The fact that the most rapid increase took place in the latter half of the century, makes any evidence which throws light upon the development of fixed capital in industry of great importance. " Direct employment, net wages, steam-power, large scale industry,''1 are the marks which point an industry as capitalistic in organization. At the end of the eighteenth century, steam-power meant large scale industry, and the two combined stood for the most advanced type of capitalism then in existence. Therefore, the use of the steam-engine (bringing with it the use of true machinery)2 in any industry meant the presence of much capital in that industry, and the consequence was a large addition to the fixed capital of the country.
Mines were capitalist, at least those that employed steam-power were owned by large proprietors or companies. 3 The Cornish copper mines were worked by a kind of joint-stock limited liability company.4 The coal-mines, where they were so deep as to need engines for drainage, likewise were capitalist in organization, being in many cases the property of the local aristocracy, who owned the land under which the coal-mines were.5 It is, however, probable that in Staffordshire and other places where the coal cropped out on the surface, small capitalists were working shallow shafts, and the organization of the " butty " system was growing up. The capitalist had taken possession not only of the textiles, but was also organizing some of the allied trades, for by 1800, steam-engines were at work in bleaching, calico printing, dyeing, and calendering, Thus, in the textiles, specialization was going on rapidly, operation after operation was being capitalized and organized as a separate industry. In the cotton trade many companies had grown up. In Manchester there were the Salford Twist Company (first engine, 1791) and the Chorlton Twist Company (first engine, 1974), while in Paisley there was the Underwood Spinning Company (first engine, 1798) These were, of course, only convenient names for partnerships. In which a large number of people participated, but, nevertheless, they show an increase in the numbers of the investor class, for it is obvious that not more than one or two men were required to manage a cotton mill. However, the majority of the cotton mills were the property of one or two capable men6 The amount of capital invested in public works at this period must have increased very rapidly. In canals alone much capital was very quickly sunk. Watt estimated that the cost of a canal to cover the three or four miles from Monkland to Glasgow would be £10,0007 while the cost of the Bridgewater Canal, from Worsley to Runcorn via Manchester, was £220,0008 moreover, after the first canals had been successful, an immense number of Navigation Acts received the sanction of the legislature, and canal works were in progress all over the country. In the Gazette of August 18, 1792, eighteen new canals were announced, and the shares of others were already at large premiums.9
There was a period of speculation, and more canals were built than were immediately required, but eventually all were opened up for traffic, and though individuals lost, the country was developed and the community benefited immensely. In the four years ending 1794, eighty-one Canal and Navigation Acts were obtained, authorizing a total expenditure of £5,300,000
A curious point in connection with the early subscriptions of capital for canals, before they became a speculation on 'Change, was that they were projected as necessities, and not from any idea of profit. The Duke of Bridgewater built his canal to convey his coals to Manchester and Liverpool, and the money to build the canal came mainly from the coal-mines themselves. Similarly with the Birmingham Navigation, which was inspired by Boulton and other manufacturers, who needed a method of obtaining fuel,10 while the Grand Trunk was Josiah Wedgwood's conception, in order to convey his pottery unbroken to London.11 Again, in spite of the speculation, the canals not only paid back their projectors in increased transport facilities, but also made them a handsome money profit.12
The same story is true of the water-works, except that the profits came in more slowly and speculation touched them less easily.13 Of the other industries the corn mills, breweries, and distilleries had been gradually increasing in scale during the century, and it is easily understandable that some of them should have sufficient capital to employ steam- power. The position of the small capitalist or master in these three trades was, as yet, fairly secure, in fact windmills were still being erected all over the country for several decades of the nineteenth century.
The breweries were becoming vast undertakings, and a movement seems to have been growing to divide the great bulk of the production between home brewing and " the great brewers who have large fortunes." " The small publicans, which the legislature and police seem apparently equally anxious to diminish,"14 are beginning to feel the effects of large scale enterprise and social reform. The big capitalist brewers were already in existence before the introduction of the steam-engine, but its introduction, by Whitbread and others, about 1790, greatly accelerated their increase in output.15 The number of breweries that were of any importance seem to have been considerably reduced by the year 1796, for according to the statistics of the period, there were only twelve noteworthy breweries at that date. Whitbread heads the list with an output of 202,000 barrels, more than triple his output of thirty-six years before.16
The iron trade had likewise developed gradually into a capitalist enterprise, the rise of Wilkinson is an epitome of it. However, it was in the iron industry that many of the large increases in fixed capital took place. The machinery for boring, cutting, rolling, and splitting was all being rapidly introduced ; accuracy was replacing roughness, and making all advances in execution cumulative.17 Among the other industries of the country, steam- power had little direct influence ; one tannery used an engine of six horse-power, one shot mill an engine of four horse-power, and so on. In fact, apart from the trades we have already discussed, there were only about thirty engines, representing a total of less than 400 horse-power, used in the country in 1800. However, steam-power had an indirect effect on many trades, and even on agriculture, by its influence on the iron and steel trades, the textiles and transport.
The capitalist growth of the century can be roughly and vaguely divided into three types. The first became capitalist by gradual growth and enlargement, like the corn-mills, forges, and potteries, and had little need to rely on credit organization for their means of expansion. Secondly, there were the canals and water-works, and some times the mines, which, owing to the long waiting for returns, were specially suited to joint-stock enterprise, and were floated as ordinary companies. Thirdly, there were the new inventions which needed capital to float them, and which had recourse to the ordinary credit agencies and founded their enterprises on the capital collected and distributed by the banks.
Under this third heading there are also included old industries set up in new surroundings, and, after the establishment of capitalism in a trade, most new works. It is obvious that, in the generality of cases, new-comers to an industry must employ the newest methods and the most modern organization, in order to neutralize the advantage that the existing firms owe to their connection and long established relations with markets both for raw materials and the finished product.
1 C. R. Fay, Life and Labour in the Nineteenth Century, p. 226.
2 K. Marx, Capital, p. 367. A machine according to Marx consists of three parts, the motor mechanism, the transmitting mechanism, and the working tool itself.
3 Boulton & Watt to Chapman, of Newcastle, February 22, 1777. Tangye MSS. Boulton & Watt to Colville, of Torrybourn, Scotland. Tangye MSS. Boulton & Watt to G. Meason, Edinburgh, April 24, 1777. 'Tangye MSS.
4 Vide supra, p. 119.
5 Boulton to Watt, September 17, 1783. In Ireland £ll,000 was spent by one Coleclough in establishing a colliery before any sales were made. Tangye MSS. Fay, op. cit., p. 224. Though it is probable that in the Midlands many of the mines were small works needing little capital, worked by the small owners, who were afterwards to be exploited by the "butty " system.
6 e.g. Drinkwater; Peel; Ainsworth & Co.: McConnell & Kennedy; Sir Rd. Arkwright, etc.
7 Watt to Small, December 12, 1769. Tew MSS.
8 Smiles, Brindley, p. 225.
9 Grand Trunk, £350: Birmingham and Fazeley. £1,750 Coventry, £350 Leicester, £155. Smiles, Brindley, p. 296.
10 Boulton to Wedgwood, July l0, 1767. Boulton subscribed £1,000 Tew MSS.
11 The Present State of Birmingham, 1789, p. 21.3
12 Boulton to R. Small, August 28th, 1781. Tew MSS.
" Navigation shares for the last two half-years:
| 6 months at £9 per share | £63 | 0 | 0 |
| 6 months at £10 10s per share | £73 | 10 | 0 |
13 It is worth noting that the water-works which drew from the Thames gradually failed, while those which drew their supplies from more distant places came to the front.
14 S. Child, A Practical Treatise on Brewing, p. 23.
15 Brewers' returns in 1760 :
| Calvert and Seward | 74,704 | barrels |
| Whitbread | 60,508 | " |
| Truman | 60,140 | " |
| Sir W. Calvert | 52,785 | " |
| Lady Parsons | 34,098 | " |
| Thrale | 30,740 | " |
| Huck | 28,615 | " |
A. Barnard, Noted Breweries of Great Britain and Ireland, Vol. I p. 209.
16 A. Barnard, op. cit., Vol. 11, p. 201.
17 Boulton to Watt. January 9, 1782. Wilkinson's improvements in boring all meant improved accuracy in making the next machine. Boulton suggested that " it would be worth while to make a machine for dividing and cutting the tooth in good form out of sectors." TewMSS.