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A British Firm on the American West Coast, 1869–1914*

Published online by Cambridge University Press:  24 July 2012

Morton Rothstein
Morton Rothstein
Affiliation:
Assistant Professor of History, University of Wisconsin
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Abstract

The success of Balfour, Guthrie and Company in mobilizing British and American capital for productive investment contributed importantly to the economic development of the Pacific-coast region of the United States. The changing economic patterns of that region emerge through Professor Rothstein's analysis of the firm and its managers' actions and responses, from which a broader understanding of the problems and direction of foreign investment in the American West is possible.

Type
Research Article
Information
Business History Review , Volume 37 , Issue 4 , Winter 1963 , pp. 392 - 415
Copyright
Copyright © The President and Fellows of Harvard College 1963

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References

1 Among the best of these works are Spence, Clark C., British Investments and the American Mining Frontier, 1860–1901 (Ithaca, 1958)Google Scholar; Clements, Roger V., “The Farmers' Attitude Toward British Investment in American Industry,” Journal of Economic History, vol. XV (June, 1955), pp. 151–59CrossRefGoogle Scholar; ibid., “British Investment and American Legislative Restrictions in the Trans-Mississippi West, 1880–1900,” Mississippi Valley Historical Review, vol. XLII (September, 1955), pp. 207–228Google Scholar; ibid., “British Investment in the Trans-Mississippi West, 1870–1914, Its Encouragement, and the Metal Mining Interests,” Pacific Historical Review, vol. XXIX (February, 1960), pp. 35–50Google Scholar.

2 The following account is based mainly on a privately circulated company history, Hunt, Wallis G. G., Heirs of Great Adventure, A History of Balfour, Williamson and Company, 1851–1901 (London, 1951)Google Scholar and on the correspondence of Stephen Williamson. Mr. Hunt, an executive in the company, is preparing a second volume, and has a vast fund of knowledge about the firm's past. I am indebted to him for several interviews in which he shared this knowledge, and to him and the Hon. G. H. G. Williamson, the late Chairman, for access to the letterpress copybooks of Stephen Williamson, on file at their offices, Roman House, Cripplegate Buildings, London, E. C. 2.

3 Hunt, Heirs of Great Adventure, pp. 47–48.

4 Quoted in ibid., p. 51. In the same letter, Balfour also asked: “God is giving us position and influence and wealth, and if we will not take them to use for His glory and men's good, what kind of stewardship shall we render?”

5 Quoted in Hunt, Heirs of Great Adventure, p. 68.

6 I have dealt more extensively with the firm's wheat business in my unpublished doctoral dissertation, “American Wheat and the British Market, 1860–1905” (Cornell University, 1960), chap. IX.

7 Andrews, Frank, Marketing Grain and Live Stock in the Pacific Coast Region (U. S. Department of Agriculture, Bureau of Statistics, Bulletin No. 89, Washington, 1911), pp. 28–30Google Scholar. For an excellent survey of the California wheat trade, see Paul, Rodman W., “The Wheat Trade between California and the United Kingdom,” Mississippi Valley Historical Review, vol. XLV (December, 1958), pp. 391–412CrossRefGoogle Scholar; a good, brief historical treatment of the Pacific Northwest trade is contained in Davis, Joseph S., “Pacific Northwest Wheat Problems and the Export Subsidy,” Wheat Studies (Stanford University Food Research Institute), vol. X (August, 1934), pp. 361–69Google Scholar.

8 Paul, Rodman W., “The Great California Grain War: The Grangers Challenge the Wheat King,” Pacific Historical Review, vol. XXVII (November, 1958), pp. 333–49Google Scholar.

9 Stephen Williamson to Robert Balfour, November 11, 1869. Stephen Williamson Copybooks.

10 Ibid.

11 The trade in full cargoes of wheat was highly developed in Britain, having been initiated in the Southern Russia trade in the 1830's and 1840's. See Fairlie, Susan, “The Anglo-Russian Grain Trade, 1815–1861” (Ph.D. dissertation, London School of Economics, 1959)Google Scholar. I am grateful to Dr. Fairlie for a copy of her work. On the difficulties of the West Coast cargo trade, see Paul, “Wheat Trade between California and the United Kingdom,” passim and my own “American Wheat and the British Market,” chap. VIII.

12 Stephen Williamson to Robert Balfour and Alexander Guthrie, January 29, 1870. Stephen Williamson Copybooks. The standard work on the Barings, Hidy, Ralph W., The House of Baring in American Trade and Finance (Cambridge, Mass., 1949)CrossRefGoogle Scholar, contains detailed discussion of the reaction to depression in chapters VIII and XVI, and is a major source of my other comparisons with merchant shippers of an earlier period.

13 Stephen Williamson to Mr. Allardice, January 16, 1871. Stephen Williamson Copy-books.

14 Hunt, Heirs of Great Adventure, pp. 93–94.

15 Ibid., pp. 81–90.

16 Stephen Williamson to Mr. Allardice, October 16, 1874. Stephen Williamson Copy-books.

17 Several letters from Stephen Williamson to “My Dear Collie” in 1873 and 1874 discuss the question of outsiders “assuming the Bills” on cargoes afloat from San Francisco. On one occasion Williamson asked: “Could you in conjunction with some of your friends face a series of operations, say 3, 4, 5, or 8 to 10 cargoes during the season?” Stephen Williamson to “My Dear Collie,” September 28, 1874. Stephen Williamson Copybooks.

18 Hunt, Heirs of Great Adventure, pp. 78–80. Stephen Williamson was a member of the board of the Standard Marine Insurance Co., Ltd., founded in 1871.

19 Paul, “The Great California Grain War,” pp. 333–49.

20 Stephen Williamson to Alexander Balfour, February 25, 1878. Stephen Williamson Copybooks.

21 Ibid.

22 Hunt, Heirs of Great Adventure, pp. 94–96; Stephen Williamson to Robert Forman, November 17, 1876. Stephen Williamson Copybooks.

23 Williamson was a fervent Gladstonian Liberal who sat in Parliament for a time, and also an active pamphleteer and speaker for the cause of bimetallism. Some of his manifold interests are revealed in his many letters to the London Times. Among the choicest are those in the issues of January 25, 1881; May 18, 1882; May 3 and July 30, 1883; November 24, 1884; July 23, August 8 and 13, 1885. The San Francisco partners were from the beginning dedicated to such activities as missionary work and teaching Sunday school, and were encouraged to do this by the senior partners. One piece of evidence of their standing is the prominent position occupied by Robert Forman in the British Benevolent Society at San Francisco. San Francisco Bulletin, May 24, 1879.

24 Stephen Williamson to Archibald Williamson, February 1, 1884. Stephen Williamson Copybooks.

25 Stephen Williamson to Robert Balfour, October 11, 1883. Ibid.

26 Hunt, Heirs of Great Adventure, pp. 132–33; Stephen Williamson to Mr. Henderson, April 7, 1887. Stephen Williamson Copybooks.

27 Watkins, John B., Wheat Exporting from the Pacific Northwest (State College of Washington, Agricultural Experiment Station, Bulletin No. 201, Pullman, Wash., 1926), pp. 9–10Google Scholar alludes to the firm's early activity in the region. Baillie had joined the Liverpool firm in 1879, transferred to Portland a year later at the age of twenty-one, and was placed in charge of the Tacoma branch because of his experience in the area. He remained there to become a prominent citizen. Hunt, Herbert, Tacoma: Its History and Its Builders (3 vols., Chicago, 1916), vol. III, pp. 593–94Google Scholar.

28 Stephen Williamson to Robert Forman, December 21, 1892. Stephen Williamson Copybooks.

29 Hunt, Heirs of Great Adventure, pp. 185–87.

30 Stephen Williamson to Mr. Fairweather, October 28, 1880. Stephen Williamson Copybooks.

31 Hunt, Heirs of Great Adventure, pp. 95–96; Stephen Williamson to “My Dear Uncle,” July 27, 1877; Stephen Williamson to Robert Forman, November 17, 1876. Stephen Williamson Copybooks. In the first of these letters Williamson indicated that since neither he nor his senior partner had any private investments, they were interested in “perhaps gradually investing £25,000 ca. £50,000, each as a small source of private income to help us live when business happens to be unremunerative or losing.” They were then undecided whether to put it all into mortage loans in California through “our firm,” or from a separate “Trust Investment company for a few private Friends, after the model of the Dundee Coy.,” or “build a block of offices in San Francisco for ourselves and to let.” They acted on the second course.

32 Stephen Williamson to Balfour and Forman, September 20, 1878. Stephen Williamson Copybooks.

33 Stephen Williamson to Robert Balfour, September 24, 1878. Ibid.

34 Stephen Williamson to “My Dear Robert,” March 14, 1878; Stephen Williamson, “Private Memo, as to Capital,” February 2, 1888. Ibid.

35 Stephen Williamson to Mr. Bowes, October 14, 1886. Ibid.

36 Stephen Williamson to Mr. Cook, December 10, 1890. Ibid.

37 For the early history of this company see Marcosson, Isaac F., Anaconda (New York, 1957), pp. 30–66Google Scholar, and Toole, Kenneth Ross, “The Anaconda Copper Mining Company: A Price War and A Copper Corner,” Pacific Northwest Quarterly, vol. XLI (October, 1950), pp. 312–29Google Scholar.

38 Alexander Balfour continued in poor health after returning from America and died in 1886, which may have put additional strain on the process of reorganization within the company. Williamson described Balfour as “deeply impressed by the indomitable industry and self reliance of the Americans, but equally impressed by the gross materialistic tone or semi paganism of San Francisco society.” Stephen Williamson to Archibald Williamson, February 1, 1884. Stephen Williamson Copybooks.

39 Elliott, William Yandell et al. , International Control in the Non Ferrous Metals, (New York, 1937), pp. 396–97Google Scholar. This study also contains a good brief description of the Lake Pool in copper and the price war against Anaconda.

40 Ibid., p. 395.

41 Stephen Williamson to Mr. Henderson, December 2, 1887. Stephen Williamson Copybooks.

42 Stephen Williamson to Robert Balfour, October 6, 1888. Ibid. Actually, the heads of the Anaconda company entered the contracts reluctantly, since the terms restricted their output and they were confident they could expand production enormously. Haggin's methods of negotiation also contributed to Williamson's anxieties, since the American was rather secretive and would not indicate his decisions until the last possible moment.

43 Elliott, et. al., International Control, pp. 397–99; Toole, “Anaconda Copper Mining Company,” pp. 326–29.

44 Stephen Williamson to “My Dear Robert,” October 30, 1888. Stephen Williamson Copybooks.

45 Hunt, Heirs of Great Adventure, pp. 174–75. Originally, the New York branch was conceived as primarily an aid to “the San Francisco people” in buying and selling bills, particularly those involved in the copper trade, but by the time it was opened in late 1889, the bulk of its work was with the Chile branch.

46 Ibid., pp. 150, 166–68. The firm bought shares in the Durham Coal Mine through the Pacific Loan and Investment Company for $400,000. The first serious blow came in 1889, when the Northern Pacific Railway, hitherto a major customer, opened its own mines and cancelled its orders; at the same time the entire West Coast coal market suffered a steep decline. Williamson had been somewhat apprehensive about the risks involved; in March, 1888 he cautioned against the idea that the companies could be floated in England, since there would be no capital forthcoming “under the existing alien act for the iron industry.” Stephen Williamson to Robert Balfour, March 20, 1888. Stephen Williamson Copybooks.

47 Stephen Williamson to Robert Balfour, March 20, 1888. Stephen Williamson Copybooks. Information on part of the firm's activities in fruit growing and in the wheat trade is scattered through Purcell, Mae Fisher, History of Contra Costa County (Berkeley, 1940), esp. pp. 412–19, 437–43Google Scholar.

48 Stephen Williamson to Robert Balfour, November 28, 1888. Stephen Williamson Copybooks.

49 Stephen Williamson to Robert Balfour, November 17, 1891. Ibid. Williamson discussed the company in several letters to close friends, in one of which he noted that the Investment Company was capitalized at about $500,000 used for loans on mortgages, “but unemployed funds are lent on produce with ample margin — Call Loans.” Stephen Williamson to Mr. Cook, June 22, 1891. Ibid.

50 Stephen Williamson to Robert Balfour, July 2, 1897. Ibid. One of the greatest disappointments to Williamson was the Anita Vineyard, “one of the most beautiful in the Country, with 100 acres of splendid Muscat Vines in full bearing. It would have been worth a fortune 12 years ago! It is most deplorable that it remains at present a profitless undertaking.”

51 Stephen Williamson to Robert Balfour, September 4, 1897. Ibid.

52 Ibid.

53 For an American businessman's tribute to Balfour (“as fine a man to deal with as I ever met, and he had a sense of humor and highly appreciated a good joke,”), see Graves, Jackson A., My Seventy Years in California, 1857–1927 (2nd ed., Los Angeles, 1927), pp. 314–15Google Scholar.

54 Stephen Williamson to Alexander Guthrie, January 9, 1900. Stephen Williamson Copybooks.

55 Stephen Williamson to Alec Williamson, February 23, 1900. Ibid.

56 Archibald Williamson to C. J. Williamson, June 4, 1904. Ibid.

57 Archibald Williamson to “Dear Harry,” November 2, 1907. Ibid.

58 Archibald Williamson to Alec Williamson, December 12, 1905. Ibid.

59 Balfour, Guthrie and Co. to Balfour, Williamson and Co., London, March 2, 1911, Outgoing Correspondence, Balfour, Guthrie and Company (San Francisco).

60 Balfour, Guthrie and Co. to Balfour, Williamson and Company, London, September 12, 1910, and to Liverpool, September 29 and October 4, 1910. Ibid.

61 Beaton, Kendall, Enterprise in Oil: A History of Shell in the United States (New York, 1957), pp. 71–75Google Scholar. Beaton includes a detailed description of the workers' quarters, and indicates that many pains were taken for their comfort. An old concern of Balfour, Guthrie is also evident in the provision of a salaried minister to conduct services for the community on Sundays.

62 Ibid., pp. 75–76.

63 Stephen Williamson to Robert Balfour, July 20, 1892. Stephen Williamson Copybooks.