The move towards joint stock capital was linked to an increase in the levels of economic concentration. [1] In the 1880s, the hundred largest industrial firms accounted for less than 10% of the total market. However, a spate of company amalgamation led to greater concentrations in the 1890s as the increased merger activity outpaced the growth of the market. Companies were floated on the stock exchange and might then grow by taking over their competitors; or rival firms might join together to float a common holding company. The families whose firms were floated or merged at this time often retained the ordinary, voting, shares for themselves and allowed debentures and non-voting shares to be sold to the wider public. As a result, family control could be maintained on the basis of a relatively small capital investment. The flotation of firms allowed capital to be raised from outside the family circle; and the joint-stock form allowed family wealth to be diversified and made more secure.
Large amalgamation of family firms occurred in a rapid burst between 1898 and 1900, but the rate of flotation and merger remained at a high level until 1914. These were, however, often hamstrung by attempts to maintain the autonomy of the constituent family firm, leaving the large firms as merely holding companies with no real control over their subsidiaries. The desire to maintain family control was paramount and could lead to difficulties in managing the newly created company. For example, in the fusion of 59 firms that produced the Calico Printers’ Association in 1899, each of the 84 directors on the board was determined to safeguard the interest of his original company that, in the majority of cases, was still under his management.
Bramcote Hall was built by Frederic Chatfield Smith, head of Smith’s Bank in Nottingham, in the late 19th century
However, in other cases, family firms were able to prosper. In 1848, for example, Thomas Barlow founded Barlow & Co. in Manchester, manufacturing and trading in textiles in Britain. From the mid-1850s, the firm started importing cotton from America and began exporting textiles to India and the Far East. In 1864, he founded Thomas Barlow & Bro. and during the 1870s and 1880s established his own trade agencies in Calcutta, Shanghai and Singapore to export goods from Britain, to import tea and coffee, and to acquire his own plantations in these regions. During the last two decades of the nineteenth century, Thomas’s eldest son John Emmott Barlow steered the family firm away from textiles to develop its interests in agency work, in the export of iron and steel, and in tea and coffee, which led to the acquisition of a bonded tea warehouse in London. In 1891, the Barlows took over the ailing textile importers Scott & Co. in Singapore and began to extend their business to coffee estates. When the crop failed in the late 1890s, business was diversified to planting rubber trees. In 1906, a number of estates combined to form the Highlands and Lowlands Para Rubber Co., with Barlow & Co. as its agents in Singapore and Kuala Lumpur, while the partnership of Thomas Barlow & Bro. acted as Secretaries in England. Diversification was one route to family success but, in the case of W.D. & H.O. Wills in the tobacco industry. Family control was maintained through a combination of technical innovation and organisational change in the 1890s that reinforced the predominance of the firm and did not lead to a haemorrhage of capital and ability from the organisation into landownership and politics.[2]
Because of family loyalties and priorities, those larger companies that succeeded in adopting a more centralised structure were generally either those in which one constituent firm was considerably larger than the others or those in which a particular family managed to subordinate its fellows in the struggle for control. The families who lost out in the struggle for the fewer positions of control in the amalgamated firms were faced with the choice of either retiring into land or politics or moving into new business ventures. Families that wished to leave business often decided to sell out to a company promoter prior to the stock exchange flotation. These families sometimes retained a stake in the firm but were not involved in active control.[3] Promoters were often keen to recruit peers to the board of companies of the companies that they floated, feeling that a ‘lord on the board’ would help the sale of shares.[4] The number of the aristocracy on the board of the Great Western Railway, for example, rose from eight of the forty-nine directors in 1856-1875 to thirteen out of thrity-six between 1896 and 1915. From the 1870s, landowners joined the boards of joint-stock companies and by 1896, a quarter of all peers had directorship. Many of these men would have been invited on to a board to provide kudos but many landowners found that their directorships provided a significant supplement to their income. Companies may even have benefited from the ‘managerial’ expertise of the landowners since the managerial problems of large firms and the need for delegated administration was similar to those faced on their estates.
The declining return of agriculture as a proportion of the returns of the economy as a whole was aggravated by the agricultural depression of 1873-1896.[5] Smaller landowners were hit far more severely than the larger landowners who had been able to diversify into non-agricultural activities. The squeeze that this exerted on the smaller landowners exacerbated the growing awareness and criticism of the accumulation of wealth in land, commerce and industry.[6] The result of this controversy and criticism was the establishment of an official investigation to scotch the claim that the bulk of British land was owned by 30,000 people. In fact this backfired: the investigation discovered that the land was owned by a much smaller number of people. The results of the survey for 1873 were published in the Returns of Owners of Land (the ‘New Domesday Book’)[7] and, although there is some confusion in the various summaries of the Return, certain conclusions about the ownership of land are clear. First, 80% of land was owned by 7,000 people, of whom 4,200 in England and Wales and 800 in Scotland held 1,000 acres or more. Secondly, among these people, 363 held 10,000 acres or more and 44 had 100,000 acres or more. Most of the largest estates were in Scotland: there were a total of 35 estates larger than 100,000 acres, of which the 25 Scottish estates accounted for a quarter of the Scottish land. Thirdly, in total the large landowners held about 24% of the land, the smaller rentiers held about 55% and owner-occupiers held a further 10% with the Church of England and the Crown holding a similar amount. Finally, this national picture was repeated at local level: in East Anglia, for example, 350 people owned 55% of the agricultural land in Norfolk, Suffolk and Cambridgeshire.
In terms of income from land, 2,500 people had an annual rental income of £3,000 or more in 1873 of whom 866 received an income of £10,000 or more and 76 received £50,000 or more. Sixteen people received a rental income in excess of £100,000, the largest incomes going to the Dukes of Norfolk and Buccleuch and the Marquess of Bute. There was not a perfect correlation between income and acreage. Only 7 people had both 100,000 acres and £100,000 annual income: the Dukes of Buccleuch, Devonshire, Northumberland, Portland and Sutherland, the Marquess of Bute and the Earl Fitzwilliam. The survey did not extend to the rental income derived from urban rents and the wealth of men such as the Duke of Westminster was underestimated.[8] To identify Britain’s richest landowners more closely it is necessary to include the Dukes of Norfolk and Westminster, who had large incomes from relatively small estates and six men with massive estates with less than £100,000 rental: the Duke of Richmond, the Earls of Breadalbane, Fife and Seafield, Alexander Matheson and Sir James Matheson. These fifteen people constituted the core of the British landed class. The continuing overlap between the rich and the peerage is obvious. Of the 363 people with both £10,000 income and 10,000 acres, together holding almost a quarter of Britain’s land, 246 were members of the peerage; and a further 350 peers had smaller estates.
| Landed wealth-holders 1809-1899 | |||
|
| 1809-1858 | 1858-1879 | 1880-1899 |
| Millionaires | 75 | 33 | 32 |
| Half-millionaires | 150 | 50 | n/a |
| Total | 225 | 83 | -- |
This table shows the estimate by Rubinstein of the numbers of landed millionaires and half-millionaires that is those leaving land valued at £500,000 or more on their death. It is clear that the number of landed millionaires fell considerably between the first and second half of the century. It is, however, important to recognise that the holding of land through settlements and trusts tended to result in an underestimation of landed wealth in studies based on land held at death. The position of landowners in relation to wealthy merchants and industrialists was deteriorating significantly.[9] Harold Perkin has estimated that there were, in 1850, 2,000 businessmen with profits of £3,000 or more; 338 of these people received £10,000 or more and 26 £50,000 or more. [10] In 1867, the wealthiest 0.5% of the population received 26.3% of the total income. By 1880, the number of businessmen with Schedule D profits of £3,000 or more had risen to 5,000 of whom 987 received £10,000 or more and 77 £50,000 or more.
| Top British wealth-holders outside land 1809-1914 | ||||
|
| 1809-1858 | 1858-1879 | 1880-1899 | 1900-1914 |
| Millionaires | 9 | 30 | 59 | 75 |
| Half-millionaires | 47 | 102 | 158 | 181 |
| Total | 56 | 132 | 217 | 256 |
By 1880, the commercial and manufacturing classes had overtaken the landed classes in economic terms. The financial sector consistently accounted for between 20 and 40% of all non-landed millionaires. Both of the main industries of the industrial revolution were well-represented among millionaires. Textiles accounted for about 10%, a slight increase from earlier in the century while metals accounted for the same percentage in both of the earlier periods and then fell away. In the later periods, the food, drink and tobacco industries together accounted for about a fifth of all non-landed millionaires, and from 1858 the distributive trades accounted for one-tenth.
The wealthy men of land, commerce and manufacturing drew closer together during the Victorian period, though landowners still tended to denigrate merchants and manufacturers as ‘middle-class’ and concerned with ‘trade’.[11] This status exclusion was eased by the existence of a vast number of clerks, shopkeepers and tradesmen who were oriented towards the commercial and manufacturing classes and appeared to form a continuous social class with them. In fact, the economic gulf between them was immense.
It was the development in the scale of business activity and the emergence of the joint-stock company that brought into existence professional and salaried managers and administrators who occupied an increasingly important position in the class system. These ‘professionals’ were distinct from manual workers by virtue of their higher earnings, the ‘career’ nature of their work and their participation in the control and surveillance of the labour process but they were distinct from the capitalists themselves. They constituted a loose middle stratum below the main areas of privilege, but enjoyed superior life chances to the majority of the working population. They were, however, dependent on the business and private actions of manufacturers and merchants and were also direct beneficiaries of the new form of property that the joint-stock company represented. Yet with the landowners, manufacturers and merchants, the intellectual property of the professions represented an important shift in the definition of property in late Victorian Britain.
[1] Johnson, Paul, Making the Market: Victorian Origins of Corporate Capitalism, (Cambridge University Press), 2010.
[2] Alford, B.W.E., W.D. & H.O. Wills and the Development of the UK Tobacco Industry, 1786-1965, (Taylor & Francies), 2006, pp. 304-306.
[3] Casson, Mark, ‘The economics of the family firm’, Scandinavian Economic History Review, Vol. 47, (1999), pp. 10-23.
[4] See, Jeremy, David, J., ‘Anatomy of the British Business Elite, 1860-1980’, Business History, Vol. 26, (1), (1984), pp. 3-23, Channon, G, ‘The recruitment of directors to the board of the Great Western Railway’, www.manchesteruniversitypress.co.uk/uploads/docs/200001.pdf
[5] On the depression see above, pp. ***. See also, Channing, Francis Allston, The Truth about Agricultural Depression: an economic study of the evidence of the Royal Commission, (Longman, Green and Co.), 1897, pp. 29-52 on evidence for successful farming.
[6] Burrows, A.J., The agricultural depression and how to meet it; hints to landowners and tenant farmers: By Alfred J. Burrows, ...Reprinted, with considerable additions, from ‘The Journal of Forestry and Estate Management’, (William Rider & Son), 1882 was one, of several, self-help books.
[7] See Bateman, John, The Great Landowners of Great Britain and Ireland, (Harrison and Sons), 1879, 4th ed., (Harrison and Sons), 1883.
[8] Ibid, Rubinstein, W.D., Men of Property: The Very Wealth in Britain since the Industrial Revolution, pp. 193-226 provides analysis based on the Returns of Owners of Land; see especially Table 7.1, pp. 194-195.
[9] Spring, David and Spring, Eileen, ‘Debt and the English aristocracy’, Canadian Journal of History, Vol. 31, (1996), pp. 377-394.
[10] Ibid, Perkin, H., The Origins of Modern English Society 1780-1880, pp. 414-420.
[11] See, Spring, Eileen, ‘Business men and landowners re-engaged’, Historical Research, Vol. 72, (1999), pp. 77-91.
