CHAP. XIV.

FROM THE YEAR 1840 TO 1854.

It is now about fourteen years since the former part of this work was written; it concludes with stating that iron being altogether the production of our own soil, will continue to give employment to hundreds of thousands of our population, to the great advantage of the country at large, as well, we trust, as the individual benefit of the ironmaster. What vast changes have taken place since that time! The iron trade then holding a position of great national importance, has now increased to double the then annual make. From 1,300,000 tons to 2,700,000 tons! There can be little difficulty in showing, to the present advantage of the country, but more so in proving it to have been to the advantage of the manufacturer. That the trade has been greatly productive to many of the original ironmasters, there can be little doubt; amongst others, Sir John Guest, Mr. Alderman Thompson, and last, though not least, Mr. James Foster, who possessed possibly a more perfect knowledge of his trade than any other ironmaster. These gentlemen have died, leaving large fortunes, and some of the survivors are merchant princes.* The reverse of the picture points to the Messrs. Harford, of the Ebbw Vale and Sirhowy Works, whose lamentable failure was most deeply deplored; and whether the books of the ironmasters in general would

* How well Paley describes the advantages derived from wealth :—

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Money is the sweetener of human toil; the substitute for coercion; the reconciler of labour with liberty. It is, moreover, the stimulant of enterprise in all projects and undertakings, as well as of diligence in the most beneficial arts and employments."

admit of the same searching investigation as that to which the books of the Joint Stock Companies are yearly or more frequently subjected, is a matter which may admit of some doubt, when the events of the period are taken into consideration. As regards ironmasters in general we say, as we said before, that we trust it is to their benefit - there are no means of showing to the contrary- the country benefits by their exertions. But we have a test as regards Joint Stock Companies. Thirty years' experience proves that, according to all that has hitherto been done, they are not but we will not say cannot, be profitable.

In the management of these companies every necessary ingredient seems to be collected to lead to a beneficial result. You have as Directors some of the first and most able of the London merchants; Bankers, most able financiers; Mining talent, the best that can be procured. You have occasionally the assistance of the original proprietors of the works, which have been either leased or purchased, and although these gentlemen may by their neighbours have been called peddling managers, yet the very narrowness of their views may, for the sake of the argument, be considered beneficial in checking the reputed lavish expenditure of Joint Stock Companies; and thus, instead of by active measures bringing matters to a speedy close, they may, on the homœopathic principle, prolong existence by administering small globules.

Of what are called the managers of the works, it will be hardly necessary to speak; good salaries are offered as an inducement to parties to tender their services, and the best selection is supposed to be made. But these persons hold but a very secondary position; the management rests with others, who, under the name of local boards, visiting directors, or inspectors (physicians they have been called) by their interference take it into their own hands, and the only undivided share which the so-called manager retains, is the responsibility.

To make the picture complete, you have for the general management possibly the best arrangement which could be adopted that of Managing Directors, consisting of two or three able and intelligent men of business, whose knowledge

of the trade, and great anxiety to show a successful result, tend to assimilate the company to a private trading firm.

And these gentlemen have under their superintendence what may be supposed to be a choice of works, which, with their original large capital, they were enabled to command. But cui bono? You have the solemn farce, You have the solemn farce, year after year, of a general meeting of the proprietors; with rarely an exception*, a report is read to explain the various unforeseen circumstances which have occurred to militate against the expected success of the year's transactions, so as to render it impossible or inexpedient to make a dividend; a reduction in the establishment is suggested; thanks are given to the acting directors, which they well deserve for their anxious endeavours to make the best of an almost hopeless case, and the meeting separates, leaving the proprietors to hope against hope for another year.

The management of Joint Stock Iron Companies in foreign countries may not be carried out on the same able principles as in this country; at any rate, they do not seem more successful. A writer in the " Mining Journal," of the 27th Aug., 1842, who had just visited Belgium, thus speaks of the ironworks: "There are 58 blast furnaces in that country. Fourfifths of them belong to Joint Stock Companies, and not one of which, we regret to learn, is at present paying dividends to the shareholders."

Whence does this arise? It has been shown that the management in itself contains all that is necessary to a successful result: the companies are, in the first instance, possessed of large capitals, and nothing could be more legitimate than their original institution at a time when the trade was a perfect monopoly; and so formidable did they appear that an eminent ironmaster now living, in a letter which the writer saw, expressed a wish that the companies, like the heads of the Hydra, had but one body, and that he could at once put his foot upon them and crush them to death. How

* At a Meeting of the New British Iron Company held yesterday, a dividend was declared, making, with the distribution in February last, an aggregate of 10 per cent. for the year.-The Times, July 27th, 1854.

many of those who rushed into these companies would have been thankful in after years, if he had had the power of carrying his wish into effect! We again say whence does this want of success arise? Are Joint Stock Companies incompatible with success in ironmaking? On the contrary, with such arrangements as we have described, they ought to be most successful, provided that the management had the proper and sufficient means of carrying their exertions into effect. These means we consider to be concentration and sufficient ready-money capital. Without these, or at any rate the latter, no talent, no exertion, will alter the dire results of the last thirty years' experience!

When companies are first formed, the greater part of the capital is paid away either for works already erected, or else in bringing a new mineral field into operation, and by the time the works are erected and a sufficient supply of materials on the banks, the capital is pretty well exhausted; the ready sale of the iron being considered capable of yielding profit for dividend, maintaining a stock of materials, keeping the works in repair, and leaving a sufficient balance at the bankers for monthly requirements.

With respect to the first point, concentration, having acquired a valuable property, the advantages are manifest; you have but one establishment, and the whole weight is thrown on this one work to bring it to perfection; it stands on its own merits; it has not to carry, besides its own burden, a lame brother, the successful work cannot be marred by the unsuccessful.

But the still more important ingredient of success is money. It is not sufficient to the success of a company that it should barely have the means of carrying on the works from month to month; a sudden check comes; there is a want of demand, the bankers are resorted to; then comes a pressure on the money-market, and to pay off the extra assistance, you are compelled to sell large quantities of iron at a ruinously low price; and to whom is it sold? Why, to the ready-money proprietors of other iron-works, who, in return, will undersell you with your own iron. This is no fanciful picture. If pro

prietors in Joint Stock Iron-works really require success, give the sinews to the management, and do not, year after year, hope against hope, while the property itself is wearing out; the country may be benefited, but not so the shareholders. The iron trade is not like our other staples; it is not reproductive. In cotton, the seed is sown, and you have yearly crops; in wool, the sheep are yearly shorn, and you still keep up your stock; but iron, once taken out of the ground, leaves nothing behind to restore the value of the property; and if a yearly sum be not laid by, you have at the termination of your lease or minerals, nothing but valueless furnaces, and land utterly useless for any purpose; the capital will be annihilated, and "like the baseless fabric of a vision leave not a rack behind."

To aid a successful result, an ironmaster must occasionally be an iron-purchaser; with ready money this can be accomplished. Then a depression in the trade is the period to sow the seed of profit instead of sellers become purchasers of iron which cannot be made for the money, and store it till the improvement takes place, when you not only reap the direct and large profit, but you are also able to meet the certain and immediate demand for an advance of wages, which affects in every way the manufacture of iron. It falls upon the coal, ironstone, limestone, and labour generally, which, with the needy ironmaster, sweeps away all the profit possibly of months, making, in fact, an advance in price a positive loss. In many we may say in most- cases upon an advance the ironmaster has to supply hundreds or thousands of tons at a low price, but made with the advanced wages, all of which might be readily met to the great advantage of the iron companies, provided they possessed sufficient capital; without it dividends can hardly be expected, because there will seldom be available profits.

We cannot leave this part of the subject without alluding to the Scotch iron trade. Has the extraordinary working of the Airdrie mineral field been of individual or even general advantage?

The make of iron in Scotland in 1830 was 37,500 tons;