Technological Change and the British Iron Industry, 1700-1870 9780691198415

Table of contents :
Acknowledgments
Abbreviations
Contents
LIST OF TABLES
LIST OF FIGURES
INTRODUCTION
PART I: THE INDUSTRIAL REVOLUTION IN IRON , 1700-1815
ONE : THE CHARCOAL IRON INDUSTRY IN THE EARLY EIGHTEENTH CENTURY
TWO. THE CHOICE OF FUEL BEFORE 1750
THREE. THE DEVELOPMENT OF THE CHARCOAL IRON INDUSTRY, 1700-1750
FOUR. THE ADOPTION OF COKE-SMELTING, 1750-1790
FIVE: INNOVATION IN THE WROUGHT IRON SECTOR: THE POTTING AND PUDDLING PROCESSES TO 1790
SIX: THE IRON INDUSTRY IN WAR, 1790-1815
SEVEN: THE NEW TECHNOLOGY AND ITS CONSEQUENCES: THE IRON INDUSTRY IN THE EARLY NINETEENTH CENTURY
PART II: THE MATURE IRON INDUSTRY, 1815-1870
EIGHT: THE IRON INDUSTRY IN PEACE, 1815- 1830: ADJUSTMENT AND INNOVATION
NINE: THE HOT BLAST AND THE DEVELOPMENT OF THE SMELTING SECTOR, 1828-1870
TEN: THE WROUGHT IRON SECTOR, 1830-1870
ELEVEN: THE IRON INDUSTRY ON THE EVE OF THE AGE OF STEEL
TWELVE: TECHNOLOGICAL CHANGE AND THE DEVELOPMENT OF THE BRITISH IRON INDUSTRY: SOME GENERAL CONSIDERATIONS
APPENDICES
APPENDIX A: BRITISH IRON OUTPUT, 1715-1750
APPENDIX B: CALCULATING VARIABLE COSTS FROM EIGHTEENTH-CENTURY IRONWORKS ACCOUNTS: A NOTE
APPENDIX C: PIG IRON OUTPUT ESTIMATES FOR GREAT BRITAIN, 1788-1860
Bibliography
Sources Cited
Index

Citation preview

Technological Change and the British Iron Industry 1700-1870

Technological Change and the British Iron Industry 1700-1870

CHARLES K. HYDE

PRINCETON UNIVERSITY PRESS PRINCETON, NEWJERSEY

Copyright© J077 by Princeton University Press Published by Princeton University Press, Princeton, New Jersey In the United Kingdom: Princeton University Press, Guildford, Surrey All Rights Reserved Library of Congress Cataloging in Publication Data will be found on the last printed page of this book Publication of this book has been aided by a grant from T h e Andrew W. Mellon Foundation This book has been composed in VIP Baskerville Printed in the United States of America by Princeton University Press, Princeton, New Jersey

Princeton Legacy Library edition 2019 Paperback ISBN: 978-0-691-60274-5 Hardcover ISBN: 978-0-691-65634-2

To the memory of my Mother

ACKNOWLEDGMENTS

book began as a doctoral dissertation at the University of Wisconsin under the patient direction of Rondo E. Cameron. I received valuable criticisms from several members of the Wisconsin economic history program, including John Bowman, Peter Lindert, Ralph Andreano, Morton Rothstein, Jeffrey Williamson, and Eugene Smolensky. I am also indebted to Donald McCloskey and Stanley Engerman for their comments on several drafts of this book. Several British scholars encouraged my efforts, particularly M. W. Flinn, Dr. R. A. Mott, and the late G. R. Morton. A Ford Foundation grant enabled me to exploit British archival sources in 1969-1970. Numerous anonymous archivists guided me through their respective institutions and made my stay in Britain thoroughly enjoyable as well as productive. M. L. Pearl of the Iron and Steel Institute and E. V. Dicker of the British Steel Corporation gave me invaluable assistance. I thank the Economic History Review and Explorations in Economic History for permission to use materials from my published work. Finally, I thank my indomitable secretaries, Barbara Rosenbaum and Diane Abbott, for cheerfully conquering the numerous drafts of this book. THIS

ABBREVIATIONS BHMG EHR JEH JISI PIME SEHR TNS

Bulletin of the Historical Metallurgy Group Economic History Review Journal of Economic History Journal of the Iron and Steel Institute Proceedings of the Institute of Mechanical Engineers Scandinavian Economic History Review Transactions of the Newcomen Society VIl

CONTENTS

Acknowledgments

ν

Introduction

3

List of Tables

xiii

List of Figures

xvi

PART I: TH E INDUSTRIA L REVOLUTIO N IN IRON , 1700-1815 ONE :

T H E CHARCOA L IRO N INDUSTR Y IN TH E EARL Y EIGHTEENT H CENTUR Y

TWO :

7

Technolog y Locatio n Integratio n an d Industr y Structur e Market s Aggregate Outpu t

7 10 15 18 20

T H E CHOIC E OF FUE L BEFOR E 1750

23

Abraha m Darb y an d th e Historian s Blast Furnac e Costs : Som e Calculation s T h e Neglec t of Coke : A Reinterpretatio n

23 29 32

THREE : T H E DEVELOPMEN T OF TH E CHARCOA L I R O N I N D U S T R Y , 1700-175 0

42

Domesti c Outpu t an d Foreig n Competition : An Overview Economi c Fluctuation s Industr y Performance : An Evaluatio n

43 43 47

FOUR : T H E ADOPTIO N OF COKE-SMELTING , 1750-^9 °

5 3

ix

FIVE:

The Triumph of Coke The Choice of Fuel: Some Cost Comparisons The Diffusion Process T h e Role of the Steam Engine

56 63 69

INNOVATION IN THE WROUGHT IRON SECTOR: T H E POTTING AND PUDDLING PROCESSES TO 1790

76

Early Efforts to Use Coal T h e Potting Process T h e Puddling Process: The Early Years T h e Significance of the Potting Process SIX:

T H E IRON INDUSTRY IN WAR,

1790-1815

The Adoption of the Puddling Process The Development of the Smelting Sector The Wartime Expansion of the Iron Industry

53

77 83 88 92 95 95 108 112

SEVEN: T H E N E W TECHNOLOGY AND ITS CONSEQUENCES: T H E IRON INDUSTRY IN THE EARLY NINETEENTH CENTURY

Technology Location Industry Structure Markets

117

117 121 124 127

PART II: THE MATURE IRON INDUSTRY, 1815-1870

EIGHT:

T H E IRON INDUSTRY IN PEACE, 18151830: ADJUSTMENT AND INNOVATION

T h e Development of the Smelting Sector

135

135

The Development of the Refining Sector The Industry's Competitive Position

140 143

NINE: T H E H O T BLAST AND THE DEVELOPMENT OF THE SMELTING

SECTOR, 1828-1870

146

The New Technique and the Rise of the Scottish Iron Industry 146 The Adoption of the Hot Blast in the Other Ironmaking Districts 153 Other Innovations and Movements in Productivity and Output 159 TEN:

ELEVEN:

T H E WROUGHT IRON SECTOR,

1830-1870

166

The Growth in Output The Demand for Wrought Iron

166 172

T H E IRON INDUSTRY ON THE EVE OF THE AGE OF STEEL

Technology Industry Structure Location Problems and Prospects Iron in the British Economy

174

174 177 180 187 190

TWELVE: TECHNOLOGICAL CHANGE AND THE DEVELOPMENT OF THE BRITISH IRON INDUSTRY: SOME GENERAL CONSIDERATIONS

The Historical Patterns of Diffusion The Determinants of Diffusion The Impact on Productivity and Costs

193

193 197 204

APPENDICES APPENDIX A: BRITISH IRON OUTPUT, 1715-1750

xi

213

APPENDIX B:

APPENDIX C:

CALCULATING VARIABLE COSTS FROM EIGHTEENTH-CENTURY IRONWORKS ACCOUNTS: A NOTE

221

PIG IRON OUTPUT ESTIMATES FOR GREAT BRITAIN, 1788-1860

223

1788-1815 1815-1830 1830-1840 1840-1860

224 233 245 248

BIBLIOGRAPHY

Sources Cited Index

XIl

257 273

LIST OF

TABLES

1.1 GEOGRAPHICAL DISTRIBUTION OF EARLY EIGHTEENTH-CENTURY IRONWORKS 2.1 CAPITAL INVESTED IN SELECT PARTNERSHIPS IN THE CHARCOAL IRON INDUSTRY 2.2 AVERAGE VARIABLE COSTS OF CHARCOAL BLAST

FURNACES, 1710-1750, BY DECADES 2.3 COALBROOKDALE VARIABLE COSTS, 1709-1737 2.4 OBSERVED VARIABLE COSTS AT COLNBRIDGE FORGE, 1730-1739 AND HYPOTHETICAL COSTS AT COLNBRIDGE, USING AVERAGE PHYSICAL INPUTS FROM COALBROOKDALE FORGE FOR

1732-1738

3.1 IMPORTS OF IRON PRODUCTS INTO ENGLAND AND WALES, 1720-1749, ANNUAL AVERAGES (IN T O N S )

12 31

34 35

39 45

4.1 AVERAGE VARIABLE COSTS OF CHARCOAL BLAST

FURNACES, 1730s-1790s BY DECADE (IN £ PER T O N OF PIG IRON) 4.2 TOTAL FACTOR PRODUCTIVITY, AVERAGE VARIABLE COSTS, AND CHARCOAL PRICES FOR SELECT CHARCOAL BLAST FURNACES,

1730-1801

4.3 TOTAL COSTS OF SOME EARLY COKE BLAST FURNACES, 1730s-1780s 4.4 TOTAL FACTOR PRODUCTIVITY AND AVERAGE TOTAL COSTS FOR SELECT EARLY COKE BLAST FURNACES. 4.5 PARTNERSHIP CAPITAL AND DIVIDENDS PAID O U T BY T W O EIGHTEENTH-CENTURY IRON PARTNERSHIPS 4.6 CHARCOAL AND COKE FURNACES IN OPERATION, 1750-1791, AND T H E I R ESTIMATED OUTPUT XlIl

57

59 60 62

65

67

5.1

AVERAGE VARIABLE COSTS, BY DECADE, AT SELECT CHARCOAL FORGES,

(£ PER TON OF BAR IRON)

1740-1801

5.2

AVERAGE INPUT PRICES, AT THE FORGE, FOR

5.3

AVERAGE VARIABLE COSTS AT FORGES USING THE

5.4

PIG IRON COSTS AT FORGES USING THE

5.5

AVERAGE V ARIABLE COSTS OF PRODUCING BAR

SELECT CHARCOAL FORGES,

1740S-1790S

CHARCOAL AND POTTING PROCESSES, CHARCOAL AND POTTING PROCESSES,

87

1787

88

1790

6.1

AVERAGE VARIABLE COSTS OF THE PUDDLING AND

6.2

COSTS OF PRODUCING PUDDLED IRON,

POTTING PROCESSES,

179°-18°4

INCLUDING TRANSPORT COSTS, COMPARED

6.3

TO SELLING PRICE,

1791

AND

1804

93 102 103

PRICE DIFFERENTIAL BETWEEN BRITISH AND FOREIGN BAR IRON,

179°-1815,

COMPARED

TO THE DUTY ON FOREIGN BAR IRON

6.4

ESTIMATES OF BRITISH BAR IRON OUTPUT,

6.5

BAR AND PIG IRON OUTPUT AND FURNACES IN

6.6

REGIONAL DISTRIBUTION OF BRITISH PIG IRON

6.7

BRITISH PIG IRON OUTPUT AND THE PIG IRON

1788-1815

OPERATION, SELECTED YEARS, OUTPUT,

1788-1815

1788 AND 1815

EQUIVALENT OF GOVERNMENT PURCHASES OF IRON,

1794-96 AND 1805

7.1

THE DISTRIBUTION OF COKE BLAST FURNACES,

7.2

REGIONAL DISTRIBUTION OF BRITISH PIG IRON

7.3

NET EXPORTS OF BRITISH IRON, IN PIG IRON

BY SITE, OUTPUT,

1810

1720 AND 1815

EQUIVALENTS, AND BRITISH PIG IRON

8.1

79

1787

IRON WITH THE POTTING AND PUDDLING PROCESSES BEFORE

78

OUTPUT,

1815

CONSTRUCTION AND CLOSING DOWN OF BLAST FURNACES,

1810-1823

XIV

105 108 113 114 115

122 123 130 136

8.2

P I G I R O N O U T P U T , P R I C E S , FURNACES I N O P E R A T I O N , AND F U R N A C E C O N S T R U C T I O N ,

1823-1830 8.3

137

AVERAGE VARIABLE C O S T S OF SELECT BLAST FURNACES AND T H E M A R K E T PRICE OF

P I G I R O N , 1810-1830 8.4

139

T O T A L FACTOR PRODUCTIVITY, AVERAGE VARIABLE C O S T S , I N P U T PRICES, AND INPUTS U S E D BY S E L E C T F O R G E S , 1 8 0 4 - 1 8 2 9

9.1

T H E S T R U C T U R E O F T O T A L C O S T S FOR B L A I R

9.2

CARBON C O N T E N T OF VARIOUS B R I T I S H COALS

I R O N W O R K S , J U N E 1841 U S E D IN BLAST FURNACES

142 153 157

10.1 S I Z E O F T H E W R O U G H T I R O N S E C T O R ,

1860-1880

168

11.1 R E G I O N A L D I S T R I B U T I O N O F B R I T I S H P I G I R O N O U T P U T , 1815 A N D 1871

181

11.2 R E G I O N A L D I S T R I B U T I O N O F P I G I R O N O U T P U T AND P U D D L I N G F U R N A C E S , 1871

184

11.3 B R I T I S H O R E O U T P U T , I M P O R T S O F F O R E I G N O R E , AND B R I T I S H O R E PRICES COMPARED T O GENERAL PRICE INDICES, 1860-1880 A.l

189

ESTIMATES OF B R I T I S H P I G IRON O U T P U T IN T H E E A R L Y E I G H T E E N T H C E N T U R Y

A. 2

ESTIMATES OF BRITISH B A R IRON O U T P U T

A.3

CHARCOAL BLAST FURNACES ERECTED

FOR T H E E A R L Y E I G H T E E N T H C E N T U R Y

213 216

AND S H U T D O W N I N G R E A T B R I T A I N ,

1 7 2 0 - 1 7 4 9 , BY D E C A D E Cl

REGIONAL AND N A T I O N A L P I G I R O N O U T P U T

C.2

B R I T I S H I R O N O U T P U T , FURNACES, AND CANAL

C.3

AGGREGATE O U T P U T ESTIMATES, 1830-1840

C.4

S O U T H STAFFORDSHIRE O U T P U T ESTIMATES,

ESTIMATES, 1815-1823 SHIPMENTS, 1823-1830

1840-1843

218 241 243 248

250

xv

LIST OF FIGURES 2.1 PIG IRON PRICES, 1750-1790 3.1 PRICES OF BAR IRON, PIG IRON, AND CHARCOAL,

1710-1750

4.1 CHARCOAL PRICES, 1750-1780 5.1

SWEDISH BAR IRON PRICES IN GREAT BRITAIN,

6.1

PRICES OF RUSSIAN, SWEDISH, AND ENGLISH

1750-1805

BAR IRON, 1780-1815

28

44 58

81 104

9.1 COAL SAVINGS WITH THE H O T BLAST COMPARED TO THE CARBON CONTENT OF BRITISH COALS, 1828-1836, REGIONAL AVERAGES

9.2 9.3 10.1 Cl C.2 C.3

158

PIG IRON PRICES, 1830-1870 PIG IRON OUTPUT, 1830-1870 BAR IRON PRICES, 1830-1870 PIG IRON OUTPUT, 1750-1815 PIG IRON OUTPUT, 1790-1830 PIG IRON OUTPUT, 1800-1860

XVl

163 164 171 234 245 253

Technological Change and the British Iron Industry 1700-1870

INTRODUCTION historians have long recognized that the iron industry was an important part of the British economy during the Industrial Revolution and that the industry underwent changes in production techniques as radical as those experienced by the cotton textile industry. Ashton's classic study, Iron and Steel in the Industrial Revolution, presents an admirable narrative of the lives of the inventors of new ironmaking processes, as well as lucid descriptions of the techniques they developed. There are numerous studies of individual ironworks and ironmasters, as well as a few regional histories of the industry, but there is no systematic analysis of the process of technological change in this industry. ECONOMIC

I will devote little time to the invention of new techniques but will concentrate on their diffusion. Most of the evidence that I have uncovered indicates that changes in the relative costs of different ironmaking techniques explain both the timing and speed of their adoption. British ironmasters were consistently rational in their choice of technique during the years covered by this study. Much of this book is simply an attempt to estimate the production costs of different ironmaking processes in order to treat the issue of economic rationality. I also make several attempts to assess the relative impact of "major" and "minor" innovations by examining cost and productivity movements over the entire period 1700-1870. The first part of the book examines technological change in the industry from the early eighteenth century to the end of the Napoleonic Wars. Chapters One to Three consider the overall development of the charcoal iron industry before 1750 and its failure to use coal during those years. The adoption of coke-smelting after mid-century is analyzed in Chapter Four, while the use of coal for refining is examined in Chapters Five and Six. I conclude this sec-

3

INTRODUCTION

tion with an assessment of the long-term impact of these innovations. The second part of this study considers the development of the industry from the early nineteenth century to the widespread introduction of cheap steel in the 1870s. The use of heated air in the blast furnace, the only "major" innovation of this period, is treated in detail in Chapter Nine. I conclude that the "minor" innovations in refining considered in Chapters Eight and Ten had a significant impact on productivity and costs. I then assess the overall impact of nineteenth-century technological changes in ironmaking prior to Bessemer's discoveries. My study of the iron industry has suggested several tentative hypotheses about technological change and I oflFer these in the concluding chapter.

4

PART I

THE INDUSTRIAL REVOLUTION IN IRON, 1700-1815

ON E

TH E CHARCOA L

IRO N

INDUSTR Y IN T H E

EARL Y E I G H T E E N T H

CENTUR Y

T H E innovation s tha t revolutionize d th e British iro n indus try in th e eighteent h centur y were no t mad e by researc h scientist s workin g in obscur e laboratories , but rathe r by ironmaster s attemptin g to solve particula r technica l or economi c problems . Innovation s did no t occu r independ en t of th e economi c structur e an d busines s condition s pre vailing in th e iro n industr y an d in th e nationa l economy . Before examinin g particula r innovations , we mus t there fore describ e th e charcoa l iro n industr y of th e early eight eent h century . Thi s chapte r examine s th e industry' s technology , location , economi c structure , markets , an d outpu t to establish th e economi c framewor k within which technologica l chang e occurred . TECHNOLOG Y

T h e majo r product s of th e charcoa l iro n industr y were pig, cast, an d bar iron . T h e reductio n of iro n or e (usuall y Fe20s ) in th e blast furnac e yields pig iron , which ha s a relatively high (3%-5% ) carbo n content , makin g thi s form of iro n har d an d brittle . Fo r mos t uses, pig iro n ha d to be furthe r refined , althoug h som e was used to produc e castings. Th e majo r cast-iro n product s of th e eighteent h cen tur y were pot s an d pans , canno n an d shot , stoves, firegrates, anchors , an d som e machin e parts . T h e thir d an d mos t importan t iro n produc t is bar or wrough t iron , which is simply pig iro n with mos t of th e carbo n an d othe r impuritie s removed . Bar iro n ha s a low carbo n conten t (less tha n ι %) , which make s it relatively soft an d malleable . T h e majo r uses of bar iro n were in th e manufactur e of nails,

7

THE INDUSTRIAL REVOLUTION IN IRON

wire, locks, bolts, horseshoes, various other types of hardware, gates and fencing, and small arms. Some bar iron was used to make steel, which stands between bar iron and pig iron in terms of its carbon content. The blast furnace was the basic unit of production of the iron industry. T h e typical charcoal blast furnace of the early eighteenth century was a square stone structure about twenty-five feet high with an interior lining of stone. It was usually built against a hill to expedite the feeding of raw materials into the top of the structure. An alternating pair of large bellows driven by a water wheel provided the "blast" or stream of air needed to support combustion. T h e reduction of the ore to its metallic form took place near the furnace bottom, where temperatures reached about 14000 C. Molten pig iron settled to the bottom of the furnace, with the lighter slag (Unreduced ore and impurities) floating on top of it. Both were drawn off periodically and the pig iron run into sand molds. Large stocks of charcoal and iron ore were accumulated before the furnace began its blast or "campaign." Wood for charcoal was cut from coppices (thickets of young trees), rather than from mature forests. Trees were allowed to grow in individual coppices for fifteen to twenty years and the coppices were "harvested" on a rotating basis to supply the furnace with a perpetual supply of wood for charcoal. The wood was gathered and seasoned for several months before it was partially burned in mounds and then allowed to cool before being stored in preparation for the blast. 1 The ironmaster also carefully prepared the ore before using it in the furnace. The ore was washed with water to rid it of dirt, then "calcined" (roasted) to drive out moisture and sulphur, and crushed into pieces roughly the size of a walnut. 2 Most ironmasters also used a "flux," usually limestone, which promoted the formation of slag. Charcoal, 1 H. R. Schubert, History of the British Iron and Steel Industry, From c. 450 B.C. to A.D. /775 (London: Routledge and Kegan Paul, 1957), pp. 221-

224. 2 Ibid., p p . 215-218

8

T H E CHARCOAL IRON INDUSTRY

ore, and limestone were mixed together to form the "charge" that was introduced into the top of the furnace. Once the blast had commenced, the smelting process was continuous. The furnace had to be constantly monitored to maintain the quality of the pig iron produced and to achieve maximum output. Since ironmasters were ignorant of the chemistry of smelting, furnace practice was determined by a combination of trial and error, tradition, and intuition. A prominent ironmaster described the ambiguous relationship between man and furnace in the eighteenth century: "A Furnace is a fickle mistress and must be humoured and her favours not to be depended upon. I have known her (to) produce 12 tons per week, and sometimes but g tons, nay, sometimes but 8, the excellency of a Founder is to humour her dispositions, but never to force her inclinations." 3 The individual charcoal furnace produced a small quantity of pig iron by modern standards. Average annual output in the early eighteenth century was a mere 300 tons, although individual furnaces with outputs of 600 to 700 tons were not uncommon. 4 There were several technical constraints on output, but the most important was the limited size of the furnace itself. It was impractical to build a charcoal furnace over twenty-five feet high because charcoal, which is friable, cannot support a taller "charge" in the furnace stack. Too much weight would reduce the charcoal to dust, making the furnace inoperable. T h e limited blast available from bellows was an added constraint on production, as was the short length of the annual campaign. The charcoal furnaces of the early eighteenth century were in operation for only about thirty weeks per year. 5 The furnace would typically operate from October until 3 Letter, 30 July 1754, John Fuller to the Prince of San Sorrino, quoted in Schubert, History, pp. 237-238. 4 E. Wyndham Hulme, "Statistical History of the Iron Trade of England and Wales, 1717-50," TNS, ix (1928-29), p. 115. 5 Schubert, History, p. 243.

9

THE INDUSTRIAL REVOLUTION IN IRON

May and then shut down for the summer. Several considerations forced ironmasters to cease operations during the summer months. Furnaces tended to run relatively poorly during warm weather because increased humidity resulted in lower outputs and deteriorating pig iron quality. 6 Insufficient water supplies also posed a serious threat to many furnaces. Finally, the furnace linings and the leather bellows often deteriorated badly enough to require repairs after only eight months of operation. While the furnace was shut down, the ironmaster accumulated stocks of raw materials for the next campaign and performed needed repairs on the furnace. Most pig iron was converted to bar iron at the forge. There, the pig iron was refined in the "finery" fire, then reheated in the "chafery" fire and forged into a bar under the forge hammer. Both fires used charcoal as fuel and water-powered bellows to provide a blast of air. A painstaking process of passing small lumps of pig iron over the finery fire removed the oxidizable impurities, namely carbon and silicon. T h e typical forge contained two or three finery fires and one chafery fire.7 The bars of wrought iron, which were forged under a huge hammer (also water-driven), were the final product of the forge. They went from the forge to a slitting mill to be cut into small rods for nailmaking or directly to a blacksmith. The average forge produced only 115 tons of bar iron in 1717, although outputs of 200 tons were not uncommon. 8 LOCATION

Charcoal ironmasters were severely restricted in their choice of sites for their ironworks. The blast furnace had to be constructed close to its major raw materials. The high 6

Ibid., p. 244. For an excellent description of the operation of the forge, see G. R Morton, "An Eighteenth Century Ironworks," Metallurgist, 11 (1963), pp. 299-300, and "The Products of Nibthwaite Ironworks," Metallurgist, 11 (1963), pp. 259-268. 8 Hulme, "Statistical History," p. 16. 7

IO

THE CHARCOAL IRON INDUSTRY

cost of transport in the pre-industrial period virtually prohibited moving bulky (low value to weight) commodities like ore and charcoal more than a few miles. This problem was particularly acute with charcoal, which easily broke down into useless dust when moved any appreciable distance. The supply of water was another crucial determinant of location. Ideally, the furnace would be located on a swiftrunning river or stream that would consistently provide a flow of water sufficient to drive the bellows for at least eight months of the year. The ironmaster also preferred to erect his furnace on a navigable river because land transport costs were typically five to ten times higher than water transport costS. 9 Since blast furnaces required sites richly endowed with ore, wood, and water power, most of them were situated far from population centers. They were also separated from each other because of the limited supply of charcoal and water power. Ironmasters rarely built a furnace within five miles of an existing one. 10 The choice of sites for the forge was not as restricted as was the case for the blast furnace. A forge required no ore and considerably less charcoal and water power than a furnace. The high wastage of pig iron (about 30%) in the refining process gave the forgemaster a considerable incentive to locate near a blast furnace. The supply of charcoal, however, seemed to be a overriding consideration, since most forges were located a considerable distance from the furnace, usually downstream from it and nearer to the markets for bar ironY The location of ironworks is summarized in Table 1.1. The ironworks have been grouped into regions (see Map 9 B.L.C. Johnson, "The Foley Partnerships: The Iron Industry at the End of the Charcoal Era," EHR, 2nd Series, IV (1952), p. 334. 10 Ibid., p. 33 2; Arthur Raistrick, Quakers in Science and Industry (New York: Philosophical Library, 1950), p. 103; Arthur Raistrick, "The South Yorkshire Iron Industry, 1698-1756," TNS, XIX (1938), p. 60; and Ernest Straker, Wealden Iron (London: Bell, 1931), passim. 11 Ibid.

11

THE INDUSTRIAL REVOLUTION IN IRON TABLE 1.1 GEOGRAPHICAL DISTRIBUTION OF EARLY EIGHTEENTHCENTURY IRONWORKS

Region

Output (Tons)

Number

Share of National Output(%)

Output Per Furnace

11·5 24·4 8.6 12·9 14.6 13.8 13.8

133 472 25 0 45 0 36 4 400 218

A. FURNACES (1720) The Weald Forest of Dean South Wales N. Wales-Cheshire Shropshire Staff.-Worcester. S. Yorkshire-Derby Lanc.-Cumberland Scotland Average or Total

2,000 4,25 0 1,500 2,25 0 2,55 0 2,4 00 2,400

15 9 6 5 7 6

I.

2. 3· 4· 5· 6. 7· 8. 9·

II

297

17,35 0

59

B. FORGES (1717) The Weald Forest of Dean South Wales N. Wales-Cheshire Shropshire Staff.-Worcester. 7· S. Yorkshire-Derby 8. Lanc.-Cumberland 9· Scotland Average or Total I.

2. 3· 4· 5· 6.

9 20 1,840 1,75 0 880

15 20 13 8 14 28 16 2

3,9 20 1,690 3 20

II6

13,33 0

2,010

6,9 13.8 13. 1 6.6 15.0 29·4 12.6 2·4

61 92 134 110 143 140 105 160

II5

Source: Hulme, "Statistical History," pp. 14-15 and 21-22.

1), based on both resource and market considerations. The Weald, for example, was the oldest ironmaking district in Britain, with furnaces in operation since 1496.12 It was the premier ironmaking district in the country until the late seventeenth century, when it had within its borders (in 1664) thirty-one of the sixty-eight blast furnaces in operation in Great Britain. 13 Only one new blast furnace was 12

Schubert, History, p. 163.

13

12

Ibid., p. 175.

T H E CHARCOAL IRON INDUSTRY MAP I: IRONMAKING DISTRICTS OF GREAT BRITAIN

KEY 1: 2: 3: 4: 5: 6: 7: 8: 9:

The Weald (Sussex, Kent, Surrey, and Hampshire) Forest of Dean South Wales and Monmouthsire North Wales and Cheshire Shropshire Staffordshire, Worcestershire, and Warwickshire South Yorkshire, Derbyshire, and Nottinghamshire Lancashire, Cumberland, and Westmoreland Scotland

13

THE INDUSTRIA L REVOLUTION IN IRON

erecte d in th e Weald in 1660-1720 , while at least twenty 4 eight were built in othe r regions.' T h e Fores t of Dea n ironwork s ar e treate d separatel y from thos e of Sout h Wales becaus e th e Fores t or e yielded a distinc t qualit y of pig iron . T h e West Midland s were divided int o Region s 4, 5, an d 6, even thoug h mos t of th e ironwork s in thes e region s served th e greate r Birmingha m market . Thi s division was based on th e fact tha t th e iro n industr y of th e West Midland s consiste d of several cluster s of geographicall y separate d works. 1 5 T h e remainin g regiona l divisions ar e easily justified. T h e ironwork s of Sout h Yorkshire, Derbyshire , an d Not tingha m all served th e Sheffield marke t an d mos t of the m were unde r th e sam e ownership. 1 6 Finally , th e ironwork s in th e Lancashire-Cumberlan d region share d commo n ownershi p an d access to th e region' s rich suppl y of haema tit e o r e . 1 7 Mos t of th e charcoa l iro n industr y was locate d in th e West Midland s (Region s 4-6) an d served th e hardwar e industr y of Birmingha m an d vicinity. T h e West Midlands ' ironwork s accounte d for over 40% of nationa l pig iro n outpu t an d nearl y 60% of ba r iro n productio n in th e early eighteent h century . T h e forges in th e Birmingha m region also consume d abou t hal f th e pig iro n produce d in th e Fores t of Dean. 1 8 T h e dat a presente d in Tabl e 1.1 also reveal th e existenc e of significant interregiona l variation s in output . Th e com parativel y low output s of th e Weald ironwork s ar e particu larly striking, while th e furnace s an d forges of th e Sout h Yorkshire-Derbyshir e region also produce d well below th e nationa l average. Thes e outpu t variation s appea r to be largely a functio n 14 M. W. Flinn , "Growt h of th e English Iro n Industry , 1660-1760, " EHR, 2n d Series, xi (1958) , p. 146. 15 Johnson , "Fole y Partnerships, " p. 323. 1β Raistrick , "Sout h Yorkshire Iro n Industry," passim. 17 Alfred Fell, The Early Iron Industry of Furness and District (Ulverston : Hum e Kitchin , 1908), passim. 18 B.L.C . Johnson , " T h e Midland s Iro n Industr y in th e Earl y Eight eent h Century, " Business History, π (i960) , pp . 67-74 .

14

T H E CHARCOAL IRON INDUSTRY

of the age of the ironworks. T h e regions with low outputs were the oldest ironmaking districts in Britain, with a majority of ironworks erected before 1650. 19 T h e size and output of blast furnaces increased significantly in the late seventeenth century, while the older furnaces embodied an earlier technology. 20 It was apparently not profitable for an ironmaster to enlarge an existing furnace. Altering the size of a furnace probably involved considerable expense, but raw material limitations were perhaps an overriding consideration. A site with adequate charcoal, ore, and water power for a furnace producing, say, 100 tons of pig iron might be incapable of supporting a furnace with a much larger capacity. INTEGRATION AND INDUSTRY STRUCTURE

Furnaces and forges were separated from each other and from major markets only in a geographical sense. The charcoal iron industry of this period was highly integrated, both vertically and horizontally. The blast furnace was usually part of an integrated enterprise that ran forges and slitting mills as well. All the various processes of ironmaking—smelting iron ore, refining pig iron into bar iron, slitting bars into rods, and marketing the bar and rod iron—were usually carried out by the same enterprise. There was also a considerable degree of integration on the regional level because much of the industry was controlled by several combinations of ironworks. The largest of these, dominated by the Foley family, included ironworks in South Wales, the Forest of Dean, Staffordshire, Cheshire, North Wales, and Worcestershire. T h e Foley partnerships controlled a total of nine furnaces, thirteen forges, and four slitting mills, with a combined output of roughly 5,700 tons of pig iron and 2,100 tons of bar iron in 1704·21 A similar combination dominated the industry in the 19

20 Schubert, History, Appendix v. Ibid., pp. 205-208. For a full discussion of the Foley holdings, see B.L.C. Johnson, "The Charcoal Iron Industry in the Early Eighteenth Century," Geographical Journal, cxvn (1951), pp. 167-177, and "Foley Partnerships,"passim. 21

*5

T H E INDUSTRIAL REVOLUTION IN IRON

South Yorkshire-Derbyshire region. T h e Spencer syndicate, formed in 1702, initially operated seven furnaces, eight forges, and a slitting mill, with a total output of about 3,000 tons of pig iron and 1,000 tons of bar iron. Through marriages and additional partnerships, the Spencer group gained at least partial control over ten furnaces, eighteen forges, and three slitting mills by 1727. 22 The Foley and Spencer syndicates together produced about 9,000 tons of pig iron in the early eighteenth century, perhaps half of the total output of Britain. Another important group of ironworks was the FeIlRawlinson combination, which controlled only two furnaces and four forges in the Lancashire-Cumberland region in 1720, but had ten furnaces and ten forges by 1750. 23 It is quite likely that a large number of small partnerships with two or three furnaces and several forges, such as the Knight family in the West Midlands, controlled most of the rest of the industry. 24 Where formal partnerships did not exist, family interconnections were important. Quakers owned or managed between half and three quarters of the ironworks in operation in the early eighteenth century and most of these ironworks were at least loosely interconnected by a complex series of partnerships and marriages. 25 In addition to this integration at regional level through ownership, there was also a considerable interregional trade in pig iron in the early eighteenth century. This trade 22

A detailed discussion of the Spencer partnerships is given in G. G. Hopkinson, "The Charcoal Iron Industry in the Sheffield Region, 15001775>" Transactions of the Hunter Archeological Society, vm (1961), pp. 122151; Raistrick, "South Yorkshire Iron Industry," pp. 51-86; and Arthur Raistrick and E Allen, "The South Yorkshire Ironmasters, 1690-1750," EHR, ix (1939), pp. 168-185. 2:1 Raistrick, Quakers, pp 95-107. 24 R. L. Downes, "The Stour Partnership, 1726-36: A Note on Landed Capital in the Iron Industry,"EHR, 2nd Series, 111 (1950), pp. go-g6. 25 Raistrick, (Quakers, pp. 89-160 and Brian Awty, "Charcoal Ironmasters of Cheshire and Lancashire, 1600-1785," Transactions of the Historical Society of Lancashire and Cheshire, cix (1957), pp 71-124

16

T H E CHARCOAL IRON INDUSTRY

developed because there were two distinct types of charcoal pig iron. "Tough" pig iron had a low phosphorus content and could be converted into high quality (very malleable) bar iron. The ores of the Forest of Dean and North Lancashire yielded this high quality pig iron. T h e higher phosphorus "cold-short" pig iron was produced from the ores found in the other regions and yielded a bar iron that was brittle when cold. The two types of pig iron were usually mixed in the forge to produce "common" bar iron, the type of bar iron normally used to make nails and hardwares. With a high demand for tough pig iron, the ironmasters of the Forest of Dean found it profitable to specialize in smelting and to ship pig iron to the Birmingham region, which was more specialized in the refining stages of iron production. Johnson has calculated that in 1717, central Shropshire and the Birmingham region had a deficiency of pig iron of about 4,000 tons, i.e., the demand for pig iron by the forges exceeded the regional supply by 4,000 tons. At the same time, the Forest of Dean, North Staffordshire, and Cheshire had a surplus of pig iron of about 3,200 tons. The result of this regional specialization was an extensive interregional trade in pig and bar iron, with "tough" Forest of Dean pigs going to the forges on the Stour River (Worcestershire), while the bar iron produced in these forges was sold in Birmingham and vicinity.26 T h e iron industry was not, however, economically integrated on the national level. The industry was little more than a series of loosely connected regional iron industries serving regional markets. Most ironmasters, with the exception of those in the West Midlands, sold their iron in local markets insulated from competition from outside the region by high transport costs. Competition within some regions was even further limited when a syndicate of ironworks, such as the Spencer group, controlled most of the regional output. 2li For an excellent discussion of the trade patterns, see Johnson, "Charcoal Iron Industry,"passim and "Midlands Iron Industry," pp. 67-74.

17

T H E INDUSTRIAL REVOLUTION IN IRON MARKETS

The two major branches of the iron industry, the smelting and refining sectors, had very distinct markets for their products. Most blast furnaces sold virtually their entire output to forges, where it was converted into bar iron. The exception to this rule were several furnaces in the Weald specializing in cannon, firebacks, andirons, graveslabs, and other cast iron products. 27 Aggregate output estimates support the view that the castings branch was very small in the early eighteenth century. There are estimates of pig and bar iron output for 1717 and 1720. These are discussed in detail in Appendix A. If we assume that about 1.35 tons of pig iron were required to produce a ton of bars, then only about 5% of pig iron production was available for castings. 28 Britain was self-sufficient in pig iron during these years. Pig iron imports were negligible until the late 1720s, although British merchants imported an average of over 1,000 tons of "bushel and cast iron" in 1715-1719. 29 Bar iron imports, however, probably exceeded domestic output in the early eighteenth century. Imports averaged over 16,000 tons per annum in 1700-1719 and then climbed to an annual average of nearly 20,000 tons in the 1720s.30 Swedish ironmasters were able to capture a large share of the British market even though they paid an export duty of £3.45 and an import duty of £2.05 per ton of bar iron, plus 27

Straker, Wealden Iron, pp. 155-177. Hulme, "Statistical History," pp. 14-15 and 21-22. The industry was said to produce 18,540 tons of pig iron and 13,300 tons of bar iron in 1717, while in 1720 it produced 17,350 tons of pigs and 12,060 tons of bars. The assumption of 1.35 tons of pig iron per ton of bars is based on observations from a sample of fourteen forges operating between 1700 and 1750. Pig iron consumption at these forges ranged from 1.26 to 1.49 tons per ton of bar iron produced. 29 Elizabeth B. Schumpeter, English Overseas Trade Statistics, 169J-1808 (Oxford: Oxford University Press, i960), pp. 52-53. 30 K. G. Hildebrand, "Foreign Markets for Swedish Iron in the Eighteenth Century," SEHR, Vi (1958), p. 10. 28

18

T H E CHARCOAL IRON INDUSTRY

transportation charges, at a time when British bar iron was selling for £15-20 per ton. 31 Swedish bar iron competed with the local product over a wide range of uses in most parts of Britain. In the eyes of many contemporaries, Swedish iron was superior to English bar iron because it was harder and thus more durable. When the durability of a product, rather than its cost (English bar iron was usually cheaper), was a primary consideration, British consumers preferred Swedish bar iron. English steel makers, for example, used Swedish Oregrund bar iron exclusively.32 There are no reliable data on the size of the English steel industry for this period, but it is unlikely that it used more than 2,000 tons of Swedish iron annually in the early part of the century. 33 Swedish iron was also preferred in the manufacture of naval hardware, edge tools, cutlery, and agricultural implements such as scythes and spades. 34 The softer (and more easily worked) English iron was superior to Swedish iron in many uses, such as in the manufacture of nails and inexpensive hardware. 3 5 The nail industry was the most important iron finishing trade in the early eighteenth century and was the largest single consumer of English bar iron. According to one estimate, roughly 9,000 tons of bar iron were consumed in the Birmingham region in the late 1730s, with most of it used in the nail trade. 3 8 31

Hulme, "Statistical History," p. 18, and Harry Scnvenor, A Comprehensive Hutory of the Iron Trade (London: Longmans, 1841), p. 333. 32 Hildebrand, "Foreign Markets," pp. 13-14; R- A. Pelham, "The West Midland Iron Industry and the American Market in the Eighteenth Century," University of Birmingham Historical Journal, 11 (1950), pp. 151-152; and T. S. Ashton, Iron and Steel in the Industrial Revolution (Manchester: Manchester University Press, 1924), p. 54. 33 Estimates of Swedish iron used in steelmaking, presented to a Parliamentary Committee in 1738, ranged from 900 tons to 1,500 tons. See Journal of the House of Commons, xxn, pp 851, 853. 34 Hildebrand, "Foreign Markets," pp. 21-24. 35 3e Ibid. Ashton, Iron and Steel, p. 19.

19

T H E INDUSTRIAL REVOLUTION IN IRON

T h e existence of somewhat specialized markets for domestic and foreign bar iron does not imply that direct competition between the two was minimal. T h e Crowley enterprises, one of the largest manufacturers of hardware in the early eighteenth century, used large quantities of both English and Swedish iron. They were probably the largest importer of Swedish bar iron, reportedly consuming about 1,300 tons annually around 1710. 37 Flinn observed that "for many of the purposes of the iron manufacturer it was immaterial whether English or Swedish bar iron was used, the determining factor being- normally the price of the iron delivered at the works." 38 AGGREGATE OUTPUT

There are no reliable output statistics for the iron industry before the late eighteenth century. It is possible, however, to derive crude output estimates for the early part of the century from contemporary lists of ironworks. A detailed examination of these lists and other relevant information is given in Appendix A. Utilizing these materials, I have estimated that during the years 1716-1720, seventy blast furnaces produced an average of about 23,000 tons of pig iron, while 150 forges had a combined output of about 16,000 tons of bar iron. Many historians have argued that the output of the charcoal iron industry declined from the end of the Civil War (1660) until the widespread adoption of coke-smelting in the 1760s. 39 They cite a growing shortage of charcoal as 37

M. W. Flinn, Men of Iron · The Crowleys in the Early Iron Industry (Edinburgh: Edinburgh University Press, 1962), p. 107. 38 Ibid. 39 ". . . it is probably safe to conclude that the national output about the year 1720 did not exceed 20,000 tons of bar iron; and that between this time and the middle of the century it diminished rather than increased." (Ashton, Iron and Steel, p. 13.) "The general history of the English iron industry in the eighteenth century is well known and it is closely connected with the contemporary history of coal. In its first half it was a period of decline." (W.H.B. Court, The Rise of the Midland Industrie!,, 1600-1835 [Oxford: Oxford University Press, 1938], p. 170.) "Although reliable aggregate statistics are fragmentary, it appears that the decline in 20

T H E CHARCOAL IRON INDUSTRY

the cause of this decline. 40 This general view has recently been challenged by Flinn, who argued that since at least forty-three new furnaces were erected in 1660-1760, pig iron output may have increased by as much as 10,000 tons during this period. 41 Since Flinn's arguments have not been universally accepted, the question of output movements before 1720 warrants further consideration. Aggregate output movements during the years 1720-1750 will be analyzed in Chapter 3. Much of the confusion that has developed about output movements originates from an absurd output estimate for the early seventeenth century. In 1612, Simon Sturtevant, in his Treatise of Metallica, stated that there were some 800 "mills" for making iron in operation in Britain at that time. Dud Dudley, in his Metallum Martis (1665), assumed that 300 of these "mills" were blast furnaces with an average annual output of 600 tons, giving an output estimate of 180,000 tons for the early seventeenth century. 42 The estimates of the number of furnaces in operation and their outputs are both absurd. There were no more than ninety furnaces in operation around 1610, and even if these had an average output of 300 tons (the 1717 average), total output would have been only 27,000 tons. 43 There is some evidence of declining output during the period roughly from 1660 to 1720. There were 73 blast furnaces in operation in 1653, while only 61 appear on the 1717 list.44 It is possible, however, that there was an increase in output per furnace sufficiently large to prevent total output from falling. Virtually all the furnaces shut down during this period were the older furnaces of the the production of iron, which had begun long before, continued during this period (1720-1750)." (Howard G. Roepke, Movements ofthe British Iron and Steel Industry, 1J20-1951 [Urbana: University of Illinois Press, 1951], p. 10.) "The hundred years after the Civil War appear as a period of steady, though slow, decline." (Schubert, History, p. 335.) 40 41 Ashton./rw? and Steel, p. 15 Flinn, "Growth," pp. 146-148. 42 R. A. Mott, "Abraham Darby (I and II) and the Coal-Iron Industry," TNS, xxxi (1957-58 and 1958-59), p. 51. 43 44 Schubert, History, p. 175. Ibid 21

T H E INDUSTRIAL REVOLUTION IN IRON

Weald, most of them producing well below the national average. 45 The new furnaces erected after 1653 were generally larger than earlier furnaces and would tend to raise the average output nationwide. According to the 1717 list of ironworks, furnaces constructed after 1653 had an average output of nearly 400 tons, while those built earlier produced only 290 tons on average. 46 It seems more likely that output either stagnated or grew slightly over the period 1660-1720. The preceding discussion suggests several generalizations about the charcoal iron industry of the early eighteenth century. The basic processes of ironmaking were fairly simple and the technology used in the industry was certainly not sophisticated by modern standards. The nature of the processes, however, when combined with the existing technology of transportation and power, forced ironmasters to build their furnaces, and to a lesser extent their forges, close to supplies of charcoal, ore, and water power. Resource limitations helped produce a highly dispersed industry. While individual ironworks were scattered and isolated, the iron industry was highly integrated, both horizontally and vertically. Integration was achieved at the regional level because the industry was dominated by integrated enterprises and combinations of ironworks. Interregional trade in iron further encouraged industry integration on a national level. Britain was self-sufficient in pig iron in the early eighteenth century, but was heavily dependent upon foreign bar iron producers. Imported bar iron, particularly from Sweden, effectively competed with English iron in most uses. Although imports of foreign bar iron exceeded British output and were increasing substantially, domestic bar iron output had probably not changed significantly since the early decades of the previous century. 45

Ibid. Hulme, "Statistical History," pp. 21-22, and Schubert, History, Appendix v. 46

22

TWO

THE CHOICE OF FUEL BEFORE 1750 T H E Industrial Revolution in the iron industry was essentially a series of innovations in the use of fuel in the major ironmaking processes. At the beginning of the eighteenth century, charcoal was used exclusively in all the primary production processes, but coal had become the industry's chief source of heat by the early 1800s. T h e first major technological advance was the use of coal in the blast furnace. The peculiar and often paradoxical history of this innovation before mid-century is the subject of this chapter. At least one British ironmaster successfully used coal (in the form of coke) in the smelting process around 1709 but others did not embrace the new technique until the 1750s. This chapter first examines and rejects the standard explanations of this technological lag. Finally, this chapter proposes a new interpretation of the neglect of coke, based on cost information from contemporary charcoal and coke blast furnaces. ABRAHAM DARBY AND THE HISTORIANS

From the sixteenth century, British ironmasters unsuccessfully attempted to utilize coal, coke, and peat in the smelting process. 1 It was not until the early eighteenth century 1 For a discussion of the early experimenters, see Ashton, Iron and Steel, pp. 24-25; M. W. Flinn, "William Wood and the Coke-Smelting Process," TNS, xxxiv (1961-62), pp. 55-71; G. R. Morton and M Wanklyn, "Dud Dudley, A Reappraisal," Journal of the West Midlands Regional Studies, I (1967), pp. 48^65, G. R Morton, "The Early Coke Era," BHMG, No. 6 (1966), pp. 49-60, G. R. Morton, "The Uses of Peat in the Reduction of Iron From Its Ore," Iron and Steel, xxxvm (1965), pp. 421-424; R. A. Mott, "Dud Dudley and the Early Cast Iron Industry," TNS, xv (1934-35), pp. 17-37; aT,d Schubert, History, pp. 225-229.

23

THE INDUSTRIAL REVOLUTION IN IRON

that an obscure Quaker ironmaster, Abraham Darby, developed a coke-smelting process, an innovation that eventually revolutionized the British iron industry. Abraham Darby was operating a brass and iron foundry in Bristol when he took over the lease of an abandoned blast furnace at Coalbrookdale, Shropshire in 1708. 2 He began smelting pig iron there the following year, probably using coke as his fuel. Darby's place in history as the innovator of coke-smelting and the exact date of his innovation are still disputed, but there is general agreement that the Darbys used coke exclusively at Coalbrookdale at least as early as 1718. 3 Other ironmasters, however, did not adopt the new technique until the early 1750s and instead increased their charcoal-smelting furnaces during the period 1720-1755. 4 The only ironworks known to have used coke on a regular basis before 1750 were the two furnaces at Coalbrookdale and one at Willey (after 1733), all operated by the Darbys. 5 The standard interpretation of the iron industry's failure to use coke-smelting before mid-century was first advanced by T. S. Ashton in his classic history of the iron industry 6 and has gone largely unchallenged by other scholars. 7 According to Ashton, a variety of factors com2

Ashton, Iron and Steel, p. 26. W. H. Chaloner, "Further Light on the Invention of the Process of Smelting Iron Ore With Coke," EHR, 2nd Series, 11 (1949), pp. 185-187; M. W. Flinn, "Abraham Darby and the Coke-Smelting Process," Economica, New Series, xxvi (1959), pp 54-59; Flinn, "William Wood," pp. 55-71; Mott, "Dud Dudley," pp. 17-37; Morton and Wanklyn, "Dud Dudley," pp. 48-65; and R. A. Mott, "The Earliest Use of Coke for Iron Making," Gas World, cvi. (1957), Coking Section, pp. 7-18. 4 About twenty-five charcoal furnaces were closed down during these years, but total pig iron output increased from about 23,000 tons in 1716-20 to about 28,000 tons at mid-century. These output estimates are discussed in detail in Appendix A. 5 Flinn, "William Wood," pp. 66-67. 6 Ashton, Iron and Steel, pp. 24-38. 7 Alan Birch, Economic History of the British Iron and Steel Industry, 17841879 (London: Cass, 1967), pp. 28-29; Flinn, "William Wood," p. 67; W.K. V. Gale, The British Iron and Steel Industry: A Technical History (Newton Abbot: David and Charles, 1967), p. 33; Arthur Raistrick.A Dynasty of Iron Founders: The Darbys and Coalbrookdale (London: Longmans, 1953), p. 68; and Schubert, History, p. 331. 3

24

THE CHOICE OF FUEL BEFORE 1750 bined to retard the adoption of the new technique. Abraham Darby chose to keep his discovery secret, so other ironmasters did not even know about coke-smelting until around mid-century. Other ironmasters could not have duplicated Darby's success even if they had known about the process because they did not have access to the unique "clod" coal found near Coalbrookdale. 8 Finally, Ashton argued that the inferior quality of coke pig iron, which prevented its use in the forge until mid-century, further delayed the adoption of the new process. 9 Ashton's "industrial secret" argument is not very convincing. While there is little evidence that Darby's discovery was public knowledge, it is likely that many other ironmasters knew about it. Darby visited a fellow Quaker ironmaster, William Rawlinson, in 1712 and wrote a letter (July 12, 1712) in which he offered to share his discovery with Rawlinson. 10 T h e Darbys operated the Coalbrookdale furnaces through a partnership and their partners traveled a great deal and probably informed some of their business associates that Coalbrookdale was smelting with coke. During the 1720s and 1730s, the Darbys held interests in at least four other furnaces with other partners, adding to the likelihood that other ironmasters knew they were using coke. 11 It is also likely that some of the Coalbrookdale workmen moved to other regions and perhaps even worked in other ironworks. They too could have spread the knowledge about coke-smelting to others. Ashton rightly pointed out the importance of the quality of coal used by the Darbys. Even when coked, coal with a high sulphur content contaminated the pig iron, which in turn yielded bar iron that was "cold-short." The easily accessible "clod" coal found near Coalbrookdale had a relatively low sulphur content (about 0.50%), while the coals mined in the other regions had a much higher sulphur content of about 1% to 3%. The primitive mining tech8

9 Ashton,7ron andSteel, pp 33-34Ibid., pp. 35-36. Chaloner, "Further Light," pp. 185-187 and Flinn, "Abraham Darby," p. 57. 11 Raistrick,Dynasty, pp. 30-82. 10

25

THE INDUSTRIAL REVOLUTION IN IRON

niques of the early eighteenth century may have prevented ironmasters from using most of Britain's low-sulphur coal because it was located too far below the surface. 12 The "coal quality hypothesis" does not, however, stand up under closer scrutiny. Ironmasters successfully utilized the coals of other regions after 1750 and there is no evidence of major improvements in mining technology around mid-century. 13 This hypothesis also fails to explain the striking failure of ironmasters to utilize the massive deposits of easily accessible low-sulphur (under 1%) coal of South Staffordshire. 14 The most condemning evidence is the fact that other Shropshire ironmasters had access to the same kind of coal that Darby used, but they also did not use coke until the early 1750s. While the low-sulphur coal found in Shropshire certainly accounted for part of Darby's success, the quality of coal found in the rest of Britain does not explain the ironmasters' failure to adopt cokesmelting before mid-century. Finally, Ashton argued that ironmasters shunned the new process because coke pig iron was "cold-short" and thus unsuitable for use in the forge. 15 The forgemasters of Worcestershire, for example, first used coke pig iron after 1750 because "by this time its quality was better and more uniform than in the early days." 16 This "pig iron quality hypothesis" is the standard explanation of the industry's failure to use coke before mid-century. 17 12

Mott, "Abraham Darby," p. 63. T. S. Ashton and Joseph Sykes, The Coal Industry of the Eighteenth Century (Manchester: Manchester University Press, 1929,), pp. 10-12. 14 Morton, "Early Coke Era," p. 51. 15 Ashton, Iron and Steel, p. 35. 16 Ibid., p. 36 17 "There can be little doubt that the technical limitations of the cokesmelting process of Abraham Darby I were severe, and widely known among practicing ironmasters. The process would, apparently, make little iron beyond what was suited to the specialized need of the potfounder." (Flinn, "William Wood," p. 67.) Alan Birch repeated Flinn's statement almost verbatim in his Economic History, pp. 28-29: "Moreover, the fact that Coalbrookdale iron was used only for foundry purposes would make it of little interest to the majority of ironmasters, whose major concern was 13

26

TH E CHOIC E OF FUE L BEFOR E 175Ο Thi s hypothesi s implie s tha t forgemaster s could not, in a technica l sense, conver t coke-smelte d pig iro n to usable bar iron . Ther e is n o evidenc e tha t thi s was th e case. T h e Dar bys mixed coke pig iro n with charcoa l pigs to produc e marketabl e bar iro n at th e Middl e Forge , Coalbrookdal e in 1722 an d again in 1726-1728 . Cok e pig iro n was used exclusively over th e entir e perio d 1729-1738 , althoug h Mot t argue s tha t th e bar iro n produce d from it was "of inferio r qualit y to tha t commonl y m a d e . " 1 8 It was technically possible to conver t coke pig iro n int o bar iro n by th e early 1730s at th e latest . T h e profitabilit y of doin g so will be discussed late r in thi s chapter . Th e qualit y hypothesi s is laced with errors , bot h techni cal an d economic , an d in man y respect s begs th e question . Pig iro n yielded "cold-short " bar iro n if it was contami nate d with eithe r sulphu r o r phosphorus . Mos t British ore s containe d phosphoru s an d yielded "cold-short " pig iro n regardlessof the fuel used in smelting. "Cold-short " charcoa l pig iro n was normall y mixed with "tough " (non phosphoric ) pig iro n in th e forge to produc e "common " bar iron. 1 9 T h e coke pigs used by th e Darby s to produc e bar iro n over th e perio d 1729-173 8 were n o mor e "coldshort " tha n the y would have been if the y ha d been smelte d with charcoal. 2 0 T h e r e is n o evidenc e tha t coke pig iro n was inferio r to charcoa l pig iro n becaus e it ha d a highe r con ten t of phosphoru s o r sulphur . Ther e was, however , a rea l qualit y differenc e betwee n th e two type s of pig iron . Coke-smelte d pig iro n ha d a highe r silicon conten t tha n charcoal-smelte d pig iro n bewith wrough t iron. " (Gale , British Iron and Steel Industry, p. 33.) " T h e r e was considerabl e difficulty experience d when attempt s were mad e (befor e 1748) to refin e pig iro n mad e by coke smelting , an d to conver t it to a malleable bar iro n which coul d be sold for nailers ' rods. " (Raistrick,i>yrca.sfy , p. 68.) And , " I n thi s respect , productio n of pig iro n with coke was a failure an d remaine d so for man y years. It was to o brittl e for conversio n int o bar iron. " (Schubert , History, p. 331.) 18 Mott , "Abraha m Darby, " p p 81-82 . 19 Johnson , "Charcoa l Iro n Industry, " p. 170. 20 Mott , "Abraha m Darby, " pp . 80-82 .

27

T H E INDUSTRIAL REVOLUTION IN IRON

cause of the higher temperatures achieved in the coke blast furnace. This higher silicon content made it more costly to convert coke pig iron into bar iron in the forge, but did not lower the quality of the bar iron produced. 2 1 T h e inferior quality of coke pigs stemmed from the nature of the two smelting processes and was relatively constant. This quality difference is evidenced by the price differential that existed between charcoal and coke pig iron in the second half of the eighteenth century (see Figure 2.1). This price (and quality) difference did not diminish after 1750 and there is no evidence that it had decreased before mid-century. The difference in quality between the two types of pig iron was relatively constant and historians have erred in treating this constant as a crucial variable that explains the lag in the adoption of coke-smelting before mid-century. FIGURE 2.1:

1750 Series 1: Series 2· Series 3:

PIG IRON PRICES, 1750-1790

1760

1770

Backborrow furnace charcoal pig iron Bringwood furnace charcoal pig iron Horsehay furnace coke pig iron

1780

Source

1790

Lewis, "Two Partnerships", p. 180

Differences in the quality of coke and charcoal pig iron were in fact of little consequence to either the consumer or producer of pig iron. If the price differential between the two types of pig iron reflected their real differences in quality, the consumer would be indifferent between coke and 21 G. R. Morton and Norman Mutton, "The Transition to Cort's Puddling Process,"y/5/, ccv (1967), p. 722.

28

T H E C H O I C E O F FUE L BEFOR E 1 7 5 Ο

charcoa l pig iron . If th e pric e differentia l did no t accu ratel y reflect th e real qualit y difference , the n forgemaster s would purchas e coke pig iro n onl y if its pric e was sufficientl y low to compensat e for th e increase d difficulty of convertin g it to bar iron . Cok e pig iro n qualit y per se was also irrelevan t to th e prospectiv e entran t int o th e coke smeltin g sector . An ironmaste r coul d adop t coke-smeltin g if th e average tota l costs of producin g coke pig iro n were less tha n its selling price , regardles s of ho w low tha t pric e migh t have been . Th e standar d interpretatio n of th e iro n industry' s failur e to adop t coke-smeltin g before th e early 1750s is no t very convincing . Ashto n an d othe r historian s of th e iro n industr y have no t compare d th e costs of productio n associate d with th e two techniques , bu t have instea d assumed tha t coke-smeltin g was cheape r an d therefor e tha t othe r factor s mus t explain thi s technologica l lag. However , a thoroug h examinatio n of th e costs of producin g pig iro n with charcoa l an d coke reveals that , before mid-century , cost consideration s were sufficient to discourag e charcoa l ironmaster s from adoptin g coke . BLAST FURNAC E COSTS : SOM E CALCULATION S

Ther e ar e two question s tha t mus t be pose d abou t th e adoptio n of coke-smelting . First , why did ironmaster s con tinu e to use existin g charcoa l furnace s rathe r tha n build ne w one s to utiliz e coke ? Secondly , why did ironmaster s erec t twenty-tw o new charcoa l furnaces , bu t no t a single coke furnace , over th e perio d 1720-1755 ? I n a world with n o coke-smelting , th e individua l iron maste r would continu e to operat e his furnac e as lon g as his revenue s covere d his variable costs. H e faces a mor e com plex decisio n when h e ha s to conside r mor e tha n on e productio n process . T h e ironmaste r alread y operatin g a charcoa l furnac e will adop t coke onl y if th e total costs of producin g coke pig iron , includin g capita l costs, ar e lower (pe r uni t of output ) tha n th e variable costs of th e existin g furnace . T h e entrepreneu r who plan s to erec t a new fur29

THE INDUSTRIAL REVOLUTION IN IRON

nace simply compares the total costs of producing with charcoal and with coke. The ironmaster will not build either type of furnace unless expected average revenues exceed expected average total costs. In spite of the limitations imposed by eighteenth-century accounting practices, it is relatively easy to derive reliable estimates of the operating costs of charcoal blast furnaces from the surviving business accounts. 22 Calculating total costs, however, is extremely difficult because of the way the accounts treat capital costs. There are three components of capital costs that need to be considered—depreciation, repairs, and interest. Depreciation of fixed capital was negligible because annual repairs made on the furnace kept up its resale value. The valuation of the Backbarrow furnace (erected in 1712), for example, increased from £500 in 1715 to £600 in 1736. 23 Charcoal ironmasters usually replaced the furnace lining and the leather bellows during the annual summer shutdown, while the outside shell of the blast furnace had a life expectancy of at least a century. Repairs on waterwheels, sluices, dams, etc., were also commonly made during the summer shut-down. Most of the furnace accounts treated repairs as operating expenses, and often the distinction between production wages and repairs wages was muddled. Repairs will be treated as part of operating costs in this study in order to make cost comparisons between furnaces more meaningful and because they were generally an insignificant part of the total operating costs. The Bank furnace, for example, produced 360 tons of pig iron in 1721 with operating costs of £2054. Of this total, £1459 was spent on charcoal, £313 on iron ore, and £282 on all other expenses. Half of the £282 went to rent (£40), the clerk's salary (£40), and furnace labor (£61). Replacement of the hearth and bellows, plus 22 See Appendix B for a detailed analysis of the quality of these accounts and the cost estimates derived from them. 23 Backbarrow MSS, Lancashire Record Office and Barrow-in-Furness Public Library.

30

THE CHOICE OF FUEL BEFORE I75O general repairs, cost £63 or roughly 3% of operating costs.24 Including repairs in operating costs will not seriously distort the cost figures and makes all the furnace accounts comparable. It is impossible to make precise estimates of the appropriate principal and interest rate needed to calculate capital costs. Capital investment in a single blast furnace can be ascertained only indirectly, from the records of the iron partnerships, summarized in Table 2.1 below. TABLE 2.1 CAPITAL INVESTED IN SELECT PARTNERSHIPS IN THE CHARCOAL IRON INDUSTRY IRONWORKS CONTROLLED

Partnership Principal Foley Works Staffordshire (Foley) Cheshire (Foley) Backbarrow Company Nottingham Company Knight Family Spencer Group

Year

Capital

Furnaces

Forges

1710 £27,542 11,927 1710 13,500 1707 7,600 !715 6,780 1717 7,000 1726 16,600 '735

Sources: Johnson, "Foley Partnerships," pp. 326-330; Backbarrow MSS, Barrow-in-Furness Public Library; Hopkinson, "Charcoal Iron Industry," p. 135; Downes, "Stour Partnership," p. 96; and the Spencer-Stanhope MSS, Sheffield City Library.

T h e capital figures given in Table 2.1 include the total value of all buildings, machinery, tools, and inventories of both raw materials and finished goods. T h e accounts do not distinguish between investment in furnaces and forges, but the data suggest an average investment of perhaps £4,000 per furnace and £1,500 per forge. Finding the appropriate interest rate to apply to this average investment figure is equally difficult. T h e yield on 24 Spencer-Stanhope MSS, Sheffield City Library, Bank Furnace Accounts. 1

3

T H E INDUSTRIAL REVOLUTION IN IRON

consols, the most obvious alternative investment, fluctuated between 3% and 5% over the period 1725-1760. 25 There is some evidence that established ironworks were considered as safe an investment as consols. The Knight Family partnership was able to borrow at between 4% and 5% in 1728-1734. 26 These loans were short-term and since working capital made up a large part of the total investment needed to operate a furnace, perhaps an interest rate of 5% is appropriate. Applying this interest rate to an estimated investment of £4,000 and an average output of 300 tons produces a capital cost estimate of £0.66 per ton of pig iron. Most furnaces probably had capital costs of less than £1 per ton in the early eighteenth century. Variable costs, which ran between £3.50 and £6 per ton during these years, dominated the overall cost structure. T H E NEGLECT OF COKE: A REINTERPRETATION

A comparison of the costs of producing pig iron with charcoal and coke reveals that charcoal-smelting was the less costly technique before mid-century. I have calculated variable costs for eighteen charcoal furnaces in operation during the period 1700-1720. This is a substantial sample, since there were only about seventy furnaces in operation at the time. It is also a fairly representative sample of Britain's blast furnaces in terms of size, age, and location. The only major ironmaking district not included in the sample is the Weald, where costs were probably higher than the national average. 27 Average variable costs of the furnaces in my sample ranged from £3.40 per ton at Rockley Furnace in 17011706 to £5.92 per ton at St. Weonard's Furnace in 17101712. Two-thirds of the furnaces had variable costs of under £5 per ton and only three furnaces, all in the Forest 25 L. S Pressnell, editor, Studies in the Industrial Revolution (London: Athlone Press, 1960), pp. 211-212 26 Downes, "Stour Partnership," p. 93 27 T h e raw data are available from the author

32

TH E CHOIC E OF FUE L BEFOR E 175Ο of Dean , ha d costs of mor e tha n £5.50 . Mott' s painstakin g analysis of th e Coalbrookdal e account s enable s us to com par e th e costs of th e two techniques . Durin g th e first year of operatio n (Decembe r 1709 to Januar y 1711), th e Coal brookdal e furnace s ha d operatin g costs of abou t £ 7 pe r to n of pig iron , significantl y highe r tha n th e costs of contem porar y charcoa l furnaces. 2 8 O n th e basis of variable costs alone , ther e was n o incentiv e for an ironmaste r operatin g a charcoa l furnac e befor e 1720 to switch over to coke . T h e r e was also n o incentiv e for a prospectiv e investo r to build a ne w coke furnac e as oppose d to on e usin g charcoal . H e would d o so onl y if th e capita l costs of producin g with coke were sufficiently lower tha n for charcoal , to compen sate for th e highe r operatin g costs of th e ne w technique . Ou r crud e estimate s indicat e tha t ther e was n o wide differentia l in th e capita l costs of th e two techniques . T h e Coal brookdal e Company , valued at £4,20 0 in 1718, produce d 392 ton s of pig iro n th e following year. 2 9 If we assum e an interes t rat e of 5%, Coalbrookdal e capita l costs were abou t £0.5 0 pe r to n of pig iron , onl y slightly lower tha n ou r estimat e of capita l costs for charcoa l furnaces . Give n th e tota l costs of th e two techniques , it is no t surprisin g tha t ther e was n o massive investmen t in coke-smeltin g befor e 1720. Charcoal-smeltin g retaine d its cost advantag e throug h th e 1720s an d 1730s. Cos t dat a for charcoa l furnace s for 1710-175 0 ar e summarize d in Tabl e 2.2. Som e crud e generalization s can be mad e abou t cost movement s after 1720. T h e furnace s tha t ha d bee n high-cos t producer s befor e 1720 remaine d so in 1720-1750 , bu t thei r costs rose little o r even fell slightly durin g thi s period . T h e fuel costs of th e Fores t of Dea n furnace s were lower by th e late 1730s o r early 1740s tha n the y ha d been in 1710-1712 . T h e thre e relatively new furnace s in thi s sampl e (Backbarrow , Inver garry, an d Leighton ) were consistentl y low-cos t producers , 28 Mott , "Abraha m Darby," passim; "Coalbrookdale : 1709," pp . 33-42 ; an d "Earliest Use of Coke, " pp . 7-18 . Mot t gives cost estimate s for two distinc t blasts tha t too k plac e in 1709. I have take n an average of th e two. 29 Raistrick,Z))'na.s/)' , p. 45 an d Mott , "Abraha m Darby, " p. 69.

33

THE INDUSTRIAL REVOLUTION IN IRON TABLE 2.2 AVERAGE VARIABLE COSTS OF CHARCOAL BLAST FURNACES, 1710-1750, BY DECADES (IN £ PER TON OF PIG IRON )

Furnace

/7105

7720s

77305

1740s

Backbarrow Bank Barnby Bishopswood Chappell Charlcott Elmbridge Gun's Mill Halesowen Heathfield Invergarry Leighton Red brook St. Weonard's

£4-54 4.08

£4.40 5-67

£4.24 4.16 4.40

£4-57

5-34 5-56

5.01 5.22

6.44

5-63 7.87

—

4-97 4.06

—

5-5« 591

— — —

— —

6.17

— — —

7-3 1

—

4.05 5-25 5-92

4.70

— — —

—

— —

— — — — —

— — —

— —

—

4.67

— —

Sources: Spencer-Stanhope MSS, Sheffield City Library for Bank and Chappell furnaces; Backbarrow MSS, Lancashire Record Office for Backbarrow and Leighton furnaces; Foley MSS, Hereford Record Office and B.L.C. Johnson, "The Charcoal Iron Industry in the Midlands, 1620-1720," M.A. thesis, University of Birmingham (1950), xxxv-xxxviii for Bishopswood, Elmbridge, Gun's Mill, Halesowen, Redbrook, and St. Weonard's furnaces; Spencer-Stanhope MSS, Sheffield City Library for Barnby furnace; Norman Mutton, "Charlcott Furnace, 1733-1779," BHMG, No. 6 (January 1966), 18-48 for Charlcott furnace; Margaret Richards, "The Wealdon Iron Industry," Ph.D. thesis, University of London (1924), 128 for Heathfield furnace; and Henry Hamilton, Economic History of Scotland in the Eighteenth Century (Oxford, 1963), 190 for Invergarry furnace.

with Backbarrow achieving a large cost reduction. The Yorkshire furnaces, Bank and Chappell, had been low-cost producers before 1720, but experienced rapid cost increases in the 1720s. Table 2.3 summarizes Coalbrookdale costs for the period 1709-1737. Since there is no information of "other costs" after 1709, I have assumed that they fell to about £2 per ton, so the estimates of total costs after 1709 are probably too low. For the 1720s, the only charcoal furnace in our

34

THE CHOICE OF FUEL BEFORE I75O TABLE 2.3 CoALBROOKDALE VARIABLE COSTS, 1 7 0 9 - 1 7 3 7 (IN £ PER T O N OF PIG IRON)

1709 1719-26 1729-32 1734-37

Other Costs

Total Variable Costs

£0.91

£3.27

!•73 1-43 1.03

C.2.OO

£6.98 c.6.50 c.7.00 c.5.50

Coal Costs

Ore Costs

£2.08 2.84 3-59 2.64

C.2.OO C.2.OO

Source: Mott, "Abiaham Darby," pp. 68-74. Dr. Mott also kindly supplied me with additional information on coal and ore prices. sample with higher operating costs than Coalbrookdale was Halesowen. Most of the charcoal furnaces had significantly lower operating costs, despite the increase they had experienced in the 1720s. Charcoal-smelting remained the less costly technique through the 1730s. T h e Darbys reduced their operating costs to £5.50 a ton by the mid-1730s, but charcoal pig iron costs also fell from the high levels of the 1720s. Several of the furnaces in our sample (Backbarrow, Bank, and Barnby) retained a clear cost advantage over coke, while Chappell and Charlcott furnaces had approximately the same costs as Coalbrookdale. Only Halesowen furnace had significantly higher operating costs. Operating costs for coke and charcoal furnaces may have been approximately equal by the late 1730s. T h e total costs of the new technique, however, remained well above the variable costs of charcoal-smelting and probably exceeded the total costs of the older technique as well. T h e capital costs associated with coke-smelting had increased sharply since the 1710s, and there is no evidence of a similar increase for charcoal furnaces. T h e capital valuation of the Coalbrookdale Company jumped from £4,200 in 1718 to £16,000 in 1737, while pig iron output increased from 400 tons to 670 tons over the same period. 30 The capital estimate for 1737 should be ad30

Ibid.

35

THE INDUSTRIAL REVOLUTION IN IRON justed downward by perhaps as much as £1,000 to eliminate the investment in the small forge (22 tons average output) operated by the Company. If the appropriate interest rate was 5%, as assumed earlier, then capital costs per ton of pig iron were about £1.10 in 1737, more than double our estimate for 1718. Estimating the capital costs of charcoal furnaces is complicated by the inclusion of forge investment in the capital estimates. The Stour partnership of the Knight family, for example, was valued at £21,043 in 1735, when it produced 650 tons of pig iron from one furnace. The partnership also owned four large forges producing an average of about 300 tons of bar iron each. 31 If each forge required an investment of £3,000, which is probably an underestimate, the investment in smelting is reduced to £9,000, yielding capital costs of about £0.70 per ton, well below the capital costs at Coalbrookdale. T h e same procedure can also be used for the Bringwood partnership of the Knight family, which was valued at £13,691 in 1736, when it controlled two furnaces with a total output of 795 tons and a single forge producing about 300 tons of bar iron. 32 If we assume that the investment in the furnaces was about £11,000, we again estimate capital costs of about £0.70 per ton of pig iron. The lower capital costs associated with charcoal are even better illustrated by the experience of the Backbarrow Company, which operated two furnaces and three forges when it was valued at £16,500 in 1740. 33 Since two of the three forges produced only about 40 tons each, 34 the total investment in the forges was probably only about £2,500, reducing the capital used in smelting to about £14,000. 31 Knight MSS, Kidderminster Public Library, Stour Partnership Accounts. 32 Ibid., Bringwood Partnership Accounts. 33 Backbarrow MSS, Lancashire Record Office, Account Book, 17401742. 34 Fell, Iron Industry of Furness, p. 252.

36

THE CHOICE OF FUEL BEFORE 175Ο Th e two furnace s (Backbarro w an d Leighton ) produce d a combine d average of abou t 1,500 ton s in th e early 1740s, 35 so capita l costs were unde r £0.5 0 pe r ton , less tha n hal f th e level achieve d at Coalbrookdale . Th e ironmasters ' reluctanc e to use coke before 1740 ha s been explaine d in term s of th e relative costs of productio n of th e two techniques . We have compare d th e productio n costs of variou s charcoa l furnace s with th e costs of produc in g coke pig iro n at Coalbrookdale . Thi s compariso n is no t entirel y adequat e becaus e it fails to conside r th e possible impac t of regiona l difference s in facto r prices . Perhap s ironmaster s in othe r part s of Britai n coul d have produce d coke pig iro n at a lower cost tha n th e Darby s by utilizin g cheape r raw materials . Inpu t price s from ironwork s in othe r region s suggest tha t thi s was no t th e case. At th e Coalbrookdal e furnaces , coal cost £0.2 3 pe r to n an d iro n or e £0.3 1 pe r to n durin g th e years 1734-1737 · Fo r a sampl e of nin e furnace s an d seven forges in operatio n in th e 1730s, coa l costs range d from £0.2 4 to £0.4 3 pe r ton , while or e costs varied from slightly below tha t at Coalbrookdal e to £1.4 1 pe r to n at In vergarry furnac e in Scotland. 3 6 Sinc e ironmaster s in othe r region s generall y faced highe r inpu t price s tha n th e Dar bys, thei r costs of producin g coke pig iron probabl y would have been highe r tha n at Coalbrookdale . The y coul d have equalle d or surpasse d th e Darbys ' cost performanc e onl y if the y coul d have achieve d substantiall y lower consumptio n of th e two majo r raw materials . T h e cost advantag e tha t charcoa l hel d over coke befor e 1740 is probabl y understated by my use of costs from th e Coalbrookdal e furnaces . We canno t compar e th e costs of th e two technique s dur in g th e 1740s becaus e ther e is n o evidenc e on costs at Coal 35 Backbarro w MSS , Lancashir e Recor d Office, Accoun t Book , 17401742. 36 Dr . R. A. Mot t kind h supplie d m e with th e Coalbrookdal e cost information . Th e dat a from th e othe r ironwork s ar e available from th e author .

37

THE INDUSTRIAL REVOLUTION IN IRON

brookdale. The small sample of charcoal furnaces that extends into the 1740s shows a slight reduction of costs from the previous decade. The total costs of producing with coke may have fallen slightly below the total costs of charcoal-smelting by this time, but the prospective entrant into the iron industry was still acting rationally if he built a new charcoal furnace. Coke-smelting had to have a significant cost advantage over charcoal before ironmasters would use it, mainly because of the inferior quality of coke pig iron. T h e high silicon content of coke pig iron made it more difficult (and costly) for the forgemaster to convert it into bar iron. Forgemasters would use coke pigs only if they were significantly cheaper than charcoal pigs. The size of this price differential can be estimated by comparing the costs of converting the two types of pig iron into bars. The Coalbrookdale forge used coke-smelted pig exclusively to produce bar iron during the period 1732-1738 and on average, this forge used 1.41 tons of pig iron and 3.06 dozens of charcoal to produce a ton of bar iron. Charcoal consumption cannot be readily compared to that of other forges because coal was used instead of charcoal in the chafery fire. 37 If the equivalent all-charcoal process had been used at Coalbrookdale, charcoal consumption would have been at least 3.50 dozens per ton of bar iron. Raw material consumption was significantly lower when charcoal pig iron was used in the forge. Pig iron consumption at twelve forges in operation in the 1730s ranged from 1.25 tons to 1.53 tons per ton of bar produced, but threequarters of these forges used 1.35 tons or less. Similarly, charcoal consumption at the forges ranged from 1.75 to 3.47 dozens per ton of bars, with three-quarters of the forges using 2.75 dozens or less. 38 These differences in physical inputs may not seem significant at first glance. Take, for example, the cost data for the 1730s from Colnbridge, a medium size forge in South 37 38

Mott, "Abraham Darby," p. 82. T h e raw data are available from the author upon request.

38

THE CHOICE OF FUEL BEFORE 1 7 5 Ο

Yorkshire with a relatively low consumptio n of fuel an d pig iron . If on e assume s tha t inpu t price s an d all othe r costs remaine d constan t bu t replace s th e dat a for pig iro n an d charcoa l consumptio n (in physica l units ) with thos e from Coalbrookdale , ther e is marke d increas e in tota l costs, as th e dat a in Tabl e 2.4 illustrate . TABLE 2.4 OBSERVE D VARIABLE COST S AT COLNBRIDG E FORGE , 1730-173 9 AND HYPOTHETICA L COST S AT COLNBRIDGE , USIN G AVERAG E PHYSICA L INPUT S FRO M COALBROOKDAL E

FORG E FOR 1732-173 8 PI G IRO N

δ

a. a. Observed Hypothetica l

£5-9 8 5-98

Si 1.30 1 41

ε

δ β

* 5? 1 I £7-7 9 8.44

Ni O

£ t a, a.

§ S

£1.2 1

2.48

1.21

350

CHARCOA L

δ a, a

O

1

^

1 %

e

S-, O

E-

£3.0 0 4.24

£3.6 0 3.60

£143 9 16.28

Th e use of coke pig iro n at Colnbridg e would have mean t an increas e in operatin g costs of abou t £2 pe r to n of bars. Thi s figure is probabl y an underestimate of th e cost impac t of coke pig iro n becaus e of th e assumption s used in th e calculations . T h e equivalen t charcoa l consumptio n at Coalbrookdal e ma y have been closer to 4.00 dozen s tha n th e 3.50 dozen s used above. At th e sam e time , it seem s likely tha t th e ceteris paribus assumptio n is unrealistic . An increase d consumptio n of charcoa l pe r to n of bar iro n would increas e th e deman d for charcoa l an d drive u p its price . "Othe r costs" would be highe r as well. T h e high con sumptio n of charcoa l an d pig iro n indicate s tha t it was mor e difficult to "work" coke pig iron , i.e., it ha d to be heate d an d hammere d mor e time s tha n did charcoa l pig, so labor costs would also be increased . Unde r thes e circumstance s th e forgemaster , who was consumin g at least go% of all pig iro n outpu t befor e 1750, would no t conside r purchasin g coke-smelte d pig iro n un -

39

THE INDUSTRIA L REVOLUTION IN IRON

less its pric e was sufficiently lower tha n charcoa l pig iro n to mak e u p for th e difficulty in usin g it. I n th e Colnbridg e case used above, coke pig would have to be mor e tha n £ ι a to n cheape r tha n charcoa l pig iro n befor e its use coul d be justified. After th e ceteris paribus assumptio n is relaxed , on e can argu e tha t a differentia l of £2 a to n is a mor e realistic figure. Ther e is n o evidenc e tha t a pric e (o r cost) differen tial of tha t magnitud e existed betwee n cok e an d charcoa l pig iro n befor e 1750. I n th e light of th e precedin g informatio n on th e relative costs of charcoal - an d coke-smelting , ho w d o we explain th e use of coke by Abraha m Darb y an d his successor s at Coalbrookdale ? T h e Darby s profitabl y produce d pig iro n with coke in spite of the higher costs of the new process becaus e the y receive d highe r tha n average revenue s from a ne w by-produc t of coke pig iron—thin-walle d castings. Abraha m Darb y I develope d a ne w techniqu e for castin g bellied pots , usin g sand rathe r tha n loam , an d h e patente d thi s inventio n in 1707. 3 9 It was onl y after h e ha d develope d thi s ne w castin g techniqu e tha t Darb y decide d to lease th e old charcoa l furnac e at Coalbrookdal e an d attemp t smelt in g with coke there. 4 0 Cok e pig iro n prove d to be superio r to charcoa l pig iro n for th e productio n of thin-walle d casting s with Darby' s ne w method . T h e highe r temperature s obtaine d in th e cok e blast furnac e gave coke pig iro n a highe r silicon conten t tha n charcoa l pig iron , makin g cok e pig iro n mor e fluid at a given temperature . Thi s adde d fluidity of th e molte n pig iron decrease d th e possibility of defect s like hole s an d crack s in th e casting s an d allowed Darb y to mak e thinne r castings. H e coul d produc e a one-gallo n cast-iro n po t tha t weighed 6½ pounds , while th e sam e po t mad e from char coa l pig iro n was twice as heavy. 4 1 Usin g hal f th e metal , h e produce d a superio r po t tha t sold at a highe r price . It was Darby' s casting technolog y tha t mad e coke 19 40 41

Mott, "Abraha m Darby, " p. 78. Raistrick,Z)yiiasfy , pp . 20-25 . Mott , "Earliest Us e of Coke, " pp . 6-7.

40

T H E CHOICE OF FUEL BEFORE I 7 5 O

smelting profitable. During the first two "blasts" at the Coalbrookdale furnace, he produced pig iron at a comparatively high cost of £7 per ton, but he realized an average revenue of nearly £10 per ton from his castings. 42 The Darbys relied heavily on their cast iron sales throughout the first half of the century. Over the period 1719-1737, they cast about 70% of their total output and sold the remainder as pig iron. 43 Other ironmasters could not have realized the same average revenues as the Darbys because they could not have produced the same quality cast iron products. Darby's method of casting remained a well-guarded industrial secret long after the expiration of his patent. 44 Given the Darbys' monopoly on thin-walled castings and the high costs of smelting with coke, other ironmasters were quite rational in shunning the new process before mid-century. 42

Ibid., "Coalbrookdale: 1709," p. 41. Ibid., "Abraham Darb)," p. 69. Most of the output sold as pig iron went to foundries in Bristol and London. For a detailed discussion of the markets of the Coalbrookdale Company, see Raistnck, Dynasty, pp 58-69. 44 Abraham Darb) recognized the critical importance of his casting technique and made every effort to keep it secret. He patented the process in 1707, a step he never took for coke-smelting itself. The agreements his apprentices were forced to sign contained provisions that they would never cast iron pots for anyone else or reveal his methods of casting to anyone. With these agreements in force, plus the fact that onh a small number of skilled artisans actually did the casting, it would have been relatively easy to maintain secrecy. For a discussion of Darby's concern about secrecy, see Raistrick.DyTuu/y, pp. 21-23. 43

41

THREE

THE DEVELOPMENT OF THE CHARCOAL IRON INDUSTRY, 1700-1750 have described the condition of the charcoal iron industry in the first half of the eighteenth century in dismal terms. There is general agreement that output declined during this period. 1 T h e major problem the industry faced was an increasing shortage of charcoal that drove up production costs. 2 This fuel shortage reached crisis proportions by the early eighteenth century: "As the hunger for fuel increased ironmasters were forced to migrate into more remote lands; smelting and refining were literally fleeing to the wilderness to escape destruction." 3 The industry's difficulties were further compounded by increased foreign competition. Bar iron imports, which probably exceeded domestic output in the early part of the century, increased from an average of 16,000 tons in 1700-1709 to about 22,500 tons in the 1740s.4 T h e industry also lost its self-sufficiency in pig iron and by the 1740s was importing over 2,300 tons per year, mostly from the American colonies. 5 T h e standard view of the industry's development during these years is certainly a dismal one. The British ironmaster is pictured with his back to the wall, fighting for survival against the evils of rising costs and of increased competition from abroad. This view has considerable foundation in fact, but is inaccurate and overpessimistic in several important respects. HISTORIANS

1

See Chapter One, note 39. Ashton, Mm and Steel, pp. 13-18. 3 Ibid., p. 15. 4 Hildebrand, "Foreign Markets," p. 10. 5 Schumpeter, Overseas Trade Statistics, pp. 53-54. 2

42

THE CHARCOAL IRON INDUSTRY, 170O-175O DOMESTIC OUTPUT AND FOREIGN COMPETITION: A N OVERVIEW

Virtually all the available evidence on aggregate output, including information on the construction of ironworks, suggests a small but not negligible increase in iron output during the first half of the century. The evidence is discussed in detail in Appendix A. Aggregate output of both pig and bar iron increased by roughly one-fifth between 1716-1720 and mid-century. The industry experienced several violent fluctuations in output and individual years of depression (such as 1736-1737) during this period, but there was no permanent decline in production. While output increased during the first half of the century, the industry's competitive position in the domestic market deteriorated noticeably. I have calculated the industry's share of the domestic market in 1716-1720 and 1750, using the output estimates and foreign trade statistics for those years, along with the assumption that 1.35 tons of pig iron was required to produce a ton of bars. 6 British pig iron output as a share of domestic iron consumption (in pig iron equivalents) declined from 54% in 1716-1720 to 43% in 1750. Although pig iron production had increased by 22% in the interim, domestic iron consumption had risen by roughly 50%. Most of the difference was made up by a substantial increase (76%) in retained bar iron imports. The demand for iron was increasing substantially as the British economy began to industrialize and the industry increased its output, but not rapidly enough to supply this increased demand. British consumers as a result became increasingly dependent upon foreign supplies of iron. ECONOMIC FLUCTUATIONS

Although the demand for iron increased substantially over the long run, the iron industry experienced violent fluctuations in demand that produced alternating periods of 6

T h e detailed calculations are available from the author upon request.

43

THE INDUSTRIAL REVOLUTION IN IRON

prosperity and depression. There are not sufficient data on prices, output, and profits to plot these fluctuations in a very detailed way, but their broad outlines are nevertheless reasonably clear. The first major trade fluctuation began around 1715 and was triggered by events outside Britain. War broke out in the Baltic in 1715 and trade with Sweden was prohibited in early 1717. 7 Bar iron imports declined from nearly 22,000 tons in 1714 to about 7,000 tons in 1717 and did not return to the previous levels until 1720. 8 With foreign supplies cut off, the demand for British bar iron increased, driving up its price about £2-3 per ton in 1716-1718 (see Figure 3.1). FIGURE 3.1:

1710 Series Series Series Series

PRICES OF BAR IRON, PIG IRON, AND CHARCOAL, 1710-1750

1720

1: 234:

Bar Iron, Charcoal, Pig Iron, Pig Iron,

1740

1730

Kirksrall Forge South Yorkshire Roach Abbey Forge Chappell Furnace

Source:

Spencer-Stanhope MSS, Sheffield City Library

Within two years the prices of both pig iron and charcoal had also increased substantially. In attempting to increase pig iron output, furnace operators demanded more charcoal and drove up its price as well. Although the supply of Swedish bar iron returned to normal levels after 1720, the prices of bar iron, pig iron, and charcoal did not decline noticeably until after 1725. 7 8

Ashton, Iron and Steel, pp. 110-111. Schumpeter, Overseas Trade Statistics, pp. 52-53.

44

THE CHARCOAL IRON INDUSTRY, 17ΟΟ-175Ο T h e decad e of th e 1720s was probabl y a prosperou s perio d for mos t charcoa l ironmasters . T h e high level of produc t price s over th e years 1718-1735 , combine d with falling charcoa l price s after 1724, probabl y mad e ironmak ing reasonabl y profitabl e durin g thes e years. While direc t evidenc e on profit levels is scant , th e experienc e of on e investor can be clearly documented . Sir Thoma s Lyttleto n earne d an average retur n on capita l of abou t 15% while a partne r in an ironwork s in 1726-1729. 9 Th e impressio n tha t th e 1720s was a prosperou s decad e is also supporte d by evidenc e of industr y expansion . Ironmaster s built nin e ne w furnace s durin g thes e years, while onl y on e furnac e permanentl y ceased operations. 1 0 I n shar p contras t to th e previou s decade , th e 1730s were years of depression , especially after 1735. Produc t price s droppe d sharpl y while productio n costs fell mor e slowly, squeezin g th e profit s of man y producers. 1 1 T h e marke d increas e in import s tha t too k plac e aroun d 1735 (see Tabl e 3.1) was probabl y th e majo r cause of thi s depression . TABLE 3.1 IMPORT S OF IRON PRODUCT S INT O ENGLAN D AND WALES, 1720-1749 , ANNUA L AVERAGE S (I N TONS )

1720-172 9 1730^73 4 1735-173 9 1740-174 9

Bar Iron

Pig Iron

!9.65° 23,727 27,52 9 22,500

328 2,381 2,544 2,357

Source: Schumpeter , OverseasTrade Statistics, pp . 53-54 .

T h e late 1730s brough t declinin g outpu t as well. Blast furnac e constructio n virtually halted . Onl y two ne w furnace s were built in thi s decade , while at least eleven were permanentl y shu t down. 1 2 T h e forgemaster s were proba Dowries , "Stou r Partnership, " pp . 95-96 . See Appendi x A for details . ' · Table s 2.2 an d 5.1. 12 See Appendi x A for details .

9

10

45

T H E INDUSTRIAL REVOLUTION IN IRON

bly more seriously affected than the furnace operators since the former had to compete directly with foreign producers. According to an anonymous pamphlet published in 1737, bar iron production in the previous year was only 12,000 tons. 13 This estimate suggests that output had fallen by about one-third from the levels of the late 1720s. The forgemasters agitated for higher duties on foreign iron to relieve their distress, but to no avail.14 Prosperity returned to the industry during the next decade, particularly after 1745. The War of the Austrian Succession (1740-1748) disrupted shipping and foreign penetration of the British market declined noticeably as a result. 15 Iron prices stabilized in the late 1740s (see Figure 3.1) and ironmasters achieved cost reductions at the same time. 16 While the 1740s were probably not as prosperous as the 1720s, there was considerable recovery from the previous depression. Ironmasters shut down nine furnaces during the 1740s, but they also erected seven new ones, five of these after 1745. 17 There is also some evidence that charcoal ironmasters earned respectable profits during the 1740s. The FellSpencer partnership paid dividends of 6.2% on capital in 1740-1744 and 7.5% in 1745-1749. 18 The Backbarrow Company showed a healthy return on capital of 16% for the years 1740-1742. 19 Over the longer period 1736-1746, Edward Knight earned an average return of over 20%, with most of the profits coming after 1740. 20 Contrary to the gloomy picture painted by many historians, the charcoal iron industry was not on the verge of extinction by 1750. The industry had experienced a severe 13

Hulme, "Statistical History," p. 16. Ashton,Iron andSteel, pp. 117-118. 15 16 Ibid., p. 118. Tables 2.2 and 5.1. 17 See Appendix A for details. 18 Spencer-Stanhope MSS, Sheffield City Library, Partnership Accounts. 19 Backbarrow MSS, Lancashire Record Office, Account Books for 1740-1742. 20 Downes, "Stour Partnership," pp. 93-94. 14

46

T H E CHARCOAL IRON INDUSTRY,

I70O-175O

depression during the 1730s, but this dislocation was sandwiched in between two decades of moderate growth and prosperity. INDUSTRY PERFORMANCE: AN EVALUATION

The pessimistic view of the charcoal iron industry's performance during the first half of the eighteenth century must be modified in light of considerable evidence of growth and prosperity. In many respects, however, whatever success the industry enjoyed was artificial. Most British ironmasters survived and earned profits during these years only because they operated in a highly protected market. British ironmasters were high-cost producers, especially when compared to the ironmasters of Sweden. There were several factors behind their higher costs. The relatively high cost of both labor and wood in Britain resulted in higher charcoal costs. The island's relatively poor (in terms of metallic content) ore deposits also contributed to higher costs. Finally, the irregularity of water supplies forced most British ironworks to lie idle much of the year, further driving up production costs. 21 British ironmasters earned profits in spite of their high production costs because the market was highly protected and iron prices were kept artificially high. British import duties and Swedish export duties combined amounted to roughly one-quarter to one-third of the price of Swedish bar iron in Britain. 22 The Swedish government also fostered high iron prices in Britain by deliberately restricting Swedish iron output from the 1720s until the early nineteenth century. 23 21

Flinn, "Growth," p. 151. Import duties were £2.05 and export duties £3.45 per ton, for a total of £5.50 per ton. Bar iron sold at £15-20 per ton in 1710-1750. See Hulme, "Statistical History," p. 18, and Scrivenor, Comprehensive History, 22

P- 33323 Eli Heckscher, An Economic History of Sweden (Cambridge: Harvard University Press, 1963), pp. 178-180.

47

THE INDUSTRIAL REVOLUTION IN IRON

High transportation costs further protected British ironmasters from foreign competition. Transport costs probably account for the relatively small imports of pig iron, in spite of the small duty on this bulky item. 24 British producers located far from major ports or navigable rivers were reasonably safe from foreign competition. During the years 1706-1710, over three-quarters of Swedish bar iron imports went to London and Newcastle, posing no immediate threat to the major ironmaking districts. 25 This umbrella of tariff protection and high transportation costs probably saved the charcoal iron industry from extinction. Few British ironmasters even faced competition from other domestic producers. Interregional competition was severely restricted by the inadequate transport system of the early eighteenth century. The strong regional combinations of ironworks described in Chapter One also limited competition within many regions, particularly in Yorkshire and Lancashire. 26 British ironmasters may have attempted to limit competition on a national scale as well. A Swedish traveler reported in the 1720s that most of the ironmasters of Britain met monthly at Stourbridge "to confer on their business affaires and interests, and to agree upon the division of the market for their iron for the month." 27 Although most ironmasters enjoyed a highly protected market, the charcoal iron industry was in many respects quite progressive and dynamic during these years. I have already demonstrated that the industry's unwillingness to use coke was based on cost considerations and was economically rational. T h e industry had several major achievements that are particularly impressive in light of the severe limitations imposed by charcoal technology and by Britain's meager resources of charcoal, ore, and water power. 24 Duties were less than £0.20 per ton before 1750, while pig iron sold for roughly £4-6 per ton. See Ashton, Iron and Steel, p. 120. 25 Hildebrand, "Foreign Markets," p. 25. 26 Ashton, Iron and Steel, pp. 162-163. 27 Quoted in Hildebrand, "Foreign Markets," p. 28.

48

THE CHARCOAL IRON INDUSTRY, 170O-175O The first major achievement was the expansion of output without severe long-run cost increases. 28 Ironmasters could not significantly expand output on an individual site or in an established ironmaking district without sharply increasing costs because of the severely limited supply of charcoal in any given area. The industry could expand output without increasing costs only by building additional ironworks in new areas. 29 The pattern of furnace construction during these years is evidence of the industry's vitality. Of the twenty-nine new furnaces erected in 1710-1756, thirteen were in Lancashire, six in Scotland, and five in northern and central Wales. None of these areas were producing iron in 1700. There were also twenty-eight furnaces shut down in 1710-1750 and sixteen of these were in the Weald and South Yorkshire, the oldest ironmaking districts in Britain. 30 These furnaces tended to be high-cost producers utilizing poor ore supplies. 31 Furnace closings were concentrated in years of depression, while new construction took place during the prosperous decades, an indication that the industry was adjusting to changing patterns of costs and demand. A second major achievement was a substantial growth in exports of finished iron products. In the first decade of the eighteenth century, British manufacturers exported about 1,600 tons of finished iron per annum. This trade had more than quadrupled by the 1740s, when annual exports averaged about 6,500 tons. 32 If the weight loss in converting bar iron into these finished products was about 20%, as 28 Production costs probably increased about 10-20% between the 1710s and the 1740s. T h e Schumpeter Price Index for both consumers' and producers' goods indicates a decline in the general price level of roughly 10% over these years. See B. R. Mitchell and Phyllis Deane, Abstract of British Historical Statistics (Cambridge: Cambridge University Press, 1962), pp. 468-469. 29 Michael Flinn, "Timber and the Advance of Technology," Annals of Science, xv (June 1959), p. 118. 30 Schubert, History, Appendix v. 31 Flinn, "Timber," p. 118. 32 Schumpeter, Overseas Trade Statistics, pp. 23-24.

49

THE INDUSTRIAL REVOLUTION IN IRON estimated earlier, then about 8,000 tons of bar iron went into the export trade in the 1740s. This was a substantial quantity when compared to the industry's output of about 19,000 tons. The foreign trade accounts do not offer a detailed breakdown of the iron products exported. About twothirds of the total volume in the 1740s (4,300 tons of a total of 6,500 tons) is described simply as "wrought iron" and was probably mostly hardware and tools. T h e only finished iron exports clearly identified were nails (1,300 tons) and steel (400 tons). 33 T h e New World and particularly the American colonies were the most important markets for British iron. During the first half of the century, the British West Indies and the American colonies together accounted for about half the "wrought iron" exports. T h e American colonies alone took about two-thirds of the nail exports. 34 The importance of the American market was recognized by British hardware producers, who consistently opposed American manufacture of finished iron. 35 Most of the manufactured iron destined for foreign markets was produced in the West Midlands from English bar iron. Abraham Spooner, a prominent ironmaster of this region, estimated in 1738 that about 9,000 tons of bar iron was converted into ironwares within a ten-mile radius of Birmingham, providing employment for about 20,000 metal workers. 36 The nail trade was probably the most important branch of the Midlands hardware industry. 37 Most of the iron used in the Birmingham hardware district came from nearby forges in Staffordshire and Worcestershire. Spooner estimated that 6,900 tons of the total of 9,000 tons of bar iron used in this region was of English 33

3i Ibid. Ibid., p. 64. Pelham, "West Midland Iron Industry,"passim. 36 Journal ofthe House of Commons, xxn (1738), p. 854. 37 For an excellent discussion of the size and organization of the nail trade in the eighteenth century, see Court, Rise of the Midland Industries, pp. 191-216. 35

50

THE CHARCOAL IRON INDUSTRY, I 7 O O - 1 7 5 O

origin. 38 There is additional evidence that domestic bar iron was the primary raw material of the hardware trade. Bristol, the main port serving the Birmingham region, took only 1,200 tons of Swedish bar iron in the early 1730s. 39 In addition, the business accounts of two major iron manufacturers, the Foleys and the Knights, show no significant dependence upon foreign iron. 40 The substantial growth in exports of manufactured iron products made from British bar iron may seem peculiar in light of the apparent deterioration of the iron industry's international competitive position during the first half of the eighteenth century. This export growth was in fact another example of industry's adjusting to changing market conditions. By mid-century, British ironmasters had largely lost their ability to compete with foreign producers in the London market and in markets where high-quality bar iron was required. They reacted to this loss of markets by concentrating on the production of cheap hardwares, especially nails, for export. They utilized the lower quality, cheaper English bar iron, which still held a competitive advantage over Swedish iron when used for this purpose. The movement toward production for export illustrates the continued vitality of the charcoal iron industry before 175°· A definitive evaluation of the iron industry's performance during the first half of the eighteenth century is certainly not warranted by the ambiguous and contradictory evidence presented above. There is some evidence to support a pessimistic interpretation of the industry's development. Charcoal ironmasters were not able to expand output to keep up with the growth in demand, and their ability to compete with foreign producers further deteriorated during these years, even though they were operating in a highly protected market. However, the industry survived and even enjoyed occasional prosperity during this period. 38

Journal of the House of Commons, XXII (1738), p. 854. Hildebrand, "Foreign Markets," p. 25. 40 Foley MSS and Knight MSS.

39

51

T H E INDUSTRIAL REVOLUTION IN IRON

The fact that a highly protected industry endured is not grounds for a very optimistic view of the industry's development. There is considerable evidence, however, that the charcoal iron industry can be credited with more than mere survival. While many high-cost ironworks were shut down before mid-century, the industry expanded into new regions and achieved a moderate increase in total output. The dramatic growth in exports of hardware is further evidence of industry flexibility. While the charcoal iron industry was certainly struggling with a variety of economic and technological problems during these years, the industry as a whole was not stagnant, much less declining. The industry demonstrated an ability to change, and this in turn helps to explain the rapid adoption of coke-smelting after mid-century, the subject of the next chapter.

52

FOUR

THE ADOPTION OF COKE-SMELTING, 1750-1790 of the innovations of the Darbys, the iron industry remained essentially unchanged during the first half of the eighteenth century. Outside Coalbrookdale, charcoal was the exclusive source of heat for both the smelting and refining processes. Aggregate output had increased slightly by mid-century, but the industry's international competitive position had deteriorated considerably. The iron industry achieved a rapid rate of growth and experienced a fundamental change in technology between mid-century and the eve of the French Revolution. Pig iron output trebled during these years, while the production of bar iron nearly doubled. 1 More importantly, coal became the primary source of heat in both the smelting and refining branches of the industry. This chapter will focus on the adoption of coke-smelting, while Chapter Five will consider the application of coal to the refining process before 1790. IN SPITE

T H E TRIUMPH OF COKE

Ironmasters began to use coke in the blast furnace in the early 1750s and the diffusion of the new technique was fairly rapid by eighteenth-century standards. During the initial phase of adoption (1750-1771) at least twenty-seven coke furnaces were brought into production, while about twenty-five charcoal furnaces were permanently shut down. 2 The relatively large number of coke furnaces 1 Richard Meade, The Coal and Iron Industries of the United Kingdom (London: Lockwood, 1882), p. 830, and David Mushet, Papers on Iron and Steel (London: Weale, 1840), p. 40. 2 Lists of coke blast furnaces erected before 1790 and charcoal furnaces permanently shut down before 1790 are available from the author.

53

THE INDUSTRIAL REVOLUTION IN IRON

erected during these years creates a misleading impression of the popularity of the new technique. Only a few ironmasters built coke furnaces in relatively few locations. The Carron Company erected five of these on one site in Scotland; the Coalbrookdale Company, long experienced with coke-smelting, built six coke furnaces (two each at Horsehay, Ketley, and Madeley Wood); the Wilkinson family, also familiar with the coke process, built three more (two at Bradley and one at Bersham); and ironmasters erected another four (Hirwain, Dowlais, Plymouth, and Cyfarthfa) within a few miles of each other on lands controlled by Anthony Bacon in Merthyr Tydvil in South Wales. 3 Compared to the failure of the industry to embrace cokesmelting before 1750, this initial wave of adoption was nevertheless large and significant. The initial wave of construction of coke blast furnaces was closely accompanied by a dramatic increase in the use of coke pig iron in the forges. Charles Wood and Gabriel Griffiths made a tour of ironworks in the West Midlands in September 1754. They visited eleven forges, carefully noting the methods of production at each. They did not mention the use of coke pigs at any of the forges they visited except for the forge at Coalbrookdale.4 This pattern changed drastically within a couple of years. T h e Knight forges, which consumed about 3,500 tons of pig iron annually, began to use coke pig in 1756 and quickly increased their consumption to over 1,000 tons per annum by 1765. 5 There is similar evidence from pro3 Roy Campbell, The Carron Company (London: Oliver and Boyd, 1961), pp. 34-38; W. H. Chaloner, "Issac Wilkinson, Potfounder," in L. S. Pressnell, editor, Studies in the Industrial Revolution (London: Athlone Press, i960), pp. 23-51; Louis B. Namier, "Anthony Bacon, M.P., An Eighteenth-Century Merchant,"yourna/ of Economic and Business History, 11 (1929), pp. 20-70; and RaistricV., Dynasty, passim. 4 "Some Observations of My Journey With Gabriel Griffiths, into Yorkshire, etc., September 1754," appended to the "Diary of Charles Wood at Cyfarthfa Ironworks, 1766 and 1767." A microfilm copy of this document was kindly loaned to me by Professor Flinn of Edinburgh University. 5 Knight MSS, Kidderminster Public Library.

54

THE ADOPTION OF COKE-SMELTING

ducers of coke pig iron. During their first six years of operation (1755-1761), the two coke furnaces at Horsehay sold over go% of their total output to various forges. 6 Historians of the iron industry offer no cogent explanation for the adoption of coke in the 1750s. Ashton argued that it was the result of the improved quality of coke pig iron: "Not until the 1750s did the great forgemasters of Worcestershire begin to make use of it (coke pig), and probably by that time its quality was better and more uniform than in the earlier days." 7 A letter written around 1775 by Abiah Darby, wife of Abraham Darby II, is cited as additional evidence to support this hypothesis. 8 Ashton asserted that this letter "strengthens and indeed, renders superfluous" his previous arguments. 9 There is little evidence to support this "quality of coke pig iron" hypothesis. Ashton presents no evidence of a marked improvement in coke pig iron quality around mid-century, nor does he offer an explanation for the timing of the alleged improvement. Finally, there is no evidence that it was the alleged quality change, rather than some other consideration ('ike price), that induced forgemasters to begin to use coke pig iron in great quantities in the early 1750s. Abiah Darby's letter proves nothing except that coke pig 6

Mott, "Abraham Darby," p. 82. Ashton, Iron and Steel, pp. 35-36. 8 "But all this time the making of Barr Iron at Forges from Pit Coal pigs was not thought of. About 26 years ago my Husband conceived this happy thought—that it might be possible to make bar from pit coal pigs. Upon this (thought) he Sent some of our pigs to be tryed at the Forges, and (so) that no prejudice might arise against them he did not discover from whence they came, or of what quality they were. And a good account being given of their working, he erected Blast Furnaces for Pig Iron for Forges. Edward Knight Esquire a capital Iron Master urged my Husband to get a patent, that he might reap the benefit for years of this happy discovery: but he said (that) he would not deprive the Public of Such an Acquisition which he was Satisfied it would be; and so it has proved, for it soon spread, and Many Furnaces both in this Neighbourhood and Several other places have been erected for this purpose." Quoted in Ibid., p. 251. 9 Ibid., p. 249. 7

55

T H E INDUSTRIAL REVOLUTION IN IRON

iron was not purchased by the Worcestershire forgemasters before 1750. In other respects, this letter is very misleading. She was wrong in her assertion that coke pig iron was not used in the forge before 1750. Mott has shown that it was used exclusively at the Middle Forge, Coalbrookdale, in 1729-1738. 10 Why Abraham Darby II tested his coke pig iron in the forges around 1750 instead of ten or twenty years before is certainly not revealed in this letter. Surely the "happy thought that it might be possible to make bar iron from pit coal pigs" had been pondered by the Darbys well before 1750. The fuel used in smelting produced real differences in pig iron quality that were reflected in the prices of the two kinds of iron (see Figure 2.1). However, this quality difference was of little importance to either the consumer or the producer of coke pig iron. The forgemaster would prefer coke pig iron if its price was low enough to compensate for the increased difficulty of converting it to bar iron. Coke pig iron quality per se was also irrelevant to the prospective entrant into the coke-smelting sector. An ironmaster would adopt the new technique if the average total costs of producing coke pig iron were less than its selling price, regardless of how low that price might have been. The diffusion of coke-smelting must be explained in terms of costs and prices and not in terms of the quality of coke pig iron. T H E CHOICE OF FUEL: SOME COST COMPARISONS

Cost considerations alone are sufficient to explain the adoption of coke-smelting after mid-century. The cost of producing charcoal pig iron increased sharply after midcentury, while coke pig iron costs fell dramatically, giving the new process a clear cost advantage. By the late 1750s, the total cost of producing pig iron with coke had fallen well below the variable cost of producing charcoal pig iron. Charcoal furnace costs after mid-century are sum10

Mott, "Abraham Darby," p. 82.

56

THE ADOPTION OF COKE-SMELTING

marized in Table 4.1. Operating costs of £4.50 and above were the rule in the 1750s, but increased to £5.50 and above in the 1760s. Movements in charcoal furnace costs are less clear for the 1770s and 1780s as our sample becomes smaller. Aston, Charlcott, and Halesowen furnaces experienced rising costs in the 1770s, while costs at Backbarrow and Pennybridge fell slightly in the 1770s and 1780s. TABLE 4.1 AVERAGE VARIABLE COSTS OF CHARCOAL BLAST FURNACES, 17308-17905, BY D E C A D E ( I N £ P E R T O N O F P I G I R O N )

Furnace Aston Backbarrow Bunawe Chappell Charlcott Halesowen Pennybridge Staveley Whaley

iy4os

1750s

1760s

17 70s

17 80s

—

£5.84

£6.48 6.13

£6.70 598

5.28 5-93 6.44

5.66 7.11 7.10 6.14 5.40

£6.75 5.80 6.50

7-43 9-25 5-72

£4.24

—

5.01 5.22 5-63

— — —

— —

—

4.76 3-94

—

—

— —

— —

— — — — — —

Sources: For Backbarrow, Chappell, and Staveley, see Table 2.2. Cost data for Backbarrow and Pennybridge for 1763-80 are from Brian Awty, "Backbarrow and Pennybridge Furnace Accounts," Transactions of the Lancashire and Cheshire Historical Society, LXV (1965), pp. 19-38. T h e Whaley furnace accounts are found in the Staveley Ironworks MSS, Sheffield City Library. Costs for Aston, Charlcott, and Halesowen furnaces were calculated from accounts found in the Knight MSS, Kidderminster Public Library.

T h e increased cost of producing charcoal pig iron after mid-century was almost entirely a result of the increased cost of raw materials, particularly fuel. Charcoal prices rose sharply in the early 1750s in all the major ironmaking districts (see Figure 4.1) and the cause of this increase is not entirely clear. One possible explanation is that rising labor costs drove the price of charcoal up. It seems more likely, however, that the higher input prices were a reflection of demand conditions. Pig iron prices also increased sharply

57

T H E INDUSTRIAL REVOLUTION IN IRON FIGURE 4.1:

I 1750

Series 1: Series 2: Series 3:

1

CHARCOAL PRICES, 1750-1780

1 1760

1

Charlcott Furnace (Shropshire) Backbarrow Furnace (Lancashire) The Duke of Norfolk's Ironworks (South Yorkshire)

1 1770

1

1780

Sources: Norman Mutton, "Charlcott Furnace, Backbarrow MSS, Lancashire Record Office; and Spencer-Stanhope MSS, Sheffield City Library

in the mid-1750s (see Figure 2.1), while output expanded, reflecting an increase in demand for iron from an economy beginning to industrialize. In attempting to increase output in response to this increased demand, ironmasters drove up the prices of their major inputs. Charcoal ironmasters were not able to economize in their use of raw materials to offset rising input prices, so rising costs resulted. T h e efficiency with which they used their inputs can be measured through an Index of Total Factor Productivity, defined as: TFP =

X,*(W*,lWd P~

where W( is each input price, P is average total cost, and Xj is the share of total costs of the tth input. T h e asterisks refer to the non-base year. Total Factor Productivity Indices for five charcoal furnaces are given in Table 4.2, along with average variable costs and charcoal prices. Because of the difficulty of estimating capital costs, they have been excluded from these indices.

58

T H E

A D O P T I O N

OF

T A B L E

C O K E - S M E L T I N G

4.2

T O T A L FACTOR PRODUCTIVITY, A V E R A G E VARIABLE COSTS, AND C H A R C O A L P R I C E S FOR S E L E C T C H A R C O A L F U R N A C E S ,

1730-1801

Furnace

Years Covered

Total Factor Productivity

Average Variable Costs

Aston

1750-59

100 91

£5.84 6.48 6.70

90

6-75

I-73

100 88 87 87 84

4.24 6.13

1.44

1760-69 1770-79 1780-84

Backbarrow

1732-43

1763-71 1772-80 1787-92 1798-1801

Charlcott

I73°"39

1740-49 I75O-59

1760-69 1770-77 Halesowen

I730-39

1740-49 1750-59

1760-69 1770-72 Staveley

1751-60 1761-73

95

5-98

5.80 7-I5

100 107 112 107

7.11

115

7-43

100

5 5 6

5.22 5-93

6.44

Charcoal Prices (Per Dozen) £I-95

2.05 2.04

I-99

1.92 1.87 1.96 1.44 1.40 2.00 2.29 2.76 1.85 1.60 1.91

105 109 100

6.44 7.10

77

9-25

2.19

100 101

4.76 5.40

1-45

5 6 3

I-94

1.26

Sources: See Table 4.1.

O u r sample of charcoal furnaces shows that ironmasters achieved no significant efficiency gains in the use of raw materials after mid-century, while several furnaces experienced declining productivity. T h e r e were no improvements in the technology of producing pig iron with charcoal important enough to significantly change the industry's efficiency. With this stagnant technology, increased input prices, especially charcoal prices, drove costs up sharply. While charcoal pig iron costs were rising, the cost of 59

THE INDUSTRIAL REVOLUTION IN IRON

producing coke pig iron had fallen sharply since the 1730s, producing a large cost differential between the two techniques. Total cost estimates for coke blast furnaces are summarized in Table 4.3. The estimates of capital costs for the TABLE 4.3 TOTAL COSTS OF SOME EARLY COKE BLAST FURNACES, 1 7 3 O S - 1 7 8 0 S (ALL IN £ PER TON OF PIG IRON)

Furnace Coalbrookdale (Shropshire) Horse hay (Shropshire) Dowlais (Glamorganshire) Plymouth (Glamorganshire) Horse hay (Shropshire) Dowlais (Glamorganshire) Boyd's River (Glamorganshire) Staveley (Derbyshire)

Years Covered

Estimated Capital Costs

Average Variable Costs

Estimated Total Costs

1734-37

£1.20

£5.50

£6.70

1755-61

0.80

336

4.16

1764

0.50

2.02

2.52

1766

0.50

2.85

3-35

1767-74

0.80

3.11

3-9 1

1770-75

1.70

2.03

3-73

1777

0.50

3.00

3-5°

1785-87

1.00

2.66

3.66

Sources: For Boyd's River, see PRO MSS c. 108/135; for Dowlais, see "Diary of Charles Wood," January 21, 1767, and PRO MSS Ei 12/2096/ 135; for Plymouth, see "Diary of Charles Wood," July 31, 1766; for Staveley, see the Staveley Ironworks 1MSS, Sheffield City Library, Accounts for 1785-1806; and for Horsehay, see Mott, "Horsehay Works," pp. 271-283. Mott gives both input prices and physical consumption of each input, so costs can be easily calculated for Horsehay.

Dowlais and Plymouth furnaces are based on the interest rate (10%) which appears in the accounts of both furnaces. 11 I will use this interest rate in calculating capital costs for the other coke furnaces as well, although doing 11

"Diary of Charles Wood," 21 January 1767.

60

THE ADOPTION OF COKE-SMELTING this biases the cost comparisons between coke and charcoal in favor of the older process, for which I had used an interest rate of only 5% in calculating capital costs. Perhaps this differential in interest rates is justifiable in light of the higher perceived risks involved in investing in the newer process. Even with this assumption, it is difficult to estimate capital costs for the Horsehay furnaces. T h e capital stock of the Coalbrookdale Company increased by £10,000 over the period 1740-1757, but it is not certain that all this increase should be attributed to the construction of Horsehay furnaces. 12 T h e total investment needed to build and operate the two furnaces, which together produced an average of over 1,200 tons of pig iron in 1755-1761, was probably not far from £10,000, yielding a capital cost of about £0.80 per ton of pig iron. A comparison of the cost estimates given in Table 4.3 with the cost estimates for the charcoal furnaces given in Table 4.1 reveals that coke-smelting was clearly the superior technique by the 1760s. T h e total cost of coke pig iron at the South Wales furnaces, Dowlais and Plymouth, was more than £2 per ton less than the variable costs of the most efficient charcoal furnaces. A detailed breakdown of coke-smelting costs is presented in Table 4.4, along with an Index of Total Factor Productivity based on the total costs of production. Total factor productivity in the coke-smelting sector had increased significantly since the 1730s, but not nearly as fast as total costs had fallen. Roughly half the cost reduction can be attributed to increased efficiency, while the remainder was a result of lower factor prices. T h e decline in fuel costs accounted for most of the reduction in total costs achieved during these years. Unit ore costs did not fall between the 1730s and the 1760s. In spite of a doubling of the interest rate used in these estimates (from 5% to 10%), unit capital costs declined significantly, although not as rapidly as fuel costs fell. The decline in "other variable 12

Raistrick,D;ynasiy, pp. 81 and 278.

6l

THE INDUSTRIAL REVOLUTION IN IRON TABLE 4.4 TOTAL FACTOR PRODUCTIVITY AND AVERAGE TOTAL COSTS FOR SELECT EARLY COKE BLAST FURNACES (ALL IN £ PER TON PIG IRON)

Furnace

Average Average Other Average Average Years Fuel Ore Variable Capital Total TFP Costs Costs Costs Index Covered Costs Costs

Coalbrookdale Horsehay Plymouth Horsehay

!734-37 £2-64 1755-61 1.40 1766 0.65 1767-74 1.46

£1-03 1.40 1.08 1.15

£2.00 0.50 1.18 0.50

£1.20 0.80

£6.70 4.16

0.50 0.80

3-35 3.91

100

143 !52 !52

Sources: See Table 4.3. costs" is e x a g g e r a t e d because these costs w e r e a b n o r m a l l y high at C o a l b r o o k d a l e , d u e to t h e extensive castings o p e r a tions c a r r i e d o u t t h e r e . Fuel costs fell m o r e sharply t h a n any o t h e r single c o m p o n e n t of total costs. I r o n m a s t e r s h a d greatly i m p r o v e d t h e i r efficiency in u s i n g coal, while coal prices h a d fallen, especially relative to charcoal prices. Since coke i r o n m a s t e r s usually o w n e d a n d o p e r a t e d t h e i r own coal mines, t h e r e d u c t i o n in coal prices indicates that i r o n m a s t e r s h a d probably increased t h e i r efficiency in coal m i n i n g as well. A c o m p a r i s o n of t h e costs of p r o d u c i n g p i g iron with coke a n d with charcoal reveals t h e source of t h e new technique's cost a d v a n t a g e . B o t h processes h a d similar o r e costs a n d " o t h e r variable costs," b u t t h e r e is a striking disparity in fuel costs. T h e use of coke r a t h e r t h a n charcoal saved t h e i r o n m a s t e r r o u g h l y f 1 . 5 0 - f 2 . 0 0 p e r ton of pig i r o n in t h e 1750s. A c o m p a r i s o n of t h e "best practice" charcoal a n d coke furnaces in t h e 1760s shows fuel cost savings of nearly f 3 p e r ton of pig iron. T h i s disparity in t h e fuel costs of t h e two processes was largely a result of t h e drastic shift in t h e relative factor prices of charcoal a n d coal t h a t took place s o m e t i m e a r o u n d m i d - c e n t u r y . T h e r e s u l t i n g differential in total cost, which first b e c a m e a p p a r e n t in t h e 1750s a n d c o n t i n u e d t h r o u g h o u t the second half of t h e c e n t u r y , e x p l a i n s t h e a d o p t i o n of coke-smelting at t h a t time. 62

T H E A D O P T I O N OF COKE-SMELTING T H E DIFFUSION PROCESS

Once coke-smelting had established its superiority over charcoal-smelting in the 1750s, ironmasters rapidly adopted the new technique. A comparison of the total costs of production of the early coke furnaces listed in Table 4.3 with their average revenues suggests that coke-smelting was highly profitable. Average revenues exceeded average total costs by more than £2 per ton of pig iron in the 1760s and by £1-2 per ton in the 1770s. The Dowlais furnace, an extreme example, had profits of nearly £2,500 in 1764 on an initial investment of £4,000. These high profit levels indicate that there was a less than optimal flow of resources into coke-smelting after 1750. The British economy was characterized by localized, highly imperfect resource markets and the coke iron industry had to face additional handicaps because of its location. Blast furnaces were built close to the raw materials, which were generally located far from both urban and rural population centers. T h e furnaces built in South Wales and Scotland in particular were literally located in the wilderness. Ironmasters not only had to recruit, train and discipline an industrial labor force, but they also often had to provide their workers with food, housing, and social services. The correspondence of the Dowlais furnace in South Wales, for example, contained numerous references to the added problems of recruiting and maintaining a labor force far from established markets and population centers. 13 T h e special problems associated with maintaining a labor force under these conditions probably kept many investors from entering the coke-iron industry. The size of the investment needed to build and operate a coke furnace was another significant barrier to entry. The early coke furnaces were large enterprises by eighteenthcentury standards, requiring a substantial initial investment. While established firms were able to reinvest their profits, a progressively larger initial investment was needed to enter the coke iron industry. T h e earliest coke iron pro13

Dowlais MSS, Glamorgan Record Office.

63

THE INDUSTRIAL REVOLUTION IN IRON ducer, the Coalbrookdale Company, was valued at £4,200 in 1718, £16,000 in 1738, and £40,000 in 1794. 14 TlIeDoWlais furnace, begun in 1760 with an initial capital of £4,000, was valued at £20,000 in 1782 and £61,000 in 1798. 15 The Carron Company began with an initial capital of £12,000 in 1760, but expanded this to £150,000 in 1771. 16 The Pennydarren furnace, constructed in 1786, required an initial investment of £14,000. 17 As many as a dozen or more partners might make the initial investment, but most furnaces involved fewer than eight partners. These early coke furnaces commonly required individual investments of over £1,000, a very substantial sum in eighteenth-century Britain. The number of individuals able to invest that sum of money in what was essentially an infant industry must have been very limited. T h e existence of these barriers to entry slowed the flow of resources into the coke-smelting sector, while increased demand for pig iron after 1750 kept prices from falling significantly. These same conditions slowed the exit of charcoal furnaces from the industry. Charcoal ironmasters could continue producing because charcoal pig iron prices remained higher than variable costs well after cokesmelting had become fairly widespread. Variable costs at Backbarrow Furnace, for example, were about £6 per ton over the period 1763-1792, but remained substantially below the selling price of its pig iron. In 1787-1792, Backbarrow pigs were produced for £5.80 per ton and sold at an average price of £8.36 per ton. 18 Of the seventy-odd charcoal blast furnaces in operation at mid-century, twenty-six were still in blast in 1788. 19 The 14

Raistrick, Dynasty, pp. 64, 81, and 214. Kenneth T. Weetch, "The Dowlais Ironworks and Its Industrial Community, 1760-1850," M.Sc. Thesis, London School of Economics (1963), pp. 48-49. 16 Campbell, Carron Company, pp. 23-24. 17 Birch, Economic History, p. 198, note 6. 18 Backbarrow MSS, Lancashire Record Office and Barrow-in-Furness Public Library. 19 Scrivenor, Comprehensive History, pp. 360-361. 15

64

THE ADOPTION OF COKE-SMELTING

survivors tended to be furnaces constructed in the eighteenth century, but there were also many of a much older vintage. 20 Their continued operation was not a case of irrationality on the part of charcoal ironmasters, but was simply a reflection of costs and market prices. Many charcoal ironworks did not fare as well as Backbarrow. There are two documented cases of fairly large-scale ironmaking enterprises that responded to deteriorating profit levels by closing down relatively soon after profits had declined. We have data on the total capital invested and the dividends paid out by the Fell-Spencer group of ironworks in South Yorkshire for 1750-1764 and a related group of ironworks in the DerbyshireNottinghamshire area for the years 1750-1773. Both partnerships operated furnaces, forges, and slitting mills, and their performance is summarized in Table 4.5. Both TABLE 4.5 PARTNERSHIP CAPITAL AND DIVIDENDS PAID O U T BY Two EIGHTEENTH-CENTURY IRON PARTNERSHIPS FELL-SPENCER

Average Capital Invested

DERBY-NOTTINGHAM

Dividends Average Dividends Average As % of Capital Average As % of Dividends Capital Invested Dividends Capital

i750-54

£13.836

£1,388

1755-59 1760-64 1765-68 i769-73

13.102 13,318 — —

674 368 — _

10.3

£10,583

5.1 10,777 2.7 12,763 — 12,653 — ?

£1,404

13.4

639 699 374 -2,056 (LOSS)

5-9 5.4 2.9 —

Sources: Spencer-Stanhope MSS (Sheffield City Library) and Staveley Ironworks MSS (Sheffield City Library).

show fairly high profit levels in the early 1750s, but then a deterioration by the early 1760s. T h e Fell-Spencer partnership was dissolved in 1764 and a new partnership was formed to take over the Derby-Nottingham works, 20 A list of the charcoal furnaces in operation in 1790 and their approximate dates of construction is available from the author.

65

THE INDUSTRIAL REVOLUTION IN IRON which continued to operate into the early 1770s. T h e accounts indicate a loss of over £2,000 for 1769-1773 and these ironworks were shut down shortly thereafter. 21 It was pointed out earlier that there was a price differential between coke and charcoal pig iron of about £ 1 a ton in the 1750s and 1760s (see Figure 2.1). We would expect this price differential between the two types of iron to have increased as the cheaper coke pig iron flooded the market. Competition between coke ironmasters should have driven the price of coke pig iron down sharply, encouraging consumers to purchase the cheaper product. This did not take place until around 1775, when the price differential jumped from £1 to £2 per ton. Coke pig iron producers sharply increased their output over the period 1775-1791 (see Table 4.6), putting additional competitive pressure on the charcoal ironmasters. Twenty-two charcoal blast furnaces were shut down over this span of fifteen years, while the share of total pig iron output held by the charcoal iron industry fell from 45% in 1775 to about 10% in 1791. A closer examination of demand conditions over the period 1750-1790 throws a great deal of light on the diffusion process. The demand for pig iron was increasing rapidly in the second half of the eighteenth century as Britain began to industrialize. About eighty coke blast furnaces with a capacity of roughly 80,000 tons were built by 1790. These furnaces all had total costs well below the market price of pig iron and yet competition among these furnaces did not bring about a sharp fall in the price of the pig iron. We can see from Figure 2.1 that Horsehay pigs sold for about £6.50 a ton over the years 1755-1771, remained slightly under £6.00 a ton in 1772-1778, and then fluctuated around £6.00 a ton until after 1790. Although coke pig iron prices fell in the second half of the century, the demand for pig iron increased sufficiently over these years to keep prices well above total costs. T h e high profits 21 G. G. Hopkinson, "A Sheffield Business Partnership, 1750-1765," Transactions of the Hunter Archeological Society, vm (1961), p. 104.

66

CT>

3 14 30 43 53 60 81 8 s

q.koo

Number of Coke Furnaces

26,625 25,600 19,800 17,000 14,000 14,500 12,500

Estimated Total Output

55>5°° 74.925 80,700

925 925 QSO

28,125 35,400 43,800

1,500 9,800 24,000 36,500 47,700

500 700 800 850 900

87.425 Q0.200

53-55° 61,700 70,000

Total Industry Output

Estimated Total Output

Estimated Average Output

COKE

QO

77 79 86

55 68

5 28

Coke Pig Iron Output As % of Total

Sources: T h e figures for 1785 and before are my own estimates. T h e number o f furnaces in operation is derived from A p p e n d i x A. A v e r a g e output per furnace is a crude estimate based on observations o f individual furnace outputs and the general trends in furnace output. T h e resulting output estimates are necessarily crude. T h e remaining estimates (1788, 1790, and 1791) were made by contemporaries and appear to have been very reliable. T h e y are discussed in detail in A p p e n d i x C .

558 500 432

45 0 500 500

44 34 28 26

1775

25 22

375 400

Estimated Average Output

CHARCOAL

7i 64

1780

1750-1791,

A N D T H E I R E S T I M A T E D O U T P U T ( A L L F I G U R E S IN T O N S )

175° 1760

1785 1788 May 1790 Dec. 1 7 Q 1

c. c. c. c. c.

Number of Charcoal Furnaces

4.6

C H A R C O A L A N D C O K E F U R N A C E S IN O P E R A T I O N ,

T A B L E

w w c/1 g w r H Z O

o

O

O

2

O

O O

>

H EC M

T H E INDUSTRIAL REVOLUTION IN IRON

enjoyed by the coke iron industry allowed entrepreneurs with no experience in ironmaking to enter the industry, experiment, make mistakes, learn by these mistakes, and yet survive. Few coke furnaces failed during this period. 22 While the increased demand for pig iron encouraged the adoption of coke-smelting, it also permitted charcoal ironmasters to continue with the old technique long after its inferiority in terms of costs had been clearly established. The increased demand for pig iron prevented coke pig iron prices from falling as rapidly as they would have otherwise, and thus limited the price competition from the cheaper product. Resources—capital, labor, and entrepreneurs^—were used to produce pig iron with an inferior technology. There is little evidence, however, that a faster flow of capital and entrepreneurs out of the charcoal iron industry would have increased the flow of these resources into the coke iron industry. There are few cases of charcoal ironmasters transferring either themselves or their capital into coke-smelting. Two important families of early coke ironmasters, the Wilkinsons and the Walkers, worked with both techniques, but such cases are rare. 2 3 In a detailed examination of the occupational origins of coke ironmasters, Birch has shown that of twenty-five individuals operating ironworks in South Wales in 1788, only fourteen had experience in the iron industry and most of these had worked with coke. 24 22

T h e furnace at Maryport was shut down in 1784, one of the five furnaces at Carron was taken out of production in 1777, and furnaces at Bedlington and Clifton, both in Cumberland, ceased operations sometime before 1788. For Maryport, see H. R. Schubert, "The Old Blast Furnace at Maryport," JISI, 172 (1953), p. 162. For Carron, see Campbell, Carron Company, p. 39. Bedlington and Clifton are included in a list of blast furnaces "entirely down" in 1788 found in the Weale MSS, Science Museum Library, South Kensington. Neither of them appears in any subsequent list. 23 Chaloner, "Issac Wilkinson,"passim, and A. H. John, The Walker Family, Ircmfounders and Manufacturers, 1741-1893 (London: Council for the Preservation of Business Archives, 1951),/)002??!. 24 Birch, Economic History, p. 282.

68

T H E A D O P T I O N OF COKE-SMELTING T H E ROLE OF THE STEAM ENGINE

This chapter has discussed the adoption of the cokesmelting process in the 1750s and its subsequent diffusion almost exclusively in terms of production costs, prices, and profits. Several historians of the iron industry, however, have argued that the application of the steam engine, particularly the improved Boulton and Watt engine, to the blast furnace was a prerequisite for the spread of cokesmelting. Ashton asserted the importance of steam power for the development of the coke iron industry: "The application of steam power was to have effects of almost incalculable magnitude in many industries, but in none were these more striking than in that with which we are concerned." 25 More recently, Phyllis Deane has argued that it was the Boulton and Watt engine that made coke-smelting the superior technique: "It was not until Boulton and Watt had developed an efficient steam-engine, around 1775, that the furnaces were able to generate a blast strong enough and continuous enough to make coke-smelting a manifestly more efficient way of producing pig-iron in any circumstances. Till then the use of coke was confined to only a few furnaces while the majority still used charcoal." 26 Both Ashton and Deane overstate the importance of the Boulton and Watt engine to the adoption of coke-smelting. None of the early coke furnaces given in Table 4.3 utilized a Boulton and Watt engine at the time their costs were recorded. T h e previous discussion has shown, however, that these early coke furnaces were clearly superior to their charcoal-using counterparts in terms of production costs. Coke-smelting was superior to charcoal-smelting by 1775 and was a profitable and growing part of the iron industry by that time. There were about thirty coke furnaces in operation, producing more than half the aggregate pig iron 25

Ashton, Iron and Steel, p. 69. Phyllis Deane, The First Industrial Revolution (Cambridge: Cambridge University Press, 1965), p. 101. 26

69

THE INDUSTRIAL REVOLUTION IN IRON

output (see Table 4.6). There is no evidence that the development of the Boulton and Watt engine was in any sense a prerequisite for the adoption of coke-smelting. Recognizing the limited importance of the Boulton and Watt engine to the initial diffusion of coke-smelting does not in any sense dispose of the question of the importance of steam power. The comparatively inefficient and unreliable Newcomen steam engine, developed by 1705, was available to the industry long before the Boulton and Watt engine and was used by many of the early coke ironmasters. T h e first Newcomen engine used to power a blast furnace, albeit indirectly, was installed at Coalbrookdale in 1742. There, the engine pumped water onto the waterwheel, which in turn powered the bellows providing the blast. 27 At least eight coke ironworks with a total of sixteen furnaces used Newcomen engines before 1790, including many of those built before 1775. 28 T h e fuel savings associated with the Boulton and Watt engine were much less important to the ironmasters than they were to other entrepreneurs. Coal was certainly not a free asset for the ironmaster, but the nature of both cokesmelting and coal mining made "engine coals" very cheap. The coal cut from the mine was classified into three distinct types or qualities, according to the size of the pieces. Only the larger pieces were coked and used in the furnace. T h e "small coals" and "slack" (coal dust) had limited uses, but nevertheless had to be removed from the mine so as not to hinder the cutting of the remaining seams. It was this less valuable product that was used to heat the boilers for the steam engine. The added reliability of the Boulton and Watt engine was probably a more important consideration than its efficiency. Water power was often adequate and reliable enough to 27

Raistrick,Dynasty, pp. 115-116. T h e ironworks, number of furnaces, and date of purchase of the Newcomen engine: Coalbrookdale (2), 1742; Horsehay (2), 1755 and 1757; Ketley (2), 1761; Dowlais (1), 1764; Madeley Wood (2), 1766; Bradley (2), 1766; Carron (4), 1767; and Clyde (1), 1788. 28

70

THE ADOPTION OF COKE-SMELTING

operate a coke blast furnace. As late as 1790, there were twelve coke blast furnaces (out of a total of eighty-three) that used no steam power of any kind. 29 Many of the coke blast furnaces employing steam power in 1790 were also dependent upon water power. There is considerable evidence that water power was often sufficient to operate a single coke blast furnace and that steam engines were purchased only when a second or third furnace was added. At Masbrough in Yorkshire, for example, one furnace was erected in 1765 and another in 1779, but a steam engine was not installed until 1782. 30 Had there been no steam power of any kind in the eighteenth century, a substantial coke-smelting sector would nevertheless have developed by 179

°·.

While the steam engine was not a prerequisite for the adoption of coke-smelting, it served to speed diffusion of the new technique. It was not coincidental that of the eighty-three coke furnaces in operation in 1790, all but twelve used steam power, while all twenty-five charcoal furnaces were water-powered. 31 The steam engine was almost universally adopted because it enabled the ironmaster to cut production costs in several important ways. Steam power permitted the coke ironmaster to operate the blast furnace almost all year long, increasing output and lowering unit capital costs. Charcoal furnaces were shut down for at least four months of the year. While needed furnace repairs made the periodic "blowing-out" of the furnace inevitable, the length of time the furnace was out of blast was cut down sharply by the application of steam engines to the furnace. The Horsehay furnaces, steam-powered and using coke, shut down for repairs for five weeks in 1767 and for only three weeks in 1772. 32 29

Scrivenor, Comprehensive History, pp. 359-361 John, Walker Family, p. 52, and Boulton and Watt MSS, Muirhead Section, Engine Book. 31 Scrivenor, Comprehensive History, pp. 359-361. 32 R. A. Mott, "The Coalbrookdale Group Horsehay Works," TNS, xxxi (!957-5 8 a n d !958-59). P- 283. 30

71

T H E INDUSTRIAL REVOLUTION IN IRON

T h e operation of the Staveley furnace in Derbyshire shows how the steam engine eliminated long shut-downs for furnaces with highly inadequate water supplies. A steam engine was installed at Staveley by the spring of 1790, when the purchase of 89 tons of "small coals for the engine" was recorded. In September 1790 the firm made a payment of £278 on "Engine Account." It seems likely, however, that the steam engine had been installed in 1789 because furnace operations changed significantly in that year. During the years 1785-1788, the Staveley Furnace was shut down an average of five and a half months per year and produced 418 tons of pig iron per annum. Over the next seven years output climbed to an average of 776 tons per annum, while yearly shut-downs lasted slightly over a month. 3 3 T h e flexibility that the steam engine gave the ironmasters in selecting the site for their blast furnaces was another way in which it helped the early coke iron industry to cut costs. T h e steam engine allowed the ironmaster to build the furnace where he could best take advantage of his raw materials. T h e nature of the raw materials used to make iron, i.e., their very low value to weight, necessitated building the blast furnace near the coal and ore deposits. Without the steam engine the spread of coke-smelting to some parts of Britain would have been severely retarded. The Black Country (South Staffordshire) in particular had very rich and extensive coal and ore deposits, but very little water power. This region is a great plateau, with few streams near its rich natural resources. 34 Although the Black Country accounted for less than 10% of national pig iron output in 1788, it became an important ironmaking district in the following three decades. Without the steam engine, the resources of this region would not have been exploited for some time. 33 Staveley Ironworks MSS, Sheffield City Library, Furnace Accounts, 1785-1806. 34 G. R. Morton and M. LeGuillou, "The Rise and Fall of the South Staffordshire Pig Iron Industry," British Foundryman, LX (1967), p. 271.

72

THE ADOPTION OF COKE-SMELTING

Finally, the steam engine permitted the ironmaster to increase output by increasing the size of the blast furnace. Coke could support a much heavier "charge" in the furnace stack than charcoal could support. T h e size of the coke furnace was limited only by the strength of the blast needed to support combustion. The use of the steam engine, coupled with various blowing cylinders that replaced the leather bellows, increased the strength of the blast, permitting the construction of larger furnaces. Both the output and the size of coke blast furnaces increased sharply in the early coke era. Before 1760, the two coke furnaces at Horsehay were producing less than 700 tons each. 35 Average output of coke furnaces had risen to 925 tons by 1788 and then climbed to nearly 1,500 tons in 1805. 36 This increased output was partly a result of more intensive use of existing furnaces, but in part resulted from increased furnace size. T h e coke furnaces erected at Coalbrookdale (1715), Horsehay (1755), and Ketley (1755) were not significantly larger than contemporary charcoal furnaces. They stood about twenty-five feet high and had an inside capacity of less than 600 cubic feet. Furnace size, however, increased considerably in the second half of the century. When the Coalbrookdale furnace was rebuilt in 1777, it was enlarged to 1,750 cubic feet. The Madeley Wood furnace, built around 1810, stood forty-five feet high and had a capacity of roughly 2,600 cubic feet. 37 The steam engine also made it possible to increase output by constructing several furnaces on the same site. While water power was often adequate for a single furnace, it was seldom sufficient to power several furnaces. In 1790 there were twenty-two multi-furnace sites in Britain, with a total of fifty-three furnaces, more than half the total number in operation. None of these multi-furnace sites were without a steam engine. 38 35 36 37 38

Mott, "Horsehay Works," p. 283. See Appendix C for a detailed explanation of these data. Mott, "Abraham Darby," pp. 75-76. Scrivenor, Comprehensive History, pp. 359-361.

73

TH E INDUSTRIA L REVOLUTIO N IN IRON T h e r e is considerabl e circumstantia l evidenc e tha t coke smeltin g was characterize d by significan t economie s of scale. Pig iro n costs an d price s were bot h falling durin g th e perio d 1750-1790 , while th e size an d outpu t of furnace s was increasing . I t seem s unlikel y tha t an ironmaste r would build a single furnac e with a capacit y of 1,000 ton s instea d of two with a capacit y of 500 ton s eac h unles s uni t tota l costs were lower from th e larger furnace . Constructio n costs pe r uni t of capacit y would be lowered by buildin g larger furnaces . Althoug h th e eighteenth-centur y blast furnac e was in fact a truncate d pyramid , let us view it as an elongate d squar e structure . A furnac e with th e dimension s 25' χ 10' χ 10' require s 1,000 squar e feet of masonr y (o r brick) an d would have a volum e of 2,500 cubi c feet. Say we increas e th e dimension s to 40' χ 15' χ 15'. Volume would increas e by a facto r of 3.6 (t o 9,000 cubi c feet) , while th e squar e footag e of masonr y require d would increas e by a smaller facto r of onl y 2.4 (t o 2,400 squar e feet) . Construc tio n costs would presumabl y fall as furnac e size increased . T h e use of a larger furnac e an d mor e tha n a single furnac e on a given site would ten d to lower uni t capita l costs for othe r reason s as well. T h e r e were heavy costs incurre d in developin g a site for a blast furnace . T h e ironmaste r typically ha d to sink mines , build road s or tramways , an d con struc t housing , as well as build th e furnac e itself. We would no t expec t th e constructio n of a larger furnac e o r th e addi tio n of a secon d o r thir d furnac e o n a develope d site to increas e thes e fixed costs as fast as outpu t would be increased . Manageria l costs, essentiall y fixed in nature , coul d also be lowered by increasin g output . Addin g a secon d furnac e to on e alread y in operatio n did no t necessitat e hir in g a secon d manage r o r clerk . T o tak e advantag e of thes e economie s of scale, th e ironmaste r invariabl y neede d to increas e th e powe r of th e blast, an d thi s was convenientl y don e by addin g anothe r steam engine . Althoug h th e coke proces s ha d a clear cost advantag e over th e charcoa l process , independen t of th e steam en -

74

T H E A D O P T I O N OF COKE-SMELTING

gine, the innovations of Boulton and Watt helped to speed the diffusion of the new process considerably. Similarly, innovations in the refining process, particularly the use of coal, also contributed to the spread of coke-smelting. Technological change in the refining sector will be considered in the next chapter.

75

FIVE

INNOVATION IN THE WROUGHT IRON SECTOR: THE POTTING AND PUDDLING PROCESSES TO 1790 T H E second major improvement in ironmaking technology in the eighteenth century was the application of coal to the refining process, i.e., to the production of wrought iron. The standard view of the development of the wrought iron sector emphasizes the discontinuity of technological change. Historians of the iron industry have discussed the application of coal to the refining process almost entirely in terms of Henry Cort's "puddling process," patented in 1783-1784. 1 Historians like Ashton have not ignored Cort's predecessors or their processes. 2 However, they were generally unaware of the precise nature of the various refining techniques developed in the 1760s and 1770s and of the extent to which ironmasters adopted these techniques. One major exception is Dr. Mott's discussion of the widespread use of the "Shropshire process" in the 1780s.3 A more recent contribution by Morton and Mutton has further enhanced our technical understanding of these processes. 4 Although historians have given vague recognition to earlier experimentors, the standard interpretation is that there were no significant innovations in refining before 1783 and that the puddling process saved the wrought iron industry from extinction. This view was recently echoed in a standard economic history of the eighteenth century: "It 1

Harry Scrivenor, History of the Iron Trade (London: Longmans, 1854), pp. 110-124; Ashton, Iron and Steel, pp. 87-103; and Birch, Economic Hisiory, pp. 31-43. 2 Ashton, Iron and Steel, pp. 87-90. 3 Mott, "Horsehay Works," pp. 47-544 Morton and Mutton, "Transition," pp. 722-728.

76

INNOVATION IN T H E W R O U G H T IRON SECTOR

was not until 1783 and 1784 when Henry Cort patented a puddling and rolling process, which permitted the largescale production of bar-iron with coal fuel, that it was possible to produce wrought-iron, at a price and quality which effectively killed the charcoal industry (and also the industry based on imported ores) for all purposes except highgrade steel."5 There is considerable evidence, however, contradicting this view and suggesting a quite different course of technological change in the wrought iron sector. One important innovation was the "potting and stamping" process for converting pig iron to bar iron. This technique, developed in the 1760s by the Wood brothers, utilized both coal and coke-smelting pig iron. 6 The potting process achieved considerable success, accounting for nearly half of bar iron output by 1788. 7 This chapter will argue that potting, rather than puddling, enabled the refining sector to expand output and increase its share of the domestic bar iron market over the period 1750-1790. EARLY EFFORTS TO U S E COAL

The refining sector of the iron industry stagnated in the first half of the eighteenth century. Bar iron output was slighdy higher at mid-century than in the period 17161720, yet the share of the British bar iron market held by domestic producers had fallen off significantly since the early part of the century. There were no major changes in the technology of wrought iron production during these years. Forgemasters converted charcoal-smelted pig iron to bar iron through a tedious process of reheating small batches of pig iron in charcoal-fired "finery" and "chafery" fires. Their efforts to replace charcoal with coal or coke were largely unsuccessful before mid-century. 8 5

Deane, First Industrial Revolution, p. 107 Morton and Mutton, "Transition," pp. 723-724. 7 Mushet, Papers, p. 44. 8 For a discussion of the early efforts to use coal in refining, see Flinn, "William Wood," pp. 55-71, and Morton and Mutton, "Transition," pp. 722-728. 6

77

TH E INDUSTRIA L REVOLUTIO N IN IRO N T h e cost of producin g bar iro n with charcoa l increase d in bot h mone y an d rea l term s in th e secon d hal f of th e eighteent h century . All th e charcoa l forges in ou r sampl e (Tabl e 5.1), with th e exceptio n of Bromfor d an d Cookley , experience d cost increase s of ΐ5%-2θ % betwee n th e 1740s an d th e 1770s. T h e genera l pric e levels of bot h producers ' TABLE 5.1 AVERAGE VARIABLE COSTS , BY DECADE , AT SELEC T CHARCOA L FORGES , 1740-180 1 (£ PE R TO N OF BAR IRON )

IJ 5OS

1760s

IJJOS

ι J 80s

ι J 90s

Forge

Π 40s

Attercliffe Backbarro w Bromfor d Carburto n Colnbridg e

— — — £13.1 7 £14.0 2 £16.0 5 14.70 — — — £18.5 2 £21.0 6 15.14 15.28 £14.2 7 15.08 15.02 14.12 17.88 16.25 — — — 1449 14.85 — — — — 13-35

Cookle y Kirkstal l Mitto n (Lower ) Mitto n (Upper ) Roch e Abbey

!3-23 12.88 13.21

Staveley Wadesley Whittingto n Wolverly

—

•3-3 9 16.02 H-3 4 13.08 12.99

1563 13-5 8 14-97 15.21 1443 1352 14-3 2 1513 14.87

16.27

15.21

15.87

18.36

15.76

1592 16.38

15-97 15.41

17.44 16.78

14.68

16.59

—

1590 16.24 1552 15.60 15-55 15.20

—

—

16.74

—

16.52 14.70

—

— — — —

—

— — — —

Sources: Bradfor d Cit y Library , Spencer-Stanhop e MSS for Colnbridg e an d Kirkstal l forges; Kidderminste r Publi c Library , Knigh t MSS , Stou r Partnershi p Accounts , K 141-98 an d Bringewoo d Partnershi p Accounts , K 243-6 8 for Bromford , Cookley , Mitto n (Uppe r an d Lower) , Whittington , an d Wolverly forges; Lancashir e Recor d Office, Backbarro w MSS , DP/37 6 for Backbarro w forge; an d Sheffield Cit y Library , Spencer-Stanhop e MSS an d Staveley Ironwork s MSS for Attercliffe, Car burton , Roch e Abbey, Staveley, an d Wadesley forges.

good s an d consumers ' good s (excludin g cereals ) rose by onl y abou t 10% over th e sam e period. 9 Risin g costs of raw materials , mainl y charcoa l an d 9 Calculate d by averagin g th e Schumpeter-Gilbo y pric e indice s by dec ade . T h e inde x number s ar e take n from Mitchel l an d Deane , British Historical Statistics, p. 469.

78

INNOVATION IN THE WROUGHT IRON SECTOR

charcoal-smelted pig iron, accounted for most of the cost increases experienced by forge operators. T h e prices of these two inputs tend to move together because charcoal accounted for about half of the cost of charcoal pig iron. Input prices, summarized in Table 5.2, increased more rapidly than the general price level. Charcoal prices rose by about 45% between the 1740s and the 1770s, while pig iron prices jumped about 15%. TABLE 5.2 AVERAGE INPUT PRICES AT THE FORGE FOR SELECT CHARCOAL FORGES, 1740s-1790s

1740s 1750s 1760s 1770s 1780s 1790s

Pig Iron (£ per ton)

Charcoal (i per dozen)

5.79 6.40 6.84 6.70 7.17 7.57

1.28 1.51 1.70 1.86 1.83 2.07

Sources: Same as for Table 5.1.

Since these two raw materials accounted for roughly 80% of variable costs, any change in their prices was likely to have a significant impact on costs. 10 Ironmasters using the finery-chafery (charcoal) process were unable to improve their efficiency in using these inputs, so production costs rose sharply. In fact, productivity stagnated or declined after mid-century at ten of the fourteen forges in our sample. 11 Most forge operators had probably achieved the maximum efficiency possible, given the technology they were utilizing. During these years, for example, the amount of pig iron needed to produce a ton of bars was 10

Among the forges in our sample, this share ranged from 71% to 90%. 11 More comprehensive cost and productivity data for these forges are available in my "Technological Change in the British Wrought Iron Industry, 1750-1815: A Reinterpretation," Economic History Review, Second Series, xxvn (May 1974), pp. 192-194.

79

T H E INDUSTRIAL REVOLUTION IN IRON

fairly constant at about 1.35 tons. 12 T h e nature of the finery-chafery process made major productivity advance impossible without the abandonment of the process itself. T h e cause of rising input prices after mid-century is somewhat obscure. For the forges in our sample, both charcoal and pig iron prices rose simultaneously, beginning in the mid-1750s. One possible explanation is that rising labor costs drove up the price of charcoal. It seems more likely, however, that higher prices were a reflection of demand conditions . While we cannot plot the course of bar iron output with any great degree of certainty, bar iron imports can be used as a reasonably accurate indicator of changes in the domestic bar iron market. Imports nearly doubled between the 1740s and the 1770s, 13 reflecting a sharp increase in demand for iron from an economy beginning to industrialize. In attempting to expand output in response to this increased demand, forgemasters drove up the prices of their major inputs. Charcoal ironmasters probably faced dwindling profit margins after mid-century because, while costs were rising, product prices were fairly stable. Market prices of Swedish bar iron in Britain in the second half of the eighteenth century are given in Figure 5.1. While prices fluctuated a great deal between 1750 and 1780, there was no marked upward trend. Expanded imports from Sweden and Russia were crucial in keeping down bar iron prices during these years. Faced with rising production costs and increased foreign competition, British forgemasters were encouraged, if not driven, to find cheaper techniques for producing bar iron. Forgemasters first used coal in the final process of bar iron production, the reheating of the refined metal in the chafery. Malleable iron, already decarbonized in the finery fire, was reheated in the chafery fire to enable it to be forged under the hammer. Bar iron reheated in the chaf12 Pig iron used per ton of bar iron produced ranged from 1.26 tons to 1.49 tons for the forges in our sample. 13 Bar iron imports averaged 22,500 tons per annum in the 1740s and 44,100 tons per annum in the 1770s. T h e data are from Hildebrand, "Foreign Markets," p. 10.

80

INNOVATION IN T H E W R O U G H T IRON SECTOR FIGURE 5.1:

1750 Source:

SWEDISH BAR IRON PRICES IN GREAT BRITAIN, 1750-1805

1760

1770

1780

1790

1800

Professor A . H. John, London School of Economics

ery was less likely to be contaminated by sulphur from coal because it was reheated to a forging temperature, much lower than the melting temperature attained in the finery. 14 14

Morton and Mutton, "Transition," p. 722. 8l

T H E INDUSTRIAL REVOLUTION IN IRON

While the exact timing of the replacement of charcoal with coal in the chafery cannot be documented, coal was being used in some forges in the 1730s and was in general use by the 1760s. Mott has argued that an air furnace using coal had replaced the charcoal chafery fire at Coalbrookdale forge by the 1730s.15 An agent of Lord Foley testified before a House of Commons Committee in 1737 that several forges on the Stour River in Worcestershire were using coal, although charcoal was still the more common fuel. 16 There is also considerable evidence that several forges in the South Yorkshire-Derbyshire region used coal by the 1740s. There are references in the forge accounts to this practice at AtterclnTe (early 1740s), Kirkstall (1750), Staveley (1754), and Wadesley (1755)- 17 The use of coal in the chafery fire had become the accepted practice by the 1760s. Charles Wood reported that eight of the eleven forges he visited in the West Midlands in 1754 used coal, 18 while another ironmaster reported in 1766 that an additional fourteen forges in Shropshire and Cheshire had adopted the same technique. 19 There were numerous efforts in the second half of the eighteenth century to replace charcoal with coal for the entire conversion process. Morton and Mutton list nine distinct patents taken out by various inventors between 1761 and 1784, the date of Cort's second patent. 20 Ashton argued that "most of these, however, must have been the expression of aspiration rather than of achievement." 21 Many of the patent specifications, such as John Roebuck's in 1762, were extremely vague, while there is often little evidence that a distinct process was ever developed and put into operation. 22 15

Mott, "Abraham Darby," p. 82. Ashton, Iron and Steel, p. 88. 17 Spencer-Stanhope MSS, Sheffield City Library and Bradford Public Library. 18 "Diary of Charles Wood at the Cyfarthfa Ironworks." 18 Ashton, Iron and Steel, p. 88. 20 Morton and Mutton, "Transition," p. 723. 21 Ashton, Iron and Steel, pp. 87-88. 22 Morton and Mutton, "Transition," p. 724. 16

82

I N N O V A T I O N IN T H E W R O U G H T IRON SECTOR T H E POTTINC PROCESS

There were serious technical obstacles to be overcome before the forgemaster could use coal to convert pig iron to bar iron. The conversion process (strictly speaking, the "fining" process) utilized heat to remove carbon from pig iron, making the metal malleable. Coal usually contains sulphur and direct contact between this fuel and the molten pig iron resulted in the contamination of the metal with sulphur. Bar iron containing sulphur was brittle when hot (or "red-short") and was very difficult to work under the forge hammer. Instead of being easily shaped by the blows of the hammer, the metal would disintegrate when struck. T h e forgemaster's problems were multiplied if he wanted to use coke-smelted pig iron because it contained a relatively high share of silicon, another undesirable impurity.23 The ironmaster who wanted to use both coal and coke pig iron had to develop a process that would yield bar iron that was free of carbon, sulphur, and silicon. The first real breakthrough came in the early 1760s, when the Wood brothers patented a new process for producing wrought iron with coal. 24 They removed silicon from coke-smelted pigs by melting them in a "refinery" heated with raw coal. After this initial process, the pig iron had lost most of its silicon, but had been contaminated by sulphur from the coal. The pig iron was removed from the refinery, allowed to cool, and then broken into small pieces. These pieces of desiliconized iron were then put into covered crucibles or pots with a flux such as lime, which would absorb sulphur from the metal. Between a dozen and twenty of these pots were then placed in a coalfired reverberatory furnace and heated. Two chemical reactions took place at this stage in the process. The high temperature oxidized the carbon in the metal and thus removed this undesirable element, while the flux absorbed the sulphur that the metal had acquired in the refinery stage. The clay crucibles or "pots" served to protect the metal from further contamination. These pots 23

Ibid., p. 727.

24

Patent Nos. 759 (1761) and 794 (1763).

83

T H E INDUSTRIAL REVOLUTION IN IRON

would eventually break and the metal was then quickly removed from the furnace, reheated in a coal-fired chafery, and consolidated under the forge hammer. This third stage was the same as the final stage of the finery-chafery process. Distinctive new elements in this process were the use of heavy stampers to break up the refined iron into small pieces to be placed in the pots, and the use of the pots themselves. Because of these new operations, this technique became known as the "potting and stamping process," or simply the "potting process." It was also occasionally called the "Shropshire process" because of its popularity in that region. 25 A significant improvement in the basic potting process was described in patents taken out in the early 1770s by John Cockshutt (1771) and by Richard Jesson and John Wright (1773). 26 I n both specifications, coke was used instead of raw coal in the refinery fire. Coking the coal removed most of the sulphur and diminished the contamination of the metal with this undesirable element. This enabled both patents to specify the use of pots without fluxes in the reverberatory furnace. Except for the use of coke instead of coal and the elimination of the use of fluxes, the process described in both patents was essentially the same as that described in the Woods' patent of 1761. 27 T h e potting process was the only commercially successful technique for utilizing coal in the production of bar iron before Cort introduced puddling in the 1780s. John Roebuck took out an extremely vague patent in 1762 describing a process that was probably never implemented. The Cranage brothers patented a process similar to puddling in 1766. Their patent described in vague terms a 25 Morton and Mutton, "Transition," pp. 723-724. My understanding of the potting process was greatly enhanced by conversations with the late G. R. Morton. 26 Patent Nos. 988 and 1054 respectively. 27 Morton and Mutton, "Transition," p. 726.

84

INNOVATION IN THE WROUGHT IRON SECTOR

process using a reverberatory furnace fired with raw coal without the use of either pots or fluxes.28 While the Cranage process may have been adopted, there is some evidence that it was a failure. 29 Among the papers relating to the Gibbons family of ironmasters found in the StafiFordshire Record Office, there are some accounts of early experiments performed with Cort's process. On one of these accounts, it was noted in the margin that: "G. and T. Cranage took out a patent and assigned it over to the C Dale (Coalbrookdale) Co. for a trifle, (the Cranage brothers) being their Workmen. (The patent was) for making Iron in an Air Furnace-which they have since discontinued not being able to make (sufficient) Yield. They used nearly 40 cwts. pigs to make 20 cwts. (bar) iron." 30 James Weale noted that the Cranage's patent was so poorly specified that it was worthless and that the Coalbrookdale Company bought it "for a trifle." 31 The Coalbrookdale Company probably paid little for the patent because the technique was unworkable. They perhaps hoped that this vague patent would allow them to adopt improved techniques later without having to pay royalties to a legitimate inventor. The potting process was adopted by much of the industry before puddling was introduced in the 1780s. There appears in Mushet a "List of Forges where the old method of making iron exists, with the number of refineries and the quantity of iron they are supposed to make, in 1788." 32 The Mushet list is nearly an exact copy of another list found in the Weale MSS. 33 Both lists were based upon the more detailed list of furnaces and forges drawn up by William Wilkinson sometime between 1788 and 1794. 34 28 29 30 31 32 33 34

Patent No. 851, 17 June 1766. Morton and Mutton, "Transition," p. 724. Harward MSS, Staffordshire Record Office, D 695/1/12/36. Weale MSS, Science Museum Library, South Kensington. Mushet, Papers, p. 44. "Accounts of the Iron and Steel Trade," 11. Birmingham Reference Library, Boulton and Watt MSS, Muirhead

THE INDUSTRIA L REVOLUTION IN IRON

T h e Mushet-Weal e MS S version shows 105 forges an d 208 fineries (chaferie s ar e no t listed) producin g 16,400 ton s of bar iro n with charcoal . Mor e importantly , it was also note d tha t "ther e were at thi s tim e 60 meltin g refinerie s for workin g with coke an d stamping." 3 5 I t was the n estimate d tha t if eac h "meltin g refinery " produce d five ton s of bar s pe r week, the n thei r outpu t (5 χ 60 χ 52) would have been abou t 15,600 tons. 3 6 Thi s estimat e shows tha t at th e tim e tha t Cort' s proces s was introduced , roughl y hal f of th e bar iro n produce d in Britai n was mad e with th e pottin g process . Ther e is little informatio n on th e timin g of th e diffusion of th e pottin g process . T h e Wilkinson list include s th e dat e of constructio n of forges usin g th e pottin g proces s for mor e tha n hal f (33 ou t of 50) of th e meltin g refinerie s in use in 1788. Virtually all of thes e (28 ou t of 33) were built in th e 1780s. I t is possible tha t Wilkinson was unawar e of th e exact constructio n date s of th e remainin g forges because the y ha d been built well befor e 1780, bu t evidenc e of widesprea d adoptio n of pottin g before 1780 is scanty . T h e pottin g proces s ha d been originall y patente d in 1761 an d 1763 by th e Wood brother s an d the y presumabl y pu t it int o operatio n at thei r forge at Wednesbury. 3 7 Charle s Wood also introduce d th e pottin g proces s at Cyfarthf a ironwork s in Sout h Wales in 1766. 3 8 Perhap s ther e was little diffusion of th e proces s befor e th e improvement s of th e early 1780s. Pottin g was definitel y in use at th e West Bromic h works of Jesson an d Wright by 1775. 3 9 T h e exten t of its use in th e rest of th e industr y before 1788 is unknown , bu t th e available evidenc e suggests tha t forgemaster s did no t adop t pot tin g on an y significant scale unti l th e late 1770s. 36 Mushet , Papers, p. 44. Ibid. Morto n an d Mutton , "Transition, " p. 723. 38 "Diar y of Charle s Wood at Cyfarthf a Ironworks. " 39 Marchan t d e la Houliere , "Repor t to th e Frenc h Governmen t on British Method s of Smeltin g Iro n Or e With Coke , an d Castin g Nava l Canno n in th e Year 1777," translate d an d edite d by W. H . Chalone r in Edgar Allen News, xxvm (1948) , p. 213. 35 37

86

INNOVATION IN THE WROUGHT IRON SECTOR

T h e potting process brought forgemasters significant cost reductions over the finery-chafery process. Variable costs for the two processes are compared in Table 5.3 below. Capital costs are ignored because of the lack of reliable data on investment. This is probably not a serious omission because the lack of specific estimates of capital costs in the accounts implies that they were relatively small. Labor costs are included in these estimates, but are not considered in any detail because raw materials made up about 80% to 90% of the variable costs of producing bar iron, regardless of the process used. TABLE 5.3 AVERAGE VARIABLE COSTS AT FORGES USING THE CHARCOAL AND POTTING PROCESSES, 1787 Pig Iron Forge Backbarrow Bromford C o o k ley L. M i t t o n U. Mitton Wolverly W e a l e MSS (Potting) Cyfarthfa (Potting)

Variable Costs

Other

£5-37 2.87

£2.13 2 17 3-58 4.66

15-38 16.19 17.40

8.21

2-73 39 2.77 2.89

2-45 2.88

15-35 1398

7.20

0.60

3.12

10.92

8.80

1.88

1.44

12.12

Costs £

Average Fuel Costs

9.00 10.34 9.88 9-75 10.13

Costs

£17.50

Sources: For the six charcoal forges, see the sources cited in Table 5.1 above. T h e other estimates are from the Weale MSS, Science Museum Library, South Kensington, "A Comparative View of the Expense of Making Iron in the Stampered Method and Henry Cort's Process" and the Melville Castle Muniments, Scottish Record Office, GD 51/10/17.

Forges using the potting process consistently had average variable costs at least £2-3 lower than those recorded at contemporary charcoal forges. Potting gave the forgemasters a significant savings in fuel costs over the older process. Pig iron costs were also lower for potting in spite of the

87

T H E INDUSTRIAL REVOLUTION IN IRON

fact that forges using the process consumed at least 25% more pig iron than the contemporary charcoal forges (see Table 5.4). T h e lower price of coke-smelted pigs more than compensated for this increased consumption level. TABLE 5.4 PIG IRON COSTS AT FORGES USING THE CHARCOAL AND POTTING PROCESSES, 1787

Backbarrow (Charcoal) Bromford (Charcoal) Cookley (Charcoal) L. Mitton (Charcoal) U. Mitton (Charcoal) Wolverly (Charcoal) Weak MSS (Potting) Cyfarthfa (Potting)

Price Per Ton of Pig Iron

Pig Iron Used Per Ton Bars (Tons)

Pig Iron Costs Per Ton Bars

£7.00

1.28

£9.00

7.04

1.47

10.34

8.00

1.23

7.22

7.87

!•35 1.28

9.88 9-75

10.13

6.12 4.50

!•34 1.60

8.21 7.20

5.00

1.76

8.80

Sources: See Table 5.3. T H E PUDDLING PROCESS: T H E EARLY YEARS

The puddling process, described in patents taken out in 1783 and 1784, 40 was a significant technological improvement on the potting process. Pig iron was refined in a coal-fired reverberatory furnace without the use of pots or fluxes. The fuel did not come into contact with the metal, but, instead, the heat generated by the coal fire was reflected ("reverberated") off the ceiling of the furnace onto the metal. De-carburization was speeded by stirring the molten pig iron, bringing impurities to the surface to be burned off. T h e molten pig iron formed a pool or puddle in the reverberatory furnace, giving the process its name. Cort's technique also used a new method for consolidating wrought iron into bars. T h e metal coming from the 40 T h e patents are discussed in detail in Morton and Mutton, "Transition," p. 727.

88

INNOVATION IN T H E W R O U G H T IRON SECTOR

puddling furnace was a pasty mass containing lumps of wrought iron intermixed with slag. Cort reheated this mass in an air furnace to a welding heat (lower than the melting temperature) and then "shingled" or pardy consolidated the metal into slabs under a hammer. T h e slabs were then reheated and formed into bars in a rolling mill rather than under the hammer. Rolling was a much faster method of consolidating than hammering, and permitted ironmasters to produce bars of standard size. Both the size and the shape of the bars could be altered by simply changing the size and shape of the grooves in the rolls. Since consolidation of the metal by rolling was a distinct feature of Cort's process, it should really be called the "puddling and rolling" process. Puddling had several advantages over potting. Cort's process used no pots or fluxes, and de-carburization was much faster because the metal was stirred. If pig iron of sufficiently low silicon content was used, the preliminary refining of the pig iron could be eliminated, making puddling a one-stage process. These improvements, plus the advantages of rolling over hammering, made puddling an attractive alternative to potting. T h e originality of Cort's invention can be questioned. Morton and Mutton noted that the processes patented by John Roebuck in 1762 and the Cranage brothers in 1766 may have been early attempts at puddling. 4 1 There is no evidence that either of these inventors were successful. Morton and Mutton also pointed out that John Purnell patented a machine for making bolts that utilized grooved rollers in 1766, anticipating Cort's rolling technique. 42 Separate patents taken out by Richard Jesson (No. 1396) and Peter Onions (No. 1370) in 1783 describe a process for producing bar iron similar to puddling, although both patents specified consolidation by hammering. T h e Onions specification was very detailed and bore a striking resemblance to Cort's patent. 43 There is no concrete evi41 43

42

Ibid., p. 724. Ibid., pp. 726-727.

89

Ibid., pp. 724-725.

THE INDUSTRIAL REVOLUTION IN IRON

dence, however, that the process developed by Onions was ever successfully put into operation. Richard Reynolds, a prominent Shropshire coke ironmaster, wrote to Cort: "I am sorry to say that Peter Onions has not succeeded, and has with us, entirely given up the point. However, he seems confident of succeeding elsewhere, but this I doubt, unless he hits upon some other expedient. I am on the contrary as much pleased to hear of the great success of thy experiments and certainly hope they will be attended with every advantage to the ingenius author that he can wish." 44 There is, then, no solid evidence that Henry Cort does not deserve full credit for the invention of puddling. Although Cort's process appeared to have several advantages over potting, few ironmasters used the new process before 1790. Cort first developed puddling at his forge at Fontley, near the Portsmouth naval yards, and used it there until his bankruptcy in 1789. 45 He made several efforts to publicize his process, but few ironmasters were convinced of its value. Cort conducted tests of his method for several West Midlands ironmasters in November and December 1784, using coke pig iron from furnaces at Ketley, Snedshill, Bradley, and Cyfarthfa. 46 There is no evidence that these tests produced any converts. It was not until 1786 that other ironmasters began to adopt puddling. In February of that year, Folliot Scott and Company took out a license from Cort, agreeing to pay him a royalty of £0.50 per ton of bar iron produced with the process. 47 They were apparently successful with Cort's technique, as they were still using it more than a year later. 48 In May 1787, Richard Crawshay of Cyfarthfa iron44

Weale MSS, Richard Reynolds to Henry Cort, 17 February 1784. Samuel Smiles, Industrial Biography: Iron Workers and Tool Makers (London: John Murray, 1863), pp. 123-125. The details of Cort's career are given in Smiles, Industrial Biography, pp. 114-132; Ashton, Iron and Steel, pp. 90-103; and H. W. Dickinson, "Henry Cort's Bicentenary," 7WS, xxi (1940-41), pp. 31-47. 46 Harward MSS, Staffordshire Record Office, D. 695/1/12/36. 47 Dickinson, "Henry Cort's Bicentenary," p. 37. 48 Weale MSS, Folliot Scott & Company to Henry Cort, 10 March 1787. 45

90

INNOVATION IN THE WROUGHT IRON SECTOR

works in South Wales took out the second license issued by Cort. 49 Crawshay reported that he was using puddling in November of that year. 50 Cort continued his efforts to convince other ironmasters to adopt his process, but with little success. He reduced the royalty to £0.25 per ton in July 1788. Crawshay sent a circular to the rest of the ironmasters, informing them of the reduction and encouraging them to adopt the process. 51 He reported no response from the other ironmasters by mid-September: "The Ironmasters are all silent. I have not (received) one line of Answer. We must expect little (in order) to avoid Disappointment." 52 Only six ironworks adopted Cort's process before 1790. In addition to the three forges previously mentioned, puddling was used at the Pennydarren ironworks in South Wales in mid-1788, 53 at Wilsontown (Scotland) in 1789, 54 and at Wortley forge in South Yorkshire by 1790. 55 Two of these six ironworks, Fontley forge and Folliot Scott and Company, had ceased producing by 1790. 56 Puddling did not spread very rapidly before 1790 because of the serious technical problems associated with the new process. Cort had been able to eliminate the refining (de-siliconizing) stage of the conversion process by using coke pigs with a low silicon content, but most ironmasters found that they needed to refine the pig iron before puddling, thus increasing the costs of producing with the new technique. 57 As is the case with most new techniques, the original 49

Dickinson, "Henry Cort's Bicentenary," p. 37. Weale MSS, Richard Crawshay to Henry Cort, 3 November 1787. 51 Monmouthshire Record Office, Letter Book of Richard Crawshay, 1 January 1788 to 3 November 1797. Circular dated July 1788. h2 Ibid., Richard Crawshay to Samuel Jellicoe, 12 September 1788. 53 Ibid., Richard Crawshay to James Cockshutt, 17 May 1788. 54 Weale MSS, "An Account of the Expense in Making a Ton of Iron for Government at Equal Quality to the Best Swedish Iron, 1789." 55 Victoria County History of Yorkshire (London, 1907), pp. 398-400. 5e Crawshay Letter Book, Richard Crawshay to James Cockshutt, 7 November 1788 and 18 November 1789. 57 Morton and Mutton, "Transition," p. 727. 50

91

T H E INDUSTRIAL REVOLUTION IN IRON

puddling process had to be improved considerably before it became commercially successful. Both entrepreneurs and workers had to go through a learning period, making many mistakes that often resulted in low outputs of uneven quality. Richard Crawshay's correspondence with the works manager at Cyfarthfa over the years 1788-1792 is ample evidence that puddling was not an immediate technical success. 58 More importantly, the cost savings associated with puddling were initially relatively small, discouraging most ironmasters from adopting the process. Variable costs of puddling and potting before 1790 are compared in Table 5.5. While puddling was a cheaper technique than the older finery-chafery process, it had no great cost advantage over the potting process. If we dismiss the estimate of puddling costs in 1787, part of a pamphlet purporting to show the superiority of puddling to potting, the remaining estimates show variable costs about the same as for the potting process. Given the technical problems associated with puddling, it is not surprising that there was no widespread adoption of Cort's process in the 1780s. T H E SIGNIFICANCE OF THE POTTING PROCESS

T h e potting process had an important impact on the overall development of the British iron industry in the second half of the eighteenth century. It was certainly a technological advance over the finery-chafery method, permitting ironmasters to use coal instead of charcoal and thereby to reduce costs substantially. Had puddling not been developed, the potting process probably would have become the predominant method used to produce bar iron. The success of the potting process probably accounts for the relatively good performance of the refining sector over the period 1750-1788. Output grew from 18,800 tons to 32,000 tons, and the potting process accounts for all the growth. The industry's output of charcoal bar iron fell from 18,800 tons in 1750 to 16,400 tons in 1788, and it 58

Letter Book of Richard Crawshay, 1788-1797.

92

INNOVATION IN THE W R O U G H T IRON SECTOR TABLE 5.5 AVERAGE VARIABLE COSTS OF PRODUCING BAR IRON WITH THE POTTING AND PUDDLING PROCESSES BEFORE

1790

(£ PER TON)

Forge

Year

Weale MSS (Potting) Cyfarthfa (Potting) Fontley (Puddling) Fontley (Puddling) Cyfarthfa (Puddling) Fontley (Puddling) Cyfarthfa (Puddling) Fontley (Puddling) Cyfarthfa (Puddling) Wilsontown (Puddling)

1787 1787 1787 1789 1789 1789 1789 1789 1789 1789

Type of

Bar Iron Unspecified Unspecified Mill Common Common Merchant Merchant Government Government Government

Average Variable Costs £10.92 12.12 9-58 17.90 11.30 i8-55 n-75 21.40 13.40 14.50

Sources: Science Museum Library, Weale MSS, "A Comparative View of the Expense of Making Iron in the Stampered Method and Henry Cort's Process, 1787" and Scottish Record Office, Melville Castle Muniments, GD 51/10/17.

seems likely that total bar iron output would have fallen if the potting process had not been developed. Potting lowered production costs and bolstered what would have been a declining sector of the iron industry. The adoption of the potting process and coke-smelting enabled the iron industry to increase output and significantly improve its position in the domestic market. British bar iron consumption increased by about 40% in 17501788, but domestic output jumped by 70%, enabling British producers to increase their share of the domestic market from 45% to 52%. Pig iron production climbed by roughly 150% in the interim, with about half of the increased output devoted to castings. British ironmasters increased their share of total iron consumption (in pig iron equivalents) from 43% in 1750 to 60% in 1788. 59 Up to this point, technological changes in the smelting and refining sectors have been discussed separately. There 59

Details of the calculations are available from the author.

93

T H E INDUSTRIAL REVOLUTION IN IRON

was in fact a great deal of economic interdependence between the two sectors. The availability of the cheaper coke-smelted pig iron can be viewed as a prerequisite for the development of the potting process. The data given in Table 5.4 show that the potting process was wasteful of pig iron compared to the finery-chafery process, while saving fuel costs. Had the forge using the potting process described in the Weale MSS been forced to use charcoal pig iron at, say, £7 a ton instead of £4.50 a ton for coke pig iron, its variable costs would have risen by £4 per ton of bar iron, an increase of about 35%. Charcoal pig iron prices would have been much higher than £7 a ton had there been no coke-smelting sector, driving up bar iron costs even more. The development of a refining sector dependent upon coke pig iron was also an important influence on the adoption of coke-smelting. About half the pig iron produced with coke in 1788 went to the forges using the potting process, while the rest went into castings. 60 The adoption of coke smelting would have been significantly slower over the period 1750-1790 without the rapidly expanding refining sector serving as a major market for coke pig iron. Although the potting process was an important innovation that allowed ironmasters to cut costs and increase output substantially, it was the puddling process that revolutionized the British iron industry and gave it world dominance through much of the nineteenth century. The rapid diffusion of puddling after 1790 is the subject of the next chapter. 60 Charcoal pig iron output was 14,500 tons and coke pig iron output was roughly 55,500 tons. The 16,400 tons of charcoal bar iron produced in that year would have required about 1.30 tons of pig iron per ton of bars or about 21,500 tons of pig iron altogether. If the charcoal forges absorbed the entire output of charcoal pig iron (14,500 tons), plus all the imported pig iron (1,500 tons), they would still need an additional 5,500 tons of coke pig iron to produce their output of bar iron. T h e great bulk of all pig iron (50,000 tons out of a total of 70,000 tons) went into castings or into the production of bar iron through the potting process. These data are from Mushet, Papers, p. 44 and Meade, Coal and Iron Industries, P- 830.

94

S IX

THE IRON INDUSTRY IN WAR, 1790-1815 T H E British iron industry had achieved considerable technological and economic progress by the eve of the French Revolution. Coal, already the dominant fuel used in smelting, was quickly replacing charcoal in refining as well. Output had grown considerably since mid-century and British ironmasters were gradually recapturing the domestic market. The coal-based iron industry of the 1780s bore little resemblance to the charcoal iron industry of the early eighteenth century. However, the technological and economic transformation of the industry was still incomplete at that time. The Industrial Revolution in iron was essentially completed during the quarter century ending with the defeat of Napoleon. The crucial development of this period was the rapid adoption of the puddling process, which fundamentally altered the economic structure and international competitive position of the industry. It was during these years that Britain emerged as the world's leading iron producer, a position she retained until the late nineteenth century. T H E ADOPTION OF THE PUDDLING PROCESS

Henry Cort patented the puddling process in 1783 and 1784, but few ironmasters used his innovation until the mid-i79os. Cort's tragic career, particularly his bankruptcy and the suspension of his patents, has clouded our understanding of the diffusion of puddling. Ashton, for example, has argued that the suspension of Cort's patents in 1789 greatly encouraged the use of puddling, implying

95

THE INDUSTRIAL REVOLUTION IN IRON

that the patents had been a major barrier preventing the adoption of the new technique. 1 There is considerable evidence that this was not the case. The cost information presented in the previous chapter indicates that puddling initially offered the forgemaster no great cost advantage over the potting process. There is also considerable evidence that the early puddling process was plagued with technical problems which retarded its diffusion.2 Puddling became the superior technique as the result of the improvements that Richard Crawshay made in the process at his ironworks at Cyfarthfa in South Wales. 3 By the mid- 1790s, he had demonstrated that the puddling process could yield unprecedented quantities of high quality bar iron at costs significantly lower than those associated with other techniques. T h e crucial role that Crawshay played in making the puddling process a commercial success is well documented in two largely unexploited sources—his letterbook for the period 1788-1797 4 and the Cyfarthfa ironworks accounts for 1791-1798 and 18021806. 5 Crawshay's letters reveal that puddling did not become an unquestioned commercial success at Cyfarthfa until nearly four years after its introduction there. The Cyfarthfa works continued to use the potting process until August 1791 and produced over 800 tons of bar iron with the older technique during that year. 6 The superiority of puddling was far from obvious to Crawshay during the period 1787-1791. As late as December 1791, he remarked 1

Ashton, Iron and Steel, p. 97. Birch,Economic History, pp. 36-43. 3 For the history of the Crawshay family, see John Addis, The Crawshay Dynasty (Cardiff: University of Wales Press, 1957). 4 Monmouthshire Record Office, Letter Book of Richard Crawshay, 1 January 1788 to 3 November 1797, D 2.162. 5 Glamorgan Record Office, Cyfarthfa MSS, Account Books, 1791-1798 and 1802-1806. "Ibid., Accounts for 1790-91. 2

96

THE IRON INDUSTRY IN WAR

that Cyfarthfa was "in compleat readiness for stamping and hammering again," and that he was prepared to abandon puddling if necessary. 7 The Cyfarthfa works initially used the puddling process in only a very limited way. They began by producing blooms, but did not roll their own bar iron until September 1789. 8 Crawshay instead contracted to have the blooms converted to bars by either Cort and Jellicoe or Folliot Scott and Company. He signed a major contract with these two firms in April 1788, agreeing to supply them with between 1,000 and 1,500 tons of blooms within a year. 9 Even though puddling was initially used in this limited way, the process had very serious shortcomings during the first few years it was used at Cyfarthfa. The correspondence between Richard Crawshay, who remained in London, and the works manager, James Cockshutt, reveals that the quality of the blooms produced at Cyfarthfa was extremely poor. Crawshay commented about poor quality in about one-third of all the letters he wrote in 1788. Folliot Scott and Company first complained to Crawshay about the poor quality of the Cyfarthfa blooms in August 10 and he immediately wrote to Cockshutt: "Enclosed is a letter from F. Scott and Company. I have been down (there) and it's with a real concern that I find their Complaints of bad blooms well founded. What you can intend in this kind of neglect in o u r Fabrick, I don't know, except it is a determined plan (on your part) to keep us all in ill temper and prevent our enjoying either pleasure or profit." 11 The quality of Cyfarthfa iron did not improve in 1788, but seems to have deteriorated even further. Crawshay again warned his manager: "If your consideration respect7 Crawshay Letter Book, Richard Crawshay to Henry Cort, 24 December 1791. 8 Ibid., Richard Crawshay to James Cockshutt, 30 September 1789. 9 Ibid., Richard Crawshay to Folliot Scott & Company, 3 April 1788. 10 Ibtd., Folliot Scott Sc Company to Richard Crawshay, 22 August 1788. 11 Ibid., Richard Crawshay to James Cockshutt, 22 August 1788.

97

THE INDUSTRIAL REVOLUTION IN IRON

ing Patent Blooms led to the improvement in (their) quality and if (it is) possible to make the Iron white like that we saw of Peter Onions at Pentyrk, that would please me very much. Whether the quantity is 40 tons a week or 60, we need not then fear a vend, but a repition (sic) of such (blooms) as are now arrived will ruin us all!"12 Folliot Scott and Company repeated their previous complaints, arguing that poor workmanship was to blame for the quality of the Cyfarthfa blooms. 13 Cyfarthfa's customers continued to criticize the quality of its puddled iron until the end of 1789. Samuel Jellicoe's comments were typical: "We received the Cargo of Patent Blooms by Heart of Oak (at) the end of December and immediately on the first breaking (of the ice) we rolled them off. If this was a (hand-) picked Cargo, Justice to you as well as regard to the common concern will not permit me to conceal the real truth, that they are not sufficiently refined and that the waste in rolling is very great." 14 Crawshay's warnings to Cockshutt continued, but with a new sense of urgency: "Your assurance of Cort's Blooms not costing us £9 (a ton) would be very pleasing if the Metal was good. It's completely damned here and I am at a very great loss to know what to do with what we have or how to direct you, (whether) to go on or totally stop making it. It's pretty good on the surface (say) about 1^ inch thick (but) within (it is) Black and Rotten." 15 The problem with poor quality became important enough to threaten the continued operation of Cyfarthfa. Crawshay observed in mid-September that: "Poor Cort and Jellicoe are ruined and will become Bankrupts. T h e Blooms made and (in the) making, if no use is found for them, will ruin us too. On the (rolling) Mill is my hope. For God's sake, get the Mill ready (to operate). When it's at work, I will contrive to spare a week to see it and consult 12

Ibid., Ibid., 14 Ibid., 15 Ibid., 13

Richard Crawshay to James Cockshutt, 1 October 1788. Folliot Scott & Company to Richard Crawshay, 9 October 1788. Samuel Jellicoe to Richard Crawshay, 31 January 1789. Richard Crawshay to James Cockshutt, 22 May 1789.

98

THE IRON INDUSTRY IN WAR

(with you about) how we may go on with more chance of well doing than heretofore." 16 He decided at that time to send his son, William, to Cyfarthfa to correct the situation there. 17 William Crawshay quickly improved the quality of Cyfarthfa's output and his father was very pleased with the results. 18 The precise nature of the impediments to producing high quality bar iron and the solutions eventually found are not entirely clear from the correspondence. Crawshay noted that the refined metal was picking up a great deal of "dirt and rubbish" from the mill floor when it was moved from the puddling furnaces to the hammer. 1 9 He also cited the lack of experience of the puddlers as a major source of difficulty.20 Crawshay had to train workers to use a process that was not only new, but also somewhat of a "mystery" to everyone, including Cort. An efficient puddler was a workman who could not only do the strenuous labor of moving masses of iron in and out of the puddling furnaces, but could also develop a "feel" for the process itself. He had to learn to determine from the color of the flames in the puddling furnace and the texture of the molten metal when the pig iron was fully de-carburized or had "come to nature," i.e., when the carbon and other impurities had been sufficiently removed. Early efforts to modify the puddling process also seem to have contributed to deteriorating quality. Cockshutt introduced a blast of cold air into the puddling furnace in May 1788 in an effort to speed the refining process and thereby increase output. 2 1 This innovation seems to have been counterproductive. When Folliot Scott and Company complained about quality in October, they argued that the 16

Ibid., Richard Crawshay to James Cockshutt, 18 September 1789. Ibid. ls Ibid., Richard Crawshay to James Cockshutt, 8 February 1788. 19 Ibid., Richard Crawshay to William Crawshay, 22 October, 29 October, 5 November, and 13 November, 1789. 20 Ibid., Richard Crawshay to Robert Thompson, 10 May 1788. 21 Ibid., Richard Crawshay to James Cockshutt, 3 May, 22 May, and 5 J u n e 1788. 17

99

THE INDUSTRIAL REVOLUTION IN IRON

metal was not sufficiently refined because the puddlers were too concerned about increasing output. 22 Puddling finally succeeded at Cyfarthfa after Crawshay made two modifications in the design of the puddling furnace. He replaced the clay ceiling inside the furnace with a cast iron plate and used sea sand for the floor. The exact date of these changes is not specified, but they were made sometime before December 1791, when Crawshay emphasized their significance: "I am happy to tell you that (I) have at least overcome the evils of puddling and am now at work making good iron, about 7½ Tons of Blooms weekly from each Air Furnace. Our chief mischief was a want of cleanliness. Our bottoms were made of sand mixed with Common earth and (the) tops (which were made) of clay (were) perpetually falling into the Metal. I have substituted sea sand for the Former and cast iron for the Latter, of 2 Inches thick. Both stand (up) very well. Our Iron (went) from being black and redshort or rather rotten (and) is (now) white as silver, perfectly sound and tough enough for any purpose whatever. I had nearly given up the (puddling) furnaces. Finery Hearths were laid and the Stamping Hammers (were) ready when the above alterations suggested to my idea. All my neighbors ridiculed me. However, the proof has saved the South Wales works from abandoning a principle that I expect will be put in practice by you and others with still greater improvements." 23 The profitability of puddling at Cyfarthfa depended on the levels of output and costs achieved there. Crawshay was understandably interested in maximizing output while simultaneously cutting costs. His correspondence with Cockshutt indicates that Cyfarthfa was operating well below its capacity during the first few years that puddling was used. Crawshay lamented in July 1790 that the rolling mill was producing at only about 60% of its capacity of 50 22

Ibid., Folliot Scott & Company to Richard Crawshay, 9 October 1788. Ibid., Richard Crawshay to William Reynolds, 28 December 1791.

23

1OO

THE IRON INDUSTRY IN WAR

tons per week. 24 As late as December 1791, when the works had a capacity of 100 tons of bar iron per week, output was only 45 tons. 25 The turning point in Cyfarthfa's fortunes came when the partnership of Richard Crawshay and Company was dissolved in September 1791 and James Cockshutt was dismissed as works manager. 2 6 Thomas Cooke was left in charge of the works until May 1793, when Richard Crawshay personally assumed their management. 2 7 The performance of Cyfarthfa during the 1790s was impressive. Between 1790 and 1798 bar iron output increased from about 2,300 tons to roughly 6,000 tons, while variable costs fell from £12.3 per ton to slightly under £11 per ton. Capital invested in the works quadrupled during these years and stood at £114,000 by mid-1798. Since the accounts do not distinguish between capital invested in the smelting and refining branches, it is not possible to calculate a separate rate of return for bar iron production. T h e overall rates of return on capital were high, ranging from about 30% in 1793-1794 to 90% in 1791-1792, with forge profits making up the bulk of total profits. 28 Crawshay's improvements made the puddling process the cheapest technique for producing bar iron by the mid-1790s. Cost estimates for forges using the potting and puddling processes are given in Table 6.1 below. Variable costs for the potting process increased from roughly £11-12 per ton in the late 1780s (see Table 5.3) to £15 and higher by the end of the decade. Crawshay was able to reduce costs during these years, giving puddling a clear cost advantage over potting. By the turn of the century forges using the puddling process had variable costs of less than 24

Ibid., Richard Crawshay to James Cockshutt, 16 July 1790. Ibid., Richard Crawshay to Thomas Cooke, 30 December 1791. 26 Ibid., Richard Crawshay to Robert Thompson, 23 September 1791. 27 Ibid., Richard Crawshay to Thomas Cooke, 9 January and 27 May 1792. 28 Cyfarthfa MSS, Glamorgan Record Office, Account Books for 179125

THE INDUSTRIAL REVOLUTION IN IRON TABLE 6.1 AVERAGE VARIABLE COSTS OF THE PUDDLING AND POTTING PROCESSES, 1790-1804 (£ PER TON BAR IRON)

Forge

Process

Cyfarthfa

Puddling

Horsehay Bromford

Potting Potting Puddling Potting Potting Puddling Potting Puddling Puddling Puddling

Cookley Mitton (Lower) Mitton (Upper) Clydach Cyfarthfa

Year 1790/91 1791/92 1792% 1793/94 1794/95 1795/96 1796/97 1796 1799-1800 1802 1800-01

Average Variable Costs £12.30 12.15 12.61 10.71 11.01 11.10 10.71 12.25 1550 12.40 18.04

1798-99 1800-01

15-34 11.92

1797-99 1800-01 1804

1517 12.68 11.65

1803/04

12.70

Sources: Glamorgan Record Office, Cyfarthfa MSS, Account Books, 1791-98 and 1802-06; National Library of Wales, John Lloyd MSS, Clydach Accounts, 145-6; and for the remaining forges see the sources cited in Tables 5.1 and 5.3.

£13 per ton, well below the costs recorded at forges using potting. This comparison of costs is imperfect because it excludes capital costs. The cost information from Cyfarthfa implies that capital costs for puddling may have increased significantly during these years. If we assume that the refining operations accounted for two-thirds of the capital invested there and apply an interest rate of 10% to this crude capital estimate, then Cyfarthfa had capital costs of roughly £0.50 per ton in 1791-1792. If we use the same assumptions, this figure increased to about £1.25 per ton in 1797-1798 and in 1803-1804. However, even with this increase in capital 102

THE IRON INDUSTRY IN WAR costs, the total costs of puddling nevertheless declined at Cyfarthfa during the 1790s. In money terms, puddling costs declined in the early 1790s and, at worst, increased slightly over the period 1790-1804. In real terms, however, costs fell significantly, for these were years of sharp wartime inflation. The Gayer-Rostow-Schwartz index of domestic commodity prices shows an increase in the general price level of roughly forty per cent over the years 1790-1804. 29 Rising bar iron prices during the war years helped to maintain the profitability of the new process. T h e cost data for the Cyfarthfa ironworks summarized in Table 6.2 seriously understate the profits earned during this period because bar iron prices were on average considerably higher than £18 per ton (see Figure 6.1). TABLE 6.2 COSTS OF PRODUCING PUDDLED IRON, INCLUDING TRANSPORT COSTS, COMPARED TO SELLING PRICE, 1791 AND

1804

(ALL IN £ PER TON OF BAR IRON)

Forge Cyfarthfa 1791/92 Cyfarthfa 1803/04

Average Cost of Total Costs Price of Transport Delivered Bar Iron to London in London in London

Average Variable Costs

Estimated Capital Costs

£12.15

£0.50

£1.45

12.50

1.25

1.40

£14.10

£16.00 18.00

Sources: Glam. R. O., Cyfarthfa MSS, Account Books, 1791/92 and 1803/04. London bar iron prices are from Arthur Gayer, W. W. Rostow, and Anna Schwartz, The Growth and Fluctuation of the British Economy, 1J90-1850 (New York, 1951), Microfilm Supplement, p. 586.

The high bar iron prices prevalent over the period 17951815 were not simply a reflection of high wartime demand. The tariff policy followed by the government during these years kept bar iron prices artificially high and allowed 29

Mitchell and Deane, British Historical Statistics, p. 470.

103

THE INDUSTRIAL REVOLUTION IN IRON FIGURE 6.1:

PRICES OF RUSSIAN, SWEDISH,

AND ENGLISH BAR IRON, 1780-1815

1780 Source:

1790

1800

1810

Gayer, Rostow and Schwartz, o p , c i t . , pp. 586 and 694-5. (London prices, including import duties)

104

THE IRON INDUSTR Y IN

WAR

British ironmaster s to drive foreign competitor s from th e domesti c market . T h e tariff o n importe d bar iro n ha d bee n £2.8 1 pe r to n over th e years 1782-1795 , but was the n rapidl y increase d to £6.4 9 pe r to n by 1813. 3 0 T h e impac t of thi s increas e in th e tariff is shown in Figur e 6.1. British bar iro n becam e substantiall y cheape r tha n tha t sold by th e Swedes an d th e Russian s by th e late 1790s. T h e widenin g pric e differentia l betwee n British an d foreign bar iro n was largely a result of tariff policy, which effectively price d bot h Russian an d Swedish iro n ou t of th e British market . T h e size of th e impor t dutie s relative to th e pric e of bar iro n is shown in Tabl e 6.3. TABL E 6.3 PRIC E DIFFERENTIA L BETWEE N BRITIS H AND FOREIG N BAR IRON , 1790-1815 , COMPARE D T O TH E DUT Y ON FOREIG N BAR IRO N (I N £ PE R TO N OF BAR IRON )

Swedish Bar Iron, Including Duty, Higher By

Russian Bar Iron, Including Duty, Higher By

Amount of Duty

1790

£ 6.00

£1.4 8

£2.8 1

1795 ι8ο ο 1805 1810 1815

· 75 10.00 12.90 13.75 14.10

ΐ·75 4-5 ° 4.75 6-75 5.50

2·8ι 3-7^ 5.05 549 6.49

6

Sources: Scrivenor , Comprehensive History, p. 128, an d Gayer , Rostow , an d Schwartz , Growthand Fluctuation, pp . 586 an d 694-695 .

T h e increase d dutie s sharpl y reduce d foreign sales of bar iro n in Britain . Retaine d import s of bar iro n remaine d fairly stable unti l 1800, when the y began to fall off sharply . Ther e was a dramati c reductio n in import s of Russia n bar iron , bu t th e increase d dutie s seem to have ha d muc h less impac t on Swedish iron . Import s from Russia, which ha d averaged 26,300 ton s pe r a n n u m in th e 1790s ha d decline d to abou t 3,400 ton s by 1815-1819 , while Swedish bar iro n 30

Scrivenor , History of the Iron Trade, p. 128. 105

THE INDUSTRIAL REVOLUTION IN IRON

imports fell by about one-third over the same period. The overall reduction of imports was dramatic—retained imports fell from over 41,000 tons per annum in the 1790s to 7,000 tons in 1815-1819. 31 While the tariff policy pursued by the British government undoubtedly assisted British ironmasters in the domestic market, its importance can be overemphasized. The telltale price series in Figure 6.1 is the one for English bar iron. The demand for bar iron increased sharply throughout the period 1790-1815, but English bar iron prices fell off sharply from the 1801 peak of £22 per ton to £14 per ton in 1815. There was also a decline in the general price level during these years, but a much smaller one. T h e Rousseaux price indices show a decline of 13% in the general price level in 1801-1815, but a stable level of industrial prices. 32 Once Richard Crawshay had improved the puddling process, the rest of the iron industry quickly adopted Cort's invention. While only five forges used puddling before 1795, fifteen adopted the process in 1795-1805 and thirtyseven more followed suit before the end of the Napoleonic Wars. 33 T h e high profit levels of the war years encouraged both the adoption of puddling and the rapid growth of output based on the new technique. Aggregate bar iron output for 1815 can be estimated with some degree of certainty from regional output estimates and from various lists of forges in operation. A list of ironworks in South Wales in 1817 shows seven rolling mills with an annual output of roughly 60,000 tons, 34 and there is considerable evidence that the region's output in 1815 was approximately the same. 35 31

Scrivenor, Comprehensive History, pp. 420-423, and Hildebrand, "Foreign Markets," p. 10. 32 Mitchell and Deane, British Historical Statistics, p. 471. 33 A list of ironworks using the puddling process before 1815 and the approximate dates of adoption are available from the author. 34 Dowlais MSS, Glamorgan Record Office, Letter Book for 1817, Gilbert Gilpin to William Wood, 23 September 1817. 35 Bar iron shipments on the Monmouthshire Canal were roughly the same in both years—30,584 tons in 1815 and 30,692 tons in 1817 106

T H E IRON INDUSTRY IN WAR

The second major district, Staffordshire, had seven rolling mills in operation in 1815. 36 Information on the output of these mills is sketchy, but they appear to have been only slightly smaller than their Welsh counterparts. John Wilkinson's Bradley ironworks, for example, was producing more than 5,000 tons of bar iron as early as 1802. 37 The Bilston New Mill produced between 7,500 and 10,000 tons per annum, depending upon the type of iron rolled. 38 In 1817 and 1818, relatively depressed years for the iron industry, the Highfields ironworks produced roughly 5,600 tons of bars. 39 The average output of the seven rolling mills in operation in 1815 was probably about 7,000 tons, giving the region a total output of about 50,000 tons. There is even less evidence on output in the remaining regions. T h r e e Shropshire forges produced about 7,500 tons of bar in 1817, 40 a year of depression, so output in that region may have been as high as 10,000 tons in 1815. Output in both Scotland and the South Yorkshire-Derbyshire region may have approached 10,000 tons, since each area had at least three forges using puddling, as well as several charcoal forges. 41 The remaining districts probably produced an additional 10,000 tons, since they contained at least seven forges using puddling as well as numerous charcoal forges. 42 (Scnvenor, Comprehensive History, p. 127). There is some evidence that the 1817 output may have been lower than that of 1815 because the South Wales iron industry was still recovering from the postwar depression. See relevant parts of Appendix C for details. 36 Alan Birch, "The Midland Iron Industry During the Napoleonic Wars," Edgar Allen News, August 1952, pp. 209-210. 37 August Henri de Bonnard and R. O'Reilly, "Memoire sur les procedes les traitement du fer par Ie moyen de la houille," Annates des Arts et Manufactures, x x m (1805), p. 252. 38 D.M.B. Huffer, "The Social and Economic History of Wolverhampton, c. 1750-c. 1850," M.A. thesis, University of London (1957), pp. 206-207. 39 Harward MSS, Staffordshire Record Office, D 695/1/9/19. 40 Coalbrookdale MSS, Shropshire Record Office, Simpson MSS 245/ 101. 41

A list of ironworks using the puddling process before 1815 and the approximate dates of adoption are available from the author. 42 Ibid.

107

THE INDUSTRIAL REVOLUTION IN IRON If the combined output of all the regions outside South Wales and Staffordshire was about 40,000 tons, a conservative estimate, then aggregate bar iron output was approximately 150,000 tons by the end of the Napoleonic Wars, a fivefold increase since 1788. There are few reliable estimates for the intervening years. In 1806, two different authorities on the iron industry argued that bar iron output in 1805 had been 100,000 tons and 105,000 tons. 43 An output estimate of 100,000 tons for 1805 seems reasonable and will be used here. There is also an estimate for 1810 based on a survey made of the ironworks of Great Britain. T h e anonymous author estimated bar iron output at 130,000 tons for that year. 44 These estimates, summarized in Table 6.4, illustrate the rapid growth of the industry. Most of the growth in bar iron output between 1788 and 1805 was achieved after 1795, when the rapid adoption of puddling began. Output was probably not much more than 50,000 tons in 1795, doubled over the decade 1795-1805, and then increased another 50% by 1815. TABLE 6.4 ESTIMATES OF BRITISH BAR IRON OUTPUT, 1788-1815 (TONS)

1788

32,000 100,000 130,000 150,000

1805 1810

1815

T H E DEVELOPMENT OF THE SMELTING SECTOR

The production of pig iron also expanded rapidly during these years, increasing from 90,000 tons in 1790 to nearly 400,000 tons by 1815. 45 In the interim, the charcoal iron 43 Estimate made in "Letter on the Iron Tax Advanced to a Member of Parliament, April 1806," and "A View of the Financial Operation of the Proposed Tax on Pig Iron," both found in the Boulton and Watt MSS, Birmingham Reference Library, Muirhead 11. 44 Weale MSS, Science Museum Library, South Kensington. 45 See Appendix C for details.

108

T H E IRON INDUSTRY IN WAR

industry faded into insignificance. Twenty-six charcoal furnaces had produced 14,500 tons of pig iron in 1788, roughly 2 1 % of total output, but by 1805, there were only eleven in operation with a total output of 7,800 tons, about 3% of aggregate output. 4 6 The smelting sector expanded output by sharply increasing the production of existing furnaces and by building additional capacity. Average furnace output doubled between 1788 and 1810, while the total number of furnaces nearly trebled. 47 There were no spectacular innovations in smelting practice during these years and productivity improvements were relatively minor compared to those achieved when ironmasters first used coke. The cost and productivity performance of the smelting sector seems contradictory during this period. T h e money costs of production increased by as much as one-fourth for several furnaces, but real costs declined because general price levels were rising more rapidly. 48 I calculated Total Factor Productivity (excluding capital costs) for several of these furnaces and the results suggest efficiency declines. 49 Lower productivity is consistent with falling real costs because input prices fell sharply in real terms. For the furnaces in our sample, the money cost of coal increased slightly during this period, but much less than the general price level. At the same time, coal prices in the rest of the economy had risen substantially. Over the years 17921813, coal prices increased by 32% in London, 47% at Greenwich Hospital, and 72% at Westminster School. 50 The data suggest that ironmasters, who generally operated their own mines, achieved significant productivity advances in mining, but not in smelting. There were no dramatic changes in blast furnace practice that greatly improved productivity during this period. There was, however, a sharp increase in furnace output 46

Scrivenor, History of the Iron Trade, p. 99. See Table 6.5 for details. 48 See my Ph.D. thesis, pp. 155-158. 49 Ibid., pp. 158-160. 50 Mitchell and Oeane, British Historical Statistics, pp. 481-482. 47

iog

THE INDUSTRIAL REVOLUTION IN IRON

from an average of 780 tons in 1788 to roughly 1,550 tons in 1810. 51 Some of this increase came from the construction of larger furnaces, but much of it was achieved through more efficient utilization of existing structures. The trend toward larger furnaces was accelerated in the 1790s. The early coke furnaces of the 1750s and 1760s stood about twenty-five feet high, roughly the same size as charcoal furnaces. 52 Coke ironmasters began to experiment with larger furnaces in the late 1770s, but the first major increase in furnace size apparently came in the 1790s in South Wales. The reports of Gilpin, who toured the region in 1796, illustrate this development. Most of the coke furnaces he visited were between fifty and sixty feet high and produced roughly 1,500 tons per annum. 5 3 Average furnace output in South Wales climbed to 2,100 tons by 1805, well above the national average. 54 Ironmasters also increased the production of existing furnaces considerably. Decreasing both the length and frequency of furnace shut-downs was one way to raise output. Plymouth furnace, for example, was continuously in blast from January 1787 to August 1789, a total of 136 weeks. It then shut down for nine weeks for repairs. Its next campaign (October 1789 to July 1795) lasted about 300 weeks or almost six years. T h e furnace was shut down in 1795 for only five weeks. The following blast of about 250 weeks was shorter than that of 1789-1795, but still considerably longer than that of 1787-1789. 55 Similar results had been achieved at Carron by the 1790s. One furnace was shut down for twenty-one weeks in 1797, apparently because it needed a major overhaul. The manager at Carron noted in 51

See Appendix C for details. Mott, "Abraham Darby," pp. 75-76. 53 Boulton and Watt MSS, Assay Office, Birmingham, Iron Trade Box, "Mr. Gilpin's Memorandum Book, October 1796," MSS 23. 54 Dowlais MSS, Glamorgan Record Office, 1817 Letter Books, Gilbert Gilpin to William Wood, 23 September 1817. 55 Hill MSS, National Library of Wales, Plymouth Furnace Book, 1787-1807,MSSi5335-D. 52

1 IO

THE IRON INDUSTRY IN WAR

the accounts that this furnace had been in continuous operation for eleven years! 56 Furnace output was also increased by "driving" the furnaces harder when they were in operation. Generally the greater the available blast, the more output could be obtained from a given furnace. At Plymouth, for example, the output achieved from a single furnace increased from 1,457 t o n s m ^ 8 7 to 2,098 tons in 1798. In both years, the furnace was in blast for the full year. Adding furnaces on an existing site often brought a temporary decline in average output, probably because the blast was insufficient for the added capacity. There were three furnaces in full operation at Plymouth in 1803, but their average output was only 1,529 tons, although total output had increased greatly. These three furnaces achieved an average output of 2,180 tons in 1807, in spite of the fact that one of them was shut down for twelve weeks. 57 Furnace operators probably earned substantial profits during the period 1790-1815. Variable costs of £4-5 per ton were the rule for the furnaces in our sample, while pig iron usually sold for over £6 a ton during these years. 58 Estimating capital costs after 1790 is extremely difficult because most ironworks contained forges as well as furnaces and the accounts seldom separate the two. Finding the relevant interest rate is an additional barrier to calculating capital costs. One alternative investment was consols, which returned between 3.3% and 5.9% in 1790-1815. 59 T h e late eighteenth century entrepreneur probably considered a rate of return on capital of perhaps 10% as "normal." The Clydach furnaces, with a total capital of £16,000 in 1795, produced 3,380 tons of pig iron in 1796. 60 If we use 56

Carron MSS, Scottish Record Office, Furnace Cost Books, 1792-

179757 Hill MSS, National Library of Wales, Plymouth Furnace Book, 1787-1807, MSS 15335-D. 58 See my Ph.D. thesis, pp. 155-156. 59 Mitchell and Deane, British Historical Statistics, p. 455. 60 John Lloyd, The Early History of the Old South Wales Iron Works, iy6o11 1

THE INDUSTRIAL REVOLUTION IN IRON a 10% interest rate, capital costs would have been £1,600 or £0.46 per ton of pig iron. Similarly, Plymouth furnace had a total capital of £20,000 and an output of 4,587 tons in 1803. 61 Capital costs at Plymouth, if we again use an interest rate of 10%, would have been £0.46 per ton of pig iron. There are numerous other examples, all yielding capital costs of about £0.50 per ton. Even if the inclusion of depreciation increases capital costs to £1.00 per ton of pig iron, all the furnaces in my sample—with the exception of BaIgonie (1808), Lemington (1812), and Horsehay (1813)— were earning profits, since prices still exceeded total costs. Over the period 1790-1815, ironmasters increased the size of furnaces and utilized existing equipment better, but made no significant innovations in smelting technology. They were able to lower the real costs of producing pig iron by utilizing cheaper raw materials. Industry profits remained high and the entire industry grew dramatically during these years. T H E WARTIME EXPANSION OF THE IRON INDUSTRY

Estimates of bar and pig iron output, along with the number of furnaces in operation, are given in Table 6.5 below. There is no reason to believe that pig iron output fell in any year between 1790 and 1815. Even during the Peace of Amiens (October 1801 to May 1803), many new furnaces were built and put into operation. 62 The smelting sector expanded at roughly the same rate as the refining sector, largely because of increased demand for pig iron from the forges. Average furnace output doubled between 1788 and 1810, while the total number of furnaces in existence nearly trebled. There were proportionately many more 1840 (London: Bedford Press, 1906), p. 180, and Scrivenor, History of the Iron Trade, p. 99. 61 Lloyd, Old South Wales Iron Works, p. 180 and Hill MSS, National Library of Wales, Plymouth Furnace Book, 1787-1807, MSS 15335-D. 62 Appendix C and Ashton, Iron and Steel, p. 146. 112

T H E IRON INDUSTRY IN WAR

TABLE 6.5 BAR AND PIG IRON OUTPUT (TONS) AND FURNACES IN OPERATION, SELECTED YEARS, 1788-1815 Bar Iron Output 1788 179° 1794 1796 1802 1805 1810 1815

32,000

—

50,000

— —

100,000 130,000 150,000

Pig Iron

Output 70,000 go ,000 125,000 125,000 220,000 258,000 350,000 395,000

Average Output Blast Furnaces Per Furnace in In Out Total Operation (Tons) 86 106 127 121

168

»73

226

—

7 7 8

10 14 60 40

—

93 "3 135 131 182 233 266

—

780 850 984 1.033 1,310 L49 1 1.550

—

furnaces out of blast in 1805 and 1810 than in previous years, so the number of furnaces actually in operation less than trebled in 1788-1810. The iron industry had little excess capacity before 1805, but had a large number of furnaces out of blast after that date. Perhaps as many as half of the idle furnaces were obsolete furnaces that would never again be used and the remainder were furnaces that could be brought back into operation quickly. These were marginally profitable furnaces that were put into blast when pig iron prices were sufficiently high. While pig iron output increased sharply in 1790-1815, the geographical distribution of output also shifted sharply. This shift in the location of the smelting sector can be seen from the data given in Table 6.6. The iron industries of South Wales and the Black Country (Staffordshire) increased their share of a rapidly growing national output from 26% in 1788 to 67% in 1815. Shropshire, the birthplace of coke-smelting, had produced over one-third of the total output in 1788, but had become a minor region by 1815. T h e remaining districts also became relatively less important, largely because they had been the center of much of the charcoal iron industry. These regions (principally Yorkshire, Derbyshire, Scotland, Lancashire, North

"3

T H E INDUSTRIAL REVOLUTION IN IRON TABLE 6.6 REGIONAL DISTRIBUTION OF BRITISH PIG IRON OUTPUT, 1788 AND 1815

(TONS)

1.788

Region

Output

Shropshire South Wales Staffordshire Other Districts Total

24,900 11,300 6,900 26,900 70,000

1815

Share of Total (%) 35-6 16.2 9.8 38.4 100.0

Output 50,000 140,000 125,000 80,000 395,000

Share of Total (%) 12.6 35-4 31.6 20.4 100.0

Source: Appendix C.

Wales, and the Forest of Dean) had produced 8,400 tons of charcoal pig iron in 1788, or about 58% of the total. Their relative decline was largely a reflection of the demise of the charcoal iron industry. Along with a rapid growth in output, the industry achieved a dramatic shift in its international competitive position. Between 1788 and 1805 total iron consumption in Britain had more than doubled. British ironmasters, who were able to capture only about 60% of the domestic market in 1788, had not only driven out foreign competitors by 1805, but were already selling a significant part of their output abroad. 63 During most of the eighteenth century, British iron production was substantially smaller than that of Russia, Sweden, and France. By the beginning of the nineteenth century, however, the British iron industry had become the largest in Europe. 6 4 Part of the rapid growth of the industry during these years was apparently the result of the increased demand for iron caused by the wars with France. With the excep63

See my Ph.D. thesis, p. 166. Scrivenor, History of the Iron Trade, pp. 150 and 179-181, and Marshall Goldman, "The Relocation and Growth of the Pre-Revolutionary Russian Ferrous Metal Industry," Exploration in Entrepreneurial History, 1st Series, ix (1956), p. 20. 64

114

THE IRON INDUSTRY IN WAR

tion of the Peace of Amiens, the entire period 1793-1815 was one of constant warfare. Government purchases of iron for war (see Table 6.7) provided a direct stimulus to the industry. 65 TABLE 6.7 BRITISH PIG IRON OUTPUT AND THE PIG IRON EQUIVALENT OF GOVERNMENT PURCHASES OF IRON, 1794-96 AND 1805 (TONS) GOVERNMENT P U R C H A S E S

1794-96 1805

Pig Iron

Output

Cast and Pig Iron

Bar and Finished Iron

Total in Pig Iron Equivalents

125,000 258,000

13,600 33,900

5,300 5.065

24,200 45,000

Government Purchases as a Share of Total Output (%) ig 17

Sources: Pig Iron output is from Appendix C. The figures for 1794-96 are from Harry G. McNab, "Thoughts on Taxation in 1798 by an Ironmaster," reprinted in his Letters on the Coal Trade of London (London, 1801), 55-57. T h e figures for 1805 are from "A Comparative View of the Estimates of Nett (sic) Proceeds of the Duty on Pig Iron," (1805) in the Boulton and Watt MSS, Birmingham Reference Library, Muirhead II.

The net effect of the wars on the demand for iron is less clear. Industries like shipbuilding probably increased their demand for iron substantially during the war years. However, the wars probably disrupted the normal patterns of investment in construction, agriculture, and other industries, as resources were diverted to the war effort. In addition, the disruption of foreign trade during these years probably reduced the demand for British iron abroad. In 65

These estimates include detailed enumerations of iron purchased by the Ordnance Board, Navy Board, and Victualling Office based on published reports issued by those agencies. The figures for purchases of bar and finished iron are multiplied by 2.00 to get the equivalent in pig iron. Since there is no weight loss assumed for cast iron, Table 6.7 is probably an understatement of government purchases, which may have represented a quarter of the total pig iron output n

5

T H E INDUSTRIAL REVOLUTION IN IRON

the absence of fighting, overall demand for iron might have been higher than it was. Given the pervasive influence of the wars on both the British economy in general and on the iron industry in particular, it is difficult to evaluate the role of technological change in the development of the iron industry during the period 1790-1815. The rapid adoption of the puddling process after the mid-1790s was clearly the most important technological improvement. Richard Crawshay had significantly improved Cort's process in the early 1790s and government tariff policies further encouraged its adoption. The rapid expansion in the production of puddled iron further stimulated the growth in pig iron production. By the early nineteenth century, the "industrial revolution in iron" was essentially completed and Britain had become one of the largest and most efficient iron producers in Europe. For both the smelting and refining sectors of the industry, however, the rapidly expanding demand for iron during the war years seems to have been the crucial determinant of growth. The fundamental technological change that had taken place since the middle of the eighteenth century, i.e., the substitution of mineral for vegetable fuel in all processes of ironmaking, enabled the iron industry to increase output sharply during these years, while at the same time lowering real costs of production.

116

SEVEN

THE NEW TECHNOLOGY AND ITS CONSEQUENCES: THE IRON INDUSTRY IN THE EARLY NINETEENTH CENTURY T H I S study has considered the invention and diffusion of new ironmaking techniques in the eighteenth century. We have focussed on the major innovations, particularly cokesmelting and puddling. British ironmasters, however, did not merely invent several new processes in the course of the Industrial Revolution. They developed an entirely new technology by combining a cluster of innovations, including numerous relatively minor ones. It was this new technology, rather than a handful of discrete innovations, that fundamentally changed the British iron industry. This chapter will examine the coke technology of the early nineteenth century and compare it to the charcoal technology of the early eighteenth century. The impact of the new technology on the iron industry will also be considered. The coke iron industry of the early nineteenth century was radically different from its charcoal predecessor. The new technology fundamentally altered the industry's location, economic structure, and markets. TECHNOLOGY

The coke blast furnaces and forges of the early nineteenth century bore little resemblance to their charcoal-using counterparts of the previous century. One noticeable difference was the quantity of iron they made. T h e average charcoal furnace around 1720 produced about 300 tons per annum, while output at the largest furnaces was about 700 tons. 1 Average furnace output had increased to about 1

Hulme, "Statistical History," pp. 21-22.

117

THE INDUSTRIAL REVOLUTION IN IRON

1,500 tons by 1815, with some individual furnaces producing upwards of 3,000 tons of pig iron. 2 The growth in forge output is even more striking. The typical charcoal forge of the early eighteenth century produced less than 150 tons of bars, while the largest forges made about 350 tons. 3 By the end of the Napoleonic Wars, average forge output had approached 5,000 tons. The largest producer, the Cyfarthfa ironworks, had an output of approximately 13,000 tons at that time. 4 T h e furnaces and forges of the coke iron industry also required a much larger investment than the charcoal ironworks. In the early eighteenth century, furnaces and forges required investments of roughly £4,000 and £1,500 respectively. 5 Scattered evidence indicates that investment in a single coke furnace in the early nineteenth century might run as high as £20,000. 6 The capital requirements of the refining branch of the industry had also grown tremendously with the advent of puddling and rolling. The total investment in the Cyfarthfa ironworks, which included four furnaces, was £160,000 by 1813. 7 Even if the investment in the furnaces was about £80,000 (£20,000 each), the refining operations must have required an investment of £80,000. T h e ironworks of the charcoal era depended upon water power and consequently often shut down for extended periods. The seasonal character of ironmaking had largely disappeared by the early nineteenth century because of the widespread use of the steam engine. The vast majority of coke furnaces used steam power as early as 1790 and it was the predominant source of power for both furnaces and 2

Scrivenor, History of the Iron Trade, p. 99. Hulme, "Statistical History," pp. 21-22. 4 Dowlais MSS, Glamorgan Record Office, Letter Book for 1817, Gilbert Gilpin to William Wood, 23 September 1817. 5 See pp. 31-32 above. 6 T h e three Dowlais furnaces, for example, were valued at £61,000 in 1798. See Kenneth Weetch, "Dowlais Ironworks," pp. 48-49. 7 Cyfarthfa MSS, Glamorgan Record Office, Account Book for 18033

04.

Il8

THE NEW TECHNOLOGY

forges by the early nineteenth century. 8 The steam engine allowed ironmasters to operate their plants with the almost monotonous regularity that characterizes modern industry. Coke-fired furnaces and forges were highly mechanized compared to their charcoal predecessors. Mechanization in charcoal ironworks was limited to simple water wheels used to power leather bellows and to lift the forge hammer. These ironworks used no other machines more complex than a wheelbarrow. Raw materials as well as finished products were normally moved by hand, on horseback, or in simple carts on rough dirt roads. Production technology remained essentially unmechanized. The typical coke blast furnace of the early nineteenth century utilized considerably more machinery than its charcoal counterpart. The steam engine, a complex machine by eighteenth-century standards, was the source of power for the increased blast of air needed to support combustion in a coke furnace. The steam engine was used to drive the increasingly complex blowing mechanisms that first began to replace the simple bellows in the late 1760s and 1770s.9 Most furnaces also used a pressure regulator that minimized the variations in the intensity of the blast that resulted from using reciprocating blowing machines. 10 Machines were also used in several additional furnace operations. As furnace heights grew and the weight of the raw materials fed into the "throat" of the furnace increased, ironmasters were forced to mechanize the "feeding" operation. By the early nineteenth century, several types of vertical and inclined hoists were in use. These were commonly powered by a small steam engine. 11 The movement of coal and ore from the mines to the blast furnace was also partially mechanized by this time. As 8

Scnvenor, Comprehensive History, pp. 359-361. Ashton, Iron and Steel, p. 51. 10 W.K.V. Gale, The Black Country Iron Industry: A Technical History (London: The Iron and Steel Institute, 1966), pp. 41-42. 11 Ibid., pp 37-38. 9

11

9

THE INDUSTRIAL REVOLUTION IN IRON early as the 1740s, the Coalbrookdale Company began to lay wooden (later, iron) railways to facilitate the movement of raw materials. They had built over sixteen miles of these "railways" by 1757. 12 By the early nineteenth century, most furnaces used horse-drawn wagons to move their raw materials along narrow-gauge iron railways. 13 This partial mechanization of materials' handling was necessitated by the immense raw material consumption of the coke furnace. T h e amount of coal required to produce a ton of pig iron varied from about four tons in South Wales to nearly twelve tons in Scotland, but the national average was probably about eight tons. An additional three tons of iron ore was also required. 14 A single furnace producing 1,500 tons of pig iron would require over 16,000 tons of raw materials. Many ironworks contained more than one furnace and by 1805 there were seventeen ironworks producing more than 4,000 tons of pig iron each. 15 The smallest of these may have used upwards of 40,000 tons of raw materials per annum. Transporting such a volume of raw materials from the mines to the furnaces without mechanization is inconceivable. The contrast between the old technology and the new is even more striking in the refining branch of the industry. The charcoal forge was little more than a simple shed containing a "finery" fire, one or two "chafery" fires, and a single water-powered hammer. The early nineteenthcentury forge using the puddling process was considerably more complex. It would typically include two or three small "refining furnaces," as many as a dozen puddling furnaces, and several large shingling and stamping hammers driven by a steam engine. At least one rolling mill and a slitting mill, both steam-powered, were required to prepare the bar iron for market. Many of the larger works, 12

R. A. Mott, "English Waggonways in the Eighteenth Century," TNS, xxxvii (1964-65), pp. 10, 15 13 Gale, Black Country Iron Industry, p. 45. 14 Consult the sources cited in my Ph.D. thesis, pp. 155-156. 15 Scrivenor, History of the Iron Trade, p. 99. 120

T H E NEW T E C H N O L O G Y

such as the Brierly Hill forge, also had a hoop mill, sheet mill, and a "guide" mill, all utilizing individual steam engines. 16 The refining and rolling of iron with Cort's process was broken down into several distinct operations that were performed in separate buildings and required the use of sophisticated machinery. T h e rotative steam engine used to drive the rolling, slitting, and other "mills" was a more complex machine than the reciprocating engine used to provide the blast for the furnace. 17 The forge had clearly become a more mechanized and generally more complex operation than its eighteenth-century predecessor. LOCATION

The coke ironmaster had considerably more freedom in selecting a site for his furnace than the charcoal ironmaster had enjoyed. Charcoal blast furnaces had to be built near adequate supplies of charcoal, ore, and water power and there were relatively few sites with this combination of resources. The difficulty of transporting raw materials, especially charcoal, plus the limited amount of power that a given source of water could provide also meant that furnaces could not be built near other ironworks. The new technology gave the ironmaster more flexibility in selecting a furnace site. The steam engine largely freed the furnace from its dependence on water supplies, although water was still needed for the boilers. T h e ironmaster was free to focus his attention on his major raw materials, coal and ore. Since both minerals are commonly found together in Britain and since either could be transported without damage, it was considerably easier for a coke ironmaster to find an adequate site for his furnace. Where abundant coal and ore deposits existed, the ironmaster could build more than one furnace on a single site. Table 7.1 indicates that this practice had become 16 17

Gale, Black Country Iron Industry, pp. 53-54. Ashton, Iron and Steel, pp. 72-74. 121

THE INDUSTRIAL REVOLUTION IN IRON TABLE 7.1 T H E DISTRIBUTION OF COKE BLAST FURNACES, BY SITE,

Number of Furnaces on the Site 1 2 3 4 5 or more Totals

1810

Number of Sites

Number of Furnaces

31 47 22 8 5

31 94 66 32 26

113

249

Source: Weale MSS, "Ironmasters Return of 1810, Account of Works Making and Rolling Iron."

common by the early nineteenth century. Steam power also enabled ironmasters to build furnaces near existing ironworks. Large concentrations of ironworks developed where there were extensive deposits of coal and ore. There were, for example, four ironworks with a total of seventeen furnaces within a two-mile radius of Merthyr Tydvil, South Wales, in 1810. 18 T h e Merthyr ironworks probably produced about 40,000 tons of pig iron at that time. The use of coal in the blast furnace brought about significant changes in the industry's location. The major locational shifts, summarized in Table 7.2, were towards the major coalfields of South Wales and Staffordshire. These two regions accounted for two-thirds of the national pig iron output in 1815. Ironmaking disappeared in two major centers of the charcoal iron industry, the Forest of Dean and the Weald, largely because they lacked adequate coal resources. The refining branch of the iron industry experienced similar changes in location as it switched from charcoal to coal. T h e charcoal forge was invariably isolated from other ironworks because of the limited supply of charcoal and water power in any given area. T h e puddling process en18

Weak MSS, "Ironworks Returns of 1810, Account of Works Making and Rolling Iron." 122

T H E NEW T E C H N O L O G Y

TABLE 7 2 REGIONAL DISTRIBUTION OF BRITISH PIG IRON OUTPUT, 1720 AND 1815

Region Forest of Dean Shropshire Staffordshire Yorkshire-Derby N. Wales-Cheshire The Weald South Wales Scotland Others Total

(TONS)

IJ20 Output

Share of Total (%)

181; Output

Share of Total (%)

4,250 2.550 2,400 2,400 2,250 2,000 1,500 nil nil

24.4 14.6 13,8 13.8 12.9 11.5 8.6 ml nil

nil

50,000 125,000 c. 40,000 c. 5,000 nil 140,000 c. 20,000 c. 15,000

ml 12.6 31.6 c. 10.0 c. 1.3 ml 354 c. 5.0 c 4.0

395,000

17,350

Sources: Hulme, "Statistical History," pp. 14-15 and Appendix C.

couraged the ironmaster to build forges and furnaces on the same site. T h e success of puddling depended on the availability of cheap pig iron and cheap coal, so a site advantageous for producing coke pig iron was also an attractive site for a forge and rolling mill. With the steam engine to supply power, all the barriers to integration were eliminated. By the early nineteenth century, virtually all the forges using puddling and rolling were part of an ironworks that also included blast furnaces. The 1810 list of ironworks does not list a single forge that used Cort's process where this was not the case. 19 The refining branch was therefore concentrated in the same regions as the smelting branch. South Wales and Staffordshire produced about three-quarters of the national bar iron output by 1815. 20 The Merthyr Tydvil ironworks (Cyfarthfa, Dowlais, Pennydarren, and Plymouth) produced about 31,000 tons of bar iron in 1812, or roughly one-fifth of the national output. 2 1 The new coke technology clearly had a profound influence on the location of furnaces and forges. 19

20 Ibid See Chapter Six, pp. 106-108. Dowlais MSS, Glamorgan Record Office, Letter Book for 1817, Gilbert Gilpin to William Wood, 23 September 1817. 21

123

T H E INDUSTRIAL REVOLUTION IN IRON INDUSTRY STRUCTURE

The puddling process encouraged the geographic and economic reintegration of the iron industry. This reintegration was accompanied by a concentration of pig and bar iron production in the hands of relatively few firms. The trend towards concentration apparently developed because of the existence of significant economies of scale in both smelting and refining. The rapid growth in the number of coke blast furnaces over the years 1788-1810 22 masks the concentration that existed in the industry. There were 249 coke blast furnaces in Britain in 1810. These, however, were located on 113 sites controlled by only 76 firms. The fifteen largest firms controlled 102 furnaces, or 40% of the total. 23 Production was even more concentrated since the largest firms also operated the most productive furnaces. In 1805, the fifteen largest producers accounted for 53% of the coke pig iron output. 24 Concentration was even more pronounced in the refining sector. Our estimates of bar iron production indicate that South Wales and Staffordshire accounted for roughly three-quarters of the total output by the end of the Napoleonic Wars. 25 There were only seven rolling mills in South Wales at the time, while Staffordshire perhaps had as many as eight. 26 The bar iron trade was therefore dominated by about fifteen firms. Cort's process was probably characterized by significant economies of scale. This was apparently not the case for the puddling process itself because ironmasters typically increased the output of puddled iron by building addi22

From 60 in 1788 to 249 in 1810. Weale MSS, "Ironworks Returns of 1810, Account of Works Making and Rolling Iron." 24 They produced 133,000 tons, while the total output of coke pig iron was 250,000 tons These data are from the Boulton and Watt MSS, Birmingham Reference Library, Muirhead n, "List of Furnaces in Great Britain, 1806." 25 26 See Chapter Six, pp. 106-108, for details. lbid. 23

124

THE NEW TECHNOLOGY tional puddling furnaces rather than by increasing their size. Economies of scale existed for the rolling mills, which became very large units of production by the early nineteenth century. The average output of the South Wales rolling mills, for example, quickly increased from 5,300 tons in 1812 to about 8,400 tons in 1817. The smallest rolling mill in the region in 1817 produced over 4,000 tons, while the largest, Cyfarthfa, had an output of about 13,500 tons. 27 The existence of economies of scale in rolling encouraged the development of large integrated firms operating a rolling mill and as many as five or six blast furnaces to provide sufficient pig iron for refining. These integrated firms dominated the industry by the early nineteenth century. It is not coincidence that virtually all the fifteen largest pig iron producers in 1805 were integrated firms operating a rolling mill. These large integrated works were immense undertakings requiring very heavy investment. Two such firms, the Carron Company and the Coalbrookdale Company, were respectively valued at £270,000 and £165,000 in 1815. 28 Investment in the Cyfarthfa ironworks amounted to £160,000 by 1813 and there were half a dozen other South Wales ironworks valued at about £100,000 each at that time. 29 The existence of large integrated ironworks suggests that competition between firms may have been less than vigorous. We are able to offer only highly tentative judgments on the extent of competition within the industry in the early nineteenth century. Direct price competition between firms was limited because there was considerable product differentiation, i.e., iron products were not standardized. Pig iron quality, for example, varied considerably 27 Dowlais MSS, Glamorgan Record Office, Letter Book for 1817, Gilbert Gilpin to William Wood, 23 September 1817. 28 Campbell, Carron Company, p. 332, and Raistrick, Dynasty, p. 297. 29 A. H.John, The Industrial Development of South Wales, iyjo-1850 (Cardiff: University of Wales Press, 1950), p, 35.

!25

T H E INDUSTRIAL REVOLUTION IN IRON

because of the differences in the ores used in its manufacture. Similarly, bar iron quality was affected by the quality of the pig iron used in the forge. The reputation of the ironmaster's raw materials was so important that most bars were branded. 3 0 More importantly, there is considerable evidence that the major producers attempted to limit competition by fixing prices. Beginning in the early nineteenth century, ironmasters in the major producing regions held regular meetings to set prices. Ironmasters in the Birmingham area held weekly dinners from 1790 on; the major producers in South Yorkshire and Derbyshire formed a "Friendly Association" in 1799; and there was a Welsh Quarterly Meeting beginning in 1802. These "trade associations" met regularly until the mid-1820s. Although smaller producers often did not participate in the sessions, the larger firms usually sent representatives. These meetings remained essentially regional in scope, although there were periodic attempts at interregional cooperation. 31 The effectiveness of these attempts to fix prices is questionable. Several considerations undermined these price agreements. The lack of standardization in the quality of the products made price-fixing difficult, as did the existence of various shapes and sizes. The credit and commission terms a firm could offer were never regulated, so firms could still undersell their rivals. 32 Finally, since prices were not set nationally, there could still be considerable interregional competition in major markets like London, Bristol, and Liverpool. The surviving price series from the early nineteenth century suggest that the efforts to fix prices were largely ineffective. The price of Midland forge pig iron, for example, fluctuated between £6.75 and £3.75 per ton in 18011820 and dropped precipitously from £6.00 to £3.75 per ton in 1814-1816. Bar iron prices at Liverpool experienced 30

Birch, Economic History, p. 114. Ibid., pp. 104-110, and Ashton, Iron and Steel, pp. 177-182. 32 Birch, Economic History, pp. 114-115. 31

126

THE NEW TECHNOLOGY

similar changes in 1806-1820. 33 T h e same conclusion is reached when one compares the "official" South Wales bar iron prices given in the Newport Quarter Books with the actual prices of Welsh bar iron in London. Over the years 1811-1814, the "official" prices of bar iron changed by no more than £0.50 per ton from year to year. 34 However, the monthly price quotation in London reveals considerably larger fluctuations. For example, bar iron prices fell by £2.00 per ton between July and October of 1812. 35 The fact that these "trade associations" disbanded in the early 1820s also suggests that they were largely ineffective.36 MARKETS

Compared to his charcoal-using predecessor, the coke ironmaster sold a greater variety of products in a wider range of markets. In the early eighteenth century, about 95% of all pig iron was sold to the forges to be converted into bars. 37 Few cast iron products were made and casting was important for only a handful of furnaces concentrated mostly in the Weald. 38 The forges and slitting mills sold wrought iron in a few specific shapes, mainly as bars and rods. The typical ironmaster sold his wares in a local or regional market and interregional trade was severely limited by high transport costs. Britain was a heavy importer of bar iron and, with the exception of the American trade, overseas sales were minor. Iron products and the markets in which they were sold had changed significantly by the early nineteenth century. The most noticeable development was the growing importance of the casting branch of the industry. Several early coke ironmasters, particularly the Darbys and the Walkers, had developed new casting techniques and had popu33

Mitchell and Deane, British Historical Statistics, p. 492. Scrivenor, Comprehensive History, p. 410. 35 Ibid., p. 409. 36 Birch, Economic History, pp. 108-110. 37 See Chapter One for details. 38 Straker, Wealdon Iron, pp. 155-178.

34

127

THE INDUSTRIAL REVOLUTION IN IRON larized many new cast iron products. 39 One extreme enthusiast of cast iron was "iron-mad" John Wilkinson, who even built a cast iron coffin for himself.40 Cast iron was used in a wide range of products by the early nineteenth century. There was a considerable market in cast iron pots, pans, and vats of various descriptions for household and industrial use. T h e cannon and shot, as well as the small arms used against Napoleon, were cast in British foundries. Much of the machinery of the Industrial Revolution, including the cylinders of the steam engine, was made primarily of cast iron. It became an increasingly important construction material as well. After the first iron bridge in the world was erected near Coalbrookdale in 1779, cast iron was commonly used for this purpose. 4 1 Sewer and water systems typically used cast iron pipe and iron-framed buildings became popular in the early nineteenth century. 42 The growing importance of cast iron is reflected in output estimates for the entire industry. Pig iron output approached 400,000 tons and bar iron output was about 150,000 tons by the end of the Napoleonic Wars. If approximately 1.50 tons of pig iron were required to produce a ton of bars, the forges must have consumed 225,000 tons of pig iron, only about 60% of the total produced. Since only 8,000 tons of pig iron were exported, roughly 160,000 tons of this product must have gone into castings. The high proportion of pig iron devoted to castings was partly a reflection of government purchases of cast iron products for war. However, even if these purchases amounted to 50,000 tons, 43 the equivalent "peacetime" production of cast iron still required over 100,000 tons of pig iron, or roughly one quarter of the total output. The volume of castings had 39 40 41 42 43

Raistrick, Dynasty, passim and John, Walkers, passim. W.K.V. Gale, Iron and Steel (London: Longmans, 1969), pp. 30-31. Raistrick,Dynasty, p. 198. Birch, Economic History, pp. 213-215. This estimate is probably too high. See Table 6.7 above.

128

T H E NEW T E C H N O L O G Y

grown much faster than the total output since the early eighteenth century and the foundries had become a significant part of the industry. The coke ironmasters specializing in cast iron goods were producing a much wider variety of products than their predecessors in the charcoal iron industry had made. The same was true of the coke ironmaster operating a forge and rolling mill. A list of products made by the Dowlais ironworks in 1816 mentions thirty-three distinct shapes and sizes, including eight sizes of "rounds" and six sizes of "flats."44 The large integrated firms produced and marketed a wide range of specialized shapes unknown in the previous century. The charcoal iron industry had been a series of regional industries selling in protected regional markets. The coke ironmasters of the early nineteenth century, however, sold the bulk of their products in markets that were national in character. This was particularly true of the Welsh producers. There were no significant secondary metal trades in South Wales, so most of the region's iron was shipped to London, Liverpool, Bristol, or to foreign destinations. 45 Approximately one-third of the national iron output of 1817, for example, was shipped on the two major South Wales canals, and most of this went outside the region. 46 Even the West Midlands, with its extensive metal traddes, shipped nearly one-fourth of its 1817 output to London on the Grand Junction Canal. 47 There was other interregional trade, such as the sales of Scottish iron in London and Liverpool, the Sheffield trade with London, and the sales of West Midlands iron in Liverpool and Bristol. There are no reliable estimates of the volume of trade between these districts. Nationally, ironmasters may have 44 Dowiais MSS, Glamorgan Record Office, Letter Book for 1816, "Prices of Iron at Dowlais-Works, Glamorganshire, October 3 1816." 45 John, Industrial Development of South Wales, pp. 98-102. 46 Scnvenor, Comprehensive History, pp. 126-127, a n d Appendix C. 47 Ibid., p. 413, and Appendix C.

129

THE INDUSTRIAL REVOLUTION IN IRON

sold as much as two-thirds of their total output outside the region in which it was produced. Finally, there was already a considerable amount of iron sold in foreign markets by the end of the Napoleonic Wars. The trade statistics summarized in Table 7.3 show the extent of the industry's dependence on foreign sales. Even if the conversion factors used in these calculations are too high, exports probably accounted for at least one-fifth of British pig iron output in 1815. Nearly half of all exports went to the New World, Ireland took about one-fifth of the total, and the remainder was sold primarily in Southern Europe and Asia.48 The New World, particularly the United States, remained the most important market for British iron, as it had been since the early eighteenth century. TABLE 7.3 N E T EXPORTS OF BRITISH IRON, IN PIG IRON EQUIVALENTS, AND BRITISH PIG IRON O U T P U T , 1815 (1)

(2)

Pig and Cast Iron

Bar Iron

(3) NaiL·, Steel, Hardwares, and Finished Iron

7,966

18,950

44,300

(TONS)

Pig Iron Equivalent of (1), (2), &

113,911

(3)

British Pig Iron

Output

395,000

Sources: Scrivenor, Comprehensive History, p. 421, and Appendix C. The pig iron equivalent of a ton of bar iron was estimated at 1.50 tons and that of a ton of finished iron products at 1.75 tons.

The impact of the new ironmaking techniques developed in the eighteenth century went far beyond the immediate results, such as lower costs, higher outputs, and increased profits. Coke technology also greatly increased the size, level of mechanization, and regularity of operation of furnaces and forges. The iron industry moved to the coalfields as a result of the new technology and the 48

Sensenor, Comprehensive History, p. 421. 130

T H E NEW T E C H N O L O G Y

smelting and refining branches of the industry were reintegrated. Raw materials' considerations and economies of scale led to the development of large-scale integrated ironworks requiring heavy capital investment. Finally, coke technology significantly altered both the variety of products the ironmaster made and the markets that he served.

131

PART

II

THE MATURE IRON INDUSTRY, 1815-1870

EIGHT

THE IRON INDUSTRY IN PEACE, 1815-1830: ADJUSTMENT AND INNOVATION the return to a peacetime economy, the iron industry experienced a severe depression, but recovered in the early 1820s. Even with the postwar depression, the industry achieved impressive output growth over these years. This was also a period in which the industry experienced extreme fluctuations in prices and profits. British ironmasters no longer needed tariff protection by the 1820s and were selling an increasing share of their output abroad. There were no spectacular technological developments in smelting or refining, although ironmasters made numerous minor improvements in equipment and processes. Blast furnace productivity and costs (in real terms) probably stagnated during these years. Forge operators, however, were able to increase productivity and achieve slight reductions in their costs. WITH

T H E DEVELOPMENT OF THE SMELTING SECTOR

The demand for iron and industry output fluctuated violently during this period. With the end of the Napoleonic wars, pig iron output fell by roughly one-third and did not return to the level of 1815 until 1820 or 1821. 1 As late as 1823, pig iron production was only 10% higher than the peak wartime levels. Declining demand for iron was also reflected in price levels. Forge pig iron had sold for £6 a ton in 1814, but its price fell to £3.75 in 1816 and remained a t £ 5 or less in seven out of the nine years after 1814. 2 1 2

Output estimates for individual years are given in Appendix C. Prices of Midland forge pig iron, P.P., 1833, vi, Questions 9609-9611.

!35

T H E M A T U R E IRON INDUSTRY

In spite of low product prices and falling or stagnant demand, new investors continued to enter the industry and to construct additional capacity after the end of the wars. The total number of furnaces appears to have remained roughly constant (266 in 1810 and 273 in 1823) during this period. However, a comparison of lists of furnaces for 1810 and 1823 (Table 8.1) reveals that in the intervening years, seventy-seven new furnaces had been erected and seventy-one shut down, yielding a net gain of only six. TABLE 8.1 CONSTRUCTION AND CLOSING DOWN OF BLAST FURNACES, 1810-1823

Built in 1810-1823 Staffordshire South Wales Shropshire Scotland S. Yorkshire- Derbyshire

43

Total

23

Closed in 1810-1823

Net Change

13

30

!4

3

11

7

24

77

71

1

9

9 -8 -8 "!7 6

Sources: Weale MSS, Science Museum Library, South Kensington, 1810 List of Furnaces, and Scrivenor, History of the Iron Trade, pp. 132-35.

There is no comprehensive list of furnaces for the intervening years, but most of the furnaces abandoned in 1810-1823 probably went out of existence during the postwar depression, say in 1815-1820. Many new furnaces were erected before 1815, but there is also considerable evidence that ironmasters built new capacity after that date. For Staffordshire, twenty-eight furnaces in the 1823 list do not appear in a comprehensive list of Staffordshire furnaces drawn up in 1815, indicating that these were probably built after the war. 3 A similar comparison of lists 3

Rodney Butler, The History of Kirhstall Forge Through Seven Centuries, 1200-1954 A.D. (York: Ebor, 1954), pp. 250-251.

136

THE IRON INDUSTRY IN PEACE of South Wales f u r n a c e s for 1817 a n d 1823 shows that n i n e t e e n f u r n a c e s w e r e built in this r e g i o n in 1817-1823. 4 T h e ease with which new investors w e r e able to e n t e r t h e i n d u s t r y a n d c o n s t r u c t n e w capacity c o n t r i b u t e d to t h e s h a r p price fluctuations t h e industry e x p e r i e n c e d in t h e 1820s. T a b l e 8.2 illustrates the p a t t e r n of rising prices, ind u c e d by increased d e m a n d , followed by heavy i n v e s t m e n t in new capacity which increased o u t p u t a n d in t u r n d e p r e s s e d prices. TABLE 8.2 PIG IRON OUTPUT, PRICES, FURNACES IN OPERATION, AND FURNACE CONSTRUCTION, 1823-1830

Pig Iron Output (Tons) In 1823 1824 1825 1826 1827 1828 1829 1830

452,000 525,000 613,000 581,000 690,000 703,000 700,000 678,000

— —

261 224 284 277

— —

Blast Furnaces Total Out

— —

273

—

374 359

113 135

— 9° — —

—

367

—

375

Midland Forge Pig Iron Prices

Furnaces Under Construction

£4.00 5.00 7-5° 5.00 4.50 4.00 3-63 344

— !9

22 21 12 18

7 2

Sources: Appendix C for the output estimates and furnaces in operation Construction data are from Scrivenor, History of the Iron Trade, p. 135. Price data are from P.P. 1833, vi, Questions 9,609-9,611.

T h e r e a r e s o m e discrepancies in the d a t a r e f e r r i n g to the n u m b e r of furnaces in o p e r a t i o n a n d u n d e r c o n s t r u c t i o n . T h i s arises f r o m t h e fact t h a t m a n y of t h e furnaces listed as " o u t of blast" in 1825, 1826, a n d 1828 w e r e e i t h e r old furnaces that h a d b e e n entirely a b a n d o n e d or new furnaces u n d e r construction. Pig iron prices rose d u r i n g t h e early 1820s to a p e a k in 1825, i n d u c i n g e n t r e p r e n e u r s to e n t e r t h e i n d u s t r y . T h e r e 4 Dowlais MSS, Glamorgan Record Office, Letter Book for 1817, Gilbert Gilpin to J. J. Guest, 18 December 1817.

137

T H E M A T U R E IRON INDUSTRY

was heavy investment in blast furnaces until 1828, when new construction fell off sharply. Over one hundred furnaces were built in 1824-1830. Output climbed from about 450,000 tons in 1823 to nearly 700,000 tons in 1827 an< ^ then leveled off for the rest of the decade. This great increase in the supply for pig iron brought about a sharp fall in prices after 1825. ^y t n e !820s, then, the iron industry had become highly responsive to demand conditions. The rapid construction of new furnaces assured that the high profits earned during the booms were short-lived. It is difficult to trace cost movements during these years with any degree of certainty. Variable costs for a tiny sample of furnaces are summarized in Table 8.3.There is little information available on capital costs, so estimating total costs is virtually impossible. The available data suggest that variable costs, in money terms, declined by about onequarter between 1810-1813 and 1830. In real terms, however, costs increased substantially because this was a period of sharp price deflation. The Rousseaux indices of general prices and industrial prices both register declines of about 50% between 1813 and 1830, while the Gayer-RostowSchwartz index of domestic commodities prices shows a decline of 42%. 5 These scattered data indicate that at least some furnaces experienced declining productivity during these years. There is some evidence that suggests that this may also have been true for the industry as a whole. Since there were a large number of iron producers and relative ease of entry, the industry was probably highly competitive by the late 1820s, with product prices and total costs not far apart. The data in Table 8.3 support this hypothesis. With the exception of the boom years of the mid-1820s, pig iron prices were falling faster than costs, which implies a long-run decline of profits. If we can assume that the industry was approaching perfect competition, then pig iron prices can serve as a rough proxy for blast furnace costs. Pig iron 5

Mitchell and Deane, Historical Statistics, pp. 470-471.

138

T H E IRON INDUSTRY IN PEACE TABLE 8.3 AVERAGE VARIABLE COSTS OF SELECT BLAST FURNACES AND THE MARKET PRICE OF PIG IRON, 1810-1830 (IN £ PER TON)

County

Year

Average Variable Costs

Horsehay Dawley Castle Lemington Horsehay

Shropshire Shropshire Durham Shropshire

1810 1811 1812 1813

£4.50 4.20 5.28 4-75

Dawley Castle Horsehay Unidentified Dudley Wood & Netherton Calder Clyde Bute Elsecar Merthyr Area

Shropshire Shropshire S. Wales

1819 1825 1825

4.07 4.20 3.00

Staff. Scotland Scotland S.Wales Yorkshire S. Wales

1825 1825 1829 1829 1830 1830

4.01 3-83 3.80 2.91 4.60 3.02

Furnace

Year

Price of Midland Forge Pig Iron

1810 1811 1812 1813 1814 1815 1816 1817 1818 1819 1820 1821 1822 1823 1824 •825 1826 1827 1828 1829

£6.30 6.25 5-5° 513 6.00 5.00 3-75 4-25 550 6.13 4.50 4.00 3-75 4.00 5.00 7-5° 5.00 4.50 4.00 3-63

Sources: For the data referring to the years 1810-1813, see the sources cited in Table 6.2. For the remaining furnaces: Bute—Bute MSS, Cardiff Central Library, xiv, 12; Calder and Clyde—Dufrenoy, "Rapport," pp. 439-453; Dawley Castle—Iron and Steel Institute MSS, the Institute, MSS 7; Dudley Wood and Netherton—Attwood vs. Small, in Appeal From His Majesty's Court of Exchequer at Westminster, Heard in the House of Lords n.d., Staffordshire Record Office, MSS 3/68; Elsecar—Wentworth Woodhouse MSS, Sheffield City Library, Elsecar Ironworks Accounts, 1827-33; Horsehay—Iron and Steel Institute MSS, the Institute, MSS 3; Merthyr region—Andrew Ure, Dictionary of Arts, Manufactures, and Mines (London, 1839), p. 719; and unidentified South Wales furnace—Smith MSS, Birmingham Reference Library, MSS 622383, Letter of 8 October 1825. Price data are from P.P. 1833, vi, Questions 9,609-9,611.

!39

THE MATURE IRON INDUSTRY prices fell about as fast as the general price level in 18131830, which implies that there was no significant productivity improvement during this period. There were no spectacular advances in smelting technology that could have produced significant gains in efficiency. Blast furnace practice in 1830 was essentially the same as it had been in 1815. The size and output of blast furnaces, however, continued to increase rapidly up to 1830. Average output had been about 1,550 tons in 1810, climbed to almost 2,600 tons in 1826 and remained at roughly that level until 1830.6 By the late 1820's, British blast furnaces were producing about three times the average output achieved in 1790. T H E DEVELOPMENT OF THE REFINING SECTOR

Although there are few reliable estimates of bar iron output for this period, the refining sector probably experienced roughly the same growth trends as the smelting branch of the industry. We had previously estimated that bar iron output in 1815 was about 150,000 tons. There are no reliable figures until 1827, when two independent observers reached similar conclusions. Ure's estimate of 354,000 tons and Holland's figure of 338,000 tons imply an increase of about 130% since 1815. 7 There is some indirect evidence that output may have reached about 350,000 tons by the late 1820's. The South Wales iron industry shipped nearly 150,000 tons of finished iron on the two major canals of the region in 1827, a n increase of 150% over the region's 1815 output. 8 If Welsh output had grown somewhat faster than that of the other regions in 1815-1827, then a total bar iron output of 350,000 tons for 1827 is plausible. As was the case with pig 6

See Appendix C for details. Andrew Ure, Dictionary of Arts, Manufactures, and Mines (London, 1839),Vol. i, p. 1 1 0 2 , a n d j . Holland, A Treatise on the Progressive Improvement of and the Present State of the Manufactures in Metal (London, 1831), Vol. i, pp. 76-77. 8 Scrivenor, History of the Iron Trade, pp. 124 and 127. 7

140

T H E IROr- INDUSTRY IN PEACE

iron, bar iron production probably stagnated in the late 1820s. This was certainly the case for South Wales, where finished iron shipments leveled off in 1827-1830. 9 These output estimates imply a significant shift in the composition of output. The share of pig iron output devoted to castings fell from 43% in 1815 to about 30% in the late 1820's, a reversal of the trend that had begun in the eighteenth century and had continued to 1815. This shift may have been more apparent than real because of the unusually high demand for cast iron during the war years. Perhaps as much as one-third of the cast iron produced in 1815 was sold to the government in the form of cannon, shot, and other war goods. Forge operators achieved significant reductions in production costs in both money and in real terms. A small sample of forge costs are given in Table 8.4. The Rousseaux indices of general prices and industrial prices registered declines of 3 1 % and 39% between 1804 and 1829, while the Gayer-Rostow-Schwartz index of domestic commodities prices shows a decline of 14%. 10 In contrast, by 1829 both the variable costs of producing bar iron and its market price were about half their levels of 1804. If capital costs fell over these years or simply remained roughly constant (estimated at £0.50 per ton in 1804), bar iron producers still enjoyed a comfortable profit margin until the late 1820s. Most producers probably earned huge profits during the boom years 1825-1827, when much of the growth in output achieved between 1815 and the late 1820s took place. Shipments of bar iron on the South Wales canals, for example, rose sharply from about 110,000 tons in 1823 to about 170,000 tons in 1828. 11 There were two major factors that brought about the sharp decline in bar iron costs. Raw materials prices fell off sharply after the war, while at the same time the forgemasters achieved significant advances in productivity. T h e data 9

Ibid. Mitchell and Deane, Historical Statistics, pp. 470-471. 11 Scrivenor, History of the Iron Trade, pp. 24 and 127. 10

141

THE MATURE IRON TABLE

INDUSTR Y

8.4

TOTA L FACTO R PRODUCTIVITY , AVERAG E VARIABLE COSTS , INPU T PRICES , AND INPUT S USE D BY SELEC T FORGES , 1804-182 9 COA L

PI G IRO N

Price Per Ton

Forge

Year

TFP

Average Variable Costs

Clydac h

1804

100

£11.6 5

£4-5 4

Corngreave s Horseha y

1825

132

5.80

3·°3

1825

8.20

Dowlai s But e

! 31

1829

123

1829

129

Used Used Per Per Ton Price Ton Bars Per Bars (Tons) Ton (Tons) £0.3 8

8.50

1.3 2

0.15

3.71

4.40

1.40

0.23

4.17

5.00

2.25

1.40

0.13

5.00

6.03

2.90

1-4 3

0.15

3.02

!•5 5

Sources: Bute—But e MSS , Cardif f Centra l Library , xiv, p . 12; Con greaves—Attwood vs. Small, Appendi x B, p. 6; Clydach—Lloy d MSS , Na tiona l Librar y of Wales, MSS 145; Dowlais—But e MSS , xiv, ρ 2i ; Horsehay—Iro n an d Stee l Institut e MSS , th e Institute , MSS 3.

given in Tabl e 8.4 illustrat e ho w thes e two development s combine d to cu t productio n costs sharply . Fue l consump tion was cu t in half, while th e consumptio n of pig iro n (75% of variable costs) fell off as well. Thi s saving, when combine d with th e shar p fall in pig iro n prices , brough t abou t an enormou s cost reduction . At Clydac h forge, for example , pig iro n costs pe r to n of bar iro n were £7.0 2 in 1804. At Dowlai s forge, thi s cost ha d been reduce d to £3.1 0 pe r to n of bar iro n by 1829. T h e r e was n o single spectacula r chang e in wrough t iro n technolog y durin g th e perio d 1815-1830 , bu t ther e were several small improvement s tha t take n togethe r probabl y accounte d for mos t of th e productivit y improvement . I n 1818, Samue l Roger s of Nantygl o ironwork s in Sout h Wales introduce d th e use of cast iro n bottom s on th e puddlin g furnace . Forgemaster s ha d previousl y used san d bottoms , which tende d to unit e chemicall y with th e pig iro n an d therefor e wasted thi s importan t raw material. 1 2 Littl e is know n abou t th e cost savings associate d with thi s innova 12

J . Percy , Metallurgy of Iron and Steel (London , 1864), p. 652.

142

THE IRON INDUSTRY IN PEACE

tion or about the speed at which it was adopted by the industry. Griffiths believed that the use of iron bottoms in puddling furnaces did not become common until after 1825. 13 Birch has argued that producers also achieved important cost reductions by charging the puddling furnace with molten pig iron, a practice patented in 1822. 14 Previously, the pig iron had been allowed to cool and then had to be reheated in the puddling furnace before it was converted to wrought iron. The fuel savings shown in Table 8.4 were probably a result of this innovation. The decade and a half following the Napoleonic Wars was a period of painful adjustment for the iron industry. The uninterrupted growth in demand of the previous quarter century ceased and the spectacular cost reductions associated with the new technology seemed exhausted. The industry nevertheless expanded substantially during the mid-1820s. Productivity stagnated in smelting, but improved significantly in refining in spite of the absence of spectacular innovations. T H E INDUSTRY'S COMPETITIVE POSITION

T h e reduction in wrought iron costs after 1815 further improved the competitive position of the industry in world markets. The iron industry was not only able to compete with foreign producers in the British market without the high protective tariffs imposed in the 1790s, but it had also greatly expanded its exports. The tariff on imported iron was reduced from £6.50 per ton to £1.50 per ton in 1826. 15 The price differential between Russian and British bar iron had increased sharply after the Napoleonic Wars, so the British iron industry would not have been seriously affected had the tariff been reduced much earlier than it was, say in 1820. When the tariff was reduced in 1826, a sharp fall in domestic bar iron prices, the result of domestic sup13

Samuel Griffiths, Guide to the Iron Trade oj Great Britain (London, 1873), p. !68. 14 Birch, Economic History, p. 190. 15 Scrivenor, History of the Iron Trade, p. 131.

HS

THE MATURE IRON INDUSTRY ply and demand conditions, caused the price differential between British and foreign bar iron to increase in that year. 16 By the late 1820s, Swedish and Russian bar iron had ceased to compete directly with puddled iron. Retained imports of foreign bar iron averaged only 13,300 tons in 1825-1829, with virtually all of this used in steelmaking. 17 While the iron industry faced no real competition in the domestic market after 1815, it also sold much of its output abroad. Exports (in their equivalent weight in pig iron) increased by nearly 50% in 1815-1830 and usually amounted to between one-quarter and one-third of total output. Most of this growth was achieved within Europe, where British iron exports increased from about 13,000 tons (16% of total exports) in 1815 to 59,000 tons (45% of the total) in 1830. 18 British export success within Europe was a reflection of the economic development of this area as much as of the result of Britain's growing cost advantage in iron. Over the same period, exports to the United States stagnated, while sales to the rest of the New World, primarily Canada and the West Indies, grew by roughly 40%. The largest importers of British iron in 1830 were the United States, the Netherlands, Italy, France, Canada, and Holland, accounting for 55% of the total trade. 19 In spite of its rapid growth since the middle of the eighteenth century, the iron industry remained a relatively small sector in the British economy in the late 1820s. The final output of the primary iron industry at that time was about 350,000 tons of bar iron and perhaps 200,000 tons 16 Gayer, Rostow, and Schwartz, Growth and Fluctuation, pp. 568 and 694-695· 17 Scrivenor, Comprehensive History, pp. 420-423. 18 These calculations utilized the output estimates given in Appendix C and the foreign trade statistics summarized in Scrivenor, Comprehensive History, pp. 421-423. It was assumed that 1.50 tons of pig iron were required to produce a ton of bars in 1815, but only 1.40 tons in 1830. The detailed calculations are in my Ph.D. thesis, p. 187. 19 Scrivenor, Comprehensive History, pp. 420-423.

144

T H E IRON INDUSTRY IN PEACE

of cast iron products. 20 If we apply average prices of £10 a ton for bar iron and £7 a ton for cast iron—and both figures are probably too high—the gross output of the primary iron industry was under £5 million in the late 1820s, compared to an estimated gross national product of about £340 million. 21 Deane and Cole defined the iron industry more broadly to include all the secondary iron trades, such as the manufacture of steel, cutlery, hardwares, and even the village blacksmith's output of horseshoes. They estimate that the gross product of the (more broadly defined) iron industry was about £18 million in the late 1820s22 In spite of its small size relative to the rest of the economy, the industry had become one of the largest single industrial sectors in Britain by the late 1820s. Only cotton textiles, with a gross output of about £32 million, and the woolen industry, with a gross output of about £27 million, were larger. 23 20

Estimates taken from Appendix C. Phyllis Deane and W. A. Cole, British Economic Growth, 1688-1959, Trends and Structure (Cambridge: Cambridge University Press, 1962), p. 166. 22 Ibid., p. 225. 2S Ibid., pp. 187 and ig6. 21

H5

NINE

THE HOT BLAST AND THE DEVELOPMENT OF THE SMELTING SECTOR, 1828-1870 T H E progress of the iron industry during the middle decades of the nineteenth century is closely associated with a single innovation—the use of a heated blast of air in the furnace. Economic historians, however, have largely misunderstood this crucial innovation. This chapter will reassess the impact of the hot blast on the Scottish iron industry, the subsequent adoption of the new technique in the rest of Britain, and the overall expansion of the smelting sector before 1870. T H E N E W TECHNIQUE AND THE RISE OF THE SCOTTISH IRON INDUSTRY

Before the late 1820s, ironmasters believed that using a cold blast to the furnace improved both the quality and quantity of pig iron produced. They observed that blast furnaces produced greater outputs in the winter than in the summer and erroneously concluded that the lower temperature of the blast was the explanation. In fact, furnace performance improved during the winter months because the air was relatively dry then. The less moisture in the air, the more combustion would be supported by a given volume of air pumped into the furnace. 1 James Beaumont Neilson conducted experiments at several Scottish furnaces and patented the hot blast in September 1828. 2 Neilson had made the simple discovery that pre-heating the blast going to the furnace brought significant fuel economies and sharply increased furnace out1 2

Gale, British Iron and Steel Industry, p. 56. Birch, Economic History, pp. 181-182.

146

T H E H O T BLAST AND SMELTING

put. 3 T h e use of the hot blast raised the temperature in the furnace, brought about a more complete combustion of the fuel, and lowered fuel consumption. Higher temperatures also speeded up the smelting process, making possible much higher output from a given furnace. Economic historians have argued that the main impact of the hot blast was a sharp reduction in Scotland's pig iron costs that vastly improved the competitive position of her ironmasters. This general interpretation is correct. The precise significance of the hot blast for the Scottish iron industry, however, has been widely misunderstood. T h e traditional view is that the hot blast saved the Scottish iron industry from extinction. It is alleged that before the introduction of the hot blast, Scottish furnaces were highcost producers compared to their English and Welsh counterparts and survived only because of high transport costs. In the standard economic history of Scotland, Hamilton presented this view: "The high costs of transport enabled the Scots to monopolize most of their home market. . . . Had it not been for the invention of the hot-blast, making possible the use of the rich store of blackband ironstone, the Scottish iron industry would not have survived the coming of the railway and steamship." 4 Campbell has recently repeated the same argument: "The deficiencies of the Scottish iron industry lay in its high costs of production. . . . Consequently, Scottish iron was priced out of most markets. It was little known in England, Wales or overseas and could be sold in Scottish markets only because of the cost of transporting iron from England and Wales. Even these sheltered markets were gradually being lost as transport costs fell with improved 3 Neilson's career and the details of his early experiments are given in Birch, Economic History, pp. 181-185; Smiles, Industrial Biography, pp. 149-161; and Thomas B. MacKenzie, Life ofJ.B. Neihon (Glasgow, 1929). T h e unsuccessful efforts of several Scottish ironmasters to invalidate Neilson's patent are discussed in R. D. Corrins, "The Great Hot-Blast Affair," Journal of Industrial Archeology, xn (1970), pp. 233-263. 4 Henry Hamilton, The Industrial Revolution in Scotland (Oxford: Oxford University Press, 1932), p. 175.

147

THE MATURE IRON INDUSTRY communications . With th e furthe r reductio n of transpor t costs brough t by th e railways, Scottis h iro n would almos t certainl y have been price d ou t of mos t of its hom e 5 markets." Thi s view ha s bee n attacke d by J o h n Butt , who cite d numerou s example s of sales of Scottis h iro n in Englan d as evidenc e of th e ability of Scottis h ironmaster s to compet e with th e ironmaster s of Englan d an d Wales.6 H e pointe d ou t tha t over 3,000 ton s of Scottis h pig iron , or abou t 8% of tota l Scottis h output , were sold in Liverpoo l alon e in 1830. 7 But t argue s tha t th e relatively slow growth of th e Scottis h iron industr y before 1830 was no t a result of high produc tio n costs, but was instea d a consequenc e of a stagnan t deman d for iron in Scotland. 8 T h e available dat a on furnac e productio n costs in th e majo r ironmakin g district s d o no t suppor t th e traditiona l interpretation . I have calculate d variable costs at nin e furnace s (a tota l of fifteen observations ) for th e perio d 18251830. Average costs were roughl y £ 3 pe r to n in Sout h Wales, £ 4 pe r to n in Scotland , an d £4.5 0 pe r to n in th e remainin g districts. 9 Perhap s thi s small sampl e of furnace s doe s no t accuratel y reflect th e productio n costs of th e 300-od d furnace s in operatio n in th e late 1820s, but the y nevertheles s thro w considerabl e doub t on th e traditiona l interpretation , which incidentally , is state d with no supportin g cost dat a whatsoever . T h e dat a suggest tha t ther e were shar p interregiona l cost differential s in th e industr y in th e late 1820s an d tha t Sout h Wales was th e least-cos t region , while costs in th e remainin g district s were significand y higher . Scottis h costs were muc h highe r tha n thos e R. H . Campbell , Scotfand Since iyoy: The Rise of an Industrial Society (Oxford , 1965), pp . 118-119. 6 Joh n Butt , " T h e Scottis h Iro n an d Steel · Industr y Before th e Ho t Blast, " Journal of the West of Scotland Iron and Steel Institute, LXXIII (196566), pp . 206-207 . 1 8 Ibid., p. 220. Ibid. , p. 206. 5

9 T h e costs for th e individua l furnace s ar e available in Hyde , " T h e Adoptio n of th e Ho t Blast by th e British Iro n Industry : A Reinterpreta tion, " Explorations in Economic History, χ (Spring , 1973), p . 283.

148

THE HOT BLAST AND SMELTING

of the Welsh furnaces, but were probably roughly the same as those experienced at many furnaces in the remaining regions. There was nothing unique about the Scottish competitive position in 1830 because high transport costs protected much of the iron industry from competition from the Welsh. There is no evidence, for example, of sales of Welsh iron in the Birmingham region or in Sheffield, much less in Scotland. At Liverpool, however, about equidistant in terms of transport costs from the ironworks of South Wales, Staffordshire, and Scotland, the ironmasters of all three regions sold a considerable tonnage of iron. 10 High transport costs served to protect all regions from competition. Historians of the iron industry have explained the success of the hot blast in Scotland largely in terms of Scotland's unique "blackband" ironstone. The traditional view is that the hot blast made Scotland the lowest-cost producer in Britain because it enabled ironmasters to exploit her reserves of cheap blackband ore. Hamilton made this argument 1 1 and Campbell recently echoed this same view: "Making possible the profitable, indeed the highly profitable, use of this (ore) was the great work of the hot blast, patented by J.B. Neilson in 1828." 12 Finally, in his study of the British iron industry, Birch cautiously takes the same position: "For perhaps more important than the direct benefits resulting from Neilson's invention itself were its complementary consequences. It was (for the first time) possible to exploit the rich mineral resources of the blackband ironstone." 13 Part of this traditional view is an implicit assumption that Scottish ironmasters simply could not use blackband ore, for either technical or economic reasons, before the introduction of the hot blast. This assumption is demonstrably 10 11 12 13

Birch, Economic History, p. 235. Hamilton, Industrial Revolution, p. 175. Campbell, Scotland Since IJOJ, p. 119. Birch, Economic History, p. 173.

149

THE MATURE IRON INDUSTRY

false. Blackband ore was used at Calder and Clyde furnaces, where it was mixed with other ores, well before the invention of the hot blast. 14 The Monkland Company used it exclusively in their furnace beginning in 1825, adding only limestone to the furnace charge. 15 David Mushet, who discovered blackband ore, argued that the Scottish ironmasters refused to use it only because of their ignorance and conservatism, not because of technical or economic con siderations. 16 Historians holding the traditional view imply, but never prove, that lower ore costs accounted for most of the cost savings brought by the use of the hot blast. Cost data from Scottish furnaces suggest that the major savings were in fuel costs. Four Scottish furnaces that adopted the hot blast achieved an average reduction in variable costs of £1.52 per ton of pig iron between 1828 and the late 1840s. Savings in unit fuel costs (f 1.15) and in "other" costs (£0.35) account for virtually the entire cost reduction. 17 A comparison of Scottish and Welsh costs also suggests that the fuel savings brought by the hot blast account for the dramatic change in Scotland's competitive position after about 1830. Variable costs at the Clyde furnace in Scotland (using a cold blast) exceeded costs at Bute furnace in South Wales by nearly £1 a ton in 1829. The two furnaces had virtually identical ore costs, but fuel costs at Clyde (£1.78) were nearly three times those at the Welsh furnace (£0.65). 18 By ^ 3 3 the Clyde and Calder furnaces, both in Scotland, had reduced their fuel costs to £0.66 per ton of pig iron. The Scottish furnaces, both using the hot blast, had achieved cost parity with the Welsh furnaces by this time. 19 The significant development over the brief period 1829-1833 was the drastic reduction of Scottish fuel costs to a level below that of the Welsh furnaces. 14

Hamilton, Industrial Revolution, p. 179. 16 Ibid. Mushet, Papers, p. 127. 17 T h e details are available in Hyde, "Adoption of the Hot Blast," p. 285. 18 1 /fed., p. 286. ^ Ibid 15

150

THE HOT BLAST AND SMELTING

The most important effect of the hot blast was this sharp reduction in fuel costs. Neilson's invention allowed Scottish ironmasters to use raw coal in the furnace and thus save the costs of coking the coal. The sulphur normally removed from the coal by coking was removed in the furnace slag because of the higher temperatures attained with the hot blast.20 Raw coal was used at Calder in 1831 and at Clyde by 1833 and the other Scottish ironmasters quickly followed suit. 21 The use of the hot blast also reduced capital costs because it enabled ironmasters to increase furnace output substantially. At Calder, for example, daily output per furnace rose from 5.60 tons in 1828 to 8.20 tons in 1833, a 46% increase. 22 Capital costs must have been reduced because output increased sharply and the investment needed to convert furnaces to the hot blast was small. It was estimated, for example, that the construction of Blair ironworks in 1836 required a total investment of £27,000. Of this total, £3,800 was spent on the blowing engine and heating apparatus together. 23 T h e steam engine alone probably cost at least half this amount. At Corbyn's Hall furnaces in Staffordshire, the heating apparatus for two furnaces was valued at only £780 in an 1841 inventory. 24 T h e investment needed to install the hot blast was minimal, while the increase in output was substantial. Scottish pig iron costs declined sharply with the introduction of the hot blast and Scotland became the lowestcost region in Britain. Between 1828 and the early 1840s, 20

Gale, British Iron and Steel Industry, p. 57. I. E. Gibson, "The Economic History of the Scottish Iron and Steel Industry, 1830-1880," Ph D. thesis, University of London (1955), pp. 136 and 150. 22 Pierre Amand Dufrenoy, "Rapport a M. Ie Directeur general des ponts et chaussees et des mines sur l'emploi de lair chaud dans les mines a feu l'Ecosse et de l'Angleterre,"/lnnafei des Mines, 3rd Series, iv (1833), p. 436. 23 Blair of Blair Muniments, Scottish Record Office, Papers Relating to the Blair Ironworks, 1830-1863, GD 167/Bundle C. 24 Harward MSS, Staffordshire Record Office, D 695/1/12/38. 21

!51

T H E MATURE IRON INDUSTRY

Scottish producers cut their production costs by nearly two-thirds, both in money and in real terms. By the early 1840s, Scottish furnaces registered variable costs of below £1.75 per ton, while furnaces in the other districts generally had costs of over £3 per ton. 25 With this large cost advantage, Scottish producers were able to pay transport costs and still compete very effectively in the major domestic and foreign markets. As early as 1834, Scottish hot blast pig iron was selling in the Sheffield market, forcing the neighboring ironmasters to cut their prices by £0.50 per ton. 26 Scottish blast furnace owners earned high profits from the introduction of the hot blast until at least the early 1840s, when pig iron prices fell below £3.00 a ton. By the early 1840s, the ironmasters' accounts begin to deal explicitly with capital costs, including depreciation, so total costs can be estimated with more confidence. A detailed cost estimate for the Blair ironworks for June 1841 (Table 9.1) shows the relative importance of raw materials and capital costs in the total costs of hot blast pig iron. T h e average cost of delivering the pig iron to market was an additional £0.37 per ton, so Blair pig iron cost £2.22 per ton delivered. Scottish pig iron prices in Liverpool were £3.00 in 1841, yielding the ironmaster a comfortable profit above his total costs. 27 For the case of Blair, capital costs and transport costs together amounted to £0.70 per ton of pig iron. If this same figure is added to the variable costs of the other Scottish furnaces in our sample, we derive total cost estimates that remained well below market prices until the early 1840s. T h e existence of high profits in the production of hot 25 Costs for individual furnaces are given in Hyde, "Adoption of the Hot Blast," p. 288. T h e Rousseaux and Gayer-Rostow-Schwartz price indices show price declines of less than ten per cent over these years. 26 R. H. Campbell, "The Growth and Fluctuations of the Scottish Pig Iron Trade, 1828-73," Ph.D. thesis, University of Aberdeen (1956), pp. 27

Mitchell and Deane, Historical Statistics, p. 493. 152

T H E H O T BLAST AND SMELTING TABLE 9.1 T H E STRUCTURE OF TOTAL COSTS FOR BLAIR IRONWORKS, JUNE 1841 (IN £ PER TON PIG IRON)

Coal for Furnace (2.00 tons) Coal for Hot Blast (1.20 tons) Ore (1.70 tons) Limestone Wages Depreciation and Management 5% Interest on £60,000 Capital Total cost at the furnace

£0.44 0.05 0.71 0.12 0.20 0.16 0.17 I.8J

Source: Blair of Blair Muniments, Scottish Record Office GD 167/ Bundle E. These cost estimates were based on the assumption that the four furnaces at the Blair ironworks would produce an annual average of 4,500 tons each or a total of 18,000 tons.

blast pig iron brought about a heavy investment in the Scottish iron industry and led to a sharp increase in output. In 1830, twenty-seven furnaces produced 37,500 tons, but by 1860 there were 133 furnaces in blast with an output of roughly 1,000,000 tons. 28 Increased sales of Scottish pig iron abroad and in other regions of Britain were the key to output expansion. In the 1840s and 1850s, between half and two-thirds of Scotland's pig iron output was consumed outside the region. Exports accounted for about onequarter of output in i860, making the Scottish iron industry more dependent on foreign markets than any other region, with the possible exception of South Wales. 28 T H E ADOPTION OF THE H O T BLAST IN THE OTHER IRONMAKING DISTRICTS

The diffusion of the hot blast over the period 1828-1860 is also widely misunderstood. Scottish ironmasters adopted the hot blast very quickly, but English, and especially 28

R. H. Campbell, "Statistics of the Scottish Pig Iron Trade, 1830 to 1865," Journal ofthe West of Scotland Iron and Steel Institute, LXIV (1956-57), pp. 283 and 287. 29 Campbell, "Statistics," p. 286.

»53

T H E M A T U R E IRON INDUSTRY

Welsh, producers were much slower to embrace this innovation. While the complete specification of Neilson's patent was made in February 1829, it was not until the development of improved stoves for heating the blast in 1832 and the introduction of the water-cooled tuyere (blow pipe) in 1834 that the hot blast was perfected. 30 As early as 1833, when Dufrenoy visited the ironworks of Great Britain, there were sixty-seven furnaces (out of a total of four hundred) using the hot blast. 31 All the Scottish ironworks had adopted Neilson's innovation by 1836, but it spread more slowly into England and Wales. 32 By 1840, roughly 55% of British pig iron output was produced with the hot blast, while only 40% of the furnaces in operation were using the new technique. 33 The hot blast was almost universally adopted by i860, when it accounted for about 95% of the total output. 34 T h e exact timing of the adoption of the hot blast between 1840 and i860 is unclear, but there is considerable evidence that many ironmasters switched over in the early 1840s. Neilson had issued seventy-one licenses to various ironmasters by 1840, and this number increased to eighty the following year. 35 Fragmentary evidence shows a strong movement toward the hot blast in Staffordshire in the early 1840s. Out of a total of 106 furnaces in blast in this region in 1839 (total output of about 346,000 tons), only twentyseven used it, producing 98,500 tons or about one-third the total output of the region. 36 In 1843, a depressed year for the iron industry, there were only eighty furnaces in 30

Birch, Economic History, p. 183. Dufrenoy, "Rapport," p. 436. 32 Gibson, "Economic History," p. 150, and James Cleland, The Former and Present Stale of Glasgow (Glasgow, 1936), p. 50. 33 Gibson, "Economic History," p. 155 and Meade, Coal and Iron Industries, p. 826. 34 Ibid. 35 Memoirs and Portraits of One Hundred Famous Glasgow Men (Glasgow, 1886), pp. 242-246, and Neilson vs. John Harford and Others (May 1841), p. 31

109. 36

Mushet, Papers, pp. 417-418.

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T H E HOT BLAST AND SMELTING

blast in Staffordshire, but forty-two used the hot blast and accounted for 55% of total output. 3 7 The expiration of Neilson's patent in 1842 also served to hasten the adoption of the hot blast in the early 1840's. There were significant interregional variations in the speed of adoption of the hot blast. We will focus on the four principal ironmaking districts—Scotland, South Wales, Staffordshire, and the South Yorkshire-Derbyshire area, which together accounted for about 85% of the national output in 1830. 38 As was already noted, the new technique was adopted most rapidly in Scotland, where all the furnaces were using it by 1836. 39 The ironmasters of South Wales were the slowest to utilize Neilson's invention. If all the South Wales ironworks known to have used the hot blast before 1836 were still using it in all their furnaces in that year, hot blast pig iron may have made u p about one-fifth of the region's output. 4 0 Its share of total output was probably much lower, since many ironworks like Dowlais used the process intermittently on a few furnaces. 41 As late as 1839, only one-sixth of the Welsh furnaces were using the hot blast.42 The ironmasters of Staffordshire adopted the new process more rapidly than the Welsh producers, but significantly more slowly than their Scottish counterparts. By 1839, about one-fourth of the furnaces were using Neilson's process and they produced about one-third of the region's output. 4 3 These shares increased quickly to about 55% by 1843. 44 Historians like Birch have argued that the 37

13138

Report ofthe Midland Mining Commission, P.P. 1843, xm, Appendix, p.

Mitchell and Deane, British Historical Statistics, p. 132. Gibson, "Economic History," p. 150. 40 Dufrenoy, "Rapport," p. 436, and Harward MSS, Staffordshire Record Office, D 695/1/9/81/1. 41 Dufrenoy, "Rapport," pp. 470-471, and Mushet, Papers, p. 415. 42 John, Industrial Development of South Wales, p. 156, and Mushet, Papers, pp. 414-415 43 Mushet, Papers, pp. 417-418. 44 Report of the Midland Mining Commission, P.P. 1843, x m , Appendix, p. 39

T H E M A T U R E IRON INDUSTRY

Staffordshire ironmasters refused to use the hot blast because they believed that it lowered the quality of the pig iron. 45 There was sufficient disagreement among ironmasters about the quality of hot blast pig iron to prompt major investigations of this question in 1837, 1842, and 1844. These investigations concluded that hot blast pig iron was equal in quality to cold blast pig iron. 46 Scattered evidence on the Yorkshire-Derbyshire region suggests that ironmasters there adopted Neilson's method at roughly the same speed as the Staffordshire ironmasters. Four ironworks with a total of twelve furnaces had switched over to the hot blast by 1836, 47 while at least two more furnaces had done so by 1842. 48 There were probably about fifteen furnaces, or one-third of the total in the region, using the hot blast by 1840. Historians of the iron industry have not offered a cogent explanation of these interregional variations in the diffusion of the hot blast. If the blackband ironstone found in Scotland explains the rapid adoption of the hot blast in that region, then the rate of adoption outside Scotland would have to have been a function of the size and location of blackband ore deposits in the other districts. This leads nowhere, since blackband ore was unique to Scotland. We have already shown, however, that the main advantage brought by the use of the hot blast in Scotland was a drastic reduction in fuel costs. There were, however, great regional variations in the potential fuel savings from the 45

Birch, Economic History, p. 185. There are reports by T. Thomson, E. Hodgekinson, and W. Fairbairn in the Report of the Seventh Meeting of the British Association (Liverpool, 1838), pp. 117-126 and 337-417, as well as an article by Harry Hartop, "A Paper on the Relative Properties of Iron Made by the Use of Cold and Hot Air Blast in the Smelting Furnace," West Riding Geological and Polytechnic Society (1842), pp. 1-17, and a second detailed study by Fairbairn in 1844, the results of which were reprinted in Percy, Metallurgy, p. 863. 47 Dufrenoy, "Rapport," pp. 10-11 and Neilson vs. John Harford and Others (May 1841), p. 101. 48 A. K. Clayton, "The Story of the Elsecar and Milton Ironworks From Their Opening Until the Year 1848," typescript, Sheffield City Library, p. 106. 46

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T H E H O T BLAST AND SMELTING

hot blast and these variations explain the varying speed at which ironmasters in the regions outside Scotland adopted this innovation. The potential fuel savings from the hot blast were a function of the carbon content of the coal used at the furnace. In regions such as Scotland, with coal with a relatively low carbon content, more coal needed to be coked to yield a given tonnage of pure carbon. The higher temperatures realized with the hot blast allowed the ironmasters to use raw coal and completely avoid coking. The lower the carbon content of the coal available to a region, the higher the probability of achieving significant cost reductions with the hot blast. An analysis of British coals made in the early nineteenth century is given in Table 9.2. TABLE 9.2 CARBON CONTENT (% BY WEIGHT) OF VARIOUS BRITISH COALS USED IN BLAST FURNACES

Furnaces

Regions

Hirwain Aberdare Nine Misc Nine Misc. Five Misc. Three Misc. Unspecified

South Wales South Wales South Wales Yorkshire Derbyshire Staffordshire Scotland

Average Number of Carbon Coal Seams Analyzed Content (%) 4 9 83 9 7 4

—

8909 85-99 83.07 6319 61.28 5442

—

Range of Observations {%) 87.15-90.27 80.44-91.18 79-79-89-75 54.61-69.13 55.27-68.93 49.42-63.57 35.00-50.00

Sources' All the data except that relating to Scotland are from Mushet, Papers, pp. 826-906. His origi nal analysis was done in 1808. The Scottish estimates, admittedly crude are from Hamilton, Industrial Revolution, p.174.

The fuel savings achieved in each region from the use of the hot blast are plotted against regional coal quality in Figure 9.1. These savings were inversely related to the quality of coal available to the ironmaster. These data also support the hypothesis that the rate of adoption of the hot blast was a function of coal quality. Scotland had the poorest quality coal, achieved the greatest reduction in fuel costs, and adopted the hot blast more 157

T H E FIGURE 9 . 1 :

M A T U R E

I R O N

I N D U S T R Y

C O A L SAVINGS WITH THE H O T B L A S T COMPARED TO THE CARBON CONTENT o r BRITISH COALS, 1 8 2 8 - 1 8 3 6 , REGIONAL AVERAGES

158

THE HOT BLAST AND SMELTING

rapidly than any other region. At the other extreme was South Wales, with the best coal, smallest coal savings, and the slowest rate of adoption. Finally, Staffordshire and the South Yorkshire-Derbyshire region had similar coal, achieved similar cost reductions, and adopted the hot blast at about the same speed. O T H E R INNOVATIONS AND MOVEMENTS IN PRODUCTIVITY AND O U T P U T

There were other innovations in smelting during the period 1830-1870, but they appear minor compared to Neilson's discovery. For example, ironmasters began to exploit the anthracite coal of South Wales in the early 1840s. The first successful use of anthracite coal in smelting took place at Yniscedwyn ironworks in 1837. 49 T h e ironmaster who used coal there credited the hot blast for his success. He claimed he was able to produce pig iron with only 1.35 tons of raw coal, less than half the lowest coal consumption of contemporary furnaces. 50 The costs of smelting with anthracite coal are not known. The use of the hot blast to make pig iron with anthracite coal became widespread in the United States, but was never important in Great Britain. Anthracite pig iron output reached a peak of 63,400 tons in 1857 and then declined to slightly over 30,000 tons in 1862. 51 In the year of its peak output, the anthracite pig iron sector accounted for less than 2% of total British output. 5 2 Ironmasters also altered the basic lines of the blast furnace considerably. John Gibbons, a Staffordshire ironmaster, observed that the square hearths of his blast furnaces became roughly round after several months of use, so he built a furnace with a round hearth in 1832. He worked his new furnace alongside an identical one with a square 49 I. L. Griffiths, "The Anthracite Coalfield of South Wales," Ph.D. thesis, University of London (1958), p. 53. 50 George Crane, "On the Smelting of Iron With Anthracite Coal," Report of the British Association, 1837, p. 53. 51 Griffiths, "Anthracite Coalfield," p. 53. 52 Mitchell and Oeane, Historical Statistics, p. 131.

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T H E M A T U R E IRON INDUSTRY

hearth, using the same raw materials and blast for both furnaces. The traditionally designed furnace had an average output of 75 tons per week, while the new furnace with the round hearth produced 100 tons per week. He further increased output by increasing the size of the hearth (not the height of the furnace) and steepening the angle of the boshes. 53 Another Staffordshire ironmaster, Oakes, built a furnace sixty feet high embodying Gibbons' innovations in furnace design. Oakes also greatly increased the blast pressure, introducing the blast into the furnace through six tuyers (blow pipes) instead of the normal three. He quickly achieved an unprecedented output of 236 tons per week from this furnace. 54 These generally neglected improvements in blast furnace design were achieved independently of the hot blast. When combined with the use of the hot blast, improved furnace design and the use of a more powerful blast greatly increased output and lowered capital costs. Ironmasters began to utilize the waste heat generated by the blast furnace in the late 1840s. T h e major innovator was J. P. Budd of Ystalyfera ironworks in South Wales. Budd used the waste heat from his furnaces to heat the blast in 1844 and reported total cost savings of about £2,800 per year on a total output of from 15,000 to 18,000 tons of pig iron. While the cost savings, about £0.15 per ton of pig iron, were not large, they encouraged Budd to continue his experiments. He reported in 1848 that he was also using the waste heat from the furnaces to make steam for the steam engine. The savings from this further application of waste heat were roughly the same as from its application to heating the blast. 55 The total savings from these uses of waste heat were probably about 10% of variable costs. 53 John Gibbons, Practical RemarL· on the Construction of the Staffordshire Blast Furnace (Birmingham, 1844). T h e bosh is the portion of the blast furnace above the hearth where the furnace widens considerably. 54 Gale, British Iron and Steel Industry, p. 59. 55 James Palmer Budd, "On the Advantageous Use Made of the Gase-

160

THE HOT BLAST AND SMELTING

Budd and the other early experimenters simply drew off the hot gases from the top of the furnace, but made no effort to burn these gases. T h e use of waste heat seems to have spread slowly before 1860. We know that it was used in two ironworks in Derbyshire in 1849 a n d an 1852 article in the Proceedings of the Institute of Mechanical Engineers included drawings of apparatus used at five additional ironworks to capture the waste heat from the furnace. 56 Two articles published in the same journal in i860 include descriptions of waste heat recovery apparatus in use at an additional seven ironworks. 57 There is little evidence on the use of waste heat at other ironworks before i860, but by that time the practice was well-known and in use at many of the leading works. Ironmasters also increased blast temperatures considerably during these years. Scottish producers had raised the temperature of the blast to about 600 0 F during the initial adoption of the hot blast in the late 1830s. T h e Cleveland ironmasters, who had doubled blast temperatures by the late 1850s, were able to raise them to about 15000F with the new Cowper stove, patented in 1856. It is difficult to document the cost reductions achieved by superheating the blast. The Cleveland ironmasters claimed that they reduced coke consumption per ton of pig iron by one cwt. for every 1000F increase in blast temperature. 5 8 Ironmasters increased both the size and output of the blast furnace during these years. T h e average furnace produced about 2,500 tons per annum in 1830, but by 1870 average output had climbed to about 9,000 tons. 59 ous Escape From the Blast Furnaces at the Ystalyfera Ironworks," Report of the Eighteenth Meeting of the British Association (1849), pp. 79-81. 56 Samuel H. Blackwell, "On the Arrangement of the Materials in the Blast Furnace and the Application of the Waste Gases," PIME, 1852, pp. 192-193, and Plates 76-78. 57 Charles Cochrane, "Description of a Method of Taking Off the Waste Gas From Blast Furnaces," PIME, 1860, pp. 121-135, and Samuel Lloyd, "On Taking Off the Waste Gas From Open-Topped Blast Furnaces," PIME, i860, pp 251-276. 58 Birch, Economic History, pp 186 and 372. 59 Details are given in Appendix C.

l6l

T H E M A T U R E IRON INDUSTRY

Ironmasters built larger furnaces, particularly in the rapidly expanding Northeast (Durham, Northumberland, and North Yorkshire), where output soared from 5,327 tons in 1830 to 1,628,000 tons in 1870. Bolckow and Vaughan, the leading ironmasters of this district, more than doubled the height of their new furnaces between 1851 and 1868, while increasing their internal capacity from about 4,500 cubic feet to nearly 29,000 cubic feet. 60 T h e furnaces of the Northeast had an average output of about 13,600 tons in 1870, well above the national average for the entire industry. 61 While there were several technological advances of some importance in the smelting sector during the period 1830-1870, the hot blast was the only innovation responsible for substantial improvements in blast furnace productivity and costs. Scottish furnaces increased productivity by about 50% in 1828-1833, reducing costs by roughly onethird in money terms. Since prices fell by about 10% during these years, real costs declined by about one-quarter in five years. 62 Over the longer period 1828-1844, Scottish producers cut their real costs by nearly two-thirds. 63 Cost estimates from four furnaces in blast in 1857 suggest that productivity stagnated in 1844-1857. Real costs may have declined by about one-tenth during these years because input prices fell substantially. 64 These data suggest that the hot blast was the only innovation that pro60

James S. Jeans, Notes on Northern Industries (London, 1879), p. 65. Birch, Economic History, pp. 135-136. 62 Cost estimates are from Duf'renoy, "Rapport," p p 439-453, and Gibson, "Economic History," p. 146. T h e Rousseaux and Gayer-RostowSchwartz price indices are reproduced in Mitchell and Deane, Historical Statistics, pp. 470-471. 63 Costs for individual furnaces are given in Hyde, "Adoption of the Hot Blast," p. 288. T h e Rousseaux and Gayer-Rostow-Schwartz price indices are reproduced in Mitchell and Deane, Historical Statistics, pp. 470471. 64 T h e productivity and cost estimates are taken from my Ph.D. thesis, p. 223. T h e money costs of production increased by 8% in 1844-1857, but the general price level, as measured by the Rousseaux index, increased by 17% over the same period. 61

162

T H E H O T BLAST AND SMELTING

duced major improvements in productivity and costs during this period. Technological advances in smelting, especially the hot blast, lowered costs, and competition in the iron industry brought a long-run decline in pig iron prices, illustrated in Figure 9.2. Despite sharp price increases in 1834-1836 and FIGURE 9.2:

PIG IRON PRICES, 1830-1870

7

1830

1.840

1850

1860

1870

Source: Mitchell and Deane, Historical Statistics, pp. 492-493.

163

THE MATURE IRON INDUSTRY

1844-1846, pig iron prices fell significantly over the period 1830-1870. Scottish pig iron prices fell by about 50% during these years, while the general price level was rising slightly.65 The rapidly expanding production of pig iron during this period put considerable downward pressure on prices. The growth in output, illustrated in Figure 9.3, was briefly FIGURE 9.3:

1830 65

1840

PIG IRON O U T P U T , 1830-1870

1850

I860

1870

Mitchell and Deane, Historical Statistics, pp. 470-471 and 492-493.

164

T H E H O T BLAST AND SMELTING

interrupted in 1831-1832, 1841-1843, and 1847-1848, but was nevertheless impressive. This rapid expansion of output was closely associated with the introduction of the hot blast, which was clearly the dominant technological advance of the middle decades of the nineteenth century.

165

TEN

THE WROUGHT IRON SECTOR, 1830-1870 T H E rapid growth in pig iron output that accompanied the adoption of the hot blast was closely linked to developments in the wrought iron sector since most pig iron produced in British furnaces was destined for the forge. It is not surprising, then, that the expansion of the refining sector roughly paralleled the growth of the smelting sector after 1830. The wrought iron sector, however, did not produce spectacular changes in technology comparable to the hot blast. The prosperity that the industry enjoyed during these years was largely the result of the rapid growth in demand for wrought iron from domestic and foreign consumers. T H E GROWTH IN OUTPUT

There are no reliable estimates of national bar iron production until 1881, so we must rely on indirect evidence to trace the growth of output. British ironmasters probably produced about 350,000 tons of bar iron in the late 1820s. The next aggregate output estimates are for the mid1850s, and they are contradictory and irreconcilable. Bar iron output was estimated to have been roughly 2.25 million tons in 1853, 2.0 million tons in 1854, and 1.6 million tons in 1855. 1 The first two estimates greatly exaggerate output levels, while the third is more plausible. The 1853 estimate of 2.25 million tons is inconsistent with more reliable regional estimates. It was based on the assumption that Scottish bar 1 Ure, Dictionary, p. 1102; William Truran, The Iron Manufacture of Great Britain (London, 1865), p. iii; and Richard Cort, "British Iron Manufacture," Journal ofthe Royal Society of Arts, m, p. 607.

166

THE WROUGHT IRON SECTOR iron output was approximately 600,000 tons, but other observers put this region's production at no more than 130,000 tons in 1853. 2 If we calculate the potential bar iron output of the industry, the 1853 and 1854 estimates seem equally unlikely. The amount of pig iron available for conversion to bars can be calculated by subtracting exports from total output. I then assumed that 70% of the available pig iron went into bars, as was the case in the late 1820s, and that 1.30 tons of pig iron were required to produce a ton of bar iron. 3 The resulting calculations yield a potential bar iron output of 1.4 million tons for 1853, 1.5 million tons for 1854, and 1.6 million tons for 1855. Even if I made the unlikely assumption that 90% of the available pig iron was converted into bars in 1853, bar iron output for that year would have been about 1.8 million tons, well under the existing estimate. In light of these calculations of potential output, the 1855 estimate of 1.6 million tons seems plausible. The same calculations indicate that output may have reached roughly 2 million tons by i860. 4 Wrought iron production grew very rapidly in the early 1860s and probably reached its peak in the early 1870s. The number of puddling furnaces and rolling mills in operation, summarized in Table 10.1, strongly supports this hypothesis. A simple comparison of the number of puddling furnaces in operation probably exaggerates the growth in output. This figure, for example, doubled between i860 and 1873. There were, however, a large number of puddling furnaces that operated for part of 1860 but were excluded from the total because they were shut down at the time the survey was taken. There were nearly 300 of these furnaces in Staffordshire alone in the i860 listing. 5 2

Hamilton, Industrial Revolution in Scotland, p. 187, and R. M. McCuIlock, Commercial Dictionary (Philadelphia, 1882), p. 789. 3 Details are in my Ph.D. thesis, p. 231. 4 Ibid., p. 226. 5 Mineral Statistics for i860 (London, 1861), pp. 89-90.

167

THE MATURE IRON INDUSTRY TABLE 10.1 SIZE OF THE WROUGHT IRON

SECTOR, 1860-1880

Ironworks i860 1865 1870 1873 1880

211

252 255 287 3M

Puddling Furnaces

Rolling Mills

3,614 6,407 6,699 7,264 5^35

289 730 851 939 855

Source: Geological Survey, Mineral Statistics of the United Kingdom of Great Britain andIrehnd (London, 1855-) f ° r t n e relevant years.

There is other indirect evidence that suggests that wrought iron production did not double between 1860 and 1873. Pig iron output increased only 75% during these years and the rapidly expanding steel industry was consuming a considerable volume of pig iron by the early 1870s.6 Bar iron output was probably between 3.0 and 3.5 million tons in the early 1870s and this was the highest production level achieved by the industry. Wrought iron production had already fallen to 2,681,000 tons by 1881, when the first reliable output estimates begin. 7 This output decline was a reflection of competition from the rapidly expanding steel industry, which increased output from 329,000 tons in 1871 to 1,778,000 tons in 1881. 8 The regional distribution of wrought iron output did not change significantly between 1830 and i860. T h e first reliable national listing of puddling furnaces and rolling mills, compiled in i860, shows the continued heavy concentration of production in Staffordshire and South Wales. The two districts contained two-thirds of the industry's puddling furnaces and rolling mills in i860. This list also reveals significant interregional differences in the size of forges. There were only 32 ironworks making bar iron in South Wales, compared to 120 in Staffordshire, but Welsh 6

Mitchell and Deane, Historical Statistics, pp. 131-132 and 136. Ibid., p. 135. "Ibid., p. 136.

7

168

THE WROUGHT IRON SECTOR

forges had an average of 30 puddling furnaces, while the Staffordshire forges averaged only 13. 9 However, there were significant changes in the location of bar iron production after 1860. While all the major districts increased output, the Northeast and Scotland grew more rapidly than the older centers. In 1860-1873, for example, they increased their share of the industry's puddling furnaces from 13% to 29%, while the share held by South Wales and Staffordshire fell from 7 1 % to 5 1 % . The Northeast, where the number of puddling furnaces had increased from about 400 to 1,700, had become the second largest wrought iron district by the early 1870s.10 This expansion roughly paralleled the growth in pig iron output in the Northeast during this period. 11 The only major technological advance of these years was a process known as wet puddling or pig boiling developed by Joseph Hall in the early 1830s. He lined the puddling furnace with roasted slag instead of cast iron. When pig iron was introduced into the furnace, the oxygen in the lining combined with the carbon in the iron in such a violent manner that the pig iron "boiled," giving the process its name. Hall's innovation had several advantages over Cort's original technique. It speeded up the refining process, thus saving labor, and it reduced the wastage of pig iron. 12 The fact that there were few significant changes in wrought iron technology during these years should not be taken as evidence that British ironmasters had lost their zest for innovation. There were, for example, numerous efforts to mechanize puddling, but none were successful.13 There were also minor improvements in rolling and finishing practices, such as the adoption of the steampowered hammer. 14 With these few exceptions, wrought iron technology changed very little after 1830. 9

Mineral Statistics for i860 (London, 1861), pp. 81-91. Ibid., and Mineral Statistics for 1873 (London, 1873), P11 Mitchell and Deane, Historical Statistics, pp. 131-132. 12 Gale, Black Country Iron Industry, pp. 66-69. 13 14 Ibid., pp. 106-107. Ibid., pp. 90-91. 10

169

J1

4-

T H E M A T U R E IRON INDUSTRY

Cost data from the industry suggest that wrought iron producers did not achieve major cost reductions after 1830. 15 There were significant savings in the consumption of coal and pig iron, probably resulting from the use of Hall's innovation, but these savings were offset by rising input prices. At the Dowlais ironworks, for example, coal consumption per ton of bar iron was reduced by 43% between 1829 and 1856 and pig iron consumption fell by 7%. However, coal prices more than doubled in the interim and pig iron prices increased by roughly one-quarter. Dowlais' variable costs increased from £5 in 1829 t o n e a r l y £7 m 1856. 16 This was a real cost increase since it was three times the general increase in prices (13%) in the British economy during these years and nearly twice the increase in British industrial prices. 17 The experience at Dowlais may have been shared by many of the older producers, but not necessarily by the industry as a whole. Movements of bar iron prices (Figure 10.1) suggest that forge operators may have achieved some significant real cost reductions during this period. The market price of bar iron did not change significantly in real terms between 1830 and 1845, but then declined considerably in 18461870. During the second period, British price levels, as measured by the Rousseaux and Sauerbeck general price indices, increased approximately 10%, while bar iron prices fell roughly 20%. 18 This price decline may have been simply a reflection of declining profits or even losses in the industry after the mid-i86os, as wrought iron output peaked and cheap steel began flooding the market. However, it seems more likely that the cost experience at Dowlais was simply not representative of the entire industry and that forge operators as a whole were able to reduce real costs in the 1850s and 1860s. An increasing share of national bar iron output 15

T h e detailed data are given in my Ph D. thesis, p. 231. Bute MSS, Cardiff Central Library, xiv, 21, and Dowlais MSS, Glamorgan Records Office, D/DG Section C, Box 4 and Section E, Box 2. 17 Mitchell and Deane, Historical Statistics, pp. 471-472. l *lbtd., pp. 471-472 and 492-493. 16

170

T H E WROUGHT IRON SECTOR FIGURE 10.1:

BAR IRON PRICES, 1830-1870

T - Merchant Bar Iron at Liverpool Common Bar Iron

1 1830

Source:

J

L 1840

_l_ 1850

J 1860

L

>

1870

Mitchell and Deane, Historical Statistics, pp. 492-493.

came from Scotland and the Northeast, where real pig iron prices fell substantially in 1846-1870. 19 The reductions in real costs achieved by forge operators were probably the 19 The money price of pig iron in the two regions fell by roughly onequarter between 1846 and 1870. Price quotations are given in Mitchell and Deane, Historical Statistics, p. 493.

171

T H E M A T U R E IRON INDUSTRY

result of cheaper raw materials rather than gains in productivity. Nevertheless, British forgemasters were able to lower real costs and simultaneously increase output substantially. T H E DEMAND FOR WROUGHT IRON

Much of the increased demand for wrought iron came from new domestic and foreign sources, mainly the construction of railroads in Britain and abroad. The expansion of the iron industry was closely tied to the domestic railway booms of the 1850s and 1860s. The iron industry became increasingly dependent upon foreign markets in general throughout this period. Railway construction had a significant impact on the iron industry during several brief periods, but its overall influence is often exaggerated. Mitchell has shown, for example, that British railways consumed only about 7% of pig iron output in 1835-1843. This share increased to 18% in 1844-1851, and during the peak years of the railway boom (1846-47) railway demand may have accounted for a quarter of total output. Over the next two decades (1852-1869), however, the railways consumed only 8.2% of total pig iron output. 20 Foreign sales of British iron, particularly railroad iron, were far more significant. Exports (in pig iron equivalents) increased more than twenty-fold between 1830 and 1870, while their share of total pig iron output jumped from one-quarter to roughly 60%. The shift toward export markets was particularly noticeable in the late 1840s. Pig iron output stagnated between 1845 and 1850, while exports more than doubled. Output trebled between 1850 and 1870, with increased foreign sales accounting for roughly 70% of this growth. 21 The construction of European rail20

B. R. Mitchell, "The Coming of the Railway and United Kingdom Economic Growth," in M. C. Reed, editor, Railways in the Victorian Economy: Studies in Finance and Growth (Newton Abbot: David and Charles, !9 6 9). PP- 22-23. 21 Mitchell and Deane, Historical Statistics, pp. 141, 146-147, and Appendix C of this book.

172

T H E W R O U G H T IRO N SECTO R

ways generate d a large bu t volatile deman d for British iron . Export s of railway iro n averaged abou t 450,00 0 ton s pe r annu m durin g th e decad e 1856-1865 , climbe d to a pea k of over 1,000,00 0 ton s in 1870, an d the n fell off to onl y 415,000 ton s in 1876. 2 2 While foreign sales o r iro n were expandin g rapidly , th e domesti c marke t grew mor e slowly. Pig iro n consumptio n in Britai n double d in th e 1830s bu t the n grew by onl y 10% in th e 1840s. Domesti c sales double d again betwee n 1850 an d 1870, bu t pe r capit a consumptio n increase d by onl y 57% durin g thes e years. 2 3 T h e r e ha d been a gradua l ero sion of th e traditiona l source s of increasin g deman d for iron . Th e railway system continue d to expand , bu t th e deman d generate d by thi s industr y was relatively small after 1850. Iro n ha d alread y displace d othe r material s in indus try an d in construction , so thi s sourc e of increase d deman d was largely exhauste d by th e 1850s. I n a sense, th e iro n industr y was victimize d by its early successes. British ironmaster s were able to expan d bar iro n outpu t almos t nine-fol d betwee n 1830 an d 1870, an d yet simulta neousl y reduc e thei r rea l costs of productio n significantly. The y maintaine d an d perhap s strengthene d th e stron g internationa l competitiv e positio n the y ha d establishe d in th e early par t of th e century . As late as 1873, Britai n prob ably produce d as muc h pig iro n as th e rest of Europ e an d th e Unite d State s combined . British exports of iro n durin g th e perio d 1850-187 0 were nearl y as high as th e total output 24 of th e othe r Europea n producers. Britai n served as "ironmaste r to th e world " durin g th e middl e decade s of th e nineteent h century . , Ibid., p. 147. Ibid., an d Dean e an d Cole, British Economic Growth, ρ 8. 24 Scnvenor , History of the Iron Trade, pp . 241-243 ; Marshal l Goldman , "Th e Relocatio n an d Growt h of th e Pre-Revolutionar y Russian Ferrou s Meta l Industry, " Explorations in Entrepreneurial History, 1st Series, ix (1956) , p. 20; Landes , Unbound Prometheus, pp . 194 an d 217; PeterTemin , Iron and Steel in Nineteenth-Century America: An Economic Inquiry (Cam bridge , Mass. , 1964), p. 266; an d Appendi x C. 22

23

!7 3

ELEVEN

T H E IRON INDUSTRY ON T H E EVE OF T H E AGE OF STEEL T H E last three chapters have described the development of the iron industry during the period 1815-1870, with continued emphasis on technological change. The major innovations of this period, like the hot blast, were not nearly as revolutionary as those of the eighteenth century. They did, however, serve to fundamentally alter the industry in several important respects. This chapter will provide a "snapshot" of the iron industry around 1870, before the widespread adoption of new steelmaking techniques. First, we will describe the technology of ironmaking on the eve of the Age of Steel. We will also examine the economic structure and location of the industry, as well as some of the major problems confronting ironmasters in the early 1870s. Finally, we will attempt to evaluate the importance of the industry in the British economy. TECHNOLOGY

The major changes in ironmaking technology since the early part of the century were the increased size and complexity of the basic units of production, the blast furnace and the forge. The "typical" blast furnace of the early nineteenth century stood about forty feet tall, had an internal capacity of between 4,000 and 6,000 cubic feet, and produced an average of about 1,500 tons of pig iron each year. 1 Furnace outputs rose steadily during the nineteenth century to an average of 9,845 tons by 1871. This figure, however, understates the advances made in the more progressive areas like the Cleveland District, where average furnace output was over 14,700 tons. 2 1 2

Scrivenor, History of the Iron Trade, p. 99. Mineral Statistics for i8yi (London, 1872), p. 86.

174

THE AGE OF STEEL Ironmasters had achieved these increases in output by building larger furnaces and by "driving" them much harder than they had in the early part of the century. The growth of furnace size dates from the late eighteenth century, when the ironmasters of South Wales began to experiment with taller furnace stacks. This trend was accelerated with the wave of new furnace construction in the Cleveland District in the 1850s and 1860s. Ironmasters had doubled both the height and diameter of the furnace by the early 1870s, producing internal capacities of 25,000 cubic feet and above. 3 While ironmasters built larger furnaces, they also substantially increased the volume, pressure, and temperature of the blast, thus speeding up the combustion process. It was common practice in the early nineteenth century to use a blast pressure of 1 lb. per square inch and to introduce the blast into the furnace through two or three tuyers. After the experiments of Oakes in the late 1830s, blast pressures were quadrupled and six or eight tuyers were commonly used. 4 Virtually all furnaces were using the hot blast by the 1860s and many ironmasters, particularly in the Northeast, had doubled the blast temperature of 600 0 F recommended by Neilson. 5 Increased temperatures in turn required the development of new, more heat-resistant tuyers. 6 Ironmasters not only built larger furnaces and "drove" them harder, but they also erected more furnaces on a given site, substantially increasing the scale of their smelting operations. Half the furnaces in blast in 1810 were on sites with only one or two furnaces. 7 Clusters of six or eight furnaces were common by 1871, when only 15% of all furnaces were on sites containing two furnaces or less and nearly one-third were part of an ironworks containing nine or more furnaces. 8 The largest works, such as Dowlais, 3

Jeans, Notes on Northern Industries, pp. 64-65. Gale, British Iron and Steel Industry, pp 59-60. 5 Birch, Economic History, p. 186. 6 Gale, British Iron and Steel Industry, pp. 115-116. 7 See Table 7.1 for details. 8 Mineral Statistics for i8yi (London, 1872), pp. 88-95. 4

!75

THE MATURE IRON INDUSTRY with seventeen furnaces, and Gartsherrie, with sixteen, probably produced over 100,000 tons of pig iron and consumed roughly 500,000 tons of raw materials per annum. Technological change noticeably increased the complexity of blast furnace operation during the nineteenth century. The trend toward increased mechanization continued and the machinery used with the blast furnace became considerably more complex. Mechanized handling of raw materials was of necessity a universal practice by the 1870s. Virtually all ironworks used devices of varying complexity to pre-heat, regulate, and deliver the blast to the furnace. Perhaps a majority of furnaces also recycled previously wasted by-products. The waste heat or gases were drawn off the top of the furnace and then used to pre-heat the blast and to produce steam for the engine that powered the blowing apparatus. The blast furnace of the late 1860s was far more complex than its early nineteenth century predecessor. Similarly, the typical forge was substantially larger in 1871 than it had been a half century earlier. The maximum annual output of a single puddling furnace was about 1,000 tons during most of the nineteenth century. 9 Most puddling furnaces, however, probably produced only about 500-600 tons. The largest forges in operation around 1815 contained no more than 10 or 15 puddling furnaces and produced roughly 10,000 tons of bar iron per annum. By 1871, however, the average forge contained 26 puddling furnaces and 38 ironworks had over 50. The Dowlais forge was easily the largest, with 161 furnaces. 10 Individual forge outputs of over 50,000 tons were common by the early 1870s. Forge practice did not change as radically as blast furnace practice during the period 1815-1870. Hall's "pig boiling" method had largely replaced "dry puddling" by the late 1850s, but this innovation did not require significant 9

Birch, Economic History, p. 189, and Gale, British Iron and Steel Industry, PP- 73-74· 10 Mineral Statistics for I8JI (London, 1872), pp. 96-100.

176

T H E AGE OF STEEL

changes in forge machinery. 11 A few forges used the Nasmyth steam hammer to consolidate the iron, but most relied on the simple helve hammer, much as they had a half century earlier. 12 Rolling mills were more sophisticated by the 1870s, but innovations in rolling, like the three-high mill, were not radical departures from past practice. 13 The waste-heat boiler introduced by Rastrick in 1827 was one of the few innovations that significantly altered the operation of the forge. This device enabled the forgemaster to utilize the waste heat produced by the puddling furnace to generate steam. 14 T h e refining sector, like the smelting branch, was using a more complex technology and was producing on a much larger scale than it had been in the early part of the century. INDUSTRY STRUCTURE

The rapid expansion of the industry during the nineteenth century helped to bring about significant changes in industry structure. T h e trend towards increased concentration of production was reversed during the period 1815-1870. Early in the century, there were only 76 firms producing pig iron and the 15 largest enterprises controlled about 40% of all furnaces and accounted for roughly half of total output. 1 5 The number of firms in the smelting sector had increased to over 200 by 1871, when the 15 largest firms controlled about one-quarter of the 897 blast furnaces in existence. 16 The decline in concentration was even more pronounced in the refining sector. At the end of the Napoleonic Wars, there were only about 30 firms making puddled iron and the 15 largest producers may have ac11

Gale, British Iron and Steel Industry, p. 70. "Ibid., pp. 74-75. "Ibid., pp 81-83. "Ibid., p. 66. 15 Weale MSS, "Ironworks Returns of 1810, Accounts of Works Making and Rolling Iron," and Boulton and Watt MSS, Birmingham Reference Library, Muirhead 11, "List of Furnaces in Great Britain, 1806." 16 Mineral Statistics for i8yi (London, 1872), pp. 88-95. I

7 7

THE MATURE IRON INDUSTRY counted for three-quarters of total output. 1 7 By 1871, however, there were 232 distinct firms in the refining sector operating approximately 6,800 puddling furnaces. The 15 largest producers owned about 1,800 puddling furnaces, about one quarter of the total. 18 While there was a significant decrease in economic concentration in both smelting and refining, the absolute size of ironmaking enterprises continued to grow. The average smelting concern of the early nineteenth century made about 4,600 tons of pig iron, while the "typical" firm in the refining sector produced about 4,300 tons of bars. 19 Pig iron production per firm had climbed to 32,000 tons by 1871, while bar iron output per firm was about 15,000 tons. 20 The amounts of capital and labor employed by the large integrated ironworks also increased substantially during the nineteenth century. The growth of the Dowlais Iron Company, one of the largest producers, illustrates the pattern experienced by most of the industry. T h e capital valuation of the company rose from about £61,000 in 1798 to £503,200 during the 1850s. The latter figure does not include the "floating capital" which averaged about £180,000 during those years. 21 Similarly, the labor force at Dowlais had climbed to 8,500 workers by 1866. Nearly half of these employees worked in the collieries, iron mines, or limestone quarries, and three-quarters of them were adult males. 22 Most of the ironmaking firms were traditional partnerships that expanded their capital either by attracting new 17

108.

Weale MSS, "Ironworks Returns of 1810," and Chapter 6, pp. 106-

18

Mineral Statistics for i8yi (London, 1872), pp. 96-100. In 1810, there were 76 firms producing roughly 350,000 tons of pig iron and about 30 major firms producing about 130,000 tons of bar iron. 20 In 1871, there were 207 firms producing 6,626,000 tons of pig iron and 232 firms producing about 3,500,000 tons of bar iron. 21 Birch, Economic History, p. 72, and Dowlais MSS, Glamorgan Record Office, "Table Showing Stock Account, Profit & Loss, Floating Capital, etc., 30 Years Ending March i860," DDG Section E, Box 2. 22 Birch, Economic History, pp. 255-256. 19

178

T H E AG E O F STEE L

partner s or by reinvestin g profits . Beginnin g in th e mid 1820s, however , ironmaster s experimente d with th e joint stock form of compan y organization . T h e British Iro n Compan y an d th e Welsh Iro n an d Coa l Company , with paid-u p capital s of £650,00 0 an d £250,00 0 respectively , were th e earliest example s of thi s development . Ther e were 15 joint-stoc k companie s in th e iro n industr y by 1844, with mos t of the m locate d in Sout h Wales. T h e nomina l capita l of th e Welsh companie s was abou t £ 4 million , bu t th e paid-u p capita l was probabl y less tha n hal f tha t amount. 2 3 Mos t of thes e companie s were highly speculativ e venture s forme d durin g th e railway boom s an d virtually all of the m earne d little or n o profits. 2 4 After limite d liability becam e mor e readil y accessible in 1856, man y establishe d firms change d over to th e joint stock form . T h e Ebbw Vale Compan y an d th e partnershi p of Bolcko w an d Vaughan , with paid-u p capital s of abou t £800,00 0 each , were th e mos t visible example s of thi s trend. 2 5 As late as 1871, however , ther e were onl y 36 limited liability companie s in th e primar y iro n industr y an d the y controlle d onl y abou t 15% of th e existing furnace s an d forges. 2 6 I n spite of th e developmen t of limite d com panies , th e simpl e partnershi p was still th e mos t commo n form of busines s organizatio n in th e early 1870s. Th e mos t significant change s in industr y structur e over th e perio d 1815-187 0 were th e growth in th e size of indi vidual enterprise s an d th e simultaneou s decreas e in eco nomi c concentratio n within th e industry . T h e r e is also con siderabl e evidenc e tha t competitio n betwee n ironmaster s increase d significantl y durin g thes e years. T h e growth in th e numbe r of producer s tende d to mak e competitio n between firms mor e vigorous. T h e rapi d developmen t of th e railway system after 1830 an d th e resultin g declin e in transpor t costs also increase d competition , particularl y between regions . Competitio n ha d becom e so intens e by th e early 1840s tha t an y schem e to regulat e price s was un 23 26

Ibid., pp . 201-205 . Mineral Statistics for i8yi

2i Ά Ibid. Ibid., pp . 205-207 . (London , 1872), pp . 96-100 .

179

T H E M A T U R E IRON INDUSTRY

workable. In fact, the iron industry had no national organization of any kind between the early 1840s and the 1870s.27 Competition was also intensified by the violent business cycles that the industry experienced during these years. Most of these economic fluctuations were closely associated with the periodic bursts of railway construction, which created huge short-term demands for iron. During a railway boom, iron prices nearly doubled within a few months and remained at this inflated level for two or three years. This was the pattern in 1825-1828, 1836-1839, 1845-1847, 1853-1857, and 1872-1873. 28 Profits soared, inducing a feverish expansion of output as established producers utilized all their excess capacity and new capital flowed into the industry. When railway construction ceased and demand returned to "normal" levels, prices abruptly fell to their pre-boom levels or below. Ironmasters decreased production as stocks of unsold iron accumulated. Profits disappeared and bankruptcies became common. Prices often remained low for four of five years, partly because there was so much excess capacity in the industry. In 1854-1870, for example, roughly 30% of all furnaces were idle. 29 The industry responded to any increase in prices by quickly "blowing-in" additional furnaces, which increased output, and in turn drove prices down again. Prosperity usually did not return to the industry until the next railway boom. 30 LOCATION

The geographical distribution of production also changed substantially during the nineteenth century, as Table 11.1 illustrates. The "old" centers of the iron industry— Shropshire, South Wales, and South Staffordshire— 27

Birch,Economic History, p. 112. Mitchell and Deane, British Historical Statistics, pp. 492-493. 29 Birch, Economic History, pp. 124-125. 30 Ibid., pp. 222-224, contains an excellent description of this cycle. 28

180

T H E AG E O F STEE L TABLE

11.1

REGIONA L DISTRIBUTIO N O I BRITIS H PI G IRO N O U T P U T , 1815

18Ί 5 Output (000 Tons)

5°

Shropshir e Sout h Wales S. Staffordshir e S. Yorkshire-Derb y Scotlan d

c- 35 c. 25

Northeas t Coas t N . Staffordshir e Lancashire-Cumberlan d Othe r District s

nil nil nil c. 20

Total

140 ! 25

Share of Total (%)

1871

1871 Output (000 Tons)

12.6

129

35 4 31.6 8.8 6. 3

1088

— — —

5.0

726

385 1160 1823 268

857 191

Share of Total (9c) 1-9

16.4 10.9 5.8 17-5 27-5 4. 0

12.9 2.8

6627

395

Source: Mineral Statistics for i8yi C of thi s book .

AND

(London , 1872), p . 86, an d Appendi x

experience d a relative declin e in productio n durin g thos e years. Thei r shar e of nationa l outpu t fell from abou t 80% in 1815 to onl y 29% by 1871. T h e "new" center s of production—Scotland , th e Northeast , an d th e Lan cashire-Cumberlan d district—accounte d for abou t 58% of 1871 pig iro n output . Thi s chang e in th e regiona l compositio n of th e industr y was intimatel y tied to th e discovery an d exploitatio n of ne w source s of coal an d ore . Muc h like its charcoal-usin g predecesso r of th e early eighteent h century , th e iro n industr y of th e nineteent h centur y was lure d northwar d by plentifu l supplie s of chea p coal an d ore . T h e first majo r locatio n shift began in th e 1830s with th e rapi d adoptio n of th e ho t blast by Scottis h ironmasters . The y were alread y producin g nearl y 250,000 ton s of pig iron , o r abou t one-sixt h of th e nationa l outpu t by 1840 an d the y quadruple d thi s outpu t level by th e early 1860s. 31 Althoug h th e early success of th e Scottis h iro n in31

Mitchel l an d Deane, British Historical Statistics, p . 131

l8l

THE MATURE IRON INDUSTRY

dustry was probably based on the region's supply of cheap coal, 32 the growth of Scottish iron output would have been inconceivable without the region's huge reserves of readily accessible blackband ore. Scottish miners raised an average of about 1.9 million tons of ore over the years 1855-1870, and output did not fall below a million tons until the early 1890s. 33 Scotland was the last region to develop an iron industry based on "coal measures" ore, i.e., ore found in close proximity to coal deposits. High transportation costs had always forced ironmasters to seek furnace sites near extensive deposits of both coal and ore. When these two resources were not found together, it was more economical to build the furnace on the coal field and to transport the ore, since coal consumption was often two or three times the furnace's ore requirements. This locational pattern began to change in the 1850s in response to changing economic conditions. The gradual exhaustion of the coal measures ore, plus the increasing demands of ironmasters drove up ore costs. 34 With the simultaneous decline in transportation costs associated with the railways, ironmasters found the prospect of transporting ore great distances more attractive. The hot blast and other innovations had also reduced coal consumption per ton of pig iron to roughly the same level as ore consumption. It then became as economical to transport coal to the orefields as it was to move ore to the coalfields. The development of smelting on the northeast coast of England illustrates these new locational patterns. The furnaces of this region utilized the excellent coking coal of Durham and the cheap ironstone of the Cleveland Hills. Both materials were carried by rail to ironworks on the Tees, roughly midway between the major coal and ore fields. The key development was the discovery of the immense ore deposits at Eaton in 1850. 35 The Cleveland 32 33 34

This point is discussed in detail in Chapter Nine. Mitchell and Deane, British Historical Statistics, p. 129. 35 See pp. 188-89. Birch, Economic History, p. 334.

182

THE AGE OF STEEL mines were producing about 2 million tons of ore by 1861 and nearly 5 million tons a decade later. Pig iron output similarly soared from only 24,000 tons in 1851 to about 1.8 million tons twenty years later. 36 T h e Cleveland ore deposits were large enough to consistently yield an output of over 5 million tons per annum until 1914. 37 T h e Lancashire-Cumberland region (the Northwest Coast) was another "new" ironmaking district based on raw materials brought great distances. T h e rich haematite ores of the Barrow area were discovered in the early eighteenth century, but the lack of good coking coke in the area had prevented the development of smelting. Ore production grew rapidly in the early 1850s, but most of it was shipped to the furnaces of South Wales and the Northeast Coast. 38 New ironworks were erected in Cumberland in the late 1850s and they utilized local ores and coke brought by rail from south Durham. 3 9 Pig iron output soared from 48,000 tons in 1855 to 871,000 tons by 1871, making the Northwest Coast the fourth largest producing region, behind the Northeast, Scotland, and South Wales. 40 Ore output reached two million tons in 1870 and remained at that level for the rest of the century. 41 The discovery of new ore supplies did not automatically induce ironmasters to erect new furnaces nearby. By 1871, for example, the iron mines of Lincolnshire, Northamptonshire, and Oxfordshire yielded over 1.1 million tons, yet these areas produced only 91,000 tons of pig iron. 42 Most of their ores fed the furnaces of other regions, particularly those of South Staffordshire. In the aggregate, the iron industry of the early 1870s was heavily dependent upon ore supplies that were either unknown or largely unused in the early nineteenth century. These new supplies 36 37

Ibid., p. 336.

Mitchell and Deane, British Historical Statistics, pp. 129-130. Birch, Economic History, p. 341. 39 Ibid., pp. 341-342. 40 Mitchell and Deane, British Historical Statistics, p. 132. 41 Ibid.,p. 129. "Ibid., pp. 129, 132. 38

183

T H E M A T U R E IRON INDUSTRY made u p nearly three-quarters of the ore raised in Britain in 1871. 4 3 T h e refining branch of the industry also migrated into these new districts over the period 1815-1870, but the movement was not as rapid as it was in smelting. T h e r e are n o reliable regional estimates o f bar iron output until the 1880s, but the number of puddling furnaces will be used as an extremely crude proxy for output. Table 11.2 compares the regional concentration o f the smelting and refining branches. Even if there were large interregional variations in puddling furnace outputs, these data nevertheless suggest that there was considerable regional specialization within the industry. TABLE 11.2 REGIONAL DISTRIBUTION OF PIG IRON OUTPUT AND PUDDLING FURNACES, 1871 Share of Pig Iron

Output (%) South Wales S. Staffordshire Scotland Northeast Coast Northwest Coast S. Yorkshire-Derby Other Regions

16.4 10.9 175 27-5 12.9 5-8 9.0

Source: Mineral Statistics jor i8yi 100.

In view The little

Share of Puddling Furnaces (%) 18.3 2

9·7 4-9 22-7 3.6 lO.l

10.7 (London, 1872), pp. 86,

some cases, however, these figures give a distorted of the degree of specialization in particular regions. Northeast Coast, for example, appears to have made puddled iron and instead specialized in pig iron or

43

Mineral Statistics for i8yi (London, 1872), p. 69. The new regions include North Yorkshire, Durham, Northumberland, North Staffordshire, Lancashire, Cumberland, Northamptonshire, Lincolnshire, Oxfordshire, and Scotland.

184

TH E AGE OF STEE L perhap s castings. Th e region' s shar e of nationa l bar iro n outpu t was probabl y muc h larger tha n its shar e of Britain' s puddlin g furnaces . Sinc e mos t of th e ironwork s in thi s region were erecte d in th e ι86os, outpu t pe r puddlin g furnac e probabl y exceede d th e nationa l average an d th e amoun t of idle capacit y was probabl y relatively small. Thi s distric t was also specializin g in steel productio n as early as 1871, when it containe d nearl y hal f of Britain' s steelmak in g capacity. 4 4 T h e statistic s for th e Sout h Yorkshire-Derbyshir e are a probabl y understate th e exten t to which ironmaster s in thi s region concentrate d on finished, as oppose d to cast iron , products . By th e early 1860s, th e Sheffield are a was pro ducin g abou t 80,000 ton s of blister steel, mostl y from Swedish bar iron. 4 5 T h e region also ha d an outpu t of perhap s 100,000 ton s of Besseme r steel by 1871, in addi tio n to its ba r iro n output. 4 6 Althoug h ther e ar e few reliable statistic s on interregiona l trad e in pig iron , it is proba bly safe to conclud e tha t in orde r to suppl y its needs , Sheffield importe d considerabl e amount s of pig iron , perhap s from Scotlan d an d th e Northeast . Th e dat a presente d in Tabl e 11.2 probabl y exaggerat e slightly th e size of th e Sout h Staffordshir e wrough t iro n industry . T h e forges, rollin g mills, an d puddlin g furnace s used in th e Black Countr y were smalle r tha n thos e of th e 47 othe r majo r districts. Thi s was on e of th e oldest center s of wrough t iro n manufacture , with a considerabl e amoun t of outmode d equipmen t an d excess capacity , so man y of th e region' s 2,000-od d puddlin g furnace s were probabl y 48 idle at an y given time. T h e Black Country' s shar e of na Ibid., p. 101. T h e capacit y of th e district' s Besseme r converter s was 200 tons , while nationa l capacit y was 426 tons . 45 Birch , Economic History, pp . 310, 317. 46 Mitchel l an d Deane , British Historical Statistics, p . 136, an d Mineral Statistics for i8yi (London , 1872), p. 101. Nationa l steel outpu t was 329,00 0 ton s an d th e Sout h Yorkshire-Derbyshir e distric t containe d nearl y one-thir d of Britain' s Besseme r capacity . 47 Gale , Black Country Iron Industry, p. 104. 48 Beginnin g in th e early 1860s bot h th e smeltin g an d refinin g branche s 44

185

TH E MATUR E IRO N INDUSTR Y tiona l bar iro n outpu t was probabl y abou t 2θ%-25 % in 1871, considerabl y lower tha n its shar e of puddlin g furnaces . Even with th e downwar d adjustmen t of estimate d bar iro n output , ther e was still a large discrepanc y (Tabl e 11.2) betwee n th e region' s share s of nationa l pig iro n an d bar iro n output . Sout h Staffordshir e ironmaster s ma y have produce d abou t 900,00 0 ton s of wrough t iro n in 1871, usin g roughl y 1.25 millio n ton s of pig iro n in th e process. 4 9 Sinc e th e Black Countr y mad e onl y 726,00 0 ton s of pig iro n in tha t year, forge operator s mus t have importe d at least 500,00 0 ton s from othe r districts . Thi s is probabl y a good approxi matio n of th e region' s pig iro n deficit , since in 1866, when bar iro n outpu t was substantiall y lower, on e observer estimate d tha t th e Black Countr y was importin g abou t 300,00 0 ton s of pig iron. 5 0 Sout h Staffordshir e was heavily specialize d in th e productio n of wrough t iro n products . Scotlan d exhibite d precisel y th e opposit e patter n of specialization . T h e r e was n o malleabl e iro n industr y of an y consequenc e in th e region unti l th e late 1840s, an d Scottis h bar iro n outpu t remaine d relatively small durin g th e 1850s an d 1860s. 51 He r furnace s produce d 1,160,00 0 ton s of pig iro n in 1871, bu t onl y 190,000 ton s were used to mak e bar iron . Approximatel y on e quarte r of th e region' s pig iro n was used in Scottis h foundries , bu t th e remainin g tonnage , abou t 60% of th e total , was eithe r shippe d to Englan d o r exported. 5 2 Thi s heavy concentratio n on th e productio n of of th e Black Countr y iro n industr y experience d a slow but stead y decline . Fo r a detaile d discussion of thi s decline , see Gale , Black Country Iron Industry, pp . 102-107 . 49 Perhap s 1,800 puddlin g furnace s were actuall y in use an d produce d an average of 500 ton s pe r annum . Roughl y 1.30 ton s of pig iro n was require d to mak e a to n of bar iron . 50 Samue l Timmins , editor , The Resources, Products, and Industrial History of Birmingham and the Midland Hard-mare District (London , 1966), p . 66. 51 Birch , Economic History, p . 176. 52 Mineral Statistics for 18 Ji (London , 1872), p. 95.

186

T H E AGE OF STEEL

pig iron and castings apparently resulted from the quality of Scottish hot-blast pig iron, considered excellent for foundry purposes, but generally viewed as unsuitable for use in the forge. 53 There had been considerable changes, then, in the location of the iron industry since 1815. New regions, particularly Scotland, the Northeast Coast, and the LancashireCumberland district, had become the major centers of production, while districts like South Wales and South Staffordshire had lost their positions of leadership. These new ironmaking centers were based on the exploitation of previously unused raw materials, often transported great distances. By the early 1870s, the industry was highly dependent upon the long-distance movement of huge quantities of coal, ore, and pig iron. PROBLEMS AND PROSPECTS

In order to complete our "snapshot" of the iron industry in the early 1870s, we will briefly examine two problems confronting the industry—the exhaustion of Britain's ore resources and the alleged shortcomings of her entrepreneurs. Finally, we will attempt to evaluate the industry's prospects as it was about to enter the Age of Steel. The exhaustion of Britain's ore resources was inevitable because her ironmasters had increased pig iron output over an extended period of time and had used huge amounts of ore in the process. In 1788-1830, the iron industry produced about 14 million tons of pig iron. During the three decades 1831-1860, total output was about 60 million tons, while in the single decade 1861-1870 about 48 million tons were produced. 5 4 Over the entire period of coke-smelting, say, 1750-1870, the iron industry produced roughly 125 million tons of pig iron and probably consumed between 400 and 500 million tons of ore. 53 54

C.

Campbell, Scotland Since ijoy, p. 125. Estimates derived by adding the output estimates given in Appendix

187

THE MATURE IRON INDUSTRY Shortages of ore were already felt on the regional level by the 186os. It was estimated, for example, that the South Staffordshire iron industry raised 785,000 tons of ore in i860, but imported an additional 500,000 tons, mainly from Northamptonshire and North Staffordshire. 55 South Wales was another major ironmaking district that required increasing imports from other regions. While Welsh pig iron production remained at roughly 800,000-900,000 tons between 1856 and the mid-1860s, the region's ore output fell from nearly 1.8 million tons to less than 500,000 tons over the same period. 56 By the early 1870s, the ironmasters of South Wales and South Staffordshire were mining less than half their ore requirements. 5 7 They made up the deficit with imported ore from Lancashire, Cumberland, North Staffordshire, Northamptonshire, and abroad. 58 T h e depletion of ore supplies after i860 was felt on the national as well as the regional level. Table 11.3 shows that ore prices increased relative to the general price level and, while domestic ore output increased in 1860-1880, imports rose even faster. T h e full impact of dwindling ore supplies was not felt until the latter part of the nineteenth century, which is well beyond the scope of this study. There is an extensive literature dealing with the alleged failure of Victorian entrepreneurs, particularly in the iron industry, to adopt the best available technology and to apply science to their production processes. 59 In his ana55

M. W. Wise and R. H. Kinvig, Birmingham and Its Regional Setting (Birmingham, 1950), pp. 234-235. 56 Mitchell and Deane, British Historical Statistics, pp. 129, 131. 57 South Wales made 1,087,000 tons of pig iron in 1871, but raised only 970,000 tons of ore. South Staffordshire produced 705,000 tons of pig iron and raised about the same volume of ore. The data are from Mineral Statistics for i8yi (London, 1872), pp. 69, 87. Ore consumption per ton of pig iron was approximately 2 or 3 tons, depending on the iron content of the ore. 58 Ibid., pp. 70-76. 59 An excellent discussion of the hypothesis of entrepreneurial failure can be found in Donald N. McCloskey, Economic Maturity and Entrepreneur-

188

T H E AGE OF STEEL TABLE 11.3 BRITISH ORE OUTPUT, IMPORTS OF FOREIGN O R E , AND BRITISH ORE PRICES COMPARED TO GENERAL PRICE INDICES, 1860-1880 (IN 0 0 0 TONS AND £ PER TON)

Year

Output

i860 1870 1880

8,024 14.371 18,026

Rousseaux Value of Sauerbeck General Raw Materials British Ore at the Mines Price Index Price Index Imports 23 208

2.633

£0.31 o-35 0.36

120 110 102

97 89 79

Source: Mitchell and Deane, Historical Statistics, pp. 129, 139, and 472474·

lytic study of the British iron and steel industry during the period 1870-1914, Donald McCloskey rejects the notion that the industry's relative decline during those years was the result of entrepreneurial failure. 60 Similarly, I have found no evidence of substantial entrepreneurial weakness before 1870. British ironmasters demonstrated considerable interest in innovation and in the use of science through the 1860s. A constant stream of innovations—the hot blast, changes in furnace design, apparatus to recover furnace heat and gasses, the Cowper stove, Hall's "pig boiling" technique, the Rastrick boiler, the Nasmyth steam hammer, and Bessemer steel—enabled Britain to retain her unquestioned technical leadership in iron through the 1860s. These innovations were not simply the result of good fortune. They were developed because ironmasters remained vigorous and interested in technical progress, particularly when it enabled them to cut costs. In 1865, for example, ironmasters comprised one-third of the membership of the Institute of Mechanical Engineers. Over two hundred ironmasters received the Proceedings of that organization and thereby ml Decline: British Iron and Steel, 1870-1914 (Cambridge: Harvard University Press, 1973), pp. 1-21. 80 Ibid., passim.

189

T H E M A T U R E IRON INDUSTRY

kept informed about techniques used throughout the industry. 61 T h e iron industry's prospects were generally bright on the eve of the Age of Steel. T h e industry had achieved unprecedented levels of production and was supplying most of the countries of the world with a significant part of their iron consumption. It still retained its technical leadership and could produce iron at costs below those of its major competitors. British ironmasters seemed as vigorous and innovative as they had been a century earlier, when the "Industrial Revolution in Iron" was just beginning. IRON IN THE BRITISH ECONOMY

The production of iron was one of Britain's most important economic activities by the early 1870s. Deane and Cole estimated that the industry's gross output was about £113 million at that time, compared to £105 million for cotton textiles and £60 million for woolen textiles. 62 This comparison understates the economic impact of the iron industry, which relied almost exclusively on domestic raw materials. The cotton textile industry, which imported its basic raw material, had a comparable gross output in 1869-1871, but value added was only £58 million during those years. 63 The iron industry was not only large relative to other industries, but it was also a significant part of the aggregate economy. In 1871, when the estimated Gross National Product was £917 million, the gross output of the iron industry was probably about £100 million. 64 The value of its net exports was £34 million or about 15% of total domestic exports. 65 The value of cotton textile exports (£73 million) was double that of iron, but this gross comparison overstates the importance of cotton because it fails to consider 61 PlME, 1865, List of Members, pp. vii-xxvi. There were 224 listing an ironworks as their address. The total membership was approximately 650. 62 Deane and Cole, British Economic Growth, pp. 187, 196, 225. e3 64 Ibid., p. 187. ZW., p. 282. 65 Mitchell and Deane, British Historical Statistics, pp. 283, 304.

190

T H E AGE OF STEEL

the fact that Britain also imported £44 million worth of raw cotton in 1871. 66 T h e cotton textile industry's net contribution to the balance of payments was only £29 million, compared to £34 million for iron. There are several other crude indicators of the impact of the iron industry on the British economy. Deane and Cole have estimated that in 1871 the primary iron industry (blast furnaces, forges, and foundries) employed 40% of the adult male labor force in industry and used roughly one-quarter of the steam power consumed in British factories and workshops. 67 These shares would be considerably higher if they included the secondary metal trades such as the manufacture of hardwares, cutlery, and shipping. 68 T h e iron industry also consumed about 30% of national coal output. 6 9 We have listed the important "backward linkages" of the iron industry—its demand for coal, ore, steam power, and labor. The industry's "forward linkages"—the effects of a plentiful supply of cheap iron on the rest of the economy—also had a profound impact on Britain's industrial development. T h e growth of machine technology in the eighteenth and nineteenth centuries was closely tied to contemporaneous advances in ironmaking. A supply of cheap iron was also a prerequisite for the revolutions in building and transportation that were an integral part of the industrialization process. T h e indirect effects of technological change in the iron industry were numerous and often cumulative and interrelated. 70 One student of the Industrial Revolution recently observed: "The iron industry played a role in British industrialization that was both pervasive and stimulating. It provided cheaply and abundantly the commodity on which, more 66

Ibid., pp. 298, 307. Gross imports were £55.9 million and re-exports were £11.9 million in 1871. 67 Deane and Cole, British Economic Growth, p. 226. 6S 69 Ibid. Ibid., p . 219. 70 Some of these effects are discussed in more detail in Deane, First Industrial Revolution, pp. 111-114.

191

T H E MATURE IRON INDUSTRY

than any other single material except coal, modern industry was to depend for its essential equipment. ". . . continuous industrialization depended on the availability of coal and iron, and would have been inconceivable without the steam-engine and the technical progress in the iron industry. . . ."71 71

Ibid. , p . 114.

192

TWELVE

TECHNOLOGICAL CHANGE AND THE DEVELOPMENT OF THE BRITISH IRON INDUSTRY: SOME GENERAL CONSIDERATIONS T H E development and diffusion of new ironmaking techniques has been the central focus of this investigation. This chapter will summarize the major conclusions of this study, as well as offer some tentative observations on technological change. It will include an examination of the historical patterns of technological change, as well as a discussion of the major determinants of the diffusion of new techniques. Finally, it will attempt to evaluate the impact of technological change on industry productivity and costs. T H E HISTORICAL PATTERNS OF DIFFUSION

There are several common patterns of adoption shared by the major innovations we have examined. There was usually a time lag, often substantial, between the initial innovation and the beginning of widespread adoption. This lag or gestation period existed because most of the new techniques were really clusters of interdependent innovations that developed over time. T h e initial innovations of Darby, the Woods, Cort, and Nielson were crude and imperfect, requiring further refinements and subsidiary innovations before they began to replace older techniques. Ironmaking technology advanced through a process of gradual, continuous change rather than through a series of sharp, discrete innovations. T h e major innovations we have considered exhibited this pattern of development. Abraham Darby successfully smelted with coke in 1709, but he and his descendants im-

!93

T H E M A T U R E IRON INDUSTRY

proved the new technique considerably during the following four decades. They increased the volume of the blast, built larger furnaces, experimented with coking techniques, and varied the charge fed into the furnace. 1 Cokesmelting was technically and economically successful by the early 1750s, when widespread adoption began. There were additional innovations that helped to speed the adoption of Darby's method, although they were not prerequisites for its success. The improved blast cylinders developed in the 1760s and the Boulton and Watt steam engine fall into the category of "supportative" innovations. 2 Technological advance in refining followed a similar pattern of slow, continuous change. Ironmasters first began to use coal in the final stages of refining in the 1730s and this was the common practice by the 1750s. The next improvement was the all-coal "potting process" patented by the Wood brothers in 1761 and 1763. Few forges used potting until Cockshutt (1771) and Jesson and Wright (1773) eliminated the need for "fluxes" by using coke instead of raw coal as the fuel. There was probably no significant diffusion of potting until the late 1770s, when ironmasters quickly embraced the new technique. Cort's puddling process, patented in 1783-1784, was both a modification of and a radical departure from the potting process. Cort's process in turn required significant modification by Richard Crawshay before it was both technically and commercially viable. Crawshay's major contributions were his modifications in the puddling furnace linings and the practice of refining the metal prior to puddling. A handful of ironmasters used Cort's method in the 1780s, but widespread adoption did not begin until 1795. The substitution of coal for charcoal in refining was a gradual process extending over six decades. There was a similar pattern of adoption for the hot blast, the last major innovation we have considered. Nielson pat1

Raistrick, Dynasty, pp. 105-116. See pp. 69-75 f ° r a m o r e detailed discussion of the role of the steam engine in the adoption of coke-smelting. 2

194

SOME GENERAL CONSIDERATIONS

ented his discovery in 1828, but few ironmasters used the innovation before the mid-1830s. The hot blast was only a limited success until other ironmasters developed improved stoves and tuyers in 1832-1834. 3 Scottish ironmasters quickly adopted the hot blast in 1835-1840, but the new technique spread more slowly into the other ironmaking districts, where it was universally accepted by about i860. There were several subsidiary innovations that helped to speed the adoption of the hot blast after 1840. The most important of these were the increased size of furnaces, the Cowper regenerative stove, and improved tuyers. The diffusion of new techniques became more rapid during the time span considered in this investigation. First, the gestation period for new techniques—i.e., the lag between the initial innovation and its widespread adoption—became noticeably shorter. Abraham Darby used coke in 1709, but few ironmasters followed suit until about 1755, a lag of some forty-five years. The next major innovation, the potting process, was patented in 1761, but was generally shunned until about 1780, a delay of roughly two decades. T h e gestation period for the puddling process was only about ten years. Cort patented his innovations in 1783-1784 and widespread adoption began around 1795. The last major innovation, the hot blast, enjoyed widespread popularity, at least in Scotland, within five or six years after the initial innovation. The second stage of the diffusion process, the replacement of older techniques by the new ones, also seems to have accelerated during the eighteenth and nineteenth centuries. The period of time between the beginning of widespread adoption and the point where the new technique had become the predominant one should perhaps be called the "supersession period." The crude measures that we will employ indicate that this period also became shorter over time. For purposes of this analysis, we will assume that an innovation has superseded an older tech3

Birch, Economic History, p. 183.

!95

T H E MATURE IRON INDUSTRY

nique when roughly go% of output is produced by the new process. This requirement was reached in 1791 for cokesmelting. Since the widespread adoption of Darby's method began around 1755, the "supersession period" for coke-smelting was approximately thirty-five years. Although the potting process never became the predominant refining technique because it was quickly superseded by puddling, its adoption was nevertheless noticeably faster than the diffusion of coke-smelting. By 1788, within ten years after widespread adoption had begun, the potting process accounted for roughly half of bar iron output and this share may have reached 60% or even 70% by the early 1790s. T h e puddling process was a less ambiguous case. Rapid adoption began around 1795 and the new process accounted for virtually all of British bar iron output by 1815 at the latest. Thus, the supersession period for puddling was less than twenty years. T h e diffusion of the hot blast was largely a function of coal quality, which varied greatly between the major ironmaking districts. In Scotland, for example, the hot blast replaced the cold blast within five years after the beginning of widespread adoption around 1835. For the rest of Britain, the process of supersession was certainly completed by i860, when less than 5% of British pig iron was made with the cold blast. T h e supersession period, then, may have been as long as twenty-five years for the hot blast. It is more likely, however, that it was between fifteen and twenty years, roughly the same as for the puddling process. This investigation has revealed several general patterns of technological change in the eighteenth and nineteenth centuries. T h e advance in ironmaking technology was a gradual, continuous process involving clusters of interrelated innovations rather than simply a series of discrete, revolutionary discoveries. T h e diffusion of new technology became more rapid during the period covered by this investigation. Both the "gestation period" and the "supersession period" became progressively shorter for each successive innovation. 196

SOME GENERAL CONSIDERATIONS T H E DETERMINANTS OF DIFFUSION

The invention of new ironmaking techniques was often the result of chance or individual genius, but the speed and timing of the diffusion of these techniques was determined by the less personal forces of the market. The adoption of new techniques was a function of their profitability vis a vis existing methods of production. Ironmasters were economically rational in their choice of technology during the period covered by this investigation. This is not to say that the adoption of new techniques always proceeded rapidly along a smooth path. Both resource and product markets remained highly imperfect during the entire eighteenth and most of the nineteenth centuries. There were large interregional dilferences in the costs of producing with both the old and new techniques, so innovations did not become profitable at the same time in all regions. T h e ironmasters' rationality in choosing production methods is evident for all the major innovations we have considered. They shunned coke-smelting during the first half of the eighteenth century because they could produce pig iron more cheaply with charcoal, but adopted the new technique after mid-century, when it became the least-cost technique. 4 Similarly, forge operators adopted the potting process in the early 1780s because it enabled them to produce bar iron more cheaply than with the finery-chafery (charcoal) process. 5 They did not adopt the puddling process on a massive scale until the mid-1790s, when puddling costs had fallen below those of all other techniques. 6 The rate of diffusion of the hot blast was also a function of its profitability. Scottish ironmasters realized the greatest profits from Nielson's discovery and they adopted his innovation more rapidly than the ironmasters of other districts. 7 The profits earned by an ironmaster using any technique were only partially determined by his production costs. 4

T h e relevant data are presented in Tables 2.2, 2.3, 4.1, and 4.3. 6 Tables 5.3 and 5.5. Tables 5.3 and 6.1. 7 Chapter Nine, passim. 5

197

T H E M A T U R E IRON INDUSTRY

The prices he received for his products were the other key consideration in the profit calculus. Prices were in turn the result of general supply and demand conditions in the market. For most of the period we have considered, the general state of the iron market probably influenced the adoption of innovations as much as did cost considerations alone. Most of the innovations we have studied were adopted during years of rapid economic expansion, particularly during the period 1775-1815. The demand for iron grew so rapidly that prices increased or at least remained stable in spite of the tremendous growth in output achieved by the industry during those years. 8 These price movements, combined with the relatively slow entry of new producers into the industry, enabled firms using the new techniques to earn extraordinary profits. Early coke blast furnace operators, for example, realized a profit of roughly £2-£% per ton of pig iron. They earned a rate of return on capital ranging from slightly over 40% to about 70%. 9 Similar profits were enjoyed by some of the first ironmasters to use the puddling process. The rate of return on capital at the Cyfarthfa works, for example, was between 30% and go% during the 1790s. 10 T h e increased demand for iron, which kept prices high and helped to produce huge profit margins for the early innovators, could have slowed the diffusion of new techniques. High prices bestowed profits on ironmasters utilizing outdated methods, encouraging them to continue producing and thus presumably slowing the movement of resources into the new technology. Lower prices probably would have accelerated the closing down of ironworks operating with older techniques, but would have done little to speed the diffusion of new processes, since the resources 8

Figures 2.1, 5.1, and 6.1. See Table 4.4 and preceding text for details. I estimated a "normal" rate of return of roughly 10%. 10 Glamorgan Record Office, Cyfarthfa MSS, Account Books for 17911798. 9

198

SOME GENERAL CONSIDERATIONS

thus freed were rarely transferred into the new technology. 11 Many of these resources, like good sites for charcoal ironworks, were irrelevant to the new technology. At the same time, declining demand levels and prices would have lowered the ironmasters' profits from new techniques and thus slowed their adoption. The diffusion of new techniques like coke-smelting or puddling required substantial capital investments in new sites and equipment. Most of the capital came from two major sources—the entrance of new entrepreneurs into the industry and the reinvestment of profits by firms already using the innovation. Extraordinary profit levels were probably needed to overcome the fears of entrepreneurs about to enter a high-risk "infant" industry. Since most of the established firms financed expansion out of profits, a common eighteenth-century practice, 12 high rates of return were probably a prerequisite for the rapid diffusion of innovations. T h e capital employed at the Cyfarthfa ironworks, for example, more than quadrupled during the 1790s and absorbed about half of the firm's extraordinary profits. 13 The rapidly expanding demand for iron during the period 1775-1815 and the resulting high profit levels enjoyed by ironmasters accelerated the diffusion of cokesmelting and puddling. These conditions may have even been a prerequisite for the adoption of those innovations, since both were radical departures from past practice and required extensive investments in new sites and equipment. The general market conditions produced by rapidly expanding demand were not the only conditions conducive to the spread of new technology. In fact, ironmasters often adopted new methods under precisely the opposite conditions after 1815. T h e rapid growth in the demand for iron continued 11

T h e flow of capital and entrepreneurship into coke-smelting was considered in detail in Chapter Four 12 Deane, First Industrial Revolution, pp. 164-165. 13 Glamorgan Record Office, Cyfarthfa MSS, Account Books for 17911798.

!99

T H E MATURE IRON INDUSTRY

over the period 1815-1870, but the expansion of output was even more rapid, producing a long-term decline in prices. 14 Railway booms produced temporary periods of high prices and industry prosperity, but these were followed by periods of depression that often lasted for five or six years. Because this cyclical pattern was imposed on a long-run price decline, prices and profits were more often depressed than not. Some of the most rapid diffusion of new techniques occurred during these periods of depression. T h e initial wave of adoption of the hot blast, for example, took place in 1835-1845, when prices fell sharply. 15 For South Staffordshire, the share of total output produced with the hot blast jumped from about onethird to 55% in 1839-1843, a period of severe depression in that district. 16 The pattern of diffusion of new techniques during the period 1815-1870 was markedly different from that of the late eighteenth century. Because market conditions were different, ironmasters made innovations for new reasons. The eighteenth-century entrepreneur often made innovations in order to increase output and to earn windfall profits. His nineteenth-century counterpart was forced to adopt new methods in order to maintain profits threatened by falling price levels and by increased competition. As often as not, the ironmaster of the nineteenth century made innovations to insure his survival in an increasingly competitive industry. Ironmasters were able to adopt new techniques in times of depression because the nature of the innovations had changed significantly since the late eighteenth century. With the exception of the hot blast, none of the post-1815 innovations—taller furnaces, increased blast pressure, the Cowper stove, waste heat and gas recovery systems, "pig boiling," the Nasmyth steam hammer, or the Rastrick 14

I5 Figures 9.2 and 10.1. Ibid. Mushet, Papers, pp. 417-418, and Report of the Midland Mining Commission, P.P. 1843, XIII> Appendix, p. 131 16

2OO

SOME GENERAL CONSIDERATIONS

boiler—represented a revolutionary departure from past practice. The risks associated with these innovations were relatively small, as was the required capital investment. Most of the innovations required relatively little new equipment, which was easily installed in an existing ironworks. The ironmaster did not have to develop a new site, as he had done with coke-smelting and puddling. He could initially adopt a new technique on a limited basis, say on a single blast furnace, at a relatively small cost. T h e nature of the nineteenth-century innovations made them reasonably attractive even in periods of low profits. Many of the "minor" innovations nevertheless spread very slowly through the industry. T h e Cowper hot-blast stove, for example, was patented in 1856, but only about one-sixth of the furnaces were using this innovation twenty-five years later. 17 T h e Nasmyth steam hammer, invented in 1839, spread very slowly until the late 1850s. 18 The diffusion of other innovations like "pig boiling," the Rastrick boiler, and gas recovery systems followed a similar pattern. Low profit levels in the industry may have slowed the adoption of these innovations, particularly when the cost savings associated with the new techniques were relatively small. The size of productivity improvements associated with the "minor" innovations will be considered in the next section. T h e major determinant of the diffusion of new techniques was their profitability, which was in turn determined by the costs of production and product prices. We have considered the general market conditions of the eighteenth and nineteenth centuries and their impact on iron prices. However, prices, profits, and the diffusion of new techniques were also influenced by the efficiency of resource and product markets and the degree of competition in both. Iron markets underwent considerable structural 17

Duncan Burn, The Economic History of Steelmakmg, 186J-1939 (Cambridge: Cambridge University Press, 1940), p. 45, note 6. 18 Gale, British Iron and Steel, p. 74. 2Ol

T H E M A T U R E IRON INDUSTRY

change during the period covered by this investigation, and these changes in turn affected the course of technological change. The iron industry was characterized by highly imperfect markets when entrepreneurs began to use coke-smelting and puddling. T h e charcoal iron industry was really a collection of independent regional industries, most of which were dominated by combinations of ironmasters. 19 High transportation costs prohibited interregional trade except along navigable waterways. During the initial wave of coke-smelting (1754-1775) charcoal ironmasters probably faced little direct competition from the new technique. Market imperfections also helped to produce a slower than optimal flow of resources into coke-smelting and thus were partially responsible for the extraordinary profits earned by the early innovators. 20 If these high profits were necessary for the adoption of the new technique, then the imperfect nature of the iron market may have assisted the initial diffusion of coke-smelting. There was a fairly steady decline in market imperfections and a concurrent growth in competition beginning in the 1770s. About a dozen regional combinations of ironmasters had controlled most of the 70-odd charcoal furnaces in operation in the middle of the eighteenth century. There was a noticeable growth in competition by 1790, when there were over 60 separate firms operating a total of 113 blast furnaces. 21 T h e trend towards increased competition was probably reversed in 1790-1815, particularly in the refining sector, but then continued again over the period 1815-1870. 22 T h e industry had become highly competitive by 1871, when there were over 200 firms in both the refining and smelting branches. 23 19 A detailed analysis of these regional combinations is given in Chapter One. 20 This point was considered m more detail in Chapter Four. 21 Scrivenor, Comprehensive History, pp. 359-361. 22 See detailed discussion in Chapter Eleven. 23 Mineral Statistics for i8yi (London, 1872), pp. 88-100.

202

SOME GENERAL CONSIDERATIONS

The development of an extensive canal network in the late eighteenth century and the growth of railways beginning in the 1820s lowered transportation costs and thus eliminated the major barrier to interregional competition in iron. An imperfect national market had already emerged by the first decade of the nineteenth century. By that time, virtually all of the output of the South Wales iron industry was shipped via canal to Newport or Cardiff and then by sea to London or Liverpool. T h e ironmasters of the Black Country also sent large volumes of iron by canal to both London and Liverpool, while Scottish producers shipped small amounts of pig iron to Liverpool. 24 T h e emergence of a national market was accelerated during the late 1830s by the construction of the railway network and the rapid growth of the Scottish iron industry. It was during these years that the remaining barriers to interregional trade were overcome. Scottish ironmasters had penetrated the Sheffield market by 1834 and they were selling a quarter of a million tons of hot blast pig iron, in England a decade later. 25 The emergence of new centers of production like the Cleveland district in the 1850s and Cumberland in the following decade further increased interregional competition within the industry. The emergence of a national market for iron greatly encouraged the adoption of new techniques. T h e ironmasters of South Wales, for example, were among the first to build ironworks utilizing coke-smelting and puddling. Since South Wales had few population centers and no significant secondary metal trades, the demand for iron within the region was relatively small. Welsh ironmasters were able to adopt the new technology in the 1790s only because they could sell their rapidly growing output in other regions. Scottish ironmasters faced similar circumstances in the late 1830s, when they began to expand output based on the hot blast. 24

Scnvenor, Comprehensive History, pp. 126-128, and Butt, "Scottish Iron and Steel Industry," pp. 206-207. 25 Campbell, "Growth," pp. 13-14 and "Statistics," p. 286.

203

T H E M A T U R E IRON INDUSTRY

The development of national markets encouraged innovators to expand output, which in turn increased the competitive pressures on other ironmasters, forcing them to innovate. There was vigorous price competition between ironmasters because there were significantly different levels of productivity and costs associated with each production technique. T H E IMPACT ON PRODUCTIVITY AND COSTS

The speed of diffusion of innovations was a function of their profitability vL· a vis existing techniques, and profitability was in large part determined by productivity and costs. An ironmaster would adopt a new technique if it enabled him to earn higher profits by lowering his production costs. Changes in productivity and costs were the principal determinant and result of the diffusion of new techniques. I estimated the economic impact of innovations by examining the movement of productivity and costs over time. Productivity, which measures the ironmaster's efficiency in utilizing resources, is the best single indicator of economic performance. Productivity is also crucial because increases in efficiency usually bring reductions in the costs of production. However, changes in production costs are not always a reliable indicator of productivity change, particularly when input prices are changing. An ironmaster could increase his efficiency in using resources, but experience rising costs because of increased input prices. Therefore, we must use both cost and productivity information to determine the economic impact of new techniques. During the transition between charcoal-smelting and coke-smelting, cost and productivity movements in the competing techniques were simple and clear-cut. From the 1740s onward, charcoal blast furnace productivity either stagnated or declined slightly, while production costs, in both money and real terms, increased by roughly 10% per decade. The principal source of rising costs was the in204

SOME GENERAL CONSIDERATIONS creased cost of charcoal, which was not counterbalanced by productivity improvements. 26 Charcoal prices increased sharply in the mid-1750s and were about 50% higher in the 1760s than in the 1740s.27 The productivity of coke blast furnaces had increased by about 50% between the mid1730s and the 1760s and costs fell by about 50% during the same period. Coke blast furnace costs remained at about half the levels of the 1730s through the 1770s and 1780s, thus increasing the cost advantage of coke over charcoal. 28 The initial adoption and perfection of the coke-smelting process, which brought substantial improvements in productivity and costs, was largely completed by 1790. Blast furnace productivity then declined from 10% to 40% over the period 1792-1813, when there were no major changes in the existing technology. Production costs (in money terms) increased by about 10% to 20% during these years. 29 Blast furnace operators, however, reduced real costs substantially during this period of sharp wartime inflation. T h e Schumpeter-Gilboy index of consumers' goods prices shows an increase of 94% over the period 17921813, while the Gayer-Rostow-Schwartz index of domestic commodities prices registers an increase of 114%. 30 This cost reduction (in real terms) was achieved because input prices fell by roughly 40%, in real terms, during these years. 31 Ironmasters achieved significant improvements in productivity in the mining and preparation of coal and ore, but not in the operation of the blast furnace itself. T h e productivity performance of blast furnaces over the period 1813-1830 was mixed, with some furnaces registering sharp declines, while others showed significant improvements. All the furnaces in our sample exhibited reductions in money costs ranging from 4% to 37%. 32 With few exceptions, most of the cost reductions were the result of lower input prices, rather than of increased productiv26 28 30 31

27 Tables 4.1 and 4.2. Figure 4.1. 29 Tables 4.3 and 4.4. Chapter Six, p. 109. Mitchell and Deane, Historical Statistics, pp. 469-470. 32 Chapter Six, p. 109. Table 8.3.

205

T H E M A T U R E IRON INDUSTRY

ity. In fact, real production costs increased considerably for most furnaces during these years of sharp price deflation. The Gayer-Rowtow-Schwartz index of domestic commodities prices, for example, declined by 42% in 18131830, while the Rousseaux general price index registered a fall of 47% over the same years. 33 The hot blast brought the next major change in productivity and costs. Several Scottish furnaces increased productivity by roughly 50% in the brief period 1828-1833, while costs of production (in money terms) fell by roughly 35%. 3 4 Real costs fell by slightly less, since the general price level also declined by 5% to 10% over those years. 35 Scottish producers lowered real costs by an additional thirty percent between 1833 and 1844, but this reduction came from lower input prices and not from increased productivity at the furnace. 36 A shortage of reliable cost data severely impedes any attempt to trace precisely the movements of productivity and costs for the rest of the industry after 1830. Non-Scottish producers who used the hot blast probably experienced improvements in productivity that were significant, but not as large as those achieved in Scotland. 37 Productivity apparently stagnated during the period 1830-1844 for ironmasters who shunned the hot blast. 38 The same was true in 1844-1857 for all the furnaces in our small sample, regardless of the technique utilized. 39 The preceding evidence generally supports the hypothesis that significant improvements and productivity and major reduction in the real costs of production have stemmed from the "major" innovations that historians have traditionally emphasized, namely coke-smelting and the hot blast. With the major exception of the period 33

Mitchell and Deane, Historical Statistics, pp. 470-471. Chapter Nine, p. 162. 35 Mitchell and Deane, Historical Statistics, pp. 470-471. 36 Chapter Nine, pp. 152 and 162. 37 Detailed productivity and cost estimates are given in my Ph.D. thesis, pp. 198 and 211. 38 39 Ibid. Chapter Nine, p. 162. 34

206

SOME GENERAL CONSIDERATIONS

1792-1813, there is no evidence of any significant improvements in productivity or costs that could be attributed to the so-called "minor" innovations. They had no noticeable impact on blast furnace productivity over the entire period 1790-1870. However, productivity improvements in mining and raw materials' preparation, inadequately considered by our measures, did exert a powerful influence on real costs during the Napoleonic Wars. The refining branch of the industry experienced a slightly different pattern of cost and productivity change. Like its counterpart in the smelting branch, the charcoal forge exhibited stagnant productivity and rising costs during the second half of the eighteenth century. Costs of production increased because rising charcoal prices were not counterbalanced by increased productivity. 40 Cost information for the potting process, the first alternative technique available to forgemasters, is extremely sketchy. By 1787, potting costs were between 15% and 40% lower than the costs of refining with charcoal. Potting consumed more pig iron than the finery-chafery process, but lower costs resulted because potting used coke-smelted pig iron, which was much cheaper than pig iron made with charcoal. 41 There were three refining techniques in use in the 1790s—the finery-chafery (charcoal) process, potting, and puddling. Since the charcoal process was demonstrably inferior by the 1780s and was quickly dying out, we will exclude it from the discussion. The money costs of production with potting increased by about 25% to 40% over the period 1787-1800. 42 Since the general price level increased by roughly the same percentage during those years, real production costs remained roughly constant. 43 There are not sufficient data for precise measurements, but there is indirect evidence that productivity in potting stagnated during those years. The amount of pig iron consumed per 40

41 Tables 5.1 and 5.2. Tables 5.3 and 5.4. Tables 5.3 and 6.3. 43 Mitchell and Deane, Historical Statistics, pp. 469-470.

42

207

THE MATURE IRON INDUSTRY

ton of bar iron remained fairly constant, as did the consumption of coal. The prices of inputs, particularly pig iron, increased about the same, in percentage terms, as costs did, implying that productivity probably did not change very much in 1787-1800. 44 Puddling costs and productivity improved significantly after 1787, giving Cort's process clear superiority over potting. The money costs of production with puddling remained stable over the period 1787-1804. 45 The general price level, however, increased by about 40% in the interim, 46 so the real costs of making bar iron with the puddling process fell by about one-third. We have no precise estimates of productivity for these years, but all the indirect evidence implies that forge operators improved efficiency significandy. They stabilized costs, in money terms, while the prices of inputs, particularly pig iron, increased by about 30-40%. They significantly reduced their consumption of pig iron per ton of bars from roughly 1.60 tons in the late 1780s to about 1.40 tons by the early 1800s. 47 The productivity improvements achieved during this period made puddling the superior refining technique and assured its widespread adoption after the turn of the century. Productivity improvements in puddling continued long after the initial wave of adoption. Over the period 18041829, productivity increased by roughly 30% and the costs of production, in money terms, declined by about 50%. 48 Real costs fell by only about 20-25%, since the general level of prices fell substantially during those years. 49 There were no spectacular innovations in refining during the first 44

T h e major evidence is from the forges at Horsehay, Bromford, Cookley, and Mitton. See the sources cited in Tables 5.1 and 5.3. 45 Tables 5.3 and 6.3. 46 Mitchell and Deane, Historical Statistics, pp. 469-470. 47 This was the experience of the six forges listed in Table 6.1. 48 Table 8.4. 49 Mitchell and Deane, Historical Statistics, pp. 470-471. Gayer-RostowSchwartz index of domestic commodity prices declined by 14% in 18041829, while the Rousseaux general price index registered a decline of

SOME GENERAL CONSIDERATIONS three decades of the nineteenth century. These productivity gains must have been the result of so-called "minor" improvements in technology, like the use of cast iron bottoms in the puddling furnace and the practice of charging the furnace with molten pig iron, developed in 1818 and 1822 respectively. 50 T h e performance of the refining sector after 1829 is less clear because reliable cost data are scarce. Forge productivity stagnated or increased slightly between 1830 and 1870. Real costs were generally stable in 1830-1845, but then declined by about one-third in 1845-1870. This reduction of real costs was the result of lower input prices rather than productivity improvements. 51 The rarely discussed unspectacular changes in technology had a greater impact on productivity and costs in refining than in smelting. However, the long-term effect of all innovations, taken together, was nothing short of revolutionary in both the smelting and refining sectors. T h e real costs of producing pig iron declined by at least 60% in 1750-1815 and then fell even further in 1830-1870. Similarly, the real costs of producing bar iron fell by at least 50% between the late 1780s and the late 1820s. The ironmaking techniques that British ironmasters adopted in the eighteenth and early nineteenth centuries radically altered production costs and Britain's position in world markets. Prior to the "industrial revolution in iron," British ironmasters were among the highest-cost producers in Europe and were able to supply only about half their country's consumption. They had achieved cost parity by the early nineteenth century and by the early 1870s were exporting nearly half of their total output, which had increased roughly 250-fold since the middle of the eighteenth century. T h e remarkable development of the British iron industry during these years was in large measure the result of technological change. 50 See Chapter Eight for a more detailed discussion of these innovations. 51 Chapter Ten, pp. 170-72.

209

APPENDICES

A P P E N D I X

A

BRITISH IRON OUTPUT, 1715-1750 are three estimates of pig iron output in the early eighteenth century, summarized in Table A.i below: THERE

TABLE A.I ESTIMATES OF BRITISH PIG IRON OUTPUT IN THE EARLY EIGHTEENTH CENTURY

Year Referred To Rea-Fuller List Mushet-Scrivenor William Rea

Number of Furnaces Listed

Total Output (Tons)

Output per Furnace (Tons)

62 59

18,540 17.350 25,000

325 297

1717 c. 1720 1718

Sources: Hulme, "Statistical History," pp. 12-20, and Flinn, "Growth," p. 145·

These pig iron estimates all come from one source, "A List of All the Furnaces and Forges in England and Wales with a computation of what they are supposed to make one year with another," which John Fuller (a Sussex gunfounder) received from William Rea (a Monmouthshire ironmaster) in 1717. 1 Each furnace is listed separately with its output in this list. The output figures given for each furnace are round numbers and appear to represent an "average" output. The second estimate is that given by Scrivenor, who has taken the estimate from David Mushet's Papers on Iron and Steel (1840), while changing the date from c. 1720 to c. 1740 for no apparent reason. 2 This estimate did not include a listing of the individual furnaces, 1 2

Hulme, "Statistical History," p. 12. Mushet, Papers, p. 43, and Scrivenor, History of the Iron Trade, p. 57. 213

APPENDICES

but only their number and total output broken down by county. Hulme has argued that the Mushet-Scrivenor list must be a revised version of the Rea-Fuller list, although he was unable to find the original list in the papers of either Mushet or Scrivenor. 3 The original Mushet-Scrivenor list can be found in an article on blast furnaces by Mushet in Abraham Rees's New Cyclopaedia (1819). It is entitled, "List of Blast Furnaces in England and Wales immediately before the introduction of pit coal," and gives each individual furnace with its output, so it can be compared to the ReaFuller list.4 The third estimate was given by William Rea in 1737 before the House of Commons. He estimated that pig iron output had been 25,000 tons in 1718. 5 T h e Mushet-Scrivenor list is clearly a copy of the ReaFuller list.6 The furnaces are listed in precisely the same order (non-alphabetical) in both lists. T h e list that appears in Rees is a very poor copy of a revised Rea-Fuller list. Well-known furnaces such as Vale Royal (Cheshire) are listed as "Valerclyde," Blakeney (Forest of Dean) as "Blabney," and Mearheath (Staffordshire) as "Wincheath." The 1717 list gave five furnaces with no output, while the 1720 list repeats four of them, giving each an output of 100 tons, omits the fifth, but also adds one furnace (Elmbridge) not in the 1717 list. T h e 1720 list also gives slightly higher outputs for a few of the furnaces listed. Five furnaces in the 1717 list, with a combined output of 2,100 tons, are excluded from the 1720 list.7 Adding this amount to the 1720 total of 17,350 tons yields a minimum output for 1720 of 19,450 tons. This figure is probably too low, because the estimates for the individual furnaces seem too low. We have output data 3

Hulme, "Statistical History," p. 13. Abraham Rees, New Cyclopaedia or Universal Dictionary of Arts and Sciences (London, 1819), Volume iv, "Blast Furnaces," n.p. 5 Journal ofthe House of Commons, x x x m (1737-1742), p. 112. 6 Appendix B of my Ph.D. thesis for a complete comparison of the two lists. 7 These are Backbarrow (500 tons), Bersham (300 tons), Cunsey (500 tons), Halesowen (500 tons), and Leighton (300 tons) 4

214

APPENDIX A for fifteen individual furnaces for the period roughly 1700-1720. T h e combined average output of these furnaces was 6,920 tons, about 20% higher than their combined output of 5,700 tons given in the 1720 list.8 An average understatement of output of only 10% would add another 2,000 tons to the estimate, bringing it up to 21,450 tons. There are also several furnaces that were probably operating at this time that were not included in either list. There are at least seventeen furnaces that were probably in blast around 1720 that were totally excluded. 9 If it is assumed that only ten of these were in fact in operation, with an average output of 300 tons each, then a total output of roughly 24,500 tons is plausible. William Rea's estimate of 25,000 tons for 1718 appears quite reasonable in light of the omissions and errors of the two lists and the fact that the years 1717-1719 were boom years for the industry. 10 On the basis of these output estimates, it seems likely that about seventy blast furnaces produced on the average about 23,000 tons of pig iron per annum in 1715-1720. T h e estimates for national bar iron output, summarized in Table A.2 below, are even harder to interpret than those for pig iron. Three of these four estimates have the same origin as the pig iron estimates for the same years. There is, however, no breakdown of the Mushet-Scrivenor list, as there was for the furnaces. The estimate of 19,485 tons and a list of individual forges and their outputs appeared as an appendix to an anonymous pamphlet entitled The Interests of Great Britain in Supplying herself with Iron Impartially Considered. A MSS copy of this list can be found in the 8

Appendix C of my Ph.D. thesis for details. These are Bretton (Yorkshire), Cannock (Staffordshire), Conway (Cheshire), Dolgyn (Merionethshire), Etchingham (Sussex), Eridge (Sussex), Fernhurst (Sussex), Gravetye (Sussex), Hampton Load (Shropshire), Holme Chapel (Lancashire), Mayfield (Sussex), Newent (Forest of Dean), Rushall (Staffordshire), Seacroft (Yorkshire), Warren (Sussex). Wornbridge (Shropshire), and Titchfield (Hampshire). See Schubert, History, Appendix v. Mr. G. R. Morton has kindly pointed out several of these exclusions and additional ones that could not be verified. 10 Ashton, Iron and Steel, pp. 130-132. 9

215

APPENDICES TABLE A.2 ESTIMATES OF BRITISH BAR IRON OUTPUT FOR THE EARLY EIGHTEENTH CENTURY

Number Year Rea-Fuller List William Rea The Interests of Great Britain Mushet-Scrivenor List

of

Forges

1717 1718

n

9

—

c.1718 c.1720

'35

100

Total Output (Tons)

Output per Forge (Tons)

13.370

116

18,000

—

19.465

145

12,060

120

Sources: Same as Table A. 1.

Weale MSS (Science Museum Library, South Kensington) and is entided, "A List of Forges in England and Wales, With an Account of the Quantity of Iron they have Annually made, and do now make, according to the best information we could get." There are two columns giving output, one labelled "Have Made," the other labelled "Do Make." T h e total outputs given in the two columns were 19,465 tons and 12,290 tons respectively. Directly under the lists is the note, "The first column is the amount of the produce on an average for a few years previously to 1718. The second is the amount of their produce in 1736." 11 This pamphlet was published during the debate that took place in 1736-1737 over the tariffs on imported iron. 12 It has often been cited as evidence of the decline of the iron industry during the eighteenth century. This list of forges is undoubtedly the most complete listing available for the early part of the century, but the output figures given are suspect. Because these lists are given as "evidence" in a polemic, it is quite likely that they exaggerate the output decline since c. 1718. T h e estimate for 1736 is probably a deliberate understatement of output, while the 1718 figure is almost certainly too high. Perhaps the figures given in 11 James Weale, Account of the Iron and Steel Trade, iyy^-i8o^, Volume 11. MSS found in the Science Museum Library, South Kensington. 12 Pelham, "West Midland Iron Industry," p. 156.

2l6

APPENDIX A

the column, "Have Made," represent the maximum output achieved by each forge since about 1715. It is highly unlikely that all the forges produced their peak output (or were even in operation) in the same year. Because of the polemical nature of the pamphlet for which the 1718 list was prepared and the lack of supporting evidence, this estimate of 19,465 tons must be rejected as unrealistically high. There is little doubt, however, that both the Rea-Fuller list and the Mushet-Scrivenor list understate bar iron output for the period roughly 1715-1720. Ashton noted that the 1717 list (Rea-Fuller) excluded well-known forges with a combined output of roughly 1,000 tons. 13 A cursory examination of the list in The Interests of Great Britain shows the inadequacy of the earlier lists. There are a total of twenty-eight forges that appear on the list drawn up in 1736, but do not appear on the 1717 list. According to the 1736 list, these forges produced a total of 2,545 t o n s around 1718. They were smaller on average than the forges included in the 1717 list, with an average output of only g i tons. If we add these to the 1717 list, we have a total of 147 forges producing 15,915 tons. Again, William Rea's estimate of 18,000 tons for 1718 begins to seem more plausible. It is more likely, however, that for 1715-1720 as a whole, about 150 forges were producing something like 16,000 tons of bar iron. This estimate is consistent with a pig iron estimate of 23,000 tons. If we assume that 1.35 tons of pigs were needed to produce a ton of bars, then the forges would consume about 21,500 tons of pigs. 14 T h e rest presumably went into castings. Most of the historians of the iron industry have argued that both pig and bar iron output fell between c.1720 and c. 1750. 15 The evidence available on the number of furnaces in operation and their outputs suggests the opposite. 13

Ashton, Iron and Steel, p. 235. Detailed data on pig iron consumption at the forges is given in my Ph.D. thesis, p. 52. 15 Chapter One, footnote 39. 14

217

APPENDICES

The number of furnaces in operation probably remained about the same as in 1715-1720, i.e., about seventy. T h e available data on the construction of new furnaces and the shutting down of existing ones are summarized below in Table A.3: TABLE A.3 CHARCOAL BLAST FURNACES ERECTED AND SHUT DOWN IN GREAT BRITAIN, 1720-1749, BY DECADE

1720-29 1730-39 '740-49 Sources: Schubert,

Number Number Erected Shut Down 9 1 2 11 7 9 History, Appendix V, and Flinn, "Growth," p. 146.

For the new furnaces, I have used the date at which the furnace came into operation, when known. Dating the closing down of furnaces is more difficult. The furnaces given in Table A.3 are those which definitely shut down permanently in 1720-1749. There is no comprehensive list of furnaces in blast until 1790, when there were only twentysix charcoal furnaces still in operation. 16 I have assumed that all the furnaces in blast in 1790, except those known to have been built after 1750, were in blast in 1750. There is, however, in the Boulton and Watt Papers (Birmingham Reference Library) "An Account of Charcoal Blast Furnaces which have declined Blowing since the Year 1750 owing either to the want of Woods or the introduction of making Coak Iron. January 1st, 1788." 17 This list gives the individual furnaces, the ironmasters who last operated them, and their "Present State." It includes a total of seventy furnaces. Thirteen of these cannot be found in any other list, while several of them are known to have shut down before 1750. With some reservations, this list seems 18 17

11.

Scrivenor-, Comprehensive History, pp. 359-361. Boulton and Watt MSS, Birmingham Reference Library, Muirhead

2l8

APPENDIX A

to be a fairly reliable guide to the furnaces in operation in 1750. I have used it to supplement other sources of information, but have accepted well-documented closing down dates that contradict this list. The number of furnaces in operation in 1720-1750 was stable at about seventy, since there were at least eighteen new furnaces constructed during these years, while roughly twenty shut down. It is unlikely that the net effect was a decrease in output. The output of the new furnaces was well above the 1720 average of roughly 300 tons, while the furnaces that closed down tended to be the smaller ones. Gradual improvements in technology at the same time tended to raise the output of all furnaces. 18 We know that by 1788 the surviving charcoal furnaces achieved an average output of 558 tons. 19 With seventy furnaces in operation around the middle of the century, with an average output of perhaps 400 tons, total output of pig iron was roughly 28,000 tons. This estimate is supported by the only detailed estimate of bar iron production that exists for the mid-eighteenth century. It appeared as an appendix to an anonymous pamphlet entitled The State of the Trade and Manufactory of Iron in Great Britain Considered (1750). This appendix is a list of forges that is a greatly revised version of that given in The Interests of Great Britain (1736). This list is probably reasonably accurate. 20 The appendix gives 114 forges producing 18,800 tons, a considerable increase since the 17161720 period. These figures imply a rapid growth in cast iron production in the first half of the century. If pig iron output was about 28,000 tons in 1750, then roughly 5,500 tons of pig iron or about 20% of the total was in the form of cast iron, a three-fold increase from the period 1716-1720. The available evidence on the output of individual blast furnaces confirms this trend. The production of castings at 18 19 20

T h e output data are given in Appendix E of my Ph.D. thesis. Meade, Coal andiron Industries, p. 830. Hulme, "Statistical History," pp. 30-33. 219

APPENDICES

Coalbrookdale increased from about 250 tons in the early 1720s to 350 tons by the late 1730s and perhaps reached 500 tons by mid-century. 21 T h e Darbys also gained control of Bersham furnace in 1731 and Willey furnace in 1733 and there is some evidence of large-scale casting done at both these works. 22 T h e two combined may have produced an additional 400 tons of cast iron products. T h e Walkers were producing 200 tons of castings at Rotherham by midcentury, while Backbarrow furnace averaged 280 tons of castings over the period 1740-1748. 23 Heathfield furnace in Sussex cast virtually its entire output of 300 tons into castings in 1746. 24 Many other furnaces in the Weald were also producing cast iron goods in volume, but there is no specific information on the tonnages involved. It seems reasonable in light of this evidence to argue that cast iron output trebled in 1720-1750. 21

Mott, "Abraham Darby," pp. 69 and 73. Raistrick,D)m&sfy, pp. 58-61. 23 John, Walker Family, p. 7, and Backbarrow MSS, Barrow-in-Furness Public Library. 24 Straker, Wealdon Iron, p. 128. 22

220

APPENDIX

B

CALCULATING VARIABLE COSTS FROM EIGHTEENTH-CENTURY IRONWORKS ACCOUNTS: A NOTE

CALCULATING variable costs from eighteenth-century ironworks accounts is a tricky business at best. In the course of this study I have used several major manuscript collections containing various accounts from ironworks. Almost without exception, charcoal ironmasters did not include in their annual accounts any estimate of capital costs or depreciation. Instead, they kept a separate set of accounts dealing with the profits, dividends, and net worth of the enterprise and these accounts have generally been either lost or deliberately destroyed. Most of the charcoal ironworks were operated by partnerships of as many as a dozen individuals, with each partner receiving a copy of the annual accounts. Although all the partners had sets of accounts, rarely has more than one copy survived.

T h e cost of producing iron in the South YorkshireDerbyshire region is well documented in three overlapping manuscript collections: the Spencer-Stanhope MSS at Sheffield City Library; the Spencer-Stanhope MSS at Bradford City Library; and the Staveley Ironworks MSS at Sheffield City Library. T h e three collections contain annual accounts for eleven furnaces and eight forges for various years over the period 1690-1785. All these accounts have a standard form and give the expenditures of each ironworks in great detail. Each annual account gives output and both the prices and physical units of all inputs consumed. Annual operating costs can be calculated by adjusting the figures given for "total charges", i.e., purchases in that year plus inventories from the previous year, for changes in inventories. There is no notion of capital costs 221

APPENDICES

or of depreciation in these accounts. Large expenditures on repairs were always charged against one year's operating expenses, causing costs to fluctuate violently in particular years. The use of averages here to smooth out these fluctuations is almost a necessity. T h e accounts also give a figure for "profit" or "proceed" for each year. As used in the accounts, "profit" means the surplus of total revenues over total expenditures, where both revenues and expenditures are not adjusted for inventory changes. These inventory changes are not reflected in the profit figures, but rather in the valuation of the net worth of the enterprise. Unfortunately, the valuation of the individual ironworks is not given in these collections, so it is impossible to calculate actual profits for the individual furnaces and forges. The accounts of the ironworks held by the Foley partnerships, largely in the Forest of Dean and the West Midlands, are found in the Foley MSS, Hereford Record Office. T h e Foley partnerships controlled seven furnaces and ten forges in 1710, but lost control over or closed down most of these by 1750. B.L.C.Johnson has done an exhaustive survey of these accounts, but calculated operating costs only up to 1717. For the years 1725-1751, one must turn to the Foley collection. T h e accounts are extremely difficult to use because there are no calculations of inventories other than charcoal and ore for the individual ironworks. The accounts give the physical inputs for charcoal and ore, but omit input prices. I have taken the prices used to value inventories of charcoal and ore as a proxy for market prices. These inventory prices fluctuate annually and vary from one ironworks to another, so they probably reflect market prices. Profits from the individual works cannot be calculated from the accounts. The remaining ironworks accounts used in this study defy description. Each partnership had a unique accounting system, usually including a vague notion of profits. Adjustments for changes in inventories invariably had to be made in order to derive operating costs. In general, capital was not explicitly dealt with in these accounts. 222

A P P E N D I X

C

PIG IRON O U T P U T ESTIMATES FOR G R E A T B R I T A I N , 1788-1860

is a paucity of data on aggregate pig iron output before 1788, while after that date, there are numerous estimates. 1 T h e available estimates of pig iron output are of very uneven quality and must be used with a great deal of caution. There are three general types of estimates. First, there are those which resulted from a survey, where ironmasters were asked to report their output. Surveys were occasionally conducted by government officials, but were more commonly taken by the ironmasters themselves. Secondly, there are several estimates made by contemporaries who had some familiarity with the iron industry. These estimates are likely to be far less accurate than those based on a survey of all the blast furnaces. They are really only "educated guesses" but have some value if used cautiously. Finally, there are numerous estimates given in secondary works. Many of these appear to be sheer guesses. T h e author rarely gives the source of his estimate, if in fact there was any source other than the author's own mind. Many of those estimates are implausible, given other information we have on the iron industry, and have been given little consideration. THERE

Several general criteria are used here to evaluate individual output estimates. Those based on surveys which seem comprehensive and accurate are accepted without reservation. There are often several slightly different ver1

A summary of most of the known estimates can be found in Arthur Gayer, W. W. Rostow, and Anna Schwartz, The Growth and Fluctuation of the British Economy, 1J90-1850 (New York, 1953), Microfilm Supplement, pp. 920-928, and in Alan Birch, The Economic History of the British Iron and Steel Industry, iy84-i8yp (London: Cass, 1967), pp. 124-126.

223

APPENDICES

sions of the same estimate. The highest estimate is generally accepted because it often includes individual furnaces or a minor region, like North Wales, excluded in the other versions. Surveys found in MSS collections have been given precedence over those found in secondary sources, provided that the origin and dating of the survey is clear. As long as there is evidence that a reasonably accurate survey was taken, that estimate has been accepted. The numerous estimates that do not reveal the number of furnaces in operation and do not include at least a regional breakdown of output have been rejected almost automatically. We will first examine the individual estimates and then indicate how reasonable interpolations can be made between the acceptable estimates. It should be recognized that even the "acceptable" estimates contain an unknown degree of error. 1788-1815 Two MSS collections are the source of several output estimates for these years. The Boulton and Watt MSS (Birmingham Reference Library and Birmingham Assay Office) contain several lists of furnaces and their outputs. Among the Boulton and Watt papers there is a "List of the Different Iron Works in England, Wales, Scotland, and Ireland to the Year 1794. Copied from the Papers of the late Wm. Wilkinson, Esq."2 This is a remarkably detailed list of ironworks, with the number of furnaces, their location, owners, source of power, date of construction, and the fuel used. William Wilkinson was a prominent Black Country ironmaster and this list seems to be comprehensive. It will be shown later that the Wilkinson list is the basis for numerous other estimates. Another major source is the Weale MSS. 3 In this collection are numerous materials gathered by James Weale over the years 1779-1811 for a history of the iron trade that he never published. This col2 3

Boulton and Watt MSS, Birmingham Reference Library, Muirhead 11. Science Museum Library, South Kensington.

224

APPENDIX C

lection contains several lists of furnaces and output estimates, all of which will be discussed in some detail. Finally, there is an article by David Mushet entided "Blast Furnaces" in Rees's Cyclopaedia (1819) which gives additional output estimates. 4 Scrivenor included Mushet's article in his book, quoting almost verbatim without giving Mushet so much as a footnote! 5 Scrivenor also apparently had access to both the Wilkinson list and the Weale MSS when he wrote his history. There are two estimates for 1788, one given in Scrivenor of 68,500 tons and another found in the Weale MSS of 70,000 tons. The Scrivenor estimate was taken from Mushet and appears to be a version of the estimate found in the Weale MSS. T h e estimate found in the Weale MSS gives twenty-six charcoal furnaces producing 14,500 tons and sixty coke furnaces with an output of 55,500 tons. T h e origin of this estimate is not clear, but it is definitely not based on a survey of actual output. T h e number of furnaces in each county is also given. Whoever made this estimate recognized that there were wide variations in average output between regions. He estimates, for example, that the average Shropshire furnace produced 1,100 tons, while the Yorkshire furnaces produced only 750 tons on average. There is no listing of the individual furnaces for 1788. This estimate reflects some notion of average output, rather than actual output. It is at least an educated guess and will be accepted. We then have three lists of furnaces that are all based on the Wilkinson list found in the Boulton and Watt MSS. Scrivenor gives a list of furnaces in operation in May 1790 (106 in blast, 7 out of blast), but does not give an estimate of their output. 6 A nearly identical list of furnaces that in4 Abraham Rees, New Cyclopaedia or Universal Dictionary of Arts and Sciences (London, 1819). The author of the article on blast furnaces is not revealed in the article itself. In a letter to James Weale (1 August 1808), David Mushet revealed that he was the author of the article. 5 Scrivenor, History of the Iron Trade, pp. 82-104. 6 Ibid., Comprehensive History, pp. 359-361.

225

APPENDICES

eludes an estimate of output, dated December 1791, appears in the Boulton and Watt MSS. Here it was estimated that 107 furnaces produced 90,300 tons of pig iron. Again, this estimate was not the result of a survey, but was simply an educated guess. It seems plausible that with twenty more furnaces in operation in 1791 than in 1788, output could have increased by 20,000 tons. An output of about 90,000 tons for both 1790 and 1791 seems likely. T h e Wilkinson list of 1794 gives a total of 127 furnaces in operation (eight not in blast), but does not give an estimate of their output. Since an average output of 1,000 tons per furnace is not unlikely by this time, total output probably reached 125,000 tons by 1794. For 1796, there is an often-quoted estimate of 125,000 tons from 121 furnaces. There are four or five slight variations of this estimate given by Mushet, Scrivenor, the Weale MSS, and the Boulton and Watt MSS. This estimate was the result of a government survey taken after a tax on coal was proposed in 1796.7 Individual furnaces are listed, with three different estimates of output, labelled "excise return, supposed quantity made, and exact return." T h e total of these three returns are given below: 8 Excise return Supposed quantity made Exact return

172,512 tons 152,605 tons 125,079 tons

The "excise returns" probably represented the highest previous output of the furnaces, perhaps exaggerated, and the "supposed quantity made" may have been the ironmasters' estimate of their expected output for 1796. T h e version of the list given by Mushet in Rees' Encyclopaedia also gives the initials of the person "from whom the information was received." All the returns from Shropshire, for example, were made by "W. R." (William Reynolds?) T h e lowest figure was an actual output return, probably made to the Excise Office the following year, when Pitt consid7

Ibid., History of the Iron Trade, p. 94.

226

8

Ibid., p. 97.

APPENDIX C ered a tax on pig iron. 9 A list of the furnaces in the Boulton and Watt MSS dated "Excise Office, 3rd November 1797" is identical to the list reprinted by Scrivenor, except that it also includes ten furnaces out of blast in that year. This estimate of 125,000 tons for 1796 was based on a comprehensive survey of the ironworks and is accepted as accurate. No similar survey exists until 1805, when output had increased to 258,000 tons. From the few estimates for the interim, it appears that output grew at a high and fairly steady rate over the years 1796-1805. T h e construction of new furnaces continued, presumably as a response to the high wartime demand for iron. Mushet gives a list of twenty-two blast furnaces that were under construction in 1801-1802. He estimated that by the end of 1802 the new furnaces would increase pig iron output over the 1796 figure by some 47,000 tons (forty-seven furnaces producing 1,000 tons each), giving a total output of 172,000 tons from 168 furnaces. This estimate seems to me to be unrealistically low. Mushet assumed that output per furnace was the same in 1802 as it had been in 1796, i.e., roughly 1,000 tons. By 1805, average output had reached about 1,500 tons and it seems unreasonable to assume that the entire increase took place after 1802. A more steady cumulative process seems more likely. If we assume instead that output per furnace had reached 1,300 tons by 1802, then total output would have been about 220,000 tons in that year. The 1805 estimate was the result of a threatened tax on pig iron in 1806. The ironmasters of Great Britain met in the different ironmaking districts and drew up a statement of output to present to the House of Commons Committee investigating the proposed tax. These lists showed a total output of 258,000 tons from 173 furnaces in operation (60 not in blast). 10 Scrivenor and many others have given 258,000 tons as the pig iron output for 1806. A MSS copy 9

Ibid., p. 98.

"Ibid., p. 99.

227

APPENDICES of the original list can be found in the Boulton and Watt MSS, and it is clear from this list that the output figures refer to 1805. Each ironworks is listed separately, with its owner, number of furnaces in and out of blast, and its output. These appear to have been accurate returns and the list is comprehensive, so this estimate will be accepted. It is not until 1810 that there is another comprehensive list of the blast furnaces of Great Britain. There is a detailed list of furnaces in the Weale MSS entitled "Ironmasters Return of 1810, Account of Works Making and Rolling Iron," which gives a total of 226 furnaces in operation and 40 out of blast. Unfortunately, there is no estimate of total output. If output per furnace in blast was the same as it had been in 1805, i.e., about 1,500 tons, then total output in 1810 would have been 339,000 tons. An output of about 350,000 tons seems more likely, given the increasing size of the furnaces. There exists no comprehensive list of blast furnaces between 1810 and 1823. There is considerable evidence to suggest that output stabilized at about 350,000 tons in 1810-1812 and then climbed to perhaps 400,000 tons in 1815. Pig iron prices fell off sharply after 1810, recovered in 1814, but then fell off sharply in the postwar years. From the evidence given by ironmasters against the government's Orders in Council cutting off trade with Napoleonic Europe, it appears that total demand may have slackened after 1810. A representative of the nail-making trade in the Black Country claimed that the nail trade had been severely depressed since October 1810. 11 It seems that industry supply had overtaken wartime demand and declining prices resulted. There is no evidence of any extensive construction of new furnaces after 1810. All the available national output estimates, most of them admittedly crude, as well as numerous estimates of regional outputs, indicate that output grew slowly after 1810. Richard Cort estimated 11

Evidence on Orders in Council, P.P. 1812, m, pp. 21-23, testimony of William Whitehouse.

228

APPENDI X C in 1855 tha t outpu t in 1811 ha d bee n 350,00 0 tons. 1 2 I n his stud y of th e British econom y durin g th e war years, Crouze t estimate s pig iro n outpu t at abou t 330,00 0 ton s for 1812. 1 3 Finally , Birc h used regiona l estimate s to conclud e tha t pig iro n outpu t in 1815 was less tha n 375,00 0 tons. 1 4 Several regiona l outpu t estimate s an d lists of furnace s ar e available for th e years 1810-181 5 a n d the y suggest tha t aggregate outpu t stabilized at abou t 350,00 0 ton s in ί δ ι ο ι 812 an d the n climbe d to a wartim e pea k of abou t 400,00 0 ton s in 1815. We will first examin e th e regiona l dat a in detail an d the n derive nationa l outpu t estimate s from them . On e majo r ironmakin g distric t tha t was growin g rapidl y in th e early nineteent h centur y was Sout h Wales (includin g Monmouthshire) . I n 1805, thirty-nin e furnace s produce d abou t 78,000 tons , while fifty-one furnace s ar e include d in th e Weale MS S list of 1810. If we assum e an average out pu t in 1810 of abou t 2,000 ton s (th e sam e as in 1805), Sout h Wales probabl y mad e 100,000 ton s in 1810. T h e r e is also a list of Sout h Wales furnace s in operatio n in 1812 tha t shows forty-eigh t furnace s in blast with a combine d weekly outpu t of 2,230 tons. 1 5 If th e furnace s operate d at tha t rat e for fifty-two weeks, the y would have produce d 115,000 tons . Thi s estimat e implie s an increas e in average output , for ther e were thre e fewer furnace s in operatio n in 1812 tha n in 1810, while outpu t was highe r in th e latte r year. Othe r dat a suppor t th e notio n tha t Sout h Wales outpu t rose by abou t 15,000 ton s in 1810-1812 . We kno w th e amoun t an d type of iro n shippe d on th e Monmouthshir e 16 Cana l after 1802. Thi s cana l was th e sole mean s of trans por t for abou t hal f th e Sout h Wales iro n industry . Ship Richar d Cort , "British Iro n Manufactures, " Journal ofthe Royal Society of Arts, in (1855) , p. 607. 13 Frangoi s Crouzet , L'Economie Britannique et h Blocus Continental, 1806-1813 (2 Vols., Paris , 1958), p. 750. 14 Birch , Economic History, pp . 48-49 . 15 Dowlai s MSS , Glamorga n Recor d Office, 1817 Lette r Books, Gilber t Gilpi n to William Wood, 15 Septembe r 1817. 16 Scrivenor , Comprehensive History, pp . 126-127 . 12

229

APPENDICE S ment s on th e Monmouthshir e Canal , in thei r equivalen t weight in pig iron , increase d from 41,60 0 ton s in 1810 to 49,70 0 ton s in 1812. 1 7 If th e rest of th e Sout h Wales iro n industry , primaril y in Glamorganshire , grew at th e sam e rate , an increas e in outpu t of 15,000 ton s was no t unlikely . Ther e is n o list of furnace s for Sout h Wales for 1815, bu t it is clea r tha t outpu t was muc h highe r tha n it ha d been in 1812. T h e pig iro n equivalen t of iro n shippe d on th e Monmouthshir e Cana l rose from 49,70 0 ton s in 1812 to 61,600 ton s in 1815, an increas e of abou t 25%. Th e four majo r ironwork s in Glamorganshir e (Cyfarthfa , Dowlais , Pennydarren , an d Plymouth ) increase d thei r combine d pig iro n outpu t from abou t 40,00 0 ton s in 1812 to 49,40 0 ton s in 1815, an increas e of abou t 20%. 1 8 If we assum e tha t out pu t for th e entir e region rose by 20% in 1812-1815 , tota l outpu t would have been abou t 140,000 ton s in 1815. T h e estimate s given for Sout h Wales ar e summarize d below: South Wales Pig Iron Output (Tons) 78,00 0 100,00 0 115,00 0 140,00 0

In 39 51

48 —

Furnaces Out Total 11 12 10

50 63 58

—

—

T h e secon d majo r ironmakin g distric t for which we have informatio n is Staffordshire . I n 1805, thi s region produce d 49,500 ton s of pig iro n from thirty-on e furnace s or abou t 1,600 ton s pe r furnac e in blast. T h e 1810 list in th e Weale MSS shows fifty-on e furnace s in operatio n in Staffordshire . Outpu t ha d probabl y reache d abou t 100,000 ton s by tha t time , for a list of furnace s in blast in 1812 foun d in th e "Ibid. Manufacture d iro n was multiplie d by 1.50 to get its equivalen t weight in pig iron . 18 T h e estimat e for 1812 is take n from th e list foun d in th e Dowlai s MSS . Th e estimat e for 1815 come s from T . E. Clark , Guide to Merthyr (Merthy r Tydvil, 1848), pp . 27-28 .

23Ο

APPENDI X C Dowlai s MS S shows fifty furnace s producin g abou t 110,000 tons. 1 9 I n Septembe r 1815, Thoma s Butler , a Yorkshire ironmaster , toure d Staffordshir e an d reporte d fifty-five furnace s in blast. 2 0 If we assum e tha t outpu t pe r furnac e was th e sam e in 1815 as it ha d bee n in 1812, i.e., 2,200 tons , the n a tota l outpu t of abou t 125,000 ton s for 1815 seem s likely. T h e estimate s given for Staffordshir e ar e sum marize d below: Staffordshire Pig Iron Output (Tons) 49,50 0 100,00 0 110,00 0 125,00 0

In 31 51

δ» 55

Furnaces Total Out 11

42

3

54 66 7i

16 16

Shropshire , th e hom e of coke-smelting , decline d in importanc e as an ironmakin g distric t after 1810. I t ha d twenty-eigh t furnace s producin g 55,00 0 ton s in 1805 an d thirty-si x furnace s in blast in 1810, when outpu t was prob ably abou t 2,000 ton s pe r furnac e o r roughl y 70,000 tons . I n his tou r of Shropshir e in Septembe r 1815, Butle r reporte d onl y twenty-fiv e furnace s in operatio n there. 2 1 With eleven fewer furnace s in operatio n tha n in 1810, it seem s likely tha t outpu t ha d fallen significantly, perhap s t o 50,000 tons . We would no t expec t outpu t pe r furnac e to increas e very muc h in Shropshir e after 1810 becaus e ther e was n o constructio n of ne w furnaces , a majo r sourc e of increase d average outputs . We have n o indicatio n of th e numbe r of furnace s in operatio n or thei r tota l outpu t in 1812. It seem s likely tha t man y of th e furnace s shu t down betwee n 1810 an d 1815 mus t have bee n shu t down in 1812, a year of depresse d prices . If thi s ha d bee n th e case, 19 Dowlai s MSS , Glamorga n Recor d Office, 1817 Lette r Books, Gilber t Gilpi n to J . J . Guest , 18 Decembe r 1817. 2(1 Rodne y F. Butler , The History of Ktrkstall ForgeThrough Seven Centuries, 1200-1954 A.D. (York, 1954), pp . 250-251 . 21 Ibid.

231

APPENDICES then output in Shropshire could have fallen to 60,000 tons in 1812. T h e estimates for Shropshire can now be summarized:

1805 1810 1812 1815

Shropshire Pig Iron Output (Tons) 55,000 70,000 60,000 50,000

Furnaces In Out Total 28 14 42 36 10 46 — — — 25 12 37

Finally, we must estimate output changes in the remaining regions, principally Scotland, Yorkshire, and Derbyshire. In 1805, these regions had seventy-five furnaces in blast producing 75,500 tons, over 25% of national output. T h e furnaces in these regions were noticeably smaller than those in the other regions, producing an average of about 1,000 tons in 1805, compared to a national average of about 1,500 tons. In 1810, there were a total of eighty-eight furnaces in blast in these regions. Since there were in fact only four new furnaces constructed in 18051810, we would not expect average output to have been increasing much. If we assume an average output of slightly more than 1,000 tons in 1810, total output must have been roughly 90,000 tons. There is sufficient indrrect evidence to allow us to speculate on output movements after 1810. We have tonnage data for iron shipped on the Chesterfield Canal (serving Derbyshire) and the Dearne and Dove Canal (serving Yorkshire). 22 There are also a few scattered estimates of Scottish pig iron output during these years. 23 From these data, I have concluded that output may have fallen to 70,000 tons in 1812 and then recovered to 80,000 tons in 22

Chesterfield Canal Accounts, Chesterfield Burough Library, and Spencer-Stanhope MSS, Sheffield City Library, MSS 60577. 23 John Butt, "The Scottish Iron and Steel Industry Before the Hot Blast," Journal oj the West of Scotland Iron and Steel Institute, LXXIII (19651966), p. 202.

232

APPENDI X C

1815. Combinin g thes e crud e regiona l estimate s suggests tha t nationa l outpu t was roughl y 350,00 0 ton s in 18ιο ί 812 an d the n peake d at nearl y 400,00 0 ton s in 1815. T h e estimate s I have accepte d as reliable show a five-fold increas e in aggregate outpu t betwee n 1788 an d 1815. T h e pat h of outpu t growth was probabl y quit e smoot h durin g thi s period . T h e industr y was operatin g at close to full capacity , while th e numbe r of furnaces , as well as thei r average outputs , increase d gradually . I n th e figure below I have interpolate d betwee n th e reliable estimate s in orde r to derive a curve showin g th e probabl e pat h of growth durin g thes e years. 1815-183 0 Fro m th e en d of th e Napoleoni c Wars unti l 1823 ther e ar e few reliable estimate s of pig iro n output . A survey was take n in 1823 D y an ironmaster , F. Finch , at th e reques t of th e government. 2 4 Scriveno r reprinte d thi s survey in full an d a MS S cop y of it can also be foun d in th e Boulto n an d Watt collection . T h e survey shows 259 furnace s with a combine d outpu t of 442,00 0 tons . Scriveno r rightl y pointe d ou t tha t Finc h forgot th e furnace s in Nort h Wales, so h e adde d 10,000 ton s to th e tota l outpu t to adjust for thi s error. 2 5 We kno w tha t Nort h Wales ha d nin e furnace s in Novembe r 1817 with a tota l outpu t of abou t 10,000 tons. 2 6 I n 1825, t n e region ha d fourtee n furnace s an d pro duce d som e 13,000 tons. 2 7 Scrivenor' s adjustmen t of th e 1823 estimat e seem s reasonabl e an d will be accepted . Fro m an outpu t of 452,00 0 ton s for 1823, we mus t no w work backward s to trac e outpu t change s since 1815. Ther e ar e onl y four aggregate outpu t estimate s for th e immediat e postwa r years an d onl y on e of the m can be con Scrivenor , History of the Iron Trade, p. 131. Ibid., p. 136. 26 Dowlai s MSS , Glamorga n Recor d Office, 1817 Lette r Books, Gilber t Gilpi n to J . J . Guest , 30 Novembe r 1817. 27 Boulto n an d Watt MSS , Birmingha m Referenc e Library , Mmrhea d 11, "Abstract of Blast Furnace s With Amoun t of Produc e in Grea t Britai n an d Ireland , Decembe r 1825." 24

25

23 3

APPENDICES FIGUR E C l :

1750

1760

PIG IRO N OUTPUT , 1750-1815

1770

1780

1790

1800

1810

sidered acceptable. Taylor estimated output at 3 0 0 , 0 0 0 tons in 1818 , but given no indication of the origin of this estimate. 2 8 Estimates o f 325,00 0 tons for 181 8 and 368,00 0 tons for 182 0 are given by the Iron and Stee l and Allied 28 Richard C. Taylor, Statistics of Coal Distribution ! All ι Parts of the World (Philadelphia: Moore, 1848), p. 330.

234

APPENDIX C Trades Federation, again with no information on the source of their data. 29 There is only one estimate for these years that approaches acceptability. David Mushet testified before a Parliamentary Committee in 1871 that output in 1820 had been roughly 400,000 tons. His estimate was based "On a survey I made of the ironworks about the year 1820." He broke down the estimate by regions, but gave no additional details. 30 It is not possible to determine if Mushet actually made an enumeration of the furnaces or simply made an informal survey. It is clear, however, that at least an attempt was made by someone very familiar with the industry to determine output. On that basis alone, the Mushet estimate is superior to the others and will be accepted. Mushet's estimate indicates that the iron industry had roughly the same output in 1820 as it had had in 1815. It is also quite clear that the industry experienced a severe depression in both prices and output during the intervening years. Pig iron prices fell from £6 a ton in 1814 to £5 a ton in 1815, then to a trough of £3.75 in 1816. Prices improved slightly in 1817 and then rose steeply in 1818-1819. 31 All the available evidence also indicates that there was a sharp fall in output from the peak level of 1815. Since the most reliable evidence on output movements for the entire period 1815-1823 relate to the county or region, the best way to arrive at national output estimates is by aggregating regional estimates. There is considerable information on output movements in South Wales. A list of blast furnaces drawn up in September 1817 shows forty-five furnaces in blast (nineteen out of blast) producing roughly 125,000 tons. 32 This figure should be contrasted with my estimate of 140,000 tons for 29 Statistical Report of the Iron and Steel and Allied Trades Federation (London, 1916), p. 49. 30 Report of the Royal Commission on the Coal Supply, P.P. 1871, xvm, p.

879· 31

Mitchell and Deane, Historical Statistics, p. 492. Dowlais MSS, Glamorgan Record Office, 1817 Letter Books, Gilbert Gilpin to William Wood, 23 September 1817. 32

235

APPENDICES 1815, Mushet's estimate of 150,000 tons for 1820, and the 1823 list, which gives an output of 182,300 tons. For the entire period 1815-1823, we can also calculate the pig iron equivalent of iron shipped on the Monmouthshire Canal. Beginning in 1817, we also have tonnage figures for the Glamorganshire Canal, which served the other half of the South Wales iron industry. There is no breakdown of the Glamorganshire Canal data by the type of iron shipped, but Scrivenor asserted that "these returns consisted almost entirely of manufactured iron." 33 It will be assumed here that the "mix" of pig and finished iron was the same as on the Monmouthshire Canal. A few general observations are in order. It is clear that total shipments on the two canals accounted for well over three-quarters of the total output of the region. It is highly unlikely that the general trends shown by the shipping data would be altered by output changes among the furnaces that did not use the canals. T h e relationship between shipments and output in a given year is not necessarily a direct one. Changes in inventories could mean that shipments might be increasing while output was falling and vice versa. There is some evidence that this is not a major problem. While ironmasters' inventories fluctuated a great deal, shipments nevertheless reflected output because the stocks of finished goods were not kept at the ironworks, but rather in the marketing centers like Liverpool and London. 34 Shipments are probably a good proxy for output, but a very poor indicator of sales. We will now consider the years for which there are no 33

Scrivenor, History of the Iron Trade, p. 124. Crawshay of Cyfarthfa ironworks, for example, attempted to even out his production by allowing stocks of iron to accumulate in his London warehouses. This practice is discussed in J. D. Evans, "The Uncrowned Iron King," Journal of the National Library of Wales, vn (Summer 1951), p. 25. The Ebbw Vale Company kept stocks of iron both at its works and at Newport. T h e stocks at Newport increased by only 300 tons from the prosperous year 1815 to the depressed year 1817. T h e data are from F. J. Ball, "The Growth of Industrialism in the Valley of Ebbw Vale," M.A. thesis, University of London (1958), p. 137. 34

236

APPENDI X C

outpu t estimate s for Sout h Wales. Give n th e shippin g data , it seem s likely tha t outpu t in 1816 was well below tha t of eithe r 1815 o r 1817. I f outpu t move d roughl y with shipment s on th e Monmouthshir e Canal , the n outpu t in 1816 would have been roughl y 110,000 tons . T h e shippin g dat a show a fairly large increas e in outpu t in 1817 an d the n a stable outpu t level throug h 1819. Perhap s outpu t remaine d at abou t 125,000 ton s in 1817-1819 . Shipment s were abou t 20,000 ton s highe r in 1820 tha n in 1819, con sistent with Mushet' s estimat e of 150,000 ton s for 1820. Ther e was a shar p rise in 1823. Between 1820 an d 1823, shipment s on th e two canal s rose by mor e tha n tota l outpu t (42,30 0 ton s as against 32,30 0 tons) , indicatin g eithe r tha t th e canal s were takin g a larger proportio n of tota l outpu t o r tha t th e pig iro n to manufacture d iro n conversio n ratio , assume d constan t at 1.50 was falling. Th e forge cost dat a given in Chapte r Eigh t indicat e tha t pig iro n consumptio n pe r to n of bar iro n ha d fallen to abou t 1.40 ton s by th e late 1820s. Thi s rati o probabl y fell graduall y betwee n 1815 an d 1830, so th e chang e in an y single year would no t have been large enoug h to chang e th e validity of th e outpu t estimate s based on change s in cana l shipments . I n an y case, outpu t did no t increas e as rapidl y as shipments . Outpu t probabl y increase d to abou t 170,000 ton s in 1821, the n fell slightly to 165,000 ton s in 1822 befor e increasin g sharpl y again in 1823. 3 5 Treatin g othe r district s in thi s manne r is mor e difficult an d th e result s ar e less reliable . Staffordshir e an d Shrop shire ar e lumpe d togethe r becaus e som e of th e estimate s d o no t distinguis h betwee n th e two region s an d becaus e doin g so make s it possible to utilize shippin g dat a from a majo r cana l tha t served bot h districts . Any estimate s for thes e region s ar e little mor e tha n educate d guesses becaus e th e available dat a ar e very limited . I n th e previou s section , 35 I have simply assume d tha t outpu t followed th e sam e patter n as shipments . Fo r a direc t compariso n betwee n th e shippin g dat a an d my outpu t estimates , see my Ph.D . thesis, pp . 290-292 .

237

ϊ

APPENDICES

it was estimated that the two regions together produced about 175,000 tons from eighty furnaces in 1815. Mushet gave them a combined output of 180,000 tons in 1820 and the 1823 list shows an output of 191,500 tons. Evidence on output movements between these years is shaky at best. We have data on the tonnage and type of iron shipped on the Grand Junction Canal to London beginning in 1814. 36 Since London sales represented a small and declining part of the total output of Staffordshire and Shropshire, the use of these shipping data as a proxy for output is necessarily limited. We also have numerous estimates in 1816 and 1817 of the number of furnaces in blast in the two regions. In J u n e 1816, when the iron industry was clearly depressed, Thomas Buder visited the two regions and reported only fifty furnaces of a total of 108 in operation. 37 This was not, however, the trough of the depression in this district. Buder reported fifteen furnaces in blast in Shropshire in June 1816, while the Annual Register reported only ten in blast in August. 38 Butler had also reported thirty-five Staffordshire furnaces working in June 1816, while a Home Office report showed only twenty-four in blast in October. 39 If the Shropshire total remained the same in October 1816 as it had been in August, then the two regions had only one-third (34 out of 102) of their furnaces in blast at that time. There is no evidence that conditions worsened after October 1816, and by October of the following year a mild recovery was already under way. Gilbert -Gilpin reported twenty furnaces in blast in Shropshire in October and thirty-four in blast in Staffordshire in November. 40 This would give us a total of at least fifty-four 36

Scrivenor, Comprehensive History, p. 413. Birch, "Midland Iron Industry," p. 232. 38 Ashton, Iron and Steel, p. 153. 39 D.M.B. Huffer, "The Social and Economic History of Wolverhampton, c. 1750- c. 1850," M.A. thesis, University of London (1957), p. 211. 37

40 Dowlais MSS, Glamorgan Record Office, 1817 Letter Books, Gilbert Gilpin to J. J. Guest, 12 October and 18 December 1817.

238

APPENDIX C

furnaces in operation in November 1817 in the two regions. Recovery was quite sharp in the last few months of 1817. Gilpin reported in December that about forty-five furnaces were at work in Staffordshire. 41 He had reported twelve additional furnaces "announced for blowing in" in Shropshire in October and it seems likely that these were all working by the end of the year. 42 In the middle of October, Gilpin had reported on the recovery of the iron trade: "Everywhere are the greatest exertions making to get Furnaces ready for blowing in. I cannot hear of a work in either county (Staffordshire and Shropshire) that has either Bars or Pigs in stock, and all are for continuing to advance the price." 43 It seems likely that by December at least seventy-five furnaces, or about three-quarters of the total, were back in operation. T h e numbers of furnaces in blast imply that output fell sharply in 1816. T h e shipping data show a 50% drop from 1815 and an even greater drop from 1814. Output may not have fallen as fast as iron shipments because inventories probably increased greatly in 1816. T h e Annual Register reported that two Shropshire ironworks had over 8,000 tons of iron ori hand in August 1816. 44 Perhaps an average of forty furnaces remained in blast in 1816, half the number in operation the previous year. It seems likely that the region's output fell to 100,000 tons in 1816 and may well have been lower. There is considerable evidence of a sharp recovery in the closing months of 1817. While fifty-four furnaces were in operation by November, there were probably well under fifty working in the earlier part of the year. Shipments on the Grand Junction Canal more than regained their 1815 level, but it is doubtful that output was anywhere near the 1815 peak. Most of these shipments were probably made in the last three or four months of the 41

Ibid., Gilpin to Guest, 18 December 1817. Ibid., Gilpin to Guest, 19 October 1817. 43 Ibid., Gilpin to Guest, 2 November 1817. 44 Ashton, Iran and Steel, p. 154. 42

239

APPENDICES year and largely consisted of previously accumulated inventories. The output of the two regions was perhaps 20% higher than it had been in 1816, or about 120,000 tons. T h e rapid recovery in output began in late 1817 and was probably quite strong in 1818. Perhaps output reached 160,000 tons in 1818 and remained at roughly that level in 1819 before rising again to Mushet's figure of 180,000 tons in 1820. Since 1823 output was only slightly higher (191,500 tons) and output in that year was probably considerably higher than in 1822, if South Wales was typical of the national trend, it is possible that output remained at about 180,000 tons in both 1821 and 1822. The remaining regions (Yorkshire, Derbyshire, Scotland, and North Wales) accounted for less than 20% of total output and were declining relative to the other regions after 1815. It was previously estimated that their total output was about 80,000 tons in 1815, and Mushet claimed they produced only 70,000 tons in 1820. In 1823, when the other regions had far surpassed their 1815 performance, these remaining districts produced only 78,300 tons. We have shipping data for the Chesterfield Canal, which served the Derbyshire iron industry, and the changes in shipments on this canal indicate that the industry there experienced much the same output movements as the rest of the country. 45 T h e slump of 1816-1817 w a s followed by a strong recovery in 1818 and then output continued to climb until 1823. All the previous regional output estimates and conjectures for the years 1815-1823 are brought together in Table C. 1 below. These aggregate estimates are crude but nevertheless of some value. T h e absolute output levels are of course hypothetical and could conceivably differ from the "true" output by as much as 50,000 tons. Nevertheless, these estimates give a reasonably accurate picture of output movements in the postwar years. Both 1816 and 1817 were years of severe depression, with no significant recovery 45

Chesterfield Canal Accounts, Chesterfield Burough Library. 240

APPENDIX C

TABLE C l REGIONAL AND NATIONAL PIG IRON OUTPUT ESTIMATES, 1815-1823 (ALL IN TONS)

1815 1816 1817 1818 1819 1820 1821 1822 1823

South Wales

Staffordshire and Shropshire

Other Regions

140,000 110,000 125,000 125,000 125,000 150,000 170,000 165,600 182,300

175,000 100,000 120,000 160,000 160,000 180,000 180,000 175,000 191,500

80,000 50,000 40,000 50,000 60,000 70,000 70,000 70,000 78,200

Total

Output 395,000 260,000 285,000

335.°°° 345,000 400,000 420,000 410,000 452,000

coming until 1818. It is likely that output did not regain the level of 1815 until 1820 and then was fairly stable until 1823, when it rose sharply. We have a picture of an industry going through a long and painful period of postwar adjustment. There are numerous reliable output estimates after 1823. We have acceptable estimates for 1825, 1826, 1827, 1828, and 1830. There are two different estimates for 1825, both of which seem to have been based on the same survey. Samuel Walker, a prominent South Yorkshire ironmaster, testified before a Parliamentary committee in 1833 that a reliable survey of the ironworks had been taken in January 1826 by a Mr. Marshall, who determined that output was 613,000 tons. Walker gave no evidence of the number of furnaces in operation. 46 Scrivenor cited a survey that showed 261 furnaces in blast (103 out of blast) in 1825 with a total output of 581,000 tons. 47 There are two MSS copies of the 1825 ^ s t that explain the two different estimates. One can be found in the Boulton and Watt MSS and is labelled "Abstract of Blast Fur46 Report of the Select Committee on Manufactures, Commerce, and Shipping, P.P. 1833, vi, Question 9576. 47 Scrivenor, History of the Iron Trade, p. 136.

241

APPENDICES

naces with Amount of Produce in Great Britain and Ireland, December 1825." T h e number of furnaces in operation and the total output given in this list are identical to Scrivenor's figures. This estimate was the result of a careful survey, for the author noted that "nearly the whole of the Works in South Wales, Shropshire, and Staffordshire, also in Yorkshire and Derbyshire, were visited to obtain this return." It is also clear that, while this list had been initially drawn up in December 1825, it had been revised considerably. It was noted in the margin that it included "Corrections where they could be obtained to March 20, 1826." In a column labelled "Remarks," the comment "Blown out last week" appeared several times. This list appears to refer to 1826 and not to 1825, a s Scrivenor had claimed. There is a second version of the same list in the Staffordshire Record Office.48 It is dated December 1825 and is apparendy a copy of the original unrevised list. It gives 261 furnaces in blast, compared to 241 in the later list. The estimate of 613,000 tons for 1825 w a s probably based on the list of December 1825. ^ s e e m s likely that output was 613,000 tons in 1825 and then fell to 581,000 tons or less in 1826. T h e canal shipment data given in Table C.2 below confirm this view. T h e exact origin of the apparently reliable estimate for 1827 is unclear. Neither Scrivenor nor Samuel Walker mention an estimate for that year. Meade said that an anonymous contributor to the Philosophical Magazine estimated that 284 furnaces produced 690,000 tons in 1827. 49 This estimate was probably based on a survey, for more details of the estimate appear in other sources, although nowhere is the original source of the estimate given. T h e number of furnaces and their output are both broken down by county in one source, 50 while in another, we are given the amount of pig iron devoted to the production of 48 49 50

Staffordshire Record Office, D 695/1/9/81 (1). Meade, Coal and Iron Industries, p. 610. William Needham, The Manufacture of Iron (London, 1831), p. 30.

242

APPENDIX C TABLE C.2 BRITISH IRON O U T P U T , FURNACES, AND CANAL SHIPMENTS, 1823-1830 (ALL IN TONS)

Total Canal Shipments 1823 1824 1825 1826 1827 1828 1829 1830

205,267 227,537 248,187 226,159 290,977 3°7·743 310,016 304,924

BLAST FURNACES

In

261 224

284 277

Total

Under Construction

273

—

374 359

22

135

9°

367

18

375

2

Out

113

!9

21 12

7

Total

Output 452,000 (525,000) 613,000 581,000 690,000 703,000 (700,000) 678,400

bar and cast iron. 51 It is likely that a detailed survey had been taken and other evidence confirms that this is a reasonable estimate, so it will be accepted. There is another good estimate for 1828, based on a survey taken by the same man who made the 1825 estimate. 52 T h e original list is lost, but according to Scrivenor there were 277 furnaces in blast, producing 703,000 tons in 1828. 53 There are no estimates of any kind for 1829, but another reliable one for 1830. In that year, a survey was made by Finch, the author of the 1823 survey. 54 A MSS copy of this survey can be found in the Boulton and Watt MSS. Scrivenor pointed out that the estimate of 653,400 tons from 360 furnaces is an underestimate because it excluded North Wales. He added 25,000 tons for North Wales, making a total of 678,400 tons. 55 Another fifteen furnaces should be added to the total to take account of North Wales.The revised estimate can then be accepted. A clear picture of output movements for the years 51

J. Holland, Manufactures in Metal: Iron and Steel (London, 1831), pp. 76-77. 52 P.P. 1833, vi, Question 9576. 53 Scrivenor, History of the Iron Trade, p. 136. 54 P.P. 1833,Vi 1 Question 9576. 55 Scrivenor, History of the Iron Trade, p. 136.

243

APPENDICES

1823-1830 can be obtained by combining the reliable estimates with shipping data. These estimates, and the number of furnaces in operation and under construction in those years, are given in Table C.2, along with the pig iron equivalent of all iron shipments on the Monmouthshire, Glamorganshire, and Grand Junction canals. This table probably grossly exaggerates the industry's idle capacity during these years. There was a marked tendency for the people taking surveys in this period to include many furnaces that had not been used for years. In the list of March 1826, for example, 135 furnaces or over onethird of the total were listed as shut down. A closer look at this list reveals that at least 53 of these did not produce in either 1823 o r !^30, indicating that they were abandoned furnaces. 56 About a dozen of these were old charcoal furnaces. Another fourteen furnaces that were under construction in 1826 were included in the total and listed as "out of blast." A more realistic statement of industry capacity in 1826 would show 224 furnaces in operation and about 70 not in blast. This tendency to include longabandoned furnaces is evident in many of the other surveys as well. There are only two years in the period 1823-1830 for which we do not have output estimates and need to speculate. T h e canal shipping data indicate that about half the increase in output between 1823 a n d 1825 w a s achieved by 1824, so it seems reasonable to guess that 1824 output was about 525,000 tons. There is also no output estimate for 1829. The shipping data given in Table C.2 indicate that output was roughly the same as in the previous year. An output of about 700,000 tons for 1829 seems plausible. The output estimates for the entire period 1790-1830 are plotted in Figure C.2. While the immediate postwar period represented a sharp break in the industry's growth curve, the overall performance for 1815-1830 was nevertheless impressive, although output did not expand quite as rapidly as it had during the war years. 56

Ibid., pp. 132-135.

244

APPENDIX C FIGURE C.2:

1790

1800

PIG IRON O U T P U T , 1790-1830

1810

1820

1830

1830-1840 There are few reliable output estimates for the 1830s. Estimates of the quality of the one for 1830 (678,400 tons) are not available until 1839 and 1840. David Mushet gives a detailed estimate for 1839, showing 380 furnaces in blast, 50 245

APPENDICES

out of blast, and 45 under construction, producing a total of 1,248,800 tons. While Mushet does not reveal the source of this estimate, it was clearly the result of a detailed enumeration of all the ironworks. 57 In 1840, we also have a detailed survey carried out by William Jessop of the Butterley ironworks. His survey shows 402 furnaces in blast (88 out of blast) producing 27,928 tons per week. He multiplied this weekly output estimate by fifty to derive an estimate of 1,396,400 tons for the year. 58 T h e estimates for 1839 and 1840 are based on detailed surveys, with output given by region and by individual ironworks. Both estimates appear to be accurate and comprehensive, so we will accept them as they stand. They show that total output roughly doubled during this decade. Output levels between 1830 and 1839 cannot be determined with any certainty. The early 1830s were depressed years for the iron industry, especially when compared to the mid-1820s. The only aggregate output estimates for the early 1830s were given by Samuel Walker before a Parliamentary Committee in 1833. 59 Walker revealed that at the ironmasters' meeting held in Gloucester in August 1831, national pig iron output was estimated at 590,000 tons. This estimate was the result of regional surveys compiled by various ironmasters, so it is probably a reasonable estimate of output. 6 0 The details of this survey have not survived. He also estimated that output in January 1832 had been about 500,000 tons. 61 This second estimate should be discounted because it was made early in the year and would not reflect improvements in the iron trade that may have taken place in late 1832. More importantly, it is inconsistent with regional output estimates that will now be considered in detail. 57

Mushet, Papers on Iron and Steel, pp. 412-414. G. R. Porter, "On the Progress, Present Amount, and Probable Condition of the Iron Manufacture in Great Britain," Report of the Sixteenth Meeting of the British Association (London, 1847), P- 1 0 3 59 P.P. 1833, Vi, Questions 9573-9621. 60 61 Ibid., Questions 9577 and 9586. Ibid., Question 9577. 58

246

APPENDIX C

I have attempted to construct regional output estimates and then aggregate them to produce national estimates. 62 T h e most reliable indirect evidence of pig iron output comes from South Wales. Since iron shipments on the Glamorganshire and Monmouthshire canals amounted to over 90% of the region's output, I have simply assumed that output fluctuated at the same rate as shipments. This method cannot be used for StaffordshireShropshire, since the major canal serving this area, the Grand Junction Canal, carried less than one-fifth of its output. There is some evidence that this region experienced a sharper decline in output in 1831 and 1832 than did South Wales. In his testimony before the 1833 Parliamentary Committee, Samuel Walker referred to a survey of Staffordshire iron industry made in October 1831. This survey indicated that the region had a monthly output of 15,400 tons or an annual output of 184,800 tons, a decline of 13% from 1830. 63 He also testified that output in midsummer 1832 was roughly the same, or 186,000 tons. 64 Perhaps the total output of Staffordshire and Shropshire fell to roughly 240,000 tons in 1831 and was roughly the same in 1832 as well, I have assumed that output jumped to about 325,000 tons in 1833. Because the fall in output in 1831-1832 was much sharper than in South Wales, it seems plausible to argue that the recovery in 1833 was also sharper. T h e two regions had about the same output in 1830 and again in 1839-1840. The wide disparity in their outputs in 1832 was eliminated by the rapid recovery that I have assumed for 1833. My estimates for StaffordshireShropshire for 1833-1838 are based on the assumption that this region experienced the same general output movements as South Wales. The growth of Scottish pig iron output is relatively easy to trace. There are reliable regional estimates for 1830, 62 T h e details of these estimates, including the annual shipping data for the major canals, are given in my Ph.D. thesis, pp. 307-313. 63 64 P.P. 1833, vi, Questions 9617-9621. Ibid.

247

APPENDICES

1835, 1836, 1838, 1839, and 1840. 65 We also know the number of furnaces in operation in the Coatbridge region of Scotland, the center of much of the growth of the industry in the 1830s. 66 I have assumed that output stagnated at about 40,ooo-tons in 1830-1833. We know that it climbed to 75,000 tons in 1835 and I used straight-line interpolation to derive an estimate for 1834. I did the same for 1837, the only other year lacking a reliable estimate. By combining these regional estimates I have produced the aggregate estimates given in Table C.3 belaw. We should recall that only the figures for 1830, 1839, and 1840 are based on national surveys. T h e remaining estimates are my own. TABLE C.3 AGGREGATE OUTPUT ESTIMATES,

1830-1840 (000 TONS)

1830 1831 1832 1833 1834 1835

1836 1837 1838 !839 1840

678 605 630 775 790 930

965 1030 1125 1249 1396

These figures suggest that aggregate output fell by about 15% between 1829 a n t ^ 1831-1832. The industry then recovered rapidly in 1833, with production reaching record levels. From 1834 until 1840 output expansion was steady and uninterrupted, proceeding as rapidly as in previous periods of high growth. 1840-1860 Tracing output movements after 1840 is relatively easy because there are numerous reliable output estimates for 65 R. H. Campbell, "The Growth and Fluctuation of the Scottish Pig Iron Trade, 1828-73," Ph.D. thesis, University of Aberdeen (1956), p. 31. 66 Andrew Miller, The Rise and Progress of Coatbridge and Surrounding Neighborhood (Glasgow, 1864), p. 20.

248

APPENDIX C those years. T h e iron industry experienced a serious depression in the early 1840s and output did not regain the level of 1840 (1,386,000 tons) until 1844 and then climbed sharply in the late 1840s. A detailed survey of the ironworks was made in 1841, and it was estimated that the industry produced an average of 25,530 tons of pig iron per week. This survey showed 350 furnaces in blast and 177 out of blast and gives the distribution of furnaces and output by county. 67 T h e precise origin of this survey is not clear, but it should nevertheless be accepted as a reasonable estimate. Multiplying this weekly output estimate by 52 weeks yields an output of 1,327,600 tons for the year, a slight drop from 1840. The next reliable estimate is given by Porter and refers to 1842. This estimate was also based on a survey that showed 339 furnaces in blast (190 out of blast) producing 1,215,000 tons. 68 This estimate also seems to be reliable, since the furnace and output data are broken down by county. There are detailed surveys for 1847 and 1848, both indicating that the industry had expanded considerably since 1843. The ironmasters reported their output in 1847 to a Parliamentary Committee and their returns, given in Scrivenor, show 433 furnaces in operation (190 out of blast) with an output of 1,999,608 tons. 69 A list of individual furnaces and their outputs (sometimes estimated) in 1847 can be found in an appendix to an 1871 report on coal. 70 Finally, another survey conducted in 1848 showed 452 furnaces (174 out of blast) producing 2,093,736 tons. 71 Our first task is to trace the length and depth of the output depression of the early 1840s. Regional output movements and general price fluctuations indicate that the trough of the depression was probably reached in 1842, 67

Samuel Salt, Statistics and Calculations (Manchester, 1845), p. 46. Porter, "On the Progress," p. 118. 69 Scrivenor, History of the Iron Trade, p. 295. 70 Report of the Royal Commission on the Coal Supply, P.P. 1871, xvm, Appendix, pp. 26-27. 71 Porter, "On the Progress," p. 269. 68

249

APPENDICES

with a slight recovery in 1843. Output in 1842 probably fell to about 1,100,000 tons. Regional output estimates can be combined to give a rough notion of aggregate output movements. Partly offsetting the national trend, the Scottish iron industry continued to expand during the early 1840s, but there was clearly a decline in the rate of growth of output from the late 1830s. 72 The other regions, however, were clearly depressed during these years. Iron shipments (in pig iron equivalents) on the Monmouthshire Canal, the Glamorganshire Canal, and the Taff Vale Railway suggest that South Wales output fell by about ten per cent between 1841 and 1842-1843. 73 Evidence on output movements in South Staffordshire is conflicting. One set of output estimates can be found in an appendix to the Report of the Midland Mining Commission (1843). 74 There are lists of furnaces and their outputs for the first half of 1841, the first half of 1842, and January 1843. These three estimates are compared to the estimates taken from the national surveys for those same years in Table C.4. TABLE C.4 SOUTH STAFFORDSHIRE OUTPUT ESTIMATES,

1840-1843 (TONS)

Midland Mining Commission 1840 1841 1842 1843

—

452,000 302,000 346,840

72

National Surveys 407,150 347,100

—

300,250

Campbell, "Growth and Fluctuation," p. 31. Mary A. Swallow, "History of the Development of the Means of Transport in the County of Monmouth, 1760-1914," Ph.D. thesis, University of London (1932), Appendix D, 111, and Bute MSS, Cardiff Central Library, v, 4 1 . 74 P.P. 1843, XI1173

250

APPENDI X C

T h e estimate s from th e Midlan d Minin g Commissio n Repor t ar e consistentl y highe r tha n thos e from th e na tiona l surveys. T h e 1841 estimat e is almos t certainl y to o high . I n fact, th e autho r of thi s survey note d tha t th e 1841 estimat e was onl y "an approximatio n to quantity." 7 5 Even if th e estimat e for th e first hal f of 1841 is reliable , it is likely tha t outpu t fell considerabl y in th e secon d hal f of th e year. We kno w tha t bar iro n price s were abou t £7.5 0 a to n in th e first hal f of 1841, bu t the n fell off to an average of abou t £6.2 5 pe r to n in th e secon d hal f of th e year. 7 6 T h e estimat e of 347,00 0 ton s seem s mor e reasonable . Price s continue d to plummet , reachin g £5.0 0 pe r to n in th e summe r of 1842 an d recovere d slightly by th e en d of th e year. 7 7 Sout h Staffordshir e outpu t in 1842 was considerabl y lower tha n in 1841, an d it is possible tha t it fell to as little as 250,00 0 tons . O n th e basis of thes e crud e regiona l estimate s I have conclude d tha t pig iro n outpu t ma y have reache d a low of abou t 1.1 millio n ton s in 1842, a declin e of 20% from 1840. T h e industr y the n expande d rapidl y betwee n 1843 an d 1847, when outpu t reache d abou t 2 millio n tons . T h e r e ar e n o reliable outpu t estimate s for th e crucia l years 18441846, bu t indirec t evidenc e point s to a shar p rise in outpu t to a pea k in eithe r 1845 o r !846, the n a declin e in 1847. 7 8 Mos t of th e expansio n was linke d to a boo m in th e domesti c economy , particularl y in railway construction . Richar d Taylo r estimate d tha t outpu t was 1.6 millio n ton s in 1844 an d roughl y 2.2 millio n ton s in 1845 an d 1846. 7 9 Taylo r doe s no t identif y th e sourc e of his estimates , bu t I will nevertheles s accep t the m as roug h indicator s of outpu t becaus e the y ar e consisten t with othe r evidenc e for thes e years. 8 0 η6 Ibid., Appendix , p. 129. Ibid., Appendix , p. 133. Ibid. 78 T h e indirec t evidence , summarize d in my Ph.D . thesis, pp . 318-320 , include s th e shippin g dat a for th e canal s an d railways of Sout h Wales, a reliable outpu t series for Scotland , dat a on furnac e construction , an d statistic s of railway construction . 79 80 Taylor , Statistics, p . 330. See my Ph.D . thesis, pp . 318-320 . 75 77

251

APPENDICES

After 1848 there are reliable estimates every other year until 1854, when the ironmasters began to report output annually. An estimate of 2,249,000 tons for 1850 is given in the Statistical Yearbook of the iron industry. 81 This estimate seems to have been based on a survey and will be accepted. For 1852, there is an estimate of 2,701,000 tons from 497 furnaces in operation (158 out of blast), based on detailed survey. 82 This too appears to be a reasonable estimate. T h e semi-official returns then begin in 1854. Estimates for the missing years are derived by using straightline interpolation between the reliable estimates. T h e use of interpolations here can be justified on several grounds. First, there is no evidence that aggregate output fell in any year between 1848 and 1854. Growth was probably fairly steady, as it was in the late 1850s, when more reliable data exist. With the growth of output beginning to slow down and no evidence of either a depression or a boom during these years, it seems unlikely that the estimates gained by interpolation would be far off the mark. By the early 1850s, pig iron output was so large that an error of 100,000 tons would be less than five percent of total output. The output estimates for the entire period 1800-1860 are plotted in Figure C.3 Aside from the depression years 1830-1832, 1841-1843, and 1847-1848, the growth in output after 1830 was impressive when compared to the period 1800-1830, especially when the absolute size of the iron industry in 1830 is considered. 81 Statistical Report of the Iron and Steel and Allied Trades Federation (London, 1916), p. 49. 82 Reproduced in Scrivenor, History of the Iron Trade, p. 302.

252

A P P E N D I X

FIGURE C . 3 :

C

PIG IRON O U T P U T ,

253

1800-1860

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Morton, G. F. and M. LeGuillou. "The Rise and Fall of the South Staffordshire Pig Iron Industry."British Foundryman, LX (July 1967), 269-86. Mott, Reginald Arthur. "Dud Dudley and the Early Cast Iron Industry." TNS, xv (1934-35), 17-37· Pelham, Reginald Arthur. "The West Midland Iron Industry and the American Market in the Eighteenth Century." University of Birmingham Historical Journal, 11 (1950), 141-62. Smith, W. A. "The Bradley Ironworks of John Wilkinson." BHMG, No. 6 (1966), 61-65. . "Hallfields Furnace, Bradley Ironworks." BHMG, No. 7 (36-39). .John Wilkinsons Bradley Ironworks. M.A. thesis. University of London, 1968. Timmins, Samuel, editor. The Resources, Products, and Industrial History of Birmingham and the Midland Hardware District. London,1866. 6 . SOUTH YORKSHIRE AND DERBYSHIRE

Butler, Rodney F. The History of Kirkstall Forge Through Seven Centuries, 1200-1954 A.D. York, 1954. Clayton, A. K. The Story of the Elsecar and the Milton Iron Works From Their Opening Until the Year 1848. Typescript, 1955, Sheffield Central Library. Hopkinson, Geoffrey Gill. "The Charcoal Iron Industry in the Sheffield Region, 1500-1775." Transactions of the Hunter Archeological Society, vin, Part 3 (1961), 122-51. . The Development of Lead Mining, and of the Coal and Iron Industries in North Derbyshire and South Yorhhire. Ph.D. thesis. University of Sheffield, 1958. . "A Sheffield Business Partnership, 1750-1765." Transactions of the Hunter Archeological Society, vn (1954), 103-17. . "Stavely Forge, 1762-82." Transactions of the Hunter Archeological Society, vn, Part 2 (1952), 94-95. Raistrick, Arthur. "The South Yorkshire Iron Industry, 1698-1756." TNS, xix (1938), 51-86. 270

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and E. Allen. "The South Yorkshire Ironmasters, 1690-1750."EHR, ix (1939), 168-85. Warren, Kenneth. "The Derbyshire Iron Industry Since 1780." East Midland Geographer, xvi (Dec. 1961), 17-33. 7 . LANCASHIRE AND CUMBERLAND

Awty, Brian G. "Backbarrow and Pennybridge Furnace Accounts, 1763-80." Transactions of the Lancashire and Cheshire Historic Society, cxvi (1965), 19-38. . "Charcoal Ironmasters of Cheshire and Lancashire, 1600-1785." Transactions of the Lancashire and Chesire Historic Society, cix (1957), 71-124. Fell, Alfred. The Early Iron Industry of Furness and District. Ulverston, 1908. Morton, G. R. "The Furnace at Duddon Bridge." fISI, cc (June 1962),444-52. . "The Products of Nibthwaite Iron-Works," The Metallurgist, 11, No. 11 (Sept. 1963), 259-68. Wood, Oliver. The Development of the Coal, Iron, and Shipbuilding Industries of West Cumberland, 1750-1914. Ph.D. thesis. University of London, 1952. 8 . NORTHEAST ENGLAND

Armstrong, W. G., and others, editors. The Industrial Resources of the Tyne, Wear and Tees. 2nd ed. London, 1964. Hoskinson, T. M. "Northumberland Blast Furnace Plants in the Nineteenth Century." TNS, xxv (1945-47), 73-81. Jeans, James S. Notes on Northern Industries. London, 1879. . Pioneers of the Cleveland Iron Trade. Middlebrough, 1875. 9. SCOTLAND

Butt, John. "The Scottish Iron and Steel Industry Before the Hot Blast. "Journal of the West of Scotland Iron and Steel Institute, LXXIII (1965-66), 193-220. Cadell, Henry M. The Story of the Forth. Glasgow, 1913. Campbell, Roy Hutcheson. The Carron Company. London, 1961. 271

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Campbell , Ro y Hutcheson . "Development s in th e Scottis h Pig Iro n Trade , 1844-8."JEH , xv (Sept . 1955), 209-226 . . "Earl y Malleabl e Iro n Productio n in Scotland. " Business History, iv (1961) , 23-33 . . "Statistic s of th e Scottis h Pi g Iro n Trade , 1830 to 1865." Journal of the West of Scotland Iron and Steel Institute (!956-57) - 282-89 . Donnachie , Ian , an d J o h n Butt . " T h r e e Eighteent h Cen tur y Scottis h Iro n Works." Journal of Industrial Archeology, i, No . 4(1965) . . " T h e Wilsons of Wilsontown Ironwork s (17791813): A Stud y in Entrepreneuria l Failure. " Explorations in Entrepreneurial History, Secon d Series, iv (Winte r 1967), 150-68 . Gibson , Ia n Forester . The Economic History of the Scottish Iron and Steel Industry, 1830-1880. Ph.D . thesis. Universit y of London , 1955. Gibson , Ia n Forester . " T h e Establishmen t of th e Scottis h Stee l Industry. " Scottish Journal of Political Economy, ν (1958),22-39 . Hume , Joh n R., an d Joh n Butt , "Muirkirk , 1786-1802 : T h e Creatio n of a Scottis h Industria l Community. " Scottish Historical Review, XLV (1966) , 160-83 . Mackenzie , Thoma s B. Life ofJ. B. Niehon. Glasgow , 1929. Memoirs and Portraits of One Hundred GlasgowMen. 2 vols. Glasgow, 1886. Miller , Andrew . The Rise and Progressof Coatbridge and Surrounding Neighborhood. Glasgow, 1864.

27 2

INDEX

American colonies, 50 Annual Register, 238f anthracite coal, 159 Ashton, T h o m a s Southcliffe, 3, 24S, 29, 55, 69, 76, 82, 217 Asia, 130 Backbarrow Company, 31, 36f, 46 Bacon, Anthony, 54 bar iron (charcoal), chemical composition, 7. See also bar iron, quality; duties on imports, 18, 47n, l o s f , 143^ imports, i8ff, 42-48, 80, 8on, 105^ 114, 140; markets, i8ff, 5of; output, i8n, 2off, 43, 85^ 215-18; prices, 44ff, 103-106; products, 7; quality, 51, 83; Russian, io4ff, 143^ Swedish, igf, 44, 80f, 104S, 144. See also finery-chafery process; forge bar iron (potting), output, 85f, g2f bar iron (puddled), exports, 130, i 7 2 f ; government purchases of, 115; interregional trade, 129, 203; markets, 130, i 7 2 f ; output, io6ff, 1 1 3 ^ i 4 o f , 166-69; prices, 103-106, i26f, i 7 o f , 251; products, 129; quality, 97-101; railway demand, i 7 2 f ; regional distribution of output, 123, 168-71, 184-87. See also Henry Cort; forge; puddling process Bessemer steel, 185, i8g Birch, Alan, 68, 143, 149, 155^ 229 Birmingham, 149; hardware industry, 14, i g , 5of blackband ore, see iron ore Black Country, see Staffordshire

blast furnace (charcoal), bellows, 8, l o f , 30; campaign, see shutdowns; capital invested in, 31, 36f; closings, 24n, 4 5 f , 49, 53, 53n, 64ff, 2 i 8 f ; construction, 21, 29, 45f, 49, 2 i 8 f ; costs of production, 30-38, 56-62, 69, 204^ fluxes, 8; furnace temperatures, 8; linings, 8, 10, 30; location, 10-13, 12 i f f ; number in operation, 21; operation, 8ff; output, 9, 15, 22, 117, 219; productivity, 59, 204f; profits, 64ff; regional variations in output, i 4 f ; repairs, 3of; shut-downs, gf, 30, 7 1 ; size, g; slag, 8 blast furnace (coke), blast pressure, 73f, n g , 160, 175; blast temperatures, i46f, 161, 175; blowing machinery, 73, 119; boshes, 160; campaigns, see shut-downs; capita] invested in, 61-64, m f , 118; closings, 68n, 136 ff; construction, 53f, 53n, 66, i36ff; costs of production, 30-36, 4 1 , 56-62, 69, 11 i f , i 3 8 f , 148-53, i62f, 204-07; economies of scale, 74; furnace temperatures, 28, 40, 147, 157; hearth design, i59f; hot blast equipment, 151, 154, 161; labor force, 63; location, 63, i 2 i f f , 182; materials' handling, 1 i g f ; mechanical feeding, n g ; mechanization, n g - 2 1 ; multifurnace sites, 73, 1 2 i f , 175; output, 73, 109-13, 118, 140, i6off, 174f; productivity, 6 i f , l o g , 138, 140, i62f, 204-07; profits, 4of, 63, 66, 68, 11 i f , 138, 152; re-

273

INDEX blast furnace (coke) (cont.) gional variations in costs, 14853; shut-downs, 7 i f , 110-13; size, 73f, 110-13, l 6 z , >74f; tuyeres, 154, 160, 175; waste gases, 161, 176, 200f; waste heat, i6of, I76f, 2 oof. See also cokesmelting; hot blast blast furnace (individual), Aberdare, 157; Aston, 57, 59; Backbarrow, 28, 30, 33-37, 57ff, 64f, 2i4n, 220. See also Backbarrow Company; Balgonie, 112; Bank, 30, 34f; Barnby, 34f; Bedlington, 68n; Bersham, 54, 2i4n, 220; Bishopswood, 34; Blair, i 5 i f f ; Blakeney, 214; Boyd's River, 60; Bradley, 54, 7on, 90; Bretton, 2i5n; Bringwood, 28, 34; Bunawe, 57; Bute, 139, 150; Calder, 139, i5of; Cannock, 2i5n; Carron, 54, 68n, 7on, 1 ion. See also Carron Company; Chappell, 34f, 44, 57; Charlcott, 34f, 57ff; Clifton, 68n; Clydach, 1 1 1 ; Clyde, 7on, 139, 150^ Coalbrookdale, 24f, 33-37, 41, 6off, 70, 7on, 73, 22o. See also Coalbrookdale Company; Abraham Darby; Conway, 2i5n; Corbyn's Hall, 151; Cunsey, 214; Cyfarthfa, 54, go. See also Richard Crawshay; Cyfarthfa ironworks; Dawley Casde, 139; Dolgyn, 2i5n; Dowlais, 54, 6of, 63^ 7on, 155. See also Dowlais Iron Company ; Dudley Wood, 139; Elmbridge, 34, 214; Elsecar, 139; Eridge, 2 i 5 n ; Etchingham, 2i5n; Fernhurst, 2i5n; Gravetye, 2 i 5 n ; Gun's Mill, 34; Halesowen, 34f, 57, 59, 2i4n; Hampton Load, 2i5n; Heathfield, 34, 220; Hirwain, 54, 157; Holme Chapel, 2i5n; Horsehay, 28, 54f, 6off, 66, 7on, 71, 73,

112, 139; Invergarry, 3 3 f , 37; Ketley, 54, 7on, 73, 90; Leighton, 3 3 f , 37, 2i4n; Lemington, 112, 139; Madeley Wood, 54, 7on, 73; Mary port, 68n; Masbrough, 71; Mayfield, 2i5n; Mearheath, 214; Monkland, 150; Netherton, 139; Newent, 2i5n; Pennybridge, 57; Pennydarren, 64; Plymouth, 54, 6off, n o f f ; Redbrook, 34; Rockley, 32; Rotherham, 220; Rushall, 2i5n; St. Weonards, 32, 34; Seacroft, 2150; Snedshill, 90; Staveley, 57, 5gf, 72; Titchfield, 2i5n; Vale Royal, 214; Warren, 2i5n; Whaley, 57; Willey, 24, 220; Wombridge, 2i5n; Yniscedwyn, 159; Ystalyfera, 160 blister steel, 185 Bolckow and Vaughan, 162, 179 Boulton and Watt MSS, 218, 22428, 233, 241, 243 Bradford City Library, 221 Bristol, 24, 4 m , 51, 126, 129 British Iron Company, 179 Budd, J. P., i6of Butler, Thomas, 231, 238 Butt, John, 148 Campbell, R. H., i 4 7 f f Canada, 144 canals, in Derbyshire, 232, 240. See also Chesterfield Canal; in South Wales, 129, i2gn, i4of, 203, 22gf, 236f, 244, 247, 250. See also Glamorganshire Canal; Monmouthshire Canal; in West Midlands, 129. See also Grand Junction Canal; in Yorkshire, 232. See also Dearne and Dove Canal; iron shipments, 129, i4of, 22932, 236-40, 243^ 247, 25o. See also individual canals capital investments, see blast fur-

274

INDEX nace; combinations of ironworks; forge; ironworks; names of individual enterprises Cardiff, 203 Carron Company, 54, 64, 125 castings, Darby's "thin-walled" type, 4of cast iron (charcoal), markets, 127; output, 18, 127, 141, 2 i g f ; products, 7; share of pig iron output, 18, 127, 141, 2igf.See also pig iron cast iron (coke), government purchases of, i2g, 141; in bridges, 128; output, i28f; products, i27ff; share of pig iron output, 128. See also pig iron chafery fire, 10, 77, 80, 82. See also forge

demand, 66ff; and pig iron prices, 66; and the steam engine, 69-75. capital required, 61-64; costs of production, 33-37, 56-62, 204-07; diffusion, 24-41, 53-75. i93f> i 9 6 ; discovery, 24; early attempts, 23, 23n; economies of scale, 74; patents, 55n; productivity, 6 i f , 204-207; profits, 4of, 63^ ig8f; quality of pig iron, 25-2g, 38f, 55. See also pig iron, chemical composition; rationality of ironmasters, 33,

charcoal, preparation for blast furnace, 8; prices, 44f, 57ff, 7gf; supply of, 20, 42, 47 charcoal technology, limitations of, gff, 15, 4g, 79 Cheshire, 12-17, 82, 123, 214, 215n Chesterfield Canal, 232, 240 Cleveland, 161, i74f, 183 f. See also Northeast Coast coal, chemical composition, see coal, quality; in Durham, 182; in Staffordshire, 72; prices, log, 170; quality in Great Britain, 26, i57ff; quality in Shropshire, 25f; sizes, 70; threatened tax on, 226; used in chafery fire, 80S; used in furnace in raw form, 151, i 5 g Coalbrookdale Company, 33, 35f, 54, 60, 64, 85, 120, 125 Coatbridge district, number of furnaces, 248 Cockshutt, James, g 7 - i o i Cockshutt, John, 84, ig4. See also patents coke-smelting, and barriers to entry, 63^ and castings, 4of; and

35. 37-4'. !97; r l s k s . 66 > supportative innovations, 69-75, 194. See also blast furnace; Abraham Darby; pig iron combinations of ironworks, 1 5 s Cooke, Thomas, 101 coppices, 8 Cort, Henry, 76f, 82, 88-91, gsf, ig4f. See also patents Cort, Richard, 228f, 22gn costs of production, see blast furnace; forge; ironworks; raw materials; rolling mill; technological innovations cotton textile industry, gross output, 145, igo; value added, igo; value of exports, igo counties, see regions; individual county names Cow per stove, 161, i8g, ig5, 2oof Cranage, George and Thomas, 84f, 8g. See also patents Crawshay, Richard, goff, g 6 - i o i , 106, 116, 236n. See also forge, Cyfarthfa Crawshay, William, gg Crouzet, Frangois, 22g Crowley enterprises, 20 Cumberland, 12-17, 181, 183^ See also Northwest Coast Darby, Abiah, 55f Darby, Abraham, 23ff, 4of, 193

275

INDE X Darby , Abraha m I I , ^f Darb y family, 25, 35AF1 4of, 53, 56, 127, 22O Deane , Phyllis, 69, igoff Dearn e an d Dov e Canal , 232 Derbyshire , acceptanc e of ho t blast, 155^ bar iro n output , 12-17, 107; cana l shipment s of iron , 232; closin g of blast furnaces , 136; combination s of ironworks , 65; constructio n of blast furnaces , 136; pig iro n out put , 12-17, 113, 123, 181, 184, 240; shar e of nationa l output , 12-17, 113, 123, 181, 184; specializatio n in finishe d iron , 185; use of coa l in chafery , 82 Dowlai s Iro n Company , 178 Dowlai s MSS , 231 Dudley , Dud , 24η ; Metallum Martis, 21

Dufrenoy , Pierr e Amand , 151η, 154 Durham , see Northeas t Coas t duties , see bar iron ; cast iron ; pig iro n Eato n or e deposits , 182 Ebbw Vale Company , 179, 236η economie s of scale, see blast furnace ; forge; ironworks ; rollin g mill; technologica l innovation s entrepreneurs , 68, 188Ϊ. See also combinatio n of ironworks ; ironmasters ; ironworks ; profits , technologica l innovation s Excise Office, 226f exports , see bar iron ; cast iron ; finished iron ; hardwares ; pig iro n Fell-Rawlinso n partnerships , 16 Fell-Spence r partnerships , 46, 65. See also Spence r partnership s Finch , F. , 233, 243

finery-chafery process , see forge (charcoal ) finery fire, 10, 77. See also forge (charcoal ) finished iro n (charcoal) , exports , 4gff; markets , 50. See also hard ware; nai l manufacturin g finishe d iro n (coke) , exports , 130. See also hardware ; nai l manufac turin g Flinn , M. W., 2of Fole y MSS , 222 Fole y partnerships , 15, 31, 51, 222 Follio t Scot t an d Company , gof, 97ff Fores t of Dean , 12-17, 32f, 114, i22f, 214, 215η forge (charcoal) , capita l invested in, 31; costs of production , 78ff, 87, 88; location , 10-13 ; opera tion , 10; output , 10, 118; pro ductivity , 7gf; profits , 80. See also ba r iron ; chafer y fire; finery fire forge (individual) , Attercliffe, 78, 82; Backbarrow , 78, 87f. See also Backbarro w Company ; Bilston Ne w Mill, 107; Bradley , 107; Brierl y Hill , 121; Bromford , 78, 87f; Bute , 142; Carburton , 78; Clydach , 142; Coalbrookdal e Middl e Forge , 27, 38f, 54ff, 82. See also Coalbrookdal e Com pany ; Colnbridge , 38AF1 78; Cookley , 78, 87f; Corngreaves , 142; Cyfarthfa , 86-93 , 9°"1 0 3> Dowlais , 129, 142, 170. See also Dowlai s Iro n Company ; Fontley , 90-93 ; Highfields , 107; Horse hay, 142; Kirkstall , 44, 78, 82; Mitton , Uppe r an d Lower , 78, 87f; Pennydarren , 91; Pentyrk , 98; Roch e Abbey, 44, 78; Staveley, 78, 82; Wadesley, 78, 82; Wednesbury , 86; West Bromich , 86; Whittington , 78;

276

INDEX Wilsontown, 91, 93; Wolverly, 78, 87f; Wortley, 91 forge (potting), construction, 86; costs of production, 87f, 93f, l o i f f , 207f; productivity, 207. See also potting process forge (puddling), capital invested in, 118; costs of production, 92ff, l o i f f , i 4 i f f , 170, 2o7ff; description, i2of; economies of scale, i24f; mechanization, 1 19ft; output, loof, 118, 176; productivity, i 4 i f f , 2o8f; profits, 141, 170; size, io6f, 176. See also bar iron; Henry Cort; puddling process forgemasters, of Worcestershire, 26, 55f France, 144 Fuller, John, 213 Gibbons family, 85 Gibbons, John, i59f Gilpin, Gilbert, 238f Glamorganshire Canal, 236, 244, 247, 250 Gloucester, 246 Grand Junction Canal, 129, 238f, 244,247 Greenwich Hospital, 109 Griffiths, Gabriel, 54 Griffiths, Samuel, 143 Gross National Product, 190 Hall, Joseph, i6g, 176, i8g Hamilton, Henry, 147, i4g Hampshire, see the Weald hardware (charcoal), see finished iron; nail manufacturing hardware (coke), exports, 130. See also finished iron; nail manufacturing Hereford Record Office, 222 Holland, 144 Holland, J., 140 hot blast, and anthracite coal, i5g;

and blackband iron ore, 147-50, 156; and coal quality, i57ff; and prices of pig iron, 152, i62ff; capital required, 151; costs of production, i5off, 156-59, i62ff, 2o6f; diffusion, 150-59, ig4ff , 200; discovery, i46f, 154; patents, 146, 149, 154^ productivity, i62f, 2o6f; profits, 152; quality of pig iron, 156, i56n; rationality of ironmasters, 156-59, 197; supportative innovations, 154, i59ff, i g 5 .See also blast furnace; J. B. Neilson; pig iron House of Commons, 227 Hulme, E. Wyndham, 214 imports, see bar iron; cast iron; finished iron; hardwares; pig iron Institute of Mechanical Engineers, i8gf The Interests of Great Britain in Supplying herself with Iron Impartially Considered (1736), 215-18 Ireland, 130 iron industry (charcoal), degree of competition, 17, 45-48, 202; economic fluctuations, 43-47; economic integration, 15-20; international cost position, 47; performance, 47-52; position in domestic market, 43, 51; profits, 45f; regional distribution of output, 12-15; regional markets, 17. See also bar iron; blast furnace; cast iron; forge; ironmasters; ironworks; pig iron; rolling mill; technological innovations iron industry (coke), and steam power, 69-73, 75, 118-23, ' 9 1 . ig4; backward linkages, i g i ; barriers to entry, 63f; degree of competition, l a s f f , 129, 179^ 202ff; economic concentration, i22ff, i 7 7 f f ; economic fluctua-

277

INDEX iron industry (coke) (cont.) tions, 180, 200; economic integration, i2gff; employment, 191; excess capacity, 180; exports, i44f; forward linkages, i g i f ; importance in British economy, i44f, igoff; location, 63, 12 iff, 181-87; movement to coalfields, i22f; position in domestic market, 93, 114, i43f; product differentiation, i25f; regional distribution of output, H 3 f , i22f, 168-71, 181-87; regional specialization, 184-87; technical leadership, i8gf; value of output, 144^ 190. See also bar iron; blast furnace; cast iron; forge; ironmasters; ironworks; pig iron; rolling mill; technological innovations ironmasters, efforts to fix prices, 48, i26f. See also iron industry, degree of competition; trade associations; membership in the Institute of Mechanical Engineers, 189^ igon; occupational origins of, 68. See also individual names; patents; technological innovations Ironmasters Return of 1810, 228 iron ore, blackband, 147, i4gf, 156, 182; chemical composition of, 27; exhaustion of supplies, i8yff; haematite ores of Lancashire and Cumberland, 14, 183; in Barrow area, 183; in Cleveland district, i82f; in the Forest of Dean, 14, 17; in Lincoln, Northampton and O x f o r d , 183; in South Wales, 188; interregional shipments, 183^ 186; output, i82ff, i87ff; preparation for blast furnace, 8; prices, i88f; quality, 47 ironworks, accounts, 22if; capital

investment, 125, i78f; economic integration, 123?; labor force, 178; size, 178. See also blast furnace; forge; puddling furnace; rolling mill ironworks (individual), at Merthyr Tydvil, i22f; Butterly, 246; Cyfarthfa, 118, 125, ig8f. See also Richard Crawshay; Dowlais, i2g, i75f, 178 .See also Dowlais Iron Company; Gartsherrie, 176; Nantyglo, 142 Italy, 144 Jellicoe, Samuel, gyf Jesson, Richard, 84, 86, 8g, 194. See also patents Jessop, William, 246 Johnson, B.L.C., 17, 222 joint-stock companies, 179 Kent, see the Weald Knight, Edward, 46, 55n Knight partnerships, 16, 3 i f , 36, 46> 5 1 .

54

Lancashire, 12-17,48^ 113, 181, 183!', i87f. See also Northwest Coast Lincolnshire, 183 Liverpool, 126, 129, i48f, 152, 203, 236 London, 4 m , 48, 51, 109, i26f, 129, 203, 236, 236n Lytdeton, Sir Thomas, 45 malleable iron, see bar iron markets,see bar iron; cast iron; finished iron; hardwares; pig iron McCloskey, Donald, i88n, 189 Meade, Richard, 242 Merthyr Tydvil, 54 Midland Mining Commission, 25of Mitchell, B. R., 172 Monkland Company, 150

278

INDEX Monmouthshire Canal, io6n, 22gf, 236f, 244, 247, 250 Morton, G. R., 82, 89 Mott, R. A., 33, 37n, 56, 76, 82 Mushet, David, 85, 150, 213, 2256?, 235ff, 240, 245f Mushet-Scrivenor list of ironworks, 213-17 nail manufacturing, 19, 50, 5on, 228 .See also Birmingham; hardwares; Staffordshire Nasmyth steam hammer, 169, 177, 189, 2oof Neilson, James Beaumont, 146, 1 4 7 n ' H 9 f f . i54f. 175. !94 Netherlands, 144 Newcastle, 48 Newport,. 203, 236n Newport Quarter Books, 127 New World, 130, 144 North Wales, 12-17, 123, 224, 233, 240, 243 Northamptonshire, 183, i87f Northeast Coast, 162, 169, 171, 181-84, i87f. See also Cleveland; Yorkshire Northumberland, see Northeast Coast Northwest Coast, 183^ 187f. See also Cumberland; Lancashire North Yorkshire, see Northeast Coast Nottinghamshire, 12-17, 65 Oakes, T., 160, 175 Onions, Peter, 8gf, 98. See also patents Orders in Council, 228 output, see blast furnace; forge; iron industry; ironworks; rolling mills Oxfordshire, 183 patents, Cockshutt, John, 84, 194; Cort, Henry, 76, 82, 88ff, 95 f,

ig4f; Cowper, Edward, 161, 201; Cranage, George and Thomas, 84f, 89; Darby, Abraham, 4of, 44, 55n; Jesson, Richard, 89; Jesson, Richard and James Wright, 84, 194; Neilson, James Beaumont, 146, 149, i54f, i94f; Onions, Peter, 891; Purnell, John, 8g; Roebuck, John, 82, 84, 89; Wood, Charles and William, 83f, 86, 194 Peace of Amiens, 112, 115 Philosophical Magazine, 242 pig boiling, see wet puddling pig iron (charcoal), chemical composition, 7; duties on imports, 48, 48n; imports, 18, 42-48; interregional trade, i6f; markets, 18; output, i8n, 2off, 43, 94n, 109, 213!?, 2 i 7 f f ; prices, 28f, 40, 46ff, 66, 68, 7 9 f ; regional specialization, 17; share of national output, 67, 109; types, 17. See also blast furnace; cast iron pig iron (coke), demand, 66ff, 173; domestic consumption, 173; exports, 130; government purchases of, 115; interregional tradein, 153, i85ff, 203; output, 66f, 93^ 94n, 108, i i 2 f f , 153, 164^ prices, 28f, 40, 66, 68, 1 35"39' »53. i6aff, 170, 235; quality, 25-29, 3 8ff, 55, 156, i86f; regional distribution of output, i i 3 f , i22f, 181-87; share of national output, 67, 109; threatened tax on, 227; used in forges, 27, 38f, 54ff. See also blast furnace; cast iron Porter, G. R., 249 Portsmouth naval yards, 90 potting process, costs of production, 87f, 92ff, 101 ff, 207f; description, 83^ diffusion, 86ff,

2 79

INDE X pottin g proces s (cont.) ig4ff; discovery, 77; earl y attempts , 77, 80, 82; patents , 82-85 ; productivity , 207; rationalit y of ironmasters , 87f, goff, ioif, 197; significance , g2ff. See also ba r iron ; forge; technologica l innovation s prices , genera l level of, 28η, 78, 78η, 103, 106, 109, 138, 141, 162, 162η, 170, i88f, 205-208 . See also ba r iron ; cast iron ; finished iron ; pig iro n productivity , see blast furnace ; forge; ironworks ; rollin g mill; technologica l innovations ; Tota l Facto r Productivit y profits, see blast furnace ; forge; ironmasters ; ironworks ; rollin g mill; technologica l innovation s puddlers , skills, 99 puddlin g furnace , cast iro n bot toms , i42f; linings, 169; mod ified by Richar d Crawshay , 100; numbe r in operation , 167?, 178, 185; operation , 88f, 99; output , 176 puddlin g process , an d Richar d Crawshay , goff, 96-101 , 106, 116, 194; an d Cyfarthf a iron works, goff, 96-103 ; an d de mand , 103-106 ; an d tariff policy, 103-106 ; attempt s to mechanize , i6g; capita l required , io2f, 118, igg; costs of production , giff, 101 ff, 207ff; description , 88f, gg; diffusion, goff, 95-108 , 194, 196; discovery, 76, 90; economie s of scale, i24f; patents , 76, 82, 88-gi , 95f; productivity , 14 iff, 2o8ff; profits , 101 ff, ig8f; qual ity of ba r iron , 97-101 ; ra tionalit y of ironmasters , goff, ioif, 197; technica l problems ,

91 ff. See also ba r iron ; Henr y Cort ; forge; puddlin g furnace ; rollin g mill; technologica l inno vation s Purnell.John , 89. See also patent s Quakers , in th e iro n industry , 16, 25 railways, built by ironmasters , 120; deman d for iron , i72f, 180, 200 Rastric k boiler , 177, 189, 20of Rawlinson , William, 25 raw materials , see charcoal ; coal ; iro n or e Rea , William, 213-1 6 Rea-Fulle r list of ironworks , 213-1 7 Rees , Abraham , New Cyclopaedia, 214,225 f regions, see Cheshire ; Cleveland ; Cumberland ; Derbyshire ; Fores t of Dean ; Lancashire ; Lincoln shire ; Northamptonshire ; Northeas t Coast ; Nort h Wales; Northwes t Coast ; Nottingham shire ; Oxfordshire ; Scodand ; Shropshire ; Sout h Wales; Staffordshire ; th e Weald; West Mid lands ; Westmoreland ; Worcestershire ; Yorkshire Reynolds , Richard , go Reynolds , William, 226 Roebuck , J o h n , 82, 84, 8g. See also patent s Rogers , Samuel , 142 rollin g mill, economie s of scale in , 125; numbe r in operation , io6f, 124, 168; size, 125; three-high , 177; types, i2of Scotland , bar iro n output , 12, 107, i66f, 169, 186; blackban d iro n ore , 147, i4gf, 156, 182; closin g

28 0

INDEX of blast furnaces, 136; coal consumption in blast furnaces, 120; competitive position, i48f, i 5 i f f ; construction of blast furnaces, 49, 54, 136; exports of pig iron, 153; interregional shipments of pig iron, i48f, i52f, 185; location of blast furnaces, 63; pig iron output, 12, H 3 f , 123, 153, 181-84, 232, 240, 247f, 250; pig iron prices, 152, i62ff, 1 7 1 ; share of national output, 12, U 3 f , 123, lyof, 181-84, 186, 240; specialization in pig iron, 186f. See also hot blast Scrivenor, Harry, 213, 225ff, 233,

construction of blast furnaces, 54, i36f; interregional trade in bar iron, 129, 149; ironmasters, 68; iron ore deposits, 188; iron shipments on canals, 129, i4of, 22gf, 235?, 247, 250; Merthyr Tydvil ironworks, i22f; pig iron output, i2ff, i i 3 f , i8of, 184, 22gf, 235?, 24of, 247, 250; recruitment of labor, 63; rolling mills, 106, i24f; share of national output, 12ff, 113f, 122ff, i68f, i8of, 184, 187; size of blast furnaces, 110; specialization, i2g, i68f Spencer partnerships, i6f, 31. Sec

236, 24iff, 249 Sheffield, 129, 149, 152, 185, 203 Sheffield City Library, 221 Shropshire, bar iron output, 12-14, 107; blast furnace excluded from the Mushet-Scrivenor list, 2 i 5 n ; canal shipments of iron, 237ff; closing of blast furnaces, 136; coal quality, 26; construction of blast furnaces, 54, 136; interregional trade in pig iron, 17; number of furnaces in blast, 238f; pig iron output, 12-14, 123, i8of, 2 3 i f , 237ff; share of national output, 12-14, 1 1 3> l a 3 ' i8of, 23 i f ; use of coal in chafery, 82. See also West Midlands Shropshire process for wrought

also Fell-Spencer partnerships Spencer-Stanhope MSS, 221 Spooner, Abraham, 50 Staffordshire, and the hot blast, 154-57; and steam power, 72; bar iron output, i2ff, 107, l z g f , i68f, i84ff; blast furnaces excluded from MushetScrivenor list, 2i5n; closings of blast furnaces, 136; coal deposits, 26, 72, i 5 7 f ; combinations of ironworks, i5f; construction of blast furnaces, 54, 136; hardware industry, 14, 5of, 228; imports of pig iron, 186; iron ore deposits, 188; iron shipments on canals, 238ff, 247; pig iron output, i2ff, 113, i23f, i8of, i84ff, 23of, 237-40, 247, 25of; rolling mills, 107, 124; share of national output, i2ff, i i 3 f , i23f, i68f, i8of, i 8 4 f ; specialization, 17, i68f, 186. See also West Midlands Staffordshire Record Office, 242 stamping process for wrought

iron, see potting process slitting mill, 10. See also forge; rolling mill Southern Europe, 130 South Wales, and the hot blast, 155; bar iron output, i2ff, 106, i i 3 f , i22ff, i4of, i68f, 184; closing of blast furnaces, 136; coal used in blast furnaces, 159; combinations of ironworks, 15;

iron, see potting process The State of the Trade and Manufac-

281

INDEX The State of Trade . . . (cont.) tory of Iron in Great Britain Considered, (1750), 219 Staveley Ironworks MSS, 221 steam engine, Boulton and Watt engine, 69-73, 75. " 8 - 2 3 , 191, 194; Newcomen engine, 70 steel, output, ign, 168, 185, i85n Stourbridge, 48 Stour River, 17 Sturtevant, Simon, Treatise of Metal lica, 21 Surrey, see the Weald Sussex, see the Weald Sweden, government restrictions on bar iron output, 47 Taff Vale Railway, 250 tariffs, see bar iron; cast iron; pig iron Taylor, Richard, 234, 251 technological innovations, and costs of production, 204-209; and demand, ig8ff; and market imperfections, 202ff; and productivity, 204-209; and profits, 197-202; and rationality of ironmasters, 197-202; and risks, 199, 201; and supportative innovations, ig4f; and transportation costs, 202f; diffusion of, ig3-202; gestation periods, ig3ff, 201; minor innovations, 80, 82, 84, 100, n g f , i42f, 154, i5gff, i6g, i75ff, 189, 20of, 207, 209; supersession period, i g s f . See also particular innovations Total Factor Productivity Index, 58 trade associations, Friendly Associ ation in South YorkshireDerbyshire, 126; Stourbridge Meetings, 48; Welsh Quarterly Meetings, i26f transportation costs, and competi-

tion, 48, 147^ i 7 g f , 202ff; and the location of ironworks, lof, 182 tuyeres, see blast furnace United States, 130, 144, 159 Ure, Andrew, 140 Wales, see North Wales; South Wales Walker family, 68, 127, 220 Walker, Samuel, 2 4 i f , 246!. war, and industry growth in i 7 g o - i 8 i 5 , 112-16; in the Baltic, 44; of the Austrian Succession, 46 water power, and the location of ironworks, 11, 70-73; and regularity of operation, n 8 f ; for blast furnaces, 8 the Weald (Hampshire, Kent, Surrey and Sussex), 12-17, 32, 49, 122f, 2i5n, 220 Weale, James, 85, 2i6n, 224 Weale MSS, 216, 224-30 Welsh Iron and Coal Company, 179 West Indies, 144 West Midlands, 14, 54, 82, 129. See also Shropshire; Staffordshire; Worcestershire Westminster School, 109 Westmoreland, 12-17 wet puddling, i6g, 176, i8g, 200f Wilkinson family, 54 Wilkinson, John, 107, 128 Wilkinson list of ironworks, 224f Wilkinson, William, 85^ 224f Wood, Charles, 54, 82ff, 86. See also patents Wood, Charles and William, 77, 83^ 86, 194. See also patents wool textile industry, gross output, 145, 190

282

INDEX Worcestershire, 12-17, 2®> 5°f> 55^' 82. See also West Midlands Wright, John, 84, 86, 107, 194. See also patents wrought iron, see bar iron Yorkshire, acceptance of hot blast, i55f; bar iron output, 12-17, 107; blast furnaces excluded from Mushet-Scrivenor list, 2i5n; canal shipments of iron,

283

232; closings of blast furnaces, 136; combinations of ironworks, 48f, 65; construction of blast furnaces, 136; pig iron output, 12-17, 11 3> !23. 181, 184, 240; share of national output, 12-17, 113, 123, 181, 184; specialization in finished iron, 185; use of coal inchafery, 82 .See also Northeast Coast

Library of Congress Cataloging in Publication Data

Hyde, Charles K

'945*

Technological change and the British iron industiy, 1700-1870 Bibliography p Includes index 1

Iron industry and trade—Great Britain—

History 1

2.

Technology—Great Britain—History.

Title

TN704.G7H9 338 4 ' 7 ' 6 6 9 i 4 i o 9 4 i ISBN 0-691-05246-8

76"459°1