skill remained extremely valuable for the new engineering industries
1 See John Rowland, Progress in Power, London, 1960, chapters 1-3.
2 The Engineer, Centenary Number, January 4, 1956, p. 183.
232
 THE ENGINEERING INDUSTRY

of the early nineteenth century for the making of jigs and templates
and in particular for toolroom work. All the same, the deficiency
in technical education was intensified by the growing need for a
new group of superior workmen trained to think, to devise and
scheme and accommodate known principles to new ends. Educa-
tional weaknesses were intensified by the social gap between
employees and employers. In all too many shops managers cared
little what their workers thought: workers in their turn were un-
willing to offer ideas on the basis of their practical experience. Few
workers read technical journals: few firms made copies available.
The crisis came to a head over the 'machine question' in 1897. In
an atmosphere of mutual suspicion neither side was anxious for
radical change: the employee feared he would have to work harder
and earn no more, the employer feared his workers would not use
the new machines properly. The persistence of the subcontract
system in many branches of engineering-in the carriage works,
for example-made it difficult to introduce new techniques of manu-
facture, since the worker was entirely responsible for organizing the
work, financially and physically. Even so, there were brighter sides
to the story. Firms such as Tangyes, Mather & Platt and Renold
Chains led the way in the adoption of a shorter working week.
Refusing to lock out his workers in 1897, Richard Tangye wrote:
'Its folly will be appreciated when I state that we have long pos-
sessed all the advantages the employers claim to have secured as a
result of the late ruinous contest, advantages which I firmly believe
they also might have possessed without conflict had their relations
with their employees been the same. ' 1 The traditional two-break
day with work starting at six gave way more and more to the one-
break day starting at seven or eight. As with so many other matters,
the gap between the good and the ordinary began to widen more
and more.
It has been suggested that many of the weaknesses in Britain's
industrial position arose from a decline in entrepreneurial ability-
from the persistence of the family firm and from the disinterested-
ness of the third generation of owners. Clear examples of this can
always be found-Maudslays, Boulton & Watt, Napier, for example
-but the evidence for it as a broad generalization seems weak. In
the first place, one can so easily point to as many opposite examples,
to generations of owners each receiving a more sophisticated train-
ing than its forerunner. Take B. & S. Massey of Manchester: the
first Massey served an apprenticeship in an Oldham machine shop,
1 Engineering, March 1898, p. 346.

233
 THE DEVELOPMENT OF BRITISH INDUSTRY

the second was at Graz University and then studied engineering in

continental works at Dusseldorf, Gotha and Vienna and the third
went to Marlborough College, took honours Mechanical Engineer-
ing at Cambridge and received practical training with Metro-
Vickers.1 Or take a much smaller firm of engineers, Jenkins of
Rotherham. The founder served his apprenticeship in the usual
way; his son, trained as a metallurgist and chemist, brought a
wider outlook, and his son in turn went to Rotherham Grammar
School and Sheffield University. 2 But in any case relatively few
engineering firms dated back before 1850, and in most trades
entry was not difficult-even in one so well established as textile
engineering. 3
Nor does it seem to be true that finance proved a serious obstacle
to the development of new areas of engineering. Better facilities
and cheaper funds were, no doubt, desirable as they are in most
countries at most times, but such evidence as there is suggests that
it was not so much the mechanism of finance that was faulty but
that firms were either able to finance themselves internally quite
satisfactorily or for a variety of reasons were simply unwilling to
make use of the stock market. 4 The cycle and motor industries
were surprisingly successful at raising money in their early days.
Daimler succeeded in raising £100,000 before a single car had been
made commercially by anyone in Britain. The French Darracq
company came to Britain to raise £350,000 in ordinaries and
£150,000 in debentures in 1905. Argyll also raised about £250,000
at that time. Rolls Royce got so far as to be the subject of a take-
over bid in 1912; Austin, Dennis, Napier, Rover and Sunbeam
were others who raised substantial sums by public issues before
1914. 5
1 Janes, op. cit., pp. 46 and 86.
• Eric N. Simons, Jenkins of Rotherham, Robert Jenkins Ltd, 1965, pp. 12, 32
and 44. See also Greens of Wakefield, already mentioned, where the founder's
son was educated in Germany and his grandson went to Oxford before gaining
experience with Sulzer (Waste Not, pp. 70 and 98).
• Interesting, if in no way conclusive, evidence for the pattern of entrepreneur-
ship in the Midlands can be obtained from the series of biographies 'Midland
Captains of Industry' appearing in the Birmingham Gazette and Express from
March 1907 to February 1909. Of eighty leading figures, eleven were third
generation of the family in that firm, thirty-two were second generation and
thirty-seven first generation men.
' See also L. Davis, 'The Capital Markets and Industrial Concentration',
Economic History Review, XIX (1966), p. 259.
6 It has been argued that my own evidence shows that Vauxhall and Standard

were short of cash for expansion prior to 1914. (See H. W. Richardson, 'Over
234
 THE ENGINEERING INDUSTRY

A more important point is the unwillingness of the major banks

in Britain to support industry as they did on the Continent, and the
reluctance of British firms to combine into larger and more effective
units. However, this too may be attributable to the fact that with
readier access to internal finance, British firms had not the same
urge to combine. It is hard to evaluate the effect of all this as far
as engineering was concerned. We have seen how the diesel engine
in Sweden was developed with the aid of the Enskilda Bank, but
the development of the diesel in Britain lacked not money but
technical skill. As for combinations, some of the most effective
took place in this sector-Vickers in general engineering, North
British in locomotives, Metropolitan in railway carriages and
wagons, Hetheringtons in textile engineering, Rudge Whitworth in
cycles-none of them purely defensive, all involving some degree of
rationalization. Investment overseas in railways was clearly bene-
ficial to British locomotive makers, though the willingness of
German banks to finance major schemes of electrification and
insist upon the contracts for equipment going to their associated
companies, undoubtedly pressed hard on the British electrical
engineering industry. Similar action almost certainly prejudiced
Britain's civil engineering industry.
The slower rate of growth of the economy after 1870 gave less
opportunity for new investment. The raising of tariffs by the major
industrial powers hit engineering hard, as these countries were the
main importers of capital goods. There were, too, particular market
situations-the curious structural factors affecting the locomotive
trade, the unpromising home market for harvesting machinery.
Above all, until the breakthrough by cycle and motor car makers,
there was a weak market for the new machine tools emerging from
the United States-milling and grinding machines, twist drills,
turret lathes. In all sectors of industrial activity there are some
trades which have more leverage than others because their technical
ramifications are so widespread. The machine tool industry was
one of those: it was the focal point in engineering for the diffusion
of new techniques not only in cutting metal but in transmission,
control, friction, lubrication and so forth. 1 Outside the heavy
Commitment in Britain before 1930', Oxford Economic Papers, XVII (1965),
p. 246.) This is true, but the firms were so unimaginatively run at that time that
it was to the credit of financiers that they held off what were clearly poor risks.
1 It is worth remembering, of course, that even possessing experience of these
new machine tool techniques did not mean that all the problems of developing
new lines were easily resolved. E. Remington & Sons, gun and sewing machine
makers, took up the newly invented typewriter in 1873 but had to sell out to
235
 THE DEVELOPMENT OF BRITISH INDUSTRY

section, therefore, the slow development of this industry into new

fields had most unfortunate consequences, particularly on the
average standard of machine practice. It is significant that even a
first-class firm such as B. & S. Massey found itself weak in this
respect. In 1898 Leonard Massey visited over thirty works in the
east of the United States. Of his impressions he wrote:

'The best organized place I went into was Brown & Sharpe. This
is absolutely first class in every detail and the organization very
fine. A good many smaller shops are also very fine. In some others,
though the work is good, the shops are very far from up to date
... I have not seen a smithy or a pattern shop which could compare
with ours. We must, however, improve our plant. In this we are
dreadfully behind. Our lathes are most of them very poor. Our
table planes are all weak and mostly slow. We do not do enough
milling.' 1

This shortcoming in machinery techniques, the problems of

tradition, the particular institutional and market difficulties-these
seem to me to account for such shortcomings as existed in British
engineering. It may well be, too, that the peculiar system of
accountancy in wide use in the nineteenth century made replace-
ment of machinery more difficult than it should have been. 2 It may
be that differences in the cost of labour here and in the United
States account for some of the variations in techniques. But such
an explanation fails to explain German superiority in some areas,
and in any case it is almost certainly more important to think of
factors determining the development and use of new technologies
rather than just shifts in factor proportions. Many of the American
innovations in machining techniques, for example, offered immense
advantages whatever the cost of labour and system of accountancy.
Once these were realized during the 1890s, the engineering industry
adopted them with alacrity and the machine tool industry itself
moved into a new age. In this sense any study of engineering ending
new owners who continued to use their name in 1886. (Richard N. Current, The
Typewriter, Urbana, 1954, pp. 64-109.)
1 Janes, op. cit., p. 67.
2 The recognition of depreciation was frequently delayed until replacement,

and since firms often paid dividends out of profit defined gross of depreciation,
serious liquidity problems might arise when replacement was required. Hence
the much criticized regard paid by British businessmen to the size of first cost.
See R. P. Brief, 'The Origin and Evolution of 19th-century Asset Accounting',
Business History Review, XL (1966), p. 4.
236
 THE ENGINEERING INDUSTRY

in 1914 is bound to be misleading. The pace of change was accele-

rating rapidly: the transition was not over and the leeway difficult
to make good as Britain's competitors were by no means standing
still either. The industry still enjoyed extensive areas of marvellous
pre-eminence. The darkest shadows of tradition were passing; the
finer aspects were adapting themselves rapidly to a new age of
engineering.

237
 CHAPTER 8

ELECTRICAL PRODUCTS 1
BY I. C. R. BYATT

THE use of electricity did not develop particularly fast in Britain in

the forty years before 1914---certainly when compared with the
United States and Germany. This was the result of a number of
factors which form the background to a discussion of the electrical
goods manufacturers. To a considerable extent electricity provided
a new way of doing what had been done by gas, steam and horses;
because of the structure of energy costs in Britain it would not
always have been to her advantage to electrify more rapidly. By the
1870s many British towns had passed their period of most rapid
growth; where there was still rapid urbanization in Germany and
the United States, electricity could be adopted for lighting and
transport without displacing traditional methods to the same degree.
The growth rate of industrial production in Britain was slow;
hence, to achieve rapid electrification in industry, electric motors
had to replace mechanical transmissions to a greater extent than in
more rapidly growing economies. It has been argued that the British
system of controlling the private electricity supply, tramway and
railway companies delayed the adoption of electricity. Although
often exaggerated, there is something in this point. Any attempt to
check possible abuse by private monopolies will involve some
delay. The municipalities were active and enterprising in the 1890s,
but when after 1900 it began to be desirable to supply electricity
and run tramway services over a wider area than that of the local
authority, municipal ownership began to be a disadvantage.
Nevertheless, electricity was quantitatively important to the
British economy. Its main impact was on capital investment, both
in electrical equipment and in buildings and other plant machinery
associated with it. As Table I shows, gross fixed investment in
1 This chapter is based on work submitted as my doctoral thesis in 1962. For
that earlier research I received financial help from the County Borough of
Preston, from Nuffield College, Oxford, the Commonwealth Fund of New York
and Durham University. Several electrical engineering firms have been extremely
helpful to me. I am indebted to several economic historians with whom I have
discussed the subject, but above all to Professor Habakkuk, who was my super-
visor. He was extremely generous with his time, and his help was invaluable.
238
 ELECTRICAL PRODUCTS

electricity amounted to some 10 per cent of fixed capital formation

in the first few years of the century. Much of the finance for this
investment was provided by fixed interest lending to which the
British capital market was already oriented.

TABLE 1: Gross Fixed Investment in the Electrical Industry 1898-1913

(£ million, current prices)
London Isolated• Percentage
Elec- Electric Under- Factory of Gross
Year tricity Tramways ground Power Total Investment
Supply Railways Plants in the UK
1898 3·3 1-7 0·9 5·9 4
1901 6·5 6·8 1-7 0·4 15·4 8
1904 5·2 6·2 6·7 1·7 19·8 11
1907 2·9 4·1 1-7 7·5 16·2 11
1910 2·7 1·7 0·7 6·8 11·9 10
1913 3·3 1·6 2·8 13·3 21.5 14

• i.e. electric power plants in factories not taking electricity from public sup-
pliers. The figures in this column are subject to a wide margin of error.
Source: I. C. R. Byatt, The British Electrical Industry 1875-1914, p. 465, with
revisions.

Although the British economy had developed as an exporter of

manufactures and an importer of food and raw materials, in elec-
trical goods the trade pattern was rather different. Although for
much of the period from 1880 to 1914 Britain had a favourable
balance of trade in electrical goods, much of the more sophisticated
and technically advanced electrical machinery was imported-to a
considerable extent from Germany and the United States. British
exports were often to Latin America or the Empire, where tramway
and electricity supply companies were frequently financed from
London.
The manufacture of electrical machinery was an international
industry consisting of a fairly small number of top rank companies,
concentrated in a few countries. In the United States there were a
number of companies in the 1880s, but the Edison, Brush, Sprague
and Thomson-Houston interests were amalgamated around 1889-92
to produce General Electric. Westinghouse was the other main
firm.1 In Germany the major expansion of electrical manufacturing
seems to have begun in the 1890s with the development of electric
traction and continued with the development of electric factory
power after 1900. The old established telegraphic firm, Siemens
1 H. C. Passer, The Electrical Manufacturers, 1875-1900, Cambridge, Mass.,

1953.
239
 THE DEVELOPMENT OF BRITISH INDUSTRY

and Halske and the German Edison Company-later the A.E.G.

(Allgemeine Elektrizitats Gesellschaft)-were the industry's leaders.
A.E.G. had close relations with the Edison interests, acquired the
Sprague traction patents from Edison General Electric in 1890,
and transferred certain a.c. power patents to Edison General
Electric. On the formation of G.E. in 1892, when Edison General
Electric merged with Thomson-Houston, A.E.G. withdrew finan-
cially but maintained personal contacts. A new company, the
Union Electric Company, was formed to exploit the Thomson-
Houston traction patents in Continental Europe. This was merged
with A.E.G. in 1902. In 1904 A.E.G. concluded an important
exclusive patent licensing agreement with G.E. Initially it was
directed to turbine design, but, for example, became important in
lamps when G.E. developed the tungsten filament lamp. Siemens
developed their own traction system, and in 1902 absorbed
Schuckert, an important German firm in the 1890s. These mergers
led to a virtual duopoly situation in Germany, later consolidated
by some smaller takeovers and tight agreements on prices with
smaller firms. 1
Other European firms were smaller and less important. Ganz
and Co. of Budapest, pioneers in the development of a.c. machi-
nery, came to an agreement with A.E.G. in 1906 after a series of
negotiations which went on for eleven years. Brown-Boveri, an
important Swiss firm, had some links with A.E.G., although how
close they were is difficult to say. There were other important firms
in Switzerland, Belgium and France, but in general it is fair to
conclude that the whole international situation was dominated by
the Americans and Germans.

THE USE OF ELECTRICITY IN BRITAIN

The emphasis in the electrical goods industry before 1914 was on

heavy plant and cables for power stations, tramways and electric
railways and factory electrification (Table 11). At the beginning of
the period electricity was used almost exclusively for telegraphy;
the 1850s and 1860s saw the main growth of the internal telegraph,
and the 1870s and 1880s of the submarine cable. Thereafter there
were few developments on this side although the volume of busi-
1 'The Alleged Secret Syndicate in the German Electrical Industry', Electrical
Review, Vol. 63 (1908), pp. 778-80. Georg Siemens, History of the House of
Siemens, Tr. A. F. Rodger, Freiburg/Munich, 1957. Allgerneine Elektrizitiits-
Gesellschaft 50 Jahre A.E.G., Berlin, 1956.
240
 ELECTRICAL PRODUCTS

ness remained large. The telephone, although invented in the 1870s

and established in London in the 1880s, spread slowly and by 1911
there were a mere 360,000 telephones in Britain.

TABLE 11: Gross Output of the Electrical Goods Industry 1907

£000
Electrical machinery
(generators, motors, transformers, switch gear, etc.) 4,312
Cables 5,805
of which (1) lighting and power cables 3,351
(2) telegraphic cables 1,911
(3) transmission accessories 543
Electric lamps 465

Instruments, batteries, accessories 1,857

Contract work
(including repair work for customers) 1,659
14,098
Source: Census of Production 1907.

In the 1870s dynamo design was revolutionized; the clumsy,

expensive, inefficient machines which used huge permanent magnets
for their field coils were superseded by the Gramme and new
Siemens dynamos which generated the current for their own field
coils. 1 The invention of these gave immediate stimulus to further
research in electric lighting. Arc lamps, which had been used
experimentally in lighthouses from the 1850s, were greatly improved
in the late 1870s. In the 1840s several inventors had tried to
produce an incandescent electric lamp, following improvements in
primary batteries. 2 In the late I 870s another group of inventors-
notably Edison and Swan-were successful in producing a lasting
filament. 3
Electric lighting made a false start in Britain in the early 1880s.
Despite the dramatic and continuing fall in the cost of electricity
as a result of dynamo improvements, electric lighting was too
expensive to compete with gas. 4 There was a flurry of experimental
1 J. A. Fleming, Fifty Years of Electricity, London, 1921, pp. 109-10.
1 A. A. Bright, Jnr., The Electric Lamp Industry, New York, 1949, pp. 36----40.
• Ibid., pp. 42-69.
'I. C.R. Byatt, The British Electrical Industry, 1875-1914, unpublished D.Phil.
thesis, Oxford, 1962, pp. 37-42.
241
 THE DEVELOPMENT OF BRITISH INDUSTRY

lighting installations and a stock exchange boom in 1882. But it

was not until the late 1880s, when electricity costs had fallen still
further and it had been accepted that electric lighting was relatively
the 'lamp of luxury', that lighting central stations began to develop
in London. The provinces followed, but it was not until the late
1890s that investment in power stations became important and
only in 1896 did annual investment exceed £2 million. In 1900 gas
probably provided ten times as much light as electricity, but by
then investment in electric lighting had become important. In the
first five years of the twentieth century, some £33 million, by then
not all for lighting, was invested in electricity supply, and by 1903
all but two of the towns with a population of more than 100,000
had electricity supply.
Electric power was first used for tramcars. There were initial
experiments in the 1880s with accumulated cars. Then the over-
head trolley system was developed in America in the late 1880s
and early 1890s.1 In the second half of the 1890s this system was
imported into Britain, complete with American-built electrical
equipment and American consulting engineers. 2 Between 1897 and
1906, 2,100 miles of electric tramway were built, and the horse
trams virtually disappeared. By 1906 the big towns were fairly well
equipped with tramways and thereafter tramway investment fell
away. By contrast with the us, there was no need to build a net-
work of inter-urban lines as steam railways had already done this.
Electric railway investment was also concentrated around the
tum of the century. In the early 1890s there were the isolated cases
of the Liverpool Overhead Railway and the City and South London
tube, but it was not until the Americans took over the London
Underground projects that work really began. American General
Electric became closely associated with the Central London Rail-
way, and Charles T. Yerkes, a Chicago financier, bought up the
District Railway and a number of half-started underground lines.
Investment built up from £0·8 million in 1898 to £6-7 million in
1904--05, and by 1907 the present central London underground
network was virtually complete. 3
Steam railway electrification proceeded more slowly. In 1904
lines were electrified on Tyneside and between Liverpool and South-
port. From 1909 to 1914 the Brighton railway electrified their lines
as far as Croydon. But the other main line railways, although
1 H. C. Passer, op. cit., chapters 15 and 16.
1 I. C.R. Byatt, op. cit., pp. 171-6.
1 Ibid., pp. 198-204.

242
 ELECTRICAL PRODUCTS

interested in electric traction as early as around 1905, made no

decisions to electrify until 1912-13. The real advantage of electrifica-
tion was that it was a cheap way to extend capacity. On a number
of steam suburban lines traffic was pressing against capacity in the
early years of the century, but the new electric tramways suddenly
took away a lot of their traffic. 1
The factory motor was technically rather different from the
traction motor. Its development took place in the us and on the
Continent, and not until around 1900 had most of the technical
problems been solved. In the early years of the century the cost of
factory motors fell dramatically and they were soon being used in
a number of British industries. By 1907 perhaps a ninth and by
1912 perhaps a quarter of the power used in mining and manufac-
turing was electric. 2
Individual industries in Britain were, in some cases, slow to
electrify, but the structure of British industry was not favourable
to electrification. In 1907 a third of the motor power in manufac-
turing and mining was in mining, and another quarter was in
textiles. Electricity was very little used in either. But in shipbuilding
and engineering, which were only minor power users, electricity
had spread rapidly and perhaps drove as much as half of the
machinery used. There were good reasons for these differences
between industries; the relative advantages of electric driving were
great in engineering, even in the early years of the century, while
electrical driving in textile mills had only a narrow advantage over
shafting and belting-if it had one at all-right up to 1914.
This, then, was the background to the demand for electrical

TABLE 111: Purchases of Electrical Machinery•

(£ million, at current prices)
Purchases Other Total Exports
Year by Domestic Purchases Less
Utilities Purchases in Britain Imports
1898 M 1·2 N/A
1900 2·7 0·2 2·9 N/A
1904 2·8 0·6 3·4
1907 1·4 2·5 3·9 0·4
1910 1·0 2·3 3·3 1·0
• These figures are subject to a large margin of error.
Source: I. C. R. Byatt, The British Electrical Industry 1875-1914, p. 356, with
revisions.
1 Ibid., pp. 222-36.
1 Jbid., chapter 6.

243
 THE DEVELOPMENT OF BRITISH INDUSTRY

goods. In the 1880s and early 1890s demand was low, to be

followed by a major boom around 1900. Thereafter demand rose
only slowly as factory electrification took up the slack left by the
decline in investment in electricity supply, electric tramways and
railways. But superimposed on this were other fluctuations. There
was the false boom of 1882, followed by a sharp recession, and then
a minor boom in 1889-91 when the early London power stations
began. Between 1908 and 1910 there was a period of recession,
followed by the upswing continuing up to the War. Table III shows
the general pattern of output of electrical machinery.

ELECTRICAL MANUFACTURING IN BRITAIN

Major developments in the technology of electricity often meant

the formation of new electrical engineering firms. Many of these
developments took place abroad and thus many of the new entrants
were foreign manufacturers. Sometimes their machinery was im-
ported on a large scale; this was particularly noticeable in the
period from 1896 to 1904. On the whole Britain had an export
surplus in electrical goods. Yet this was partly because foreign
entrants established their own factories in Britain. By 1914, out of
the four biggest manufacturers of electrical equipment, two, British
Westinghouse and British Thomson-Houston, were offshoots of the
American duopolists, Westinghouse and General Electric, and an-
other, Siemens, was an offshoot of one of the German duopolists,
Siemens and Halske-Siemens Schuckertwerke. The main firm im-
porting into Britain at this time seems to have been A.E.G., the
other big German firm.

NEW DEVELOPMENTS AND NEW FIRMS: THE 1880S

Siemens Bros was already established in England in the 1870s as
one of the main telegraph manufacturing firms, and its head, Sir
William Siemens, started an electric lighting department in the late
1870s. In 1880 they were the most important arc lighting firm.
However, they were soon superseded in commercial importance by
the Anglo-American British Electric Light Corporation. C. F.
Brush, an American, was the inventor of the most successful early
arc lighting system. 1 The Anglo-American company, founded in
1880, acquired the British rights, and soon began to manufacture
under licence. It was, however, financially independent and the
1 H. C. Passer, op. cit., chapter 2.
244
 ELECTRICAL PRODUCTS

managers and engineers were British. During 1881 and 1882 it was
extremely successful, and the Stock Exchange mania in electric
lighting shares in 1882 was essentially a 'mania' in Brush shares.
The management of Brush, however, turned out to be weak, and
when the recession came in 1883 the Board had to be reconstructed,
assets written down and a thorough investigation of costs made.
It was the most successful example of firms founded in the early
1880s on foreign patent rights. Many of them, however, were con-
cerned simply to make money out of patent rights following 'suc-
cessful' demonstrations rather than with manufacturing. By and
large these perished in the recession following the abortive boom.
Apart from Siemens, the telegraph manufacturers took little part
in electric lighting. The 1880s were a very busy period in submarine
cable laying; their existing business was profitable and electric
lighting, although great things were hoped from it, was very un-
certain. The India Rubber and Gutta Percha Company began a
dynamo department, but it operated only on a very small scale.
The Telegraph Construction and Maintenance Company built a
large electric lighting installation at Paddington Station. But the
installation developed such teething troubles that they left the
electric lighting field. 1
The telegraphic manufacturing firms were skilled at the manu-
facture of light apparatus. But dynamos had to stand up to much
heavier currents and to much greater mechanical strains. Many of
the early dynamos were too flimsy, and inevitably the new field
attracted the established mechanical engineers. The most important
early one was R. E. B. Crompton. He came to electric lighting
almost by accident when he was supervising the construction of a
foundry. 2 He quickly saw how to improve the equipment and was
soon making lamps and dynamos. By 1881 Crompton was, with
Siemens and Brush, one of the three most important arc lighting firms.
Crompton also seems to have been the first electrical manufac-
turer to combine making equipment for both arc and incandescent
lamps. As soon as Swan considered he had invented a practical
incandescent lamp, he got in touch with Crompton. 3 Soon after-
wards Swan began to manufacture lamps with Crompton as chief
engineer; Crompton & Co. built dynamos and did the contracting
work. 4
1 I. C. R. Byatt, op. cit., pp. 313-14. R. H. Parsons, The Early Days of the
Power Station Industry, Cambridge, 1939, pp. 42-58.
• R. E. B. Crompton, Reminiscences, London, 1928, pp. 81-2.
a M. E. and K. R. Swan, J. W. Swan-a memoir, London, 1929, p. 70,
'R. E. B. Crompton, op. cit., p. 95.
245
 THE DEVELOPMENT OF BRITISH INDUSTRY

Another important entrant to electrical engineering was Mather

and Platt. In the I 870s the firm was principally engaged in the
manufacture of textile finishing machinery. As a result of a visit
by Sir W. Mather to the us in 1882-83 they acquired the patent
rights of the Edison dynamo and set up an electrical department. 1

RETRENCHMENT AND THE BEGINNING OF ELECTRICITY

SUPPLY

The middle 1880s were a very depressed period for the manufacture
of electric lighting equipment. Brush went through a period of
retrenchment, Siemens turned their energies from the unprofitable
electric light department to the extremely profitable submarine
cable department. 2 The English Edison Company, which had tried
to develop a central lighting installation from a pilot scheme on
Holbom Viaduct, amalgamated with the Swan Company; they
concentrated on making light bulbs, and used their very strong
patent position to establish a monopoly. 3 Crompton, probably the
most energetic of the new firms, turned their attention to the
European market. For the Ring Theatre lighting scheme in Vienna,
Crompton collaborated with Peter Willans, a marine engineer, and
designer of a very successful high-speed engine, and worked out
the features of British electricity supply which were so successful in
London in the late 1880s and early 1890s. 4 Brush also turned to
Europe and bought a small factory in Vienna. As Table IV shows
exports to Europe were quite important in the late 1880s, account-
ing for about a third of total exports of electric lighting apparatus.

TABLE 1v: British Trade in Electrical Goods 1878-1902

A. Exports of British-made Electrical Goods 1878-1902
(i) Telegraphic Wire and Apparatus:
(£000, current prices)
Other British
Years Europe USA Foreign Possessions Total
1878-82 1,501 1,471 3,088 1,513 7,574
1883-87 145 266 3,233 2,682 6,327
1888-92 526 123 2,254 2,599 5,501
1893-97 418 10 1,852 2,810 5,090
1898-1902 378 1,008 3,861 5,944 11,190
1 Sir W. Mather, ed. L. E. Mather, London, 1925?
1 J. D. Scott, Siemens Bros., 1858-1958, London, 1958, pp. 64-5. Supplemented
by Siemens Bros. Accounts.
• A. A. Bright, op. cit., pp. 107-9.
'R. E. B. Crompton, op. cit., pp. 117-36.
246
 ELECTRICAL PRODUCTS
TABLE IV-contd

(ii) Electric Lighting Apparatus (Excluding Steam Engines):

Other British
Years Europe• Foreignt Possessions Total
1886 39 28 22 89
87 33 41 26 100
88 61 49 56 166
89 74 73 64 211
1890 55 132 94 281
91 41 93 105 239
92 36 51 87 175
93 50 53 113 215
94 42 84 120 246
95 48 131 157 336
96 66 108 209 382
97 81 157 211 449
98 77 190 248 515
99 74 168 269 511
1900 87 135 324 546
01 46 135 373 553
02 28 167 423 618
• Industrial countries in Europe, distinguished in the Trade Statistics. Excludes
Spain, Portugal and Russia which are in column 3.
t Predominantly less developed countries; large proportion to S. America.

B. Imports of Electrical Goods• 1897-1902

Country Whence Imported
Germany,t Others
Year Netherlands USA (mainly France, Total
and Belgium some Sweden)
1897 242
1898 368
1899 613
1900 279 833 154 1,266
1901 310 388 151 849
1902 349 160 179 688

• Excludes electrical machinery. Imports are classified by country whence

imported, not country whence consigned.
t The majority of these goods were probably of German manufacture, but as
they were shipped through Holland they appear as imports from Holland.
Imports direct from Germany were: 1900, £87,000; 1901, £74,000, and 1902,
£82,000. Some Swiss goods may be included, although some were shipped
through France and are in column 4.

Source: Annual Statements of Trade.

247
 THE DEVELOPMENT OF BRITISH INDUSTRY

From 1886-88 exports seem to have accounted for about a third

of the output of (non-telegraphic) electrical engineering firms. 1
But at the end of the 1880s a number of small central stations
for electric lighting were established in London. They often grew
out of a scheme for lighting a group of town houses, or one of the
new blocks of fiats, like Whitehall Court. But these stations were
not small by foreign standards.
These London stations exploited the comparative advantages of
English electrical engineering. D.c. machinery, directly coupled to
high-speed engines used in conjunction with accumulators, pro-
vided a reliable, 2 low capital cost, low fuel cost system, where
generators could be housed in small power stations in the West
End and could economically and reliably cope with the sharp and
sometimes unexpected peaks of the London lighting load. This
period was the most successful one for English electrical engineering
before 1914. As well as the safe, low cost work of engineers like
Crompton, ensuring the successful launching of electric lighting
and leading to the extension of electric lighting into the provinces
in the early 1890s and the boom of 1897-1903, there was the
revolutionary work of Ferranti. Ferranti, a young man of twenty-
four, saw the importance of the a.c. transformer being developed
by the engineers of Ganz and Co. of Budapest. First he remodelled
a small, badly designed installation, building his own alternators
and transformers.
His success made him want to exploit the potential economies of
scale in electricity generation by planning, and persuading the
London Electric Supply Corporation to build, a massive power
station at Deptford. It was to use generators of over ten times the
capacity of anything successfully attempted at the time, and trans-
mit to London at the then unheard of pressure of 10,000 v. The
whole scheme involved a complete departure from existing prac-
tice; nearly everything had to be designed completely from scratch.
Ferranti wanted to build engines whose crankshafts alone were to
weigh 75 tons each, to use fly-wheel alternators weighing 575 tons
each standing 45 feet high. Having built a 10,000 v. transformer,
he had to devise his own way of testing it. 3 He designed his own
1 I. C. R. Byatt, op. cit., p. 330.
1 R. H. Parsons, op. cit., has a great fund of stories of the endless faults in the
early power stations and the makeshift devices used to keep the plant going.
1 I. C. R. Byatt, op. cit., pp. 74--84. F. Bailey, The Life and Work of S. Z. de
Ferranti. Address to the Electric Power Engineers Association, 1931. Privately
printed, Hollinwood. For a graphic description of his work see G. Z. de Ferranti
and R. Ince, The Life and Letters of S. Z. de Ferranti, London, 1934, pp. 57-104.
248
 ELECTRICAL PRODUCTS

high tension cables, using impregnated paper as a dielectric. 1

Ferranti's scheme was the first embodiment of the modem system
of electricity supply with large generator stations using cheap fuel
and high voltage transmission. His contemporary title 'Edison of
England' was deserved, for Ferranti had combined the same quality
of vision with the same quality of engineering ability as Edison had
showed in New York City eight years before. Yet the London
Electric Supply Corporation was commercially a failure. In 1895
its capital was reduced by a third, and no dividends were paid
until 1905. This was partly because it was run well under capacity. 2
Initially there were numerous teething troubles which drove
customers to the more reliable d.c. networks.
Also Ferranti overestimated the growth of demand. Deptford
was planned to supply a million lamps, but this figure was not
reached in London as a whole until 1898. Even on a different
Board of Trade policy it is hardly possible that Deptford would
have had a million lamps until after 1900.
But even at full capacity the capital costs of the Deptford scheme
would have been above the capital costs of the other London
schemes. Running costs were, in fact, higher than in other stations
owing to the variable lighting load. For technical reasons each
alternator was connected to a given set of lights and consequently
was running light most of the time. Crompton had learnt that the
way to reduce fuel costs was to divide a power station load between
about eight connected d.c. machines running most of the time on a
full load.
The technical breakthrough in electric tramways came in the us
in the late 1880s. But British electrical manufacturing companies
were also active in the electric traction field. Two firms were out-
standing, Mather and Platt and the Electric Construction Corpora-
tion. Mather and Platt had inherited the Siemens interest in electric
railways when they appointed Edward Hopkinson, who had worked
with Sir W. Siemens, to head their new electrical engineering
department. In 1888 they persuaded the Directors of the City and
South London Railway, which became the world's first under-
ground railway, to adopt electric rather than cable traction. 3 The
1 P. V. Hunter and J. T. Hazell, The Development of Power Cables, London,
1956, chapter 7.
• Ferranti later attributed this to the Board of Trade who divided London into
small areas for electricity supply purposes.
1 E. A. Grindle, 'The City and South London Railway', Electrical Review,
Vol. 31 (1892), pp. 140--2. T. C. Barker and M. Robbins, A History of London
Transport, London, 1963, Vol. 1, chapter 10.
249
 THE DEVELOPMENT OF BRITISH INDUSTRY

Electric Construction Corporation was formed in 1889 out of a

merger of a small electrical engineering partnership and a firm of
accumulator manufacturers with a common interest in accumulator
traction. One of the E.C.C.'s biggest early jobs was the equipping
of the Liverpool Overhead Railway, the world's first electric over-
head railway.
The position of heavy electrical manufacturing in Britain in the
early 1890s seemed very strong. The industry consisted of five
relatively large firms concentrating much of their facilities on the
production of electrical machinery, and a number of small firms,
many of them originally mechanical engineers. Concentration was
relatively high. Up to the end of 1892 almost 80 per cent of the
capacity of dynamos installed in British power stations was installed
by five firms, E.C.C. (18 per cent), Brush (16 per cent), Siemens
(15 per cent), Mather and Platt (15 per cent) and Crompton (14 per
cent). 1 As it was at the time the usual practice to award the contract
for all the electrical equipment, except the cables, of a power
station to one firm, these figures are reliable indications of the
market shares in power station electrical machinery as a whole.
Imports were negligible, being less than 3 per cent of dynamos
installed. Technically their position was strong. As well as the
work discussed above, the E.C.C. had, for example, pioneered a
system of high voltage d.c. transmission transformers and lighting
stations, in an attempt to get the advantages in cheapness and
reliability of d.c., plus the advantage of high voltage transmission. 2

THE 1890s: FURTHER ENTRY FROM ABROAD

Yet this position was very rapidly eroded. In the early 1890s about
2 per cent of the generators installed in British power stations
were imported. By 1897-98, this had risen to 10 per cent and by
1898-1901 to about a quarter. 3 The electric traction schemes of
c. 1890 had used home produced plant; by 1900 nearly all the
motor equipment for electric tramways and many of the generators
were imported. There are no import figures for electrical goods
before 1897, and up to 1903 imports of electrical machinery were
not distinguished from general machinery. But as Table IV shows,
imports of other electrical goods rose very rapidly from £¼ million
to £1¼ million in 1900. Over £800,000 in 1900 was from the USA.
1 I. C. R. Byatt, op. cit., p. 332.
• R. H. Parsons, op. cit., pp. 65-70.
8 I. C. R. Byatt, op. cit., p. 397.

250
 ELECTRICAL PRODUCTS

On the traction side the story seems quite simple. In the middle
1890s British Thomson-Houston was formed to operate the General
Electric traction patents. They supplied the plant for the early
tramway electrifications on the overhead trolley system for Bristol,
Dublin, Middlesbrough and Stockton and London. Given the
success of these schemes, the municipalities proceeded to electrify
their lines, and British Electric Traction was formed to build electric
tramways in the smaller towns.
The traction boom in the us around 1890 had led to the develop-
ment of a specialist traction motor, complete with special control
equipment. Between 1889 and 1895 there was very rapid progress
in design; the operating efficiency of traction motors rose; their
weight per horse power fell; their electrical design was improved
to make waterproofing possible; gearing was improved to reduce
noise and maintenance. At the same time high demand enabled
manufacturers to exploit economies of scale. Motor prices fell by
over 80 per cent between 1889 and 1895, a third of this price
reduction resulting from improvements peculiar to motors. 1 In the
1890s the traction load required special generators. Thus, the
Americans supplied a large number of traction generators as well
as traction motors. In 1898 a third of the generators in traction
power houses in Britain were American, but 95 per cent of those
in the course of construction were American. Most of the traction
motors used in Britain between 1897 and 1900 were built by G.E.
and supplied through B.T-H., and G.E. traction equipment was,
with the exception of the Waterloo and City Line, almost exclu-
sively used in the London underground schemes. 2 Westinghouse
soon followed; George Westinghouse was impressed with the size
of the potential market, noting particularly the high density of
traffic on British railways. His firm secured the contract for elec-
trifying the Mersey railway, and for electrical equipment for the
power station for the Yerkes London underground schemes.
In the us the demand for electrical machinery grew rapidly in
the 1880s with the success of electric lighting. The success of the
early electric trams in the late 1880s increased demand still further.
Then in 1892-93 the boom broke and the subsequent recession
1 H. C. Passer, op. cit., chapter 17.
• I. C.R. Byatt, op. cit., pp. 198, 203 and 362. In 1911 B.T-H. claimed that
they had supplied three-quarters of the motors for Britain's electric railways
(including the underground) as well as a third of the tram car equipments then
in use. Earlier the proportions would have been higher. S. B. Saul, 'The American
Impact on British Industry, 1895-1914', Business History, Vol. 3 (1960), p. 32.
251
 THE DEVELOPMENT OF BRITISH INDUSTRY

was long and severe. G.E. probably had a good deal of excess
capacity. The Westinghouse position was similar, but such was
Westinghouse's confidence that in the recession manufacturing
facilities were extended. 1 It was natural that they should tum to the
European market.
One of the great electrical engineering developments of the 1890s
was the alternating current factory motor-the induction motor-
with low maintenance costs and ability to develop steady turning
power under varying loads. The d.c. motor gave much better
starting torque and was thus relatively advantageous for traction
and for cranes, etc., but the need for a commutator was a weak
point; an a.c. motor on a single current as was used for lighting,
could easily get out of phase with the generators providing its
current and would then stop. Between 1885 and 1888, Ferraris,
Tesla and Dobrowolski showed that alternating currents differing
in phase would produce a rotating field, and in 1888 Tesla demon-
strated a motor on this principle. 2 Then in 1891 Charles Brown,
engineer to the Oerlikon Company of Zurich, and Dobrowolski,
engineer to the A.E.G., demonstrated a 300 h.p. three-phase trans-
mission system operating at 30,000 v. over 110 miles. 3 The first
large-scale polyphase a.c. scheme was that at Niagara Falls, built
by Westinghouse using the Tesla patents, demonstrating that a.c.
power would be commercially successful. 4
English engineers were completely uninterested: even Ferranti,
the a.c. pioneer, kept to single-phase work. The head of Siemens
Bros told the Institution of Electrical Engineers:

'English engineers should not be too much blamed for holding

back on this question of a.c., they were, after all, a body of prac-
tical people who had to apply science to everyday life, and that
which had to a great extent to govern them in what they did and
what they investigated was the eternal question of £ s d . . . they
must wait until they had got a thoroughly practical a.c. motor
which they could use on the ordinary mains, and then they would
use it.'6
Ordinary a.c. mains were single phase and they were situated in
the residential centres of towns. Thus, Siemens was dismissing the
1 H. C. Passer, op. cit., p. 8.
1 J. A. Fleming, op. cit., p. 146.
• Ibid., p. 239.
'H. C. Passer, op. cit., chapters 18 and 19.
1 Electrical Review, Vol. 33 (1893), pp. 728-30.

252
 ELECTRICAL PRODUCTS

large potential market in isolated electric power transmission

schemes for big factories. As late as 1897 W. M. Mordey, the Brush
Company's chief electrical engineer, with more than ten years'
successful work on the design of a.c. machinery behind him, told
the Society of Arts that he was sorry not to be able to speak from
experience with regard to polyphase motors. 1
The first British polyphase power installations were produced by
firms not hitherto manufacturing electrical plant. In 1897 Thomas
Richardson and Sons decided to install a three-phase power system
in their works buying the machinery from Brown-Boveri. 2 So
successful was it that Richardson arranged to manufacture under
licence, and C. F. Higgins, chief assistant to Brown-Boveri, was
sent over to supervise the new electrical department. In the same
year the General Electric Company, 3 primarily a wholesaler of
electn-::al goods which had begun to manufacture light bulbs, tele-
phone equipment and light electrical apparatus, made an agree-
ment with Oerlikon to manufacture polyphase plant under licence.'
In the middle 1890s A.E.G. established a sales agency in Britain.
The considerable number of polyphase installations on the
Continent had little effect on the established English plant manu-
facturers. In 1898 Alexander Siemens told the British Association
that in nearly all cases a.c. power was to be preferred ;6 Thomas
Parker told the Institution of Civil Engineers in 1899, that he him-
self thought there was no need to use three-phase currents.
Even in the power station machinery field British manufacturers
were falling behind in the late 1890s. Economies of scale in genera-
tion increased, and transmission voltages rose, but it did not prove
possible to stretch the high-speed steam engine to drive big units.
Supply undertakings began to plan big stations, generating high
voltage a.c. and converting to d.c. (this was relatively simple with
polyphase a.c.) to feed existing distribution networks. These
developments were not particularly rapid in Britain, compared with
other countries. Only on the north-east coast did supply over a
large area develop satisfactorily. But British supply engineers were
quicker to adopt big plant than British manufacturers were to
make it. Much of the plant for the bigger London power stations
1 Electrical Review, Vol. 40 (1897), pp. 474---6, 508-10 and 543-5.
1 A Swiss firm. Charles Brown was one of the founders.
3 This company had no connections with the American General Electric

Company.
4 Electrical Review, Vol. 41 (1897), p. 117.
6 Electrical Review, Vol. 43 (1898), pp. 406--8.

253
 THE DEVELOPMENT OF BRITISH INDUSTRY

built in the late 1890s was made in Germany or the us. When
Charles Merz, the successful innovator in large-scale electricity
supply in Britain before 1914, wanted advice about polyphase
machinery for the scheme he was planning on Tyneside at the turn
of the century, he went to G.E. and Brown-Boveri. A great deal of
the electrical equipment for the North-East Coast Scheme, right
up to 1914, was supplied by American and Continental firms,
especially by B.T-H. and A.E.G.
There were only two British manufacturing firms in the 1890s
who were really interested in building large-scale plant, Ferranti
and Parsons. Ferranti was the one English manufacturer who
followed Continental and American practices and built large
dynamos for direct coupling to slow-speed engines. In 1895 he
decided to begin the manufacture of engines as well and to this
end bought a new works at Hollinwood. But he did not succeed;
in 1903 his firm went bankrupt and the manufacture of generators
ceased. The main reason for this failure, at a time when the
market was growing very rapidly indeed, seems to have been the
personality of Ferranti himself. Although an engineer of genius,
he had little commercial sense. Each generator was an innovation
in itself but delivery was usually late.
Parsons by contrast was much more successful, although at the
time when the use of his turbo-alternators in power stations might
have developed rapidly, he had turned his attention to ship pro-
pulsion. The turbine was developed slowly. The master patent
dated from 1884 when Parsons was a junior partner with Clarke,
Chapman and Co., but in 1889 he quarrelled with them and left
to found a firm of his own. For several years he had to build
turbines which did not infringe his own patents, but despite this
he sold several small turbines to power stations in the first half of
the 1890s. 1
A small turbine had no very big advantages over the small high-
speed reciprocating set. But its size could be much more easily
increased, and a large turbine had tremendous advantages over the
slow-speed engine alternators of the late 1890s and early twentieth
century. With the high-speed turbine, alternators could be used
with only a fraction of the size and weight of the former. Buildings
also could be cheaper. 2
1 R. Appleyard, Charles Parsons, London, 1933, pp. 86-7, 173-9.
• It is instructive to compare the 7,500 kW turbo alternators installed in Dept-
ford in 1912 with Ferranti's projected reciprocating engine alternators. The latter
would have been nearly four times as wide, and over five times as high.
254
 ELECTRICAL PRODUCTS

However, the pioneer big turbine installations were developed

in the us and on the Continent. The first big (1,000 kW) Parsons
machines were built for the corporation of Elberfeld in Germany
in 1901. Westinghouse acquired the Parsons patents for the us in
1896. Brown-Boveri bought a licence immediately after the success
of the Elberfeld machines. G.E. in the us and A.E.G. in Germany
followed, but with somewhat different types of turbine. But from
about 1903 British power stations began to put in turbines in
substantial numbers, and about half the generating capacity installed
from 1903-07 seems to have been turbine driven.

THE NEW GENERATION OF MANUFACTURING FIRMS

The great expansion in the demand for electrical plant in the second
half of the 1890s, and the failure of British manufacturing firms to
manufacture those types of plant where demand was rising fastest,
led to a sharp rise in imports and eventually the establishment of
several big new firms who took over the leadership of the industry.
The American importers were to the fore in establishing new
factories in Britain; in 1902 Westinghouse opened a very large
factory at Manchester and General Electric one in Rugby. Both
were financed from America, and both the engineering and manage-
ment sides were dominated by Americans. 1 The British General
Electric Company built a new heavy engineering works at Birming-
ham; production began in 1903. A British firm of mechanical
engineers, Dick, Kerr and Co., who had been in the steam tramway
field, bought a factory in Preston in 1897 to manufacture electric
tramcar bodies. In 1899-1900 these works were considerably
extended so that the firm could manufacture motor equipments
and generating plant. Although management and finance were
British, the technical director was an American, S. H. Short, and
the new works were built under his supervision. 2
By 1904 some £3·4 million had been spent on these four new
factories. The principal existing manufacturers, Siemens, Brush,
E.C.C., Crompton and Mather and Platt expanded. But the first
four had expanded their fixed assets by less than £0·6 millions
between 1896 and 1904, and of this £275,000 had been spent on
Siemens's new dynamo works at Stafford. The decision to expand
Siemens came from the parent company in Berlin which kept a
1 B.T-H., Reminiscences, p. 12. J. Dummelow, 1899-1914. Privately published
histories of B.T-H. and British Westinghouse.
2 S. B. Saul, loc. cit., p. 35.

255
 THE DEVELOPMENT OF BRITISH INDUSTRY

close control over Siemens Bros and were unhappy with the slow
progress of the London firm. They had initially negotiated with
B.T-H., but proposals for a joint British factory had fallen through.1
The Brush expansion was concentrated on traction, an arrange-
ment being made with the new British Electric Traction Co. which
was buying, electrifying and extending many of the horse tramways
in private hands. There were many new firms like Bruce, Peebles,
established mechanical engineers who spent as much in expanding
their small electrical engineering department as did Crompton and
the E.C.C. taken together.
The establishment of the new manufacturers led to a sharp
reduction in imports, most of which had been from America.
Foreign produced generating plant installed in British power
stations fell from some 25 per cent (measured by kW of dynamos
installed) down to around 8 per cent in the years 1902-05. But
plant was still imported from the big Continental firms. Indeed
competition from the Continent intensified a great deal after 1901.
The traction and central station boom in Germany had begun
earlier than in Britain, and finished earlier. 2 In 1901 there was a
sharp recession in the demand for electrical plant, and this led to a
large number of low tenders from German and other Continental
firms, particularly in the years 1901-04. 3 German exports of elec-
trical machinery to Britain rose from 958 tons in 1900 to 4,667
tons in 1902, when they were 35 per cent of German exports of
electrical machinery. 4 In 1904 demand rose again in Germany; the
major firms amalgamated into three big groups, and there ceased
to be any particularly low tendering for British power station
contracts. Exports of electrical machinery to Britain fell back to
2,150 tons in 1905.
Imports of electrical machinery into Britain were not separately
recorded until 1903. As Table V shows, they were roughly stable
until 1910, but rose sharply thereafter. Imports from Germany,
separately recorded from 1904 when they were just over a fifth of
total imports, rose again until in 1910 they were 60 per cent of the
total. They then rose sharply with the sharp rise in total imports.
1 J. D. Scott, op. cit., pp. 70-1, 74.
1 D. H. Robertson, A Study in Industrial Fluctuations, London, 1914, pp. 27-9.
1 Tenders for a number of contracts were published in the electrical press. The
case of the L.C.C. tramway generator tenders in 1901 provides a good example.
The average tender price from the Continental firms for the three-phase a.c.
plant was 84 per cent of that from the American firms and 82 per cent of that
from the British firms.
'Statisches Handbuchfur das Deutsche Reich, Berlin, 1907, Vol. 2.
256
 ELECTRICAL PRODUCTS
TABLE v: British Trade in Electrical Goods 1903-13
(WOO, current prices)
All Electrical Goods Electrical Machinery
Re- Export Re- Export
Year Exports Exports Imports Balance ExportsExportsimports Balance
1903 2,924 70 1,431 1,563 437 35 555 -83
1904 2,130 132 1,405 857 523 74 559 38
1905 3,096 111 1,507 1,700 664 37 497 204
1906 2,711 154 1,759 1,106 842 32 571 303
1907 2,968 203 1,851 1,320 996 34 603 427
1908 3,298 165 1,843 1,620 1,354 32 579 807
1909 3,688 168 1,857 1,999 1,432 40 534 938
1910 5,777 254 2,268 3,763 1,603 49 581 1,070
1911 4,608 256 2,487 2,377 1,791 60 1,051 800
1912 6,013 295 2,609 3,699 1,969 69 1,151 587
1913 7,627 334 2,933 5,028 2,269 95 1,346 1,018
Electrical Cables Electric Lamps
Re- Export Re- Export
Exports Exports Imports Balance Exports Exports Imports Balance
1906 1,697 9 320 1,386
1907 1,802 29 393 1,437
1908 1,224 25 300 948 107 28 591 -455
1909 1,366 28 344 1,050 127 39 665 -499
1910 3,157 31 471 2,717 182 42 856 -581
1911 1,577 46 485 1,138 219 34 567 -238
1912 2,734 16 453 2,297 218 32 559 -308
1913 3,578 27 513 3,092 229 54 479 -195
NOTES:
1. This table cannot easily be linked to Table IV because of a change in classi-
fication. Before 1903, Electrical machinery was included in General machinery.
Imports of electrical goods before 1903 were similar to total imports Jess imports
of machinery, although the dividing line between electrical machinery and elec-
trical goods and apparatus was a fine one, especially before 1903.
2. Exports of electrical goods, excluding machinery, are similar to exports of
telegraphic wire and apparatus and electric lighting apparatus before 1903,
except that telegraphic wire was transferred to 'wire, unenumerated'.
3. Electric lamps includes arc lamps, search lights, parts of lamps and carbons
as well as incandescent lamp bulbs.
Source: Annual Statements of Trade.

During the years 1906--09 some 6 per cent of generators installed

in British electricity stations were imported. But this rose to 20 per
cent in the years 1910-13. Quite a large part of this increase was
accounted for by the purchase of A.E.G. turbo-alternators for the
North-East Coast Company. Significantly this was the most
ambitious contemporary power station, built at very low capital
cost.
257
 THE DEVELOPMENT OF BRITISH INDUSTRY

Imports of traction plant probably fell off rather more. Five

home producers dominated this market after 1902-British Westing-
house, B.T-H., Dick Kerr, Brush and Siemens. Information is
available on tenders for tramway motors; in nearly all cases only
these five firms tendered, and often only the first three. 1 The elec-
trical equipment for the N.E. railway scheme was supplied by
B.T-H. and for the Lancashire and Yorkshire scheme by Dick
Kerr. However, the equipment for the big Brighton railway scheme
of 1908-14 was made by A.E.G.
There are no satisfactory figures on the imports of factory
electrification plant. But it is possible, although the data allows a
very speculative estimate, that as much as a quarter of the total
purchases of electrical machinery for factory and railway electrifica-
tion came from Continental producers. Certainly A.E.G. seems to
have been a particularly important firm in British factory electri-
fication. 2 Much of the electrical machinery installed in the South
Wales coalfield was made by A.E.G. In Lancashire also many
installations were made by A.E.G. 3 Imports of other electrical
goods fell away from the peak of 1900, although by 1905 they
were only 20 per cent below 1900 and five times as large as in
1897.

THE NEW SITUATION

The big new manufacturing firms established in the years 1900--05

were not financially successful, and continued importation from
the Continent suggests that, despite the excess capacity which soon
appeared in Britain, they had not cured all the weaknesses in
British electrical manufacturing. After 1903 Britain reverted to the
position of the late 1880s and early 1890s and ceased to be a net
importer of electrical machinery. The export balance in electrical
machinery, shown in Table V, rose steadily from 1904 to 1910,
when it again was as much as a quarter of total output, and then
flattened out. Exports more than quadrupled between 1904 and
1913 while imports barely trebled. Low profits at home made
British firms tum to overseas markets. But Britain seems to have
been importing more sophisticated machinery from Germany in
particular, while selling less sophisticated machinery to the Empire
and to South America.'
1 From tenders published in the electrical press.
1 Electrical Review, Vol. 62 (1908), pp. 249-50.
3 S. B. Saul, loc. cit., p. 35.

'Value per ton of machinery provides some statistical guide here. The value
258
 ELECTRICAL PRODUCTS

TABLE VI: British Trade in Electrical Machinery

Origins and Destinations of Imports and Exports
(£000, current prices)
A. Imports:
Others
Belgium, (Mainly
Year Germany France and USA European Total
Switzerland Countries)
1904 121 124 290 24 559
1905 163 98 207 29 497
1906 198 87 263 23 571
1907 278 83 186 56 603
1908 323 66 161 27 579
1909 296 53 162 22 534
1910 348 49 153 32• 581
1911 744 65 195 46 1,051
1912 782 69 221 80 1,151
1913 721 109 438 78 1,346
• The increase in this column from 1909 on is mainly owing to increased
imports from Sweden.

B. Exports and Re-Exports:

British Other
Year Europe• USA Possessions Countriest Total
1907 89 6 438 496 1,029
1908 105 5 614 663 1,386
1909 87 52 649 684 1,472
1910 125:j: 6 922 599 1,652
1911 210 17 861 763 1,851
1912 296 14 983 744 2,038
1913 308 43 1,103 911 2,364
• Where distinguished. Excludes Spain, Portugal and Russia which are in
column 5.
t Non-industrial countries. A large proportion went to South America.
:j: The increase in the column after 1909 is mainly owing to increased exports
to France.
Source: Annual Statements of Trade.

As Tables VI-VIII show, virtually all imports of most types of

electrical equipment were from the industrialized countries of
Europe, with Germany more important than the others taken
together, and from the USA. Exports rarely went to Europe, except
to France. Usually they were to British possessions overseas,
per ton of British exports was between £70 and £85 a ton between 1904 and 1913.
British imports from Germany rose from £70 a ton in 1904--05 to £120--£150 a
ton in 1911-13. The value of machinery per ton imported from the usA was also
rising faster than the value of machinery exported. Literary evidence suggests a
similar picture.
259
 TABLE v II: British Trade in Electric Cables 1906-13
Origins and Destinations of Imports and Exports (£000, current prices)
A. Imports:
Electric Light and Telegraphic and
Year Power Cables Telephone Cables All Electric Cables >-j
Germany Others Total Germany Others Total Germany Others Total ::i::
1906 77 59 136 115 68 183 193 127 319 m
1907 123 37 160 153 81 234 276 118 393 t::!
m
1908 133 42 175 76 49 125 209 91 300 <
1909 142 55 197 98 49 147 239 104 344 m
t""
1910 143 59 202 207 62 269 350 121 471 0
1911 69 51 121 289 75 364 359 126 485 "d
1912 91 72 163 225 65 290 316 137 453 rs::
m
1913 326 128 454 36 23 59 362 151 513 z
>-j

~ B. Exports and Re-Exports: 0

"l'.1
0 Electric Light and Telegraphic and
All Electric Cables t:11
Year Power Cables Telephone Cables
British ...
~

Europe• Other Posses- Total British Foreign Total British Foreign Total ...
>-j

..."'::i::z
Foreign sions Possessions Possessions
1907 35 168 300 503 564 764 1,328 863 967 1,831
1908 72 193 347 612 290 346 636 638 611 1,248
1909 26 209 394 629 270 494 764 664 730 1,394 t::!
c::::
1910 31 279 522 832 1,112 1,244 2,356 1,634 1,554 3,188 "'>-j
1911 40 224 584 848 260 515 775 844 779 1,623 ~
1912 56 451 683 1,190 932 628 1,560 1,615 1,135 2,750 -<
1913 41 271 661 973 853 1,779 2,632 1,514 2,091 3,605
• Industrial countries in Europe. Excludes Russia, Spain and Portugal which are in column 2 together with other foreign
underdeveloped countries.
Source: Annual Statements of Trade.
 ELECTRICAL PRODUCTS

notably Australasia, India and South Africa, and to under-

developed foreign countries, notably South America and Japan.
Some of the imports from Germany and the us were intra-firm
transfers, although it is significant that German and American
subsidiaries sent little equipment back to Germany and America.
But the existence of foreign-owned producers in Britain is a further
element in the pattern of world trade whereby Britain was relying
heavily on foreign manufactures, while herself supplying some of
her own less sophisticated needs and many of the needs of the
underdeveloped world.
TABLE vm: British Trade in Electric Lamps• 1908-13
Origins and Destinations of Imports and Exports
(£000, current prices)
A. Imports:
Others
Year Germany (Mainly Other Total
Europe)
1908 438 153 591
1909 505 160 665
1910 697 159 856
1911 429 138 567
1912 411 148 559
1913 352 127 479
B. Exports and Re-Exports:
British Other
Year Possessions Countries Total
1908 79 56 135
1909 99 67 166
1910 139 86 225
1911 170 83 253
1912 174 77 251
1913 162 121 283
• Incandescent lamps, arc and search lights and parts thereof and carbons.
Source: Annual Statements of Trade.

The slackening of the growth of demand after about 1903 left

the industry with surplus capacity. The British market for electrical
plant had expanded unexpectedly fast in the late 1890s, and the
new firms had exaggerated expectations. 1 British Westinghouse's
factory was much too big for its needs. Also it had been built in
a great haste and consequent expense; it was lavishly equipped
1 There are a number of instances of power stations grossly underestimating
the growth of demand in the late 'nineties.
261
 THE DEVELOPMENT OF BRITISH INDUSTRY

with American machinery. In December 1905 the company stated

that financial results would get better when the long awaited
traction boom came; but by then the traction boom was largely
over. 1 Siemens's difficulties at Stafford stemmed initially from
having been too slow in extending their heavy plant business. By
1904 when the new works were ready their share of the market
had declined. It was the most unprofitable British factory and went
on making losses right up to 1914. It had to be heavily subsidized
from Germany. G.E.C.'s Witton works, not in operation until
1904, do not seem to have been fully employed as late as 1910.
Despite their early entry into polyphase equipment manufacture,
their heavy equipment works lost a lot of money, although other
divisions of G.E.C. were profitable. B.T-H. and Dick, Kerr did
rather better; the demand for tramway equipment did not fall off
sharply until after 1907, and there was less competition from
abroad than in power station plant.
The smaller firms generally did rather better. The E.C.C.,
forced out of a big power station plant and now concentrating on
factory electrification, had a better profit record than Westing-
house and B.T-H. So did Crompton. They had been forced to
reorganize their works to produce factory motors on a fairly large
scale by the drying up of the market for small power station plant. 2
The increased popularity of electric driving in factories led to the
establishment of new electrical manufacturers specializing in smaller
equipment. They also made bigger profits than the large firms.
For example, the Lancashire Dynamo and Motor Co., which con-
centrated on standard a.c. and d.c. motors· for factory electrifica-
tion, said in 1907 that its profits had been high enough to pay a
dividend of 8½ per cent for the last six years. 3

THE CABLE-MAKING INDUSTRY

The performance of the electrical machinery section of the elec-

trical goods industry was, from the point of view of the firms
themselves, disappointing. The cablemakers, however, were both
profitable and better able to withstand foreign competition. While
British Westinghouse during the years 1903-13 made net profits of
1 Electrician, Vol. 56 (1905), p. 411.
1 R. E. B. Crompton in evidence before the Select Committee of the House of
Lords on the Administrative County of London and District Electric Power Bill,
1905, Q. 4990.
• Electrical Review, Vol. 61 (1907), p. 168.
262
 ELECTRICAL PRODUCTS

2·6 per cent and British Thomson-Houston profits of 2·9 per cent
on assets (excluding goodwill, the value of patents and net trade
lending), British Insulated Wire made profits of 9·9 per cent and
Callenders profits of 7·8 per cent. While Siemens Bros Dynamo
Works lost over £700,000 during the decade 1906-16 on assets of
about £1 million, Siemens at Woolwich (the cable-making estab-
lishment) made an average net profit of 8· 1 per cent.
The cable industry consisted partly of the older established tele-
graphic cable firms, like Siemens Bros, the Telegraph Construction
and Maintenance Company and the India Rubber and Gutta
Percha Company. With the beginning of electricity supply in the
early 1890s, two important new firms, British Insulated Wire and
Callenders, rose to important positions. B.I. Wire was founded to
exploit paper insulated cables and Ferranti was an original mem-
ber of the Board. Callenders, a road material firm, discovered that
bitumen was a good insulator and developed the system whereby
wires were laid in troughs and then encased in bitumen. It was not
surprising that new firms should develop. Gutta Percha, ideal for
submarine cables, was not suitable for heavy currents. 1 and now
dielectrics had to be developed which were cheap to lay as well
as to manufacture. But the advent of electric traction and power
involved no further major changes in design. The upswing in
demand of the late 1890s saw a very substantial expansion of
B.I. Wire and Callenders. Between 1896 and 1904 they together
expanded their fixed assets and inventories by £1 ·2 million, while
four other major cable firms expanded by £1 ·3 million. 2 Callenders
and B.I. Wire continued to grow faster than the rest, and of the
two, B.I. Wire grew much faster.
Cablemakers do not seem to have been at the same disadvantage
with respect to imports as were the machinery manufacturers.
Levy, writing in 1908-09, argued that the quality of German,
Belgian and American electrical machinery was higher than that of
English machinery. 3 But in cables, although the Germans seem to
have done more research, 4 British cables were not at any com-
1 P. V. Hunter and J. T. Hazell, Development of Power Cables, London, 1956,
p. 7.
• Figures are available on inventories and work in progress of five important
cables firms from 1899 to 1912 (Siemens, Glover, Callenders, B.I. Wire, Henley).
The share of B.I. Wire and Cailenders rose from just over a quarter in 1899 to a
half in 1906 and to nearly two-thirds in 1911.
8 H. Levy, Monopoly and Competition, London, 1911.

' K. Grossfield, Interaction of Scientific, Technical and Economic Factors in the

Cable Industry, London M.Sc. thesis, 1956.
263
 THE DEVELOPMENT OF BRITISH INDUSTRY

petitive disadvantage; this was probably because quality improve-

ment in cables was achieved by the use of better quality material,
rather than by any radical changes. The municipalities were much
readier to buy cables than British machinery. Indeed they often
bought them at prices above German cables, while they seem to
have found that the superiority of foreign plant at the prices
tendered more than offset their political desire to buy at home.
As Tables IV and VII show, in telephone and telegraphic cables
British manufacturers were traditional exporters and imports were
small. Most of the exports were of submarine cable. As Table IV
shows, exports of telegraphic cables and equipment had been
running at between £1 and £2 million a year since the late 1870s.
Exports accounted for a large proportion of production. In 1907
exports of telegraphic cables were £1 ·3 million compared with a
total production of £1 ·9 million and imports of only £0·2 million.
In electric light and power cables exports were smaller in relation
to production and there was some of the tendency shown in other
electrical equipment for imports to come largely from Europe-
again often from Germany-and for exports to go to under-
developed countries. For all cables taken together we find that
imports from Germany dominated the import side-in 1903, 60 per
cent came from Germany and this rose to 70 per cent in 1913.
Exports went, as in the case of machinery, to the underdeveloped
world. There is not the same literary evidence as with machinery
as to the possibly greater sophistication of the German cables.
Some imports were, perhaps, complimentary to imports of elec-
trical plant.
No big foreign producer attempted to set up a cable works in
Britain. Also the cablemakers were not vulnerable, as were the
electrical machinery manufacturers to competition from mechanical
engineering.
For these reasons, and because cables were more homogeneous
than machinery, and after 1900 less liable to technical change, the
cablemakers were able to run a successful price agreement, 1 while
the machinery manufacturers were, despite a number of attempts,
unable to form effective price agreements until after 1914.2 The
biggest machinery firms, directed from abroad, were unwilling to
make price agreements, but even if they had price increases would
1 The Monopolies Commission, Report on the Supply of Insulated Electric
Wires and Cables, 1952, pp. 16-17.
1 The Monopolies Commission, Report on the Supply and Exports of Electrical
and Allied Machinery and Plant, 1957, pp. 12-14, 115, 150.
264
 ELECTRICAL PRODUCTS

have resulted in increased imports from Continental producers

who did not have British factories. By contrast there were some
kind of agreements-but not comprehensive ones-between the
British and German cable associations as early as 1907.1

THE ELECTRIC LAMP INDUSTRY 2

In electric lamps more than in any other type of equipment the

British industry was, after the early days, essentially an offshoot of
the American and Continental industry. In 1883 the Swan and
Edison companies amalgamated and used their very strong patent
position to drive their competitors out of the field. Their monopoly
position enabled them to keep lamp prices well above the price on
the Continent. 3 But when the basic patents ran out in 1893, new
home producers, notably the English G.E.C., entered the market
and there were substantial imports.
The developments in metallic filament lamps after the turn of
the century took place in Germany, Austria and the United States. 4
British firms made no contributions and all important innovations
were imported. G.E.C. acquired the British rights for some of the
new filament lamps. Other metal filament lamps entered the British
market through Siemens (the tantalum filament was developed by
Siemens and Halske) and B.T-H. (the tungsten filament was
developed by General Electric).
The American lamp producers had various price agreements,
and ran foul of the Sherman Act in the 1911 Anti-Trust Case. The
Continental producers had also made various agreements from
1894 on and in 1903 formed a cartel. The British price agreement,
which included Siemens and B.T-H., was made in 1905. 5 After the
introduction of metal filament lamps further price agreements were
made. The British agreements were run by the Tungsten Lamp
Association-formed in 1912 by B.T-H., Siemens and G.E.C. who
pooled their patents and licensed other companies. The association
was indirectly associated with the German filament trust formed in
1911 by the main producers, two of whom were Siemens and
Halske and A.E.G. The latter had acquired rights to the G.E.
1 Monopolies Commission, Electric Wires and Cables, p. 18.
1 This section is based on A. A. Bright, op. cit., chapter 6.
3 Edison Swan charged 3s 9d a bulb up to 1893 while lamps were selling on

the Continent at ls.

'A. A. Bright, op. cit., chapter 7.
11 Monopolies Commission, Report on the Supply of Electric Lamps, 1951, pp.
10-11.
265
 THE DEVELOPMENT OF BRITISH INDUSTRY

tungsten filament patents under the 1904 licence agreement.

The trade in electric lamps was not separately enumerated until
1908. But from then until 1913 the dominance of German products
is clearly shown in Table VIII. Lamps were the only electrical
goods where Britain had an import surplus, and, as with other
goods, imports were predominantly from Germany.

This section looks at the international situation in electrical goods

and then goes on to discuss the organization of the British electrical
manufacturing industry, concentrating on the electrical machinery
side, and to suggest reasons for its apparent competitive weakness,
and for the role it played in the world economy.

INTERNATIONAL COMPETITION

The British electrical goods industry must be seen in a world setting.

The biggest and most important electrical manufacturers were in
Germany and the United States. In the middle 1890s, when the
sales of the bigger British Companies were between £100,000 and
£250,000 each, Siemens and Halske had a turnover of some
£2 million and General Electric of some £3 million. By 1910 G.E.'s
sales had risen to about £15 million and Westinghouse's were
about £6 million. A.E.G. and Siemens were each employing about
the same number of men as G.E., although production was some-
what lower. By contrast, British Westinghouse and the British
Siemens had sales of around £1 million each. 1
The German and American firms do not seem to have com-
peted in each other's markets to any extent. A.E.G. and G.E.
maintained at least friendly relations throughout the period and at
times relations were close, especially after the patent licensing
agreement of 1904. Siemens set up a branch in Chicago in 1892,
and it was an important competitor of G.E. in the middle 1890s.
But in 1900 it was acquired by G.E. 2 G.E. sold Thomson-Houston
traction patent rights to the Union Electric Company, but it does
not seem to have interfered much subsequently. By contrast,
B.T-H., originally a patent licensee, was quickly taken over by
G.E.
1 Gold standard exchange rates are used. The Siemens figure excludes Siemens's
cable production at Woolwich also of the order of £1 million.
• H. C. Passer, op. cit., pp. 126-7, 334.
266
 ELECTRICAL PRODUCTS

Continental European markets were largely closed to British

firms. Although world production expanded rapidly in the 1890s
and, after the turn of the century, British exports to Europe
remained static. The Continent was, after 1900, increasingly domi-
nated by the German firms, partly by complex financial arrange-
ments with other manufactures through banks and investment
companies, and partly through an increasing number of restrictive
agreements.
Tables IV and V show that Britain was a net exporter of electrical
equipment throughout the period. The most important contributor
to this net balance was telegraphic equipment. Imports of tele-
graphic equipment were not separately distinguished until 1903-
when they were very small-but as Table IV shows, there were
heavy exports from the 1870s onwards. As imports of non-tele-
graphic electrical apparatus were not separately distinguished until
1897, we may presume that Britain was a net exporter of such plant
up to 1898. From then until 1902 imports grew much faster than
exports, and Britain became a net importer. Although electrical
machinery was not distinguished until 1903, Britain was almost
certainly a net importer up to 1904.
From 1903 to 1908 the British export balance in electrical goods
averaged £1 ·4 million a year, compared with a gross output of the
industry of £14 million in 1907. Imports averaged £1 ·0 million and
exports and re-exports £2·9 million. But this net export balance
was made up of a small surplus in electrical machinery, a sub-
stantial surplus in cables, especially telegraphic cables, and a big
deficit in electric lamps. A very large proportion of British output
of telegraphic cables-two-thirds in 1907-was exported. Imports
of electric lamps in 1908 were nine-tenths of the total output of
lamps in 1907, and imports of incandescent light bulbs in 1908
were half as much again as British production was in 1907.
From 1909 to 1913 the British export balance in electrical goods
as a whole rose to an annual average of £3·4 million, imports
averaging £2·4 million and exports and re-exports £5·8 million.
The export balance in cables was, at £1 ·8 million a year, somewhat
higher than in earlier years, but the export balance in machinery
had risen to £0·9 million a year. Against this there was a deficit
on lamps running at an average of £0·4 million a year.
Tables VI, VII and VIII show the directions of the trade flows.
Imports of machinery came predominantly from Germany and the
United States. In 1904, after the establishment of American firms
in Britain and after specially low tendering by German firms had
267
 THE DEVELOPMENT OF BRITISH INDUSTRY

ended, 74 per cent of machinery imports still came from Germany

and the United States and by 1912-13 this had risen to 87 per cent.
A high proportion of cable imports also came from Germany-in
1906-07, 66 per cent, and in 1912-13, 70 per cent. In electric lamps
we find 76 per cent of imports coming from Germany in the years
1908-13.
British exports of all types of product were concentrated on
underdeveloped countries. A high proportion, 48 per cent of ex-
ports of electrical machinery, 53 per cent of exports of electric
light and power cables, and 63 per cent of exports of electric
lamps, in the years 1908-13, went to British possessions, mainly
India, Australasia and South Africa. A further 41 per cent of elec-
trical machinery exports, and a further 32 per cent of electric light
and power cable exports, went to other underdeveloped countries,
notably South America and Japan. A number of the electrical
utilities buying this equipment were financed from London. Thus,
the facilities of the London capital market gave the help to British
exporters in a way which parallels the help which the German
investment banks gave to the German producers in London, and
which J.P. Morgan and others gave to G.E. in the United States.
In Britain the American and German giants met in the late
1890s at a time when the British firms had failed to develop either
traction or power equipment. Up to the middle 1890s the American
firms were too busy developing the very rapidly growing American
market to intervene actively in Britain. In Germany, Siemens was
the major firm in the 1880s, but because of their desire to keep the
control of the firm within the family, it was not anxious to expand
the London branch too fast after the death of Sir William Siemens.
In the 1890s Siemens were less aggressive than A.E.G., and not
until after 1900 did they decide on a major expansion in Britain.
By then, a large share of the British markets had been captured
by G.E. and Westinghouse. A.E.G. was relatively small until the
German traction boom of the 1890s. It was not as important in
the British market as G.E., Siemens and Westinghouse until after
the first three had established big English heavy plant factories.
But after that it became not only the biggest importer, but a major
supplier of plant.

THE ORGANIZATION OF THE BRITISH MARKET

The British electrical manufacturing (i.e. the manufacturers with

factories in Britain) industry consisted of a few major firms and a
268
 ELECTRICAL PRODUCTS

relatively large number of small producers. But as the industry

grew new firms became the main producers; the original big firms,
by growing relatively slowly, filtered down towards the tail of the
size distribution. Only Siemens remained among the leaders,
although it was never in the vanguard, either in terms of size or
as an innovator.
The crucial period in the fortunes of the original British firms
was the middle 1890s. In the 1880s, despite the slow growth of
demand, they were relatively successful but they then failed to
develop from a strong position. The 1890s were marked by growing
tension between the engineers and businessmen within the firms,
falling profitability and considerable price competition. The system
of marketing was changing; before 1893 a new supply undertaking
ordered all, or nearly all, its plant from one manufacturer, who
designed as well as built it. This practice eventually gave way to
the technique of employing a consulting engineer, who could draw
up detailed specifications and invite tenders. By 1895 it was clearly
established that consulting engineers should be independent of the
manufacturers. This was partly due to the entry of the municipali-
ties into electricity supply; they had always worked in this way,
and their experience with local building monopolies led them to
demand tight specifications and heavy penalty clauses.
Many individual orders for plant were large relative to the type
of manufacturing firm. As firms grew, so the minimum efficient
size of plant grew. Thus, a firm getting a big order would expand
capacity to achieve prompt delivery; such expansion was probably
fairly cheap in circumstances where firms had only recently laid
down new factories. Other firms, given the lumpy nature of orders,
could easily find themselves with spare capacity and be tempted
to cut prices for the next contract. Thus expansion, price cutting
and surplus capacity could, and did, take place together. As
demand was highly inelastic in the short run for machinery as a
whole, prices could fall quite sharply. 1
The size of orders also had its impact on liquidity because
manufacturing firms were often not paid until plant was working
satisfactorily and even then new supply companies often paid in
1 For a similar analysis see G. B. Richardson, 'The Pricing of Heavy Electrical
Equipment; Competition or Agreement', Bulletin of the Oxford University Insti-
tute of Economics and Statistics, Vol. 28 (1966), pp. 73-92. The main difference
between the pre-1914 period and the present time is that there were then many
more buyers. But the pre-1914 situation bears out a number of Richardson's
predictions on the effect of unrestricted competition.
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 THE DEVELOPMENT OF BRITISH INDUSTRY

shares-the market value of which was, at the time, very low.

When prices were high and new capital easy to raise this was of
little consequence, but with falling prices and at a time when the
economy was in general recession as in the early 1890s, it could
be a serious matter. In the late Victorian capital market it was
very difficult to raise money on ordinary shares except at times of
boom, 1 and the speculative history of electrical manufacturing made
investors unduly excited about the prospects of electricity at times
and unduly despondent at others. After a boom, it was difficult to
sell anything but debentures. Yet, to take the example of Brush,
considerable sums of money had to be found even to continue in
business; between 1890 and 1895 fixed assets and work-in-progress
rose by £36,000 while the nominal value of shares of customers
and net trade credit rose by £130,000.
Although electrical manufacturing was fairly highly concentrated,
there was considerable competition from mechanical engineers for
the smaller plant. Throughout the period there were mechanical
engineering firms who added electrical engineering departments as
the scope of electrical methods increased.
Falling prices and liquidity difficulties led to disagreements
between the engineers and businessmen in several of the large
companies in the late 1890s, and in two companies, the E.C.C.
and Crompton, there were serious quarrels. The management of
the E.C.C. was changed in 1893, and quickly came into conflict
with Parker, their chief electrical engineer, who resigned the
following year. 2 The new Board seems to have felt that extravagant
experimentation was one of the causes of financial troubles in the
years 1890--93, although it is clear that there was also speculation,
and probably fraud, by the original promoters. 3 Crompton was
slowly squeezed out of a position of commercial importance,
although he continued 'to superintend the technical side'. In prac-
tice he took no further important part in the company's affairs
until after the First World War. 4
1 J. B. Jeffreys, Trends in Business Organization since 1856, London Ph.D
thesis, 1938.
1 Electrician, Vol. 33 (1894), p. 585. Parker subsequently founded his own
company.
1 One of the promoters was the notorious Jabez Balfour who was imprisoned
for frauds connected with the Liberator Building Society. R. C. K. Ensor, Eng-
land 1870-1914, London, 1936. Owen A. Arnold, 'The Big Swindlers', investors
Chronicle, December 31, 1965. J. W. Beck, A Brief History of the Electrical Power
Storage Co. (unpublished typescript in the library of the Institution of Electrical
Engineers).
'R. E. B. Crompton, Reminiscences, p. 207.
270
 ELECTRICAL PRODUCTS

Management difficulties were not completely eliminated in the

new generation of manufacturing firms. They showed in some, but
not all, of the firms which entered the market around 1900. British
Westinghouse was not well managed in the early days. By 1905
the situation at Manchester was such that George Westinghouse
sent his immediate assistant, and one of his top works managers
to review the situation. Much of the top management was changed.
Major reforms followed in the accounting system, in labour rela-
tions and in the design of machinery. Siemens was also unevenly
managed. After the Von Loeffler crisis in the 1880s when the
managing director, who was not a member of the Siemens family,
nearly gained control of the firm, the family put in Alexander
Siemens, who was less likely to be independent. But he was not
enterprising enough and another member of the family, Carl
Friedrich, was sent to manage the new dynamo works at Stafford.
But he was not a success either and had to be replaced. The under-
taking was transferred to the direct control of Siemens-Schuckert-
werke. By contrast, Dick, Kerr's new electrical department seemed
to have been very competently organized by the American engineer,
S. H. Short, and there is no evidence of management difficulties.
The firm remained relatively profitable, but the demand for traction
plant kept up longer than that for power station machinery, and
there seems to have been less price cutting and hence less strains
on management. B.T-H. was initially staffed by managers and
engineers from G.E. Not all of them were persona grata with the
British staff, but there seem to have been no major difficulties.
Some of the Americans stayed and seemed to have become
integrated with the new British managers.
Contemporary writers often put their problems down to the lack
of a good 'commercial engineer'-or 'engineer trader', who had a
clear eye on the market as well as the technical ability to design
the appropriate plant. There were a number of first-rate engineers
in the British electrical industry; Crompton, Ferranti and Parsons
all had world-wide reputations. But they, like many of the British
engineers, did not have very much commercial ability. The choice
facing them was often to set up on their own as manufacturers as
did Ferranti and Parsons, with limited capital resources, or become
consulting engineers, or, like Crompton, expand by becoming a
public company and run the risk of being squeezed out of a
position of importance when there were financial difficulties.
Co-ordination between businessmen and engineers within firms
was thus imperfect. In addition, the workings of the market failed
271
 THE DEVELOPMENT OF BRITISH INDUSTRY

to provide a framework which would encourage the more effective

types of innovation. In Britain the consulting engineer came to
occupy a central position in the market in the 1890s. He designed
plant for utilities and issued detailed specifications for tenders.
Thus, manufacturers and electrical utilities usually dealt with each
other at arms length. This arrangement was not a happy one.
Generally speaking, the divorce between designers (the consulting
engineers), manufacturers and users led to an unnecessarily wide
variation in design. Each new design would contain some small
improvements, which were, according to contemporary opinion,
often unimportant. The situation in Germany and the United
States was very different. In the United States the relations between
plant manufacturer and utility were close, and utilities often simply
ordered plant automatically from one manufacturer. In Germany
the situation was similar to that in the us and the same financial
groups and industrial banks had interests in both utilities and
manufactures. In Britain in the late 1880s and early 1890s the same
close contact had prevailed, with useful results.
Close co-operation between consumer and manufacturer enabled
development work to be continued when the plant was in opera-
tion. An arms length system with rigid specification and penalties
for not meeting guarantees did not seem to do this. The advantages
of close co-operation are seen on the north-east coast in the
years 1900-14. Merz often invited tenders on very open specifica-
tions or merely consulted the firms he thought could build the
machinery. If, after plant was installed, difficulties were experi-
enced, the manufacturer was called in, and where progress con-
sisted of a series of small improvements made because operating
conditions revealed snags, this was very fruitful. For example, a
good deal of the development of metal-clad switch gear was due
to the close and friendly relations between N.E.S. Co. and Reyrolle,
the manufacturers. 1
Thus, the small size of British firms relative to the size of orders
and their relatively low degree of market power as a consequence
of the dominance of the consulting engineer, seems to have led, at
least in machinery, to persistently low profitability, to difficulties
between engineers and businessmen and to inability to resist minor
changes in specification. By contrast, the British cablemakers, who
were in a stronger market position, achieved standard contract
conditions limiting the rigour of the penalty clauses, and thus
1 H. W. Clothier, Switchgear Stages, Newcastle-upon-Tyne, 1933. C.H. Merz,
Private Notes. R. Appleyard, op. cit.
272
 ELECTRICAL PRODUCTS

achieved a greater degree of certainty in their expected profits. The

greater size of firms and greater concentration of German and
American producers relieved them of many of their difficulties and
uncertainties. This may well have made an important contribution
to their demonstrably faster rate of technical progress.

CONCLUSIONS

Electrical manufacturing in Britain was clearly not self-sufficient.

In machinery manufacturing a viable domestic industry was not
built up. Major innovations led to entry from Germany and the
United States. German and American firms came to dominate the
British market either by establishing factories in Britain or by
importing plant. In cables the British position was stronger, but
imports from Germany were still substantial. In electric lamps the
British market was almost entirely controlled by German and
American producers. In telegraphic equipment, especially in sub-
marine cable work, the British industry was stronger, although
one of the major producers was the German firm Siemens Bros.
Although there were major innovations in Britain, notably the
steam turbine, the main function of the British industry was to
produce the less sophisticated types of equipment for the home
market and for export to the underdeveloped world.
But there is no strong reason to suppose that this situation was
particularly bad for the British economy. Without the entry of
foreign producers the adoption of electrical methods in Britain
would have proceeded much less rapidly, but because of the
existence of strong German and American producers, electrification
in Britain was probably little delayed by weaknesses among manu-
facturers. Although British electrical manufacturers argued for
tariffs, their performance in the 1890s when they were in command
of the home market suggests that tariffs would, on balance, have
slowed down electrification, especially the development of electric
traction and the electrification of factories, and denied to the
economy the benefits flowing from the use of electrical methods.
Thus the weaknesses of electrical manufacturing in Britain were
not crucial to the development of the economy. For, in an impor-
tant sense, the British electrical manufacturing industry was not
an industry of its own at all, but one which after 1895 was an
offshoot of the American and German industries with an important
fringe of domestic producers.

273
 CHAPTER 9

CHEMICALS
BY H. W. RICHARDSON

IN recent discussions about the progressiveness or otherwise of

British entrepreneurs in the pre-1914 period, there has been undue
reliance on 'argument by example'. This technique, which states
plausible but untested generalizations and then supports these with
reference to one or two specific examples, is very defective as a
mode of objective analysis. Even if the ratio of backward to efficient
entrepreneurs (or vice versa) is four to one in any single industry,
it is relatively easy for a supporter of the minority case to find
sufficient individual examples to back up his views. Near unani-
mous generalizations about the characteristics of businessmen in
any past period will be impossible without a much more compre-
hensive documentation than has been available hitherto. Building
up files containing all the relevant information even for one
industry is obviously a long range research programme of no
mean size.
In the interim, a second drawback of the 'argument by example'
method can perhaps be remedied more easily. The method tends
to rely heavily on value judgments in generalizing about entre-
preneurial backwardness. For instance, progressiveness is often
equated with a high rate of innovation. This is not self-evident.
Indeed, it might be difficult in some situations to reconcile willing-
ness to innovate with profit maximization behaviour. Very often
the innovators lose money on their projects, and it is the swarm of
followers, avoiding the pioneer's mistakes and making practical
but minor improvements, who reap the benefits. Even if the innova-
tion is perfected early and gives rise to no teething troubles when
first applied, the ability of the innovator to make money out of it
may depend very closely on adequate patent protection or other
monopoly power. From the point of view of the individual, more
often than not it may be the patient and watchful imitator who
makes a fortune while the daring innovator finds himself in the
bankruptcy court. Of course, even if all this were true it does not
274
 CHEMICALS

follow that a capacity for innovations is undesirable. There is much

empirical evidence to support the argument that a high rate of
innovation in an industrial economy yields a huge bonus in future
growth, and that typically, taking two nations of roughly equal
factor endowments but one growing much faster than the other,
the faster-growing economy will have experienced a much higher
rate of innovation. But does it necessarily follow that a progressive
entrepreneur is one who innovates as fast as he can? If innovations
do not yield reductions in average unit costs, then it would be
irrational for a businessman to introduce them even if the innova-
tions would benefit the future growth of the economy. The
individual businessman cannot be expected to estimate external
economies. The net social returns from investment in innovations
may be higher than the private returns, with the result that a
capitalistic environment may produce a rate of innovation well
below the social optimum. If this is so, then it provides a case for
Government intervention (to bear part of the direct costs or to
guarantee firms against excessive risks or to make changes in the
institutional environment favourable to innovational activity) not
for criticizing entrepreneurs.
These points illustrate the need for clarity about criteria of
entrepreneurial progressiveness. It seems wrong to condemn busi-
nessmen's decisions by reference to hindsight arguments, or because
they base their decisions on benefits to the individual firm rather
than to the economy as a whole. Of course, it may be difficult for
business historians to agree unanimously on objective criteria by
which to judge entrepreneurial actions. But one should at least
state the standards of what one believes constitutes progressive
entrepreneurship. This writer holds that, unless or until better
criteria are found, the actions of the efficient entrepreneur should
bear some relation to the profit-maximizing principle. This prin-
ciple should be construed as referring to private rather than social
gain. Although the entrepreneur cannot be expected to be a public
benefactor acting in ways to benefit the future prosperity of the
economy regardless of the costs involved or the sacrificed profits
incurred, equally he should not be expected to engage in criminal
and antisocial acts in the ruthless pursuit of profits. Social rules of
conduct will act as a constraint on his actions, and if we say that
a dynamic entrepreneur is one who aims at maximizing his profits,
we add the qualification insofar as this is consistent with the ideals
and customs of behaviour of the community in which he lives and
insofar as his actions cause no direct harm to society. Similarly,
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 THE DEVELOPMENT OF BRITISH INDUSTRY

efficient businessmen should normally aim at maximizing profits in

a competitive environment. The businessman who lacks the faith
in himself to emerge successfully from a bout of competition and
who retreats repeatedly into the shelter of trade combinations and
restrictive practices should not be judged efficient.
More important is the question of the time period over which
profits are to be maximized. If the time horizon is very short, the
side effects of actions to maximize profits, say, over a period of
two months may harm future profits to a far greater extent than
the immediate gains. For instance, a businessman might improve
his short-term profits by sharply reducing wages in a period of
general unemployment but antagonize labour in a way which
reduces his profits when trade revives (through strikes, intentionally
lower labour productivity, etc.). On the other hand, if the time
horizon is very long there will be so many uncertainties involved
in profit-maximizing calculations that changed conditions are very
likely to make the estimates hopelessly astray; to take an extreme
example, if a businessman aimed at maximizing profits over a
twenty-year period, unforeseen technological changes could render
equipment invested on this basis obsolete long before the time
period was up. An arbitrary but reasonable time horizon is perhaps
five years.
Finally, businessmen have to act within a given institutional
environment. Institutional environments differ between countries,
and some environments favour a higher rate of technical progress
or a freer exercise of entrepreneurial initiative than others. Entre-
preneurs acting in an unfavourable environment cannot be expected
to show up as well as those in a very favourable one, but it does
not mean that they are less able. Historians have sometimes ignored
the existence of varied environments, and have written as if busi-
nessmen in, say, nineteenth-century France should be judged by
exactly the same standards as businessmen in nineteenth-century
USA. But the actions of an individual entrepreneur are limited by
the conditions in which his acts take place. To take a playing card
analogy: one cannot expect every player to be dealt all the high
cards, nor condemn any single player for not having them. What
makes a good player is not the cards he holds, which are beyond
his control, but how he plays them. Similarly, what makes a pro-
gressive entrepreneur is how he acts in a given set of conditions. It
is assumed that the individual businessman has no power of his
own to alter the institutional environment in which his actions
take place. It is less easy to make this assumption about the entre-
276
 CHEMICALS

preneurial class as a whole. If the institutional environment can be

changed by legislative or executive means, and if businessmen are
agreed on their objectives, there should be scope for entrepreneurs
acting as a pressure group to reform the environment in a manner
favourable to them. But, as a political rather than an economic
question, this possibility will not be considered further here.
To sum up, one possible criterion of efficient entrepreneurship
may be stated as follows: within a given institutional environment,
the pursuit of profit-maximization over a five-year period in com-
petitive conditions and in a manner acceptable to society's general
code of conduct. This standard is, of course, arbitrary, will not be
acceptable to everyone, and has no special claim to validity. Its
justification is simply that it is best to state openly one's criteria,
however imperfect, than to keep them secret or to have no criteria
at all. The criterion chosen, at least, avoids the pitfalls of criticizing
entrepreneurs for failing to innovate at the social optimum rate
and of making international or inter-temporal comparisons of
entrepreneurial behaviour without recognizing that the institutional
environment forms a constraint on businessmen's actions and
varies both between countries and over time.
In the paper that follows, this criterion will not be applied directly
since the information is not available for making firm judgments
on individual entrepreneurial performances. But this introduction
explains why specific examples of Britain's innovational failures
mentioned below will not be used as a stick with which to batter
Britain's industrialists. It also explains why nineteenth-century
chemical masters cannot be blamed for failing to pursue socially
desirable aims if their achievement was at the expense of private
profits, and why the growth of the British chemical industry must
be viewed against a particular historical environment and could
develop and prosper only within the limitations imposed by this
environment. This point of view does not necessarily safeguard the
1875-1914 economy from accusations of lack of dynamism or
enterprise, but it does infer that international comparisons of
entrepreneurial behaviour are difficult to interpret and should not
be immediately accepted at their face value.

II

In assessing the growth of the chemical industry a very serious

difficulty is the impossibility of measuring the overall volume of
output, partly because of the proliferation of products but mainly
277
 THE DEVELOPMENT OF BRITISH INDUSTRY

due to the rapid introduction of new products and processes asso-

ciated with the high rate of technical change. An attempt at an
overall measure is bound to be rough and inaccurate, and a more
reliable procedure is to look at products separately. An approxima-
tion of the importance of the United Kingdom relative to other
major producers near the end of the period under study is given
for some representative products in Table 1.1 By 1913 Britain was
the third most important producer of chemicals, but a long way
behind the United States and Germany. The relative positions
varied considerably from product to product, however. Germany
dominated in dyestuffs, the United States in the production of
sulphuric acid and superphosphates, Britain in soda ash. As the
contributions of Chile, Switzerland and Norway for certain speci-
fied products show, the production of chemicals was not always
confined to the major industrial countries since other nations,
either as a result of some abundant natural resource or because of
specialization in research on one field, were able to compete in
limited areas.

Shares in World Production of Some Chemicals and Allied

TABLE I:
Products, 1913 (%)
Other Major
UK Germany USA France Producers
All chemicals 11 ·0 24·0 34·0 8·5
Sulphuric acid 13·0 20·3 27·1 10·8 Chile
Chemical nitrogen 11 ·7 15·5 4·7 2·2 56-4 Switzerland
Dyestuffs 3· l 85-1 1·9 1·2 6·2
Soda ash (1904) 50·0 19·1 7·1 10·3
Superphosphates 7·0 15·8 27·6 16·4 Norway
Calcium carbide (1911)- 12·3 15·4 9·8 16·0
Rayon yam 27·3 31·8 6·4 13-6

Of course, the 1913 picture is misleading for it gives a static

impression. The chemical industry was changing so rapidly that a
dynamic approach is necessary. Absence of reliable statistics makes
such an approach difficult, but there is no doubt that Britain's
relative position declined markedly over this period. Up to the
1880s Britain had been the dominant chemical producer; Germany
started slowly despite her immense later efforts while the American
industry only became a major force in the 1890s. For example,
taking sulphuric acid, which was often used as a rough measure of
1 Most of these statistics are based on estimates in I. Svennilson, Growth and
Stagnation in the European Economy (1954), pp. 286--91.
278
 CHEMICALS

development in chemicals, in 1878 Britain accounted for 46·2 per

cent of world production compared with Germany's 8·6 per cent
and the United States's 13·8 per cent. Britain began to lose ground
with the development of organic chemicals and electrochemicals.
Her contribution in these fields remained generally small. In the
older-established heavy inorganic chemicals, in acid and alkali pro-
duction and soaps she held her place better but not completely
with the development of rival industries on the Continent and in
the United States. However, she was not in every case outpaced in
the finer fields since her competitive ability in paints, explosives
and pharmaceuticals was comparable with the performance of the
leading producers overseas. Nevertheless, the weighting of chemicals
in total industrial production was lower in Britain than in Germany
or the United States. About 1880, chemical workers per 10,000 of
population totalled 8 in Britain (1881), 10 in Germany (1875) and
9 in the United States {1880); two decades later the respective
numbers were 14, 19 and 19.1
Disregarding international comparisons, the British chemical
industry grew rapidly in the decades before 1914. Sulphuric acid
production increased by over 80 per cent between 1878 and 1913,
soda ash production doubled in the twenty years after 1885, soap
output after a decade and a half of relative stability doubled
between 1890 and 1910, and the production of ammonium sulphate
also doubled in the fifteen years before 1900. 2 It is estimated that
the volume of UK chemical output rose by 48 per cent between 1900
and 1913.3 The total labour force in chemicals rose from 81,000 to
201,000 between 1881 and 1911, partly accounted for by a rise of
37,000 (by 511 per cent) in female employment.' This represented
an increase from 1·7 per cent to 2·6 per cent of the manufacturing
labour force, and a rate of expansion faster than in any other
major industrial group except public utilities. Perhaps surprisingly,
the high rate of growth in chemical production was accomplished
without any upward trend in imports of chemical raw materials.
Between the 1870s and 1914 such imports fluctuated quite widely
from year to year, but imports in 1876 were as high as in any year
in the period 1900-11, and 1883 was in fact the peak year in the
1 British and Foreign Trade and Industry, 2nd series, Cd. 2337 (1904).
2 From production estimates in Svennilson, op. cit., pp. 286,289; L. F. Haber,
The Chemical Industry in the Nineteenth Century (1958), p. 106, and W. G.
Hoffmann, British Industry 1700-1950 (1955), Table 54B.
s LCES, Key Statistics of the British Economy, 190~2 (1963), Table D.
'B. R. Mitchell and P. Deane, Abstract of British Historical Statistics (1962),
p. 60.
279
 THE DEVELOPMENT OF BRITISH INDUSTRY

period 1870-1914. The absence of an upward trend in raw material

imports combined with rapid growth in finished chemicals produc-
tion indicates the extremely strong resource position of Britain in
this industry. On the other hand, the rapidity of growth should not
be exaggerated; not only was Britain's relative position declining
but the weighting of chemicals in total production remained small.
In the Census of Production year 1907 chemicals accounted for
only 3 per cent of net industrial output, equivalent to only about
1-1 per cent of GNP.
The sombre impression of the British chemical industry created
by the obsolescence of the Leblanc soda industry and by German
supremacy in synthetic dyestuffs (both of which are discussed
below) is not an accurate one. There is little doubt about German
dominance in dyes, drugs, chemical glassware, potassium and
magnesium salts, bromine compounds and photographic chemicals.
The United States retained control in electrochemicals where the
main developments emerged around the 1890s: H. Y. Castner's
work in aluminium production, in making sodium cyanide for gold
extraction and in producing caustic soda by electrolysis {his new
plant established in 1897 had a daily capacity of 20 tons of pure
caustic soda and 40 tons of bleach); the extensive use of electro-
thermal processes for manufacturing phosphorus and calcium car-
bide; the refining of copper by electrolytic methods, American
production in this field being almost five times the level of Europe
as a whole. Britain lost her predominance in sulphuric acid pro-
duction due to falling demands from the Leblanc makers and
Britain's laggardliness in superphosphates production and retention
of out-of-date technical methods, particularly the lead-chamber
process rather than the new contact acid process widely used in
Germany by the early 1900s. But although Britain lost ground in
a number of fields, she had marked successes. She was more go-
ahead in soaps, paints, some fertilizers and heavy chemicals, coal
tar intermediates and explosives.
For instance, Nobel's factory at Ardeer, Ayrshire, was the largest
explosive works in the world, and even in the early 1880s had an
annual output of almost 10,000 tons. One of Britain's most suc-
cessful ventures was the soap industry. In difficult trading con-
ditions1 the British soap industry consolidated itself as the world's
leader, based upon three strong firms-Lever Bros, Crosfield's and
1 The rate of growth in soap production was slower in the last than in the
third quarter of the nineteenth century, while British soap consumption stag-
nated between 1900 and 1914.
280
 CHEMICALS

Gossage. 1 These firms had established themselves upon high profits

accruing from windfall gains due to low-priced raw materials in
the last quarter of the nineteenth century. Their continued growth
after 1900 was based upon expanding soap exports (rising from
47,000 tons in 1901 to 80,000 tons in 1911) and compensations
found for tighter competition in soapmaking by diversifying into
chemicals (such as caustic soda production). 2 Of the major soap
firms Lever Bros illustrated the dynamism of the soapmakers most
clearly. In his first ten years of soapmaking Lever raised his annual
output from 2,946 to 38,788 tons. His continued success was based
on introducing a succession of new products supported by heavy
advertising and modern marketing methods, and by establishing a
worldwide organization with branch factories stretching across
Europe and Canada. 3 However, even in the soap field Britain was
not unchallenged, for the main technical advances in soap powders
were made in Germany. 4
One of the major developments in this period, and one which
redounds little to Britain's credit, was the competition between the
Leblanc and Solvay processes in alkali production. Up to about
1880 Britain was pre-eminent, but from that date control began
to slip away from her into the hands of foreign producers using the
cheaper Solvay (ammonia soda) process. Both techniques had a
long history, laboratory experiments stretching back into the early
nineteenth century. Virtually all the main improvements in Leblanc
technology had been effected by British chemists-Losh, Muspratt,
Gossage, Shanks, Gamble, Glover, Hargreaves, Deacon, Weldon
and Chance. Two fundamental steps had been the towers invented
by Gossage, where gas was absorbed in a stream of water permit-
ting recovery of hydrochloric acid (an important by-product from
which chlorine could be extracted for bleaching powder), and
Weldon's process of 1869-70 whereby oxidization of hydrochloric
acid into chlorine was effected by manganese dioxide. This latter
improvement spread rapidly, led to sharp rises in output and falls
1 The latter two firms were acquired by Brunner Mond in 1911, reflecting the
pressures of intensified competition and the need to find a counterbalance to
Lever.
• By 1907 Crosfield's was the second largest caustic soda producer in England.
A. E. Musson, Enterprise in Soap and Chemicals: Crosfield's & Sons Ltd. (1966),
p. 203.
a Lever was not as successful in the United States due to the strength of
domestic competition. C.H. Wilson, History of Unilever (1954), Vol. 1, passim.
' For instance, Persil had been invented in Germany by Giessler and Bauer of
Stuttgart, and patented in Britain in 1903 (Musson, op. cit., p. 199).
281
 THE DEVELOPMENT OF BRITISH INDUSTRY

in the price of bleaching powder, and within five years almost all
the chlorine works everywhere were using it. The Solvay process
also had a long ancestry. In France in the 1810s A. J. Fresnel
discovered how to precipitate sodium bicarbonate by passing
carbon dioxide into salt and ammonia, and sodium bicarbonate
could easily be converted into soda. There was a spate of improve-
ments in the late 1830s by J. Thom and two London chemists,
H. G. Dyer and J. Hemming, and a series of patents was taken
out in the early 1850s by Gossage in Britain and by Grinus, Turck,
Rollard and Schlosing on the Continent. The decisive step was
made by Ernest Solvay (1838-1922) in Belgium in 1861. He made
the process, previously applied only in the laboratory or in piece-
meal fashion, continuous by use of a carbonating tower. In 1865
Solvay began commercial operations with his brother at Couillet
in Belgium. His own output rose rapidly from 179 tons only in
1866 to about 75,000 tons in 1883. He opened factories in other
countries, especially France, and granted licences to foreign com-
panies (including Brunner Mond in Britain in 1872). By the middle
1880s there were also Solvay plants in Russia, the United States,
Germany and Austria.
The Leblanc soda industry developed first because the process
was applied on an industrial scale some years before Solvay's. By
the time the Solvay process had been perfected, Britain had a
sizeable Leblanc soda industry established. But world Solvay pro-
duction surpassed Leblanc within two decades of its inception, and
by 1902 accounted for almost 92 per cent of a world soda output
of 1,800,000 tons. By that time the world price of soda had fallen
to about £4 per ton compared with £13 in 1863.1 In Britain the
Solvay process made less headway. By 1883 ammonia soda ac-
counted for only 12 per cent of UK production compared with
44 per cent in Germany, 45 per cent in France, and 100 per cent
in Belgium and the United States. 2 For most of the period Brunner
Mond was the sole British producer of ammonia soda, and their
output rose from 800 tons in 1874 to 77,500 tons in 1885 and
240,000 tons by 1903. Later, Richards Keane and Gascoigne
obtained a licence (for a royalty of £1 per ton compared with
Brunner Mond's 8s), and in 1893 the Leblanc combine, the United
Alkali Co., opened its own ammonia soda plant.
1 A. J. Idhe, 'Chemical Industry, 1780-1900', Journal of World History, 4
(1957-58), p. 965. For developments in soda technology see C. Singer et al., A
History of Technology (1958), Vol. V, pp. 235-44.
1 W. Weldon, Journal of the Society of Chemical Industry (JSCI) (1883),
pp. 2-12.
282
 CHEMICALS

It is not easy to compare the two methods. The Solvay process

was clean (producing pure soda ash and leaving no insoluble
residue) and cheap (partly because of fuel economies). The Leblanc
process was originally dirty, producing offensive waste until con-
trolled by the Alkali Act of 1881, and consumed fuel heavily. On
the other hand, it was better adapted to the rapidly increasing
caustic soda manufacture and was more suitable for works located
far away from sources of brine. Most important of all, whereas
the chlorine in the salt used in the Solvay process was wasted,
hydrochloric acid was recovered with the Leblanc method. But
these compensations were outweighed by the cheapness of the
Solvay process: even as early as the 1870s Solvay alkali could
undersell (even with the cost of royalty payments) Leblanc products
by 20 per cent, and by 1883 ammonia soda was only 64 per cent
of the cost of Leblanc soda (though the Leblanc producer also
received his hydrochloric acid).
By the early 1880s the lower costs of Solvay production were
having their effect. The development of soda plants in many over-
seas countries had led to overproduction in the alkali industry.
Although demand remained quite buoyant, prices were low:
between 1872 and 1882 the price of soda crystals fell 50 per cent,
of soda ash 55 per cent and bleaching powder 67 per cent. By
1883 one half of the Newcastle producers had shut down, and even
in Lancashire, where firms fared better because of cheaper salt
supplies and greater access to markets, eight works were idle.
Although high import duties abroad were obviously a source of
trouble to an industry exporting more than half its output, the
main reason for the difficulties was improved efficiency in the
newer process. The German tariff had been reduced in 1873, and
Germany did not become a net exporter of soda until the 1880s.
British alkali exports to the United States slumped, especially in
the 1890s, and disappeared altogether by the turn of the century.
No doubt, high tariffs in the 1890s accelerated the process, but the
main factors were a rapidly growing efficient Solvay industry and
electrolytically produced caustic soda and bleaching powder making
inroads into Leblanc by-products. Although British alkali exports
to markets excluding Germany and the United States fell in the
depressed trading conditions of the 1880s, they rose in the next
decade and by 1902-05 were higher than ever before because of
newly developed markets in Latin America, India and the Far
East. But this did not save the Leblanc industry. British alkali
production had been decelerating from the 1860s. By the 1890s
283
 THE DEVELOPMENT OF BRITISH INDUSTRY

output had started to fall, though the Leblanc industry did not
close down until 1920. The early proved cheapness of the ammonia
soda process makes it pertinent to ask why the Leblanc industry
survived for so long and to inquire whether British reluctance to
abandon the Leblanc for the Solvay process was a symptom of
entrepreneurial failure.
One reason for the dominance of Leblanc soda manufacture in
Britain was the above-mentioned fact that the main technical
advances took place here, and given the existing media for trans-
mitting technical information knowledge of the technique was
much more widely known than the Solvay method. By the time the
Solvay process had become available a sizeable Leblanc industry
had been established in Britain and producers were naturally
unwilling to abandon relatively new plants. To this extent, the
timing of Solvay's discoveries was an unfortunate historical acci-
dent for the British chemical industry. Moreover, the Solvay
process had to face early technical difficulties which took some
time to overcome, and this enabled British Leblanc manufacturers
to rationalize about the superiority of their own technique. More-
over, in the 1880s Brunner Mond faced a possible bottleneck in
their dependence on gas manufacturers for their ammonia supplies
which came from coal distillation, though as it turned out the
problem never materialized.
The Leblanc producers did not sit back and wait to be over-
taken. There were considerable plant modernization and cost
improvements in the depressed conditions of the 1880s. The faster
fall in the price of finished soda products than in the price of raw
materials suggested an improvement in efficiency, and by 1882 coal
consumption and wage costs had been reduced to 64 per cent and
56 per cent respectively of their 1872 levels. Advances were made
in attempting to replace coal by coke as fuel and in new methods
of utilizing the technique's by-products (though Solvay too worked
on ideas to produce hydrochloric acid from the residual calcium
chloride of his process). By 1890 the price of Leblanc alkalis had
been cut to a third of their peak level in 1872-73, and there were
signs that the process was becoming competitive with the Solvay
process. Another means of defence was the attempt of Leblanc
producers to combine to control output and to finance cost im-
provements. After the collapse of a voluntary quota scheme for
caustic soda and bleaching powder in 1889, the United Alkali Co.
was set up in November 1890. Its timing was unfortunate since it
coincided with the Baring financial crisis, and this bequeathed it
284
 CHEMICALS

serious :financial problems. Nevertheless, at the time it was the

largest chemical enterprise in the world, with forty-eight firms pro-
ducing 700,000 tons of acid, 150,000 tons of bleaching powder,
180,000 tons of caustic soda and 280,000 tons of crystal soda, soda
ash and sodium bicarbonate. Up to 1893 profit levels were satis-
factory, but from then profits slumped. The combine was handi-
capped by falling exports, unprofitable prices, bad relations with
customers and discouraging trading results which hampered a
radical modernization. It met its difficulties by diversifying into a
range of products including acetic acid, acetone, arsenic, carbon
bisulphide, cyanides, fertilizers, laundry blue, sulphur, nitric acid
and many other products, but its attempts to revive the Leblanc
soda industry failed.
Finally, the Leblanc soda makers made a spirited attempt to
meet Solvay competition by taking advantage of the flexibility of
the Leblanc technique, specializing less on pure soda and more on
bleaching powder and caustic soda. This offered temporary relief,
but was thwarted by the growth of an industry producing chlorine
and caustic soda electrolytically in Britain's best markets, the
United States and Germany. In 1899 a German syndicate bought
up the bleaching powder output of the Castner-Kellner Alkali Co.
for three years, and sold it in Britain below the price set by U.A.C.
The aim was to discourage U.A.C. from selling bleach on the Con-
tinent. The result was an agreement signed in 1901 under which
U.A.C. agreed to a sales quota in overseas markets. Although this
broke down in 1903, after a price war a further agreement was
signed in 1906. But, in effect, the development of electrochemicals
was the writing on the wall for the Leblanc process. The sudden
transformation may be illustrated by the course of bleaching
powder exports. In 1895 UK exports totalled 70,600 tons and Ger-
many's a mere 3,700 tons. Within a decade (1904) British exports
had fallen to 38,800 tons while Germany's had risen to 30,000 tons.
In succeeding years the position worsened still further. By this
time all the chlorine produced in the United States was made elec-
trolytically against two-thirds in Germany and less than 20 per
cent of the chlorine made in Britain.
Did the British chemical industry do everything possible to keei;
ahead in alkali production? The persistent and varied attempts to
reduce the costs and improve the yield from the Leblanc process
are not disputed. But, as indicated below, even in the 1880s Ivan
Levinstein suggested a more radical solution: scrap the Leblanc
plants and rebuild Solvay works. Was this possible? Certainly, the
285
 THE DEVELOPMENT OF BRITISH INDUSTRY

Leblanc makers, already in the throes of sharp competition with

Solvay producers, would have found difficulty in obtaining finance,
and were reluctant to scrap technically efficient if commercially
obsolete Leblanc plants. Yet the success of Brunner Mond both at
home and abroad was a clear example to them of the lower costs
of the Solvay process. It is impossible to absolve other British soda-
makers of the sin of inertia. They were sometimes slow to take
advantage of new improvements: for instance, the Thelen pan
method avoided soda loss in production, and in the 1880s was
used widely on the Continent but only by one British firm, J. C.
Gamble & Sons of St Helens. Despite the financial difficulties and
the costs of scrapping workable equipment, taking out licences for
the Solvay process would have saved the British sodamakers from
years of miserable returns and bankruptcy by restoring the industry
to a sound position where reasonable profit levels and successful
competition were possible.
The synthetic dyestuffs industry was Britain's most notable
failure in Anglo-German comparisons of the chemical industry.
However, although a striking example of Britain's lag behind
Germany before 1914, it was by no means typical of the relative
competitiveness of their chemical industries taken as a whole, and
generalizations based on the dyestuffs trade would seriously under-
estimate the strength of the British chemical industry. The writer
has traced the history of the dyestuffs industry elsewhere, 1 and
only the most general statements will be made here. There were
many reasons for Britain's failure, but it is impossible to evaluate
their relative importance: the disenchantment of German chemists
employed in Britain, the ineffective patent laws, the heavy excise
duty on alcohol and restrictions on its use, the lack of technical
sales services provided by the manufacturers. Most important of
all may have been the contrast between German and Swiss appre-
ciation of the value of and necessity for scientific training and
British reliance on knack, rule of thumb methods and amateurism. 2
Another major factor in German supremacy was the large-scale
operations of her coal tar firms enabling them to carry a profitable
and diversified range of products and to finance heavy develop-
ment costs, whereas even the largest British firms-Levinstein of
Blackley, Read Holliday & Sons of Huddersfield (employing 750
men by 1914) and the Clayton Aniline Co. (bought out by the
1 H. W. Richardson, 'The Development of the British Dyestuffs Industry
before 1939', Scottish Journal of Political Economy, 9 (1962), pp. 110--29.
• This was Sir Henry Roscoe's diagnosis of British backwardness.
286
 CHEMICALS

Swiss company Ciba in 1911)-were pygmies in comparison.

Nevertheless, although many pioneer advances in the late 1850s
and the 1860s had been made in Britain, the industry never firmly
took hold before 1914. This was despite Britain's potentially
favourable position for dyestuffs production: plentiful cheap raw
material supplies (especially anthracene), while Germany long
depended on imports for many coal tar derivatives; cheap caustic
soda; cheap fuel; superficially good export facilities; and, best of
all, a large domestic consumption of dyestuffs on which an industry
could be based. There were many advantages to be gained from
developing the industry. By the mid-1880s, 2½ out of 3 million
gallons of benzole and toluole were exported, and a substantial
proportion of this could have been used at home to produce dye-
stuffs (in fact, only about 250,000 gallons were used in dyestuffs
manufacture). 1 Judging by the returns of German firms, dyestuffs
manufacture was highly profitable. 2 Moreover, a large UK dye
industry would have aided the inorganic chemical producers by
providing a good market for sulphuric and hydrochloric acids: in
the 1880s dyestuffs producers in Germany purchased on average
70,000 tons of concentrated sulphuric acid, 25,000-30,000 tons of
soda ash and 40,000 tons of hydrochloric acid each year.
Despite the possibilities, the industry in the United Kingdom
showed little progress. The only marked impact after the 1870s
was made by two immigrants-Ivan Levinstein, a German who by
1885 was producing 106 different dyes, and Charles Dreyfus from
Alsace. Furthermore, the position deteriorated over this period.
Estimates in the 1880s made the British industry around one
quarter the size of Germany's; by 1913 the German industry was
twenty to thirty times larger than the British. Although more than
half Britain's dyestuffs production was exported, exports showed
little tendency to expand. In the decade 1889-99, for example,
British exports fell by 25 per cent (from £492,000 to £365,000) while
German exports nearly doubled (£1 ·92-£3·75 million). By 1914
almost nine-tenths of UK consumption was satisfied by imports.
The sad history of the dyestuffs industry is the most conspicuous
example of Britain's failure to keep pace in organic chemicals,
progress in which depended far more on basic research than in

1 A contemporary estimate put the value of the raw material at only about
one-tenth the value of UK dye consumption (H. E. Roscoe, JSCI (1882), pp. &-7).
1 Dividends paid by German dye firms averaged over 20 per cent in the 1890s
and early twentieth century.
287
 THE DEVELOPMENT OF BRITISH INDUSTRY

inorganic chemicals. Although not typical, it clearly illustrates

Britain's inferiority in newer developments.

III

Foreign competition in relation to the UK economy may show

itself in several ways, both directly (that is, when UK-produced
goods and foreign-produced goods compete in the same market)
and indirectly. Direct competition may be classified as follows:
(a) competition between British goods and foreign imports in
the domestic market;
(b) competition between British exports and foreign home-
produced goods in foreign domestic markets;
(c) competition between British exports and foreign exports in
neutral markets.
Intensified competition in each of these areas will have different
effects and will give rise to varied responses from British manu-
facturers.
Problems of foreign competition are not confined to rivalry
between sales (though ultimately foreign competition always mani-
fests itself in this form), but may arise in respect to patent protec-
tion laws and licensing agreements. For example, when the British
patent laws did not contain a 'no working' clause it was possible
for foreigners to use a British patent, though British manufac-
turers were forbidden to work it despite the fact that the patentee
himself was not working the patent. Even when the law was
reformed, it gave discriminatory protection since the patentee was
protected much more against domestic than foreign manufacturers,
who in the absence of an international patent law might be able to
obtain access to the patent relatively easily. Of course, it was a
two-way traffic. The growth of foreign industries often in direct
rivalry to Britain stimulated foreign producers to introduce innova-
tions, and by gaining access to these, British industry benefited
from a larger stream of technical knowledge than would otherwise
have been available. Finally, the very fact of foreign progress in
manufacturing must have affected the psychological attitudes of
British businessmen in these and related industries, even though
direct competition between products was not always involved. In
some cases foreign advances may have been a stimulus, in others a
deterrent. In the chemical industry countless references in contem-
porary journals testify to the consciousness of British manufac-
turers and scientists about chemical advances in Germany, France,
288
 CHEMICALS

Switzerland and the United States and show how knowledge of

these advances stimulated British producers to greater efforts. On
the other hand, German supremacy in certain fields (again, syn-
thetic dyestuffs is the obvious example) may have been preserved
up to 1914 by defeatism in Britain about the possibilities of
catching up. It is argued later that one form of indirect competi-
tion, comparative research and development efforts, was of critical
significance in chemicals.
Within the compass of this short study of the British chemical
industry in the forty years before the First World War, it is not
possible to examine in detail all these aspects of the influence of
foreign competition. Attention will be concentrated on the direct
forms of competition as revealed in Britain's international trade in
chemicals. An assessment of what was happening in this trade over
the period is complicated, however, by the inability to make a
ceteris paribus assumption. Income levels were rising and at different
rates in successive phases of the period, and the marginal propen-
sities to import and to export changed in value from one cycle to
the next. The most simple, if rough and ready, method of taking
such fluctuations into account is to compare movements in the
imports and exports of chemicals with movements in total imports
and exports and with changes in national income. This procedure
gives some guide to trends in Britain's international trade in
chemicals relative to trends in the economy as a whole. The weak-
ness of using values as measures of international trade was obviated
by employing Schlote's measure of finished chemical imports and
exports, that is, volumes in £ millions at base year prices, 1 and
Imlah's indices of the volumes of total net imports and domestic
exports. 2 The national income estimates used were Feinstein's,
transferred into real terms by deflating them to a 1900 base with
the aid of A. L. Bowley's cost of living index. 3 Estimates of
chemical exports were used from 1870 to 1913, but imports esti-
mates were available only from 1881. Coefficients were calculated
relating proportionate changes in chemical exports to changes in
total exports and in national income for the decades of the 1870s,
1880s and 1890s and for the period 1900---13:' A similar exercise
1 W. Schlote, British Overseas Trade from 1700 to the 1930s (1952), Tables 13
and 18, and pp. 28 ff.
• A. H. lmlah, Economic Elements in the Pax Britannica (1958), pp. 94-8 and
205-7.
a As given in B. R. Mitchell and P. Deane, op. cit., pp. 367-8.
'Random fluctuations were reduced by talcing three-year averages for base
and terminal years, e.g. 1869-71 annual average rather than 1870.
K 289
 THE DEVELOPMENT OF BRITISH INDUSTRY

was carried out for imports from the 1880s on, and in addition
supplementary coefficients were calculated for quinquennial periods
up to and including the shorter period 1910-13. A comparison of
percentage changes in imports (exports) of chemicals with percen-
tage changes in total imports (exports) provides an index of sensi-
tivity of chemicals to changes in imports (exports). Similarly,
dividing proportionate changes in the volume of chemical imports
by proportionate changes in real national income supplies an
approximation to the income elasticity of demand for imports with
respect to chemicals, while the same relation between chemical
exports and national income gives the income elasticity of supply
for chemical exports.

TABLE II: Coefficients of the Sensitivity of Britain's Overseas Trade in

Chemicals to Total Trade and to National Income
Period Exports Imports
% A Exports % A Exports % A Imports % A Imports
of Chemicals of Chemicals of Chemicals of Chemicals
%A Total %.t:,.Real NI %A.Total %b.Real NI
Exports Imports
(1) (2) (3) (4)
1870s +3-3 +5·1
1880s +0·74 +0·49 +2·11 +1·1
1890s -0·69 -0·13 +1·26 +1·93
1900--13 +0·55 +2·52 +2·35 +4·73

The decennial coefficients are tabulated in Table II. Imperfec-

tions in the data mean that these coefficients should be taken as
approximate rather than indicating precise orders of magnitude,
and though the quinquennial coefficients were referred to in drawing
conclusions in the analysis which follows, they were not considered
accurate enough for reproduction. Had all the coefficients in
columns (1) to (4) remained stable in the region of unity ( + 1·O),
this would have suggested that chemical exports and imports had
risen in line with total exports and imports and with national
income. Stable values in columns (1) and (2) and in columns (3)
and (4) would have implied constant marginal propensities to
export and import. But the actual values in Table II are far from
stable, and examination of these may throw light on the changing
importance of chemicals in Britain's international trade and pos-
sibly on the competitiveness of Britain's chemical industry before
1914.
290
 CHEMICALS

From Table II it is clear that chemical exports fared very well in

the 1870s, increasing more than three times as fast as total exports
and considerably faster than national income. Between 1880 and
1900 the position was reversed: chemical exports grew far more
slowly (in fact, tending to decline slightly in the 1890s) than both
total exports and national income. After 1900 there was an apparent
improvement in that chemical exports rose faster than national
income which was rising slowly, but their rate of increase was
only half that in total exports. Thus, over the period 1870-1913
chemical exports performed well only in the 1870s, though they
shared to a limited extent in the pre-1914 export boom. The export
successes of the 1870s may have had adverse psychological effects
on the British chemical industry. At a time when international
competition in chemicals was emerging, the success of the 1870s
left British manufacturers complacent about the threat of foreign
competition. Because success in chemicals required a long gestation
period of research, development and technical practice, the efforts
of foreign chemical industries took time to show results, and
British chemical firms realized and responded to the dangers too
late.
The import position is even more clear-cut. Throughout the
period 1880-1913 chemical imports increased faster than total
imports and faster than national income. (The quinquennial esti-
mates call for only minor modifications to this generalization.
Chemical imports rose a little more slowly than national income
in the early 1880s, and slightly less than total imports in the early
1890s and in the years 1910-13.) In the 1880s imports of chemicals
increased twice as much as total imports and at a rate slightly
faster than the growth in national income. In the following decade
chemical imports rose more in line with total imports (about I¼
times as fast) but almost double the proportionate increase in
national income. Finally, in the period 1900-13 the coefficients
were approximately 2½ and 4¾ respectively; chemical imports rose
faster than both total imports and national income than ever
before. The conclusion that chemical imports were accelerating
relative to the growth in total imports and national income over
the period 1870-1913 seems unequivocal. Thus, whatever the
response of British chemical masters to the growth of foreign
competition as manifested in finished chemical imports, their
reactions failed to stem the growth in such imports and did not
prevent them rising faster than prevailing income trends and
marginal propensities to import would lead us to expect.
291
 THE DEVELOPMENT OF BRITISH INDUSTRY

Although this evidence presents a prima facie case for declining

competitiveness in British chemicals before 1914, it does not auto-
matically substantiate such an indictment. Chemical imports could
have been rising faster than national income and total imports
because a diversified industrial economy may require increasing
proportions of chemicals as intermediate products as aggregate
income rises. Given some inelasticity of supply in the domestic
chemical industry, this would result in accelerating imports. An-
other, not inconsistent, possibility is that chemical imports could
rise fast because of sharp increases in imports of certain categories
which do not compete with domestically produced chemicals; and
this would only be revealed in a sectoral analysis of chemical
imports. On the other hand, it would still be pertinent to inquire
why the domestic industry could not produce these categories.
There is something to be said for both arguments. There is little
doubt that as industrialization advanced and income levels rose,
the contribution of chemicals to industrial production increased
more than proportionately: Hoffmann's estimates point to an
increase in the 'relative net output' of chemicals in total industrial
net output from 1·3 per cent in 1851 to 1·9 per cent in 1871 and
to 4·4 per cent in 1907. 1 Furthermore, we have already seen that
there was considerable international specialization within chemicals.
Some of the faster-growing import categories were chemicals (such
as dyestuffs, photographic chemicals and calcium carbide) of which
UK domestic production was small. In some cases this indicated
the complete success of foreign competition, but in others the
foreign producer was protected by a natural resource monopoly
or by a series of patents. A sectoral analysis of the British chemical
industry reveals certain fields where Britain was pre-eminent and
able to resist the foreign competition that developed. On the other
hand, these factors do not in my opinion fully explain away the
acceleration in imports.
The belief that Britain's capacity for successful international
competition in chemicals was deteriorating receives further support
from considering the export and import performances together.
The weighting of chemicals in Britain's overseas trade was, no
doubt, increasing. The share of chemicals in total manufactured
imports (by value) rose from 4·8 per cent in 1868-70 to 7·4 per
cent in 1889-92 to 8·5 per cent in 1911-13,2 and the share of
1 W. G. Hoffmann, The Growth of Industrial Economies (1958), Appendix
Tables XL and XLII.
2 Schlote, op. cit., p. 67.

292
 CHEMICALS

chemicals in total domestic exports also increased. But we have

seen that after 1880 chemical exports were rising more slowly in
volume terms than total exports or national income, while chemi-
cal imports were increasing faster than total imports and national
income. Taking 1881-85 annual average as the base (100) for both
imports and exports, imports in the period 1911-13 averaged 350·1
and exports averaged 153·7. Thus, in the three decades before
1914 chemical exports had risen much less than in the course of
the single decade 1871-75 to 1881-85 (when they had increased
by over 85 per cent).
Although Britain remained a net exporter of chemicals, the
export surplus was progressively squeezed between slow-growing
exports and accelerating imports. This is clearly shown in Table III
which compares the export surplus with the total volume of
exports between 1880 and 1913. The position in the 1870s had
been very favourable due to rapidly rising exports, but after 1880
the relative export surplus deteriorates progressively. The decline
up to the turn of the century was modest, but after 1900 there was
a sudden break in trend. From an average of over 50 per cent in
the two decades 1880-1900 the relative export surplus falls to an
average of 16--17 per cent in the period 1900-13. If the progressive
but mild deterioration up to 1900 can be explained by 'natural'
forces such as the spread of chemical production from early to
late industrializers, the climacteric after 1900 is symptomatic of
Britain's declining competitiveness. It is argued later that this
prima facie case for the declining competitiveness of the British
chemical industry, especially after 1900, is consistent with the main
thesis of this paper.

TABLE 111: Relative Export Surplus in Finished Chemicals, 1880s to 1914

(Export Surplus as % of Chemical Exports-Volumes at Base Year Prices)
1881-85 (annual average) 63 %
1886--90 54 %
1~1~5 51%
1896--1900 46 %
1901-05 18%
1906--10 15%
1911-14 17%

The above analysis suggests that British chemical exports were

rising more slowly and chemical imports accelerating relative to
the growth of the economy as a whole. It also shows that the
balance of trade in chemicals slumped markedly around 1900. But
293
 THE DEVELOPMENT OF BRITISH INDUSTRY

the analysis is aggregative and confined only to Britain's overseas

trade. It says nothing of how Britain compared in international
trade in chemicals with other major producing countries, and it
pays no attention to the varying performance of different products
nor to changes in the geographical distribution of export markets
or import sources. These problems must be given some considera-
tion.
Saul has referred to the growth in the value of British chemical
exports from £8·0 million in 1880 to £11 ·6 million in 1890, £12·6
million in 1899 and £24·0 million in 1913. He estimated that in
these years British chemical exports accounted for 29·4, 26·3, 22·8
and 21 ·9 per cent of world trade respectively, and concluded from
this that Britain 'held her own reasonably well' in chemicals. 1 This
is reasonable so far as it goes, but an overall impression of this
kind neglects clear examples of decline in Britain's competitive
power, and ignores of course the serious rapid growth in imports.
For instance, British chemical exports to the great majority of
European countries were falling throughout most of this period. 2
In particular, exports to Germany and the United States fell,
though imports from these major producers were rising: imports
from Germany more than doubled between 1890 and 1912
(£2,341,000-£4,904,000) while imports from the United States,
though smaller, trebled between 1885 and 1907 (£245,000--
£740,000).3 These adverse trade balances were not evenly distri-
buted over all chemicals, but heavily concentrated on certain
products, and to this extent reflected international specialization
in chemicals. The most obvious case was dyestuffs: in 1913 Britain
imported £1 ·73 million out of total imports of £1 ·89 million from
Germany (mainly aniline and naphthalene dyes) and in return
exported only £20,000 of dyestuffs out of total exports of £177,000. 4
Similarly, in photographic chemicals and plates, though imports
were low-£128,250 in 1912-German supremacy was unchal-
1 S. B. Saul, 'The Export Economy', in J. Saville (ed.), Studies in the British
Economy 1870-1914, Yorkshire Bulletin of Economic and Social Research, 17
(1965), p. 13.
1 There were, however, modest increases in exports to Belgium and France
between 1885 and 1895 and to Portugal between 1895 and 1907, while exports
to Spain and Italy rose rapidly in aggregate from £612,000 in 1885 to £1,920,000
in 1907. Tariff Commission Report, Export Trade in Manufactures of the United
Kingdom, Germany and the United States (1909), p. 42.
a ibid., pp. 42-3, and Tariff Commission Report, Trade Aspects of the War
with Germany (1914), p. 13.
'Quoted in the Tariff Commission Report, The War and British Economic
Policy (1915), p. 109.
294
 CHEMICALS

lenged. This was partly because Germany was the exclusive pro-
ducer of many fine chemicals partly because of keen prices quoted
for goods that were produced in Britain. In some products, on the
other hand, German competition was felt most keenly not in
imports to the British market but by competing with British
exports in other markets. In heavy chemicals, for example, imports
into Britain from Germany in 1912 totalled only £255,100, insigni-
ficant compared with British production in the Census year (1907)
of £10·41 million. Yet Germany made substantial inroads at the
expense of British exports of heavy chemicals into other markets,
especially Australia and India; in 1912-13 German exports of
heavy chemicals to India increased by 27 per cent, while British
exports fell by 2½ per cent. 1 Although many cases where imports
increased rapidly are explicable in terms of international specializa-
tion and were counterbalanced by Germany's adverse balance in
coal tar products (excluding dyes) and ammonium sulphate, Britain
cannot be fully excused from accusations of being uncompetitive.
The British chemical industry was probably less diversified than its
main rivals abroad. Given the widely diversified character of
domestic demand for chemicals, the deteriorating export surplus
after 1900 was partly caused by the growth in imports associated
with Britain's narrow specialization, often in old-established pro-
ducts. There is little evidence of Britain developing new lines of
import replacing categories.
After the 1870s chemical exports were not rising as fast as
exports as a whole nor as rapidly as chemical exports from Britain's
main industrial rivals. Moreover, British chemical exports were
concentrated on Empire markets. Although the share of these
markets in total exports varied from product to product (sodium
compounds and ammonium sulphate are instances of lower than
average shares), there was a marked tendency for Empire shares
of chemicals to be considerably higher than in exports as a whole.
In 1880 and 1913 the Empire took 33·7 per cent and 37·2 per cent
respectively of total exports, but the Empire proportions for
pharmaceuticals were 59·0 and 59·9 per cent, for dyestuffs 43·0
and 48·8 per cent and for soaps 54·5 and 54·3 per cent. 2 As a
corollary, the Empire provided the most rapidly expanding markets
for British chemicals. Aggregate chemical exports to five main
Empire markets (Canada, India, Australasia, South Africa and the
1 Board of Trade, Competition with Germany and Austria-Hungary in Neutral
Markets (1914), No. 67, 'Heavy Chemicals', p. 16.
1 Schlote, op. cit., pp. 166-7.

295
 THE DEVELOPMENT OF BRITISH INDUSTRY

British West Indies) rose from £973,000 in 1876 to £2,748,000 in

1900 and to £4,791,000 in 1913.1
Attempts to explain the slow growth in exports as a consequence
of rising tariffs are not fully convincing. There were cases of tariffs
hitting British exports very hard, especially in the alkali trade. The
German tariff of 1879 reduced total soda ash imports by 75 per
cent within the space of one year. A decade later, the Dingley
tariff raised the United States duty on imported alkali by 50 per
cent. In conjunction with improving productivity in American
chemical production, this was sufficient to decimate British soda
ash exports to the United States in one decade, from 145,000 tons
in 1891 to 15,000 tons in 1901. An investigation of tariff levels
against British chemicals in 1904 showed that for three representa-
tive products (copper sulphate, caustic soda and bleaching powder)
tariffs were not high in most markets, apart from a few Western
European countries (with ad valorem duties over 20 per cent) and
the United States (for caustic soda). 2 In many markets British
chemicals were allowed in free. As countries industrialized, new
tariff laws were introduced, but because chemicals were normally
an essential requirement for newly industrialized economies, chemi-
cal imports were rarely treated severely; for example, although the
new Japanese tariff of 1911 included large percentage increases in
duties payable on certain chemicals, the absolute level of the tariff
remained low. Even in countries traditionally assumed to be high
tariff areas, the average tariff level was usually moderate. British
chemical exports to the United States in 1911 were only 60 per cent
of the level of 1895 though the average duty had fallen to 22 per
cent, and the import duty on many products had been progressively
reduced in the intervening period. 3 On the whole, the evidence
supports the view that tariffs were less important in slowing down
Britain's export growth than improving efficiency in overseas
chemical industries.
An investigation in 1909 showed that between 1895 and 1907
British chemical exports to the principal protected markets virtually
stagnated while German exports to these markets almost doubled. 4
1 Ibid., pp. 172-4.
1 Cd. 2337 (1904), p. 172.
1 Tariff Commission Memo., The New Tari.ff of the United States (1914), pp.
21-2. In 1911, German exports to the United States of chemicals were almost
75 per cent higher than Britain's.
' Of total British chemical exports in 1895 (£11.46 million) £7 .19 million went
to protected markets and of total German exports (£13.57 million) £7.74 million
went to such markets. By 1907 British and German exports to protected markets
296
 CHEMICALS

Unless there was marked discrimination against Britain and in

favour of Germany in these markets, an explanation of this must
make reference to Germany's superior competitiveness. Admittedly,
we can point to the export policies of German trusts. Of thirteen
major chemical products only soda was not controlled by a mono-
poly in Germany, and an official inquiry found some evidence that
the German chemical combines exported at prices below the level
of home prices. 1 Internal competition in the British market pre-
vented Britain pursuing a policy of effective price discrimination
between export and home markets. But this factor was less impor-
tant than the efficiency of the German chemical industry, its
product diversification and the production economies associated
with it. In 1901 the export surplus in Britain was only 10 per cent
of total chemical exports whereas in Germany the relative export
surplus was almost 70 per cent. Of sixty-four major chemicals,
Germany had an export surplus in forty-nine. 2 The British trade
statistics are not detailed enough to carry out a similar exercise for
the United Kingdom, but in 1901 five product categories (alkali,
fertilizers, medicines, paints and coal tar products) accounted for
two-thirds by value of chemical exports. 3 There is little doubt that
Britain's chemical industry and export trade were much more
specialized than Germany's.
Britain did not lag evenly behind Germany, for in some products
she was ahead. In fertilizers, British exports in 1913 were 65-70 per
cent more valuable than Germany's, though there was product
specialization since Britain concentrated on ammonium sulphate
whereas Germany exported mainly basic slag and superphosphates.
In heavy chemicals, too, the level of British exports was 70 per
cent higher than the German. In some products Britain and Ger-
many carved up the world's markets between them. In the soap
trade Britain dominated exports to the British Dominions and the
United States, whereas Germany was the chief supplier to South
America and the Dutch East Indies. In drugs and medicines British
and German exports were just before the war roughly equal in
value (£2,352,000 (1913) and £2,244,000 (1912) respectively), but
whereas Britain was unchallenged in Empire markets and China,

amounted to £7.72 million (out of £17.05 million) and £14.75 million (out of
£24.9 million) respectively (Export Trade in Manufactures • .• , op. cit., p. 41).
1 British and Foreign Trade and Industry, Cd. 1761 (1903), p. 358.
2 S. J. Chapman, Work and Wages: Pt. I, Foreign Competition (1904), pp.

218-19.
• Trade and Navigation Accounts, P.P., LXXIX (1901).
297
 THE DEVELOPMENT OF BRITISH INDUSTRY

Germany was dominant in Russia, the United States and most

parts of Western Europe. 1
Chemicals were weighted more heavily in Germany's export
trade than in the export trade of other industrial economies,
11 ·2 per cent of German manufactured exports in 1913 compared
with 5· 1 per cent in the United Kingdom and 3·7 per cent in the
United States. German supremacy was based on a more diversified
chemical trade built upon the efficiently organized, science-based
and research-minded structure of the German chemical industry.
There was a striking contrast between the ubiquity of German
competition severe in all products and the character of British
competition, strong only in a few categories: heavy chemicals,
soaps, paints and fertilizers. In most organic chemicals such as
dyes, perfumes and photographic chemicals, Britain left the field
clear for others. The main factor in the slow growth of British
chemical exports was the rise of foreign competition in the heavy
inorganic chemicals on which early British dominance in chemicals
had been based, and the failure to compensate for this lack of
dynamic by developing new products. Thus, the primary cause of
Britain's competitive weakness was the commodity structure of
her overseas trade in chemicals-that is, concentration on too
limited a range of chemicals, especially on products growing only
slowly in international trade. The very narrow specialization
characteristic of British chemical production and exports is con-
sistent with the thesis developed towards the end of this paper,
that Britain's moderate performance in chemicals was primarily
to be explained by a neglect of research and development (R. and
D.), both in the development of entirely new products and pro-
cesses and in the discovery of new methods of utilizing waste and
by-products accruing from chemical technology in current practice.

IV

The outpacing of the British chemical industry by its foreign rivals

in the pre-1914 period has been ascribed to many reasons: the
inappropriate patent laws, high transport costs, a shortage of
trained manpower, inadequate technical education and spread of
chemical knowledge, half-trained entrepreneurs relying on rule-of-
thumb methods and reluctant to accept new ideas. There was,
1 Competition with Germany and Austria-Hungary .•. , op. cit., Nos. 20, 56, 59

and 67.
298
 CHEMICALS

perhaps, something in all these explanations, but not a final answer

in any one of them.
The patent system was of critical importance to the chemical
industry because the rate of discovery of patentable advances
(whether new chemical compounds or new processes) was higher
than in other industries. Britain's patent laws compared unfavour-
ably with the well-administered and well-designed German system
and with the American patent system which was inexpensive to
operate. By the late nineteenth century only Britain and the United
States, of the major industrial countries, did not compel patents
registered there to be worked there, and in the United States import
duties virtually forced the patentee to work his patent there if he
wished to supply the American market. On the other hand, in
Britain the combination of the existing patent law and free trade
was disastrous, since a foreign patentee could supply the British
market from works established on the Continent. Similarly, the
laws in operation abroad ensured that a British patentee had to
work his patent abroad with the result that foreign competitors
could often gain access to a British patent which was denied to
British producers. The weaknesses of the patent laws had par-
ticularly serious consequences for the dyestuffs industry, and
chemists were far more anxious for patent reform than for tariff
protection.
Before 1883 there was no compulsory working clause at all in
British patent legislation, and the only method of getting a patent
revoked was by very costly court proceedings. The Patents, Designs
and Trade Marks Act of that year empowered the Board of Trade
to compel patentees to grant licences if their patents were not
worked in the United Kingdom. But the new law failed to work
satisfactorily, and could easily be evaded by foreign producers
selling direct to British consumers rather than through recognized
agents. Further legislation in 1902 made but slight changes in
procedure by which an applicant could obtain a compulsory
licence, and in fact aggravated the difficulties of a British producer
wishing to work a patent held by a foreigner since a licence was
not obtainable if the patentee could 'show that the reasonable
requirements of the public have been satisfied'.1 Agitation for
reform was renewed, and the ultimate result was the Patent Law
Amendment Act of 1907. Under this Act, if a patent was not
worked in Britain within four years of its registration, any person
could apply to have the patent revoked. It is significant that this
1 Patent Act, 1902 (2 Ed., VII, c. 34), section 3, clause 5.
299
 THE DEVELOPMENT OF BRITISH INDUSTRY

four-year rule had been advocated by the Society of Chemical

Industry as long ago as 1882, when a memorandum suggesting this
had been sent to the Board of Trade. 1 Although the Act led to a
spate of foreign plants being established in Britain covering a
range of industries including artificial indigo production, it too
proved unsatisfactory. A law case in 1909 (Hatschek's case2)
appeared to put the onus of proof of working in the United
Kingdom not on the patentee but on the applicant for revocation.
An investigation in 1915 reported that the compulsory working
clause of the 1907 Act was 'a dead letter', and argued that if the
Act had proved effective, German dye patents would have been
worked in Britain and the British dyestuffs industry would have
been firmly established at the outbreak of war. 3 Thus, the patent
laws for a long time handicapped British industrialists in fields
where technical advance was rapid, and legislators showed amazing
dilatoriness in amending them despite increasing pressure from
interested parties. But an improved patent law was only a palliative
at a time when the major innovational breakthroughs were being
made abroad rather than at home, and voluntary links and licensing
agreements with Continental producers such as those developed
for Crosfield's by Karl Markel provided a reasonable substitute
for a new patent system:'
The transport costs argument was valid but of minor importance.
Although many of the newer chemicals such as pharmaceuticals
and dyes were light and costly, the heavy inorganic chemicals were
cheap bulky goods, and for these transport charges were more than
a negligible proportion of total costs. Most of the goods carried
from works to points of consumption or to the ports were trans-
ported by rail, and railway charges were heavy and uneven. The
prices of chemicals had been falling rapidly in the last quarter of
the nineteenth century, partly because of the general secular price
fall partly because of improvements in efficiency, but the price cuts
were not matched by commensurate reductions in railway rates.
Intermittently between the 1880s and 1914 chemical manufacturers
agitated against railway rates and the monopolistic position of the
railways. They even became interested in a revival of canal traffic.
But their activities met with only very limited successes. The costs
1 JSCI (1882), p. 253.
2 A. Redford, Manchester Merchants and Foreign Trade, Vol. II: 1850-1939
(1956), p. 129.
8 The War and British Economic Policy, op. cit., p. 121.

• Musson, op. cit., pp. 80-1.

300
 CHEMICALS

of transporting alkali from German works to Frankfurt remained

much lower than from English alkali works to the point of con-
sumption. Transoceanic charges (for instance, in 1885-86 the freight
charge for soap to Bombay cost £1 per ton and to Rio de Janeiro
30s per ton plus 10 per cent primage) were little more costly than
the longer internal hauls by rail.
The lack of trained manpower may have been serious in some
fields such as dyestuffs, but a pool of highly trained labour could
be attracted from abroad by higher wages1 and the supply of
trained domestic labour was steadily increasing. The establishment
of colleges and technical schools and provision for general educa-
tion proceeded only slowly, but was improved education at the
operative level really the answer? Rather it was the lack of high
quality trained chemists at the departmental level that was the
major drawback, and Levinstein confessed that he could not see
'how technical schools or an improved general technical education
can have much to do with an industry requiring the highest tech-
nical knowledge'. 2 The contrast between the 4,000 free public
libraries and the 30,000 school libraries in France and the ninety-
six free public libraries in Britain in the middle 1880s was sharp,
but not very illuminating in view of French backwardness in chemi-
cals apart from later minor successes in electrochemicals and rayon.
It was true that few British masters had received a deep and inten-
sive chemical training but not disastrous in view of the foreign
talent at their disposal. A more serious indictment was their too
ready acceptance of the dictates of the market and their unwilling-
ness to scrap technically well-developed but obsolete plant. As
early as the 1880s, British alkali production was more costly than
the German despite cheaper raw materials (the ex-works cost mar-
gin averaged 15 per cent). Levinstein's prescription for the Leblanc
sodamakers was drastic but sound: 'In my opinion there is only
one way out of it, and that is that the less favourably situated
manufacturers reduce the nominal book value of their present
works, take advantage of cheap capital, cheap salt, cheap ammonia
and cheap coal, and erect ammonia-soda works on the best and
most approved principles.' He gave similar advice to sulphuric acid
1 The effect of the expense of higher wages and salaries to employ foreign
chemists on operating costs was small, since (to take soapmaking as an example)
wages and salaries amounted to only 3-4 per cent of total costs compared with a
raw material content of almost 80 per cent. Admittedly, in organic chemicals
labour costs were somewhat higher.
1 JSCI (1884), pp. 69-73.

301
 THE DEVELOPMENT OF BRITISH INDUSTRY

producers: 'If it really is a fact that our makers cannot sell this
article with a margin of profit at the same price as their German
competitors, they must either remodel their works or alter their
process, and if they cannot be induced to do this, then let a few
large consumers of sulphuric acid combine and put up their own
vitriolic chambers in a convenient locality, adopting all the improve-
ments, whatever they may be, of our rivals.' 1 Needless to say, his
advice was not adopted.
The writer does not wish to argue the merits and demerits of the
above factors, nor to deny their importance. Yet he believes that
most of them are best considered as symptoms rather than causes,
and as symptoms of the same disease-the inability of the British
chemical industry in particular and the British nation in general to
give a realistic appraisal to the benefits of R. and D. There is no
doubt that the progress of organic chemicals (easily the fastest
growing sector of the chemical industry covering dyestuffs, syn-
thetic perfumes, antiseptics, drugs, photographic chemicals and
many other products, and accounting by 1914 for over one-half
of the capital and labour employed in the German chemical in-
dustry) depended vitally on current developments in theoretical
chemistry as well as on expensive and time-consuming empirical
laboratory research into chemical reactions. One authority believed
that there was far less chemical research in England in the early
1870s than in the 1850s, and put this down to the apathy of the
universities. 2 He was supported by Levinstein, who complained of
the 'extraordinary want of interest' shown by British professors.
Industrial and technical journals were more numerous in Germany,
and many British researches were first published abroad. 3 German
supremacy was more evident in developing new products than in
manufacturing old ones (which Britain did very efficiently in cases
where techniques of production changed slowly), and this was
almost certainly due to greater research effort. There is no way of
measuring the relative research efforts of Britain and Germany at
this time. One can only refer to imprecise indicators such as the
fact that the main German coal tar producers took out eleven
times more patents than their British competitors in the last fifteen
years of the nineteenth century. A measure of a similar kind is the
country of origin of abstracts summarized in scientific journals.
1I. Levinstein, JSCI (1886), pp. 355-7.
1Frankland, Transactions of the Chemical Society (1872), p. 20.
1 For instance, Glover's research on denitrating towers first appeared in a
German periodical and came to the notice of German vitriol makers.
302
 CHEMICALS

Taking a British journal, the Journal of the Chemical Society, we

find that in 1872 there were 151 British abstracts and 809 German;
ten years later the margin had widened, 232 as opposed to 1,442.
Germany was even more predominant in the organic field: in 1882,
574 German organic abstracts appeared compared with 96 from
France and only 59 from the United Kingdom. 1
The inequitable distribution of basic research was not coinci-
dental resulting, say, from the chance clustering of chemical
geniuses in some countries rather than in others, but followed from
the striving of German chemical masters after technical perfection
and from their realization of the close links between basic research
and technical efficiency, especially in organic chemicals. At the
Bayer works, for instance, under the direction of Carl Duisberg,
the number of research chemists increased from five in 1885 to
over twenty-five by 1896, and the rate of expansion probably
accelerated up to 1914. Landes has argued that the German chemi-
cal industry was geared to what Schumpeter called 'institutionalized
innovation', and contrasted the profit maximization calculus and
short-time horizon of British industrialists with the 'technological
rationality' of the Germans. As he succinctly puts it: 'This was a
different kind of arithmetic, which maximized, not returns, but
technical efficiency' and 'The new was desirable, not so much
because it paid, but because it worked better'. 2 But this argument
merely echoes what had been pointed out by the Royal Commis-
sion on Technical Instruction in 1882: 'The Englishman is accus-
tomed to seek for an immediate return and has yet to learn that
an extended and systematic education, up to and including the
methods of original research, is now a necessary preliminary to the
fullest development of industry.' 3 Thus, surprisingly, Britain's dis-
paragement of R. and D. was known to contemporaries. Nor was
it a question of gradual realization of the neglect of basic research
followed by increasingly greater measures to remedy it. In fact, the
British attitude was well known from the beginning; some far-
seeing chemists were already sounding the alarm in the 1870s and
1880s, 4 and Levinstein lamented that 'the British are content with
1 From figures compiled in JSCI (1884), p. 153.
2 D. S. Landes, 'Technological Change and Development in Western Europe,
1750-1914', in The Cambridge Economic History of Europe, Vol. VI, Pt. 1 (1965),
p. 581.
• R.C. on Technical Instruction (1882).
' As C. C. Stanford melodramatically told the Society of Chemical Industry in
1884: 'Don't starve your laboratory; for while you are building a large factory on
the usual approved principles for making some marketable products, full of devices
303
 THE DEVELOPMENT OF BRITISH INDUSTRY

simply acknowledging the ever increasing amount of experimental

research in Germany, without making the slightest effort to over-
take their opponents'.
Of course, expenditure on R. and D. does not always pay off
and can often be a waste of money. In some circumstances it may
pay countries to let the pioneering efforts be made elsewhere, and
to adopt improvements only after the technical imperfections have
been solved, often at great expense. In many cases even when R.
and D. brings forth useful results, these results are applicable in a
field outside the range of the firm financing the expenditure. The
large widely diversified combines characteristic of the German
chemical industry were consequently likely to find R. and D. effort
more rewarding (and easier to finance) than their smaller and often
highly specialized British counterparts. It is well known that many
of the benefits of R. and D. are external economies, and that the
social return from R. and D. expenditure is far higher than the
private return. For this reason, the failure of British chemical firms
to devote many of their resources to R. and D. cannot be explained
in terms of entrepreneurial backwardness. On the other hand, the
returns from R. and D. were probably higher at this time in
chemicals than in other industries; it was clear, for example, that
the development of new synthetic compounds from coal-tar deriva-
tives was impossible without patent trial and error and costly
research in laboratories (on average, less than 1 per cent of the
dyes tested in German works ever reached the market). But even
where research expenditures were more likely to pay off, the British
industrialist was reluctant to undertake them. This was because he
was a prisoner of his environment. British industrial supremacy
had been built by practical men, albeit with links and in com-
munication with theoretical scientists. Heavy R. and D. expendi-
tures had not been necessary to Britain's industrialization: this
reflected the period in which her industrial leadership had been
established, the industries on which it had been based (textiles,
coal and iron) and the level and character of technology prevailing
in the first half of the nineteenth century. When technical advance
came to depend on research effort as organic chemicals did in the
late nineteenth century, it was difficult if not impossible for the
for labour and fuel economy, some pale-faced student in a far-off foreign labora-
tory may be patiently, quietly, but surely undermining the whole fabric' (JSCI
(1884), p. 151). There was also evidence of a prejudice amongst chemists them-
selves in favour of pure academic research and against industrial research; see
J. J. Beer, The Emergence of the German Dye Industry (1959), pp. 19-20 and 44--7.
304
 CHEMICALS

British to appreciate this dependence. The underestimation of the

benefits of R. and D. widespread in the United Kingdom could
have been changed, especially by scientists and industrialists them-
selves, but it could not be changed overnight for the attitude was
deeply rooted in society itself. Moreover, since the main benefits
were likely to be external economies, an individual entrepreneur
striking out on his own in research would probably have been
inviting losses and waste. At a time when State intervention in
Britain was mainly limited to providing a legal framework for the
pursuit of individual action, this was a dilemma from which there
was no easy escape. In Germany, on the other hand, by 1911 the
State had sponsored a research institute {the Kaiser Wilhelm
Gesellschaft) built by private donors but the operation and adminis-
tration of which was financed by the Government. 1
A difficulty with this thesis is that if the contrasting attitudes of
Germany and the United Kingdom to chemical research and Ger-
many's success were so well known to contemporaries, why were
the steps taken to remedy the situation so slow and ineffective?
The explanation is that R. and D. effort paid only in the long run.
Despite the fact that Britain's lag behind Germany in chemical
research had been marked since the 1870s, the analysis of Britain's
international trade in chemicals earlier in this paper showed that
any decline in competitiveness was not obvious until after 1900.
British industrialists could always shrug off the pleas of chemists
for further attention to basic research by asking for concrete
evidence of German supremacy. Outside certain specialized fields
German predominance was unclear up to the turn of the century,
and short-run developments were not too disadvantageous to
Britain. The massive effort put into scientific, especially chemical,
research by Germany (and to a lesser extent by the United States,
Switzerland and France) after 1870 only paid off in the following
generation. Suddenly, around 1900 the impact of this foreign com-
petition was felt, and then there was a gradual appreciation by the
British chemical industry of the benefits of R. and D. But, again
because of the long pay-off period attached to research effort, the
results of any UK attempts to catch up in the scientific field before
1914 did not manifest themselves until much later, during and after
the First World War.
Britain's neglect of R. and D. should not be elevated into a
single factor explanation of the declining competitiveness of the
British chemical industry. Foreign industries developed for reasons
1 Beer, op._cit., pp. 113-14.
305
 THE DEVELOPMENT OF BRITISH INDUSTRY

other than pure scientific effort, and it would be a mistake to rule

out the influence of factors such as tariffs altogether. Moreover,
although the limited research effort into synthetic dyestuffs was a
primary factor in the lack of success of the dyestuffs trade before 1914,
a contemporary estimate was that 75 per cent of UK-produced ben-
zene-toluene and 90 per cent of anthracene exported could have
been converted into dyes with existing knowledge and without any
research advances of any kind. Inadequate research does not
explain the overtaking of Britain in alkali production. The situation
was not so clear-cut that contemporary chemists were unanimous
in the view that Britain suffered from failure on the research side;
Muspratt, for example, blamed not the theoretical chemist but the
chemical engineer for the industry's troubles. Furthermore, the
disparaging attitude to research can be exaggerated: in 1888 only
six years after its inception the Society of Chemical Industry, a
society composed of chemical manufacturers and scientists and
publishing research material on a wide scale, already had a mem-
bership of over 2,400, making it the largest scientific society in the
country. But when all the qualifications have been made, it remains
probable that the British chemical industry before 1914 was the
first, but by no means the last, victim of the sin of underestimating
the returns from investing in R. and D. But the sinner was not so
much the British chemical master as society at large.

306
 CHAPTER 10

THE GLASS INDUSTRY

BY T. C. BARKER

H. J. POWELL, who entered the glass industry in the 1870s, had

some very damning comments to make about its lack of enterprise
when he came to look back just after the First World War:

'The word parlous aptly describes the condition of the English

glass trade before the war. Chance Bros kept alive with difficulty
the manufacture of optical glass. A few automatic bottle-making
machines had been introduced in some of the Yorkshire bottle-
works and there were slight signs of vitality in the manufacture of
hand-made and artistic table ware.
The unfortunate condition of the glass trade was attributed by
men of science to ignorance and want of initiative on the part of
manufacturers; but by the manufacturers it was attributed to free
trade, unfair trading conditions, and to the gulf dividing industrial
from academic chemistry.' 1

There was no department in any British university which specialized

in glass technology until one was set up at Sheffield during the
First World War, 2 no Society of Glass Technology until one was
formed in November 1916 and no technical journal for the industry
published in Britain until the Society began to produce its own in
1917. At the inaugural meeting of the Society, Dr (later Professor)
W. E. S. Turner, who was the moving spirit in all these develop-
ments, remarked upon the need 'for contact with science and men
of science by which means alone the deadening influence of genera-
tions past could be overcome'. 3
Such pre-1914 statistics as we possess for the industry seem to
confirm these depressing verdicts. The numerical evidence is very
thin, however. There are no reliable employment statistics and the
only production figure for the industry as a whole is contained in
the brief reference to glass hidden away in the Final Report of the
1 Harry J. Powell, Glass-making in England (Cambridge, 1923), p. 166.
s Arthur W. Chapman, The Story of a Modern University (1955), pp. 264--9.
8 Journal of the Society of Glass Technology (JSGT), Vol. I (1917), p. 4.

307
 THE DEVELOPMENT OF BRITISH INDUSTRY

First Census of Production. According to this, gross output in 1907

was worth £4,899,000. The value of exports free on board in that
year amounted to a little less than one-third of the works value of
glass produced, while the value of net imports taken at the port of
landing was nearly two-thirds of the value of similar products
made in the United Kingdom. 1 The foreign trade :figures since the
mid-1870s tell the same sorry story.

TABLE 1: Average Annual Glass Imports, Exports and Re-Exports,

1875-1914
£000
Imports Exports Re-Exports
1875-79 1,823 875 160
1880-84 1,670 1,020 183
1885-89 1,707 1,043 151
1890-94 2,389 889 94
1895-99 2,944 871 72
1900---04 3,507 1,060 78
1905--09 3,053 1,305 87
1910-14 2,989 1,688 71
Source: Trade and Navigation Returns. Imports and exports have been con-
veniently summarized for the years 1875-1904 in Report of the Tariff Commission,
Vol. VI, The Glass Industry (1907).

This tale of woe need not necessarily, however, be one of un-

relieved gloom. As the trade :figures above show, the British glass
industry's weakness was no new development of the later nineteenth
century. And it would be a mistake to treat it as a single, coherent
industry. There were, in fact, three major branches which were
independent of one another:
1. Flint glass and tableware manufacture, which concentrated
upon the production of such items as wine and other glasses,
cruet sets, flower vases, decanters and cut or engraved glass
of various sorts.
2. Bottle and jar manufacture, which served brewers, wine and
spirit merchants, mineral water firms, jam-makers, etc.
3. Flat glass manufacture, which was itself divided into the
thinner blown window glass and the thicker cast and polished
plate glass. Most of the output from this branch went to the
building industry, but plate glass was also silvered and sold
as mirrors.
The chemical composition of the glass differed in the various
1 Final Report of the First Census of Production of the United Kingdom, 1912-13,
[Cd. 6320] CD(, pp. 758-9.
308
 THE GLASS INDUSTRY

branches, the techniques of manufacture were quite different and

so were the markets for the finished product. Indeed, these were
more like three separate industries than three branches of the same
industry. Was the evident weakness which is to be seen in the
trade figures a feature of all three parts?

II

It is significant, perhaps, that H. J. Powell, who expressed such

strong views about the backwardness of Britain's glass industry
before 1914, knew most about its weakest branch. He managed a
family flint glass concern, the Whitefriars Glassworks in London.
In flint and decorative glass the British manufacturer could hold
his own both in quality products and in heavy glass dishes and
bowls on which freight charges from abroad were high. They were
unable, however, to capture the growing market for cheaper lines.1
Labour costs seem to have been a most important item, although,
since business records are lacking, it is not possible to be precise
on this point. Skilled craftsmen had a trade union at their back
and those who were dissatisfied with their conditions of employ-
ment could set up in business on their own account without much
difficulty. Very little capital was needed to acquire a disused barn
or cottage and to erect a small furnace. A skilled glassmaker could
do this himself and he did not require much assistance once he
went into production. There were numbers of these tiny factories,
or cribs as they were called, in the Birmingham area. 2
The established manufacturer could save labour costs by making
greater use of moulds to shape the finished article. In this way
lower-paid, semi-skilled labour could be used; but the foreign
competitor, with even cheaper semi-skilled labour, could always
beat him at this game. As a witness told Joseph Chamberlain's
Tariff Commission early in the present century:

'Our foreign rivals make an article of a special shape by taking a

mould and the glass from the furnace, then they get the glass into
a certain shape and hold it over the mould and with one puff the
whole thing is done. That article goes away from the blower, who
need not be a skilled man, and all the rest is very cheap labour.
But they produce some very fine effects. We could do the same
1 Report of the Tariff Commission (TC), Vol. VI (1907), evidence of A. Dodds
and L. J. Murray (witnesses Nos. 282 and 283). No pagination.
1 D. R. Guttery, From Broad-Glass to Cut Crystal (1956), pp. 133-5.

309
 THE DEVELOPMENT OF BRITISH INDUSTRY

thing, but it is not wise to do so knowing that the cheapness of

their labour will kill you however good your productions may
be... .'1

Under these circumstances British flint glass firms fought a

losing battle with their foreign competitors for what was, in fact,
a rapidly-growing mass market. Rising living standards created a
vast demand for this type of glass both for hotels and restaurants
and for the adornment of private houses and their tables. But the
British manufacturer fared badly in this promising market. Already,
by 1879, a factory inspector was commenting on the slow rate of
growth in the flint glass industry in and around Birmingham com-
pared with the growth rates of other local industries. 2 Yet foreign
competition was then still slight; in the later 1870s, the excess of
retained imports over exports of fl.int glass amounted to about
£50,000, while for the whole industry the excess was, as we saw in
Table I, nearly £800,000. In the five years immediately before 1914,
however, the excess of retained imports over exports of fl.int glass
had grown to more than £900,000, while that for the whole industry
stood at just over £1,200,000.

TABLE 11: Average Annual Imports, Exports and Re-Exports of Flint

Glass, 1875-1914
£000
Imports Exports Re-Exports
1875-79 345 264 27
1880 179
1881 178
1880-84 No separate 296
1885-89 returns of 267 No separate
1890-94 imports from 229 returns
1895-99 1882-99 218 1882-99
1900--04 1,020 237 46
1905-09 1,201 231 42
1910-14 1,218 277 30

In the 1870s, when the flint and tableware branch was still relatively
strong, the other branches were much more vulnerable to foreign
competition. By the beginning of the twentieth century, however,
the situation was reversed. As the flint and tableware branch
1 Evidence of L. J. Murray to TC.
2 G. C. Allen, The Industrial Development ofBirmingham and the Black Country
(1929), p. 221.
310
 THE GLASS INDUSTRY

faltered, the other two branches established themselves in a much

stronger position.

III

There were two kinds of bottle glass: black glass used for beer and
wine bottles; and pale green glass used for mineral water, sauce
and patent medicine bottles (narrow-mouth ware), and for pre-
served fruit and jam jars (wide-mouth ware). Some of the bottle
manufacturers of the West Riding of Yorkshire seem to have
switched to the pale green glass trade about the middle of the
nineteenth century, while those elsewhere, and particularly those
in the North-East and in Lancashire, continued to make the
cheaper, common black bottle. By the 1880s, foreign competitors
managed to capture the market in black bottles needed by Britain's
beer exporters; but a home trade in bottled beers was then develop-
ing and the British manufacturers of black bottles held on to this
for a time. When they were eventually driven out of it, they
followed the West Riding's example and turned to the manufacture
of pale green bottles and jars for which the growing trade in
mineral waters and preserves was creating a lively demand. Early
in the present century, however, foreign manufacturers were making
inroads into these markets, too.
Clearly the answer to lower labour costs abroad was for the
British producer to substitute capital for labour whenever possible
and develop new techniques which would cut his production, and
particularly his labour, costs. Some of these innovations could be
applied to all branches of the glass industry: the use of gas-fired,
in place of coal-fired, furnaces, for instance, and the development
of more efficient methods of annealing. A bottle manufacturer,
J. J. Candlish of Robert Candlish & Son Ltd, who gave evidence
to the Tariff Commission on behalf of bottlemakers in the North-
East, said that they had already made these improvements in their
bottle works: 'We have the latest type of gas furnaces; the latest
type of annealing kilns; we have everything that they [the foreign
competitors] have, except cheap labour and tariffs... .'1 It was,
however, the operation of shaping the glass, not of making it,
which involved such heavy labour costs and which therefore needed
to be mechanized. Here the bottlemakers were better placed than
the flint glass firms. The manufacture of a jar or a bottle was a
much simpler process than the production of a wine glass or a
1 Evidence of J. J. Candlish to TC (witness No. 284).
311
 THE DEVELOPMENT OF BRITISH INDUSTRY

decorated water jug. The search for a machine to make jars and
bottles soon attracted the attention of the inventive in Britain as
well as in America and in continental Europe.
The earliest patents for bottlemaking machinery were registered
by British inventors in 1859, 1860 and 1861, but nothing seems to
have come of them. 1 The first patent for a machine which was
actually capable of blowing narrow-mouth ware was taken out in
1886 by J.C. Arnall, postmaster of Ferrybridge in the West Riding,
who is said to have conceived the basic idea, and H. M. Ashley,
manager of an iron foundry there, who was in a position to turn it
into a piece of workable machinery. 2 Ashley took out further
patents, both British and foreign, in his own name in 1887 and
1889. The invention, as he developed it, employed the neck, blow
and parison moulds, the three essential features of the successful
bottlemaking machine. And capital was soon forthcoming for
factory-scale production. Early in 1888 the Ashley (Machine Made)
Bottle Company was formed to take over the patent rights and to
acquire works at Castleford of Messrs Sykes MacVay. A glowing
prospectus was issued and the Leeds Mercury was called in to
explain to the public how, with the aid of the new machine, pro-
duction per furnace hole could be increased from seven to eighty
gross per day, thereby cutting labour costs from 3s IOd to 3d per
gross. The capital of the new company was oversubscribed. But
the business did not prosper. In the year ended July 31, 1890, only
13 per cent of the saleable bottles produced by the company were
machine-made. Improvements continued to be made, however, and
in 1892 a German visitor reported that there were twenty-two
machines actively at work at the Castleford factory. 3 Nevertheless,
the venture did not pay and in 1894 the works and plant were put
up for sale.
The failure to develop the Ashley machine to the stage at which
it could produce a high proportion of saleable glass is puzzling,
the more so as both Bagley & Co. of Knottingley in the West
Riding and Cannington & Shaw of St Helens were subsequently
able to use Ashley machines profitably. 4 Contemporaries attributed
1 W. E. S. Turner, 'Early Development of Bottlemaking Machines in Europe',
JSGT, Vol. XXII (1938), pp. 250-1.
• S. English, 'The Ashley Bottle Machine: A Historical Note', JSGT, Vol.
VII (1923), pp. 324-34. The rest of the paragraph is based upon this source.
8 R. Dralle, Die Glasfabrikation (1911), Vol. II, p. 872, quoted in Turner, loc.

cit., p. 252.
• Edward Meigh, The Development of the Automatic Glass Bottle Machine
(Glass Manufacturers' Federation, 1960), p. 4.
312
 THE GLASS INDUSTRY

the initial failure to mismanagement-to Sykes MacVay's lack of

business skill and to differences between the managing directors
and the mechanical engineer-and partly to complete lack of co-
operation from the bottleworkers' union. As the chairman of the
ill-fated company is reported to have said when it was wound up:
'The bottle machine never had fair play, and he was afraid it never
would so long as the works were carried on at Castleford where
the union was in the very strongest position, and no bottle hand
who was a member of the union would either work himself, or
allow his lads to assist in the working of any of the company's
machines. They were therefore dependent on non-union labour,
and very strong hostility was shown towards their men.' 1
In a better-managed concern and with trade union support the
machine would have a future. But so long as the unmechanized
British bottle industry could continue to share in the rapidly-
growing market for pale green glass and could hold on to, if not
expand, its export trade, there was no particularly strong incentive
to antagonize its skilled workmen by resorting to machines.
By the beginning of the present century, however, there were
clear signs that times were changing and foreign competition was
becoming distinctly more dangerous in the home market:
TABLE 111: Average Annual Imports, Exports and Re-Exports of Bottle
Glass, 1875-1914
£000
Imports Exports Re-Exports
1875-79 No separate 326 No separate
1880-84 returns until 347 returns until
1885-89 1894 when imports 393 1894
1890-94 were_, 425 354
1895-99 427 364 7
1900--04 731 442 8
1906--09 614 492 20
1910-14 693 587 4
After 1900 there was a stronger inducement to install machines.
Joshua Horne, who had built a number of the improved Ashley
machines in his engineering workshop at Castleford in the early
1890s, subsequently made further improvements himself and took
out a patent in his own name in 1901. Machines built to this patent
were put to use in Castleford, Knottingley, Thornhill Lees, Barns-
ley, St Helens, Manchester and Newport. Some were exported to
France, Germany and the United States. Professor Turner has
1 Quoted in English, /oc. cit., pp. 333--4.
313
 THE DEVELOPMENT OF BRITISH INDUSTRY

estimated that about 200 of them were sold between 1901 and
1917.1
Other types of bottlemaking machinery also came into use in
Britain soon after 1900. John Forster of St Helens, for instance,
who, like Ashley and Horne, was an engineer and not a glass
manufacturer, took out British rights for the French Boucher
bottlemaking machine. The pilot plant, which he operated in his
own engineering works, was so successful that he felt justified in
taking over a disused plate glassworks in the town. There he
established a prosperous bottlemaking concern which still exists.
In 1908 he supplied some of his machines for the equipment of
George Younger and Sons's works at Alloa. 2 Two Yorkshire busi-
nesses, John Lumb & Co. Ltd and Kilner Brothers, were also
putting in bottlemaking machinery early in the present century.
In 1907, according to a list drawn up by the Glass Bottle Makers'
Society, which did not claim to be comprehensive, fourteen fac-
tories were then operating bottlemaking machinery. 3 In that year,
1907, however, pilot plant, using American Owens machinery,
began to make bottles in Britain. The initiative had passed to the
Americans.
No.of
Firm• Centre Machines
Breffit & Co. Castleford 5
John Lumb & Co. Ltd Castleford 23
Kilner Bros Thornhill Lees ?
Turner & Co. Savile Town ?
Bagley & Co. Ltd Knottingley 13
John Kilner & Sons Wakefield 4
Kilner Bros Ltd Conisboro ?
Rylands Glass & Engineering Stairfoot,
Co. Ltd Barnsley 20
Cannington, Shaw, Ltd St Helens 7
Forster & Co. Ltd St Helens 7
Nuttall-Dixon & Co. St Helens ?
South Wales Glass Bottle Works Newport ?
Alloa Glass Bottle Works Alloa ?
Brown & Monise Tollcross,
Glasgow ?
• The firms' names are printed as they appeared in the report.
The Americans had first taken the lead in the manufacture of
jarmaking machinery. A patent had been taken out by Philip
1 Turner, loc. cit., p. 254.
1 Ibid., p. 255; T. C. Barker and J. R. Harris, A Merseyside Town in the Indus-
trial Revolution (Liverpool, 1954), p. 451.
8 Quoted in Turner, loc. cit., p. 255.

314
 THE GLASS INDUSTRY

Arbogast in 1881 but not developed on a commercial scale in the

United States until 1893. It was used initially for the manufacture
of vaseline jars, but by 1898 had been considerably improved and
fruit jars were made on it. This was a semi-automatic machine
which had to be operated by skilled workmen. 1
The history of mechanical jarmaking in Britain at first took a
parallel course to that in America: a patent by J. R. Windmill
(1886), which does not seem to have been exploited, was followed
by some commercial use of wide-mouth machinery quite early in
the 1890s. By the end of the decade, however, British manufac-
turers of wide-mouth ware were preferring to install American
plant. 2 This was soon to happen in bottlemaking, too, thanks to
the development of the Owens machine.
Michael J. Owens, a working flint glassmaker, started to experi-
ment with glassblowing machinery in the mid-1890s. He had by
then become manager of E. D. Libbey's flint glassworks at Toledo,
Ohio. 3 On March 5, 1900, Libbey was in a position to sell the
British rights for a tumblermaking machine to an English syndi-
cate, but the syndicate was soon in financial difficulties and the
whole venture came to nothing. 4 A British glass manufacturer, who
was invited to join the syndicate, later recalled why the tumbler
machine failed:

'In England, the heat is liable to material fluctuation. . . . With a

sharp, keen air, you get a much keener furnace than on a hot day
with little air stirring. Mr Libbey's machine had a uniform amount
of air going through, never varying and never accommodating itself
to the varying consistency of the glass, and so was doomed to
failure. They got people to put money into it and erected a factory
near Smethwick, and they worked for five or six weeks, and then
gave it up as a bad job.'5

Meanwhile Owens had started to think about a machine capable

of producing narrow-mouth bottles and he seems to have made a
1 George E. Barnett, Chapters on Machinery and Labor (Harvard, 1926),
p. 68; Pearce Davis, The Development of the American Glass Industry (Harvard,
1949), pp. 206-7.
• Turner, loc. cit., pp. 251---4.
3 Warren C. Scoville, Revolution in Glassmaking, 1880-1920 (Harvard, 1948),

pp. 95-9; James Morrison, 'Mike Owens as a Human Being', The Glass Industry,
Vol. 13 (1932), No. 10, pp. 130--2, No. 13, pp. 185-6.
'Scoville, op. cit., pp. 100--1.
6 Evidence of L. J. Murray to TC.

315
 THE DEVELOPMENT OF BRITISH INDUSTRY

very crude model by 1900. It was not until 1903, however, that the
Owens Bottle Machine Company was formed, at first just as a
licensing body, and not until the machine had been further im-
proved that it began to be used in numbers: in 1905-06 there were
only eight Owens machines at work in the United States, but in
successive years this total increased to 18, 34, 46 and 61.1 In May
1906 the Toledo concern felt sufficiently sure of itself to begin to
build a plant at Trafford Park, Manchester, which came into
operation on April 3-, 1907. It was used mainly for demonstration
purposes but-to make the demonstration more persuasive-its
bottles were put on the market and the undertaking showed a profit
at the end of its run. Although at first British manufacturers, recall-
ing Libbey's failure with the tumbler machine, viewed the repeat
performance with some scepticism, they soon saw that the bottle
machine was quite a different proposition. The new British patent
law of 1907, which obliged foreign patentees to have their parents
worked within three years, also altered the situation. 2
The first European licence was taken out not by a bottlemaking
firm but by the Apollinaris mineral water company, a British-
owned but German-based undertaking which started to make
bottles on the machine in Germany. 3 This intrusion stirred the
established German bottlemakers, then Europe's main producers.
They took the lead in negotiating the European rights, but they
soon associated manufacturers from other countries in these dis-
cussions. 4 An option agreement was signed on August 5, 1907, by
three leading German companies, acting on behalf of this large
European group, and a conference of producers from Germany,
France, Britain, Austro-Hungary, Belgium, Norway, Sweden and
Denmark was held in Dusseldorf in the middle of November 1907.
From this series of meetings emerged the Europaischer Verband
der Flaschenfabriken G.m.b.H. (generally known as the E.V.)
which was to obtain European rights to the Owens machine for
12,000,000 gold marks .(3,000,000 of them due on March 1, 1908)
and to control the spread of the machines among its member
countries. Payment was apportioned according to each country's
estimated annual output at that time:
1 Meigh, loc. cit., p. 7; Barnett, op. cit., p. 88.
• Scoville, op. cit., pp. 121-2; Sir John Clapham, An Economic History of
Modern Britain, Vol. III (Cambridge, 1938), p. 435; Turner, loc. cit., p. 258.
a Ibid., p. 122; Meigh, toe. cit., p. 10.
' The rest of this and the next paragraph is based upon R. S. Biram, 'The Intro-
duction of the Owens Machine into Europe', JSGT, Vol. 42 (1958), pp.19N-45N.
316
 THE GLASS INDUSTRY
Germany 525,400,000 bottles
Great Britain and Ireland 301,000,000
*France 293,000,000
Austro-Hungary 154,600,000
Denmark 24,000,000
Sweden and Norway 32,000,000
Holland 66,000,000
*Belgium 13,500,000
• France and Belgium subsequently withdrew from the agreement.

All the participants (in the case of Britain and Germany through
their national manufacturing associations) contributed both lump
sums and royalties to the E.V., upon which they were all repre-
sented. It controlled not only the distribution of the machines but
also each country's output of bottles, whether by Owens machine
or traditional methods. When labour-saving machinery reached the
British bottleworks, therefore, it came as part of a more far-
reaching scheme to control output. In the event, the E.V. insisted
on what it called 'a quiet development' throughout Europe so as
not to antagonize the labour force. The machines were not to pro-
duce more than 10 per cent of each country's quota in the first year
nor more than S per cent (sic) in each of the following two years.
In Britain the manufacturers' association went further and agreed
that not more than 5 per cent of the working force was to be made
redundant in any one year as a result of this mechanization. By
1914, sixty machines were authorized by the E.V. (There were, for
comparison, sixty at work in the United States in 1909-10, but
164 by 1913-14. 1) Of the sixty, Germany had thirty and Britain
only ten, 2 though she was entitled to about eighteen if the 1907
ratios had been followed. Whether this falling behind is to be
attributed to the 5 per cent redundancy agreement or to the work-
ings of international industrial diplomacy, is not known. But it is
quite clear that the British glass industry was quick to begin
installing the Owens machine, just as it had been quick to adopt
the earlier and less satisfactory types of bottlemaking machinery.
It may, of course, be argued that British manufacturers owed the
Owens machine to German initiative rather than to their own, and
that both the number of machines installed in Britain and the dis-
appointing import figures after 1910 show that the Germans kept
1 Barnett, op. cit., p. 88.
• The first was installed at Alloa. It is said to have been transferred there from
Trafford Park in 1908 (Turner, loc. cit., p. 258; John L. Carvell, The Alloa Glass
Work (privately printed, 1953), pp. 46-7).
317
 THE DEVELOPMENT OF BRITISH INDUSTRY

this initiative within the E.V. and turned it to Britain's disadvan-

tage. But until some business records can be traced, the validity
of such an argument cannot, unfortunately, be tested.

IV

In window glass manufacture the industry showed its weakness

before, not after, 1870. An ever-increasing flow of foreign, par-
ticularly Belgian, window glass poured into Britain after the mid-
1850s, when the customs duties on glass were removed. In fifteen
years imports increased fifteenfold, and by 1870 their level had
probably reached that of home production. Most British producers
had been swept out of business and British manufacture was mainly
in the hands of three large firms: Chances of Smethwick, Pilking-
tons of St Helens and Hartleys of Sunderland.1
At this juncture a new generation assumed control at Pilkingtons.
They were very quick to adopt Siemens gas-fired tank furnaces,
which made possible round-the-clock working by cutting out the
twenty-four-hour gaps which the recharging of the pot furnaces
had necessitated. They imposed strict discipline upon their skilled
glassmakers, introducing staggered contracts after a strike in 1878.
They pursued a keen sales policy at home, developed a large export
trade and kept on cutting their prices in order to meet foreign
competition. Hartleys, less efficient and resourceful, could not stand
the pace and went out of business in 1894, by which time Chances
had fallen behind Pilkingtons in this branch of the industry. The
pace, however, soon proved too hectic even for the Belgians. After
a long strike in 1904---05-the second protracted struggle in the
Belgian window glass industry in four years-the level of imports
of window glass into Britain, which had risen sharply between 1895
and 1905, levelled off and then fell (Table IV).
Window glass was made from cylinders which were blown, slit
and flattened by skilled labour. Pilkingtons were always on the
lookout for means of mechanizing these processes. They were in
touch with Emile Fourcault in 1903 when he was beginning to
experiment with a method of drawing a continuous ribbon of glass
directly from a tank; but they soon saw that much development
lay ahead before his process could be a commercial success. Their
notes of a meeting with Delloye of the St Gobain Co. in Paris
1 This section is based upon T. C. Barker, Pilkington Brothers and the Glass
Industry (1960). Further manuscript material has been discovered since that
book was published and the notes refer only to this.
318
 THE GLASS INDUSTRY

TABLE 1v: Average Annual Imports and Re-Exports of Window Glass,

1875-1914
£000
Imports Re-Exports
1875-79 461 80
1880-84 526 80
1885-89 488 68
1890-94 526 27
1895-99 623 19
1900-04 705 15
1905--09 719 5
1910-14 659 5
NoTE: Exports of window glass are not enumerated separately after 1870.

ten years later, in October 1913, show that the Fourcault machine,
although it was by then capable of producing some good glass,
had to be worked so slowly that it was still not making enough of
it to be of commercial importance. 1
The drawn cylinder process, invented by an American, John H.
Lubbers, and developed by the American Window Glass Com-
pany, had a more promising future, but it was only a partial labour
saver. It blew huge cylinders, thereby dispensing with the glass-
blowers, but it did not do away with the flattening process. The
American Window Glass Company, a selling pool for most of the
American producers, spent several years on its development, during
which time Pilkingtons 'kept a watch upon what was going on
and had the glass over to look at it'. 2 By 1907 it was producing a
sufficient proportion of saleable glass and the American manufac-
turers started to reduce hand-blowing. After the passing of the
British patent law in that year, the American Window Glass Com-
pany approached Pilkingtons to buy the British rights and work
the plant within the stipulated three-year period. An experimental
machine was built at St Helens in October 1909, eight machines
were brought into commercial operation in May 1910 and others
followed in April 1912. They did not displace many hand-blowers
before 1914, however, for although the machines made large
amounts of glass, much of it was of poor quality.
The profitability of their window glass production helped Pilking-
tons to succeed as manufacturers of plate glass, the other section
of the flat glass branch of the industry. They had started to make
1 Pilkington Archives, St Helens (P.A.), Delloye Correspondence; notes of
meeting in Paris, October 29, 1913.
1 P.A., Board Minutes, June 22, 1909. Copy of statement to employees.

319
 THE DEVELOPMENT OF BRITISH INDUSTRY

plate glass at a new works at Cowley Hill, St Helens, in 1876 and

rapidly developed sales abroad as well as at home: within ten years
their exports amounted to two-thirds of the value of their home
sales. In addition to this vigorous sales drive, great emphasis was
laid upon efficiency in the factory. Cranes were introduced to carry
pots from the furnace to the casting table. Improvements were
made to the annealing kilns and, early in the present century, lehrs
began to be installed. The latest grinding, smoothing and polishing
equipment was put in, notably in the early 1890s when Pilkingtons
took both British and American patent rights of the Belgian
Malevez's power-driven discs. These enabled the glass to be ground,
smoothed and polished on the same movable table. When Edward
Ford, a leading American manufacturer who was on a European
tour, was shown round Pilkingtons's plate glassworks in April
1893, he was very impressed:

'These Works are being entirely remodelled, i.e. the machinery.

They believe in the best.... Their Casting Hall is now new....
They cast in the same manner as the American factories. . . . Mr
P. seemed very anxious to sell us the sole right to the Malevez
Patent in America, he claiming it to be the Key to the business in
England, and whoever bought the American right would find it
the same in America. The Pilkington Brothers are the most enter-
prising Plate Glass men, and the most progressive we have met
in Europe, and I think they are in the lead.' 1

Edward Ford's visit came at a time when European exporters

were losing the American market, once a very important destina-
tion for their plate glass. The American plate glass industry,
developed since the 1870s, was now strong enough to supply the
United States market and this growing self-sufficiency was con-
siderably helped by the McKinley and Dingley tariffs. British
exports of plate glass to the United States, worth more than
£100,000 in 1880-84 (about two-fifths of total exports), fell to
£18,000 in 1890-94 and a mere £3,000 in 1895-99. The Continental
(mainly Belgian) producers suffered in the same way and this
caused them to ship more glass to Britain. The British trade figures
tell their own story (Table V).
Pilkingtons, the sole survivors of this onslaught of the 1890s, con-
tinued to invest heavily in improvements at their plate glassworks
1 P.A., File T.D. No. 15, L.O.F., Extract from a diary kept by Edward Ford
during a trip to Europe made with Mr John Pitcairn in 1893.
320
 THE GLASS INDUSTRY

TABLE v: Average Annual Imports, Exports and Re-Exports of Plate

Glass, 1875-1914
£000
Imports Exports Re-Exports
1875-79 215 155 9
1880--84 178 243 15
1885-89 189 251 12
1890--94 319 135 9
1895-99 423 93 7
1900--04 491 119 6
1905--09 472 240 4
1910--14 411 375 5

during this critical period: £100,000 between 1895 and 1903, and
£620,000 between 1904 and 1914. Moreover, in 1901 they paid
£93,000 for the factory of one of their fallen competitors-that of
the British Plate Glass Company at Ravenhead, St Helens-and
made it profitable again; and in 1905 they paid a further £82,000
for another works, those of the former London & Manchester
Plate Glass Company at Sutton Oak, St Helens, though the latter
were never reopened as a going plate glass concern.
It is clear from the trade figures that the competition became
less intense after 1904. The Continental manufacturers, exhausted
by the struggle, formed the Convention Internationale des Glaceries
in that year to control output. This was done by limiting each
company's grinding area and by stopping all grinding for a given
number of days per month according to the state of the market. 1
Pilkingtons, who had invested in a small plate glass factory at
Maubeuge in northern France in the early 1890s, partly as a
diplomatic asset within the Continentals' ring fence, refused to join
the Convention but were prepared to adopt its prices. 2 In 1906
they further agreed not to extend their plant either at St Helens or
Maubeuge, but they were careful to reserve the right to replace
some of their grinding machinery at St Helens. Although the new
machines were to be of the same surface area, being of more
modern design they were, of course, capable of producing much
more finished glass. 3
During the early years of the Convention, while the Continental
manufacturers were stinting output by regular monthly stoppages,
Pilkingtons production was not limited in any way. When, how-
1 P.A., File marked 'Plate Glass Production Conference Notes, November
1906', draft of scheme July 18, 1904.
2 P.A., Delloye to Pilkingtons, December 7, 1910.

3 P.A., File marked 'Plate Glass Production Conference Notes, November

1906', notes of meeting at Brussels, November 12, 1906.

L 321
 THE DEVELOPMENT OF BRITISH INDUSTRY

ever, in 1908 sales fell and the Convention had to increase its
stoppages, Pilkingtons agreed to close eleven of their polishing
benches and a corresponding amount of their grinding capacity. 1
But when, two years later, the Convention proposed to reduce its
stoppages again, Pilkingtons quickly announced their intention of
restarting eleven benches of a much more modem design. 2 This
led the Convention to complain that Pilkingtons had been doing
well during the period of restraint and had gained more than their
fair share of the British market. 3 Pilkingtons's own output figures
show that they certainly produced more glass in these years and
presumably did not put all the extra into stock.

TABLE VI: Pilkingtons's Output of Plate Glass During the Years Ended
June 30, 1904-14
Footage
Year Ending
June 30 (i) at Cowley Hill (ii) at Ravenhead
1904 5,308,045 1,450,210
1905 5,522,453 1,676,721
1906 6,282,328 2,044,734
1907 7,022,198 2,422,908
1908 8,524,394 2,238,551
1909 10,320,843 2,430,832
1910 11,828,663 2,456,688
1911 13,925,992 2,397,030
1912 12,309,611 2,199,726
1913 14,093,125 2,779,238
1914 13,436,589 572,429

Relations between the Convention and Pilkingtons grew more

strained. On July 24, 1912, Pilkingtons were informed (i) that the
Convention was going to establish a centralized export selling
agency in Brussels and (ii) that the St Gobain Company had taken
a financial interest in Pilkingtons's British rival, Chance Brothers.
Delloye of St Gobain, who sent this news, concluded his letter:

'The advantage resulting for the English group from a fixed and
lasting alliance between one of the English manufacturers and an
important Continental company will not escape you. We shall thus
have one more opportunity of co-ordinating our efforts and of
directing our policy in such a manner as to look after the interests
1 P.A., Agreement between Pilkington Brothers Ltd and the Convention Inter-
nationale des Glaceries, July 2, 1908.
1 P.A. Pilkingtons to Delloye, April 14, 1910.
1 P.A., Delloye to Pilkingtons, May 6, 1910.

322
 THE GLASS INDUSTRY

of all and to observe the rules of equity without which no stable

prosperity can be obtained.' 1

The Convention was clearly resolved to bring Pilkingtons more

closely into line. On August 3, 1912, Pilkingtons agreed to send to
the Convention details of their output every three months. By
return of post came a letter from Delloye underlining the signi-
ficance of this step:

'It is necessary that the relative position of your Company and the
Convention should be maintained in the future; it is the only way
of avoiding mutual harm and difficulties of every sort. When once
the three-monthly exchange of figures enables us, in establishing
the amount of a stoppage, to take into account the total sales
(including yours), we shall be able to regulate the proportion
between our group and your factories. It is only under these con-
ditions that the new commercial organizations, whose duty it will
be to sell the productions of the contracting Works, will be able to
fulfil, in due measure, its role without bringing about disagree-
ments. It is quite clear that if an exceptional crisis were to occur
and if we were obliged to reduce our output below the present
figure, you on your part would have to take account of the
situation. ' 2

Unfortunately none of these three-monthly returns has survived;

but it is clear that for the next two years, until the outbreak of
war, Pilkingtons were much more closely linked with the Con-
vention, even to the point of contributing towards a new bottle-
works in Germany, built by the Convention as a reprisal against
one of Germany's leading bottlemakers who had had the effrontery
to set up a plate glassworks there. 8

Powell's downright condemnation of the British glass industry's

performance before 1914 was undoubtedly too harsh. He was
justified in his remarks about backwardness in optical glass, but
this sector, which was of strategic, rather than of major commercial,
1 P.A., Delloye to Pilkingtons, July 24, 1912.
2 P.A., Delloye to Pilkingtons, August 5, 1912.
8 P.A., Delloye to Pilkingtons, June 12, September 13, 1913; Pilkingtons to
Delloye, June 20, 1913.
323
 THE DEVELOPMENT OF BRITISH INDUSTRY

importance, had never taken root in Britain and there was, there-
fore, no particular backsliding before 1914. In general, however,
his criticisms were wide of the mark, for he focused his attention
on the branch of the industry where mechanization had advanced
least and where, in consequence, free-trade Britain was most vulner-
able to competition from countries where labour was cheaper. She
was doubly unfortunate in that this was the branch of the industry
particularly influenced by the growth of mass consumer demand.
Turner's emphasis on science as a universal panacea for the
industry was also a gross oversimplification. Insofar as he had in
mind the lack of chemical analysis of raw materials in the smaller
factories, he had a point. But it was the introduction of processing
machinery which was of primary significance, and here it is open
to doubt whether lack of scientific knowledge was of such over-
whelming importance. After all, the man responsible for the most
outstanding invention of this period, M. J. Owens, was the son of
a coalminer who went to work at a flint glassworks at the age of
ten. In any case, once the cost, not so much of making a rough
pilot model but of developing it into a reliable paying machine,
had become so great, it was often advantageous to stand by watch-
fully while others poured their fortunes into development. The
general manager of the American Window Glass Company claimed
that they had spent millions of dollars in perfecting the drawn
cylinder process and had piled up a loss 'that would have staggered
a banker'.1 The Fourcault Company had expended huge sums in
developing its process and could not foresee any appreciable return
upon it at the end of ten years' anxious work. The payment of
royalties when considerable economies were being effected was a
considerably lighter burden than the payment of interest on capital
borrowed to develop a process which might never be commercially
successful, or, if it were, would become so only some time in the
unpredictable future. The important thing was to have a good
intelligence service and to be sure to obtain a licence for a success-
ful process as soon as it became a paying proposition. This the
British glass manufacturers seem to have been notably successful
in doing at this time : indeed, if anything, as the history of bottle-
making before 1900 shows, they seem to have been a little too
eager to lay their hands on new machines, even to the point of
trying to exploit them before they had been fully developed.
The plain truth seems to be that in an industry which continued
1 William L. Monro, in The Glass Industry as Affected by the War (U.S. Tariff
Commission, 1918).
324
 THE GLASS INDUSTRY

to rely very considerably upon a skilled labour force, Continental

manufacturers still appear, in this period, to have gained some
advantage from their tradition and experience. Glassmaking was
firmly established abroad long before it was introduced, by foreign
craftsmen, to Britain. The first big wave of migrants, it is true,
occurred way back in the sixteenth century, but Britain lagged
behind the continent in this industry for many years after that.
The large-scale manufacture of cast plate glass, for instance, came
to Britain only in the I 770s, nearly a century after it had been
established on the Continent, and sheet glass-significantly known
in this country as German sheet-glass-was introduced to Britain
only in the 1830s, long after it had become familiar abroad. There
was a great pool of inherited skill abroad, which, often together
with lower living standards, placed the Continentals in a strong
position when these countries underwent modern industrialization.
The large imports of window glass from Belgium in the later 1850s
and 1860s are a clear illustration of this strength. The initiative
taken by Continental manufacturers in the regulation of output
and the fixing of prices in both bottle and plate glass manufacture
is a further illustration. The British glass industry could compete
with such highly-skilled foreign producers only if it could cut its
costs, and particularly its labour costs, by technical innovation.
The two branches where major technical innovation was possible
can claim a creditable record during this period. The one where it
was not possible, not surprisingly, cannot.

325
 CHAPTER 11

THE MERCANTILE MARINE 1

BY D. H. ALDCROFT

WHATEVER criticisms might be levelled against British industry

in general in the latter half of the nineteenth century, few if any
apply to the shipping industry. After the Civil War, when the
American challenge was finally thrown off, Britain's mercantile
marine emerged as the largest and most powerful fleet in the
world. It accounted for just over one-third of the total world
ocean-going tonnage (and a considerably higher proportion of the
world's steam fleet) and, although its nearest competitor was still
America, the latter's share of the world tonnage had been reduced
from 19 to 9 per cent in the decade 186~70. The rapid adoption
of the new techniques of shipbuilding and ship propulsion, namely
iron, steel and steam, ensured the maintenance of this supremacy
almost uninterrupted down to the early twentieth century. At the
outbreak of war the British mercantile marine was the largest, the
most up-to-date and the most efficient of all the fleets in the world.
It still accounted for one-third of the world fleet, and nearly one
half the world's steam fleet, and it was almost four times as large
as its nearest and most powerful rival Germany (see Table I). The
vessels on the UK Register consisted, moreover, of the largest and
most efficient type of ships. Britain sold her old vessels to foreigners
and equipped herself with the latest models. Every year around
5½ per cent of the total fleet was disposed of, two-thirds of which
were sold to foreign flags. As a result of this policy 85 per cent of
the tonnage on the Register in 1914 had been built since 1895 and
just over two-thirds since 1900. In terms of world trade carried
and ships built, Britain's superiority was equally pronounced. By
1 This chapter is part of a lengthy study being made by the author into the
history of the British shipping industry mainly since 1850. Research has been
considerably facilitated by generous financial grants from the Houblon-Norman
Fund, the Twenty-Seventh Foundation and the University of Glasgow. The
author is also extremely grateful to the Cunard and Union-Castle shipping com-
panies and to the Chamber of Shipping and the Liverpool Steamship Owners'
Association for their assistance in collecting material.
326
 THE MERCANTILE MARINE

TABLE 1: Tonnage of Merchant Shipping Owned by Various Countries

(million net tons; percentages of total world fleet in brackets)
Country 1860 1870 1880 1890 1900 1905 1911
United Kingdom 4·66 5·69 6·57 7·98 9·30 10·73 11-70
(35·06) (33·9) (32·9) (35·8) (35·5) (34·8) (33·8)

British 1·05 1-46 1·87 1-71 1-45 1·59 1·83

possessions• (7·9) (8·7) (9·4) (7·7) (5·5) (5·2) (5·3)

Germany 0·98 1-18 1·43 1·94 2·47 3·02

(5·8) (5·9) (6·4) (7·4) (8·0) (8·7)

Norway 0·56 1·02 1·52 1-71 1-51 1-48 1-65

(4·2) (6·1) (7·6) (7·7) (5·8) (4·8) (4·8)
France 0·97 1·07 0·92 0·94 1·04 1·39 1·46
(7·2) (6·3) (4·6) (4·2) (4·0) (4·5) (4·2)

us (exc1. Great 2·55 1·52 1-35 0·95 0·83 0·95 0·87

Lakes tonnage) (19·2) (9·1) (6·8) (4·3) (3·2) (3·1) (2·5)
Russia 0·47 0·63 0·66 0·74
(2·3) (2·4) (2·1) (2·1)

Sweden 0·35 0·54 0·51 0·61 0·72 0·77

(2·0) (2·7) (2·2) (2·3) (2·3) (2·2)

Denmark 0·18 0·25 0·30 0·41 0·48 0·54

(l ·l) (1 ·2) (1 ·3) (1·6) (l ·6) (1-6)

Netherlands 0·43 0·39 0·33 0·26 0·35 0·41 0·57

(3·2) (2·3) (1-7) (1 ·2) (1·3) (1·3) (1 ·6)

Spain 0·56 0·62 0·77 0-74 0·79

(2·8) (2·8) (2·9) (2·4) (2·3)

Italy 1·01 0·99 0·82 0·95 1·03 1-11

(6-0) (4·9) (3·7) (3·6) (3·3) (3·2)

Japan 0·09 0·15 0·86t 1-3t 1-St

(0·05) (0·61) (3·3) (4·2) (5-1)

World Total 13·29 16·8 19·99 22·27 26·21 30·85 34·63

• Includes Canada, Newfoundland, Australia, New Zealand, British India and

all colonial territories.
t These figures refer to gross tonnage. The percentages for these years are
therefore somewhat higher than they should be.

Source: Board of Trade, Progress of Merchant Shipping Returns.

327
 THE DEVELOPMENT OF BRITISH INDUSTRY

the early twentieth century British ships were carrying around one
half the seaborne trade of the world whilst in the twenty-five years
before the war we built two-thirds of the new ships that were
launched.
This brief summary shows clearly the dimensions of Britain's
seapower in the few decades before 1914. In some respects, how-
ever, the data gives a somewhat misleading impression of the extent
of Britain's supremacy. From the early 1880s, and in some cases
even earlier, Britain's monopoly of the carrying trade was being
increasingly challenged by the growth of foreign fleets. The impact
of foreign competition is brought out clearly from the figures for
entrances and clearances of shipping in the ports of various coun-
tries. It can be seen from Table II that the British share fell, some-
times substantially, between 1880 and 1911 in most of the short-
haul European and Scandinavian trades, whilst competition also
increased sharply in the home trade. On the other hand, on most
of the long-distance routes Britain maintained her position fairly
well and, in some cases, e.g. New Zealand, her share of total
clearances actually increased during these years. The British posi-
tion remained strongest and almost unchallenged on the Empire
routes, for even by 1913 94 per cent of the trade between the UK
and the Empire was carried by British ships. On some of the long-
haul, non-Empire trades, however, British shipping was beginning
to feel the effects of foreign competition. This is particularly true
of the Chilean trade where the British share dropped sharply until
the turn of the century. The same could also be said of the North
Atlantic run though the data on entrances and clearances for
America does not appear at first sight to support this statement.
The figures do not, however, adequately reflect the importance of
the passenger trade in which competition from the Germans was
particularly severe in the late nineteenth and early twentieth cen-
turies. Moreover, if the figures for steam shipping alone are con-
sidered, it will be found that the British share of entrances and
clearances in the United States trade fell from 68 to 51 per cent
between 1880 and 1911. Since steam propelled shipping was by far
more predominant than sail on this run from the late 1880s, it
seems not unreasonable to accept the steam data as an indication
of Britain's relative decline.
A more detailed breakdown of the entrance and clearance
statistics into national, British and foreign flags is presented in
Table I (Appendix). This provides some guide as to the source of
competition as between national and foreign fleets in particular
328
 THE MERCANTILE MARINE
TABLE II: British Share of Entrances and Clearances at Ports in Selected
Countries, 1880-1911
1880 1900 1911
% % %
UK 70·4 63·7 58·9
Germany 38·1 26·9 23·0
Holland 49·8 41·7 30·5
Sweden 13·5 9·9 5·4
Belgium 59·4 44·6 44·1
France 40·6 40·6 36·1
Italy 34·3 n.a. 28·7
Norway 11·8 10·9 9·8
Portugal 63·0 56·8 47·6
Denmark 11 ·4 7·8 5·1
us 51·7 52·8 50·1
Japan n.a. 38·9 30·5
Argentine 37·8 29·3 33·5
Chile 79·9 50·1 50·7
Canada 65·4 61·0 69·9
New Zealand 88·0 91·8 96·8
South Africa 85·6 89·8 80·0
India 79·1 79·0 76·6
British possessions 87-1 90·5 91 ·9 (1905-08)
Source: Board of Trade, Merchant Shipping Returns.

countries. In at least four countries for which data is available,

namely Sweden, Germany, Japan and Argentina, the fall in the
British share was largely due to the successful competition from
the national fleets of the respective countries. But in most other
countries where competition was at all severe, the British were
being displaced by foreign rather than national flags, though
occasionally, as in the case of Chile, it was a combination of the
two. Furthermore, in practically every country where foreign lines
were the major threat to British shipowners, the relative importance
of the national fleets declined pari passu with the British. This
would seem to indicate that the chief source of competition was
from the four countries which managed to dislodge the established
position of British shipping from their own ports. Two of these,
Argentina and Sweden, can be ruled out immediately since their
fleets were far too small even by 1914 to offer really serious com-
petition in other than local ports. Although the Japanese fleet
increased more rapidly than most others in this period, it was still
very small by 1900 and, even though it became the third largest by
1914, it was employed mainly in ousting the British from local
329
 THE DEVELOPMENT OF BRITISH INDUSTRY

waters rather than competing for trade in neutral or third markets. 1

By a process of elimination, therefore, the German fleet emerges
as the only possible contender of any importance in the mercantile
field. Germany was the only country which managed to raise its
share of world shipping significantly in these years (see Table I),
and by 1914, with a fleet of just over three million tons net, it was
the second largest in the world. By comparison with the British
fleet it was, of course, still quite small, but despite its size it was
capable, partly because of the efficient way in which it was organ-
ized, of offering an effective challenge to Britain's maritime supre-
macy in many parts of the world. By the early twentieth century
the German fleet was operating on nearly all the major trade
routes, and in many foreign ports the German flag assumed a
prominent position. It was, perhaps, more effectively deployed in
some trades than others, especially on the North Atlantic and parts
of Africa, but there is no doubt that from the British shipowners'
point of view German shipping was becoming a serious menace
and one that could not be ignored. Contemporary comments by
shipowners and the mercantile press confirm the view that it was
German shipping that offered the most serious source of danger
to British shipping. As early as 1891, the Shipping World reported
in its leader column that 'Today there is no question that the
chief competitor we have on the seas is Germany.' 2 There were,
in fact, a few references to foreign competition in later years which
failed to mention Germany as the main enemy.3
Germany then was Britain's chief competitor and the discussion
which follows will mainly be devoted to an examination of Anglo-
German mercantile rivalry. In comparison with the other studies
in this volume, the scope of this essay is perhaps somewhat
narrow, but as we have already suggested, Germany provided the
only really effective competition in shipping down to 1914. The
obvious way of dealing with this topic would be to examine the
1 Around the turn of the century Japanese competition in Chinese waters
increased sharply at Britain's expense. See Chi-ming Hou, Foreign Investment
and Economic Development in China (Harvard, 1965), p. 61.
• Shipping World, April 1, 1891, p. 372.
8 In a letter dated June 23, 1902, to the Board of Trade the Bucknall Brothers

commenting on the importance of maintaining the conference system in the

South African Trade wrote: 'It would obviously be impolitic for English lines
to recede from this mutually beneficial system in connection with the main-
tenance of regular lines, only to give greater opportunity to the Germans to
accelerate and make greater inroads upon the English mercantile shipping.'
PRO, MT9/734/M11869, 12390, 1900.
330
 THE MERCANTILE MARINE

nature of competition in specific areas, but this method is rejected

on the following grounds. In the first place, a comprehensive treat-
ment would prove too lengthy and it is doubtful whether any
worthwhile conclusions would emerge simply from the presenta-
tion of a large number of case studies. Secondly, the lack of suit-
able data precludes a thorough discussion of competition on every
major trade route. Much work still remains to be carried out on
British shipping in this period, and until the shipping companies
are willing to open up their archives, the necessary raw material
remains secret. Instead, therefore, it was deemed more useful and
appropriate to follow a thematic or analytical treatment of the
factors which assisted or promoted the growth and competitive-
ness of German shipping. These can be divided into two broad
groups: the first includes the benefits or advantages derived from
Government assistance in the form of subsidies, rebates, etc., and
lower wage costs. The second category comprises policy or pro-
motional factors used by German shipping lines to enhance their
position, e.g. use of the conference system, rate cutting and organi-
zation and operation of their enterprises. Each of these factors
will be considered in tum and, where appropriate, particular refer-
ence will be made to areas in which conflict between British and
German shipping lines occurred. Where possible, the reaction of
British shipowners will be taken into account.

II

Most countries in the latter half of the nineteenth century paid

subsidies to their shipping lines. The types of subsidy varied a great
deal. Concealed subsidies in the form of payments for the carriage
of mail were very common in Britain and on the Continent. In fact,
British policy was largely confined to subsidizing ships for postal
and Admiralty purposes, and apart from the special aid given to
the Cunard Company early in the twentieth century for the con-
struction of two crack liners, no purely navigational bounties were
made in this country. Experience abroad was somewhat different,
the system of subsidization usually being far more elaborate and
complex. France and Japan, for example, granted both naviga-
tional and constructional bounties, the terms of which were revised
frequently. Apart from payments made for the carriage of mail
which by all accounts were quite small, Germany had three types
of bounties; these comprised payments made to shipowners for
specific purposes and two classes of indirect subsidies, namely
331
 THE DEVELOPMENT OF BRITISH INDUSTRY

special railway rates for exported goods which allowed shipping

lines to quote low through rates of freight, and special customs
facilities for imports destined for use in shipbuilding yards. 1
Many contemporary commentators, including shipowners of
course, were convinced that subsidies were the main cause of the
growth of foreign shipping fleets. The Economist in 1911 stated
categorically that the expansion of Germany's shipping in recent
years was due to no small extent to the policy of general subsidiza-
tion.2 Even Sir Robert Giffen, the Board of Trade statistician, had
expressed a similar view somewhat earlier. 3 It is extremely doubt-
ful, however, whether this judgment is wholly correct. No sys-
tematic evidence has been brought forward to support the case
either for or against, so that most of the observations made have
been at best impressionistic. Admittedly the data available is
scanty and the problems of comparison formidable, but it is
possible to reach tentative conclusions by a careful examination
of the material.
The most obvious starting point is to deal with the direct subsidy
payments to shipping lines since these are fairly easy to identify
quantitatively. Comparisons between countries are obviously diffi-
cult, especially with mail subsidies since it is not clear what pro-
portion was paid for actual services rendered. But most mail pay-
ments, especially the British, were fairly lavish and usually con-
tained a concealed subsidy. The figures in Table III include all
subsidies whether navigational, constructional or for the carriage
of mail. It can be seen that in terms of subsidies per ton of ship-
ping owned, the payments were very small indeed in both Britain
and Germany. German subsidies, it is true, were higher than the
British, but the difference is not great enough to be more than
marginally significant. Moreover, account must be taken of the
fact that the bulk of the German subsidies were paid to two com-
panies for specific services. The North German Lloyd received
1 Full details can be found in the Report on Bounties and Subsidies in respect of
Shipbuilding, Shipping and Navigation in Foreign Countries, Cd. 6899, 1913.
2 Economist, Shipping Supplement, June 21, 1911, p. 4. For similar opinions

see Shipping World, January 1, 1890, p. 266, and Royal Commission on the
Dominions: Evidence taken in London during October and November 1912,
Cd. 6517, 1912-13, Q. 4611. One shipowner even went so far as to suggest
that subsidies had enabled the Germans to gain the Atlantic blue ribbon. This,
of course, was nonsense since the German fleet employed on the North Atlantic
was not subsidized. See Annual Report of the Chamber of Shipping of the UK,
1901, pp. 73-4.
• R. S. J. Hoffman, Great Britain and the German Trade Rivalry, 1875-1914
(1933), p. 215.
332
 THE MERCANTILE MARINE

annually £165,000 and £115,000 for its East Asian and Australian
services respectively, whilst the Germ.an East African Company
was paid £76,500 for its African operations. 1

TABLE III:Subsidy Payments to Mercantile Marines of Various Countries

1901 1907
Total Subsidy Total Subsidy
Subsidy Per Subsidy Per
Payment Net Ton Payment Net Ton
£ s d £ s d
United Kingdom 1,003,401 2 2 791,755 1 4
Germany 440,470 4 6 392,160 2 9
France 1,787,271 34 6 2,528,028 36 0
Russia 374,590 11 9 414,273 11 9
Japan 886,104
Italy 695,596 14 0
Austro-Hungary 566,500 24 9
Sources: Select Committee on Steamship Subsidies, H. of C., 385, 1902, App.
36; Return on Steamship Subsidies, H. of C., 359, 1907 and Report on Shipping
Subsidies in Foreign Countries, Cd. 6899, 1913.

It is important to note that, apart from very small payments for

the carriage of mail, the North Germ.an Lloyd received no financial
aid at all for its North Atlantic services, yet it was in this field
that it proved to be Britain's most serious competitor. It could be
argued, of course, that the Atlantic service stood to gain indirectly
from the subsidies which were granted to other branches of the
Company. But in view of the fact that the subsidized services were
extremely uneconomic, this line of reasoning is incorrect. Basically
the East Asian and Australian services were established for prestige
purposes, and the subsidy of 1885 had been designed to encourage
regular communication with these areas where British shipowners
maintained a virtual monopoly. Certainly the subsidy assisted the
growth of Germ.an shipping and trade with these regions, 2 but at
no inconsiderable cost to the German Exchequer and the NDL.
Between 1886 and 1896 the Company made a loss of 5·25 million
marks on the services despite a subsidy of 44·3 million from the
Germ.an Government. Had it not been for the subsidy, the directly
1 These figures are for 1901.
1 Entrances and clearances of German shipping in East Asian ports rose from
57,740 net tons in 1883 to 512,369 in 1903, and in the Australian service from
56,717 to 386,115 net tons. G. Jaensch, Die deutschen Postdampfersubventionen,
ihre Entstehung, Begriindung und ihre Volkswirtschaftlichen Wirkungen (Berlin,
1907), p. 84.
333
 THE DEVELOPMENT OF BRITISH INDUSTRY

subsidized fleet would have made a ruinous loss of 49·5 million

marks. 1 Thus, the establishment of regular services to the Far
East and Australia was a costly business, and at best it only
secured a marginal share of the British trade. Even if competition
increased in these areas, British shipowners had little cause to
complain, since the P. & 0. line was almost as heavily subsidized
as the NDL. The British company received no less than £330,000
per year for its services to India, China and Australia which
worked out roughly at 5s 6d per mile. On a comparable basis, the
NDL received 5s a mile for its East Asian operations and 6s 8d
for the Australian service. 2
German entry into the East African shipping trade can be
attributed to the subsidy policy. In the late 1880s the German
East African colonies depended almost entirely on foreign ship-
ping though there were no direct shipping services with Europe.
A law of 1890 earmarked £45,000 for the establishment of a
regular line to East Africa, 3 and as a result the German East
Africa Company was established with a capital of six million
marks, four-fifths of which was held by the German banks. The
creation of this company at that particular time was possibly
determined by the fact that the year before the first direct British
service had been started by the British India Line which received
£15,000 per annum from the British Government. Rivalry between
the two companies was short-lived, however, since the latter service
was discontinued in 1892 after having incurred losses of £30,000
per annum.
This left the German company with a virtual monopoly of direct
shipping services between Europe and East Africa. The venture
was far from being a profitable one, however. By the end of 1893
losses totalled more than one million marks and dividends were
out of the question. 4 Two factors were responsible for this un-
promising beginning. Although the subsidy terms were fairly
generous, the State laid rather onerous conditions upon the Com-
pany the effect of which was to take back part of what it gave.
All State traffic was to be carried at a discount of 20 per cent on
normal rates, and since initially the greater part of the traffic
1 Jaensch, op. cit., pp. 111-12.
1 Fairplay, August 20, 1903, p. 283, and Select Committee on Steamship Sub-
sidies (H.C. 385, 1902), Evidence August 1, 1901, para. 4236.
• This was later raised to £67,500.
'K. Brackmann, Fiinfzig Jahre deutscher Afrikaschiffahrt (Berlin, 1935), pp.
3~9.
334
 THE MERCANTILE MARINE

was under State auspices, this was obviously not a lucrative pro-
position. But rather more important was the fact that the trade of
East Africa was still very small and could not support a separate
steamship line. According to Brackmann only in three years during
the first fifteen years of the Company's existence did the value of
goods transported between Germany and East Africa by the line
amount to more than one half the value of all goods transported
by the Company.1 In other words, in most years more than 50 per
cent of the Company's traffic was derived from countries other
than East Africa. It was the limited nature of the East African
trade which eventually forced the Company to enter South African
waters and compete against the British. 2
Whilst it cannot be denied that Germany's shipping services to
East Asia, Australia and East Africa were materially assisted by
Government subsidies-in fact, without them they would most
surely have been discontinued-it is very unlikely that British ship-
owners lost much as a result. The North German Lloyd never
became a formidable competitor in Australia or in China and
Japan, and in any case, as we have already noted, the major
British company was on roughly an equal footing as far as financial
aid was concerned. East Africa never held much appeal for ship-
owners in this country, and after the failure of the British India
service, interest waned completely. The absence of a direct British
service probably caused Britain to lose about £5 or £6 million
worth of trade with East Africa a year, an amount hardly worthy
of the expense of a subsidized line. 3
It is impossible, therefore, to attribute the growth and com-
petition of German shipping to the Government's subsidy policy.
Subsidies were not large in comparison with other countries and
payments were confined to one or two particular services. Accord-
ing to Meeker, less than 4 per cent of the net tonnage of Germany's
merchant fleet received direct subventions in 1894.4 Furthermore,
the subsidized services were certainly far less prosperous and com-
petitive than the non-subsidized ones. The contrast is particularly
marked if one considers the strength of the German companies on
the unsubsidized North Atlantic route. There were, of course,
1 Brackmann, op. cit., p. 26.
• A discussion of this will be deferred until later since it involves the question
of special through rates.
• Select Committee on Steamship Subsidies (H.C. 385, 1902), Evidence July 15,
1902, paras. 2652-3.
'R. Meeker, History of Shipping Subsidies (1905), p. 94.
335
 THE DEVELOPMENT OF BRITISH INDUSTRY

many other countries which subsidized their shipping, some much

more lavishly than Germany. But the results achieved were dis-
appointing, to say the least. France's subsidy policy was one of
the most generous, yet its results were disastrous, since it greatly
favoured the construction of sailing vessels whilst scarcely any
large ocean-going steamers were built. 1 In fact, probably the only
country which achieved any degree of success with subsidies in the
pre-1914 period was Japan.
Direct payments were not the only form of subsidy which
German shipowners received. It was frequently alleged that they
were assisted materially by preferential railway rates which were
granted by all German State railways to goods exported from
inland places of Germany on through bills of lading. This allowed
the German lines to quote very low combined sea and rail rates
which had no equivalent in Britain. The actual rates for sea
carriage were usually the same as the British, but the difference
in favour of German combined land and sea rates of freight as a
result of subsidized rail charges could be quite considerable. For
example, the cost of sending a ton of rails from Oldenberg to
Hamburg was 3s 4d on the East African tariff and 3s 2d on the
Levant as against 8s 4d for the carriage of the same commodity
from Birmingham to Liverpool, a slightly shorter distance. In
some instances German railway tariffs for exported goods were
1 For the French position see Appendix 24 to the Select Committee on Steam-
ship Subsidies; and M. A. Raffalovich, 'The Effects of Shipping Bounties', Journal
of Royal Statistical Society, 1888, pp. 141-54. Although France subsidized her
mercantile marine more lavishly than any other country, the results achieved
were very disappointing indeed. Under the subsidy law of 1881 French ship-
owners received from the state no less than £1.4 million annually and from 1892
this was raised to £1.7 million. The main disadvantage of the subsidies was that
they tended to favour the building of inexpensive sailing vessels rather than large
ocean-going steamers. Thus at a time when most countries were scrapping their
sailing fleets France continued to build sailing vessels on a considerable scale
and the French sailing fleet actually increased from 1890 to 1912. Moreover,
throughout the period the growth of the French mercantile marine was very
modest indeed, rising from 919,298 net tons in 1880 to 1,462,639 in 1911, and in
fact after the turn of the century it hardly rose at all. Japan, on the other hand,
was much more successful in this respect. Subsidies were first paid in 1896 but
initially they were fairly moderate and it was not until 1908 that they were paid
on a scale comparable with the French bounties. The results were quite favour-
able. Between 1895 and 1911 the Japanese fleet rose from 386,163 to 1,838,054
gross tons and after 1900 the bulk of the increase consisted of steamships. Thus
after making allowance for the differences in tonnage measurement, the Japanese
fleet had, by the second decade of the twentieth century, surpassed that of the
French.
336
 THE MERCANTILE MARINE

only one-third the comparable British rates. 1

It is doubtful, however, whether such preferential treatment was
either as extensive or as effective as many contemporaries would
have us believe. A number of witnesses before the Select Com-
mittee on Steamship Subsidies and the Royal Commission on
Shipping Rings complained about the harmful effects of this prac-
tice and stated that German policy was to have a through rate
everywhere. 2 These judgments were probably based on limited
experience. Certainly they were common in the East African and
Levant trades, and in the case of the East African Company, they
were an important factor in enabling it to gain an entree into the
South African trade. As we have already seen, this Company had
not been very successful in its East African operations and late in
1893 it launched a concentrated attack on the English lines in
South Africa by establishing a direct link with Pretoria, Johannes-
burg and Durban. This onslaught was assisted by the negotiation
of special through rail and sea rates from Germany which allowed
the quotation of very low freight rates. But low freights were not
the only weapon which the Germans used to compete with the
British. The Company's second line of attack was to increase the
size of its fleet so that it could start extra services to the Cape via
the Atlantic route and match the speed of the English lines. This
competition proved too much for the latter and they were soon
anxious to come to terms with the German line in order to avoid
a costly rate war, though initially the two main English lines, the
Union and Castle companies, had prepared plans to take the war
into the enemy's camp. 3 The resulting agreement proved a victory
for the German East African Company since the English lines
conceded most of the Company's wishes. By the terms of the agree-
ment the English conference system was altered in such a way that
shippers would not forfeit rebates if they shipped by the German
line. The Union line, which during the rate war had lowered its
rates from Hamburg to South Africa, raised them again and
agreed not to run a regular service to Zanzibar. Furthermore, the
English lines agreed not to compete with the German line in East
African waters. In return, the German company limited its sailings
to South Africa via the Atlantic."
Entry into the South African trade and the victory over the
1 lbid., Report, para. 7, for other examples.
1 lbid., Evidence, June 17, 1902, para. 856.
a Union-Castle records, 24/8/1894.
'Brackmann, op. cit., pp. 35-6.
337
 THE DEVELOPMENT OF BRITISH INDUSTRY

British lines did not make the German company a really pros-
perous undertaking. But conditions certainly improved: traffic
increased from 1894 onwards and the Company was able to make
better use of its enlarged capacity. Financially the Company also
fared better: in the later 1890s a small surplus on trading opera-
tions began to accrue and dividends were paid for the first time
in 1895. Compared with most other German lines, the East African
was still in a very weak state, but its position had certainly im-
proved as a result of gaining a foothold in the South African
trade. But the Company's strength was not sufficient to counter
effectively a combined attack of the English lines after the Boer
War. The Union-Castle lines, having amalgamated their interests
in 1900, fought to regain their position in South Africa, and
according to Brackmann, 'Nichts liessen die englischen Linien
unversucht, um der deutschen Reederei die Siidafrikafracht fort-
zunehman. ' 1 They sent ships to Hamburg, Belgian and Dutch
ports to collect anything available at reduced rates of freight.
Despite a rapid increase in the size of the German company's fleet,
it could only manage to send out twenty-six steamers a year on the
round trip to Africa as against sixty-five English ships which sailed
from Hamburg. The competition became so fierce that by 1907
the German line was in no position to continue, and at a share-
holders' meeting a proposal was made that the Company be
liquidated. This motion was not, in fact, carried but the Company
was forced to concede victory to the British shipowners on terms
favourable to the latter.
The details of the German East African line's relationships with
the British have been traced in some detail simply to show that,
despite a fairly generous direct subsidy and preferential treatment
by the German railways, it was not sufficient to overcome the
combined opposition of the British lines in South Africa, though
it should be noted that the resources of the German line were
considerably less than those of their competitors. Presumably then,
companies which secured preferential through rates, but which did
not have the additional benefit of a direct subsidy, such as the
Levant line, must have been in an even weaker position than the
East African Company to counter opposition from foreign ship-
owners.
More generally, it is doubtful whether preferential rates were all
that important in enhancing Germany's competitive power. Apart
from the two lines already mentioned, the only other through rate
1 Ibid., p. 45.
338
 THE MERCANTILE MARINE

concessions granted by the Government were to the Bremen Atlas

line in 1906 (for destinations in the Mediterranean and the Black
Sea)1 and to shipowners trading to South Brazil. 2 Moreover, even
where such concessions existed, it is by no means clear that all
the freight carried by the favoured lines was on through bills of
lading. One witness before the Royal Commission on Shipping
Rings thought that the quantity of cargo moving on through bills
of lading from the interior of Germany to South Africa formed
only a very small proportion of total shipments. In any case, such
preferential rates only assisted German shipping marginally. They
could not enhance its competitive power in British ports or in
neutral waters, 3 and even in the home trade it might be argued
that much of the traffic would have been carried by German lines
whether through rates had been available or not. No doubt, orders
for goods were placed with German in preference to British manu-
facturers in consequence of the cheaper through rates granted
abroad, but the amount of trade lost in this way must have been
very small indeed. Probably a much more effective weapon in
attracting traffic were the cheap or fighting rates offered by German
shipowners. This method of attack was frequently adopted, but
usually as a temporary expedient, and generally it was in no way
connected with the special concessions granted by German rail-
ways.4
The only other element of subsidy was the preferential treatment
accorded to materials for shipbuilding construction. The German
customs tariff of May 1885 exempted from import duties nearly
all materials destined for use in shipbuilding yards, whilst from
1895 onwards German railways gave preferential rates for the
carriage of certain raw materials and partly manufactured articles
used for the construction of German shipping. Such facilities were
a very minor factor and could have had little effect in determining
the strength of German competition. For one thing, shipbuilding
materials were free of duty in Britain, so in this respect the two
countries were on an equal footing. Secondly, they were probably
much more of a boon to the German shipbuilding industry, which
grew fairly rapidly after 1894,6 than they were to the shipowners.
1 Shipping World, February 14, 1906, p. 180.
1 The position is unclear here, but witnesses before the Royal Commission on
Shipping Rings did mention the existence of through rates to this area. See Vol.
III, Evidence, Qtns. 9394--405, 9554-67.
8 That is in non-German or non-British ports.

' This aspect is discussed in more detail later.

1 See Stahl und Eisen, January 22, 1914, p. 157.

339
 THE DEVELOPMENT OF BRITISH INDUSTRY

German shipbuilding was still a fairly high cost industry in com-

parison with the British before 1914, and many German ship-
owners continued to take advantage of the better facilities offered
in this country. 1 In this respect the subsidized lines were at a dis-
advantage since one of the conditions of the subsidy laws was that
the ships had to be built in German yards.
Although British shipowners complained a great deal about the
harmful effects of foreign subsidies, our analysis suggests that they
were only of marginal importance in stimulating the growth and
competitiveness of foreign mercantile marines. It is not without
significance that the strongest and most serious competitor was
Germany, whose shipowners received less in the way of direct and
indirect bounties than shipowners in other countries apart from
Britain. In Germany subsidies were on far too limited a scale to
be an important factor in the growth of that country's shipping.
Occasionally, as in the case of the East African Company, they
assisted the creation and development of a new undertaking, but
even a double-edged subsidy (direct payments and preferential
rates) was not sufficient to make this line really prosperous or to
enable it to withstand the attack of English opposition after the
Boer War. If anything, then it could be argued that as far as
British shipping was concerned, foreign subsidies were 'blessings
in disguise', for as one prominent shipowner, W. J. Pirrie, told the
Select Committee of 1902, 'They have stimulated British companies
in the particular trades affected, to move more quickly and keep
more abreast of the times than they might otherwise have done. ' 2
There were other factors besides subsidies which were said to
favour foreign (German) shipping as opposed to British. British
shipowners complained frequently that British vessels were hin-
dered by official Board of Trade regulations whilst their wage and
victualling costs were higher than abroad. 3 It is true that various
rules and regulations were imposed by Parliament on British ship-
ping from which foreign shipping was partly exempt. These included
such things as the load line, life-saving appliances, inspection of
provisions, crew space, manning and cattle regulations. It is difficult
to say precisely how important these were in determining the costs
1 S. Pollard, 'British and World Shipbuilding, 1890-1914; A Study in Com-
parative Costs', Journal ofEconomic History, 1957, Vol. XVII (3), pp. 429, 443--4.
2 Select Committee on Steamship Subsidies, Evidence July 3, 1902, para. 1774.
8 See Annual Report of the Chamber of Shipping of the UK, 1895, pp. 64-5;

Annual Report of the Liverpool Steamship Owners' Association, 1906, pp. 3--4;
Fairplay, January 25, 1900, p. 127.
340
 THE MERCANTILE MARINE

of operation of British ships. The general impression is that they

were a very minor element. On the other hand, according to
Fairplay, the combined effect of these regulations was to impose
a handicap of about 10 per cent on our shipping as against
foreigners. 1 A more thorough study prepared by Dr Ginsberg for
the British Association in 1901 suggested that the difference in
terms of cargo carrying space amounted to 8·7 per cent in favour
of foreign shipping. 2 He concluded, however, by saying that though
foreign regulations were generally not as extensive or so strictly
enforced as in this country, the total effect on the competing
power of foreign ships of applying all our restrictions would be
'comparatively insignificant'. 3 This conclusion is particularly appli-
cable to the latter part of the period since by then many countries
were bringing their safety and manning regulations in line with
those in this country. 4
It is generally acknowledged that before 1914 wage and victual-
ling costs were higher on British ships than on those operating
under foreign flags. Precise international comparison of such costs
are out of the question for this period since the data is extremely
fragmentary and unreliable. But what evidence there is suggests
that the cost of wages and provisions on British ships was up to
20 per cent above that on German vessels. 5 This is, of course, only
a very approximate estimate, but it does suggest that German
shipowners might have had some advantage in this respect. The
difference in costs can be largely accounted for by the higher
wages paid to British seamen, the better scales of food and the
higher manning scales in force on British vessels. 6
The general conclusion which emerges from the discussion so
far is that German shipping had no marked economic advantages
over British shipowners. There were exceptions, of course. The
operating costs of German vessels was probably on average lower
largely because of lower wage and food costs. Unfortunately, it is
impossible to give precise estimates of the difference in costs, but
the margin in favour of German vessels might well have been
1 Fairplay, May 23, 1901, p. 838.
2 The application of such regulations had the effect of reducing the cargo
carrying space in ships.
3 See P.R.O. MT9/809/M384/1907, Memo. by Board of Trade.

• Annual Report of the Liverpool Steamship Owners' Association, 1913, p. 20.

6 That is on ships of a similar type and tonnage.

• See Select Committee on Steamship Subsidies, Evidence, July 18, 1901, Qtns.
3482-7, 2594; Shipping World, December 13, 1899, p. 584, and June 30, 1909,
p. 685.
341
 THE DEVELOPMENT OF BRITISH INDUSTRY

quite small when all costs are taken into account. 1 In one or two
trades, subsidies of one form or another no doubt assisted German
shipping, but they cannot in any way be considered as a vital
factor in the development of the German fleet. In other words, all
these factors taken together probably only had a marginal effect
in raising the competitive strength of German shipowners before
1914.

III

If our assumptions are correct it follows by implication that the

success of German competition was a product of skilful policy and
organization on the part of German shipowners. This does not
necessarily imply that German shipowners were any more efficient
than their British counterparts, though in some cases they may
have been, but rather to suggest that they adopted tactics which
ultimately paid off. One of these was the policy of rate-cutting
and the use of the conference system to serve their own ends.
Broadly speaking, the rise of German maritime competition had
by the early twentieth century resulted in a compromise, expressed
in a number of conference agreements, which left the trade of the
UK to British lines, whilst the latter abstained to a certain extent
from participating in the trade from the Continent, especially from
German ports, the implicit understanding being that outward
freights from the UK and from the Continent were to be approxi-
mately the same. In essence the conference system was a defensive
weapon and at times it undoubtedly proved a handy device for
avoiding costly rate wars. But whether it was all that successful in
bringing recalcitrant German shipowners to heel as some British
contemporaries suggested, is somewhat doubtful. 2 It is true that
the Germans were eventually strong participants in the conferences,
but they were not always coerced into joining by pressure from the
British. German shipowners were often anxious to join the con-
ferences, and in some cases sponsored them, in order to gain a
stronger foothold in particular trades whilst the British lines fre-
quently compromised with the Germans simply to prevent costly
rate wars. Moreover, once in, the Germans could hardly be said
1 It is probable, for instance, that British vessels were on average technically
more efficient and this would tend to offset the higher wage costs. Shipping World,
June 30, 1909, p. 685, suggested that the difference in running costs between
German and British vessels was fairly small.
1 See Royal Commission on Shipping Rings, Evidence, Vol. III, Qtns. 926, 1108,

1116-17.
342
 THE MERCANTILE MARINE

to have adhered strictly to the rules of the conference system. The

German lines observed the agreements only insofar as it paid them
to do so, and they evaded the rules whenever important objectives
were at stake. As one official committee remarked, 'Every weapon
was used by the German lines not only to obtain admission to the
conference, but, when admitted, to extort further concessions, not
always justified by the magnitude of their trade.'1
Because of the secrecy which still shrouds the working practices
of the conference system, and for that matter the operations of the
shipping companies in general, it is impossible to provide a defini-
tive account of the German shipowners' behaviour in the con-
ference system. But the documentary evidence available suggests
that the Germans not infrequently broke the rules of the game
and in some cases, especially on the North Atlantic, they were the
dominant players who called the tune.
Although German shipowners joined most of the conferences
on the main trade routes, there usually existed an uneasy truce
between them and the other members of the conference. From
time to time they would withdraw from the agreement on some
pretext or other and a rate war usually followed. In 1905, for
example, a dispute arose between the P. & 0. and the Hansa
Company regarding the former Company's right to load at Antwerp
for Calcutta and Bombay. Hansa wanted to debar the P. & 0.
from calling at Antwerp altogether, and the refusal of the British
Company to cede to their demands resulted in the German line
withdrawing from the Calcutta ring which it had joined in 1898.
A rate war followed between the German line and the remaining
members of the conference, 2 and some cargo rates were reduced
by nearly 50 per cent. The Hansa line attacked the members of the
conference on home territory by quoting very low rates from
Middlesbrough and London to Calcutta, and at the same time
secured the co-operation of an independent British company, the
Well Line. The rate war lasted for over eighteen months, but
eventually late in 1907 a settlement was made. The Hansa Com-
pany secured its original objective but little else since the agreement
ensured that all members of the conference, whether British or foreign,
were on an equal footing. In fact, the manager of the P. & 0. flatly
refused to allow the Germans to re-enter except on such conditions. 3
1 Report of the Departmental Committee on Shipping and Shipbuilding after the
War, Cd. 9092, 1918, p. 103.
1 P. & 0., British India, the City, Clan and Anchor Lines.
• Fairplay, March 8, 1906, p. 308, and December 13, 1906, p. 875; Royal Com-
343
 THE DEVELOPMENT OF BRITISH INDUSTRY

In the South African trade there had been constant friction

between the two parties and the agreement of 1907 was little more
than a stop-gap measure. The East African line had accepted the
conditions imposed by the British with ill grace, and in the follow-
ing years demanded an improvement of the terms. A failure to
gain satisfaction forced the Company to look round for an excuse
to break the agreement and press their claims from outside the
conference. It was known at the time that the South African
Government was considering legislation to outlaw the rebate system
and on these grounds the German East African Company with-
drew from the conference at the beginning of 1912. Shortly after-
wards the Union-Castle Company was informed that the rebate
system was to be made illegal. The effect of these two events led
to a complete collapse of the South African conference and an
outright rate war ensued between all members. It was the East
African Company, still the weakest member of the group, which
first made overtures for a settlement, and in the following year all
the East and South African shipowners concluded a new agree-
ment. This made all freight rates similar for all lines and provided
for spheres of interest in the African Continent. The Germans
agreed not to load from England for South Africa whilst in return
British shipowners allowed the Germans sole rights in the Con-
tinental-East African trade. This lessened friction to a minimum
and, until the war, it proved a workable agreement. 1
German competition in the South American trade took a slightly
different form. Here the German shipowners tried to avoid an
outright breakaway from the conference and as far as possible
they carried on competition from within. Initially the early agree-
ments in the River Plate and Brazilian trades had worked fairly
smoothly. These had been concluded towards the end of the nine-
teenth century after severe competition had developed with the
emergence of foreign lines, particularly the Hamburg-South Ameri-
can Company, in these regions. The principal basis of these agree-
ments was absolute equality of rates from the UK and Continental
ports. These rates were fairly strictly observed by all members,
though occasionally cut rates were quoted from the Continent.
The main source of trouble occurred in the Brazilian trade when
in 1900 the Hamburg-American line entered the area, by friendly
arrangement with the Booth line, with one sailing per month from
mission on Shipping Rings, Vol. III, Evidence, p. 298, Vol. IV, Evidence, Qtns.
19678-86, 20501.
1 The Times, January 12, 22, February 5, 1913; Brackmann, op. cit., pp. 94-5.

344
 THE MERCANTILE MARINE

Hamburg to North Brazil. This service became a joint one between

the Hamburg-American and Hamburg-South American lines in
1901 and, on the liquidation of the gentlemen's agreement with the
Booth line in the following year, the Hamburg lines demanded a
much larger share of the Brazilian trade. The British lines refused
to co-operate and immediately a severe rate war broke out. The
Hamburg lines invaded English ports with their steamers and
within a matter of months the whole trade was disorganized and
rates were reduced by about 40 per cent. By September 1902, how-
ever, the German lines, having been weakened elsewhere by com-
petition, withdrew their ships from English ports and agreed to
suggestions put forward by Booths for pooling the European
traffic. Freight and passenger earnings from Liverpool, Antwerp
and Hamburg were divided in the proportion of 70 per cent to the
Booth line and 30 per cent to the Hamburg lines, which for the
latter, was a slight improvement on their previous share. In addition,
freight and passenger charges were fixed by the agreement. 1
Although these arrangements worked fairly smoothly, they did
not entirely eliminate all competition from the German shipowners.
Rates were fixed at such a high level that the incentive to undercut
them was quite strong and this the Germans did on occasions.
Alternatively they fetched cargo from Liverpool to Hamburg or
Antwerp for shipment to Brazil at the current rate of freight. These
practices were carried on within the conference system with little
opposition from the English owners. The explanation was quite
simple. Paradoxically it reduced competition. By allowing the
Germans to take one or two advantages, the British lines were
able to earn the full rate on their cargo. Had the British objected
or counter-attacked, the result would have been a general lowering
of all rates. As it was, limited competition in the conference satisfied
both parties. 2
Periodic rate wars both within and without the conferences were
quite common on most of the major trade routes, and often the
German shipowners were the chief offenders. At times the terms
offered were so favourable that goods were sent from Britain to
the Continent to take advantage of the low freights. The practice
of cutting rates was usually only temporary, though occasionally
conference rates were fixed at such a level as to induce under-
1 A. H. John, A Liverpool Merchant House: Being the History of Alfred Booth
and Company, 1863-1958 (1959), p. 102; Royal Commission on Shipping Rings,
Evidence, Vol. IV, pp. 242-3 and 312.
• Royal Commission on Shipping Rings, Evidence, Vol. III, Qtns. 9344-9.
345
 THE DEVELOPMENT OF BRITISH INDUSTRY

cutting. From the German shipowners' point of view it was a

fairly effective method of gaining recognition and entry into the
established stronghold and obtaining a greater share of the avail-
able traffic. Statistical proof of the latter is unfortunately very
scanty, but there is no question that German shipping acquired
an increasing proportion of the traffic in most of the trades in
which they took an active interest.
The British shipowners' reaction to such competition varied a
great deal. When severe rate wars ensued they had no option but
to reply to the attack and hope that an agreement would soon be
reached. Occasionally they tried to forestall any possible attack by
quoting lower rates from the Continent than those from English
ports. This method was adopted for cargo to the Persian Gulf in
1906, though without much success,1 and in the New Zealand trade.
In the latter case the two main English lines, Tyser and Shaw,
Savill and Albion, shipped goods from Hamburg and Antwerp to
New Zealand via London at rates considerably below those for
British cargo direct, in the hope that the German companies would
be discouraged from starting a direct service to New Zealand. But
more often than not, the British lines were prepared to put up
with a certain amount of competition and evasion of the conference
rules rather than engage in a ruinous rate war which would have
resulted if they had retaliated with the same weapons. Asked what
his reaction would be if the Germans offered lower rates of freight
to Australia, the manager of the White Star line confessed that he
would shut his eyes to it 'unless it became so big that I could not
help looking at it. At the present time our object is not to bring
about unnecessary friction with the Continental lines.' 2
Although German participation in the conference system reduced
competition, it certainly did not eliminate it. British shipowners
probably fared better than they would have done had free com-
petition prevailed, but conferences were by no means ·such a secure
source of protection as many imagined. This reliance on a system
which only partially contained the German opposition was partly
responsible for the shipowners' reluctance to relinquish the rebate
system, since it would deprive them of security against the Ger-
mans. Even merchants, whose opposition to the rebate system was
fairly unanimous, were of the opinion that the rebates could only
be abolished by international agreement, for as the chairman of
the Australian Merchants' Committee pointed out:
1 Fairplay, September 19, 1907, p. 434.
1 Royal Commission on Shipping Rings, Evidence, Vol. IV, Qtns. 18447-8.
346
 THE MERCANTILE MARINE

'While the Germans continue to use the rebate system, it appears

to me very doubtful whether it would be advisable to have any
interference with it in our trade except by international agreement.
If by international agreement rebates were abolished abroad, in
Germany especially, then I should be quite agreeable to see them
abolished in this country, but I should be very sorry as a merchant
to see rebates abolished in this country whilst they continued in
Germany, because the inevitable result would be that the British
cargo trade being unprotected by the rebate system would be open
to the attacks of the Germans, while the German trade being pro-
tected by the rebate system would not be open to the reprisals of
the British shipowners.'1

IV

So far we have only discussed German competition on those routes

where German shipping was still a minor participant, albeit an
increasingly powerful one. But in one field the North Atlantic
passenger trade, where competition was more severe than any-
where else, Germany was a dominant partner almost from the
beginning of this period. It is true that after the collapse of the
American mercantile marine in the Civil War, Britain for a short
time held a semi-monopoly of the traffic on this route. The bulk
of the passenger traffic between Europe and the United States and
Canada passed through this country, and in 1871 there were only
one or two foreign lines of any importance operating on the North
Atlantic. Within the next decade or so foreign competition grew
very rapidly indeed, and by the middle of the 1880s there were
more than twenty distinct lines maintaining regular sailings between
Europe and North America. Of the Continental lines, the German
Hamburg-American and the North German Lloyd were by far the
most important. Even by the early 1880s these two lines accounted
for about 30 per cent of the total westward passenger traffic, and
they were rapidly encroaching on the British position. In fact,
these two lines formed the backbone of the German shipping
industry and within a short space of time they became the largest
shipping companies in the world. 2
1 Mr Tredwen, speaking at a Conference with Representatives of the Asso-
ciated Chambers of Commerce, May 1911, P.R.O., MT9/926/M12174/1911.
1 See Hans Otto von Borcke and Hugo Heeckt, Entwicklung und Aussichten

der deutschen Passagierschiffalzrt auf dem Nordatlantik (Kiel, 1956), pp. 3 and 31;
0. Mathies, Hamburgs Reederei, 1814-1914 (Hamburg, 1924).
347
 THE DEVELOPMENT OF BRITISH INDUSTRY

The vast westward migration to the United States and Canada

in the latter half of the nineteenth century provided ideal conditions
for the rapid growth of liner companies. Between 1860 and 1900
ten million people migrated to the States mainly from Britain,
Germany, Scandinavia, Holland and Switzerland. In the remaining
years before the war (1890-1914) the total migration rose to fifteen
million, the bulk of this originating from central and south-eastern
Europe. 1 This change in the geographical pattern of migration
tended to favour the Continental shipping lines and, more par-
ticularly, the German companies since the latter established special
migration or control stations along the eastern borders of Germany
to trap the emigrants as they crossed into German territory. 2 Most
of the emigrants travelled third class or steerage, and the growing
competition for this traffic especially from the 1880s onwards led
to a series of attempts to regulate and pool the business.
The first attempt to form an agreement or conference in this
trade took place in 1886. By this time German influence had grown
considerably in the North Atlantic passenger business, and the new
director of the Hamburg-American Company's Passenger Depart-
ment, Albert Ballin, was anxious to reduce the influence of the
British lines competing for traffic at Hamburg. In order to wring
concessions from the latter, Ballin attempted to break the English
monopoly of the Scandinavian traffic by establishing a line between
Stettin and New York in conjunction with a Danish firm. If this
plan failed he threatened to attack the British in their own country
by carrying steerage passengers either from Liverpool via Le Havre
or from Plymouth via Hamburg. The British lines soon capitulated
under these threats, and an agreement was made with the German
lines in September 1886. Ballin agreed to withdraw the Scandina-
vian service and the German lines gained access to steerage traffic
from English ports. A clearing house was set up in Hamburg to

1 M.A. Jones, American Immigration (1960), p. 179. These figures do not, of

course, include Canadian immigrants.
• These were sanitary control stations established along the Russian frontier
by the Prussian Government in the early 1890s. The operation of these inspection
posts was entrusted by the Government to the Hamburg-American and North
German-Lloyd who acted jointly as concessionnaires. It has been alleged that
this gave the German shipowners an unfair advantage, since because many of
the emigrants had to pass through Germany on their way to the States, they were
forced to travel by German lines or risk the penalty of being refused transit per-
mits. Moreover, it is said that this control over the emigrant traffic was used by
the German lines as a weapon for dividing their competitors and forcing un-
favourable agreements on them.
348
 THE MERCANTILE MARINE

allocate passenger traffic between the British and German lines and
minimum rates were fixed for passengers. 1
Initially this arrangement worked quite successfully since there
is little evidence of sharp disagreement between the respective
parties in the first few years. In time, however, it became increas-
ingly unsatisfactory. The British lines complained that they were
not getting the share of the business to which they were entitled
and they accused the Gennans of not withdrawing completely from
the Scandinavian traffic. A more serious objection to it from the
German point of view was that the agreement excluded many
foreign shipping lines which were competing for the passenger
traffic of Europe. There was a general feeling among German ship-
owners, particularly Ballin, that a much wider and more com-
prehensive arrangement was necessary if competition on the North
Atlantic was to be reduced to a minimum.
Accordingly in 1892 the first North Atlantic passenger line con-
ference was formed by four companies, the North German Lloyd,
Holland-American, Hamburg-American and Red Star lines. Each
line was allotted a certain percentage of the westbound steerage
traffic from North European ports, and provision was made for
the participation of the British lines. Members agreed to arrange
their services in such a way so that the number of steeragers
actually carried corresponded as nearly as possible with the num-
bers allotted by the contract. If the tonnage employed by a given
line was increased, then the company was entitled to a stipulated
increase per 1,000 tons in the number of steerage passengers car-
ried, whilst if its tonnage declined, its allotted share was reduced.
On the other hand, in the event of a company exceeding its
allotted quota, it was obliged to take measures to bring about a
readjustment, and if at the end of any year the annual steerage
traffic of a given line exceeded the stipulated quote, it was required
to pay to those lines that did not reach their quotas an agreed
amount of compensation per excess steerage passenger. Consistent
maladjustment between the actual traffic carried and the prescribed
quotas was rectified either by manipulating fares or by revising
the quotas. Passage rates for steeragers were laid down in the
contract and could only be altered by a collective decision of the
conference.
Essentially this was the basis on which pooling agreements were
made for the North Atlantic passenger traffic for the next twenty
1 B. Huldennann, Albert Ballin (1922), pp. 21-3; P. F. Stubmann, Albert
Ballin: Ein Deutscher Reeder auf Internationalen Feld (1957, Hamburg), p. 12.
349
 THE DEVELOPMENT OF BRITISH INDUSTRY

years or so until the war terminated the agreements. Of course,

the scope of the original agreement was much enlarged in later
years as other lines joined and many separate agreements were
made covering various classes of traffic, both west and eastbound.
Eventually there were some twelve separate agreements covering
thirty different lines engaged in the Atlantic passenger traffic,
including the Mediterranean Steerage Conference established in
1908. It would be quite impossible to discuss the detailed and
exceedingly complex clauses of all these contracts. Basically, how-
ever, they followed the pattern of the original agreement outlined
above. 1 In any case, from our point of view the most important
points to consider are the effects of the pooling agreements on
competition and the relationships of the British lines with the con-
ference members. Most of the comments will be confined to the
westbound steerage conference since this was by far the most
important of all the agreements made.
It is difficult to make a precise assessment of the impact of the
pooling agreements since it is impossible for one thing to acquire
a complete set of statistics of the passengers carried by each line. 2
Secondly, the working documents of the conferences which still
exist are not open to the general public for inspection.3 Conse-
quently we are forced to rely almost entirely on published, mostly
contemporary, sources for information about the operations of the
pooling agreements. Much of this consists of very fragmentary
evidence and, except in a few cases, it was virtually impossible to
construct a reasonably reliable series of data which could be used
for comparative purposes. Nevertheless, despite the inadequacy of
the data, it is possible to make one or two observations, though
1 A fairly full treatment of most of the agreements can be found in E. Murken,
Die grossen transatlantischen Linienreederei Verbiinde, Pools und lnteressenten-
gemeinschaften bis zum Ausbruch des Weltkrieges. lhre Entstehung, Organization
und Wirksamkeit (1922); there are few good accounts in English though some
useful details may be found in the Report of the Committee on the Merchant
Marine and Fisheries on Steamship Agreements and Affiliations in the American,
Foreign and Domestic Trade, U.S. Congressional Documents No. 805, 1914,
Government Printing Office, Washington; and E. R. Johnson and G. G.
Huebner, Principles of Ocean Transportation (1918, New York), pp. 293-5 and
p. 290 (chart).
• Even the companies themselves cannot provide the relevant data. The Cunard
Company, for example, have no records of the passengers they carried before
1914.
a Some of the relevant documents are now held in this country by the Secretary
of the present North Atlantic Conference. The author tried unsuccessfully to gain
access to this material.
350
 THE MERCANTILE MARINE

the reader should be warned against placing too much reliance on

them.
It seems fairly certain that the pooling arrangements achieved a
greater stability in passenger fares, though they were probably
maintained at a higher level than under free competition. In the
1890s steerage rates were maintained fairly well, and by the turn
of the century they were on average above those fixed in 1892. By
1913 they had fallen somewhat, though they still remained above
the 1892 level. In view of the fact that the profit margin on steerage
traffic was quite small, this greater stability in rates, no doubt,
ensured the companies a more secure return and permitted an
improvement in the quality of service. The Shipping World re-
marked that 'as a working agreement between the several com-
panies concerned . . . it has built up Transatlantic traffic in a way
that would otherwise have been impossible'. Even the chairman
of Cunard, a Company which caused the conference members a
considerable amount of trouble, was extolling the virtues of co-
operation by 1913.1 On the other hand, it would be unwise to
attach too much importance to the apparent stability of passenger
fares in this period. For one thing they were generally much less
volatile than freight rates anyway, and at a time when improve-
ments in service were taking place, it is perhaps only to be expected
that fares for the Atlantic crossing would either remain firm or
increase slightly. Furthermore, the general impression of con-
tinuous stability is probably misleading in itself. There is no index
of passenger fares and the comments above are based on data for
a few random years. It might well be, therefore, that the year to
year fluctuations in passenger rates were greater than the figures
suggest. This conclusion is in part confirmed by the fact that the
conference arrangements did not automatically lead to permanent
stability of rates. From time to time disputes arose among the
members, especially between the German and British lines, regard-
ing the division of traffic or the fares charged. Invariably these
disagreements led to rate wars, some of which had disastrous
results as far as the companies' profits were concerned.
In fact, trouble broke out soon after the Pool Agreement had
been inaugurated. At first the British Lines refused to join the
conference because they were dissatisfied with the proportion
(14 per cent) of the Continental traffic allotted to them. 2 It fol-
lowed, therefore, that they could no longer adhere to the original
1 Shipping World, April 16, 1913, p. 421.
• The French lines had also refused to join.
351
 THE MERCANTILE MARINE

understanding of 1886 with the Germans, which meant in effect

that the latter now had a free hand as regards the Scandinavian
traffic. This was not, however, the immediate cause of the rate
war. The strained relationships were, in fact, aggravated by the
outbreak of cholera in 1893 which caused a sharp fall in the
emigrant traffic. Total passengers carried by all lines fell from
439,730 to 285,631 between 1893 and 1894, and some of the Con-
tinental companies were hit very badly indeed. Competition for
the diminished volume of trade brought rates down sharply.
Passenger fares were reduced by nearly 50 per cent and, in an
attempt to counter British competition, the Germans re-entered
the Scandinavian trade. By the end of 1894 most of the shipping
companies engaged in the dispute were ready to negotiate a truce,
and in September of the following year an agreement was finally
signed by the four Continental lines, the American line and seven
British companies.1 In effect this brought the British lines into
the pooling arrangements for the first time, though they accepted
a much reduced quota of the Continental traffic (6 per cent) than
they had been offered originally. In return, the Continental lines
(mainly the German in this case) agreed to withdraw from the
Scandinavian traffic and to reduce their callings at British ports. 2
The British lines clearly got the worst of the bargain, but they
were prepared to acquiesce simply because the only alternative
appeared to be a prolongation of the costly rate war. Moreover,
since most of the important Continental lines were already in, or
about to join, the Pool, it would have been difficult for the British
shipowners to remain outside indefinitely. By this time the foreign
lines, taken together, formed a dominant influence in the passenger
trade of the North Atlantic and hence were in a strong position to
dictate their own terms.
Although the British lines, and particularly Cunard, were dis-
satisfied with the new pooling arrangements, most of them managed
to maintain reasonably amicable relationships with their Con-
tinental partners until the turn of the century. 3 In May 1903, how-
ever, Cunard withdrew from the Atlantic agreements. The causes
of the rift were complex. Basically, Cunard objected to the way in
which the Continental lines were trying to monopolize the European
1 The Allan, Allan and State, Anchor, Beaver, Cunard, Dominion and White

Star lines.
9 Murken, op. cit., pp. 51-68.

a Although at least one company, the Beaver line, withdrew from the confer-
ence before the end of the century.
352
 THE MERCANTILE MARINE

traffic, and in particular the Company was annoyed about the

methods employed, namely the establishment of the frontier con-
trol stations in Germany. But the more immediate cause of the
withdrawal was the agreement made between the Continental com-
panies and the Morgan Trust1 early in 1903 to the effect that each
would safeguard the other's interests against outside competitors.
Not only was Cunard ignored in connection with this agreement
but it appeared from the wording that it was directly aimed against
the British Company. 2
Cunard's departure from the conference did not immediately
precipitate the rate war. Rather it was sparked off by the Com-
pany's subsequent negotiations with the Austrian and Hungarian
Governments to carry emigrants and mail from Trieste and Fiume.
In effect, these arrangements gave Cunard virtually a monopoly
of the traffic, and the German lines, retaliating from what they
thought was their prerogative, carried the war into the rival camp
by cutting the Scandinavian rates. Inevitably this led to an all-
round reduction in western steerage rates and by 1904 they had
been reduced by two-thirds. 3 Eventually peace was restored in
October 1904, though not before the companies concerned had
sacrificed most of their profits for that year. Cunard's earnings,
for example, dropped from £248,563 to £61,588 in 1904. Altogether
it has been estimated that the crisis cost the participant companies
nearly £1 million. 4
The subsequent agreement was only a temporary or makeshift
measure, however. All the lines agreed to restore their rates to the
level prevailing before the rate war and Cunard rejoined the Pool.
1 This was the large American shipping combine formed in 1902 when a num-
ber of British shipping companies were transferred to American ownership but
continued to fly the British flag. The companies involved in the merger were the
American, Red Star, Atlantic Transport, Leyland, White Star and Dominion
lines.
2 Shipping World, April 19, 1905, p. 405.
8 Ibid., May 25, 1904, p. 490, and January 18, 1905, p. 78. Fairplay, June 23,

1904, pp. 1017-18. Herschel suggests that Cunard would not have been prepared
to carry on such a fight had she not been subsidized heavily by the British Govern-
ment. This, of course, is incorrect. True, Cunard had recently negotiated a sub-
sidy contract with the Government, but this was specifically for the building of
two crack liners and none of the subsidy had been paid to the Company before
the rate war broke out. Cunard was paid for carrying the mail, but the profit
on this was hardly sufficient to support a costly rate war. See F. B. Herschel,
Entwicklung und Bedeutung der Hamburg-Amerika Linie (Berlin, 1912), p. 115.
'D. H. Aldcroft, 'The Depression in British Shipping, 1901-1911 ', The Journal
o/Transport History, May 1965, p. 20.
M 353
 THE DEVELOPMENT OF BRITISH INDUSTRY

But a lasting arrangement was out of the question and within a

few months Cunard had withdrawn from the conference again,
largely on account of a failure to reach an agreement over the
Hungarian traffic. According to Murken, the Cunard Company
strengthened her position in the period immediately after the rate
war and could afford, therefore, to pursue a more independent
line of action. The Hungarian and Austrian contracts made an
appreciable difference to her overall position; the number of
Continental passengers carried by the Company rose from 1,267
to 35,705 between 1902 and 1906, and by the latter date they
accounted for nearly 39 per cent of the total passenger trade of
Cunard. Moreover, the technical and competitive superiority of
the Company was revealed in 1907 when the Lusitania and
Mauretania were launched.
Thus, when negotiations took place early in 1906 for a new and
more permanent pooling agreement, Cunard was in a stronger
position to press for better terms than she had previously enjoyed.1
The British lines as a whole (that is including those transferred to
the Morgan Trust) were allotted nearly 37 per cent of the total
westbound traffic and the Cunard Company alone obtained nearly
14 per cent. This was excluding her Fiume service for which a
special allowance was made. Nearly all the major lines operating
on the North Atlantic joined the new Pool which was a more
elaborate arrangement than the previous ones, for it included
clauses relating to cabin traffic.
The strength of the conference was tested almost immediately
since the economic crisis in the United States (1907-08) brought a
very sharp reduction in emigrant traffic. In 1908 the number of
steerage passengers travelling westwards was a mere 424,000 com-
pared with nearly 1,400,000 the year before. The Continental com-
panies were hit very badly indeed-the profits of the Hamburg-
American Company were halved-and the British group had to
pay them compensation. 2 Yet, though it proved the most serious
fall-off in passenger traffic for many years, a rate war failed to
materialize. Having survived the worst crisis since its inception in
1892, the pooling agreement functioned fairly smoothly in the
following years although there were one or two minor crises
caused by interference from shipping lines outside the Pool. It was
not until 1913 that another serious rate war broke out. 3 This time
1Murken, op. cit., p. 331.
2Herschel, op. cit., p. 99.
3 The Pool was revised and renewed in 1911.

354
 THE MERCANTILE MARINE

the dispute arose out of a disagreement between the two German

lines over their respective shares of the westbound steerage traffic.
The Hamburg-American Company demanded an increase in its
quota, but the other members of the conference, including the
North German Lloyd, refused to sanction this. Despite innumer-
able meetings it was found impossible to reach an understanding
with the recalcitrant company and early in 1914 the Pool was
formally dissolved. Subsequently, westbound rates were reduced
and the outbreak of military warfare a few months later ended the
possibility of negotiating any new agreement. 1
It is clear from this brief discussion that the history of the North
Atlantic passenger agreements between 1892 and 1914 was far
from being trouble free. No doubt the pooling arrangements acted
as a restraining influence on the competitive zeal of the constituent
members, but they could not prevent the occurrence of bouts of
severe competition when the lines failed to agree on some par-
ticular issue. Moreover, the conference system did not prevent
competition in service; in fact, it might be argued that it shifted
the emphasis towards competition in this field. It is well known
that the shipping companies operating on the North Atlantic tried
to outbid each other by building bigger and better transatlantic
liners and offering additional service comforts to their passengers,
even to the steeragers. At times, however, one gets the impression
that the companies carried service competition to excessive lengths.
Throughout the period the British lines maintained an uneasy
relationship with the continental members of the Pool. Cunard,
as we have seen, was never very happy with the arrangements and
was particularly suspicious of German motives. These suspicions
may at times have been well founded, but in turn it could be argued
that Cunard's actions were no less reprehensible. Whether on
balance the British lines benefited from joining the conference, or
in Cunard's case from remaining outside it for part of the time, is
difficult to say precisely, owing to the fragmentary statistical data
available. But in Tables IV and V an attempt has been made to
assemble roughly comparable figures for a number of years. Taking
the British and Canadian lines together, 2 it can be seen that they
maintained their relative share of the westbound cabin and steerage
traffic3 between 1903 and 1913 after having suffered a sharp loss in
the previous twenty years, a loss which can be attributed largely
1 The Times, July 25, 1913, and January 22, 1914.
1 Which include those transferred to the Morgan Combine in 1902.
3 Including the Mediterranean traffic.

355
 THE DEVELOPMENT OF BRITISH INDUSTRY

to German competition (see Table IV). On the other hand, after

1903 the German companies appear to have lost ground in both
cabin and steerage traffic to non-British lines. A more detailed
company breakdown of the North European westbound traffic to
New York and Canada is given in Table V. From this it can be
seen that the two German lines increased their share of the total
traffic substantially between 1883 and 1903 but failed to maintain
this lead up to 1913. But by that date their share of the North
European passenger trade was larger (33·9 per cent) than their
share of the total Atlantic passenger traffic (28·0 per cent)1 Of the

TABLE 1v: Division of Westbound North Atlantic Passenger Traffic

Between British and German Lines (All Traffic Including Mediterranean)
1883 1903 1913
Cabin Steerage Cabin Steerage Cabin Steerage
British and
Canadian
Lines 39,838 160,634 113,553 303,769 230,071 476,119
Per cent of
total 67·9 41·4 53·7 33-9 50·8 33·9

German
Lines 10,934 119,531 62,859 321,342 111,253 393,704
Per cent of
total 18·7 30·8 29·7 35·9 24·6 28·0

Total (All
Lines) 58,596 388,267 211,321 394,926 452,956 1,405,649

Sources: Glasgow Herald, January 31, 1884 and Murken, op. cit.

British lines Anchor and White Star declined in relative importance

after 1891. Cunard, on the other hand, managed to maintain its
relative position fairly well, and in fact even increased its share of
the traffic up to 1903. Thus, despite its rather wavering attitude
towards the conference system, Cunard did not do at all badly.
Overall, one might say that although the British lines lost the
predominant position that they held in the Atlantic trade in the
1870s and early 1880s, they were by no means crushed by the force
of foreign competition. In fact, in the early twentieth century,
when the conference system was fully in operation, they maintained
their relative position better than the Germans who lost ground to
non-British rivals.
1 That is including the Mediterranean traffic.
356
 TABLE v: Westbound North Atlantic Passenger Traffic (Excluding Mediterranean) of Certain Lines
1883 1891 1903 1913
Cabin Steerage Cabin Steerage Cabin Steerage Cabin Steerage
North German Lloyd 7,228 66,474 16,629 68,239 34,908 161,946 50,738 195,718 ...,
Per cent of total 12·3 17-1 11·1 15·3 17·4 23·9 12·9 19·3 ::i::
tl1
Hamburg-American 3,706 53,057 11,016 75,835 22,941 109,523 45,377 148,523 t(
tl1
Per cent of total 6·3 13·7 7-3 17·0 11·4 16·2 11·6 14·6 ::0
("')
w Cunard 9,153 11,647 14,769 27,341 23,686 61,528 43,812 86,176 >
~ Per cent of total 15·6 3·0 9·8 6-1 11·8 9·0 11·2 8·5 ...,z
....
t""
Anchor 6,380 24,545 7,323 15,082 8,820 11,909 16,970 16,190 tl1
Per cent of total 10·9 6·3 4·9 3·4 4·3 1·8 4·3 1-6 t(
>
White Star 5,842 27,994 13,193 35,502 27,712 45,957 42,095 61,970 ....
::0
Per cent of total 9·9 7·2 8·8 7·9 11·3 6·8 10·8 6·1 ztl1
Total (All Lines) 58,596 388,267 15,023 445,290 200,972 677,403 391,148 1,016,356

Source: Glasgow Herald, January 31, 1884 and Murken, op. cit.
 THE DEVELOPMENT OF BRITISH INDUSTRY

Finally, a few comments must be made about the general organiza-

tion and services of German shipping. The structure of the industry
was in some respects different from that of Great Britain. The bulk
of German shipping was employed in the great liner trades and
tramp tonnage formed a very small proportion of the total fleet.
Britain too, of course, had a large volume of tonnage engaged in
liner services, but at the same time a fairly high proportion of her
mercantile marine (probably in the region of 40 per cent) consisted
of tramp tonnage. This structural difference resulted in a higher
degree of concentration of German shipping in the hands of a
few companies. Most firms of any importance were joint stock
undertakings, and in 1905 the seven largest owned 60 per cent of
the total German tonnage whilst three-quarters of the fleet was
owned or controlled by nineteen companies. 1 British shipping was
much less highly concentrated, largely because of the existence of
many small tramp companies. Even after the massive amalgama-
tion movement of the early twentieth century, only one-quarter of
the UK fleet was owned and controlled by one of the 'Big Fh:e'
groups, though it should be stressed that by the early 1920s about
three-quarters of the British liner tonnage was in the hands of
seven large shipping companies. 2
The compactness of the German mercantile marine was, no
doubt, facilitated by the fact that there was only one main shore
line and two major ports from which German shipowners operated,
as against three different coasts and at least six major ports in
Britain. Concentration of and co-operation between German ship-
owners was, therefore, a simple affair geographically. This appears
to have resulted in a fairly tight-knit community of interests within
the ports of Bemren and Hamburg. The main lines worked closely
with one another, despite a certain amount of inter-port rivalry,
and many of the lines which were outside the main group were
either controlled by some member of it or worked in close relation
with it, the major exception being the German Levant line. It was
rare, moreover, to find the German companies competing fiercely
with each other as the English lines sometimes did. 3 A series of
1 P. Lenz, Die Konzentration im Seeschijfahrtsgewerbe (Jena, 1913), pp. 61-2.
• Aldcroft, foe. cit., p. 22.
• See particularly J. Russell Smith, 'Ocean Freight Rates and their Control
through Combination', Political Science Quarterly, 1906, xxi (2), p. 261. Com-
petition from tramp shipping was much less common in Germany of course.
358
 THE MERCANTILE MARINE

complex and intricate agreements between companies plying in the

same area acted as a safeguard against internal competition. And
even when internal differences did occur they were usually resolved
quite rapidly in the event of any attack from foreign lines. Indeed,
German shipowners were invariably prepared to support each other
against competition from foreign flags, and in the early twentieth
century the ten largest lines established a Rheederei-Vereinigung or
Shipping Union which had at its disposal some 23,000 tons of
shipping which could be chartered by its members for use as a
fighting force against external aggressors. 1
This is not meant to imply that the German shipping industry
was any more efficient than the British because of its compact
organization, but rather to suggest that it was in a better position
to meet competition from outside lines. At times, however, one
does get the impression that German shipping companies were
somewhat better adapted to meeting the conditions of the period.
The organization and direction of the larger companies at least
appear to have been rather more dynamic than that of many
British companies. Men like Woermann, Ballin (Hamburg-Ameri-
can) and Lohmann and Wiegand of the North German Lloyd
were directors or managers of outstanding ability and drive, who
built up large and flourishing companies from almost nothing. 2
They were prepared to risk everything to ferret out openings for
German ships, and part of their success lay in the way in which
they developed trade openings in areas which had hitherto been
neglected. Perhaps these men were exceptions, and no doubt they
had their counterparts on the British side, but if Sturmey is correct
one cannot help feeling that they contrasted sharply with some
of the old family cliques who featured so prominently in British
shipping. 3
Such comments are largely impressionistic and the author would
be at pains to counter any suggestion that British shipowners were,
in general, less efficient than their German rivals. Occasionally
German shipowners were more enterprising; a case in point being
the Woermann line in the West African trade. Here two British
1 Fairplay, November 25, 1909, p. 755, and December 16, 1909, p. 863.
• For an appreciation of Lohmann and Wiegand see P. Neubar, Der Nord-
deutsche Lloyd: 50 Jahre der Entwicklung, 1857-1907 (Leipzig, 1907), Vol. 1,
especially pp. 46--52 and 91-110.
• Professor S. G. Sturmey in a recent book, British Shipping and World Com-
petition (1962), has suggested that many British firms were dominated by family
groups which had an adverse effect on their competitive ability in later years,
i.e. in the inter-war period.
359
 THE DEVELOPMENT OF BRITISH INDUSTRY

lines had originally held a virtual monopoly until the Woermann

line entered the area in the early 1880s. 1 From then onwards
British ships were faced with increasing competition, and if ton-
nage employed in the West African service is anything to go by,
it appears that the Germans increased their relative share of the
trade substantially in the late nineteenth and early twentieth cen-
turies (see Table VI). Although British shipowners still continued
to exert a dominant influence in the area, a fact which was reflected
in the terms of the first West African conference of 1894,2 shippers
were becoming increasingly dissatisfied with the services they
offered and many were transferring their custom to the German
line. The reason for this was explained by John Holt (West African
merchant) to the Royal Commission:
'They (the British) have lost it through lack of attention to detail
and concentration of effort which has characterized German action
once a common basis of freight was fixed between them; it then
became a matter of which could most attract shippers, and in this
the German line has clearly proved itself superior. It is the common
opinion of shippers that the German line is more obliging, more
helpful, more pushing, more ready to adapt itself to altered con-
ditions of trade, more reliable as to time and fulfilment of promise
-in other words, more earnest, thorough and business-like.'
Apparently the two British lines had fallen into the hands of the
prominent shipowner, Sir Alfred Jones, who, according to Holt, had
tended to neglect the West African side of his many business interests. 3

TABLE v1: Tonnage Employed in the West African Trade

1892-93 1906-07
Woermann Line 15,741 71,957
British and African Steam
Navig. Co. and the African
Steamship Co. 67,125 97,646
Source: Royal Commission on Shipping Rings, Evidence, Vol. III, p. 175.

One swallow does not, of course, make a summer and it would

be a gross distortion of the facts to conclude from this single
example that German shipowners were more enterprising than their
British counterparts. In fact, apart from the case of the West
1 The Woermann family had been traders and shippers since the 1830s. See T.
Bohner, Die Woermanns (Berlin, 1935).
• C. Leubuscher, The West African Shipping Trade, 1909-1959 (1963), p. 15.
8 Royal Commission on Shipping Rings, Evidence, Vol. III, p. 178, Qtn. 5201.

360
 THE MERCANTILE MARINE

African trade, there is practically no other evidence which would

support such a hypothesis. One cannot do anything, therefore, but
conclude that British shipowners were, taken as a whole, as efficient
and as enterprising as their German counterparts.

There is no doubt that in the period in question German ship-

owners presented a serious challenge to the British shipping indus-
try. German shipowners had few marked economic advantages
over their rivals, however, and their competitive strength lay in the
skill and persistence with which they tried to penetrate the estab-
lished trades. By the late nineteenth century the Germans had
gained a firm foothold in many of the major trade routes, though
it was only in the North Atlantic passenger trade that they played
a dominant role. Although at times British shipowners might be
criticized for appearing reluctant to fight the German challenge,
one can hardly criticize them for being inefficient. But foreign com-
petition did help to keep British shipowners on their toes. Nor
could it be argued that British shipping suffered heavy losses
through foreign competition. On one or two routes, especially the
North Atlantic and West African, Germany increased her share of
the traffic substantially, but apart from the short haul European
trades, German shipping only had a fairly marginal influence in
most other areas albeit an increasingly important one. British ship-
owners had even less to fear from foreign competition. Although
by the early twentieth century there were indications that in some
respects foreign shipbuilders were gaining ground, 1 there was little
evidence to suggest that Britain's monopoly in the shipbuilding
field was in danger of being broken in the near future. In short,
the British maritime industries remained overwhelmingly predomi-
nant up to 1914, and whatever criticisms might be made about
them in later years these certainly had no relevant application in
the period prior to War I. In these years Britain's competitive
position remained virtually unassailable and, in Pollard's words, if
ever there was a class of entrepreneurs capable of standing on their
own legs it was the British shipbuilders and owners. 2
1 It has been said that some of the most important technical improvements
were taking place abroad, that some foreign yards were better equipped than
ours and that the Germans could build cheaper liners. See Report of the Tariff
Commission, Vol. 4, The Engineering Trades (1909), paras. 90-2; S. J. Chapman,
Work and Wages, Vol. I (1904), p. 103, and I. Svennilson, Growth and Stagnation
in the European Economy (1954), p. 155.
2 S. Pollard, The Economic History of British Shipbuilding, University of

London, Ph.D. thesis, 1951, p. 298.

361
 THE DEVELOPMENT OF BRITISH INDUSTRY
TABLE 1: British and National Share of Entrances and
Countries (with cargoes
1850 1860 1870 1880
Nat. Br. Other Nat. Br. Other Nat. Br. Other Nat. Br. Other
UK (all) 65·1 56·4 68·8 70·4 29·6
(steam) 81·6 84·3 88·5 83·2 16·8

Norway (all) 74·5 2·0 23·5 70·0 11·6 18·4 68·2 11·8 20·0
(steam) 25·2 53·0 21·8 40·8 26·6 32·6

Sweden (all) 40·3 31·8 37·2 13·5 49·3

(steam) 39·8 23·3 36·9

Germany (all) 35·9 39·1 38·1 22-8

(steam) 15·0 34·4 49·2 16·4

Holland (all) 39·5 37·2 23·3 28·4 53-8 17·8 30·9 49·8 19·3
(steam) 31·2 68·1 0·7 19·1 77·9 3·0 29·0 61·6 9·4

Belgium (all) 11·4 34·3 54·3 6·4 56-8 36·8 11·6 59·4 29·0
(steam) 18•4 68·6 13·0 9·3 78·9 11·8 14·3 65-8 19·9

France (all) 41·4 29·8 28·8 31-5 39·8 28·7 30·0 40·6 29·4
(steam) 40·0 32-1 35-6

Italy (all) 36·5 25-8 37·7 34·8 34·4 30·9

(steam) 19·7 36·0 44-3 23·3 43-3 33·4

us (all) 70·8 23·9 5·3 38-1 50·5 11·4 20·4 51·7 27-9
(steam) 33-1 46-1 20·8 15•5 67·7 16·8

Chile (all) 0·7 79·9 19·4

(steam) 1·0 89·7 9·3

Argentina (all) 11-1 37·8 51-1

(steam) 12·6 44·2 43·2

Japan (all) 21-7

(steam) 27·9

Canada (all) 65·4 34·6

(steam) 61·3 38·7

New Zealand (all) 71-7 28·3 92·6 7·4 88·0 12·0

(steam)

Denmark (all) 52·1 11·4 36·5

(steam) 61·0 16·3 22·7

Portugal (all) 11·8 66·7 21-5 6·5 63·0 30·5

(steam) 5-2 86·9 7·9 3-1 12·5 24·4

Spain (all) 26·6

(steam)

South Africa (all) 85-6 14·4

(steam)

India (all) 9·1 79-1 11·8

(steam) 0·6 92·6 6·8

British
possessions (all) 84-8 15·2 88·5 11-5 87-1 12-9

Source: Board of Trade, Progress of Merchant Shipping Returns.

362
 THE MERCANTILE MARINE
Clearances In Foreign Trade at Ports in Certain
and in ballast)
1890 1900 1905 1911
Nat, Br. Other Nat, Br. Other Nat. Br. Other Nat. Br. Other
72·7 27·3 63·7 36·3 63·3 36·7 58·9 41-1 UK (all)
79·5 20·5 66·8 33·2 65·5 34·5 60·0 40·0 (steam)

64·8 14·6 20·6 67·8 10·9 21-3 56·7 12-6 30·7 52·7 9·8 37·5 Norway (all)
51·3 21·4 27·3 60·0 15·2 24·8 52·0 14-9 33-1 50·7 10·7 38·6 (steam)

33·7 20·5 45·8 41-6 9·9 48·5 48·5 6·7 48·8 49-8 5-4 44-8 Sweden (all)
30·3 27·8 41·9 39·0 11-1 49·9 47-5 7·7 44·8 49·4 5·9 44·7 (steam)

43·9 35-4 20·7 49·0 26·9 24·1 48·7 27-1 24·2 50·3 23·0 26·7 Germany (all)
44·2 38·3 17·5 50·2 28·6 21·2 48·9 28·7 22-4 50·4 24·0 25·6 (steam)

28·8 52-3 18·9 25·3 41-7 33·0 27·9 34·7 37-4 26·6 30·5 42·9 Holland (all)
28·5 55·0 16·5 25·2 42·3 32·5 28·0 35·2 36·8 26·5 31-1 42·4 (steam)

19·0 53·2 27·8 16·3 44·6 39·1 11·5 47·2 41·3 13·0 44·1 42·9 Belgium (all)
20·0 53-4 26·6 16·9 44·3 38·8 11·8 47-1 41-1 13·2 4H 42·4 (steam)

31·9 44·0 24·1 26·1 40·6 33·3 27·3 35·2 37·5 24·0 36·1 39·9 France (all)
33·0 25-6 42-1 32·3 26·7 36·1 37·2 23-6 36·6 39·8 (steam)

24·4 49·4 26·2 49·8 19·7 30·5 26·0 29·7 44·3 27·0 28·7 44·3 Italy (all)
18·2 55·9 25·9 48·6 20·3 31-1 23·5 30·9 45·6 25-4 29·4 45·2 (steam)

22·1 52·8 25·1 16·9 52·8 30·3 15·8 50·5 33·7 13·5 50·1 36·4 us (all)
18·5 59·0 22·5 15·0 55-6 29·4 15·7 51·7 32-6 12·7 50·7 36·6 (steam)

14·8 47-1 38·1 8·6 50·1 41·3 6·5 48·6 44·9 6·1 50·7 43·2 Chile (all)
18-9 41-3 39·8 11·1 50·9 38·0 7-4 49·4 43·2 6·4 53-4 40·2 (steam)

27-1 42·2 30·7 33-4 29·3 37·3 35·5 32·4 32·1 43-4 33·5 23-1 Argentina (all)
29-1 45·6 25·3 31·9 31·2 36·9 34·3 33·9 31·8 40·1 36·4 23·5 (steam)

22·2 34·9 38·9 26·2 12·9 47·0 40·1 47·2 30·5 22·3 Japan (all)
22·7 35·0 38·9 26·1 12·5 47·3 40·2 47·0 30·6 22·4 (steam)

51-6 48·4 61·0 39·0 66·1 33·9 69·9 30·1 Canada (all)
53·1 46·9 64·8 35·2 68·4 31-6 73-6 26·4 (steam)

87-4 12·6 91·8 8·2 84·6 15-4 96·8 3·2 New Z.Caland (all)
88·0 12·0 94·7 5·3 85·9 14·1 98·8 1·2 (steam)

58·2 11-5 30·3 56·1 7·8 36·1 54·9 6·7 38·4 54·2 5·1 40·7 Denmark (all)
61·5 13·7 24·8 60·1 9·0 30·9 58·1 7·4 34·5 56·4 5·5 38-1 (steam)

7·0 53·5 39·5 5·4 56·8 37·8 2·8 51·3 45·4 2·0 47·6 50·4 Portugal (all)
6·3 56·7 37·0 4·7 58·1 37·2 2·5 52-3 45·2 1·8 47·8 50·4 (steam)

43·8 47·4 27·6 25·0 43-1 26·8 30·1 37·7 26·2 36·1 Spain (all)
44·5 47·8 28·0 24·2 43·3 27-1 29·6 37-8 26·4 35-8 (steam)

87·9 12-1 89-8 10·2 85·7 14·3 80·0 20·0 South Africa (all)
96·4 3-6 94·3 5·7 88·5 11·5 81-3 18·7 (steam)

5-6 82·4 12·0 3-3 79·0 17-7 1-4 80·6 18·0 3·0 76·6 20·4 India (all)
0·0 89·9 10·1 0·8 81·9 17-3 0·0 82·3 17-7 H 77·5 20·4 (steam)

British
88-6 11·4 90·5 9·5 91·9 8·1 possessions (all)

363
 SELECT BIBLIOGRAPHIES

GENERAL NOTE
THE following bibliographies contain a selection of books, articles and
other publications which should prove useful in further study. They are
not intended to be exhaustive and more detailed references on specific
topics covered in the industrial studies can be found in the footnote
citations to each chapter. The bibliographies correspond to the chapter
headings of the book. All books are published in the United Kingdom
unless otherwise stated.

INTRODUCTION: BRITISH INDUSTRY AND FOREIGN COMPETITION,

1875-1914 (CHAPTER 1)
The following list of sources includes a few of the works which the
reader should find useful in pursuing the issues raised in the introductory
chapter to this volume.
D. H. Aldcroft, 'The Entrepreneur and the British Economy, 1870-1914',
Economic History Review, 17 (1964).
W. Ashworth, An Economic History of England, 1870-1939 (1960).
D. J. Coppock, 'The Climacteric of the 1890s: A Critical Note', The Man-
chester School, 24 (1956).
R.H. Heindel, The American Impact on Great Britain (Philadelphia, 1940).
R. S. J. Hoffman, Great Britain and the German Trade Rivalry, 1875-1914
(Philadelphia, 1933).
C. P. Kindelberger, 'Foreign Trade and Economic Growth: Lessons from
Britain and France, 1850-1913', Economic History Review, 14 (1961).
A. E. Musson, 'The Great Depression in Britain, 1873-1896: A Re-
appraisal', Journal of Economic History, 19 (1959).
E. H. Phelps Brown and S. J. Handfield-Jones, 'The Climacteric of the
1890s: A Study in the Expanding Economy', Oxford Economic Papers,
4 (1952).
H. W. Richardson, 'Retardation in Britain's Industrial Growth, 1870-
1913', Scottish Journal of Political Economy, 12 (1965).
S. B. Saul, Studies in British Overseas Trade, 1870-1914 (1960).
S. B. Saul, 'The American Impact on British Industry, 1895-1914', Busi-
ness History, 3 (1960).
S. B. Saul, 'The Export Economy, 1870-1914', Yorkshire Bulletin of Eco-
nomic and Social Research, 17 (1965).
C. Wilson, 'Economy and Society in Late Victorian Britain', Economic
History Review, 18 (1965).
364
 BIBLIOGRAPHIES

THE COAL INDUSTRY (CHAPTER 2)

The following are among the principal books, articles, etc., containing
material bearing on the subject matter of this chapter.
Books and Articles:
A. S. E. Ackermann, Coal-Cutting by Machinery in America (1902).
R. Page Arnot, The Miners, Vols. I and II (1949, 1953).
S. J. Chapman, Work and Wages (1904).
H. S. Jevons, The British Coal Trade (1915).
E. E. Hunt, F. G. Tryon and J. H. Willits (Eds.), What the Coal Com-
mission Found (Baltimore, 1925).
I. Lubin and H. Everett, The British Coal Dilemma (New York, 1927).
A. M. Neuman, Economic Organization of the British Coal Industry (1934).
N. J. G. Pounds, The Ruhr (1952).
A. H. Stockder, Regulating an Industry: the Rhenish-Westphalian Coal
Syndicate, 1893-1929 (New York, 1932).
A. J. Taylor, 'Labour Productivity and Technological Innovation in the
British Coal Industry, 1850-1914', Economic History Review, Second
Series, 14 (1961).
D. A. Thomas, 'The Growth and Direction of our Foreign Trade in Coal
during the Last Half Century', Journal of the Royal Statistical Society,
66 (1903).
S. F. Walker, Coal Cutting by Machinery in the United Kingdom (1902).
Official Publications:
Royal Commission on Coal Supplies, 1903. 1903, Cd. 1725-6; 1904, Cd.
1990-2; 1905, Cd. 2353-65.
Departmental Committee on Miners' Eight-Hour Day, 1907. 1907, Cd.
3426-8; 1907, Cd. 3505-6.
Royal Commission on Coal Industry (Sankey), 1919. 1919, Cmd. 84-6;
1919, Cmd. 210; 1919, Cmd. 359-61.
Royal Commission on Coal Industry (Samuel), 1925. 1926, Cmd. 2600.
The following journals, periodicals, etc., contain material relevant to the
history of the coal industry in this period:
Colliery Guardian
Iron and Coal Trades Review
The Economist
Journal of the Royal Statistical Society
Transactions of the Institute of Mining Engineers
Transactions of the National Association of Colliery Managers
Colliery Year Book and Coal Trades Directory

IRON AND STEEL MANUFACTURES (CHAPTER 3)

There exists an extensive literature on the iron and steel industry and
the following list represents only those basic works that are especially
365
 THE DEVELOPMENT OF BRITISH INDUSTRY
relevant to the theme of this chapter. Recent studies have relied heavily
on the monographs by Duncan Burn and by T. H. Burnham and G. 0.
Hoskins, which remain the starting point for all serious inquiries. A mass
of information is contained in the industry's journals. Those works marked
by an asterisk contain useful bibliographies.
Books and Articles:
D. L. Burn, The Economic History of Steelmaking, 1867-1939 (1940).
T. H. Burnham and G. 0. Hoskins, Iron and Steel in Britain, 1870-1930
(1943).
*J.C. Carr and W. Taplin, History of the British Steel Industry (1962).
*Charlotte Erickson, British Industrialists: Steel and Hosiery, 1850-1950
(1959).
Walter Isard, 'Some Locational Factors in the Iron and Steel Industry
since the Early Nineteenth Century', Journal of Political Economy, 56
(1948).
David S. Landes, 'Entrepreneurship in Advanced Industrial Countries:
The Anglo-German Rivalry', in Entrepreneurship and Economic Growth,
Papers presented at a Conference sponsored jointly by the Committee
on Economic Growth of the Social Science Research Council and
Harvard University Research Center in Entrepreneurial History, Cam-
bridge, Massachusetts, 1954.
T. G. 0rsagh, 'Progress in Iron and Steel: 1870-1913', Comparative
Studies in Society and History, III (1960-61).
H. R. Schubert, 'The Steel Industry', in Charles Singer et al. (eds.), A
History of Technology, V (1958).
W. A. Sinclair, 'The Growth of the British Steel Industry in the Late
Nineteenth Century', Scottish Journal of Political Economy, VI (1959).
Peter Temin, 'The Relative Decline of the British Steel Industry, 1880-
1913', in Henry Rosovsky (ed.), Industrialization in Two Systems:
Essays in Honour of Alexander Gerschenkron (New York, 1966).
Journals and Industry Publications:
British Iron Trade Association, Annual Reports, 1877-1906.
British Iron Trade Association, Report of the Delegation ... on the Iron
and Steel Industries of Belgium and Germany (1896).
The Engineer.
Iron and Coal Trades Review.
Journal of the Iron and Steel Institute.
Tariff Commission, Report on the Iron and Steel Trades (1904).
Official Publications:
Board of Trade, (Annual) Returns relating to Iron and Steel.
Board of Trade, Report of the Departmental Committee on the Position of
the Iron and Steel Trades after the War, Cd. 9071, 1918.
Royal Commission on the Depression of Trade and Industry, 1886. Minutes
of Evidence and Reports.
366
 BIBLIOGRAPHIES

THE COTTON INDUSTRY (CHAPTER 4)

Although no one study covers the British cotton industry and foreign
competition between 1870 and 1913, there are a large number of works,
mainly contemporary, which deal with the points raised in this chapter;
the most useful of these are listed below. Trade journals such as The
Cotton Factory Times and The Textile Manufacturer have numerous refer-
ences to foreign competition, while the annual reviews of the cotton
industry in The Manchester Guardian and local newspapers such as The
Oldham Chronicle provide much valuable information.
Books and Articles:
S. J. Chapman, A Reply to the Report of the Tariff Commission (1905).
S. J. Chapman, Work and Wages, Part I, Foreign Competition (1904).
M. T. Copeland, The Cotton Manufacturing Industry of the United States
(Cambridge, Mass., 1912).
G. W. Daniels and J. Jewkes, 'The Comparative Position of the Lanca-
shire Cotton Industry and Trade', Transactions of the Manchester
Statistical Society, Session 1926-27.
T. Ellison, The Cotton Trade in Great Britain (1886).
G. T. Jones, Increasing Return (1933).
Frederick Merttens, 'The Hours and Cost of Labour in the Cotton Indus-
try at Home and Abroad', Transactions of the Manchester Statistical
Society, Session 1893-94.
A. Redford, Manchester Merchants and Foreign Trade (1956), Vol. II.
G. von Schulze-Gaevemitz, The Cotton Trade in England and on the Con-
tinent (1895).
Tariff Commission, Report of the Tariff Commission, II, Textile Trades,
Part I, The Cotton Industry (1905).
Official Publications:
Report of the Committee on the Textile Trades after the War, Cd. 9070,
1918.
Committee on Industry and Trade (Balfour Committee), Survey of Textile
Industries (1928).

THE WOOLLEN AND WORSTED INDUSTRIES (CHAPTER 5)

Books:
M. W. Beresford, The Leeds Chamber of Commerce (1951).
J. H. Clapham, The Woollen and Worsted Industries (1907).
J. H. Clapham, An Economic History of Modern Britain (1932), Vols. 2
and 3.
B. R. Mitchell, Abstract of British Historical Statistics (1962).
E. M. Sigsworth, Black Dyke Mills. A History (1958).
Reports:
Report of the Royal Commission on the Depression of Trade and Industry
(1886).
367
 THE DEVELOPMENT OF BRITISH INDUSTRY

Report of the Tariff Commission {London, 1905).

Balfour Committee on Industry and Trade, Part III: Survey of Textile
Industries (1928).

BOOTS AND SHOES (CHAPTER 6)

Published work on the history of the boot and shoe industry at this time
is not very comprehensive and the student must make full use of the few
publications which relate to particular centres of the industry. The reports
of several parliamentary commissions are particularly valuable. To obtain
a full picture of the extent of foreign competition during the period
recourse must be had to the official trade accounts. For the period after
1914, with which this chapter is not concerned, various trade journals
are also useful. And scrutiny of the relevant provincial newspapers is
always rewarding.
Books and Articles:
E. Bordoli, Footwear Down the Ages (1933).
E. Brunner, 'The Origins of Industrial Peace: The Case of the British
Boot and Shoe Industry', Oxford Economic Papers, 1 (1949).
A. Fox, A History of the National Union of Boot and Shoe Operatives,
1874-1957 (1958).
B. E. Hazard, The Organization of the Boot and Shoe Industry in Massa-
chusetts before 1875 (Cambridge, Mass., 1921).
H. C. Hillman, 'Size of Firms in the Boot and Shoe Industry', Economic
Journal, xlix (1939).
E. M. Hoover, Location Theory and the Shoe and Leather Industries (Cam-
bridge, Mass., 1937).
H. A. Silverman, Studies in Industrial Organization (1946).
W. L. Sparks, The Story of Shoemaking in Norwich (1949).
Victoria County History of Northamptonshire, II (1906).
Victoria County History of Leicestershire, IV (1958).
R. T. Wilcox, The Mode in Footwear (New Jersey, 1947).
T. Wright, The Romance of the Shoe (1922).
Official Publications.;
Accounts Relating to the Trade and Navigation of the United Kingdom.
Commission on Working of Factory and Workshops Acts, Reports and
Evidence, C. 1443, 1876.
Royal Commission on Labour, Reports and Evidence, C. 6795, 1893.
Report on Trade of the British Empire and Foreign Competition, Cd. 8449,
1897.
Board of Trade Working Party Report: Boots and Shoes, 1946.

THE ENGINEERING INDUSTRY (CHAPTER 7)

Very little has been written on the industry from an economic point of
view. Many firms have published brief histories, and several are listed in
368
 BIBLIOGRAPHIES

the notes to this chapter. Though they contain interesting material, none
is of any analytical importance. There is a voluminous literature on
railways and railway engines, almost all of it, however, of a technical or
extremely antiquarian character. The most fruitful sources for the student
are the various journals such as Engineering and Engineering News and,
for a more detached viewpoint, The American Machinist and also the
transactions of the various engineering societies.

Books and Articles:

G. C. Allen, The Industrial Development of Birmingham and the Black
Country (1966).
E. Ames and N. Rosenberg, 'Changing Technological Leadership and
Industrial Growth', Economic Journal, 73 (1963).
A. F. Burstall, History of Mechanical Engineering (1963).
The Engineer, Centenary Number, January 4, 1956.
M. Frankel, 'Obsolescence and Technical Change in a Maturing Eco-
nomy', American Economic Review, 45 (1955).
H. J. Habakkuk, American and British Technology in the Nineteenth Cen-
tury (1962).
Institution of Mechanical Engineers, Engineering Heritage (1963).
James B. Jeffreys, The Story of the Engineers, 1800-1945 (1946).
L. T. C. Rolt, Tools for the Job (1965).
W. E. G. Salter, Productivity and Technical Change (1960).
S. B. Saul, 'The American Impact upon British Industry', Business His-
tory, 3 (1960).
S. B. Saul, 'The Motor Industry in Britain to 1914', Business History, 5
(1962).
S. B. Saul, 'The Market and the Development of the Mechanical Engi-
neering Industries in Britain, 1860-1914', Economic History Review, 2nd
Series, 20 (1967).
J. Thomas, The Springburn Story (1964).

Official Publications:
Report on the Engineering Trades after the War, Cd. 9073, 1918, XIII.
Report of the Engineering (New Industries) Committee, Cd. 9226, 1918,
VIII.
Committee on Industry and Trade, Survey of Industries, Vol. IV, 1928.
See also the Reports of the International Exhibitions held at regular inter-
vals during the second half of the nineteenth century.

ELECTRICAL PRODUCTS (CHAPTER 8)

There is no published study of electrical engineering in Britain before the
First World War. The main sources for this chapter are biographies of
firms and individuals, technical histories, and pieces· of information
extracted from the engineering press, especially the weekly Electrical
369
 THE DEVELOPMENT OF BRITISH INDUSTRY

Review. There is no English language study of the German electrical

industry. Material on the us electrical industry has been taken mainly
from Bright and Passer (see below). The following have proved to be the
most helpful sources for this chapter.

Books and Articles:

A.E.G., 50 Jahre A.E.G. (Berlin, 1956).
R. Appleyard, Charles Parsons (1933).
A. A. Bright, Jnr., The Electric Lamp Industry (New York, 1949).
R. E. B. Crompton, Reminiscences (1928).
G. Z. Ferranti and R. Ince, The Life and Letters of S. Z. de Ferranti (1934).
J. A. Fleming, 50 Years of Electricity (1921).
K. Grossfield, Interaction of Scientific, Technical and Economic Factors in
the Cable Industry (London M.Sc. thesis 1956).
P. V. Hunter and J. T. Hazell, The Development of Power Cables (1956).
R. H. Parsons, The Early Days of the Power Station Industry (1939).
H. C. Passer, The Electrical Manufacturers, 1875-1900 (Cambridge, Mass.,
1953).
S. B. Saul, 'The American Impact on British Industry, 1895-1914', Busi-
ness History, 3 (1960).
J. D. Scott, Siemens Bros., 1858-1958 (1958).
G. Siemens (Tr. A. F. Rodger), History of the House of Siemens (Freiburg/
Munich, 1957).

CHEMICALS (CHAPTER 9)
The following suggestions for further reading are intended for the general
reader. For the specialist by far the best sources are the proliferation of
articles to be found in contemporary chemical journals, particularly the
Journal of the Society of the Chemical Industry and Transactions of the
Chemical Society.

Books and Articles:

J. J. Beer, The Emergence of the German Dye Industry (Urbana, Illinois,
1959).
L. F. Haber, The Chemical Industry in the Nineteenth Century (1958).
A. J. Idhe, 'Chemical Industry, 1780-1900', Journal of World History, 4
(1957-58).
A. E. Musson, Enterprise in Soap and Chemicals: Crosfield & Sons Ltd.
(1966).
H. W. Richardson, 'The Development of the British Dyestuffs Industry
before 1939', Scottish Journal of Political Economy, IX (1962).
Sir Henry Roscoe, Autobiography (1906).
C. Singer et al., A History of Technology (1958), Vol. V.
C.H. Wilson, History of Unilever (1954), Vol. 1.
370
 BIBLIOGRAPHIES

Official Publications:
Board of Trade, British and Foreign Trade and Industry, 1st Series, Cd.
1761 (1903) and 2nd Series, Cd. 2337 (1904).
Board of Trade, Competition with Germany and Austria-Hungary in Neutral
Markets (1914).

THE GLASS INDUSTRY (CHAPTER 10)

Very few of the books written about glass deal with the economic prob-
lems of the industry. There is a particular dearth of printed material about
the vicissitudes of flint glass manufacture in this period.

Books and Articles:

T. C. Barker, Pilkington Brothers and the Glass Industry (1960).
George E. Barnett, Chapters on Machinery and Labor (Harvard, 1926).
R. S. Biram, 'The Introduction of the Owens Machine into Europe',
Journal of the Society of Glass Technology (JSGT), 42 (1958).
John L. Carvel, The Al/oa Glass Work (privately printed, 1953).
James Frederick Chance, A History of the Firm of Chance Brothers & Co.
(privately printed, 1919).
Pearce Davis, The Development of the American Glass Industry (Harvard,
1949).
S. English, 'The Ashley Bottle Machine: A Historical Note', JSGT, 8
(1923).
Edward Meigh, The Development of the Automatic Glass Bottle Machine
(reprinted by the Glass Manufacturers' Federation from Glass Techno-
logy), 1 (1960).
Harry J. Powell, Glassmaking in England (1923).
Warren C. Scoville, Revolution in Glassmaking, 1880-1920 (Harvard,
1948).
W. E. S. Turner, 'The Early Development of Bottle Making Machines in
Europe', JSGT, 22 (1938).

Unofficial Report:
Report of the Tariff Commission, 6 (1907).

THE MERCANTILE MARINE (CHAPTER 11)

There is no single study which covers fully the issues raised in this chapter.
However, the following publications contain some material on foreign
competition and related topics and will prove useful to those wishing to
pursue their studies further. In addition, there are some useful articles
from time to time in the shipping journals, notably Fairplay and The Ship-
ping World, and occasional supplements on shipping in The Economist.
371
 THE DEVELOPMENT OF BRITISH INDUSTRY

Books and Articles:

D. H. Aldcroft, 'The Depression in British Shipping, 1901-1911', Journal
of Transport History, 8 (1965).
K. Brackmann, Fiinfzig Jahre deutscher Afrikaschiffahrt (Berlin, 1935).
C. E. Fayle, A Short History of the World's Shipping Industry (1933).
F. B. Herschel, Entwicklung und Bedeutung der Hamburg-Amerika Linie
(Berlin, 1912).
R. S. J. Hoffman, Great Britain and the German Trade Rivalry, 1875-1914
(Philadelphia, 1933).
B. Huldermann, Albert Ballin (1922).
A. H. John, A Liverpool Merchant House: Being the History of Alfred
Booth and Company, 1863-1958 (1959).
E. R. Johnson and G. G. Huebner, Principles of Ocean Transportation
(New York, 1918).
C. Leubuscher, The West African Shipping Trade, 1909-1959 (1963).
R. Meeker, History of Shipping Subsidies (1905).
E. Murken, Die grossen transatlantischen Linienreederei Verbiinde, Pools
und Interessentengemeinschaften bis zum Ausbruch des Weltkrieges. lhre
Entstehung, Organization und Wirksamkeit (Berlin, 1922).
S. Pollard, 'British and World Shipbuilding, 1890-1914: A Study in Com-
parative Costs', Journal of Economic History, 17 (1957).
P. F. Stubmann, Albert Ballin: Ein Deutscher Reeder auf Internationalen
Feld (Hamburg, 1957).
S. G. Sturmey, British Shipping and World Competition (1962).

Official Publications:
Select Committee on Steamship Subsidies, H.C. 385, 1902.
Royal Commission on Shipping Rings, Reports and Evidence, 1909.
Report on Bounties and Subsidies in respect of Shipbuilding, Shipping and
Navigation in Foreign Countries, Cd. 6899, 1913.
Report of the Departmental Committee on Shipping and Shipbuilding after
the War, Cd. 9092, 1918.

372
 INDEX
Accles, George, 213 Arnall, J. C., 312
Ackermann, A. S. E., 56, 59 Ashley, H. M., 312
Ackroyd, Stuart, 217 Ashley (Machine Made) Bottle Com-
Adamsons, firm of, 205 pany, 312
Agricultural machinery, 188, 210-12 Austin, Herbert, 226
Ainsworth, George, 93 Australia, American and British
Alkali Act (1881), 283 competition in, 170-1 ; as market for
Alkali production, 280-6 boots and shoes, 160-1
Allen, G. C., 215 Austrian Small Arms Factory, 214
Allgemeine Elektrizitiits Gesellschaft, Austro-Hungary, as exporter of wool
240,244,253,255,257,258,266,268 textiles, 140
America, 40; boot and shoe industry Automatic loom, 121-2
in, 167, 170; competition from, 158,
161-2; chemical industry in, 278-9, Babcock and Wilcox, 205
280; coal industry in, 44--7; as Bagley and Company, 312
competitor in trade, 18-21, 30; Ballin, Albert, 348, 349, 359
cotton industry in, 101-2, 113, 117, Barclay Curle and Company, 221
119, 121-4, as rival to British cotton Bayer Company, 303
industry, 121-4; decline of American Belgium, coal industry in, 44--7;
shipping, 326; electrical industry in, competitor in glass trade, 318;
239-40, 250 passim, competition exports of wool textiles from, 140;
from, 258--61, 265, 266-8, 273; iron and steel output of, 72--4;
engineering industry in, 228-30; trade in iron and steel products,
footwear machinery, development 76, 82-3, 85-7
of, 164-5; growth of economy, 12- Bessemer steel, 92, 93
13; harvesting machinery, 211; iron Beyer Peacock, 197, 199,201
and steel industry in, 72-4, 86-7; Bicycles, 213-16, 234; development of
locomotives, 201-2; market for the industry, 213-14; employment
British cotton goods, 115; motor in, 213-14; finance for, 234; pro-
industry in, 224--5; plate glass ducers of, 213-15; production of,
industry in, 320; tariffs, 22, 31, 107, 213-16, boom in, 214--15; slump in,
115, 148, 194, 296, 320; textile 215; success of, 214
machinery, 192--4, 212 Birmingham Small Arms Company,
American General Electric Company, 213
207,242-3 Black Country, coal output of, 38
American Locomotive Company, Blake, Lyman, 164
197 Bolckow Vaughan, 89
American Special Machine Company Bombay and Lancashire Cotton
Limited, 165 Spinning Enquiry (1888), 120
American Window Glass Company, Boot and shoe industry, 28, 30, 32, 33,
319,324 158-85; ability to compete, 180;
Anchor Line, 356 availability of capital, 169; central-
Andrew, Samuel, 118 ized production, 172, 175-7, 178;
Anglo-American British Electric Light changes in geographical distribution
Corporation, 244 of the industry, 172-3, 174--5;
Arbogast, Philip, 314--5 cheap labour, effects of, 168;
Argentina, exports of British cottons employment in, 172, 173-5; exports
to, 114; exports of British engineer- of, 158-62, fluctuations in, 158-9,
ing products to, 228-9 markets for, 159--60; factory system,
Arkwright, Richard, 126 development of, 166-8, 172, 175-8;
Armstrong, William, 189 foreign competition, 158-9, 161-2,
373
 169-71, adaptation of industry to, Buck and Hickman, firm of, 212
172 passim, 183--4; imports of boots Burn,D., 81, 89,90,95, 96
and shoes, into Britain, 161, into Burnham and Hoskins, 91
Australia, 170--1 ; innovations in Busch, Adolph, 218
marketing, 182-3; mechanization of,
162-6, 167-8, factors determining, Cables, manufacture of, 262-5, 268
168-9, 176-7, 183; methods of Callenders, firm of, 263
remuneration in, 178-9, disputes Cammell Laird, 220
over, 178-80; number of factories Campbell Machine Company, 165
and workshops in, 166-7; organiza- Candlish, J. J., 311
tion of, 162, 166--9, 172; putting-out Candlish, Robert and Son Limited, 311
system, 166--8, decline of, 176-8; Cannington and Shaw, firm of, 312
relative decline of industry after Capital, availability of, in boot and
first world war, 184; role and shoe industry, 169, in engineering,
viability of small firm, 180--2; unions 234; invested in coal industry, 37
in, 172, 175-6, 178-80 Capital accumulation, 14; for indus-
Booth Line, 344-5 trial investment and finance see
Borsig, firm of, 197 under separate industry headings
Bottlemaking machinery, 312-5, 316-7 Carnegie, Andrew, 79
Bowley, A. L., 289 Castle Line, 337
Brackmann, K., 335, 338 Castner, H. Y., 280
Bradbury's, firm of, 190 Castner-Kellner Alkali Company, 285
Bradford, Chamber of Commerce, 143, Census of Production (1907), 129, 134,
144, 145, 148, 151; Dyers' Associa- 295
tion, 151; Mechanics Institute, 146; Central London Railway, 242
Technical School, 146; wool trade, Chamberlain, Joseph, 81,309
142-3, 144-5 Chances, glass firm, 318
Bradford Observer, 132, 135, 155 Chemical industry, 29, 30, 32, 33, 34,
Brazil, market for British cotton goods, 274-306; alkali production, 280-6;
114; market for British engineering Britain remains a net exporter of
products, 228 chemicals, 293; chemical production
Bremen Atlas Line, 339 as proportion of total industrial
British India Line, 334 production, 292; comparison of
British Insulated Wire Company, British and German chemical trade,
263 288 passim; dyestuffs, failure of in
British Northrop Loom Company, 195 Britain, 286-7, reasons for, 286,
British Plate Glass Company, ~21 success of German dyes, 286-7;
British Thomson-Houston, 207, 244, employment in, 279-80; exports of
251,262,265,266,271 chemical products, 285, 289-98;
British United Shoe Machinery Com- foreign competition in, 288 passim,
pany, 165,181 294-5; growth of, 279; imports of
Brooks and Doxey, firm of, 192 chemicals into Britain, 287, 289-98;
Brotherhoods, firm of, 206 lack of trained manpower in, 301-2;
Brown-Boveri, firm of, 206,253, 254-5 lag in certain products, 280; Leblanc
Brown, Charles, 252 soda, 281-6; markets for British
Brown, John and Company, 89, 220 chemicals, 294-5; narrow specializa-
Brown Marshalls, firm of, 203, 207 tion in, 295, 297; neglect of research
Brown and Sharpe, firm of, 212 and development by, 302-6, con-
Brown, T. E. F01,ter, 61 trast with Germany, 302-5; patent
Brown, William, 214 laws, effects of, 288, 299-300;
Brunner Mond, 282, 286 production of chemicals, 278, inter-
Brush, C. F., 244, 255 national comparisons of, 278-9;
Brush Company, 244-5, 246,250,258 profitability, 285; relative decline of
374
 British chemical industry, 279-80, scope for investment, 67; size of
293, reasons for, 288 passim; undertakings, 63--4, comparison with
sensitivity of chemical exports and abroad, 64-5; integration of, 66, 67;
imports to changes in income and structural defects, 63-6, 67;
total trade, 290--2; soap industry, transport costs, 66; wages in, 43, 45
development of, 280--1; Solvay Coatalen, Louis, 226
process, 281-3, competitor with Coats, J. and P., 126
Leblanc process, 281-6, effects of, Colliery Guardian, 56
on soda prices, 283--4, reasons for Colville, David, 93
slow adoption of Solvay process in Competition, foreign, general: ch. 1,
Britain, 284-5; tariffs, effects of, on dimensions of, 17-26; main com-
British exports, 296; transport costs, petitors, 17-26; reaction of British
300--1; weighting of chemicals in industrialists to, 31-3, 142-52;
overseas trade, 292-3, 298 summary of impact on various
China, market for British cotton industries, 28-31, 35-6; specific: in
goods, 107, 112-13 boot and shoe industry, 158-9,
Churchill, Charles, 212 161-2, 169-71; in chemicals, 288
Civil War, American, 326 passim, 294-5; in coal industry, 39,
Clapham, J. H., 135, 151, 154 40, 48; in cotton industry, 101, 103-
Clarke, Chapman and Company, 206, 4, 106--8, 111-15, 118, 125; in
254 electrical industry, 255-61; in engin-
Clayton Aniline Company, 286 eering, 227-37; in glass industry,
Clayton and Shuttleworth, 188, 207, 310, 311, 318, 320--1, 325; in iron
208 and steel, 72-6, 79, 84-6; in wool
Climacteric, in growth, 12, causes of, textiles, 134, 139, 140, 143-5; in
14, debate on, 14-15 shipping, 328, 329, 330--1, 334-6,
Clothworkers' Company, 146 337-8, 343--4, 345, 347-57, 360,
Clyde Locomotive Works, 197 362-3
Coal industry, 28, 30, 33, 34, 35, 37-70; Conference system, see under Shipping
absenteeism among miners, 52-3; Consett, iron company, 89, 93;
attitude of miners, 51-5; capital reconstruction of, 93
invested in, 37, 65; coal consump- Consolidated Diesel Engine Manu-
tion, 39, 40, 48; coal freight rates, facturers Limited, 220
41; coal owners, 63, 67; costs in, Convention Internationale des
41, 47, 69; development of 37--42; Glaceries, 321
efficiency of, 44, 48-50, 54, 56, 69; Co-operative Wholesale Society, 165
employment in, 47, 49, 50--1, 64; Coppock, D. J., 14
exports of, 39--41, 42, 44; fluctua- Corliss, engine, 207,220; valve, 205
tions in prosperity, 37, 42-3, 67, 68; Cotton Famine, 103
German coal industry, 40--1, 45, Cotton industry, 28, 30, 33, 34, 100--27;
49, 64-5; management in, 55, 57, automatic loom, 121-2, neglect of,
60--1, 62-3, comparison with in Britain, 121-2; Britain's share of
Germany, 62, training of, 61, world trade in cotton goods, 118,
remuneration of, 63; mechanization 126; continued predominance of
in, 56--9, reasons for lag in, 57-9, British cotton industry, 125; costs of
effects of cheap labour on rate of, production in, 120, 123--4, 126; de-
59; output of, 38, 42, 48, 65, regional mand for protection by, 116; devel-
breakdown, 38, 48, 65; ownership of opment of industry abroad, 101-8,
minerals, 66; position of industry by 116--17; efficiency of, 118, 120--1,
1914, 37, 69; prices of coal, 42, 44; 123-6; exports of (piece-goods),
productivity in, 45-6, 49, relative 108-15, (yarns), 104-8; foreign
decline in, 47, 49, 50--1, causes of, competition in, 101, 103--4, 106--8,
50 passim; scale economies in, 67; 111-15, 118, 125; geographical
375
 concentration of, 119; growth of, Dumping, in iron and steel, 79, 90
100-1 passim; home consumption of Dyer, H. J., 282
cotton textiles, 103 ; imports of Dyestuffs industry, 286-----7
cotton goods, 104; main competitors
of, 116-----17; markets for British East Africa, competition in shipping,
cottons, 104-15, 126; merchant 337; establishment of shipping lines
system in, 124-5, efficiency of, 125; to, 334-5
mule, use of, 121-2; overproduction, Economic history, approach to, 11 ;
118; profitability of, 102, 127; quantitative, 11; study of, 11
position of prior to first world war, Economic growth, dimensions of, 11 ;
100; raw cotton supply, 102-3; international comparisons, 12-13;
reliance on export trade, 100; ring retardation in (1870-1914), 12-14;
spindle, use of, 121-2; specialization statistics on, 13
in, 119-20, 126; superior skill of Economist, The, 183, 332
British cotton operative, 120; tariffs, Edison General Electric, 239, 240
effects of, 108, 116, 117-18, 126; Efficiency, see u.1der productivity and
technology in, 121-3, 126 separate industry headings
Coventry Machinists Company, 213, Egypt, market for cotton goods, 107,
214 114
Coventry Sewing Machine Company, Eight-Hours Act (1908), 54
190 Electric Construction Corporation,
Cravens, machine tool firm, 208 249,250,255,256,262,270
Crimean War, 67 Electric lamps, manufacture of, 265-6
Crompton and Company, 245,250,271 Electrical industry, 25-6, 29, 33, 35,
Crompton, R. E. B., 245, 249, 255, 238-73; cable manufacture, 262-5,
270,271 success of, 263--4, trade in cables,
Crosfields and Sons, 280 264, 268; competition of foreign
Crossley, Francis, 216 suppliers, 255-61 ; demand for
Cunard Company, 351, 352-3, 354-6'. tariffs, 273; depression in,246;
relationships with foreign shipping development of electrical manu-
lines, 352-5 facturing firms, 244-6, 248-9, 250--4,
Curtis and Sons, 187, 192 255-6, 269; development of elec-
tricity supply in Britain, 248-50;
De la Vergne Company, 217 entry of foreign firms into Britain,
Dick, Kerr and Company, 255, 258, 250-6; exports of electrical products,
260 246-----7, 257, 258-61, 264, 267-8;
Diesel Engine Company, 218,220 favourable balance of trade in
Diesel, Rudolph, 217,220 electrical products, 239,267; imports
Dingley tariff, 31, 148,194,296, 320 of electrical products, 247,250, 255-
Dobson and Barlow, 187, 192 8, 259-61, 264, 266, 267-8; an
Domestic market, for coal, 39; for international industry, 239--40, 266-----
cotton textiles, 101-3; foreign 7, 268, dominated by American and
competition in, 25-6; slow growth German firms, 240, 244, 265-6,
of, 25, 34, effects of, on industry, 268, 273; investment in, 239, 242,
34-5, 75, 77, on engineering, 235, 255; lack of co-operation between
on steel, 77, 97; for woollen goods, manufacturer and consumer, 272;
135; see also under separate industry lag in power station equipment by
headings British firms, 253--4, 255; manage-
Dorman Long, 89, 95 ment in, 271, friction between
Dowlais, 89 management and engineers, 270-1 ;
Dubs, firm of, 186 marketing system of, 269; markets
Dubs, Henry, 197 for electrical products, 246-----7, 258-
Duisberg, Carl, 303 61, 267-8; organization of the
376
 British electrical industry compared also under separate branches, e.g.
with abroad, 268-73; output of bicycles, machine tools, textile
electrical products in 1907, 241 ; machinery
position of heavy electrical manu- English Edison Company, 246
facturing in early 1890s, 250; price- Enterprise, British, 14-16; criteria of
fixing agreements in, 265; produc- entrepreneurial progressiveness,
tion of heavy electrical machinery 275-7; contemporary criticism of,
and power station equipment, 252- 15-16, 17; constraints on, 276; in
4; production of electric lamps and boot and shoe industry, 172 passim,
dominance of foreign firms in, 183-4; in coal industry, 55 passim;
265-6; profitability of, 261-2, 263; in engineering, 233-4; in glass in-
use of electricity in Britain before dustry, 307, 318-20; in iron and steel,
1914, 238, 240--44, for communica- 93-4,95, 98; inshipping,359,361; see
tions, 242-3, 249-50, in factories, also under separate industry headings
243, for lighting, 241-2, 248 Erickson, C. J., 129
Electricity supply, see under electrical Europaischer Verband der Flaschen-
industry fabriken, 316,317,318
Elliot, Sir George, 65 Europe, imports of boots and shoes
Employment, in boot and shoe into Britain from, 161-2, imports
industry, 172, 173-5; in chemical into, from America and Britain,
industry, 279-80; in coal industry, 171 ; market for British cotton
47, 49, 50-1, 64; in cotton industry, goods, ll5; market for British
100; in engineering, 186--88, 196, exports, 19-20; market for engineer-
203-4, 213-4; in iron and steel, 71 ing products, 228-9; market for iron
Engineering industry, 29, 30, 32-3, 34, and steel products, 81-6
186--237; agricultural machinery, Exports, general: 14, 17; country
188, 210-2; bicycles, 213-6, 234; shares of world exports, 21 ; growth
competitive position of, 227-37, in British, 13, 17-20, 23; inter-
compared with America and national comparisons, 13, 18-21;
Germany, 228-32; effects of slow markets for, 19-21, 23; structure of
economic growth on, 235; exports trade in, 23; trade losses of Britain,
of, 193-5, 198-203, 227-9, market 22; of specific industries: boots and
distribution of, 228-30; finance for shoes, 158-62; chemicals, 285, 289-
234-5; gas and oil engines, 216--22; 98; coal, 39-41, 42, 44; cotton
grain milling and harvesting machin- textiles, 100, 104-15; electrical pro-
ery, 210-12; hydraulic machinery, ducts, 246--7, 257, 258-61, 264,
189; labour in, 232-3; machine 267-68; engineering, 193-5, 198-
tools, 208-9; mass production tech- 203, 227-9; glass, 308,310,313,319,
niques, 209, 212,224-6, 231, 235-6; 321; iron and steel, 75-6, 77, 82-6;
motor cars, 222-6; new sector, 209 wool textiles, 134-8, 140-1, 153-7
passim; organization of industry in
1860s, 186--91; output of, in 1907, Factory system, development of, in
192; overcommitment to certain boot and shoe industry, 166--8, 172,
branches, 230-1 ; railway loco- 175-8
motives and rolling stock, 186, 187, Fairbairn, W., firm of, 197
195-205; role of enterprise in, 233- Fairplay, 341
4; sewing machines, 163-4, 189-90, Feinstein, C. H., 289
212; size of firms, 187-8, 196--7, Ferranti, S. Z., 248-9, 252, 253, 271
201-3, 206--8; steam engines and Fife Coal Company, 65
turbines, 205-8, 219; technical short- Finance, availability of, in boot and
comings in, 191, 231, 236; textile shoe industry, 169; in engineering,
machinery, 191-5; weaknesses of 234; see also under Capital and
industry in general, 230-3, 235-6; see separate industry headings
377
Ford, Edward, 320 and steel, 72 passim, in shipping,
Foreign competition, see under 330--1, 334--5, 337-8, 340, 342-6,
Competition and separate industry 348-57, 360; cotton industry in, 119;
headings electrical industry in, 339-40;
Forster, John, 314 engineering industry in, 228-30;
Foster, John and Son, 137 exports of wool goods, 140; growth
Fourcault Company, 324 of the economy, 12-13; iron and
Fourcault, Emile, 318 steel industry in, 72-4, 86-7;
France, 40; chemical industry in, 278; locomotives, 202-3; market for
coal industry in, 45, 49; cotton British cotton textiles, 115; prefer-
industry in, 104, 115, 117, 119; ential railway rates, 336-7; ship-
exports of wool goods from, 140-1; building, duty free raw materials for,
failure of shipping subsidy policy, 339-40; shipping industry, competi-
336; French competition, 30, 35; tion from, 330--1, 334-5, 337-8,
French superiority in all wool 340, 342-6, 348-57, 360, and
worsteds, 143, 144--5; market for conference system, 342-6, enterprise
British cotton goods, 115; motor car in, 359, organization of, 342, 358-9,
industry in, 222-3 and pooling agreements on North
Franco-Prussian War, 67 Atlantic, 348-57, subsidies to, 333-
Freight rates, for coal, 41; in shipping, 42
343,344,345-6 Giffen, Sir Robert, 332
Fresnel, A. J., 282 Glass Bottle Makers' Society, 314
Friedrich, Carl, 271 Glass industry, 28-9, 30, 32, 33, 34, 35,
307-25; bottle glass, 311-18, adop-
Gamble, J.C. and Sons, 286 tion of bottlemaking machinery,
Garforth, W. E., 59 312-15, competition from abroad,
Garretts, firm of, 188 311, development of new machinery
Gas and oil engines, 216-22; develop- for, 312-13, 315, international agree-
ment of new types, 216-17; diesel ment to control output, 316-17,
engine, 219, antagonism towards, licensing arrangements for bottle-
219, slow adoption of, by ship- making machinery, 315-17, trade in,
builders and shipowners, 219-20; 313; competitive position of British
heavy oil engines, 218; producers of, glass industry, 324--5; criticism of
217; use of, 221 enterprise in, 307; different branches
General Electric Company, 244, 253, of, 308; exports of, 308, 310, 313,
255, 262, 265, 266, 268,271; formed 319, 321; flint glass, 309-10, impact
by amalgamation, 239 of foreign competition on, 310,
German East African Company, relative importance of labour costs
333-4, 335, 337-8, 340; competitor in, 309; foreign competition in glass
with English shipping lines, 334, products, 310, 311, 318, 320--1, 325;
337-8, 344; prosperity of, 338; imports of glass into Britain, 308,
resources of 338; subsidies to, 334 310, 313, 319, 321; output of, 308,
German Edison Company, 240; later 322; weaknesses of, 308, 325;
the Allgemeine Elektrizitii.ts Gesell- window glass, 318-23, attitude of
schaft Pilkingtons to control of output,
German Levant Line, 358 322-3, competition in, 320--1, hit by
Germany, chemical industry in, 278, tariffs, 320, international control of
281 passim; coal industry in, 40-1, output, 321-2, mechanization in,
45, 49, 64--5; competition from, 18- 320, revival of window glass sector
21, 30, in chemicals, 278-9, 294--5, in under Pilkingtons, 318-19, weak-
cotton textiles, 116-17, in electrical nesses of, in 1870, 318
products, 255-6, 258-61, 265, 266-8, Gloucester Company, 204
273, in engineering, 228-9, in iron Goodyear, Charles, 164
378
Goodyear Company, 164, 165 Imports, into Britain, general, 25-6;
Grain milling and harvesting machin- of boots and shoes, 161-2; of
ery, 210-2; comparison with United chemicals, 287, 289-98; of cotton
States, 211; development of, 210 textiles, 104; of electrical products,
Great Depression (1873-96), 11 247, 250, 255-8, 259-61, 264, 266,
Great Eastern, 189 267-8; of engineering products, 229;
Great Exhibition (1851), 191 of glass, 308, 310 313, 319, 321; of
Greens, firm of, 205 iron and steel, 75, 87; of wool
Greenwood and Batley, 186 textiles, 139; see also under separate
Growth, of British economy, 12-13; industry headings
retardation in, 12-14, reasons for, India, 118; competitor in cotton trade,
14--15 124; exporter of cotton goods, 106;
Guest, Keen and Nettlefolds, 65 as market for British cotton textiles,
Gulbenkian, Calouste, 221 106, 111-12; rise of cotton industry
Gwynne, James S., 189 in, 111 ; shipping competition in, 343
India Rubber and Gutta Percha
Habakkuk, H. J., 222 Company, 245,263
Hall and Stells, 194 Industrial production, growth of, 12-13
Halske-Siemens Schuckertwerke, 244, Industry, general: efficiency of, 24,
266,271 33-5; factors affecting British
Hamburg-American Line, 344--5, 347, industry's ability to compete, 24--5;
348-9,355,357 overcommitment in, 23-4; reaction
Hamburg-South American Line, 344, of industrialists to foreign competi-
345 tion, 31-3; structure of, 23-4;
Hansa Company, 343 techniques in, 32; see also under
Hawks Crawshay, firm of, 187 separate industry headings
Hawthorns, firm of, 199 Investment, rate of, 14; see also under
Harland and Wolff, 220 Capital and separate industry
Hemming, J., 282 headings
Herbert, Alfred, 213 Iron and Coal Trades Review, 92
Herbert, Alfred and Company, 213 Iron and Steel industry, 23, 24, 28, 30,
Hetheringtons, firm of, 192 32, 33, 34, 71-99; competition in,
Hick Hargreaves, firm of, 197, 222, 206 72-6, 79, 84; consumption of iron
Higgins, C. F., 253 and steel, 77-8; costs in, 88,
Hinrichsen, S., 116 comparison with other countries,
Hodges, Frank, 53 88-9, 90, 97; dumping, 79, 90;
Hodges, Isaac, 62 efficiency of, 24, 81, 96; exports of,
Holland-American Line, 349 75-6, 77, 82-6, international com-
Holt, John, 360 parisons of, 84-6; growth of, 24;
Hooker, R. H., 52 importance of iron and steel industry
Hooley, Ernest T., 214 to British economy, 71; imports of
Hopkinson, Edward, 249 iron and steel, 75, 87; integration,
Hornsby, Richard, firm of, 188,217 95-6; lack of enterprise in, 93-4, 95,
Horrockes, Crewdsen and Company, 98; lack of trained recruits in, 90-1 ;
127 markets for iron and steel products,
Howard and Bullough, firm of, 122, 77, 82-5; neglect of basic ores, 89;
192,193 output statistics, 72-5; relative
Howden, James, 207 decline in Britain, 72, 75, 87,
Hydraulic machinery, manufacture of, reasons for, 97, 98; slow growth in
189 domestic market, effect of, 77, 97;
tariffs, impact of, 98; technical Jag
Illinois Steel Company, 96 in, 89-90, 92-3; Thomas process of
Imlah, A. H., 289 steelmaking, 89
379
Italy, competitor in cotton trade, 114, London and Manchester Plate Glass
117 Company, 321
Lubbers, John H., 319
Japan, 30; competitor in cotton trade, Lubin and Everett, remarks on coal
106--7, 111, 113, 117, 124, 125; industry by, 37, 70
cotton industry, employment in, Lumb, John and Company, 314
120; development of cotton industry
106--7, 112; self-sufficiency of, 62 Machine tools, 26, 186, 191, 192,
Jevons, H. S., 44, 67 208-9, 235--6; firms in, 208-9; and
Johnson, Claude, 226 mass production techniques, 235--6;
Jones, Sir Alfred, 360 position of industry, 209
Jones and Potts, firm of, 197 Mckenzie, F. A., American Invaders
Journal of the Chemical Society, 303 (1902), 16
Mckinley tariff, 22, 31, 107, 115, 148,
Kaiser Wilhelm Gesellschaft Institute, 194,320
305 Maidstone Agricultural Exhibition
Kendrick, J. W., 17 (1899), 211
Kelvin, Lord, 218 Manchester, role of merchant in
Kendal, boot and shoe industry of, 172 cotton trade, 125
Kettering, boot and shoe industry in, Manchester Chamber of Commerce,
172 116
Kilner Brothers, firm of, 314 Manufacturers, world trade in, 18-21;
Kindleberger, C. P., 14, 23 see also under Exports and separate
Kirtley, Matthew, 196 industry headings
Markel, Karl, 300
Labour disputes, in boot and shoe Marketing, in cotton industry, 124-5;
industry, 178-9 innovations in, 182-3; weaknesses
Labour force, in boot and shoe of, in iron and steel industry, 80-1
industry, 172, 173-5; in chemical Marshall, A., 16, 41; Industry and
industry, 279-80; in coal industry, Trade (1919), 16
47, 49, 50-1, 64; in cotton industry, Marshall Field and Company, 125
100; in erg'neering, 186--88, 196, Marshalls, firm of, 188,207
203-4, 213-14; in iron and steel Mass production, techniques of, 209,
industry, 71 212,224--6, 231,235--6
Lancashire Dynamo and Motor Com- Massey, B. & S., firm of, 208, 233, 236
pany, 262 Massey, Leonard, 236
Langs, firm of, 209 Mather and Platt, 207, 233, 246, 249,
Lawson, Harry J., 214 250
Leblanc process, 281--6 Mather, Sir W., 246
Lee, J. C., 125 Maudsley Sons and Field, 188, 208
Leeds, boot and shoe industry in, 172 Mechanization, see under separate
Leeds Forge Company, 204 industry headings
Leeds Mercury, 312 Mediterranean Steerage Conference,
Lees, Asa, firm of, 192 350
Leicester, boot and shoe industry in, Meeker, R., 335
172, 174, 175 Meline tariff, 118
Levinstein, Ivan, 286, 287, 302, 303 Mertz, Charles, 231,254,272
Lever Brothers, 280 Metropolitan Railway Carriage and
Libbey, E. D., 315 Wagon Company, 187,203,204
Liverpool Overhead Railway, 242 Metropolitan Vickers Electrical Com-
London, boot and shoe industry in, 173 pany, 207
London Electric Supply Corporation, Meyer, J. R., 14
248,249 Midland Company, 204
380
Migration, to United States, 348 North British DieselEngine Works, 221
Miners' Federation, 51 North British Railway, 196
Mirrlees Bickerton and Day, firm of, North Eastern Steel Company, 90
220 North German Lloyd, 332, 333, 335,
Mirrlees, Watson and Yaryan, firm of, 347, 349, 357, 359
218 Northampton, boot and shoe industry
Mitchell, Henry, 142, 146 in, 172, 174
Morday, W. M., 253 Norwich, boot and shoe industry in, 172
Motor car industry, 222-6; com-
parison with France and United Oerlikon Company, 252, 253
States, 223-5; development of petrol Oil engines, see under gas and oil
engine, 222-3; finance for, 234-5; engines
firms in, 222-4, origins of, 224; Oldham, limited liability companies,
in France, 223; new manufacturing
126--7
techniques, slow adoption of, in Oldham Master Cotton Spinners'
Britain, 224, reasons for, 225-6; Association, 118
output, 223-4 Oldknow, Samuel, 126
Murken, E., 354 Orsagh, T. G., 92, 93
Otto, Dr, 216--7
National Association of Colliery Output, see under separate industry
Managers, 56, 61 headings
National Gas Engine Company, 217 Owens, M. J., 315, 324
National income, contribution of iron Owens Bottle Machine Company, 316
and steel industry to, 71
National Institute of Mining Engineers,
56,62 Paris Exhibition (1855), 211
National output, contribution of iron Parker, Thomas, 253
and steel industry to, 71 ; statistics Parsons, Charles, 206,207,219, 254-5,
relating to, 13 271
National Union of Boot and Shoe Passenger trade, see under North
Operatives, 172, 175, 176, 178-80; Atlantic and Shipping
attitudes to centralized production Patent Law Amendment Act (1907),
in boot and shoe industry, 175-6; 299,316
disputes over wage rates, 178-80; Patent Shaft and Axle-Tree Company,
reactions to mechanization, 178-9 187,203,205
Neilson and Company, 186, 197 Patent Jaws, and chemical industry,
Neilson, Walter, 197 288,299-300
Nettlefold and Chamberlain, firm of, Patents, Designs and Trade Marks
190 Act (1883), 299
Nettlefold, John S., 190 Peninsular and Orient, 334, 353;
New Premier Company, 214 competition with German shipping,
New York Times, 208-9 343
New Zealand, market for British Penn, John, firm of, 188
boots and shoes, 160-1 Petrol engine, development of, 222-3
North Atlantic, competition between Philadelphia Exhibition (1876), 208
British and German shipping on, Philippi, 0. E., 126
347-57; passenger traffic on, 347-8, Pilkington Brothers, 318-23; and
352-7, division of traffic between control of glass output, 321-3;
various lines, 356--7; pooling agree- enterprise of, 318-20; output of, 322
ments in passenger trade, 348-50, Pirrie, W. J., 340
breakdown of, 352, 355; rates wars Platts, firm of, 186, 191, 192, 193; see
on, 352-3, 354, 355, and effects of, also under Mather and Platt
355-7 Pollard, S., 361
381
Pooling agreements, see under North Royal Commission on Shipping Rings
Atlantic and Shipping (1909), 337, 339, 360
Powell Duffryn Company, 65 Royal Commission on Technical
Powell, H. J., 307, 309, 323; criticism Instruction (1882), 303
of glass industry by, 307, 323 Rudge, Dan, 214
Prince Smith and Son, 194 Ruhr, the, coal industry of, 64--5
Productivity, 13, 14; in coal industry, Russia,40
45-6, 47, 49, 50--1, causes of decline Russian Diesel Motor Company, 220
in passim; see also under separate Ruston and Proctor, firm of, 186, 188,
industry headings 207
Protection, see under Tariffs
Pullinger, Thomas, 226 St Gobain Company, 318
Putting-out system, in boot and shoe Salt, Sir Titus, 143
industry, 166----8, decline of, 176----8 Samuel Commission (1919), 53, 59
Sankey Commission (1926), 52, 63
Railway locomotives and rolling stock, Saul, S. B., 25, 294
186, 187, 195-205; amalgamation of Schlote, W., 289
firms in, 204-5; competition in, 201- Select Committee on Steamship Sub-
3; employment in, 196; 203-4; sidies (1902), 337, 340
exports of, 198-203; firms pro- Sewing machines, 163-4, 189-90, 212;
ducing, 196----7, 203-4; output of, in boot and shoe industry, 163-4;
197-8, 199-200; structure of indus- firms producing, 212; manufacture
try, 195-6, 203 of, 189-90, 212
Railway rates, preferential in Germany, Sexton, Professor, 94; comments on
336----7,338-9 iron and steel industry, 94
Railways, electrification of, 242, 249, Shadwell, A., Industrial Efficiency
250,251 (1906), 16
Raleigh Company, 214 Sharp Roberts, firm of, 208
Ransomes, firm of, 207; Ransomes Sharp Stewart, firm of, 197, 201
and Rapier, 188 Shaw, Savill and Albion Line, 346
Raw cotton, supply of, 102-3 Sherman Act, 265
Read Holliday and Sons, 286 Shipbuilding industry, and adoption of
Red Star Line, 349 diesel propulsion, 219; enterprise in,
Redmayne, Sir Richard, 52 361 ; German, 339; importance of,
Regulations, Board of Trade relating in Britain, 328; preferential tariffs
to shipping, 340--1 for shipbuilding materials in
Reid, James, 197 Germany, 339-40
Renold Chains, 233 Shipping, 28, 34, 326-63; Board of
Rheederei-Vereinigung, 359 Trade regulations relating to, 340--1 ;
Rhenish Westphalian Coal Syndicate, British shipowners' reaction to
65 competition, 346, 355; conference
Richardson, Thomas and Sons, 253 system, 342-7, effects of, 342, 343-
Ring spindles, 121-2 4, 345-6; enterprise in, 359, 361;
Robinsons, Thomas, firm of, 188, foreign competition in, 328, 329,
210 334-6, 337-8, 343-5, 347-57, 360;
Rolls Royce, 226 Germany as chief competitor, 330--1,
Royal Commission on Coal Supplies 334--5, 341-2; organization of
(1901-5), 58 British and German shipping, 358-
Royal Commission on Depression of 9; passenger traffic on North
Trade and Industry (1886), 116, 125, Atlantic, 347-8, 352-7; preferential
134,142 railway rates and German shipping,
Royal Commission on Labour (1892), 336----7, 338-9; preferential tariffs for
152 shipbuilding materials in Germany,
382
 339-40; pooling agreements in Swift Cycle Company, 214
passenger trade, 348-50, breakdown Sykes, Alfred, 150
of, 352, 355, effects of, 355-7, rate
wars in, 352-3, 354, 355; rate wars Tangye, Richard,233
in, 343, 344, 345--6, 352, 353, 354, Tangyes, firm of, 189, 233
355; relative position of British Tariff Commission, 72, 79, 88, 90, 91,
shipping, 326-7; reluctance to adopt 96, 103, 116, 134, 140, 147, 149, 309,
diesel propulsion, 219; services to 311
East Africa, 334--5; statistics on Tariffs, 31, 77; demand for, by cotton
entrances and clearances, 329, 362- industry, 116; Dingley tariff, 31, 148,
3 ; strength of British shipping, 326- 194, 296, 320; duty free materials
8, 361; subsidies to, 331-42, effects for shipbuilding in Germany, 339-
of, 335, 340-1; wages costs in, 40; effects of protection, 22, 30-1,
341 98, on chemicals, 296, on cotton
Shipping World, 330, 351 industry, 108, 116, 117-8, 126, on
Ships, sale of, to foreigners, 326 engineering industry, 235, on wool
Short, S. H., 255, 271 textile industry, 148-50, 156;
Siemens, 244, 245, 250, 255, 258, 262, German tariff of 1885, 339;
266, 268; Brothers, 252, 255--6, 263, Mckinley tariff, 22, 31, 107, 115, 148,
273 ; Halske-Siemens Schuckert- 194,320
werke, 244,266,271 Technical education, in chemical
Siemens, Alexander, 253 industry, 303; in iron and steel
Siemens, Sir William, 244, 249 industry, 90; in wool textile industry,
Singer Sewing Machine Company, 164, 146-7, 147-8
190,212 Technical progress, 14, 32; in cotton
Skelton, H. J., 81 industry, 121-3, 126; in glass in-
Smith and Coventry, firm of, 212 dustry, 312-15, 318-20, criticism of,
Snow, Lord, 206 307; in shipping, 326, 361; in wool
Soap industry, 280-1 textile industry, 145, 150; lag of, in
Society of Chemical Industry, member- engineering, 191, 231, 236, in iron
ship of, 306 and steel, 32, 89-90, 92-3; see also
Solvay process, 281-6 under separate industry headings
South Africa, 337; market for boots Telegraph Construction and Mainten-
and shoes, 160-1; shipping competi- ance Company, 245,262
tion in, 337-8, 344 Temin,P., 77,97,98,205
South America, market for boots and Tertiary sector, 12
shoes, 160-1, for cotton goods, 114, Textile machinery, 191-5; British
for engineering products, 228-9; superiority in, 191; employment in,
shipping competition in, 344--5 191-2; exports of, 193, 195, to us
South Wales, coal output, 38 market, 193; manufacturing techni-
Stafford, boot and shoe industry in, ques, 194--5; production of ring
172, 173 spindles, 193, 195; output of, 191-3;
Steam engines and turbines, 205-8, worsted machinery, 194
219; firms producing, 206-8; manu- Textile Manufacturer, 145, 147
facture of, 206-8; position of Thom, J., 282
industry, 205 Thomas, D. A., 44, 65
Steam power, used in iron and steel Thomas process, 89
industry, 71 Thomson-Houston, 240; British
Stockholm Enskilda Bank, 220, 235 Thomson-Houston, 244, 251, 262,
Stringer, George, 59 265,266,271
Sturmey, S. G., 359 Tootal, Broadhurst, Lee and Company,
Subsidies, to shipping, 331-42 127
Swan Company, 246 Trade, Britain's trade difficulties, 20-1,
383
 causes of, 22-3, 24; structure of, 23; Willan and Robinson, firm of, 206
see also under Exports, Imports and Willans, Peter, 246
separate industry headings Williams, E. E., Made in Germany
Trade unions, 172, 175, 176, 178-80; (1896), 16
in boot and shoe industry, 172, 175- Wilson, E. B., firm of, 197
6, 178-80 Wilson tariff, 148
Transport, costs of, in coal industry, Windmill, J. R., 315
66, in chemical industry, 300-1 WoermannLine, 360
Turbines, see under Steam engines and Wool textile industry, 28-9, 32, 33, 35,
turbines 128-57; adaptation of woollen
Turkey, market for cotton goods, 105, sector to foreign competition, 154-6;
107, 114 'adulteration' of raw materials,
Turner, E. R. and F., firm of, 210 154-5; bankruptcies in, 132; British
Turner, W. E. S., 307, 324 and foreign exports compared,
Tweedale and Smalley, firm of, 193 140-2; combination in, 151 ; competi-
Tyser Line, 346 tion in home market, 139, 143-4;
contrast between woollen and wor-
sted sectors, 153-4, 157; establish-
Union Boot and Shoe Company, ment of British firms abroad, 149-
165 50; exports of, 134-8, 140-1, 156,
Union-Castle Company, 338, 344; contrast between woollen and wor-
formerly the Union and Castle sted exports, 135-7, revival of
companies woollen exports, 153-7; fashion,
Union Electric Company, 240 effects of changes in, 143-5; foreign
Union Line, 337 competition, 134, 140-1, 140-5,
United Alkali Company, 282,285 from France, 143, 144-5, in home
United States of America, see under market, 139-42, reactions to, 142-
America 52; growth of, 133 passim; Imperial
United States Tariff Board, 124 markets, importance of, 156-7;
importance of domestic market for
Veblen, T., Imperial Germany and the wool textiles, 135; imports, 135,139;
Industrial Revolution (1915), 16 number of firms in, 130-1, with
Vickers, Armstrong Whitworth, 218 limited liability, 152; predominance
Vulcan Foundry, 196, 199 of family firms in, 152; price-fixing
agreements in, 151; problems of
innovation, 143-4, 145; raw
Wages, cost of, in coal industry, 43, 45, materials used by, 132-4, 154, 155,
in shipping industry, 341 statistics of, 133; search for new
Walker, Sidney F., 56 products, 150-1; structure of, 128-
Ward, H. W., 213 31; survival of firms in, 128-34;
Webb, F. W., 196 tariffs, effects of, 148-50, 156,
Well Line, 343 resolutions on, 149; technical educa-
West Africa, competition in shipping, tion, 146-7, lack of, 147-8; techno-
360; tonnage of shipping employed logical adaptation in, 145, 150
in West African trade, 360 Woollens, see under Wool textile
West Indies, 160 industry
Westinghouse, firm of, 239, 244, 255, Worsteds, see under Wool textile
266; British Westinghouse, 262, 268 industry
Westinghouse, George, 251, 271 Wright, Joseph, 203
White Star Line, 346, 356, 357 Wrightson, Sir Thomas, 90
Whitworth, Sir J., 208
Wiegand, H., 359 Yerkes, Charles T., 242
Wilcox and Gibbs, firm of, 212 Younger, George and Sons, 314
384