The Development of British Industry

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 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

This book is copyright under the Berne Convention.

Apart from any fair dealing for the purposes of private
study, research, criticism or review, as permitted under
the Copyright Act, 1956, no portion may be reproduced
by any process without written permission. Enquiries
should be addressed to the publisher.

© George Allen & Unwin Ltd 1968

First published in Canada 1968 by University of Toronto Press

Reprinted in 2018
ISBN 978-1-4875-7221-1 (paper)

PRINTED IN GREAT BRITAIN

in JO on 11 point Times Roman type
SIMSON SHAND LTD
LONDON, HERTFORD AND HARLOW
 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
Another random document with
no related content on Scribd:
overcome successfully, for the situation was dominated by the
Bakers’ Union, who for a time decreed a five o’clock start. After a
time, however, the Society was successful in arranging for a four
o’clock start, and just before the conclusion of the period with which
we are dealing a three o’clock start was arranged for. This
arrangement made for the lessening of worry to the Bakery officials
by allowing the bread to be well baked and yet to be ready for early
delivery; but it meant for the bakers the turning of night into day. In
this connection it is worthy of note that in the last four months of
1893, after the new hours for the bakers came into operation, no
complaints whatever came in from societies.
Mention has already been made of the cake trade and of the
beginning of the cake shows in order to foster that trade. It was
growing rapidly, and the sales for the season 1893–94 reached the
grand total of 32½ tons, representing 14,533 cakes of 5 lbs. each in
weight, and 4½ tons of shortbread. The tearooms and the purvey
department also were flourishing, and were showing useful profits on
the turnover. It is said that there is nothing new under the sun, and
everyday experience goes to prove the wisdom of the Hebrew
philosopher who is credited with having been the first to note the
fact. At the quarterly meeting which was held in December 1893
notice was given of a motion to print synopses of the minutes and
distribute them to the societies before the quarterly meetings. The
motion was defeated, but it kept on making its appearance on the
agenda with unfailing regularity until a few years ago it found favour
with a majority of the delegates. Another motion of which notice was
given at the same meeting, and which found a great deal of favour
with the delegates when it came up for ratification at the 100th
quarterly meeting, was a proposal made by Mr William Barclay,
Kinning Park, on behalf of that society, that the shares of the Society
should be raised from 10/ to 15/ each. The motion received the votes
of a majority of the delegates, but as it meant an alteration of rule a
two-thirds majority was necessary, and so it too was lost, as was also
a proposal for raising the purchase qualification for a vote from £160
or a fractional part thereof to £320. At the quarterly meeting,
however, perhaps the most notable thing done was the election of Mr
James Bain, of Glasgow Eastern Society, as secretary. Mr Bain thus
completed twenty-five years of service as secretary at the 200th
quarterly meeting of the Society, held in March last. Mr Bain had
served, however, a period as the representative of his society on the
board of the Federation ere his election as secretary.
In looking over the various reports of contracts made during the
time the stables and biscuit factory were in course of erection, it is
interesting to note that one or two small contracts were secured by
the S.C.W.S., particularly in connection with engineering work.
Amongst other things which they did was the supplying of an
elevator for the biscuit factory.
 CHAPTER XI.
FURTHER EXTENSIONS.

MORE TEAROOMS—INCREASING BUSINESS—NEW BISCUIT

FACTORY AT WORK—ANOTHER EXTENSION—MORE
GROUND PURCHASED—NEW BAKERY OPENED—THE
POSITION OF THE FEDERATION—NEW STABLES—
ORGANISATION—MANAGER OR NO MANAGER?—
RELATIONS WITH THE C.W.S.—THE BIG BOYCOTT—
RELATIONS WITH MASTER BAKERS—SOME
NOTEWORTHY ALTERATIONS—THE FARMING
ASSOCIATION—ACCIDENTS—THE OATCAKE
DEPARTMENT—ADVERTISING AND ENTERTAINING—
DONATIONS—A WORKS DEPARTMENT—A FOUR YEARS’
RECORD.

So successful were the tearooms in Renfield Street proving that, at

the 101st quarterly meeting of the Society, the directors sought power
to increase the number of these places of business. There was a
difference of opinion amongst the delegates as to the best course to
pursue. Some were not in favour of any further extension of this
branch of the business, and carried their opposition so far as to move
an amendment that power be not granted. Others favoured the
principle, but urged the committee to “hasten slowly,” and moved
that power to open one only be granted. The vast majority of the
delegates, however, were fired with the enthusiasm of the committee,
or, at least, were prepared to trust them not to go further than was
going to be for the benefit of the Society; so the powers sought, which
were “to open one or two more tearooms as opportunity offered,”
were granted by a large majority. The result of this permission was
that rooms were taken at Glasgow Cross—they will be remembered
by most Co-operators. They were leased for ten years, the rental
being £100 for the first two and a half years and £115 for the
remainder of the period. Steps were immediately taken to have them
fitted up as first-class tea and dining rooms, and it was decided that
they should be lighted by electricity. The premises were opened to
the public on 25th October, when there was a large gathering of
representatives from the societies in the Glasgow and Suburbs
Conference area, friendly and other societies, and trade unions. Mr
M‘Culloch presided, and the rooms were declared open by Mr
Maxwell, president, S.C.W.S. Mr Glasse, Mr Bain, Mr Chaddock, and
other gentlemen also delivered addresses.
While negotiations and preparations had been proceeding for the
opening of the Cross tearooms, preparations were also being made at
the bakery for the opening of a dining hall and bread shop, and
shortly after the function at the Cross these also were opened.
The next venture of the Federation was in Paisley Road, where, on
25th May 1895, tearooms were opened. Following on the opening of
the Paisley Road premises, no alterations took place in this section of
the Society’s business until the end of 1897, when the committee,
having failed to come to an arrangement with the factor for the
Renfield Street premises, and being faced with the prospect of having
to pay increased rent for the premises if they renewed their lease,
decided to accept an offer of premises at 102 and 104 West Nile
Street at £300 rental per annum. It was decided that the tearooms
should be known as “The Union Rooms,” and also that electric
lighting be installed. Quite a long time was spent in fitting up the
new premises so as to make them thoroughly worthy of the part
which it was hoped they would play in the social life of the Co-
operative community of the city and district, and it was not until the
28th of June 1898 that they were formally opened. The premises
comprised a tearoom and smaller rooms and offices on the ground
floor, as well as two large flats above. To celebrate the opening the
board had decided that a tea should be given to the regular
customers of the Renfield Street premises, and of these about 100
attended at a social gathering. A jovial evening was passed in song
and sentiment, and many kind things were said of Mr Watson,
manager, and the new premises.
 Meantime, the Society had undertaken yet another venture in the
catering line. In connection with the National Halls, Main Street,
Gorbals, there had been a catering department, which was giving up
business, and the business and plant were purchased by the Baking
Society, a tearoom and an auxiliary purvey department being
established there in the spring of 1898.
 INCREASING BUSINESS.
For many years the hands of the Bakery board were never out of
the mortar tub, and by a slight inadvertence they fell foul, in the early
summer of 1894, of the building regulations of the city. From the
beginning of the year they had been in communication with the
master of works of the city about some alterations which they wished
to make on an old building situated on their land at Clydeside. It was
necessary that some work should be carried out inside this building,
and, in the course of alterations, a part of the outside wall was taken
down, and was in process of rebuilding when the master of works
came on the scene, stopped the work, and reported the Society to the
Procurator Fiscal for a contravention of the by-laws. The result was
that the Society was fined £1, 1s., but, as the work they had done was
allowed to stand, they came out of the business not so badly.
By the middle of August 1894, the new biscuit factory had started
operations, and the Society was able once more to fulfil the orders for
biscuits which came pouring in. Already, however, the latest
extension of the bread bakery was beginning to have its productive
capacity taxed, and at the 104th quarterly meeting the directors
obtained power from the quarterly meeting to proceed with a further
extension of the bakery, this time at the corner of Govan Street and
South York Street. First, however, they turned their attention to a
further extension of the biscuit factory, where they had plans
prepared for the erection of another flat, with provision for seven
ovens. Already they had a biscuit traveller on the road who was doing
well, and by the middle of the year arrangements were made with the
Wholesale whereby they secured premises for a biscuit depot at
Leith, and a van was placed on the road for the delivery of their
goods in the East.
It was not until the beginning of the following year that the plans
for the addition to the bakery were ready. These provided for a
building with three flats of ovens, giving an additional baking
capacity of fifty ovens. When the plans were agreed to by the
quarterly meeting a strong recommendation was made that the work
be carried out by the Society’s own workmen, and this was done.
The next step in the scheme of extensions was the purchase of the
ground at the south corner of South York Street and Govan Street on
which the stables and St Mungo Halls now stand. This ground, which
had an extent of 9,813 square yards, cost £8,839, 9s. In pursuance of
the policy of the Society to carry out the construction of the addition
to the bakery themselves, a foreman builder was engaged, at a salary
of £4 a week, and building plant was bought at a cost of almost £500.
The new addition was not completed until October 1897; its opening
being made the occasion of a demonstration, at which a company of
1,600 people were present. The cost of the new building was
£29,000. The building was a bakery complete in itself, having fifty
ovens, a barmroom, breadroom, and storage for 3,000 sacks of flour.
The whole bakery now had a baking capacity of 150 ovens, capable of
turning out over 560,000 loaves per week.
 THE OPENING CEREMONY.
The formal inauguration of the new buildings was performed by
Mrs M‘Culloch, wife of the president, who turned the steam on to the
engine which was to drive the machinery in the department. In a
short speech, Mr Bain then sketched the history of the Federation.
On entering, each of the ladies present had been presented with a
silver souvenir brooch bearing a representation of the building, and
at the conclusion of the opening ceremony Mrs M‘Culloch was
presented with a gold brooch of similar design.
A huge vehicular demonstration, in which over a hundred vehicles
took part, paraded the streets of the city after the opening ceremony.
Many mottoes were displayed on the decorated lorries and vans,
amongst the most prominent being one which stated “Our answer to
the boycott—other 54 ovens added.” The dinner took place in the
East End Industrial Exhibition buildings, and Mr M‘Culloch,
president of the Society, presided.
In welcoming the visitors, he referred to the inception of the
Society in a little back court in Coburg Street, with a bakery capable
of doing a trade of forty sacks a week, and contrasted that small
beginning with the size and strength of the Federation that day; the
possessor of plant capable of dealing with 3,500 sacks each week. He
laid stress on the fact that the building had been done by the
Society’s own workmen, and that over £11,000 had been paid in
wages to the builders.
Mr Peter Glasse said the Society had proved to the world the power
of the Co-operative movement. During its twenty-eight years of
existence it had disbursed £143,000 in the form of dividends to
customers, and during all that time it had never had a strike of its
workers, because it had always paid the highest rate of wages and
worked the shortest possible number of hours.
Mr William Maxwell, in the course of a stirring address on “Co-
operation,” said that through the influence of the Co-operative
movement the masses had learned that that inanimate thing called
capital could be made into a willing and obedient servant, instead of,
as formerly, a harsh taskmaster. There was a community of thought
and action in the Co-operative movement which was bringing out
much that was noble and sympathetic in human nature. The social
gulfs which lay between the various classes in society would never be
bridged over by the competitive system, because that system was the
cause of these gulfs. That bridging could only be done by Co-
operation. Their opponents were saying that they were lamentably
deluded, but, if those opponents only knew it, they had aroused the
members of the movement from that apathy and indifference in
which they had hitherto lain dormant.
The point of Mr Maxwell’s address, which was punctuated with
applause, was that the “boycott” movement was then at its height in
Glasgow and the West, and everywhere attempts were being made to
intimidate Co-operators into forsaking the stores. These attempts
only resulted in giving the movement a splendid advertisement.
Everywhere the opponents came out into the open they were
defeated, and some well-known firms, which, until then, had been
reaping large profits from their trade with Co-operation, found that
the boycott was a double-edged weapon, and that the measure which
they meted out to Co-operative workmen could be meted out to
themselves by Co-operative societies.
 THE POSITION OF THE FEDERATION.
As showing the power and influence to which the Federation had
attained by this time, we cannot do better than quote from an article
which appeared in Copartnership for June 1897. After describing the
beginnings of the Society, the writer goes on:—
“But the day of small things is past; the society has grown into one of the
largest as well as one of the most important in the movement. The trade last
year—1896—was £220,536; but in case that sum should not convey a definite
notion of the work involved it should be remembered that the U.C.B.S. carries
on the largest business of its kind in the United Kingdom. At present 340
sacks of flour are baked into 65,300 loaves every day, while 25 sacks are made
into pastry and hand-made biscuits, 20 sacks into machine-made biscuits, and
the oatcake department requires 13 sacks daily; practically 400 sacks of flour
and meal daily; a great growth from the early days when it was difficult for the
committee to keep with them the baker they employed, who had no faith in
the society’s future.
The biscuits and cakes are sold not only in Glasgow and all over Scotland,
but are now finding their way into England, and winning favour. These goods,
of course, go by rail, but it will readily be understood that the bulkiest part of
the trade, bread for use in the co-operative households in and around
Glasgow, requires a large staff and rolling stock; and, as a matter of fact, the
delivery department employs 62 carmen, dealing with 71 vehicles and 107
horses.
A great capital is needed to carry on so large a business, and the extent of
the capital is shown in the following figures:—

Capital. Societies. Workers. Outside Individuals.

Shares £37,907 £2,900 Nil.
Loans 79,114 580 £10,728

£117,021 £3,480 £10,728

Total £131,229.”

The article goes on to state that the total number of employees was
829, 77 of these being employed in the building department, while
275 were members of the Bonus Investment Society. It concludes:—
 “Some organisations are mere aggregations without either heart or mind.
The parts mistakenly believe that they can evade as organisations duties that
belong to them as individuals. But the problem before co-operators allows no
such evasion. They have to set up, not only good businesses in sanitary
buildings, but also a new industrial system, where labourers are recognised as
human beings entitled to share in the results and direction of their own lives.
Because the leaders of the United Baking Society have recognised this, and
have not allowed prosperity to poison aspiration, all men will wish them well,
and we may say with an inner meaning to the words that we hope in time
great multitudes may eat their bread and be thankful.”

BELFAST ADVISORY COMMITTEE

Top Row—ALEXANDER PATTERSON; JOHN PALMER; DAVID

T. GILCHRIST.

Bottom Row—JAMES MURPHY; WILLIAM J. M‘GUFFIN,

Chairman; ROBERT RODGER, Secretary.
 1. JAMES YOUNG,
General Manager.

2. JAS. H. FORSYTH,
Cashier and Accountant.
 NEW STABLES.
The rate at which the trade of the Society was growing called for an
almost continuous growth in live and rolling stock, and consequently
for increased accommodation. Already the provision for stables and
van-sheds which had been made when the removal to M‘Neil Street
took place was much too small, and various makeshift methods had
to be adopted to provide the necessary accommodation for the
growing stud of horses. At the same time the committee were now
getting a different idea of the possibilities of the enterprise, and were
desirous, therefore, of making the bakery as compact, and with its
various parts as well co-ordinated as possible. They were desirous,
therefore, of removing the stables away from the bakery altogether,
and it was with this object in view that the ground on the south side
of Govan Street was purchased. At the quarterly meeting held in
September 1896 they were granted power to proceed with the
erection of stables and workshops, and this work was commenced
immediately. At the same time, plans were prepared and the erection
proceeded with of a temporary stable on a part of the same ground.
By the end of 1898 the new stables and workshops were completed,
and the December meeting of the Society was held there, so that the
delegates might have an opportunity of being shown over the
premises.
 ORGANISATION.
Never at any time had the directors shown carelessness in their
supervision of what had now become a gigantic concern, and they
were continually giving thought to means of improving the
organisation of the Federation and of improving the supervision by
the committee. Early in the period with which this chapter deals,
they made arrangements whereby the members of the committee
took it in turn to visit the bakery each week. These visits were found
of value by the members of the committee, as it enabled them to
acquire fuller information about the working of the Society. Each
member reported the result of his visit to the sub-committee,
together with any suggestion he had to make.
Towards the end of 1894 the committee appointed a biscuit
traveller, Mr Archibald Petrie being the man appointed.
 MANAGER OR NO MANAGER.
The quarterly meeting had under consideration the question of the
general management of the Society, the points discussed being the
appointment of a general manager, or the development of the system
of departmental managership. The discussion was inaugurated on a
motion moved by Mr Malcolm of Newton Society, “that a general
manager be appointed.” The result of the discussion was the
adoption of a suggestion by Mr Glasse—who said he had sat in
committee with a manager and without a manager, and was of the
opinion that the business could be best managed without a manager.
He suggested that the matter should be remitted back to the
committee for consideration and report, and the other motions and
amendments which had been moved were withdrawn in favour of
this suggestion.
The committee took up consideration of the question within a
month, and came to the conclusion that the business of the Society
could be best managed by being divided into six departments, with a
departmental manager over each, who would be in direct touch with
the committee. These departments were: (1) The counting-house;
with Mr James H. Forsyth as head—this department to include all
the commercial transactions of the Society. (2) The productive
department, including the production of all bread, smallbread,
biscuits, and oatcakes; to be under the charge of Mr Robert Fraser,
who was also to have control of the enginemen and oilers. (3) The
distributive department, which was to include the dispatching of the
bread and the packing and dispatching of the biscuits and oatcakes;
to be under the management of Mr William Miller. (4) The delivery
was to be under the control of Mr Milne, stable foreman, who was to
have control of all the horses, vanmen, and nightwatchman. (5) The
building and repairs department, including the tradesmen and their
assistants; to be controlled by Mr Davidson. (6) The purvey
department and tearooms, under the management of Mr Robert
Watson.
The committee recommended, further, that they should meet
fortnightly, but that the monthly meeting remain as at present, the
bi-monthly meeting to be devoted to the interviewing of all the heads
of departments, each of whom was to present a written report.
Another recommendation was that the term for which members of
committee were elected should be extended, as they were of opinion
that the frequent changes amongst the membership of the Board
prevented members from acquiring a proper knowledge of the
business, and had in this way interfered with the successful
management of the Society. They believed that, if the delegates
would accept this suggestion for the alteration of the rule governing
elections, it would do much to consolidate the management of the
business in the hands of the committee. At the following general
meeting of the Society the principle of the report was accepted, and it
was decided to hold a special meeting at the close of the next general
meeting for the purpose of considering the alteration of rule
proposed. At this special meeting the delegates, however, refused to
make the alteration, and the tenure of office of members of
committee remained at one year.
In 1894 the Society attained to the dignity of a registered
telegraphic address, “Federation” being the name adopted. They also
had the telephone installed, as well as private lines communicating
with their teashops. At the end of the year they became members of
Kinning Park, St George, and Glasgow Eastern societies for the
purposes of trade, and later, of other societies as well. They also
undertook a census of their employees for the purpose of finding out
who amongst them were Co-operators and who were not. The census
showed that the Society had 431 employees, of whom 236 were
unmarried. Of the remainder 152, or 78 per cent., were associated
with Co-operative societies, and 43, or 22 per cent., were not.
 THE SOCIETY AND THE C.W.S.
Naturally the directors were anxious to push their biscuit trade as
rapidly as they could, and having fixed up a trading agency with the
S.C.W.S. and with the Co-operative Institute, London, they
endeavoured to do the same with the C.W.S. This society had a
biscuit factory of their own, however, and were, not unnaturally,
reluctant to introduce what were really the goods of a competing
concern, therefore they refused to accept the agency. The next step
taken by the Society was that of appointing a traveller for the
purpose of pushing biscuits and oatcakes in England. Against this
step, however, a very vigorous protest was made by Mr James Young,
who considered that there should be no further pushing of the
Society’s goods into English societies against the wishes of the
English Wholesale Society’s committee. Following on this decision, it
was agreed that the Society’s productions should be exhibited at the
Crystal Palace Exhibition. This activity in England brought a letter
from the C.W.S. committee, who pointed out that the action of the
Baking Society would lead to competition and overlapping. Later,
that committee also passed a resolution in which they stated that
they were ready and willing to supply all the societies in England
with biscuits if they would only be allowed to do so, and sent a copy
of the resolution to the Baking Society’s committee.
 THE BIG BOYCOTT.
Reference has already been made to the boycott of Co-operators
which was inaugurated all over Scotland and continued throughout
1896 and 1897. The traders had made their organisation very
complete, with the result that every manufacturing firm on which
they were in a position to bring pressure was compelled to discharge
all employees who remained members of Co-operative societies, or
whose parents continued members, or else to suffer very
considerable loss of trade. In no department of labour was it easier to
bring effective pressure to bear than on the baking trade, and the
result was that all the big baking firms in the city were compelled to
post up notices informing their employees that they must cease to
trade at Co-operative stores or leave their employment. Similar
notices were posted up in every workshop and factory where the
Traders’ Association was in a position to apply any pressure, often
against the will of the employers, who recognised that those of their
workers who were Co-operators were usually the best and steadiest
men, but who were compelled to choose between perpetrating a
manifest injustice and seeing their businesses ruined. No tactics were
too mean or despicable to be resorted to by the traders’ organisation.
They had their spies everywhere, and a favourite method of
operations was that of watching the shops of the Co-operative
societies and tracking the customers home, then ascertaining where
the husbands were employed, and writing to their employers to
demand their dismissal. This espionage system was very perfect in its
way, and considerable hardship was caused to individual Co-
operators by it; while the boycott had a lasting effect in another
direction, for it was the direct cause of the large proportion of
householders, in the places throughout Scotland where the boycott
raged most fiercely, which became represented amongst the
shareholders of the societies by the wives of the householders instead
of by the householders themselves.
While it lasted the boycott was not without its humorous incidents.
If the traders had their system of espionage, so also had the Co-
operative Defence Association, and there was not a meeting of the
Traders’ Association held, however great the precautions which
might be taken to ensure absolute secrecy, of which a practically
verbatim report of the proceedings was not in the hands of the
secretary of the Co-operative Defence Committee next morning. One
of the laughable incidents concerned one such meeting, a full report
of which was published by the Co-operators. This was followed by a
visit from an irate traders’ official, who demanded to know the
source from which the report had come. It is hardly necessary to
state that he went away without the information asked for, and to
this day it is probable that the source of the information is known to
less than half a dozen people, not one of whom had anything to do
with the traders’ organisation.
But if the boycott was the cause of hardship to individuals here
and there, it brought grist in a very real sense to the Co-operative
mill in other directions. Already, in this chapter, it has been pointed
out that it was a two-edged weapon, and while Co-operative societies
did not cease to trade with private manufacturers who did not adopt
the boycott, they were kept well informed of those manufacturers
who did. It was found that while some manufacturers had no wish to
employ Co-operative labour they were keenly desirous of retaining
Co-operative custom, and it came as an unpleasant surprise to some
of them to find that Co-operative societies objected to the dismissal
of employees because of their Co-operative connection, and that they
refused to trade with manufacturers who adopted such tactics. It is
said that one Glasgow firm lost Co-operative trade at this time worth
£20,000 a year and never regained it.
In two directions the boycott benefited Co-operative production,
therefore. It turned the attention of those at the head of the
movement to the need of being as far as possible independent of
private manufacturers for supplies, and thus it did much to stimulate
Co-operative manufactures and to hasten entry into new spheres of
work. On the other hand, the operation of the boycott, where
manufacturers refused to supply goods which were already being
produced Co-operatively, increased the demand for the Co-operative
manufactures; while the process of retaliation mentioned above also
stimulated this demand. In both of those directions, the Baking
Society was a gainer. One or two societies in the neighbourhood of
Glasgow, which hitherto had always stood aloof from the Federation
and had done very little trade with it, now approached it for supplies;
while a rapidly growing city society, whose members had consistently
refused to give the Federation the whole of their bread trade, were
now prepared to do so. Notwithstanding the fact that the capacity of
the bakery was fully taxed, an endeavour was made by the committee
to supply the wants of those societies who had brought home to them
in this manner the value of federation in the day of adversity. A big
trade in biscuits had also been done hitherto with Co-operative
societies by the biscuit manufacturers of Glasgow, but the boycott
put an end to that trade, and in this direction also the Bakery gained
very considerably. It may be asserted with confidence, therefore, that
not only did the traders’ organisation fail to achieve the object they
had in view—the destruction of the Co-operative movement in
Scotland, and especially in Glasgow and the West—but their
campaign had exactly the opposite effect, and ended by leaving the
Co-operative movement stronger in membership, stronger in trade
and capital, and with a membership more closely knit together than
it would have been but for the agitation and the boycott.
The members of the Federation were not slow to recognise the
vital nature of the issues at stake, and placed a credit of £1,000 in the
hands of the directors to use as they might deem advisable for the
defence of the Co-operative movement. At the Perth Congress, which
was held when the boycott campaign was at its height, the delegates
had decided in favour of Co-operative representation in Parliament;
and later, when the Co-operative Union sent out a circular, with the
object of ascertaining what support a Parliamentary campaign was
likely to secure amongst the societies, the delegates to the Baking
Society’s meeting, by a large majority, decided in favour of a
Parliamentary campaign; mainly owing to the eloquence of the
chairman, Messrs Glasse and MacNab, Wholesale, Mr Gerrard, and
Messrs Low and Stewart of Kinning Park. Undoubtedly, the boycott
had its influence on the decision. The chairman was particularly
strong in his remarks at the meeting, and, in referring to the debate
on the subject which had taken place at Congress, suggested that if
their English friends had had a taste of the boycott they would put
aside any party prejudices. With the defeat of the traders, however,
and the apathy of the Co-operators on the other side of the Border,
the agitation died down, and, except as a subject of academic debate
at Congress, nothing further was heard of it for some years.