Here is a term paper on the ‘Economy of Britain’ during 1868-1885.
1873 is a great economic divide. It was the peak of the trading boom of the mid-nineteenth century. There followed, until 1896, what is often known as ‘The Great Depression’. This is a thoroughly misleading term, but that the economic climate changed in the ‘seventies cannot be doubted.
It is still revealing, however, to look at the economic development of the period 1868 to 1885, or of a period as close to that as the statistics allow, in somewhat the same way as for previous periods. Despite all the novelties of these years, the continuity with earlier development is impressive.
To take, as usual, population change first, the crude British birth-rate reached its highest recorded level, around 36 per 1000, in the ‘seventies, and the 26,000,000 in the Britain of 1871 became 33,000,000 in 1891. Ten more towns passed the figure of 100,000 inhabitants between these dates, making a total of 28 towns of that size outside London.
Four of these new recruits were in Lancashire, Blackburn, Bolton, Oldham and Preston; and the population of the county as a whole increased over the two decades by more than 1,000,000, to almost 4,000,000. This growth reflects the remarkable resilience of the cotton industry after its setback of the early ‘sixties.
Three old towns of the Midlands and East Anglia entered the category:
2. Nottingham and
Their emergence marks the rise of the factory in two hitherto domestic industries, making hosiery and boots and shoes. Aberdeen, Birkenhead and Cardiff all qualified as ports, Cardiff as the world’s greatest coal- exporter, the others also as shipbuilding towns.
The tenth in the group, Brighton, was the first seaside resort to enter this league. Glasgow, Liverpool and Manchester now had over half a million inhabitants each. London continued to grow as fast as any, from nearly 4 to over 5.5 million, but otherwise, at least until about 1880, the North and its towns were still gaining from the South. The agricultural labour force continued to decline, and some southern rural counties were depopulated. Heavy emigration occurred in the years around 1870 and in the ‘eighties.
Of the staple industries cotton exported an ever larger proportion of its output, four-fifths in these years, and contributed a good third of the value of all exports. The industry’s production from 1866-70, by volume, was about 50 per cent higher than from 1861-65 and slightly higher than from 1856-60; the figures for 1871-75 were about 25 per cent better than those for 1866-70, and those for 1876-80 almost as good; in 1880-84 there was an improvement over the previous decade of about 12 per cent. Woolen textile production grew at roughly the same rate—more slowly than before.
The iron industry, however, advanced very rapidly, largely through the exploitation of new processes for the making of steel. Wrought iron production grew, though more slowly than before, until 1882; as for steel, Britain manufactured perhaps 100,000 tons in 1860, over 200,000 in 1870 and almost 2,000,000 in 1885.
Iron and steel output now amounted to 10 per cent of the whole national product. Exports of iron and steel combined passed 2,000,000 tons in the late ‘sixties, 4,000,000 in the early ‘seventies, then, after dropping below 3,000,000 in the latter part of that decade, reached 5,000,000 in the early ‘eighties. Railway-building remained of importance.
At home more than 4,000 miles of railway were opened between 1868 and 1885. Abroad 60,000 miles were built in the ‘seventies and 100,000 in the ‘eighties. Ship-building, the most successful British industry of the second half of the nineteenth century, also using great quantities of iron and steel, constructed four-fifths of the world’s rapidly increasing output.
As far as this sector was concerned, Britain followed the course expected of an industrializing country: she became from the ‘sixties a great importer of iron ore, which she manufactured for export. Coal exports, on the contrary, more than doubled in this period and accounted for a growing proportion of total out-put.
These continuities with the experience of the early Industrial Revolution must be remembered. In a book whose terminal date is 1885 it is necessary to be especially careful not to allow the picture to be dominated by what appear to be harbingers of the economic transformation of twentieth-century Britain. But unquestionably there were-great changes during this final period, of which some took immediate effect and others revealed their significance only later.
One of the changes was touched on in the Introduction. Britain, although still pre-eminent, was losing ground relatively. There remained respects in which she was drawing away from her competitors, as in the size of her merchant marine and her output of ships, but in general the gap was being closed.
The most spectacular advances were made by Germany, which outdistanced France as Britain’s main European rival in the 1860s. It has been estimated that in 1860 Britain possessed steam engines with a capacity of 2,450,000 h.p., France 1,120,000 and Germany 850,000.
In 1880 Britain had 9,200,000, France 4,520,000 and Germany 6,200,000. As for iron and steel, in 1873 Germany produced over 2 million tons of pig iron, against France’s 1.4 million and Britain’s 6.6. In the late ‘seventies British steel was cheap and plentiful enough to put many German firms out of business.
But in the ‘eighties the tables were turned: while British output of pig iron was nearly stable, Germany’s nearly doubled. Still, in 1890 Britain made 5.3 million tons of steel, Germany only 3.2. The estimate was quoted in the Introduction that the United States’ manufacturing production passed Britain’s in the early ‘eighties; but the definition of manufacturing used includes baking, and more sophisticated American manufactures made little impact in export markets until the ‘nineties.
From Britain’s point of view in the ‘eighties, the United States was her granary. Again, though the later superiority of the German chemical industry is notorious, it was not fully apparent until the ‘nineties. The most complete industrial failure in Britain had little to do with foreign competition: the tin and copper mines which, disfiguring the Cornish landscape, had participated in the growth of the early Industrial Revolution virtually ceased to be worked in the 1860s. The end of mining did not, however, stop the growth of manufacturing. Britain, now using ore from overseas, had a world monopoly of tinplate production.
Other countries were bound eventually to catch up. There were even disadvantages in having led the way, for example the possession of much out-of-date plant. But in 1885 Britain’s pre-eminence and the continuity of her industrial success still stand out most strikingly, despite growing competition.
As for her trade, though it too was declining relatively to other nations’, it remained astonishingly large. In 1885 it amounted to 20 per cent of world trade, while the trade of Germany, France and the United States, taken together, totaled only 27 per cent. In the boom years before 1873 trade between Britain and the industrializing countries grew especially fast.
Thereafter the trend set in which persisted until the end of the century. The markets of Germany, France and the United States, now protected by high tariffs, became relatively less accessible to British goods than those of less developed countries, especially in the Empire.
India, for example, took more of Britain’s output of cotton textiles, which were no longer so easily sold in the more advanced countries. It was especially serious that the markets of Germany and the United States were becoming harder to penetrate, since they were showing the greatest increase in demand.
Two tendencies already observable in previous periods developed so rapidly after 1873 that the change amounts to a change of kind rather than a change of degree. First, Britain’s imports of food expanded vastly. The average annual import of wheat in the ‘sixties was under 30,000,000 cwt., in the ‘seventies over 45,000,000, in the ‘eighties over 56,000,000.
More generally, ‘In 1868 the United Kingdom still produced four-fifths in value of what the inhabitants consumed of grain, meat, dairy produce and wool. . . . In 1878 the United Kingdom supplied her inhabitants with scarcely one-half.’ In 1877, for the first time, the value of foodstuffs imported was greater than that of raw materials.
These facts have many implications. Such large amounts of food existed to be imported only because of the development of the prairies and transport in the United States and similar changes elsewhere. The bulk of the grain came from the United States, the wool from Australia, meat from both.
These areas were opened up only with the aid of British capital and emigrants. The new supplies were cheap. Even in years of good harvests in Britain, imported wheat now undercut the home producer. In bad years, which in the ‘seventies were commoner than good, his position was hopeless.
In the early ‘eighties wheat prices fell below 40 shillings a quarter, lower than at any time since the mid-eighteenth century, and they continued to fall henceforward, until around 1900. Wool prices broke also. The benefit to the consumer is as obvious as the damage to the farmer. 1873 certainly marks the beginning of the agricultural depression.
Until then, the high cost and difficulty of transporting bulk produce across Continents and oceans, the limited scope of settlement in the United States and Australia, the disruption caused by the American Civil War and the exceptional efficiency of British farming, nurtured by lavish capital expenditure, had delayed the onset of severe competition.
When it came, it was made much worse by the appallingly bad weather of the ‘seventies in Britain. In areas where wheat cultivation predominated, farmers suffered real hardship, land reverted to grass or pasture and eventually landlords had to reduce rents. The position was worst in the East Midlands and East Anglia.
Where other grains were the main crops and anywhere nears enough to big towns to profit by a shift to dairy-farming and market-gardening, the story was more cheerful. Cattle-farmers suffered little, because low grain prices reduced their costs and meat imports were insufficient to diminish the demand for home produce. In Wales rents held up, in the Fylde Lord Derby’s estates were prosperous as never before.
The agricultural depression was not general. But even between 1879 and 1887 a million-and-a-half acres, a tenth of the arable area of Britain, ceased to be so cultivated. The agricultural labour force declined. On the other hand, the total area of farming land was still growing. The effects of the depression in Ireland and on the aristocracy.
Secondly, there was a marked shift in favour of the consumer during these years. The fall in food prices was greater than average, but the inflation of the period before 1873 was sharply reversed and almost everything became cheaper. Indices are agreed that 1885 was the cheapest year covered by this book, with 1848-52 the only near competitors.
The fall continued until about 1900. Money wages fell slightly from a peak in the mid-‘seventies, but real wages, even corrected as far as possible for unemployment (which was particularly high in 1879 and in the mid-‘eighties), rose decisively. It is estimated that they were 30 per cent higher in the early ‘eighties than in the ‘fifties and early ‘sixties.
This trend too continued until about 1900. Between 1868 and 1885 consumption per head of both tea and sugar in the United Kingdom rose by more than 50 per cent. In 1884-6, for whatever combination of reasons, the proportion of the population relieved under the Poor Law was lower than ever before in the nineteenth century, 2.8 per cent.
Related to this improvement in the general standard of living were a notable development of the service industries and a diversification of manufacturing. ‘Persons engaged in transport, commerce, art and amusement, literary, scientific and educational functions had risen between 1871 and 1881 from 947,000 to 1,387,000, or from 8.8 per cent to 11.7 per cent of the self-supporting population.’
The early ‘eighties were the period of fastest development of multiple shops. In 1875 29 firms had 978 branches, in 1885 88 had 2787. Their chief fields of operation, apart from newspapers and sewing-machines, were groceries, meat and footwear. The International and Home & Colonial Stores became well-established. Boot’s original chemist’s shop was opened in 1877, and had branches by 1885.
Bicycles and perambulators both date from the ‘seventies, and their popularity from the ‘eighties. From this period come marketed sauces and meat extracts, and, at least on any large scale, marketed jams and tinned foods. At length the mass of the population was deriving undoubted benefit from the Industrial Revolution.
Such calculations as can be made of the growth of national income give this period the best record of any in the nineteenth century. From 1861 to 1891 real national product per head is believed to have doubled. For what it is worth, the ‘eighties are thought to have had a higher growth-rate than any other decade of the century. What, then, is ‘depressed’ about this period? Undoubtedly, after 1873, agriculture, at least as to wheat and wool.
The staple industries, too, had a bad time in the later ‘seventies. Overall, the rates of growth of cotton, wool and coal production were lower, and similarly with iron after the great boom ended in 1873. The most marked drop in a series showing percentage increase of industrial production per decade of the nineteenth century is that between the ‘seventies and ‘eighties.
The ‘seventies show an increase of 33 per cent over the ‘sixties. This is substantially lower than the figures for the ‘twenties and ‘thirties, but not very different from those for the ‘fifties and ‘sixties. The rise from the average of 1865-1874 to the average of 1875-1884 is only 23 per cent.
The relative decline continues until the mid- nineties. The series, however, gives undue weight to long-standing industries. The rate of growth of exports and of trade as a whole also fell. In the late ‘seventies foreign investment was comparatively low, and the days were now past when more capital was sent abroad than interest was earned there. There was a depression of prices, and a depression of industrial profits, at least in the established industries.
In particular sectors, then, and especially by value, there was relative decline. In the case of some branches of agriculture, there was absolute decline. The years immediately after 1873 constituted a grave setback in almost every field. But, per head and overall, in real terms the rate of growth of national product was more impressive than ever before.
It is the later continuance and intensification of the new trends of the ‘seventies and ‘eighties which have made historians criticize severely Britain’s performance in these years. In the long term it was clearly desirable that she should invest more capital in industry, old and new. High general growth rates can only be sustained by high industrial growth rates.
In some sectors at least there were weaknesses, which more capital and better management might have remedied, for example in chemicals. There was certainly an ominous deficiency of technical and scientific education. There must have been a diversion of resources of manpower, especially of potential managers, away from industry both into commerce and finance and into administering and extending the Empire.
But, up to 1885 and for some years thereafter, it was reasonable to be satisfied with the profits of British investment, trade, industry, shipping and financial services, especially in view of the unparalleled growth of per capita income. Entrepreneurs could hardly be expected to make contingency plans against the outbreak of a Great War in 1914.
It must be noticed finally that certain new demographic trends began in this period, although nobody could know then that they would endure. Before 1880 the crude death-rate in Britain was always above 20 per 1000 per year and at its highest just over 25. Beginning in 1881 the rate fell below 20 per 1000 per year, and, with the single exception of 1891, never rose above that figure again.
At length improvements in medical care, public health and food supplies had a distinguishable effect. The age-groups affected most were those below 35. The birth-rate was falling too, from the peaks of the ‘seventies at least, but in the period covered by this book it did not go below the figures recorded for the early years of compulsory registration from 1838.
It is likely that there is a direct connexion between the fall in infant mortality and the fall in the birth-rate. However, it is clearly not fortuitous that, following the prosecution of Charles Bradlaugh in 1877 for publishing a book on birth control, its sales rose from about 100 a year to 130,000 a year.
Some historians have plausibly suggested that the desire to restrict the size of families was strengthened by the rise in middle-class standards of living in the ‘fifties and ‘sixties. Now that a larger domestic staff and a costlier education for children were considered necessities for the well-to-do, the economic pressure is plain. As yet it was only among the middle classes that the decline in the birth-rate was evident.
There was almost no surplus rural and agricultural population left, at any rate in England. The country now had a smaller proportion of its inhabitants engaged in agriculture than any other. It was truly urbanized. This point reached, it is not surprising that patterns of migration changed.
In the ‘eighties, for the first time for probably two centuries, the towns of the North, though they grew by natural increase, did not attract so many migrants as they lost, whether to the South of England or to other Continents. Movement away from the cities created by the Industrial Revolution has continued ever since.