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The Social and Industrial history of Scotland, from the Union to the present time
Nineteenth Century: 8. Commercial Enterprise


The progress of modern commerce has been enormously facilitated by improved transport. The raw materials, imported by steamship, are expeditiously distributed by railway to the manufacturing centres. Coal, the first requisite of production, can easily be carried to these centres in the large quantities necessary to keep the factories working. The manufactured goods, for home consumption and export, can be as easily transported to their inland destinations, or to the seaports for shipment. Road transport has also been greatly developed in recent years by the advent of steam and especially motor lorries and vans. These advantages are palpable to everyone to-day. In the days when railway enterprise was but a problematic experiment, they were not so obvious. Mr Charles MacLaren wrote a series of papers in The Scotsman of December, 1824, in which he foretold the possibilities of railway locomotion and the social and commercial effects of such locomotion, with remarkable foresight. His forecast was received with scepticism, and he was regarded as a presumptuous visionary by some of his critics. Time, however, ere long proved him to be a true prophet. "We cannot scan the future march of improvement; and it would be rash to say that even a higher velocity than 20 miles an hour may not be found applicable". Tiberius travelled 200 miles in two days, and this was reckoned an extraordinary effort. But in our times a shopkeeper or mechanic travels twice as fast as the Roman emperor, and twenty years hence he may probably travel with a speed that would leave the fleetest courser behind. Such a new power of locomotion cannot be introduced without working a vast change in the state of society. With so great a facility and celerity of coinmunication, the provincial towns of an empire would become so many suburbs of the metropolis— or rather, the effect would be similar to that of collecting the whole inhabitants into one city. Commodities, inventions, discoveries, opinions would circulate with a rapidity hitherto unknown, and, above all, the intercourse of man with man, nation with nation, and province with province would be prodigiously increased."

Other factors besides the marvellous development of transport facilities have contributed to the vast commercial advance of the last 100 years. Among these, not the least effective was the introduction of Rowland Hill's scheme of the penny postage in 1840, which reduced the cost of conveying an ordinary letter within the United Kingdom to one penny, irrespective of the distance traversed. Still more effective was the introduction of electric communication by means of the telegraph and the telephone. The invention of the electric telegraph was the result of many tentative efforts to communicate intelligence by electric means, and the problem was at last practically solved by Messrs Wheatstone and Cook in England, who improved the needle telegraph between 1887 and 1845, and by Mr Morse in America, who, in 1830, produced the electro-magnetic recorder. Both systems subsequently underwent improvements and modifications, and the telegraph not only vastly facilitated intercourse in individual lands and between adjacent countries, but by the laying of undersea cables brought the old world into close touch with the new, and finally interlinked all the nations of the world. The laying of the first submarine cable—that between France and England—was successfully accomplished in 1851, and in 1800, after a couple of unsuccessful attempts, the Great Eastern at last accomplished the feat of connecting England and America by cable telegraph laid on the bed of the Atlantic. Ten years later, Mr Graham Bell, a Scotsman domiciled in America, succeeded in conveying speech by the invention of the telephone, which was publicly exhibited for the first time at Philadelphia in 1876, and before the British Association in England in the same year. In this year an improvement of it was brought out by Mr Edison. The most marvellous form of electric communication —that of wireless telegraphy—was achieved by Signor Marconi about twenty years later. The flying machine, in the form of the airship and the aeroplane, whose wonderful advent belongs to the twentieth century, has already become a mechanical commonplace. Its capabilities as a means of communication have been brilliantly demonstrated by the achievements of the Flying Forces of the belligerents of the great war, and by the airship and aeroplane flights across the Atlantic, and the aeroplane voyage from England to Australia successfully achieved at the end of 1919 by the brothers Ross and Keith Smith. Mail and passenger services have followed the aerial operations of the war and the commercial possibilities of the flying machine, though still limited, are not to be gauged by what has actually been achieved in this direction.

The organisation of commerce has undergone a marked development in the course of the last 100 years. The old leisurely methods of the eighteenth century, by which business was transacted in the back shop of the dealer, or in the tavern near, has long gone out of vogue. Competition has necessitated organising talent and pushful initiative in the successful trader, large and small, to a degree undreamt of by our great-grandfathers. Even the ordinary retailer finds it necessary to keep himself within the purview of his customers, and in the case of the provision trade at least, it is not unusual to call for orders for the day's supply. The goods ordered have to be delivered at the customer's residence, and a vast system of transport between shop and dwelling is maintained in the larger towns. The advertisement or the printed catalogue has become an essential of many branches of trade and a whole army of commercial travellers is ever on the move throughout the land, whose special business it is to obtain orders for the wholesale houses from the retail merchants. Another feature is the growth of large establishments, which deal in certain classes of goods and absorb a vast amount of the trade formerly in the hands of the small retailer. These establishments are often run by limited liability companies and the profits disbursed in the form of dividends to their shareholders. Many of these have branches all over the country, and the management of these large concerns is a task demanding great adrninistrative ability. Their extensive overturn has militated seriously against the small trader, who finds it ever more difficult to maintain himself against their powerful competition. Another form of the same tendency is the combination of merchants or manufacturers in the same line of business with the object of fostering overturn and regulating prices, by no means to the advantage of the consumer. The sinister term "profiteering" has not unjustly come to be applied to this sort of tactics which during, and even after the war, has swelled the dividends of too many of these concerns to an excessive extent.

The development of industry has enormously added not only to the quantity, but to the variety of marketable goods and has given rise to a corresponding increase in the number of specific wholesale and retail trades.

Another remarkable feature of the commercial history of the nineteenth century has been the application of the co-operative principle and the rise and extension of co-operative trading societies all over the land. The movement in Scotland dates from the later eighteenth century. The first store on the cooperative principle, as far as our knowledge goes, seems to have been started at Fenwick in Ayrshire in 1769 by the weavers of the village, and dealt chiefly in oatmeal. Another was formed by the weavers of Govan in 1777, and continued to exist till 1909; a third, which still survives, by the same craftsmen at Lennoxtown, in Stirlingshire, in 1812. Others of these early associations ere long collapsed, but the Larkhall Society, which was started in 1821, also survived to the present time. During the next thirty years societies came into existence at Glasgow, Bannockburn, Cadder, Paisley, Muirkirk, Darvel, Leven, Leslie, Kingskettle, Menstrie, Alva, Tillicoultry, Arbroath, Brechin, Kirriemuir, Galashiels, Hawick, Selkirk. These early societies aimed for the most part only at selling goods to their members at cost price, plus the extra charge for expenses of management, though some of them also divided the profits in proportion to the number of shares held by the members. A great impulse was given to the movement by the adoption of the principle of dividing the profits among the members in accordance with the amount of their purchases. The advocacy of this idea is claimed for Mr Alexander Campbell, of Glasgow, who was an ardent missionary of Robert Owen's scheme of social reform on communal lines. The movement received the sanction of Parliament in 1852, in the Industrial and Provident Societies Act, which was amended and extended by subsequent acts, that or of 1893 exempting them from income tax, provided the Society is does not sell to persons who are not members and that the d number of its shares is not limited. This exemption is resented e by the private trader as an unfair handicap, on the ground that a trading concern which distributes profits that are not subject to income tax has an advantage, in the matter of prices, over one whose profits are subject to this charge. From 1857 to 1863 a great extension of the movement took place. Among the more notable of the new ventures were the Paisley Equitable, the Paisley Provident, and the Paisley Manufacturing, the Glasgow Co-operative which, however, collapsed in 1865, owing to a too reckless extension of branches; St Cuthbert's, Edinburgh—now the largest in Scotland, with a membership of nearly 40,000 in 1909; the St Rollox, Glasgow, the Glasgow Eastern, the Barrhead Society, the Kilmarnock Equitable, the Dumbarton Equitable, the Lanark Provident, the Aberdeen Northern, the Edinburgh Northern District—later amalgamated with St Cuthbert's —the Alloa, and Dunfermline Societies. By 1866 there were as many as 120 societies on the list of the Registrar of Friendly Societies in Scotland, and many more were in existence, though not registered. The next important step was the establishment of the Scottish Wholesale Society for the supply of the retail co-operative trade throughout the country. It was started in Glasgow in 1868 under a committee representing a number of societies, which undertook to purchase their goods from it. Thus was launched the policy of co-operative production, which has grown to such large dimensions in the works at Shieldhall for the manufacture of a large variety of goods, the Chancelot Flour Mills at Edinburgh, the Ettrick Tweed Mills at Selkirk, and the Calderwood Estate for fruit growing. Its capital in 1909 was over millions, sales close on millions, and the net profit close on £280,000.

The growth of the co-operative movement may be best gauged by a comparison of the statistics relative to it in the years 1886 and 1909. In the former year the number of societies was 311, including the Wholesale Society, with a total membership of 327,000, a total share capital of £854,530. In the later year the number of societies had fallen to 294 (again including the Wholesale society), but the membership had swelled to 465,329. The total share capital to nearly 5½ million, and the total net profit to £2,852,783.

A very significant indication of the commercial and industrial progress of the country is the marked increase of population and the growth of towns at the nineteenth century. The total population of Scotland in 1801 in round numbers was 1,608,000. Fifty years later it was close on 3 millions The next fifty years saw a steady rise to nearly 4½ million, with 4,472,000 in 1901. At the end of the first decade of the twentieth century the total was 4½ million with 4,760,000  At the begining of the nineteenth century (1801) no Scottish town had a population of 100,000. The inhabitants of Glasgow, with suburbs, totalled in round number 81,000. It was then surpassed by Edinburgh and Leith (practically one city, but administered seperately) with 53,000. Dundee had only 26,000. Aberdeen 18,000. Paisley and Greenock each 17,000. Perth 15,000 and Dunfermline 10,000. All the others fell below this last figure. In the middle of the century (1851) Glasgow with suburbs had risen to 345,000. Edinburgh and Leith to 294,000. Dundee to 63,000. Aberdeen to 54,000. Paisley to 32,000. Greenock to 37,000, whilst Perth remained static and Dunfermline had fallen to 9000. Kilmarnock on the other had had risen to 29,000 and Hamilton and Inverness had risen to 14,000. Fifty years later (1901) Glasgow, with suburbs, had reached a total of 290,000. Edinburgh-Leith 250,000., Dundee 161,000, Aberdeen 158,000. The extremes of the Glasgow city boundaries in 1912 raised the population to over 1 million, and in 1919 it was estimated to have increased to 1,114,656. By the extension of the Edinburgh boundary in 1920, so as to include besides Leith, a large landward district, that of the capital now exceeds half a million.

A more direct indication of the trade is afforded by the increase in the tonnage of the vessels entering and sailing from Scottish ports. and in the value of imported and exported good carried by them. In 1851 the total tonnage entering and clearing from Scottish ports and engaging in the coasting, colonial and foreign trade was fully 5½ million tons. In 1884 it had risen to close on 20 millions. Thirty years later in 1913. the last pre-war year, the tonnage for Glasgow alone was close on 12½ million, for Leith 4¾ millions, for Greenock 3½ millions, for Grangemouth over 3 millions. Aberdeen 2½ millions. Burntisland 2 millions, Dundee over 1½ millions and Ardrossan over 1¼ millions.

Equally significant is the rise in the value of imports and exports In 1801 the figures were over 2½ millions and nearly 3 millions respectivelly. In 1851 nearly 9 millions and fully 5 millions. In 1883 nearly 39 millions and 21 millions. Thirty years later in Glasgow alone nearly 18½ millions and 38 millions. For Leith about 15½ millions and 7½ millions. Grangemouth fully 6 millions and 3 millions, etc. Another striking testimony to the progress of the shipping trade is afforded by the harbour revenue of the greatest of the Scottish ports. In 1808 this revenue amounted to about £5,500; from July 1910 to the 30th June 1911 it was £577,322.

In addition there had  to be reckoned the value of the goods produced and distributed with the country for which no figures are available but which would greatly enhance the total value of its commerce. Perhaps one may best realise this vast activity in production and exchange, which go to the making of modern commerce, by taking a railway journey which carries the traveller past one or more large goods stations, with many miles of rails and countless goods trains arriving or departing, or passing through. The work of transport to and from factory and warehouse, field and mine, harbour and dock, goes on day and night, with the partial exception of Sunday. And this work is not confined to the large railway centres, though it is displayed there on the grand scale. Every country station has its goods siding, and the goods traffic of these countless stations in the aggregate represents an enormous additional commerce. In 1912 the total tonnage of goods and minerals carried on the Scottish railways was nearly 67 millions. Go back 100 years to the days of road transport—the days of the carrier and the hawker— and what a vast and complex commercial advance does the contrast reveal! Even within the period of railway transport the increase in the exchange of goods, represented by this transport, has been colossal. In 1864 the tonnage of goods and minerals carried was a little below 18 millions. In 1884 it was very nearly double, with fully 35|½millions. In 1904 it was nearly 65 millions; eight years later it was nearly 67 millions.

Commerce is liable to fluctuations between prosperity and depression, as the London Bankers' Clearing House and the railway returns, for instance, show. These fluctuations recur in cycles. At a certain period prices begin to fall below those prevailing for some time. This fall lasts for a longer or shorter period, when they begin to rise in the case of certain commodities, and the rise extends to others, until it becomes general. The ascending movement lasts for a certain time, to be followed by the reverse process. War, rash speculation, over-production, over-trading tend to affect industry and commerce, imparting an artificial stimulus to be followed by the inevitable reaction. To these influences has to be added that of strikes, which not only disorganise and diminish the particular industry affected, but adversely react on the whole trade of the country.

Apart from the ordinary ebb and flow of trade there were in the nineteenth century a series of commercial arises, with disastrous effects for the time being. In the years 1823-26 the crisis was largely brought about by the mania for forming joint stock companies of all kinds. "It was," says Lord Cockburn, "the period of the most violent joint stock mania that ever seized this kingdom, the newspapers of the day containing little else than advertisements and recommendations of joint stock companies." It was less disastrous in Scotland than in England. Whilst more than eighty of the English banks suspended payment, only three of the smaller Scottish banks—the Caithness Banking Company, the Stirling Banking Company, and the Fife Banking Company —collapsed. Several years of depression followed, and there were not a few failures. "To such an extent was this depression felt in Dundee," notes Mr Mackenzie in The Scottish Bankers Magazine of April, 1909, "that the banks in some cases were obliged to receive payment in kind of their debts, the acceptors of bills tendering cloth when they had no money wherewith to pay." The crisis of 1847 was largely due to the railway mania. Schemes for constructing hundreds of railways were launched in 1845-46 and a credulous public recklessly invested its money in these impossible ventures, only to realise too late that it had been swindled for the most part. The ill effects of this rash railway speculation were aggravated by the bad season of 1846, which destroyed the crops in the United Kingdom and raised the price of wheat to 120s. per quarter. Corn merchants made large purchases in foreign countries in the hope of selling with a large profit. The arrival of these imports and the prospect of a good harvest in the following season led to a fall in prices, wheat dropping to about 60s. per quarter. The result was a large number of failures, which seriously affected Scottish as well as English trade, especially that of Glasgow.

Several years of prosperity preceded the crisis of 1857, which embraced America as well as Europe. British exports had been doubled between 1848 and 1857, rising from about 60 millions to fully 122 millions. Over-trading produced the inevitable reaction in America, which affected disastrously the trade of the United Kingdom. "The first occurrence which caused alarm in Scotland was the failure of the house of McDonald & Co., of Glasgow, well-known merchants in that city, who had a large connection. This failure was soon followed by that of Monteith & Co., and Wallace & Co., two other Glasgow firms. It was well known that all these houses were largely indebted to the Western Bank, and this knowledge produced a feeling of distrust in the management and soundness of that institution. This uneasiness was evidenced by a rapid decline in the price of the bank's stock, and a continuous withdrawal of deposits. On account of the crisis in the United States, and the bank's connections with business houses in that quarter, it was at the same time greatly incommoded through the failure of remittances to meet its acceptances under credits." On the 9th November, 1857, the bank, being unable to meet its liabilities, which amounted to nearly 10¾ millions, suspended payment and afterwards went into voluntary liquidation. On the following day the City of Glasgow Bank was also forced to close its doors, though in this case the suspension proved to be only temporary. A third bank—the Edinburgh and Glasgow—only escaped disaster by amalgamating with the Clydesdale Bank. "Great depression existed in the country for some time in consequence of the failure of the Western Bank. Much distress arose, especially in Glasgow and other places in the west, owing to the failures which took place and the number of people thrown out of employment."

The next serious crisis was that of 1878, which was occasioned by the failure of the City of Glasgow Bank. In this case the crash was not caused by inflation and over-trading, but by the unsound and dishonest business methods of the directors of the bank, who had not only made advances, amounting to nearly 6 millions to four firms, but some of whom fraudulently manipulated the bank's accounts so as to conceal from the shareholders and the public the actual state of affairs. After an ineffectual attempt to obtain a loan from the other banks, it was forced to suspend payment on the 2nd October, 1878, with liabilities, exclusive of capital, of nearly 12½ millions. As in the previous case of the Western Bank, the unfortunate shareholders, in virtue of their unlimited liability, were called on to make up the deficiency in the assets, which amounted to £5,190,000. Only a fraction of their number remained after the deficiency had been met, the greater number were absolutely ruined, and so widespread and crushing was the effect that a relief fund was opened, which realised £40,000. Failures were numerous and a protracted period of trade depression followed. A number of the directors were tried and imprisoned for fraud. In order to restore confidence, the Scottish Banks adopted the practice of having their accounts and balance sheets audited by professional accountants and registering under the Act of 1879 as limited liability companies.

The operations of the banks afford a good test of the commercial enterprise of the country. "Commercial activity," says Mr Milne in The Scottish Bankers Magazine, October, 1913, "is reflected with a fair amount of accuracy in the mirror of banking statistics. In 1901-2 the deposits in the Scottish banks amounted to 107½ millions. In 1916-17 they reached the total of 166½ millions, an increase of fully 59 millions. In 1901-2 acceptances and drafts totalled nearly millions; in 1916-17 nearly 81 millions. Banking advances in 1901-2 were fully 74 millions; in 1916-17 they had risen by fully 20 millions to over 95 millions. Banking profits are another indication of the extent of commercial transactions. In 1901-2 the net profits of all the Scottish banks were £1,664,109; in 1916-17 they were fully 2 millions. The total for the period from 1865 to 1897 was over 39 millions, and for the next twelve years up to 190S nearly 20 millions more, or well-nigh 60 millions for these 45 years."

Bank deposits represent only a certain proportion of the profits of industry and commerce. Investments in joint stock companies absorb a large amount of the available capital of any one year of those who prefer a higher, though less safe interest to that yielded by the banks for deposits. The paid up capital of limited companies in Scotland, exclusive of railways and tramways, rose, for instance, from about 127 millions in 1901 to about 189½ millions in 1911—an increase of about 62 millions in ten years. In the latter year, therefore, practically £40 per head of the population of Scotland was employed in the trade of the country by means of joint stock enterprises.

A more modest, but still significant indication of increasing industrial and commercial activity is afforded by the savings of the -working classes as shown by the statistics of the Trustee Saving Banks, established in 1517. and the Post Office Saving Banks established in 1561. In 1564 the amount due to depositors in the Scottish Trustee Saving Banks was £2.221.001: in 1553. £7.359,556: in 1594. £11,390,491; in 1904, £17,754,659; in 1914. £20,535.432, the number oi depositors in the last mentioned year being 615,633. From 1594 to 1914 the amount in the case of the Post Office Saving Banks rose from fully 2½ millions to nearly 5i½ millions.

The Scottish Fisheries constitute an important element in Scottish industry and commerce. They received a great impulse from the establishment of the Fishery Commissioners, who were authorised by Act of Parliament in 1507 to grant bounties on all fishing vessels from 50 to 100 tons and 2s. per barrel of fish cured on shore and 2s. 5d. additional on each barrel exported, to take measures for the improved gutting and packing of fish, and to appoint officers at the fishing ports to supervise the industry. These Commissioners were superseded in 1552 by the Fishery Board of Scotland, with increased powers. During the next twenty years. after the passing of the Act, the policy of granting bounties was so effective that it was found unnecessary to continue the system after 1530. Whilst in 1507 the quantity of herrings cured was 90.155 barrels, of which 35.545 were exported, the number in 1520 had risen to 442.195 and 294.505 respectively. The herring fishing is the most extensive. Originally it was chiefly prosecuted on the West Coast, particularly the Firth of Clyde, and in 1516. 510 of the 726 boats engaged in it belonged to this region. Ten years later the lead had passed to the East Coast, and Eyemouth. Newhaven. Anstruther, Montrose, Stonehaven. Aberdeen, Peterhead, Fraserburgh, the Moray Firth ports. Wick, and Orkney and Shetland became important centres of the industry. Wick long taking the leading place. On the West Coast, Stomoway, Lochbroom, Campbelliown, also developed into important centres of the industry. For the growing yearly catch accruing from this development. Ireland and the West Indies were the chief markets. The abolition of slavery in the Indies proved adverse to the export thither, which fell from 67.000 barrels to less than 5.000, and the Scottish curers turned for a market to the Balken ports, where Scottish cured herring successfully competed with the Dutch. So considerable had the industry become by the middle of the nineteenth century that new harbours were constructed and the old ones enlarged, and larger boats were built during the next twenty years. Already in 1550 there were fully 66,000 persons employed in connection with it, and though the season lasted only eight or ten weeks ( July-September), many of these found employment throughout the year as carpenters and barrel-maker;, rope, sail, and net-makers. etc. Its progress may- also be gauged by the increasing size of the boats engaged in it. In the early part of the century they were from 24 to 28 feet keel, were usually manned by five men. and carried from twelve to nineteen nets. They were ere long enlarged to from 32 to 96 feet. and carried iron thirty to thirty-five sets. Between 1860 and 1570 came the decked boat, and the introduction of a winch to hoist the sails and masts and haul the nets, and later of the steam capstan led to a further increase in the size of the boats, many of which are now driven by motor power, to from 60 to 65 feet keel. About 1839 the steam trawler made its appearance, and in spite fi the Act prohibiting the trawlers from fishing within three miles of the shore and the closing of the Firths of Forth and Clyde. and the Moray Firth, trawling has greatly increased. In 1893 there were 47 trawlers at work; in 1903 they had increased to 232, and in 1910 to 319. The steam drifter also made its appearance, and their number rose from 70 in 1900 to 1,167; in 1910. In the latter year the number of sailing coats had fallen to 85.295 from 14,254 in 1890, the total vessels of all kinds engaged in the industry being about 10,000. valued at nearly 5½ millions.

Next in importance to the herring fishing is the '*white fishing" embracing cod. ling, haddock, sole, halibut. etc.. and especially famous are the cured or "Finnan Haddie" of the Aberdeenshire and Barn shire coasts. The old method of fishing with baited lines for cod and other white fish has been largely superseded by the beam trawl net. Shell fish are caught in considerable quantities, and the salmon fisheries in the estuaries of the Scottish rivers are very productive. Whale fishing. on the other hand, which was formerly prosecuted from Dundee. Aberdeen, Peterhead, and other East Coast ports, has declined since about the middle of the nineteenth century.

As showing the growth of the herring curing industry during the first three-quarters of the nineteenth century, it is significant that the number of barrels of cured herrings rose from 111,519 in 1812 to over a million in 1874. In 1880 the number stood at 1,473,600, and though the catch is liable to fluctuation, the increase, taking the average, has been substantial. The export trade shows a similar rise from 62,820 barrels in 1812 to nearly three-quarters of a million in 1874 and fully*a million in 1880, the largest portion going to the Baltic ports for Germany and Russia. In addition a vast quantity is sold fresh for home consumption. The total catch of herrings and other kinds of fish is given in hundredweights in the official statistics for later years. From 1887 to 1913 the hundredweights of herring landed vary annually from 8 millions to nearly 6 millions, and in 1907 the number was fully 6^ millions. In 1918 it was millions. The total for fish of all kinds (excluding shell fish) during the same period varies from 5 to nearly 9 million hundredweights and in 1907 the 9 millions were overpassed. Similarly, the value of herring sold during the period rose from £641,572 in 1887 to over 2 millions in 1918, and the total value of fish of all kinds from £1,330,394 to close on 4 millions, the highest total reached within the period. The number of persons engaged in the industry is about 90,000, of whom 40 per cent, are fishermen, 25 per cent, curers and their employees, the remainder fishmongers, boat builders, etc. In 1900 the total capital invested in boats, nets, and other gear in Scotland amounted to about £1,605,900. In 1914 it had risen to over 3½ millions.


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