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The Rise of Specialist Firms in Spanish Shipping and Their Strategies of Growth, 1860 to 1930

Published online by Cambridge University Press:  13 December 2011

Jesús Ma Valdaliso
Jesús Ma Valdaliso
Affiliation:
JESÚS Ma VALDALISO is a lecturer of economic history atthe Universidad del País Vasco (Bilbao).
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Abstract

Spanish shipping firms relied on various strategies to direct the growth of their industry from 1860 to 1930. The diffusion of specialist shipowners during the second half of the nineteenth century was the result of both an increasing demand for maritime transport and a heavy rise in capital requirements owing to improvements in technology. During the first third of the twentieth century, some of these specialized firms became large companies through internal growth and/or horizontal combination. They achieved their gains without resorting to formal vertical integration, choosing instead to build social networks with other shipowners based on trust and loyalty. This approach allowed them to create intermediate arrangements, thereby diminishing transaction costs. When strategies of formal vertical integration were adopted, they primarily involved activities similar to shipping, such as ship brokering, consignment, stevedoring, and other maritime services. To document these trends, this article analyzes the organizational structure of Spain's twenty largest shipping concerns.

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Information
Business History Review , Volume 74 , Issue 2 , Summer 2000 , pp. 267 - 300
Copyright
Copyright © The President and Fellows of Harvard College 2000

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References

1 Valdaliso, Jesús Ma, “Growth and Modernization of the Spanish Merchant Marine, 1860–1935,” International Journal of Maritime History 3:1 (1991): 36–39CrossRefGoogle Scholar; and Fischer, Lewis R. and Nordvik, Helge W., “Maritime Transport and the Integration of the North Atlantic Economy, 1850–1914,” in The Emergence of a World Economy 1500–1914, eds. Fischer, W., McInnis, R. M., and Schneider, J. (Wiesbaden, 1986), vol. 2, 531.Google Scholar

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6 Código de Comercio of 1885, art. 595. See also Código de Comercio of 1829, arts. 616 and 617.

7 According to a commercial guide of Barcelona in 1863, sixty-five out of eighty-nine shipowners operating in the city during that year were also merchants, and “merchant” was the term that we can use to find them in the alphabetical list printed at the end of that guide; only fifteen were referred to as “shipowner,” and one, as “merchant” and “shipowner“; the author's estimate is based on the data provided by J. A. S., and M. Ll., , El Consultor Nueva Guía de Barcelona. Libro de grande utilidad para los vecinos y forasteros, y sumamente indispensable a todos los que pertenecen a las clases mercantil e industrial (Barcelona, 1863)Google Scholar. In Santander, according to the data supplied by another commercial guide published in 1861, thirty-eight out of forty-five owners of ships (lists 1 and 5) appear as “merchants capitalists,” see Remigio Salomon, Guía de Santander (Santander, 1861), 112–119.

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10 For the early 1860s Bilbao, see Valdaliso, Los navieros vascos, 183–184. See also Pou Montaner, Ibid.

11 Valdaliso, Los navieros vascos, 181–182. For England, see Ville, Ibid., 705.

12 Información sobre las consecuencias que ha producido la supresión del Derecho diferencial de Bandera y sobre las valoraciones y clasificaciones de los tejidos de lana (Madrid, 1879), vol. 1, 130. On this point, see also Emerencià Roig. La Marina catalana del vuitcents (Barcelona, 1929), 96.

13 The extent of the market was, without any doubt, the most relevant faetor. In countries like Britain, where the increase in the extent of the market between 1750 and 1850 was striking, the specialist shipping firm appeared earlier than the new technologies in maritime transport, see Ville, Ibid. Nevertheless, it is also true that in Britain the generalization of joint-stock companies went hand in hand with the diffusion of steam, see Green, Edwin, “Very Private Enterprise: Ownership and Finance in British Shipping, 1825–1940,” in Business History of Shipping. Strategy and Structure, eds. Yui, T. and Nakagawa, Keiichiro (Tokyo, 1985), 222–225.Google Scholar

14 The appearance of specialist shipping firms in these trades was narrowly linked to the diffusion of steamships, see Valdaliso, Los navieros vascos, 69–70, and La navegación regular de cabotaje en España en los siglos XIX y XX. Guerras de fletes, conferencias y consorcios navieros (Vitoria, 1997), 25–30. The most important firm in the mail trade was the Empresa de Correos Marítimos de La Habana (1827–1851), although some of its characteristics (partially state owned, benefited from a state monopoly) put it closer to a chartered company of the ancien régime than to a modern firm. On this enterprise, see Garay, Francisco, Correos Marítimos Españoles. Vol. 2. Correos Marítimos Españoles a la América Española (Cuba, Puerto Rico y Sto. Domingo). De 1827 a 1861 (Bilbao, 1987)Google Scholar; Saiz, Candelaria, “La participación del sector financiero español en el negocio de la navegación trasatlántica (1827–1851),” Historia Contemporánea III (1989): 103–117Google Scholar; and Cayuela, José G., “El sistema colonial de comunicaciones en la España del siglo XIX,” in Las comunicaciones entre Europa y América 1500–1993, eds. Bahamonde, A., Martínez Lorente, G., and Otero, Luis E. (Madrid, 1993), 201–213.Google Scholar

15 All of them operated one or various steamships, and their number of shareholders was not very large. See Valdaliso, Jesús M., “Catalanes, bilbaínos y sevillanos en el cabotaje regular español del siglo XIX,” Doctor lordi Nadal. La industrialización y el desarrollo económico de España, eds. Carreras, Albert, Pascual, Pere, Reher, David, and Sudrià, Caries (Barcelona, 1999), vol. 1, 642–644.Google Scholar

16 Valdaliso, Los navieros vascos, 98ff., and “Growth and Modernization,” 33–58.

17 Valdaliso, “Growth and Modernization,” and Appendix 1 and 2.

18 See Ville, Ibid., 712, for British shipping; Porter, Glen and Livesay, Harold, Merchants and Manufacturers. Studies in the Changing Structure of Nineteenth-Century Marketing (Baltimore, 1971), 17–22Google Scholar, and Chandler, Visible Hand, ch. 1, for American business.

19 Ville, Ibid., 712–715. Barcelona, Bilbao and Cadiz were the unique Spanish ports where the British shipping journal Fairplay was received regularly in the early 1890s; see Fairplay (1 Jan. 1892): 53.

20 On this transfer, see Valdaliso, “Spanish Shipowners.” According to a practical guide to the port of Bilbao, translated into English and edited in 1882 (2d ed.; its first edition had been published only two years before), the number of British shippers and shipping agents in Bilbao was quite remarkable, see Lazúrtegui, Julio and Larrea, V., Merchant's and Shipmaster's Practical Guide to the Port of Bilbao (Bilbao, 1882), 10–12Google Scholar, and advertisements at the end of the book. Conversely, there were some Bilbao shipowners and merchants operating from London and Liverpool in the last third of the nineteenth century, see Valdaliso, “Spanish Shipowners.” Bilbao was also the first Spanish city to have an exclusive Lloyds’ surveyor, see Blake, George, Lloyd's Register of Shipping, 1760–1960 (London, 1960): 148Google Scholar, and one of the few cities where the coal agency firm Lambert Brothers, Ltd., had established foreign branches (the others were New York and Paris), see El Comercio Hispano-Británico/The Anglo Spanish Trade (Jan.-March, 1924), advertisements.

21 Bilbao was the center of the Spanish telegraph communication with Britain carried out by the British firm the Direct Spanish Telegraph Company, see El Comercio Hispano Británico/The Anglo Spanish Trade (Oct.–Dec, 1927). The other two Spanish cities that, apart from Bilbao, had a direct line with Britain, were Madrid and Barcelona.

22 Ville, Ibid., p. 716. The most important freight market in those years was the Baltic Exchange, on which see the work of Barty-King, Ibid.

23 In those years, there were basically two types of contracts, the voyage charter and the time charter, with separate—forml—markets, and different clauses, see Lewis, W.A., “The Inter-Relations of Shipping Freights,” Economica 7 (1941), 52–76.CrossRefGoogle Scholar At least from the 1890s, and within the voyage-charter form, many different standard charters (“charter party“) appeared for the carriage of different goods (coal, timber, grain, cotton, etc.), with clauses widely recognized in the international shipping markets, see MacMurray, C.D. and Cree, M.M., Shipping and Ship Broking. A Cuide to All Branches of Shipbroking and Ship Management (London, 1925), 88ff. and 124ff.Google Scholar A third, intermediate, alternative was the charter for the transport of an established quantity of cargo (“contract of affreightment“), which implied several voyages and allowed the shipper to dispose of a secure transport capacity along a certain period of time (depending on its production necessities). See Valdaliso, Los navieros vascos, 126–127, for evidence on the use of these charter parties by Spanish firms. The existence of standard contracts in the international market, and of a well-developed body of international maritime legislation, diminished transaction coste related to the writing, monitoring, and enforcement of contracts.

24 Williamson himself also admits that the increase in die extent of the market, as it reduces the specificity of transactions, can lead to a substitution of the market for the hierarchy (by means of an intermediate alternative), see Williamson, O., “Transaction-Cost Economics: The Governance of Contractual Relations,” Journal of Law and Economics 22 (1979), 260.CrossRefGoogle Scholar The specificity of cargo ships was relatively high among the Spanish sailing fleet, see Roig, Ibid., 76–86 and 100–101, but diminished with the diffusion of the steam tramp in the period 1870–1914. According to Craig, Robin, Steam Tramps and Cargo Liners 1850–1950 (London, 1980)Google Scholar, the main distinction in the period 1850–1950 would be the one established between steam tramp and cargo liners, but notwithstanding this, the specificity of the ships (i.e., their specialization) grew in the interwar period.

25 The classic definition of increasing returns in Young, Allyn, “Increasing Returns and Economic Progress,” Economic Journal 37:152 (1928), 527–542.CrossRefGoogle Scholar Some shipping firms owned by capitalists of Cadiz and Santander had to establish themselves in Bilbao or contract the services of specialist ship-managing or ship-brokering firms of Bilbao, see, respectively, British Parliamentary Papers, Diplomatic and Consular Reports, Annual Series, Cadiz no. 2592 (1901), 7–8, and Echegaray, Rafael González, La marina cántabra. 3. Desde el vapor (Santander, 1968), 57, 73, and 243ff.Google Scholar

26 For the tonnage registered, see Valdaliso, “Growth and Modernization.” Note also the percentages of Bilbao in Appendix 1; in the case of Appendix 2, the percentages of number and tonnage of Bilbao firms related to the twenty largest shipping firms were, respectively, in 1885, 45 and 35 percent; in 1900, 70 and 64 percent; and in 1930, 50 and 43 percent. Considering the leading position of Bilbao, it is hardly surprising that its shipowners' association, the Asociación de Navieros de Bilbao (1900), became the most important pressure group of the Spanish shipowners in the first third of the twentieth century, see Valdaliso, Jesús Ma, “Política económica y grupos de presión: la acción colectiva de la Asociación de Navieros de Bilbao, 1900–1936,” Historia Social 7 (1990), 69–103.Google Scholar

27 See Valdaliso, Los navieros vascos, 113ff.

28 Sierra, Maria, La familia Ybarra, empresarios y políticos (Sevilla, 1992)Google Scholar; Erice, Francisco, Propietarios, comerciantes e industriales. Burguesía y desarrollo capitalista en la As turias M siglo XIX (1830–1885) (Oviedo, 1995), vol. 1, 163–164Google Scholar; Santos, Marino Gómez, Todo avante. Trasmediterránea 1917–1992 (Madrid, 1991)Google Scholar; and Pou Montaner, Ibid.

29 They were Menéndez y Cía. and the Cía. de Vapores de Ramón Herrera, see González Echegaray, Ibid., 168ff., and 181–182.

30 Nevertheless, as late as 1885, there were six individual proprietorships among the twenty largest Spanish shipping firms. In 1900 only one, Manuel Arrótegui, can be properly described as such. The Royal Decree of 13 June 1916 prohibited the business of shipping to individual proprietors, see Pery, José Cervera, La marina mercante española. Historia y circunstancia (Madrid, 1990), 183.Google Scholar

31 Valdaliso, Los navieros vascos, 213–217; and “Spanish shipowners,” 14–19.

32 Valdaliso, La navegación regular, 28–30, and “Catalanes, bilbaínos y sevillanos,” 644–647.

33 Erice, Ibid.

34 On Pinillos, see Alvarez, Alejandro García, “Presencia española en el comercio cubano,” Estudios de Historia Social 44/47 (1988): 607.Google Scholar On the Trasatlántica, see Sandoica, Elena Hernández, “La ‘Compañía Trasatlántica Española.’ Una dimensión ultramarina del capitalismo español,” Historia Contemporánea 3 (1989): 119–137Google Scholar; Llorca, Carlos, La Compañía Trasatlán tica en las campañas de Ultramar (Madrid, 1990), 17 and 23Google Scholar; and Rodrigo, Martin, Antonio López y López (1817–1883) primer Marqués de Comillas. Un empresario y sus empresas (Madrid, 1996).Google Scholar According to the data provided by Bahamonde, Angel and Cayuela, José, Hacer las Americas. Las élites coloniales españolas en el siglo XIX (Madrid, 1992), 148Google Scholar, merchant shipping constituted one of the most critical fields of investment in the metropolis to the Spanish-Cuban elite.

35 Although the naval mortgage system did not appear as such in Spain until 1893, the law of 22 November 1868 repealed article 592 of the Commercial Code, thus permitting the sale and mortgaging of ships not only to Spanish citizens but to foreigners as well. See Valdaliso, Los navieros vascos, 204–213; and “La flota mercante española y el tráfico con América en la segunda mitad del siglo XIX,” Revista de Historia Naval XIII:49 (1995): 19–27.

36 Valdaliso, “Growth and Modernization,” and Appendix 2.

37 The single-ship company appeared in Britain in the late 1870s and, since then, became the most common pattern of ownership in tramp navigation, see Cottrell, Phillip L., “The Steamship on the Mersey, 1815–80: Investment and Ownership,” in Shipping, Trade and Commerce. Essays in Memory of Ralph Davis, eds. Cottrell, Phillip L. and Aldcroft, Derek H. (Leicester, 1981), 150ffGoogle Scholar; and Boyce, Ibid. In Bilbao, some merchants and iron ore exporters, like Sota & Aznar and Martínez de las Rivas, thanks to their connections with British single-ship owners, were the first shipowners to adopt that pattern, see Valdaliso “Spanish Shipowners,” 24 and 30. However, unlike the policy of the British single-ship firms, the management's charges were not fixed upon the firm's gross freights, but, rather, on the net ones. In this way, the manager's and the company's earnings were linked, thereby avoiding the bitter arguments between shareholders and managers that took place in Britain in the mid-1880s, which echoed in the pages of Eairplay, a shipping journal widely known in the shipping circles of Bilbao, see Valdaliso, Ibid., 20.

38 On the patterns of finance and investment followed by the Bilbao shipping firms, see Valdaliso, Los navieros vascos, 218–223, and “Spanish Shipowners.” The case of Sota & Aznar is analyzed in Valdaliso, Los navieros vascos, 224–231; and Torres, Eugenio, “Barcos, carbón y mineral de hierro. Los vapores de Sota y Aznar y los orígenes de la moderna flota mercante de Bilbao, 1889–1900,” Revista de Historia Económica IX (1991): 16–22 and 30–31Google Scholar.

39 However, in some cases, the owners hired the services of ship-managing firms, see González Echegaray, Ibid., 57, 73, and 85–95; and Valdaliso, Los navieros vascos, 269.

40 See Valdaliso, “Spanish shipowners,” and “Catalanes, bilbaínos y sevillanos,” on the shipping firms of Bilbao, Barcelona and Seville in the period 1850–1890. For the years 1890–1914, see Valdaliso, Los navieros vascos, 265–266.

41 Despite their outstanding importance, there are just a few studies on shipbrokers or shipbrokering firms in the world, see Fischer, Lewis R. and Nordvik, Helge W., “Economic Theory, Information and Management in Shipbroking: Feamley and Eger as a Case Study, 1869–1972,” Research in Maritime History 6 (1994), 1–29.Google Scholar Although indirectly related, see also Barty-King, Hugh, The Baltic Exchange. The History of a Unique Market (London, 1977).Google Scholar

42 On Britain, see Davis, Ralph, “Maritime History: Progress and Problems,” in Business and Businessmen. Studies in Business, Economic and Accounting History, ed. Marriner, Sheila (Liverpool, 1978), 171–173Google Scholar; on Spain, see Valdaliso, Los navieros vascos, 267–268.

43 See Valdaliso, , Desarrollo y declive de la flota mercante española en el siglo XX: la Compañía Marítima del Nervión (1907–1986) (Madrid, 1993), 22 and 27–8Google Scholar; and “Catalanes, bilbaínos y sevillanos.” The four biggest companies in 1930, Naviera Sota y Aznar, Trasatlántica, Trasmediterránea, and Ybarra, had a larger staff and developed specialist departments in the interwar period.

44 Sturmey, S.G., British Shipping and World Competition (London, 1962), 364ff.Google Scholar A price-war in some trades (together with the cost structure of the liner shipping companies) also provoked, from the last third of the nineteenth century, the establishment of other concentration devices, and especially shipping conferences. For a general survey of the shipping conferences, see Deakin, B.M. and Seward, T., Shipping Conferences. A Study of Their Origins, Development and Economic Practices (Cambridge, 1973)Google Scholar, and Sicotte, Richard, “Internationals Cartel Agreements in the Ocean Shipping Industry,” in Cambio Institucional e Historia Económica, eds. Pujol, Josep, Fatjó, Pedro, and Escandell, Neus (Barcelona, 1996), 701–737.Google Scholar This phenomenon also took place within the Spanish industry, in the coastal as well as in oceanic trades, see Valdalíso, La navegación regular de cabotaje.

45 See Ville, Ibid., 718; Kindleberger, Charles P., “Multinational Ownership of Shipping Activities,” World Economy 8 (1985): 249–265CrossRefGoogle Scholar; and in general, Chandler, Alfred D., Scale and Scope. The Dynamics of Industrial Capitalism (Cambridge Mass., 1990), 37.Google Scholar

46 See Appendix 2. It is in these years that a larger number of shipping companies is found among the 200 largest Spanish firms; shipping was, together with railways and electrical companies, the industry most represented in the sample, see Carreras, Albert & Tafunell, Xavier, “La gran empresa en España (1917–1974). Una primera aproximación,” Revista de Historia Industrial 3 (1993), 127–174.Google Scholar

47 According to Boyce, Ibid., 128–129, the percentage of the British merchant fleet controlled by largest eight enterprises (tonnage) increased from 18.5 percent in 1910 to 42.5 percent in 1918–1919.

48 Valdaliso, Los navieros vascos, 218–220 and 233–234. Among the companies which were created in this way stand out the Cía. de Navegación Olazarri (1900), Cía. Algorteña de Navegación (1900), Cía. Naviera Uriarte (1900), Cía. Naviera Bachi (1901) and Cía. Naviera Sota y Aznar (1906), all of them included in the relation of 20 largest shipping firms in 1900 and/or 1930, see Appendix 2. Another case was that of the Marítima del Nervión (1907, also in the relation for 1930), which was set up from the merge among the Anónima de Navegación (1899) with part of the fleet of the Bilbaína de Navegación (1883), see Valdaliso, Desar rollo y declive, 25–26.

49 See Valdaliso, Los navieros vascos, 244–245. On the Naviera Guipuzcoana, see also the Anuario Financiero y de Sociedades Anónimas de España, 1918.

50 Valdaliso, La navegación regular, 38–39. After a cutthroat competition with Naviera Sota y Aznar in 1929, the three firms agreed to establish a pool in this trade in 1930, Valdaliso, Ibid., 41–17.

51 “Diversification” is the term that Boyce employs in his work on British shipping, Ibid., 131–132. Obviously, its meaning in a “service industry” like shipping, with its movable assets, particularly the concept of trade diversification, is slightly different from its application in manufacturing.

52 Among them, Ybarra & Cía., Naviera Sota y Aznar, and Marítima del Nervión, see Valdaliso Los navieros vascos, 128ff.

53 For the definitions employed and the analysis of the data, see the references in the Appendix. The use of commercial directories and guides has allowed me to improve substantially the information given in Appendix 2, particularly with regard to that offered in Valdaliso, Jesús M., “Las empresas navieras españolas. Estructura y financiación,” in La empresa en la historia de España, eds. Comín, Francisco and Aceña, Pablo Martín (Madrid, 1996)Google Scholar. Notice that Casson, “The Role of Vertical Integration,” also employs the same type of sources for the 1980s.

54 On the differences between the two concepts, see Perry, Martin K., “Vertical Integration: Determinants and Effects,” in Handbook of Industrial Organization, eds. Schmalensee, R. and Willig, Robert D. (Amsterdam, 1989), 185ff.Google Scholar Although Perry talks of “partial vertical integration,” others, like Porter, Michael, Competitive Strategy. Techniques for Analyzing Industries and Competitors (New York, 1980), 318ff.Google Scholar, refer to this form as “tapered integration,” which would be another intermediate form like that of “quasi-vertical integration.” I employ both terms, partial and tapered, interchangeably. Casson, “The Role of Vertical Integration,” however, does not make any distinction between one type or another.

55 On the advantages of quasi-integration, see Blois, K.J., “Vertical Quasi-Integration,” Journal of Industrial Economics 20:3 (1972), 253–272CrossRefGoogle Scholar; and Porter, Ibid., 321. Authors who have emphasized this phenomenon in case studies are Casson, “The Role of Vertical Integration,” 13–14; Hutchinson, Dianne and Nicholas, Stephen, “Theory and Business History: New Approaches to Institutional Change,” Journal of European Economic History 17:2 (1988), 416–421Google Scholar; and Ville, Simon P., “The Expansion and Development of a Private Business: An Application of Vertical Integration Theory,” Business History 33:4 (1991), 19–42.CrossRefGoogle Scholar

56 A full explanation of how I have tested vertical integration is offered in Appendix 2, notes.

57 The same phenomenon occurs in the British shipping industry, see Boyce, Ibid., and Casson, “The Role of Vertical Integration.”

58 Other companies, not listed in Appendix 2, that had internalized the cargoes' consignment in the main offices port were the Montañesa de Navegación in Santander, see Gaye, Alberto, Santander y su provincia. Guía de la Montaña y su capital (Santander, 1903)Google Scholar; or Olavarría Lozano in Gijón, see Caballero, R. and Palacios, M., Guía Ilustrada del Viajero en Gijón (Gijón, 1892), 55–58.Google Scholar

59 Ville, “Growth of Specialization,” 715–716.

60 In the case of Marítima del Nervión, the friendship between one of its managers, F. Aldecoa, and Henry Kerr, the head of an American shipping firm, resulted in a long-term agreement to collaborate, which was only broken several decades later, see Valdaliso, Desarrollo y declive. A similar agreement was reached by Antonio López y Cía. (later Trasatlántica) and its consignment business in Santander, carried out by a friend of the president and a shareholder of the company, A.B. Pérez y Cía., see Rodrigo, Antonio López, 51–52.

61 According to the Anuario del Comercio de la Industria de la Magistratura y de la Administración, six Spanish shipping firms had established agencies in La Habana in 1900.

62 See Torres, Eugenio, Ramón de la Sota: Historia económica de un empresario (1857–1936) (Madrid, 1989)Google Scholar, for Sota & Aznar; Carlos Llorca, Ibid., for Transatlántica; El Comercio Hispano-Británico/ The Anglo-Spanish Trade (July-Sept. 1920), for Trasmediterránea; and Anuario General de España, 1933, for Ybarra. In 1927, according to an advertisement in Eairplay, Sota & Aznar had foreign branches in London, New York, Rotterdam, and Duisburg, see Fairplay (13 Jan. 1927): 174. The Cía. Trasatlántica, which since the beginning of its New York line had been dependent on shipping agents, established its own agency in New York in 1930, see Exporters' Encyclopaedia (New York, 1921), 1227 and 1238; and Ibid. (New York, 1935), 1201. The rest of firms that exploited regular lines between U.S. and Spanish ports in the 1920s, Ybarra, Marítima del Nervión, Pinillos, and Tayá, all appealed to the service of shipping agents on commision in the American ports, see Exporters’ Encyclopaedia (New York, 1921), 127 and 137–138; Ibid. (New York, 1925), 1185–1197; and Ibid. (New York, 1931), 1238ff.

63 In Bilbao, there were some ship brokering firms which at the same time owned ships, like Fidel Oleaga y Cía., Aznar y Astigarraga (then split into two, Aznar y Cía. and Astigarraga Hnos.), or Sota y Aznar, see Lazúrtegui and Larrea, Ibid., and Torres, Ramón de la Sota. Un less we have a detailed history of a company, it is very difficult to estimate the degree of integration in this activity. As for Bilbao in 1915, seven out of forty-three shipping firms' managers, or 16 percent, were active shipbrokers; these seven accounted for 24 percent of the total active shipbrokers in that year, authors estimates from the data provided by Arroyo, A., Guitián, R., and González, L., Anuario Marítimo, Comercial, Industrial y de Navegación (Bilbao, 1915).Google Scholar

64 On the Trasatlántica, see Rodrigo, Antonio López, 171–172; on Ybarra, Sierra, Ibid.; on Pinillos, García Alvarez, Ibid. On the others, Valdaliso, Jesús M., “Grupos empresariales e in versión de capital en Vizcaya, 1886–1913,” Revista de Historia Económica 6:1 (1988): 15–30Google Scholar; and Los navieros vascos. The Santanderina de Navegación, a firm that does not appear in the Ust for 1900, shared its manager, C. Erhardt (who also was an active ship handler) with the iron-mining firm Minas de Liaño, which suggests a possible relationship between them, see Gaye, Ibid., 180–198.

65 See Ville “Expansion and Development,” 30–32.

66 Rodrigo, Antonio López, 49–51; and Jesús Romero and Jose L. Gutiérrez, “El origen de los astilleros en la bahía de Cádiz, 1878–1914,” in Astiüeros Españoles 1872–1998. La construcción naval en España, dir. by Stefan Houpt and Jose M. Ortiz-Villajos (Madrid, 1998), 33–45. The shipyard was closed in 1909 because of a lack of orders, and in 1914 was sold to the Sociedad Española de Construcción Naval, a shipbuilding firm which Trasatlántica participated in as a big shareholder. Since then, the shipping firm placed all its ship orders in the naval shipyards, Ibid., 192.

67 See Pascual, Pere, “La modernitzación dels mitjans de transport a la Catalunya del segle XIX,” in Historia Econòmica de la Catalunya Contemporànea. S. XIX. Indùstria, transports i finances, dir. by Nadal, Jordi (Barcelona, 1991), 314–316.Google Scholar

68 In Trasatlánticas case, its shipyard only covered a part of the company's maintenance's requirements. It was, thus, a partial vertical integration. Echegaray, Rafael González, El Astillero de San Martin. Un siglo de construcción naval (Santander, 1979), 64Google Scholar, has pointed out that the friendship between the head of the Trasatlántica, Claudio López, and Leonardo Corcho, shipbuilder and ship repairer of Santander, resulted in Corchos naval works doing all the repairs on Trasatlánticas vessels that started out from this port. Another firm that established relations with naval works was the Cía. Vasco-Valenciana de Navegación in Valencia, whose manager encouraged the establishment of Talleres Gómez in 1879, see Picó, Josep, Empresario e industrialización. El caso valenciano (Madrid, 1976), 82–83.Google Scholar

69 Ville, “Expansion and Development,” 33–34. The group led by Antonio López, apart from the Cía. Trasatlántica, included banks, railways, a tobacco company, and coal mines, see Rodrigo, Antonio López. In the case of the Naviera Sota y Aznar, the partnership Sota & Aznar managed the group's several joint-stock companies and centralized the partners' participation in the different firms. This pattern of organization meant that none of the companies had a board of directors, with the sole exception of the Euskalduna shipyard, see Torres, Eugenio, “Estrategia y estructura del grupo industrial Sota y Aznar. Un análisis de coste de transacción,” in Empresas y empresarios españoles en la encrucijada de los noventa, eds. Velarde, Juan, García Delgado, Jose L., and Pedreño, Andres (Madrid, 1993).Google Scholar

70 Sierra, Ibid., 56–57, and Valdaliso, “Grupos empresariales,” 15–18. The Compañía Eu-skalduna de Construcción y Reparación de Buques was created in 1900 by the main shipowners of Bilbao, led by Sota and Aznar, who were nominated lifelong managers, see Valdaliso, Los navieros vascos, 291–292. Another undertaking promoted by Sota and Aznar was the insurance company La Polar, which by many Bilbao shipowners and shipping firms participated in, see Torres, Ramón de la Sota, 415. In this case, the aim of these companies was not only to cover the insurance of its own ships but also, while benefiting from this secure demand, to enter other insurance business. There were other shipping firms that established strong ties with insurance firms, such as the shipping group of Martínez Rodas in Bilbao with La Aurora, see Valdaliso, “Grupos empresariales“; or the Santander companies Cía. Santanderina de Navegación, Cía Montañesa de Navegación, and Cía. del vapor Esles, which shared directors with the insurance firms La Alianza Santander and La Boreal, see Gaye, Ibid., 180–198. Nevertheless, some shipping firms like Sota & Aznar and Ybarra y Cía. had previously partially internalized this activity, suscribing part of the insurance premiums, see Valdaliso, Los navieros vascos, and Goseascoechea, Fernando, Historia de la Naviera Ybarra de Sevilla. Años 1846–1957 (Seville, c. 1958).Google Scholar

71 In the case of Sota & Aznar, managerial economies of scale were achieved, as the several firms of the group were jointly operated and managed, see Eugenio Torres, “Estrategia y estructura.”

72 Nootebom, Bart, “Towards a Dynamic Theory of Transactions,” Journal of Evolutionary Economics 2 (1992), 292CrossRefGoogle Scholar; see also Porter, Ibid., 318ff.

73 Valdaliso, “Las empresas navieras.” The same has been pointed out by Sturmey, Ibid., and Boyce, Ibid., for the British shipping firms; and by Harlaftis, Ibid., for the Greek ones.

74 Valdaliso, “Las empresas navieras“; Ville, “Growth of Specialization“; Theotokas, John, “Organizational and Managerial Patterns of Greek-Owned Shipping Enterprises and the Internationalization Process from the Interwar Period to 1990,” Research in Maritime History 14 (1998), 315–317Google Scholar; Hutchinson and Nicholas, Ibid., 425; and, above all, Casson, Mark, “Cultural Determinants of Economic Performance,” Journal of Comparative Economics 17 (1993), 418–442.CrossRefGoogle Scholar

75 Ville, “Expansion and Development,” 34–35; Boyce, Ibid.; Harlaftis, Ibid.

76 Huebner, Grover G., Ocean Steamship Traffic Management (New York, 1920), 13–14.Google Scholar

77 Other companies also decided to integrate (or quasi-integrate) forward into shipping, such as Duro y Cía. in 1863, the Vasco Asturiana and Hullera Española in 1899, and Cía. José Aramburu Gaditana de Navegación, see, respectively, Arbaiza, M. and Martínez, F., “La familia Vitoria de Lecea en el siglo XIX: de rentistas a capitalistas (1798–1864),” Letras de Deusto 22:43 (1989): 105–106Google Scholar; American State Papers, House of Representatives, 56th Cong., 2nd sess., doc. no. 380, Commercial Relations of the United States with Foreign Countries during the year 1900, vol. 2(1901), 673; and British Parliamentary Papers, Consular Reports on Cadiz, annual series 2592 (1911), 8, and 2992 (1903), 9.

78 Another iron-making firm that integrated maritime transport during these years was the Santander firm Nueva Montaña, see González Echegaray, La marina cántabra, 98–103. On the World War I years and their consequences for the Spanish shipping industry see Valdal iso, Los navieros vascos, 128ff.

79 Valdaliso, Los navieros vascos, 136. A theoretical explanation in Casson, “The Role of Vertical Integration,” 10–11, and Penrose, Edith T., The Theory of the Growth of the Firm (Oxford, 1959), 146–149.Google Scholar

80 Tortella, Gabriel, “La integración vertical de una gran empresa durante la dictadura de Primo de Rivera: la Unión Española de Explosivos, 1917–1929,” in Economía española, cultura y sociedad. Homenaje a Juan Velarde Fuertes, coordinated by García Delgado, José L. (Madrid, 1992), v. I, 372.Google Scholar

81 Casson, “The Role of Vertical Integration,” 16–17.

82 Casson, Ibid., 17–18. It is, thus, not surprising that oil companies owned more than 50 percent of the tanker tonnage in the interwar years, see Koopmans, T., Tanker Freight Rates and Tankship Building. An Analysis of Cyclical Fluctuations (Haarlem, 1939), 2–7.Google Scholar

83 Iron ore and coal cargoes could be carried by the traditional steam tramps, and the statements above indicate that asset specificity was not the reason for integrating. In the case of oil transport, a highly developed and specialized oil-tanker market existed in those years from which, if necessary, the oil companies could charter tankers in order to meet their transport requirements, see Koopmans, Ibid., 8–10. Perhaps the only possible exception might be that of the chemical firms.

84 The companies were, respectively, Petróleos de Porto Pí and la Fertilizadora, both for merly owned by Juan March, one of the most prominent shareholders of the Trasmediterránea, see Gómez Santos, Ibid., 77–79. In 1929 Cros S.A. took over all the chemical business, Ibid., 78. In both cases, it is necessary to take into account J. March's personal interests in those businesses if we want an accurate understanding of the company's decisions. According to the Anuario General de España in 1933, Trasmediterránea still owned another chemical factory in Majorca.

85 The firms merged into the new company were the Nuevo Vulcano from Barcelona and Talleres Gómez and Astilleros de Valencia, from Valencia, see Gómez Santos, Ibid., 80–81.

86 Gómez Santos, Ibid., 80–81. After the Spanish Civil War, the stake of Trasmediterránea in the capital of Unión Naval de Levante grew until it controlled almost all the share capital, Ibid. 81–82.

87 According to the Anuario Financiero y de Sociedades Anónimas de España in 1918, directors of six shipping firms sat on in the board of directors of Euskalduna, with Naviera Sotay Aznar being the most important. The Cía. Trasatlántica had strong ties with the Sociedad Española de Construcción Naval, as it was one of the constituting partners, see Mendoza, Antonio Gómez, “Government and the Development of Modern Shipbuilding in Spain, 1850–1935,” Journal of Transport History 9:1 (1988), 31.Google Scholar The Marítima del Nervión shared directors with both shipbuilding firms, see Valdaliso, Desarrollo y declive.

88 Stigler, George J., “The division of labour is limited by the extent of the market,” Journal of Political Economy 59 (1951), 185–193.CrossRefGoogle Scholar The same point has been made by Ville, “The Growth of Specialization,” 720.

89 Casson, “The Role of Vertical Integration,” table 1.

90 A definition of the term “similar” in Richardson, G. B., “The Organisation of Industry,” Economic Journal 82 (1972), 883–896CrossRefGoogle Scholar, and Langlois, Richard N. and Paul Robertson, L., Firms, Markets and Economic Change. A Dynamic Theory of Business Institutions (London, 1995).Google Scholar Both say that the range of activities undertaken by a firm is determined by its existent capabilities, that is, the skills, experience, and knowledge possessed by a firm. As Langlois and Robertson have pointed out, “what is similar need not be what is complementary,” Ibid., 15.

91 Casson, “The Role of Vertical Integration,” 22–23, additionally suggests an inverse relation between integration into freight-generating activities and marketing services, a relation that also appears in our sample, see table 4.

92 Casson, Ibid.; Penrose, Ibid., 45ff.; Langlois and Robertson, Ibid.., chap. 2; Teece, David, Pisano, Gary, and Shuen, Amy, “Dynamic Capabilities and Strategic Management,” Strategic Management Journal 18:7 (1997): 509–533.3.0.CO;2-Z>CrossRefGoogle Scholar

93 Valdaliso, Jesús M., La Empresa Nacional ‘Elcano’ de la Marína Mercante y la actuación del INI en el sector naval durante la presidencia de]. A. Suanzes (Madrid, 1998), 94–95 and 132–133.Google Scholar