In all those industries that we have sketched, coal-mining, iron-working, tin-mining, hardware, pottery, and salt manufacture, the capital was supplied by one or two men; and the new jointstock principle had little or no influence, except in the mines, where it was the result of a different set of causes, and had evolved independently of the main movement. There were, indeed, in 1700, one or two companies of an industrial nature capitalized by joint-stock methods, among which were a glass-making company, a company for " making iron with pit-coal," and, in Scotland, " the Glasgow Soaperie, the Glasgow Sugarie, and the Paper Manufactures."1 These were the exceptionsthe iron trade, and the potteries, the hardware trade, and brewing, all owe their development to the energy of isolated men.
As for the joint-stock companies, Adam Smith's dictum, though perhaps unfair in its criticism of their methods, is, nevertheless, historically true of the position as he saw it. He says, " The only trades which it seems possible for a joint-stock company to carry on successfully without an exclusive privilege are those of which all the operations are capable of being reduced to what is called a routine, or to such an uniformity of method as admits of little or no variation. Of this kind is first, the banking trade; secondly, the trade of insurance from fire, and from sea risk, and capture in time of war; thirdly, the trade of making and maintaining a navigable cut or canal; and, fourthly the similar trade of bringing water for the supply of a great city."2
Thus, in 1750, we have the old established industries, like the textiles, gradually developing and emancipating themselves from gild organization, by an increase in capital and in the amount of produce, but employing very large numbers in order to supply the demand of their markets. In the mines, the same difficulty of supplying the demand was also met, but in this case it was due to lack of power to pump the water out. In the iron trade, the wood supply was no longer adequate to supply the demand for charcoal for smelting; recourse was had to coal, but there, again, more power was needed to drive the bellows, in order to produce the increased blast necessary for smelting with coal.
In the undertakings that Adam Smith described as possible for joint-stock enterprise, more power was also needed; pumping engines were necessary to supply a town with water, as well as to keep the water in a canal at its right height all along its course. The enclosures had released or forced out of agriculture large numbers of moneyless men, while the country, by its long freedom from invasion, had had time to acquire a sound financial position that made accumulation of capital easy. Moreover, at this date, we were fortunate in having men who possessed those constructive ideas that are the most important part of capital. The importance of the constructive thoughts of men like Boulton, Watt, Wilkinson, Wedgwood, and Whitbread, cannot be overestimated.3
The most important was Watt. The history of his invention, its capitalization and its connexion with the development of other industries, is the kernel of the story of the Industrial Revolution
1 Scott, op. cit., pp. 335-6.
2 Adam Smith, Wealth of Nations, Vol. II, p.242.
3 Marshall, Principles of Economics, p. 780: " The world's material wealth would quickly be replaced if it were destroyed, but the ideas by which it was made were retained. If, however, the ideas were lost, but not the material wealth, then that would dwindle and the world would go back to poverty, and most of our knowledge of mere fact could quickly be recovered if it were lost, but the constructive ideas of thought remained, while if the ideas perished the world would enter again on the Dark Ages."