In Pursuit of Leviathan: Technology, Institutions, Productivity, and Profits in American Whaling, 1816-1906 9780226137902

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In Pursuit of Leviathan

NBER Series on Long-term Factors in Economic Development A National Bureau of Economic Research Series Edited by Claudia Goldin Also in the series Claudia Goldin Understanding the Gender Gap: An Economic History of American Women (Oxford University Press, 1990) Roderick Floud, Kenneth Wachter, and Annabel Gregory Height, Health and History: Nutritional Status in the United Kingdom, 1750-1 980 (Cambridge University Press, 1990) Robert A. Margo Race and Schooling in the South, 1880-1950: An Economic History (University of Chicago Press, 1990) Samuel H. Preston and Michael R. Haines Fatal Years: Child Mortality in Late Nineteenth-Century America (Princeton University Press, 1991)

Barry Eichengreen Golden Fetters: The Gold Standard and the Great Depression, 1919-1939 (Oxford University Press, 1992) Ronald N. Johnson and Gary D. Libecap The Federal Civil Service System and the Problem of Bureaucracy: The Economics and Politics of Institutional Change (University of Chicago Press, 1994) Naomi R. Lamoreaux Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England, 1784-1912 (Cambridge University Press, 1994)

In Pursuit of Leviathan Technology, Institutions, Productivity, and Profits in American Whaling, 1816-1906

Lance E. Davis, Robert E. Gallman, and Karin Gleiter

The University of Chicago Press

Chicago and London

LANCEE. DAVISis the Mary Stillman Harkness Professor of Social Science at the California Institute of Technology and a research associate of E. GALLMAN is the the National Bureau of Economic Research. ROBERT Kenan Professor of Economics and History at the University of North Carolina, Chapel Hill, and a research associate of the National Bureau of Economic Research. KARINGLEITERis a research associate of the Carolina Population Center at the University of North Carolina, Chapel Hill.

The University of Chicago Press, Chicago 60637 The University of Chicago Press, Ltd., London 0 1997 by The University of Chicago All rights reserved. Published 1997 Printed in the United States of America 060504030201 00999897 1 2 3 4 5 ISBN: 0-226-13789-9 (cloth)

Library of Congress Cataloging-in-Publication Data Davis, Lance Edwin. In pursuit of Leviathan : technology, institutions, productivity, and profits in American whaling, 1816-1906 / Lance E. Davis, Robert E. Gallman, and Karin Gleiter. cm.-(NBER series on long-term factors in economic p. development) Includes bibliographical references and index. ISBN 0-226-13789-9 (alk. paper) 1, Whaling-United States-History-1 9th century. 2. WhalingEconomic aspects-United States. I. Gallman, Robert E. 11. Gleiter, Karin. 111.Title. IV. Series. SH383.2.D38 1997 338.3'7295 '097309034-dc20 96-21263 CIP

8The paper used in this publication meets the minimum requirements of the American National Standard for Information Sciences-Permanence of Paper for Printed Library Materials, ANSI 239.48-1984.

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Contents

Preface

ix 1

1.

In Prospect

2.

Whales and Whaling

20

3.

Data Sets and Sources

57

4.

Natural Resources

131

5.

Labor

150

6.

Capital

214

7.

Technology

260

8.

Productivity

297

9.

Product Markets

342

10.

Agents, Captains, and Owners

38 1

11.

Profits

423

12.

The Americans Replace the British

459

13.

Modern Whaling

498

14.

In Retrospect

513

References

523

Name Index

539

Subject Index

543

vii

This Page Intentionally Left Blank

Preface

This book originated in a visit Davis and Gallman made to the Manuscript Room of Baker Library at the Harvard Graduate School of Business. Both were then, as they are now, research associates of the National Bureau of Economic Research and members of the NBER Development of the American Economy group. They had an idea for a line of research to be conducted under the aegis of DAE, a line of research on technical change and productivity improvement in the nineteenth-century United States. They planned to take it up in a year or two, once they had met other commitments, and they went to Baker Library on a scouting expedition, to see what the available data were like on two or three industries in which they had an interest-since to carry out their plan would take many data of a wide variety on each subject industry. Neither of them had any idea of doing a study of whaling. They pursued a general search and Davis took abundant notes on one of the industries they were considering. Some time late in the first day, or early in the second, they laid hands on Joseph Dias’s manuscript on whaling (see chapter 3), which contained many of the data they thought they would need for a good productivity study. Could the gaps be filled in? Probably, they thought, so they decided to do a brief study of whaling-a kind of pilot project, something to be finished in a relatively short time, before they began their major work. Something roughly on the lines of chapter 8 in this book is what they had in mind. The whales, however, turned out to be a group of tar babies. It was impossible to let them go. The plan of a paper exclusively devoted to technology and productivity expanded into a short monograph, and then into a very long book on the economic history of American whaling. Along the way the group of investigators grew. First Teresa Hutchins, then a graduate student at the University of North Carolina, joined the group, participated in turning the Dias data into an automated data set, wrote a dissertation on whaling, and took part with Davis and Gallman in writing a number of ix

x

Preface

papers. Eventually, however, she was drawn away to other projects and opportunities. By then a fourth participant, Karin Gleiter, research associate at the Carolina Population Center, had joined the group. Among other responsibilities, she took over the data set, located many new sources, and produced a much more extensive and richer empirical basis for the project than it had formerly had. Her odyssey among the data is described in chapter 3. During the research for and writing of this book we have accumulated many debts. The NBER provided seed money, on the basis of which we prepared a grant request to the National Science Foundation. The request was successful, and the NSF became the principal source of funding. We are deeply grateful. Assistance also came from the Division of Humanities and Social Sciences of the California Institute of Technology and from the Kenan Foundation. Among individuals who came to our aid we thank, in particular, Marty Feldstein, president of NBER, and David Grether, then chair of Humanities and Social Sciences at Caltech. The Carolina Population Center at the University of North Carolina shared computer facilities with us. Our thanks go to Dick Udry, then CPC director, and to Judith Kovenock, director of CPC Computing Services. Kathleen Gallagher and Billie Nonvood, CPC staff members at the time, helped Teresa Hutchins build the original data set, and Mike Butler and Emil Friberg subsequently managed the project, until Dr. Gleiter came aboard. Mathias Moersch and Rob Stahle performed a variety of tasks, from data coding to computer programming. Craig Richardson, Kim Inbae, Gene Dyer, Gerald Granderson, Inseong Hwang, and Curtis Florence provided helpful research assistance of shorter duration. Our thanks go to all of them. Librarians and archivists at the Baker Library Manuscript Room, the New Bedford Whaling Museum, the Melville Room of the New Bedford Free Public Library, the Houghton Library at Harvard University, the G. W. Blunt White Library at Mystic Seaport Museum, the Kendall Whaling Museum, the Davis Library at the University of North Carolina at Chapel Hill, and the California Institute of Technology Library were unfailingly helpful and pleasant. Florence Lathrop, of the Baker, put up with us for an especially long time yet retained her kind and cheerful manner throughout. Judith Downey, of the New Bedford Whaling Museum, not only found us apposite illustrations, but also set us straight on the matter of condemnation proceedings for whalers. Stuart Frank of the Kendall Whaling Museum was generous with both advice and manuscript material. Various materials in this book have appeared, in preliminary form, in other publications. Some of our ideas were first laid out in Lance E. Davis, Robert E. Gallman, and Teresa D. Hutchins, “The Structure of the Capital Stock in Economic Growth and Decline: The New Bedford Whaling Fleet in the Nineteenth Century,” in Quantity and Quiddity: Essays in US.Economic History, ed. Peter Kilby (Middletown, C T Wesleyan University Press, 1987), 336-98;

xi

Preface

Wesleyan University holds the copyright for Quantity and Quiddity, and we use our material by permission of the University Press of New England. We summarized our approach to the present analysis also in Lance E. Davis, Robert E. Gallman, and Teresa D. Hutchins, “Call Me Ishmael-not Doming0 Floresta: The Rise and Fall of the American Whaling Industry,” in The Vital One: Essays in Honor of Jonathan R. T. Hughes, ed. Joel Mokyr, 191-233, Research in Economic History, supplement 6 (Greenwich, C T JAI Press, 1991); we use this material with the permission of JAI Press. A first version of chapter 4 was published as Lance E. Davis, Robert E. Gallman, and Teresa D. Hutchins, “The Decline of U.S. Whaling: Was the Stock of Whales Running Out?” Business History Review 62, no. 4 (winter 1988): 569-95; we use material from that paper with the permission of Business History Review. A first version of chapter 5 was published as Lance E. Davis, Robert E. Gallman, and Teresa D. Hutchins, “Risk Sharing, Crew Quality, Labor Shares, and Wages in the Nineteenth-Century American Whaling Industry,” in American Economic Development in Historical Perspective, ed. Thomas Weiss and Donald Schaefer (Stanford, CA: Stanford University Press, 1994), 127-67; the Board of Tmstees of the Leland Stanford Junior University holds the copyright for this material, which is used here with the permission of the Stanford University Press. A first version of chapter 7 was published as Lance E. Davis and Robert E. Gallman, “The Last 1,945 Sailing Ships,” in The Economics of Znformational Decentralization: Complexi@ EfJiciency, and Stability: Essays in Honor of Stanley Reitel; ed. John 0.Ledyard (Boston: Kluwer Academic, 1995), 159217; we use the material with the permission of Kluwer Academic Publishers. A first version of chapter 8 was published as Lance E. Davis, Robert E. Gallman, and Teresa D. Hutchins, “Productivity in American Whaling: The New Bedford Fleet in the Nineteenth Century,” in Markets in History: Economic Studies ofthe Past, ed. David W. Galenson (Cambridge: Cambridge University Press, 1989), 97-147; Cambridge University Press holds the copyright for this material, which is used here with the permission of the press. A first version of chapter 12 was published as Lance E. Davis, Robert E. Gallman, and Teresa D. Hutchins, “Technology, Productivity, and Profits: British-American Whaling Competition in the North Atlantic, 1816-1842,” Oxford Economic Papers 39, no. 4 (December 1987): 738-59; we use this material by permission of Oxford University Press. Versions of several chapters were given at meetings at Washington University of St. Louis, the University of Illinois, the University of Chicago, the University of Michigan, Brown University, Yale University, the University of Rochester, the Triangle Workshop in Economic History, the International Economic History Pre-conference at Bellagio and the Conference at Beme, the International Cliometrics Meeting at Santander, and the International Whaling Symposium at Sandefjord. At each meeting we received helpful suggestions, for which we are grateful. David Galenson read chapter 8 with his usual care;

xii

Preface

Stan Engerman and Claudia Goldin read the whole manuscript and offered insightful comments; the manuscript reviewers for the University of Chicago Press provided us with most helpful suggestions. Many friends and acquaintances gave us useful bits of information. At the head of the list are those omnivorous readers Stan Engerman and Peter Coclanis, who sent us a steady stream of references. Robert Evenson suggested a statistical test that proved helpful. Daniel Vickers, Haven Wiley, and Lee Craig offered us valuable advice, based on their own research; David Robinson drew our attention to an essay that filled an important gap in our knowledge; Kathleen Gallagher sent us a very rare book on whaling; Bates Bucker brought us back whaling materials from Hawaii; and Margo Shaw of the Looking Glass Cafe kept two of the authors in good spirits through many a working lunch and dinner. From Deborah Coclanis we obtained our one piece of physical evidence: a whale’s vertebra. Finally, we thank the NBER, which funded the project in its early phases and managed the NSF grant, and whose members provide us always with encouragement and stimulation.

1

In Prospect

Beginning a book about whales and whaling with a survey of literary references has canonical authority. Melville himself ([ 185 11 1983, ix) begins MobyDick not with “Call me Ishmael” but with “Etymology” (our version is in chapter 2) and “Extracts,” an anthology of eighty-one quotations “affording a glancing bird’s eye view of what has been promiscuously said, thought, fancied, and sung of Leviathan.’” Naturally enough, the first extract is Genesis 1:21, “And God created great whales”; Melville includes also three biblical passages that refer to Leviathan, and Jonah 1:17-“Now the Lord had prepared a great fish to swallow up Jonah.”* He moves on to Plutarch (“what thing soever. . . cometh within the chaos of this monster’s mouth . . . down it goes all incontinently that foul great swallow of his”) and Lucian (“a great many Whales and other monsters of the sea appeared”), among the ancients; Wharton the Whale Killer (“he saw the distended jaws of a large Sperm Whale close to the head of the boat, threatening it with instant destruction”), among the moderns. More than one-half of Melville’s selections make the point that whales are very large, many others, that they are evil or monstrous. Melville disingenuously credits a librarian with having compiled his extracts, but acknowledges in the phrase “a glancing bird’s eye view” that they are a far from exhaustive survey. The bulk of references to whales in English I . Much of Moby-Dick is about the process of writing the novel; in that context scholars have seen “Extracts” as Melville’s bid to make himself a part of the community of authors (i.e., of the literary tradition) who wrote about whales. That is, he wanted his individual labors-labors that were directed toward whaling-to be included in the much greater body of labor about whales in general (Cindy Weinstein, private communication, 26 October 1994). 2. We have adopted the literary use of Leviathan as an equivalent for whale, but this may not be what the Hebrew writers intended. The biblical Leviathan is not a large mammal; in Melville’s version of Isaiah 27:1, it is the “crooked serpent. . . the dragon that is in the sea.” See Ellis 1991, 34. The “great fish” that made a meal of Jonah, however, is understood to have been a whale: “For as Jonas was three days and three nights in the whale’s belly” (Matthew 12:40).

2

Chapter 1

literature are less flamboyant than those he has selected. Compare, for example, Milton’s description, which was chosen by Melville, with Christopher Smart’s, which was not. Milton is expansive and audacious (and factually mistaken): There Leviathan Hugest of living creatures, on the deep Stretch’d like a promontory sleeps or swims, And seems a moving land,3 and at his gills Draws in, and at his trunk spouts out a sea.4 Smart is subdued, modest, and affecting: Strong, the gier-eagle on his sail, Strong against tide, the enormous whale Emerges as he goes5 When a literary whale is not large and evil, what is it? According to Chaucer, it is fat; in “The Summoner’s Tale,” monks are said to be “fat as a whale.” According to Shakespeare, it is hungry: And there they fly or die, like scaled schools Before the belching whale. I knew the young Count to be a dangerous and lascivious boy, who is a whale to virginity and devours up all the fry it finds.

I can compare our rich misers to nothing so fitly as to a whale; ’a plays and tumbles, driving the poor fry before him, and at last devours them all at a mouthful.6 This characteristic gave rise to the proverb “Throw out a sprat to catch a whale,” and, if the whale is hungry enough, to the proverb ‘‘Throw out a tub to the whale,” meaning offer the voracious one something other than you or your boat to swallow. 3. “Stories are found in the folklore of many languages about sailors mistaking a sleeping whale for an island they moor their ship to it and go ashore to prepare a meal, whereupon the whale awakes and dives, drowning the men and dragging their ship to the bottom. This story is incorporated in the legend of St. Brendon . . . , the Irish Benedictine abbot who, in A.D. 565, is said to have sailed west into the Atlantic to search for the Promised Land of the Saints. In the course of this voyage he and his men landed on the back of an immense whale, mistaking it for an island. The saint set up an altar and celebrated the Mass; he did not suffer the usual result of making this mistake” (Harrison Matthews et al. 1968.25). 4. John Milton, Paradise Lost, book 7 , lines 412-16. This is Milton’s gloss on Genesis. (A whale has neither gills nor a trunk, and breathes not water but air.) 5 . Christopher Smart, A Song to David. A gier-eagle is a vulture. 6. William Shakespeare, Troilus and Cressida, act 5 , scene 5; All’s Well That Ends Well, act 4 , scene 3; Pericles, Prince of Tyre, act 2, scene 1.

3

In Prospect

In 1940 Walt Disney made an animated film of the late-nineteenth-century children’s book Pinocchio. In the original Italian, the marine creature that swallows Pinocchio is a Pesce-cane (dogfish), a large shark, “who, for his slaughter and for his insatiable voracity, had been named the ‘Attila of fish and fishermen.’ Only think of poor Pinocchio’s terror at the sight of the m ~ n s t e r . ”In~ the film the shark has become a whale named Monstro, and Pinocchio is every bit as frightened-although considering that Geppetto, whom Pinocchio is out to rescue, has been living for weeks in Monstro’s belly along with his cat and his goldfish, and they are all eating and breathing just fine, one may wonder what the fuss is about. Did Disney make the change in order to allude to the story of Jonah and reassure American children that it is possible to emerge from a whale alive? If so, the reassurance must be subliminal, for Monstro is decidedly bad-tempered and indefatigable. In recent years, as the whale fishery has receded and natural history has turned from finding prey to publicizing marvels, whales have changed completely.* They are no longer dangerous, or disgusting. When Michelle Gilders writes in Rejections of a Whale-Watcher (1995, 3), “This was the year I touched a whale,” she is not saying, “This was the year I experienced terror and revulsion,” but, “This was the year I experienced awe.” In motion pictures, boys no longer risk their lives to save humans from monstrous whales; now they risk their lives to save whales from monstrous humans. In 1956 Gregory Peck, as Captain Ahab, killed a ship’s crew by trying to kill a sperm whale. In 1986 William Shatner, as James T. Kirk, saved everyone on Earth by saving two humpback whales from Norwegian hunter^.^ In the present climate, in which the whale shares with the panda the status of environmentalist emblem, and northern Californians stand alongside the Sacramento River anxiously urging a lost baby gray back to the ocean, and we are asked not simply to save whales but even perhaps to adopt one, it is an imaginative exercise to study a world industry that depended on slaughtering these fascinating and often beautiful creatures. 7. The Pinocchio stories were written by Carlo Lorenzini and published under his pseudonym, Carlo Collodi, beginning in 1880. The quotation is from Collodi n.d., 235-36. 8. At an extreme of the marvellous might be Mind in the Waters (1974). in which, for example, John Lilly is quoted as saying, “I suspect that whales and dolphins quite naturally go in the directions we call spiritual, in that they get into meditative states quite simply and easily” (83). Of another order entirely, and wonderfully written, is Roger Payne’s Among Whales (1995)-for example, “In the past twenty years there has been repeated speculation about whether we or whales possess the greater intelligence. I have stayed out of this discussion because it is obvious that we have no clear idea as to the nature of the intelligence abiding in the brains of whales (or our own, really). It all depends on what we mean by intelligence. If we mean an enduring intelligence, then whales are the winners hands down, simply because they have been around for tens of millions of years longer than we have. Besides, they do not use their extraordinary brains to do things that can destroy the world (346). 9. Pinocchio (1940). Free Willy (1993), Moby Dick (1956). Star Trek IV: The Voyage Home (1986).

4

Chapter 1

1.1 American Whaling Whaling, today, is pursued by small fleets of Norwegian and Japanese vessels, and by Inuit living beside the Arctic Ocean. In the context of the world economy, the industry is minute. Its supporters defend it, not on economic grounds, but for its cultural value or its putative contributions to scientific research.’O Most nations have agreed not to hunt whales at all; the United States not only prohibits hunting but also excludes whale products from American foreign trade. One hundred and fifty years ago, the world was different. Whaling was a major economic activity, and it was centered in the United States. In value of output, whaling was fifth among U.S. industries; it provided raw materials for the chief lighting and lubricating products of the day. New Bedford, Massachusetts, the leading whaling port, was said to be the richest town in the country,“ and Hetty Green, later called the Witch of Wall Street, would shortly inherit two New Bedford whaling fortunes and become the wealthiest woman in America. There was no need to justify whaling in terms other than the economic. How the U.S. industry achieved this distinction and why it declined so rapidly, disappearing before the end of the 1920s, are questions of substance, not grist for antiquarian mills. There are lessons to be learned from the history of American whaling that are germane to modem interests-indeed, modem preoccupations. This book is concerned with these lessons.

1.2 Economic Growth: Lessons from Whaling Economists since Adam Smith have been interested in economic growth and change, but, despite the lapse of more than two hundred years since he wrote, we have grasped only the principal outlines of the subject. As Nobel laureate Simon Kuznets demonstrated in 1930 (1967), the process is certainly related to the rise and decline of industries. Additionally, as he suggested in his presi10. The cultural importance of whaling is asserted by Norwegians and Inuit. Japanese apologists claim scientific gains from hunting but, as Matthiessen (1995, 71) says, “‘scientific whaling’ . . . is generally considered a great fraud.” See also Cousteau and Paccalet 1988.47, for a harsh critique of what is called “aborigine whaling.” 1I. Or the world: “New Bedford, in the mid-nineteenth century, was perhaps the richest city per capita in the world” (Allen 1973, 82). “Probably no city in the Union, perhaps no city in the world can show such an amount of property in proportion to the number of inhabitants. Taking the last United States census as the basis of population, a division of the wealth of the city would give to every man, woman and child in New Bedford, a fraction over $1615 each” (WSL 15 August 1854). The Whalemen’s Shipping List (WSL) may have been right. According to the 1860 census, the total value of tax assessments per head in the United States was $385. (The census gives three different wealth estimates: tax assessments, census marshalls’ estimates of true value, and individual census wealth returns. The WSL seems to have been refemng to New Bedford tax assessments. [US. Census Office 1864b. 599; 1866, 2941). For more on New Bedford wealth, see chapter 10 below.

5

In Prospect

dential address to the Third International Conference of Economic History, technical change has been the “major permissive source of modern economic growth” (1968,20). Douglass North, co-Nobel laureate in 1993, was awarded the prize in part for his work on the role of institutional invention and innovation in the process of growth (Davis and North 1971; North and Thomas 1973; Wallis and North 1986). What else do we know? Technical changes may be central to the rise and fall of industries, but economic agents (entrepreneurs, workers, investors, consumers) play major roles. Moreover, the drama is enacted against a backdrop of institutions (property rights, labor contracts, government regulations, commodity and factor markets). History can provide a laboratory-less than ideal, but better than none at all. Evidence drawn from that laboratory can be used to check theories and suggest modifications. The quality of the laboratory depends, of course, on the relevance of the historical incidents to the problems under study. The American whaling industry is a nearly ideal laboratory for the study of economic change. First, the industry was dynamic, not static; because it was dynamic one can examine the effects of changes in technology, in institutions, and in the preferences of economic agents under a variety of conditions. American whaling rose to world dominance, and then collapsed, within a single century. In terms of capital stock, it employed an annual average of only eighteen thousand vessel-tons in the years 1816-20. Over the next three decades, tonnage increased more than elevenfold. In 1896-1900, however, after a decline of many years, the capital stock was smaller than it had been in 1816-20. (See table 1.1.) In terms of the value of output, the story is much the same. In 1880 dollars, the industry’s average annual receipts grew from three-quarters of a million in 1816-20 to almost ten million in 1851-55, but by 1901-5 had fallen to less than one million dollars. (See table 1.2.) Second, although a typical vessel made several whaling voyages (the mean number from New Bedford was six), the owners and agents, who organized and directed the enterprise, treated each voyage as a separate venture. Thus, the voyage is an ideal unit of analysis, virtually the same as thefirm of economic theory. Also useful is the fact that the industry was competitive; given competition, one can use economic models based on optimization and profit maximization with little distortion of reality. Third, in some industries-agriculture and mining, for example-firms draw on a stock of locationally specific and privately owned resources, making it almost impossible to disentangle differences in natural endowment from differences in productivity. In whaling the natural resource (the stock of whales) was owned by no one, and all firms were normally free to exploit it. Finally, the production process was relatively simple: each of its stages-finding, killing, and rendering whales-is easy to describe. Whaling was a nexus for almost all the forces that economists have suggested are important to the processes of growth and change. Accompanying

Tonnages and Numbers of Vessels, U.S. and New Bedford Whaling Fleets, Annual Averages, 1816-1905

Table 1.1

Tonnage

Number of Vessels New Bedford

I8 16-20 1821-25 1826-30 1831-35 1836-40 1841-45 1846-50 1851-55 1856-60 1861-65 1866-70 1871-75 1876-80 1881-85 1886-90 1891-95 1896-1900 1901-5

New Bedford

US.'

New Bedfordb

US.

US.'

New Bedfordd

us.

18,395 37,161 47,953 92,750 133,897 185,678 208,347 195,938 195,692 111,167 73,224 58,5148 46,5171 40,8388 3 1,3648 24,1438 15,588g 10,4628

7,568 14,701 23,105 44,912 54,685 72,881 82,035 105,482 108,551 73,026 58,331 39,888 39,217 29,815 18,492 10,700 6,809 6,810

.411 ,396 ,482 ,484 ,408 ,393 ,394 ,538 ,555 ,657 .797 .682 .843 .730 ,590 ,443 .437 .65 1

-

-

31 56

672 656 628 628 374 312 209 178 152 113 92 62 40

142' 173 228 252 314= 320' 220 180' 124' 129' 96 59 38 26' 23

-

-

8W

.339 ,384 ,500 ,510 ,588 ,577 ,593 .725 .632 ,522 ,413 ,419 .575

T h e U.S. annual average tonnage figures have been computed from annual data given in Tower

1907, 121, appendix table 1. Tower uses the tonnages recorded when vessels were registered (i.e., contemporary tonnages). Since the system for computing tonnage changed in 1865, his figures for the years after 1864 are not perfectly comparable to those for earlier years. In the aggregate, post1864 tonnages appear to have been from 10 to 25 percent smaller than pre-1865 tonnages (see chapter 3). We therefore adjusted Tower's U.S. tonnages by raising them 17.5 percent. We began the adjustment with the 1871-75 figure, since new tonnage evaluations were not all made in 1865, but in the years in which vessels were reregistered. Reregistrations tended to take place when vessels sailed; given typical voyage lengths, the complete change must have taken three to six years. T h e annual figures of which the table reports five-year averages were computed by summing the tonnages of the New Bedford vessels that were involved in whaling voyages during a year. These annual figures underreport tonnages for two reasons. (1) Occasionally only the sailing date or only the arrival date of a voyage is known; when one date is missing, we assumed the voyage was completed within the calendar year of the other date-but voyages generally lasted longer than that. (2) We do not know the tonnages of seventeen New Bedford vessels active between 1816 and 1905; their twenty-two voyages in this period do not figure in the annual sums. The figures for New Bedford annual average tonnage were computed from the Voyages Data Set (see chapter 3). We calculated the tonnage of each New Bedford vessel registered after 1864 according to the law in effect before 1865 in order to arrive at an old-rule tonnage figure, and used those old-rule tonnages in calculating the New Bedford averages. (All New Bedford tonnages reported in this book are old-rule tonnages.) cThe US. annual average numbers of vessels come from Tower 1907, 121. Tower's counts of numbers of vessels in the U.S. fleet begin with 1843. The 1841-45 number here is therefore the average of only the three years 1843-45. dTheNew Bedford annual average numbers of vessels were computed from the Voyages Data Set. 'This number is one greater than the average number of vessels for which tonnage is known, during these five years. See note b. This number is two greater than the average number of vessels for which tonnage is known, during these five years. See note b. &Adjustedtonnage; see note a.

7

In Prospect

Table 1.2

18 16-20 1 82 1-25

1826-30 1831-35 1836-40 1841-45 1846-50 1851-55 1856-60 1861-65 1866-70 187 1-75 1876-80 1881-85 1886-90 1891-95 1896-1900 1901-5

Real Value of Output, U.S. and New Bedford Whaling Fleets, Annual Averages, 1816-1905 (1880 dollars) U.S.

New Bedford

New BedfordlLTS

764,922 1,652,013 2,349,900 4,489,210 6,245,711 8,750,263 8,484,838 9,630,201 8,752,811 4,623,194 3,760,800 2,440,180 2,409,458 2,2 17,906 2,178,452 2,111,910 1,341,443 877,771

222,428 485,804 9 14,966 1,550,053 2,043,798 2,997,698 3,517,398 4,507,450 4,806,959 3,163,453 2,177,034 1,795,010 1,893,965 1,507,756 1,154,786 67 1,362 402,447 419,263

,291 ,294 ,389 ,345 ,327 ,343 ,415 ,468 ,549 ,684 ,579 ,736 ,786 ,680 ,530 ,318 ,300 ,478

Sources: Output prices come from a variety of sources, summarized in appendix 9A. The same prices were used to value both U.S. and New Bedford outputs. Output amounts for the United States come from Tower 1907, 126, appendix table 3. Output amounts for New Bedford were computed from the Voyages Data Set. Tower’s output series is not perfectly comparable to ours. In the first place, as his table note says, he used data from two sources: Starbuck 1878, and WSL 17 March 1843-29 December 1914. We used a wider variety of sources (see chapter 3). In the second place his series associates output with the year in which the output itself, not the vessel producing it, returned to port. Our series associates all the output of a voyage with the year in which the vessel returned to port, even though some of it may have been shipped home in advance of the vessel’s return. (This difference should roughly wash out in the five-year averages reported in this table.) Notes: The term real value means current price value, deflated by the Warren and Pearson “All Commodities” wholesale price index (U.S. Department of Commerce 1975, series E-52).

the rise and decline of the industry, and presumably producing them, were (1) changes in the level and structure of demand; (2) changes in the competitive vigor of West Coast whaling ports and foreign fleets; (3) supply-side shocks, both positive (the discovery of new hunting grounds) and negative (perhaps the depletion of whale stocks); (4) changes in systems of business organization (the rise of such ports as Honolulu and Panama as transshipment and refitting points, for example); ( 5 ) the innovation of appropriate vessel sizes, rigging types, whalecraft, and hunting techniques; and (6) changes in the cost and quality of capital and labor, and in the supply of entrepreneurial ability. Such changes are of great interest. An industry rises rapidly and then declines; the rise and decline carry important consequences for the institutional environment and for the level and structure of the capital stock; those factors, in turn, affect best-practice techniques, productivity, output, and employment.

8

Chapter 1

This book centers on such developments, not as ends in themselves, but as ways to investigate both the forces encouraging expansion and collapse and the responsiveness of economic agents to opportunities and problems. The goal is to investigate forces underlying economic growth and change and to understand how they function. To economists, usually faced with scrappy data, often indirect, the history of the American whaling industry is extraordinarily rich. Take only three examples. In whaling, Kuznetsian technical change took the form not only of new vessel and whalecraft designs, but also of institutional innovations in both the industry and the general economic environment. Given the large number of firms (voyages), separated in space and time, the impact of these aspects of technical change can be studied in detail.I2 Second, questions of managerial control-an agent’s control over a captain working thousands of miles away, and a captain’s control of his crew-raise issues at the heart of all principal/ agent problems. Here again, the laboratory yields many observations. Third, in a world marked by great risk (vessels sometimes sank and captains sometimes found few whales), and a world that required close cooperation between officers and crewmen, the labor contract was extremely important. What was the nature of the contract, and how efficient was it? These are but three of many topics that make the history of whaling relevant to modem analytical and interpretive concerns.

1.3 The Plan of the Study If this book were solely an economic history, it might best be organized chronologically. Given the nature of our interests, however, an organization based on the microeconomic model-the production function, input and output markets, firm behavior, and industrial response-is more appropriate. The first section, chapters 1-3, gives the raison d’&tre and plan of the study. Later in this chapter we introduce four aspects of whaling (the trends in productivity, the idiosyncratic labor contract, the entrepreneurs who made business decisions, and the products of the industry) that make it of particular interest to economists, and describe the central role played by New Bedford. In chapter 2 the whales (sperms, rights, humpbacks, grays, and bowheads) that Americans regularly caught, as well as the whales (seis, blues, minkes, and finners) that they seldom managed to catch, are described. The chapter also gives a brief account of the development of hunting methods from the seventeenth century to the early twentieth. Chapter 3 describes the contents and construction of the data sets on which our analyses are based. The second section, chapters 4-8, focuses on the whaling production function-the process of converting physical inputs (land, capital, and labor) into 12. The New Bedford fleet, for example, the largest component of the American fleet, made more than forty-three hundred whaling voyages between 1816 and 1906.

9

In Prospect

physical outputs (sperm oil, whale oil, and whalebone). Chapter 4 describes the demography of whales, estimates their numbers in the oceans at the beginning and at the end of American whaling, and evaluates the impacts of American hunting on whale populations. Chapter 5 describes the labor contract, discusses both the lays-the shares of output received by crewmen-and the wages they represented, compares those earnings with wages in other industries, and explores the relationship between manning decisions and productivity. Chapter 6 describes nineteenth-century vessels and whalecraft (equipment used to catch whales). Chapter 7 describes the changes in vessels and whalecraft, as well as in the institutions that governed cooperation and competition, that took place during the American industry’s century-long life. Chapter 8 models the production process, examines changes over time in the average productivity of New Bedford whaling voyages, and attempts to explain, for example, why the 1857 voyage of the George Howland was more productive than its 1842 voyage, and why the New Bedford fleet was more productive in both 1825 and 1885 than it was in 1855. The third section, chapters 9-1 1, moves from questions of productivity narrowly defined to a more general evaluation of whaling firms as business enterprises. Chapter 9 examines the evolution of the markets for the industry’s three major products. Its focus is on demand, with an emphasis on the development of substitutes and the role of foreign markets. Chapter 10 examines the roles of agents (the men who organized enterprises and exercised general control), captains (the men on the spot who made day-to-day decisions), and owners. It gives a quantitative assessment of the quality of entrepreneurial responses to changing economic conditions. Chapter 11 computes the profits earned on individual voyages, giving an alternative measure of the success of particular captains and agents. The fourth section, chapters 12 and 13, is largely historical. It traces the long-run fortunes of the industry, the result of the interplay of technology, markets, and entrepreneurial creativity. Chapter 12 describes the competition between the whaling fleets of the United States and Great Britain in the early decades of the nineteenth century and analyzes the reasons for initial British dominance and final American triumph. Chapter 13 describes the increasingly effective competition offered by the Norwegian industry after 1880 and explains the failure of the Americans to counter it. In the final chapter the major threads of the argument are drawn together and related to the question of technical progress. In addition, we draw from the whaling experience some general ideas about technology and economic growth and decline.

1.4 What the Reader Needs to Know No matter where one begins the story of American whaling, four subjects crop up: productivity, the labor contract, the entrepreneurs, and the markets for

10

Chapter 1

whaling products. The reader should be introduced to them before embarking on this study of the economics of whaling. Managerial Decisions. Leaving aside luck (perhaps the most important factor), the productivity of a whaling venture was strongly influenced by the choices of its agent as he planned the voyage. The first was the ground to be hunted. Registrations of New Bedford vessels list fifty, including such exotic places as Patagonia, Delagoa Bay, the Sea of Okhotsk, and Tristan da Cunha. We have generally grouped the fifty into four: the Atlantic, the Indian, the Pacific, and the Western Arctic. (For a list of the fifty grounds and their distribution among these four, see appendix 3A.j Parts of the first three grounds had been systematically hunted before the War of 1812. The last, the Western Arctic, was first hunted in 1848, when Captain Thomas Welcome Roys sailed the bark Superior of Sag Harbor through the Bering Strait and found “whales innumerable, some of which yielded two hundred and eighty barrels of oil” (Scammon [1874] 1968, 58). A second choice was the class of vessel and its size: a ship (three masts, square-rigged on all), a bark (three masts, square-rigged on the foremast and mainmast, fore-and-aft-rigged on the mizzen), a brig (two masts, square-rigged on both), a schooner (two masts, fore-and-aft-rigged on both), or a sloop (one mast, fore-and-aft-rigged). On average, ships were larger than barks, barks larger than brigs, brigs larger than schooners, and schooners larger than sloops, but within a rigging class there was a range of sizes, making some barks, for example, larger than some ships. (Size was expressed in tons-for merchantmen and whalers a measure of capacity, not, as for warships, of displacementj.l3 The average size of the sixty-two whaling ships that sailed from New Bedford in 1850 was 368 tons, but they included the Leonidas at 231 tons and the Gladiator at 650. Manning decisions, too, affected productivity. Most whaling vessels were ships or barks. Such a vessel had a captain, at least two mates, some number of boatsteerers (the men who harpooned the whales and steered the whaleboats when the whales ran), a cooper, a cook, a steward, and a number of seamensome skilled (able seamen), some semiskilled (ordinary seamen), some unskilled (greenhands), and perhaps a boy or two. Choices remained. Should the vessel carry four, five, or six whaleboats? Depending on the decision, the agent would need to hire four, five, or six boatsteerers and three, four, or five mates. If the voyage was to be lengthy, the vessel would need a carpenter and a blacksmith, and the agent might choose to add a boatbuilder, a sailmaker, perhaps a painter, As technology improved, it became possible to substitute greenhands for able and ordinary seamen, but this required not only more greenhands but also more supervisory personnel. Those sixty-two ships that left in 1850 carried an average crew of twenty-nine, but the number ranged from twenty-three 13. See chapter 6 for a description of the legal formulas for computing tonnage.

11

In Prospect

The Lagoda was built in Scituate, Massachusetts, in 1826 and originally rigged as a ship. She was 107.75feet long and 26.5 feet wide (an “old measure” tonnage of 340.7), with two decks, a square stem, and a billethead. The vessel came to New Bedford in 1841 from Boston, where she had been employed as a merchant vessel. The Lagoda made six whaling voyages from New Bedford as a ship. In 1860 she was rerigged as a bark, in which guise she made another nine New Bedford voyages. During the last in 1890, she was condemned and sold at Yokohama, Japan. Note the ensign of her New Bedford agent, Jonathan Bourne Jr. This is a reproduction of a watercolor by Arthur Moniz (l991), used with the permission of the Old Dartmouth Historical Society-New Bedford Whaling Museum.

on the Ann Alexandel; the Barclay, the Iris, and the Leonidas, to thirty-six on the Globe. Finally, changes in technology forced agents to choose between new techniques and familiar ones. Early whaling vessels were drawn from the merchant fleet; if whaling proved unprofitable, they could easily be returned. In the 1850s new modified clippers-barks designed specifically for whaling-began to appear, offering a choice between specialization and versatility. In rigging, some midcentury builders believed that a greater number of small, flat sails was more efficient than a few large, baggy ones, and that wire rope or chain, although more costly, was better than the traditional hemp. In equipment, some preferred mechanized ventilators, capstans, and winches. In whalecraft, suppliers offered double-flued, single-flued, and toggle irons (harpoons), iron and steel hand-lances, guns that shot explosive lances, and, after

12

Chapter 1

the mid-l860s, darting guns, which could both harpoon and kill. Technical choices might affect a vessel’s catch; they certainly affected the cost of its voyage. The Measurement of Productivify. In the past two decades econometricians have made important contributions, both theoretical and empirical, to our ability to measure total factor productivity. For this study, the most valuable has been the discovery that a class of multilateral index numbers can be used to measure intertemporal and interfirm productivity differences, making it unnecessary to fit econometric functions. The implicit aggregator underlying the index numbers is a translog f u n c t i ~ n . ’ ~ The multilateral index used here to measure productivity comes from the work of Douglas W. Caves, Laurits R. Christensen, and W. Erwin Diewert (1982b) and is particularly well suited to the whaling industry. It is designed to handle multiproduct firms; nineteenth-century whalers sought three products. The economic model that underlies the index assumes optimizing behavior; firms in competitive industries such as whaling are forced by the market to minimize costs and maximize profits. Computation is simple and demands few data (see chapter 8). The index is, in essence, a ratio of physical outputs to physical inputs; higher values mean higher productivity, lower values, lower productivity. Trends in Productivify. An index of the average productivity of the vessels returning to New Bedford in each year from 1816 to 1898 is shown in table 1.3 and figure 1.1. It declines from 1826, when the New Bedford fleet was still quite small, to the mid-l830s, when it was quite large. Over the rest of the century, there are significant, but less marked, changes. From the mid-1830s to the mid-l860s, the curve declines less sharply; from the mid-1860s to the end of the century, productivity increases again; by 1875 the index has returned to the level of the mid-1850s. There are at least three possible explanations of this pattern of movement. It has been said that the stocks of whales were hunted down as the industry grew. Fewer whales would mean greater costs, and a consequent decline in productivity. This account is favored by some historians and many environmentalists. It is consistent with the movements of the index from the 1820s to the 1860s; it is not consistent with the movements in the years after the Civil War or with the pattern of hunting and the demography of whale populations (see chapters 4 and 8). A less widely held view relates to changes in the industry’s size-the entry of vessels into and exit of vessels from the fleet. As the industry expanded, competition for whales would have grown more intense. More vessels search14. See chapter 8 for citations. We thank Douglas Caves, V. Kerry Smith, Richard Hydell, Jeffrey Dubin, and David Guilkey, who discussed these indexes with us.

13

In Prospect

Table 1.3 Voyage Arrival Years

1816 1817 1818 1819 1820 1821 1822 1823 1824 1825 1826 I827 1828 1829 1830 1831 1832 1833 I834 1835 1836 1837 1838 1839 1840 1841 1842 1843

Index of Total Factor Productivity, New Bedford Whaling Fleet, 1816-98 (mean 1816-98 = 100) Index of Productivity

205.187 130.220 168.956 162.123 141.365 153.469 154.630 146.732 138.809 240.176 224.315 151.401 186.284 172.617 179.601 144.790 173.576 161.495 114.068 84.011 105.258 136.261 114.497 109.128 100.920 93.377 97.725 99.727

Voyage Arrival Years

1844 1845 1846 1847 1848 1849 1850 1851 1852 1853 1854 1855 1856 1857 1858 1859 1860 1861 1862 1863 1864 1865 1866 1867 1868 1869 1870 1871

Index of Productivity

147.665 127.016 121.042 110.834 117.996 97.705 99.563 136.501 61.490 80.207 98.752 69.655 83.868 92.317 69.787 72.399 84.021 57.606 54.111 44.773 37.047 58.703 75.973 89.403 73.165 110.157 44.993 88.436

Voyage Arrival Years

1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898

Index of Productivity

55.910 66.000 55.531 7 1.037 8 1.374 88.315 66.319 58.654 55.268 80.483 67.929 79.300 68.286 49.683 58.310 50.770 33.240 99.503 82.690 124.665 79.382 -0.952 111.169 47.549 96.430 94.164 -1 6.9 14

Notes: The productivity index is explained in the text of this chapter, and its derivation is described in chapter 8. Annual productivity index means were calculated (a productivity index number is applied to an individual voyage upon its return), and the mean of these annual means formed the comparison base for this table.

ing for a fixed stock should have had, ceteris paribus, an adverse effect on productivity. Later, as the industry contracted, hunting pressures would have eased and productivity should have risen. According to the third explanation, the rapid expansion of the 1820s and 1830s must have affected the supply of vessels. During those decades most new whalers were transfers from the merchant fleet. Since carrying goods and hunting whales are quite different activities, vessels built for one were not well designed for the other. As the whaling fleet expanded, this problem would have become more acute. The best-suited vessels would have been chosen first; with expansion, progressively less suited vessels would have been used. In the years

14

Chapter 1

Fig. 1.1 Index of total factor productivity, New Bedford whaling fleet, 1816-98 (mean 1816-98 = 100) Source: Data are from table 1.3.

of contraction the process would have been reversed. In fact, the reversal should have been accelerated by the innovation of vessels specifically designed for whaling. Also, vessels had to be manned; greater competition would have exerted pressure on the supply of experienced labor. The postwar contraction should have relieved the problem. (These issues are treated further in chapters 5 and 8.) The Labor Contract. Other labor contracts reward workers on the basis of time worked (wages or salaries) or individual output (piece rates); the whaling contract called for a worker to receive a share (a lay) of the net value of the voyage.15There was a standard station-to-station structure of lays from captain to boy (a station was a position-cooper, carpenter, cook, etc.), but there were vessel-to-vessel differences, and even on the same vessel not all men assigned to the same station received the same lay. The lays of New Bedford captains ranged from 1/8 to 1/20, and it was not atypical for four boatsteerers on a vessel to receive lays varying between 1/70 and 1/100, depending on their ex15. The term luy is sometimes mistakenly used for the cash value of the share, that is, the lay multiplied by the net value of the catch. A lay was expressed as a fraction (perhaps 1/16 for a captain or 1/200 for a greenhand), but was often referred to as the reciprocal of the fraction-a sixteen or a mo hundred.

15

In Prospect

perience and skill. The lay system was in use in whaling as early as the seventeenth century. Although it superficially resembles the payment schemes of some agricultural and fishing activities, it was very nearly unique.I6 A whaleman typically took an advance, but was not entitled to any more of his income until the voyage ended. This sometimes made for stormy relations between officers and crew. (Sixty percent of New Bedford voyages lasted more than two years.) Despite that weakness, the system had two characteristics that contributed to productivity and to profits, if not necessarily to the welfare of crews. First, from the point of view of the owner, it addressed the riskiness of the business, Of the 787 vessels in the New Bedford fleet, 272 were lost on whaling voyages. Since most made several voyages, the risk of loss was much lower than the 35 percent those figures suggest; nevertheless, more than 6 percent of New Bedford voyages ended in the loss of the vessel. The lay system, like a share-cropping contract, transferred part of this risk from owner to worker. Given the lengths of voyages, there was also a substantial risk that the catch would not be sold profitably. (It is difficult to predict commodity prices years in advance.) Part of this risk too was shifted to the worker. On the other side of the bargain, the contract offered a risk taker a chance for a big win. In 1880 dollars, New Bedford captains averaged an income of $98.31 a month (plus room and board) between 1840 and 1858, but their incomes ranged from a low of $0.66 to a high of $345.34. Second, profits aside, the form of the contract had a direct effect on productivity. Successful whaling depended on a crew’s close and continued cooperation. Observe the crew of a small boat attack a whale and the need is obvious. Less obviously, cooperation was needed when a carcass was cut in and rendered or when a vessel faced heavy winds, weather, or surf. Monitoring cooperation is difficult. Wages provide no incentive to work, let alone to cooperate; the incentive is provided by the threat of dismissal. Place rates reward individual effort, and often penalize cooperation. Under the lay system, each man’s pay depended on the performance of the entire group.” Entrepreneurs: Agents and Captains. Team effort characterized the crew of a whaler; a similar, if sometimes strained, interdependence existed between its 16. For a complete analysis of the labor contract and the lay, see Hohman 1928. See also chapter 5 below. 17. Writing about the whalemen of Martha’s Vineyard in the late eighteenth century, Crkvecoeur ([I7821 1912, 121) says, “They have no wages; each draws a certain established share in partnership with the proprietor of the vessel; by which economy they are all proportionately concerned in the success of the enterprise, and all equally alert and vigilant.” Jefferson (1 990, 54)makes the same point about the whalemen of Nantucket before the Revolution: “Their seamen, instead of wages, had a share in what was taken. This induced them to fish with fewer hands, so that each had a greater dividend in the profit. It made them more vigilant in seeking game, bolder in pursuing it, and parcimonious in all their expences.”

16

Chapter I

agent and its captain. When a vessel returned to New Bedford from a whaling voyage, or entered the fleet from the merchant marine or a builder’s yard, the agent prepared it for sea. He oversaw the renewal of masts, spars, and rigging and, if needed, the repair of the hull. He replaced lost or broken whalecraft, arranged for provisions, and hired the officers and men of the crew. (Some of these functions, particularly provisioning and hiring, could be subcontracted to others, but the agent kept close track. His profits from the voyage were a share of the proceeds-a strong inducement for him to plan carefully.) The agent’s work was not over when the vessel sailed. The captain made day-to-day sailing and hunting decisions and, in an emergency, might be charged with more fundamental ones, such as deciding whether a stormdamaged vessel was worth repairing. At the same time, in spite of distance and the difficulties of communication, the agent exercised general authority. He saw that cash or access to credit was available for supplies or repairs in distant ports. He cajoled and berated his captains, urging vigorous hunting and niggardly expenditures. On the basis of information received from the captain and whatever other sources he had, an agent might direct a vessel to what he believed would be more productive hunting grounds, or order the captain to sell the catch at a foreign port where prices exceeded those at home, or warn him to avoid resupplying at San Francisco in 1849, lest the crew desert to the gold fields. The captain ran the vessel while it was at sea. Since the hunt often took him to unexplored waters, which could contain hidden shoals and uncharted islands, he had to be a better navigator and seaman than his peers in the merchant service, who followed charted trade routes. He was charged with refitting, reprovisioning, and recruiting, and, because whaling voyages were long, these demands on his management skills were great. He was also charged with locating whales and with killing them. He had to understand their migration patterns; he had to command a whaleboat during the actual hunt; he had to be as skilled as any whaling mate with a lance or darting gun. It’s little wonder his pay averaged more than three times that of a merchant captain.’*

The Zndustryk Output. Sperm whales were hunted for sperm oil. In the early nineteenth century, it was valued primarily as an illuminant. Later, as the factory system spread, it was used to lubricate high-speed machinery. Baleen whales were hunted for whale oil and whalebone. Inferior to sperm oil, whale oil was the illuminant of the average consumer, and was used to lubricate heavy machinery. Whalebone, or baleen, is not true bone but fringed plates of cartilage making up a sieve through which the animal screens seawater in order to 18. “[Captain] Spicer needed some new rudder gudgeons made and summoned the blacksmith

. . . to do the job. The man confessed that he was actually not a blacksmith, but had called himself a mechanic to escape the [Civil War] draft. , . . Spicer turned to and made the gudgeons himself,

thereby demonstrating the versatility of some experienced shipmasters of this era” (Stackpole

1969, 19).

17

In Prospect

remove food. It was used by humans when a strong but flexible material was needed: in corset stays, whips, and umbrellas, for e~amp1e.l~ Sperm oil production increased rapidly from 1815-19 to 1840-44. Then, until the end of the century, it followed a gentle downward trend. The real price of sperm oil tracked production fairly closely: it more than doubled between 1816-20 and the 185Os, but by 1896-1900 had fallen back to its 1816 level. The early history of whale oil production was similar, but the peak of output was not reached until 1845-49, after which time output declined. In the early decades the whale oil real-price profile also paralleled that of sperm oil (its price almost doubled between 1816-20 and 1861-65). Thereafter, although prices declined, the rate of decline was slower; as late as 1896-1900, the real price of whale oil was still one-third above that of 1816-20. (See tables 9.8 and 9.11.> Given the technical complementarity between whale oil and baleen, it is surprising that their output trends are not congruent. Although the pattern for baleen is also one of rise, stability, and decline (see table 9.8), the increase was less steady, and the decline that began in the late 1850s was less rapid. The change in the ratio of the output of oil to that of baleen was no doubt influenced by a shift in their relative prices (see table 9.1 1).*OThe real price of baleen rose from $0.08 a pound in 1816-20 to $5.15 in 1891-95, and the ratio of the price of a gallon of whale oil to the price of a pound of baleen fell from 4.5 to 0.1.*I As its relative price rose, some whalemen took only baleen and abandoned the rest of the whale, causing oil output to fall sharply relative to baleen output. The buoyant market for baleen did not last, however. The invention of specialty steels and changes in consumer tastes at the turn of the century combined to drive the price of baleen back to its pre- 1820 level.

19.

To fifty chosen Sylphs, of special note,

We trust th’ important charge, the Petticoat: Oft have we known that sevenfold fence to fail, Though stiff with hoops, and armed with ribs of whale.

(Alexander Pope, The Rape of the Lock, canto 2, lines 117-20). A late-nineteenth-century advertisement for a bone dealer in Boston lists fifty-three “articles made of whalebone” available from him, including probangs (according to Websteri New Collegiate Dictionary a probang is “a slender flexible rod with a sponge on one end used esp. for removing obstructions from the esophagus”), tongue scrapers, divining rods, plait raisers, shoehorns, billiard cushion springs, policeman’s clubs, and painters’ graining combs. 20. That whaling captains were sensitive to relative prices is suggested by a note in the WSL 22 December 1874: “A letter from Capt. Babcock, of brig Myra, of Sagharbor, reports her at St. Helena October 12th, having taken 250 bbls. sperm and 400 do. whale oil since May. After filling all his casks he fell in with sperm whales, and threw overboard 100 bbls. whale oil to make room for the same quantity of sperm.” 21. These issues are discussed further in chapter 9. The increase in the price of baleen seems to have been a consequence of an increase in demand and a more pronounced decrease in supply. The decrease in supply was driven by developments in the market for oil. Oil prices were weak enough to discourage whaling; those who persisted earned high prices for their baleen, but not much for their oil.

18

Chapter 1

Principal American whaling ports. Courtesy of the Printing Services department at the University of North Carolina, Chapel Hill.

1.5 Why New Bedford? Chapters 12 and 13 are concerned with the interrelations between the whaling fleet of the United States and the fleets of other nations, and references are made to both the American and foreign fleets elsewhere as well. Many towns served as home ports for the American fleet (see table 3D.1); in 1850, for example, whalers sailed from twenty-two American ports. The focus of most of this book is on those that sailed from New Bedford. New Bedford is located about fifty miles south of Boston on the west bank of the Acushnet River, just above the entry of the river into Buzzards Bay-

19

In Prospect

highway to the Atlantic. Cape Cod is about twenty miles to the east, across the neck of the bay. The two islands, Martha’s Vineyard and Nantucket, lie about twenty miles to the south-southeast and fifty miles to the east-southeast, respectively. Within a radius of fifty miles of New Bedford are virtually all of the important East Coast whaling ports, Mattapoisett, Fairhaven, and Dartmouth being the closest. Between the 1820s and the 1880s the Americans dominated world whaling. It is generally agreed that the nation’s proportion of the world’s total activity had reached about 60 percent by the mid- 1830s, and averaged about 70 percent throughout the 1840s and 1 8 5 0 New ~ ~ Bedford ~ stood, in relation to American whaling, much as America did in relation to world whaling (see tables 1.1 and 1.2). In the eighteenth century Nantucket had been the center of American whaling. Its fleet was destroyed in the Revolutionary War, recovered, and was destroyed again in the War of 1812. Once again it recovered, but was soon surpassed in size by the New Bedford fleet, and not long after went into absolute decline, due to a constellation of economic and ecological misfortune^.^^ By 1823 New Bedford had become the nation’s leading whaling port. Over the years 1816 to 1906,it accounted for more than 45 percent of total U.S. whaling output (see table 1.2). From the mid-1850s to the mid-1880s its share was much higher, ranging between 55 and almost 80 percent. At the turn of the century, New Bedford had relinquished its premier standing to San Francisco, but by then the tonnage of the U.S. fleet had fallen by almost 95 percent. Not only did New Bedford contribute a large fraction of the total American whaling effort, but also the voyages of its vessels represent a composite of all American ventures. Specialization, in whales sought or grounds hunted, characterized the fleets of many ports. Nantucket was noted for its sperm whalers, Provincetown for its plum’pu’dn’rs employed on short voyages in the Atlantic, New London for the right-whale fishery and for a willingness to contend with the icy seas of Davis Strait and Hudson Bay in the search for bowheads, Sag Harbor and Stonington for the northern and southern right-whale fisheries. New Bedford vessels went everywhere. Given the relative size and the ubiquity of the New Bedford fleet, it is a reasonable proxy for the American industry as a whole.

22. In 1859 Hunrk Merchants’ Mugnzine, quoting an 1834 article in the NorthAmerican Review and the “Annual Report of the Secretary of State on Foreign Commerce for 1858:’ estimated that 400 of the 700 ships engaged in whaling worldwide in 1834 were American registered and that the figures for 1858 were 661 of 900 (Growth of the Whale Trade 1859, 475-76). Scammon ([1874] 1968,212) estimates that the figures for 1842 were 652American registered of 882 worldwide. Clark (1887a, 2:192) says that in 1846 the United States accounted for 729 vessels of a world whaling fleet of nearly 1,000, in 1880, 171 out of “not more than” 250. 23. One problem was the sandbar at the mouth of Nantucket harbor, which kept larger vessels out and became more troublesome as time went by. Another was the expense both of gathering supplies to outfit vessels and of dispersing oil, Nantucket being an island. See Mitchell 1949, 7; Hohman 1928, 305-6. Morison (1961, 315) quotes Emerson on New Bedford’s success: “New Bedford is not nearer to the whales than New London or Portland, yet they have all the equipments for a whaler ready, and they hug an oil-cask like a brother.”

2

Whales and Whaling

Whales, dolphins, and porpoises make up the biological order Cetacea. The taxonomy of cetaceans, although it encompasses about seventy-seven species, is probably not complete. The ginkgo-toothed beaked whale was discovered, and the Hubbs’ beaked whale classified, only in 1963. Also, there is evidence that some marine mammals grouped in a single category might better be presented in more than one-for example, the twelve species of beaked whales, some never observed alive, that are classified in the genus Mesoplodon. And there is still disagreement about the appropriate classification of some cetaceans. The Longman’s beaked whale, for example, is sometimes placed in the genus Mesoplodon and sometimes in the Indopacetus. Current classifications, which place some mammals still widely viewed as whales into families of dolphins, wouldn’t make a perfect basis for a study of whaling.’ The subfamily Globicephalinae of ocean dolphins, for example, contains the long- and short-finned pilot whales and killer whales that are almost always included in a popular or a nineteenth-century whaleman’s enumeration of whales.2 (The common distinction between whales and dolphins is based more on size than on biology.) Nevertheless, taxonomy is a point of departure for a study of whaling, and an outline is presented in appendix 2A. I . “[Tlhe popular terms ‘dolphin, porpoise and whale’ are not very precise taxonomically. For example, if ‘dolphin’ is used to refer to members of the Superfamily Delphinoidea, this includes the Family Phocoenidae or ‘porpoises,’ and the Subfamily Globicephalinae which all have common names ending in ‘whale.’ Members of the Superfamily Platanistoidea are also known as dolphins. To make matters even more confusing, in the USA . . . any small cetacean is known as a ‘porpoise”’ (Dolphins, Porpoises, and Whales 1991, 5-6). 2. Or perhaps it’s the family Delphinidae: “Scholars differ in their opinions concerning which genera and species should be included within the Family Delphinidae. Some zoologists believe [it] . . . should be large and include all 20 genera and their 39+ species. . . . Other scholars believe that some genera and their species . . . are sufficiently different in their anatomical structure to warrant the creation of additional families for them” (Tinker 1988, 119).The family Globicephalinae is one of these “additional families,”

20

21

Whales and Whaling

Cetaceans are divided into two suborders: the Mysticeti (from Greek mystax, moustache, and ketos, whale), which includes only whales, and the Odontoceti (from Greek odontos, tooth, and ketos, whale), which includes dolphins and porpoises as well as whales. The Mysticeti, or baleen whales, eat by straining seawater containing krill and other small creatures through a curtain of flattened rods of whalebone (baleen) that hang from the roof of the mouth. The Odontoceti have teeth, although few have sets that would please a dentist. The two teeth of the adult male strap-toothed whale, for example, curl around the upper jaw, and prevent the animal from fully opening its mouth.3 The male narwhal has, in addition to two teeth in its upper jaw, a long, twisted tusk that extends through its upper lip.4 Odontoceti feed mainly on squid and octopi. Whales range in weight from the 340-pound dwarf sperm-about the size of a large National Football League offensive tackle-to the 300,000-pound blue-about the size of the entire NFL (see table 2.1).5 The species of whales that Americans primarily sought are forty to sixty feet long (see table 2.2), roughly twice the length of the slender boats from which they were hunted. Both the cost of hunting and the value of the catch have influenced whalemen’s choices of prey, but cost seems to have dominated. On the one hand, if technology had not improved, it would have been impossible for the type of animal harvested to have progressed from what was initially the least costly to what was initially the most costly-that is, from dead whales to slow whales to fast whales. On the other hand, no matter what the market may have dictated, at the end of a voyage a captain with space in his hold attempted to harpoon any cetacean that crossed his path. Table 2.3 summarizes the speeds of the whales that have been most frequently hunted.

3. “From the examination of the stomach contents of stranded specimens, it is known that straptoothed whales eat squid, but how the males feed if they cannot open their mouths remains a mystery” (Ellis 1985, 155-56). 4. “One of the earliest written records of the unicorn would seem to predate the discovery of the narwhal by almost a thousand years . . . [blut once the [narwhal’s] tusks began to appear, it was easy enough to fit the tusk to the fable. . . . [In] ‘The Unicorn Tapestries,’ in the collection of the Cloisters in New York . . . [elverywhere the unicorn appears. . . his horn is a perfect illustration of a namhal tusk. It is long, white, tapered, and spirally twisted’ (Ellis 1985, 72-75). 5. In 1994 the NFL had twenty-eight teams of forty-five players each. Players averaged about 240 pounds: 28 x 45 x 240 = 302,400 pounds. With this comparison we join the poetic company of those who describe the sizes of whales: “[The blue] is the whale species about which all those comparisons are made: it weighs more than 40 elephants, 200 cows, 1,600 men [apparently not football players], etc. . . . [Tlhe blue whale . . . is approximately the same length as the 128passenger Boeing 737, which, fully fueled, weighs one-fourth as much as an adult blue whale. . . , [Its tongue] is about the size of a small automobile” (Ellis 1991, 18-19). “How does one weigh an animal [the blue whale] whose heart weighs half a ton, whose tongue is bigger than a taxicab” (Small 1971 , 32). “The heart of a blue whale weighs several tons. . . . The aorta leading from its heart is large enough for a child to crawl through, and the major blood vessels appear to be about the size of a sewer pipe” (Ackerman 1992, 118). “[The sperm whale] is the largest carnivore on earth.. . . Imagine a four-hundred-pound heart the size of a chest of drawers” (Lopez 1988, 121-22).

Table 2.1

Weights of Whales (pounds) Species

Heintzelman

Gray

Eschrichtius robustus

40,000

Minke

Baluenoptera ucutorostruta

20,000

Bryde’s

Baluenoptera edeni

36,000

Sei

Baluenoptera borealis

46,000

Fin

Baluenoptera physalus

128,000

Blue

Buluenopteru musculus

300,000

Humpback

Megapteru novueangliue

90,000

Right

Eubalaenu glaciulis/austrulis

144.000

Bowhead

Balaena mysticetus

244,000

Pygmy right Beluga

Caperea marginata Delphinapterus leucus

10,000 2,400

Narwhal

Monodon monoceros

2,000

Sperm

Physeter macrocephalus

Pygmy sperm

Kogia breviceps

1,500

Dwarf sperm

Kogia simius

-

Arnoux’s

Berurdius arnuxii

17,000

Baird’s

Berardius buirdii

24,000

Cuvier’s

Ziphius cavirostris

11,000

Shepherd’s Northern bottlenose

Tusmacetus shepherdi Hyperoodon ampullatus

18.000

Southern bottlenose

Hyperoodon planifrons

7,000

Hector’s True’s Gervais’ Ginkgo-toothed Gray’s Hubbs’ Longman’s Stejneger’s

Mesoplodon hectori Mesoplodon mirus Mesoplodon europaeus Mesoplodon ginkgodens Mesoplodon grayi Mesoplodon carlhubbsi Mesoplodon pac$cus Mesoplodon stejnegeri

3,000 6,000 3,200 1,700

Watsona

56,000M, A 68,000F, A I2,OOO-16,000 A 20,000L 26,000A 44,000L 28,000-34.000 A 64,000L 80,000-100,000 A 152,000L 180,000-288,000 A 392,000L 68,000-90,000 A 106,000L 120,000A 212,000L 220,000A 244,000L 10,000 A

1,400M, A 890 F, A

120,000

5,400

-

2,800

3,600M, A 2,000F, A 80,000M, A 44,000F, A 1,600A 1,800L 340A 600L 14,000A 17,000L 20,000A 25,000L 7,000A 10,000L 5,000-6,000E 8,000M, A 7,000F, A 6,000A 9,000L 3,000A 6,000? 3,400E 2,000A 3,400E -

2,600E

23

Whales and Whaling

Table 2.1

(continued) Species

Heintzelman

Andrews’ Sowerby’s Strap-toothed Blainville’s Pygmy killer

Mesoplodon bowdoini Mesoplodon bidens Mesoplodon layardi Mesoplodon densirostris Feresa attenuata

3,000 2,800 2,400 350

Short-finned pilot

Globicephala macrorhyncha

7,350

Long-finned pilot

Globicephala melas

8,400

Killer Melon-headed False killer

Orcinus orca Peponocephala electra Pseudorca crassidens

-

16,000 400 4,800

Watson‘ 2,400 A 3,000 ? 2,750 E 2,000 A 375 M, A 330 F, A 6,600 M, L 3,200 F, L 8,500 M, L 4,000 F, L 16,000 L 350 A 5,000 M, L 2,500 F, L

Sources: Heintzelman 1981: Watson 1985. Notes: How do you weigh a whale? “Accurate weights are . . . difficult to obtain, but a 29.5 m female Blue Whale, shot at South Georgia in 1930, was calculated to weigh 177 tomes, on the basis of the number of cookers filled with its blubber, meat and bone, and making some allowance for losses in the form of blood and guts” (Bonner 1980, 5). sA = average; E = estimated: F = female: L = largest; M = male; ? = perhaps.

2.1 Where the Whales Were Before 1868 only five species of whales were systematically hunted: principally the sperm, the bowhead, and the right, secondarily the humpback and the gray. Humpbacks and grays are smaller than the others, their oil and baleen are of relatively poor quality, and they pose special problems for hunters. The humpback usually sinks when killed; the gray can be a ferocious fighter. Whalemen would have liked to hunt the faster-swimming rorquals-the blues, seis, minkes, and finners-but with the technology of the time were seldom able to capture them.6 When in Moby-Dick Melville writes about the habits of the five whales that were hunted in the mid-nineteenth century, he is informative and accurate; when his subject is any rorqual except the humpback, he is often wrong. In the nineteenth century, sperm whales were hunted in the tropical and subtropical oceans. Both males and females were killed, although-males being two to three times as large as females-whalemen chose males when they could. In the twentieth century, sperm whales were hunted from shore stations in Australia and Antarctica. Because the migratory patterns of male and female 6. The rorquals are the members of the family Balaenopteridae. Rorqual comes from “the old Norwegian rorhval [furrow whale], referring to the grooves that run from just behind the lower lip to the chest” (Burton 1983, 22).

Table 2.2

Lengths of Whales (feet) Baker

Burton

40-45 M 43-50 F 26-30

46 L

45-50

32 L

30 L

42.5 M 49.2 F, L 26.2-3 1. I

49 L

48 L

39.4-46.0

59 L

60 M, L 65 F, L 88 L 64.5 A 75-80

49.2-59.0

Blue”

40-46 M 43 F, A 48 M 51-68 F 65-70 A 582 F 75-82 A

Humpbackb

40-62

49 L

62 L

Right

50

59 L

Bowhead Pygmy tight Beluga

50-58 21 16

59 L 20 L

58 L 50 A 50 20 16

Narwhal

11-16

-

Sperm

61

59 L

Pygmy sperm Dwarf sperm Amoux’s Baird’s

11 7-9 29.5 539 M 542 F 18-20 M 20-26 F 22

12 L 10 L

Gray Minke Bryde’s Sei Fin

Cuvier’s Shepherd’s Northern bottlenose Southern bottlenose Hector’s True’s Gervais’ Ginkgo-toothed Gray’s Hubbs’ Longman’s‘ Stejneger’s Andrews’ Sowerby’s Strap-toothed Blainville’s

32 M 25 F 32 M 24 F 14.5 16-17 22 18 120 17

85 L 109 L

-

-

43 L

30 L

-

-

-

17 15 16

-

16-20 17

-

Minasian

15.5 M 13-15 F 60 M 40 F 11 L 6.75-8.75 30 L 39 M, L 42 F, L 23 L 23 M, L 22 F, L 32 M F = 0.658. Adjusted R’ = -0.0077.

1844, for example, the Atlantic returned only four vessels to New Bedford, while forty-two came back from the Pacific.2’ In this later period the profit rates of the two grounds are more nearly comparable. Particularly important is that between 1844 and 1864-the heyday of the Pacific, when the ground returned between twenty-seven and sixty-three vessels to New Bedford annually-the average annual profit rate of Pacific vessels was greater than that of Atlantic vessels in ten of the twenty years that comparisons are possible (table 11.4). The two grounds seem to have been at parity during this period.*’ The relatively new Indian Ocean hunting grounds continued to be more profitable (as did the Western Arctic), recording higher rates than the Pacific in eleven years between 1844 and 1864. The industry experienced in expansion, then brief stability, and finally a contraction that appears to have been negotiated without severe commercial losses. Hunting was redistributed among the various grounds in response to profit-rate differentials. Given this evidence, can an equilibrium profit rate be identified? Consider the possibilities. First, perhaps the profit rates earned in the years during which the industry neither expanded nor contracted should be regarded as equilibrium rates, since there is, in the evidence on the size of the industry, a suggestion of equilibrium. The average rate (variant A) for this period-1846 through 1860-is about 14.9 percent, compared to a 13.7 percent average rate for the full period, 1817-92. Second, perhaps equilibrium profits can be identified with a period of zero trend in the profit rate. From the decade 1837-46 until 1892, the decadal aver21. The data on voyage numbers cited in this paragraph differ slightly from the data in table 11.4. The text data refer to all voyages; the table 11.4 data refer to voyages for which profit rates could be produced. 22. A possible explanation (partial) for the relatively poor performance of the Pacific has to do with measurement error. Although we intended to include in output all the oil and bone shipped home in advance of a vessel’s return to New Bedford, it is likely that the data on shipments are incomplete. Since Pacific voyages were typically longer and therefore led to relatively more product’s being shipped home than did Atlantic voyages, the failure to count all output shipped home in advance would probably have a bigger effect on the profit rates of voyages to the Pacific than of those to the Atlantic. We do not believe that the problem is a serious one, however.

Table 11.4

Mean Annual Profit Rates of New Bedford Whaling Voyages, by Hunting Ground, Variant A (excluding capital gains and capital losses in vessels), 1817-92 (percentages)

Arrival Year

Atlantic"

N

1817 1818 1819 1820 1821 1822 1823 1824 1825 1826 1827 1828 1829 1830 1831 1832 1833 1834 1835 1836 1837 1838 1839 1840 1841 1842 I843 1844 1845 1846 1847 1848 1849 1850 1851 1852 1853 1854 1855 1856 1857 1858 1859 1860 1861 1862 (continued)

42.7 28.7 6.4 20.5 40.8 14.4 16.9 28.1 47.4 48.9 49.4 25.1 13.9 46.2 30.7 32.8 71.5 26.0 15.7 21.7 15.0 1.5 8.9 20.3 27.5 10.7 - 18.6 23.3

2 4 6 8 3 4 4 12 I1 8 9 16 15 17 14 21 21 12 16 22 25 30 12 7 4 9 3 3 0 4 2 3

-2.6 - 10.9 12.6 -7.0 -23.8 61.3 9.6 -24.9 7.1 -8.5 13.8 -9.3 7.1 -1.0 19.7 35.5 29.6

1 1

2 2 7 14 5 7 4 5 2 1 10 7

Indian

N

Pacific

N

0 0

6.9 4.4 49.0 7.9 5.2 32.2 5.2 -15.4 2.5 18.1 15.3 0.5 9.4 22.1 8.1 17.7 14.3 8.5 -5.5 9.0 -1.7 -1.4 3.7 13.5 8.5 - 1.8 5.3 10.4 - 10.6 4.5 1.1 -2.7 8.8 19.7 36.9 29.4 16.8 2.4 12.4 23.9 4.1 2.3 7.7 8.0 -1.4 -0.2

5 1

0 0

95.0 33.8 25.3 -6.7 -8.0 21.3 32.0 19.9 28.2 36.6 21.3 28.3 34.7 20.6 25.0 12.4 12.1 13.6 18.7 27.6 31.4 10.1

14.7 8.9 16.6 -1.8 9.7 13.9 4.6 -2.8 9.9

0 0 0 0 0 0 0 0 0 1 0 1

0 I 4 1 6 4 12 13 7 17 12 31 15 11

11 9 12 10 10 9 13 11 6 9 13 10 10 7 11 9

Western Arctic

N

0 0

1

0

3 7 4 19 12 4 3 14 9 I1 12 18 10 13 22 26 20 22 22 23 21 18 22 33 37 35 34 48 43 34 37 57 27 46 49 45 45 61 32 45 43 38 28

0 0 0 0

62.0 275.1 19.7 14.6 14.5 42.6 21.4 20.0 15.7 10.5 2.9 2.6

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 1

12 22 16 13 16 15 11 11 12 16

446

Chapter 11

Table 11.4 Arrival Year

1863 1864 1865 1866 I867 1868 1869 1870 1871 I872 1873 I874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892

(continued) Atlantic"

17.6 165.7 47.8 32.3 6.0 12.8 3.4 -9.9 11.0 -4.9 35.5 91.6 40.2 31.8 73.9 5.9 -2.2 6.4 9.7 21.2 -3.9 4.5 8.3 9.4 14.6 11.1 23.9 10.4

Indian

N

14 20 23 10 20 18 11

14 7 7 7 4 10 12 12 20 11 14 14 11 9 11 6 7 6 1 0 4 0 1

5.2 -3.7 12.5 17.4 13.5 6.4 12.9 -3.1 0.2 -1.8 0.8 4.3 -2.8 22.2 -1.5 -5.2 I .2 3.1 0.0 -2.6

N 6 11 3 5

3 4 5

7 9 8 6 9 7 3 2 5

6 2 1 1

0 0

21.5 33.0

0 0 0 0 2 4 0 0

Pacific

N

9.8 -2.9 17.2 -1.8 1.8 9.5 7.1 -0.3 -4.1 -3.7 -2.1 -2.3 4.1 14.5 14.0 5.3 3.4

26 36 20 9 9 10 18 17 21 8 12 11 8 8 5 7 7 7 8 8 1 3 4 7 4 1 3 3

-1.1

-2.8 8.8 66.1 12.3 6.1 -3.3 -1.6 5.2 17.9 -4.0 17.2

1

0

Western Arctic

30.7 21.6 34.1 3.0 0.0 9.0 -0.9 1.9 12.2 32.4 14.3 74.5 90.2 67.0 3.0

N

6 2 0 4 9 7 8 6 10 2 0 0 3 3 0 1 0 0 1 2 1

0 0 0 0 0 0 0 0 0

Source: Profits Data Set. Notr: The means are unweighted. "Atlantic voyages include voyages to Hudson Bay and Davis Strait.

age profit rates seem to fluctuate around a stable level, suggesting that the industry might have been in something roughly approximating equilibrium. True, early in the period the industry was expanding, and toward the end it was contracting; but these changes did not greatly affect the general level of the profit rate. During this period the average variant A rate was almost 12 percent, compared to the 14.9 percent rate for the years 1846-60 and the 13.7 percent rate for the entire period. There is yet a third criterion. The equilibrium rate might be thought to be the one earned during the years in which the reallocation of effort to newer hunting grounds was over-that is, in the period in which the new hunting grounds no longer enjoyed a profit advantage. These were the years following

447

Profits

the Civil War, and the variant A rate earned during this period (1866-92) was about 9.7 percent. The three averages range, then, from 9.7 to 14.9 percent; the variant B estimates would be about one-half as large. These figures, however, are very much affected by extreme values. A better estimate of the approximate level of the equilibrium rate might be obtained from the median. As is to be expected, the median rates cluster closer together: 1846-60 = 9.7 percent, 1866-92 = 8.1 percent, and 1846-92 = 8.9 percent. Rounding these numbers gives a range of 8 to 10 percent for the equilibrium rate, which may very well bracket the true rate. The equilibrium rate excludes excess profits, of course, but it includes not simply the costs of Knightian uninsurable risks, but also returns to knowledge and unusual skill. (Schumpeterian returns to innovation should be part of the disequilibrium profits.) How the components of the equilibrium rate should be separately identified in quantitative terms is not clear. The data set, however, does contain evidence on the profits earned on voyages managed by the various whaling agents. Some sense of the range of experience by firm can be obtained from these data. Thus, the scale on which agents were rewarded for knowledge and skill-as well as for persistent, successful innovation-might be judged.23 Profit rates varied widely from voyage to voyage, partly due to luck. Furthermore, many agents stayed in the business only a short time. If one is interested in returns to knowledge, skill, and innovative activity, it is only sensible to explore the records of agent firms that managed many voyages, and to look at their average experience rather than at the results of individual voyages. Presumably self-selection and accumulated experience made these agents the repository of special knowledge and skills. If they stayed in the business for long, they must at least have kept up with innovations. Table 11.5 reports the profits on the voyages managed by those twenty-nine agents who organized at least forty voyages. These agents were an important group: they accounted for over one-half of the voyages in the Voyages Data Set, and well over one-half of the voyages for which profit-rate estimates can be made. The first and third columns contain two sets of calculations: the average profit rate earned on the voyages the firm managed throughout its entire history, and the ratio of that rate to the average rate earned by all the firm’s whaling competitors in the years in which it had vessels returning to New Bedford. All of these firms but two averaged positive profits on all their voyages. That is, each of these firms-except the two-managed to pay competitive rates of 23. The estimates of profits for each individual voyage are only rough approximations to true profits, of course, and therefore the results obtained for individual agents are also only approximations to what is required. Regardless of these considerations, however, the very striking results obtained for the individual agents seem secure. See the earlier sections of this chapter for a treatment of the methods by which profit estimates were made, as well as a discussion of the shortcomings of the estimates.

Table 11.5

Average Profit Rates Earned on Voyages Managed by New Bedford Whaling Agents Who Organized at Least Forty Voyages, Variant A (excluding capital gains and capital losses in vessels), 1817-92 Profit Rate

Firm Gideon Allen; Gideon Allen & Son; Gilbert Allen John P. Knowles I1 Edward W. Howland George Howland; George & Matthew Howland Abraham H. Howland Edward C. Jones Frederick Swift; William C. N. Swift & Eben Perry; William H. Aiken & Frederick Swift Henry Taber & Co. Charles H. Gifford; Gifford & Cummings; William Gifford Charles W. Morgan Isaac Howland Jr. & Co. Samuel Rodman; Sylvanus Thomas & Co.; Sylvanus Thomas & William F. Dow Abraham Barker Alexander Gibbs Joseph & William R. Wing Jonathan Bourne; Jonathan Bourne Jr. Benjamin B. Howard Jireh Perry Jireh Swift Jr. & Frederick S. Allen

(%)

Coefficient of Variation

Ratio of Column 1 to Profit Rates of Competitors"

Relative Feesb

Total Number of Voyages'

Number of Voyages in Computationd

59.2 35.9 21.5

644 33 1 I42

4.44 2.98 1.93

94 47 50

39 42

20.5 18.5 18.4

208 150 I36

1.48 1.40 1.88

119 40 81

98 26 61

17.9 17.6

233 126

1.87 1.06

131 47

68 36

17.3 15.5 14.7

248 123 184

1.27 1.06 0.97

50 60 171

35 54 145

14.6 12.4 12.0 11.8 11.8 11.5 11.2 10.5

248 157 136 240 240 273 287 200

0.98 1.01 0.93 1.08 0.94 0.74 0.93 0.83

59 43 49 236 147 46 43 88

42 30 30 76 102 32 33 62

64

John Avery Parker; John Avery Parker & Son Charles R. Tucker; Charles R. Tucker & Co. James B. Wood & Co. Thomas Knowles; Thomas Knowles & Co. Ivory H. Bartlett; Ivory H. Bartlett & Son; Ivory H. Bartlett & Sons Loum Snow; Loum Snow & Son; Thomas Cook & Loum Snow William Lewis; William Lewis & Son Matthew Luce; William Hathaway Jr.; William Hathaway Jr. & Matthew Luce Thomas & Asa R. Nye; Thomas R. Nye Jr. David R. Greene & Co. Mean, all voyages Mean, all voyages managed by agents who organized fewer than forty voyages Total

97 112 61 95

62 89 46 79

95

26

0.54 0.27

59 153

32 16

0.27

45 80 46

41 67 33

2,444

1,566

9.4 8.4 8.4 7.7

283 317 312

0.67 0.66 0.52 0.55

7.4

763

0.54

7.1 4.6

280 693

4.4 -2.3 -2.5 13.7

305 -4,126 -5,371

190

-

+

10.7

Source; Profits Data Set. Notes: Agencies that changed names but exhibited continuity with respect to the principal members of the firm were treated as one firm. For example, the three firms, Charles H.Gifford, Gifford and Cummings, and William Gifford, were treated as one firm. “or each voyage managed by a firm for which a profit rate can be calculated, the mean profit rate for all voyages agented by competing firms that arrived in the same year was computed. The entries in this column are the ratios of the means of the subject firms’ profit rates to the means of the means of the competitors’ rates. For example, say an agency managed three voyages, ending in 1820, 1820, and 1822. Its profit rates on these voyages were 10.2, 18.1, and 5.6. In 1820 the profit rates of its competitors’ voyages averaged 8.1, in 1822,7.5. The subject firm’s mean profit rate would be 11.3. Its competitors’ would be 7.9. The ratio would be 1.43 (11.3U.9). T h e fee-earning ability of the named agency compared to the abilities of all other agencies that had vessels returning to New Bedford in the same years ‘Each entry gives the number of voyages in the Voyages Data Set that the agent managed, during the course of the life of the agency. dNumberof voyages for which profit rates could be (and were) calculated.

450

Chapter 11

Table 11.6

Profit-Rate Distributions for Voyages Managed by the Leading Twenty-Nine Firms and All Other Firms, New Bedford Whaling Voyages, 1817-92 (percentages)

Loss rates 2-25%