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The Technical Transformation of the Late Nineteenth-Century Gas Industry

Published online by Cambridge University Press:  03 March 2009

Derek Matthews
Derek Matthews
Affiliation:
Lecturer in Economic History at the University of Wales Institute of Science and Technology, Aberconway Building, Colum Drive, Cardiff CFI 3EU, United Kingdom.
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Abstract

This article analyzes, with particular reference to Britain, the technological transformation in coal gas manufacture around 1900. The timing of the innovation seems to be explained by the nature of the technology itself, by Rosenberg's “technical complementarity.” The rate of diffusion is analyzed by means of an inter-firm model which points to the importance of technical interrelatedness and the need to scrap old plant and of wage costs, which encouraged some firms to hasten scrapping. Different countries chose between the range of new technologies available largely on the basis of compatibility with existing plant and the cost of raw materials.

Type
Articles
Information
The Journal of Economic History , Volume 47 , Issue 4 , December 1987 , pp. 967 - 980
Copyright
Copyright © The Economic History Association 1987

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References

1 This paper deals only with the manufacturing process by which town gas is produced. There was, of course, much technical change in the processes by which the gas was purified, stored, distributed, and applied in this period, for the details of which,Google Scholar see Matthews, Derek, “The London Gas Industry: A Technical, Commercial and Labour History to 1914” (Ph.D. dissertation, University of Hull, 1983), chap. 2.Google Scholar

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11 For the detailed history of the technological change in gas manufacture in this period, see Matthews, “The London Gas Industry,” chap. 2.Google Scholar

12 And was not a “really novel idea” in 1889 as Hobsbawm (Labouring Men, p. 160) believed.Google Scholar

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28 This is a different matter than the amount of capital that has to be raised as a result of scrapping. Here the cost of the capital raised is the issue. For example, because of the “burden of old capital” it cost the Gas Light and Coke Company 10 percent more to raise capital in the 1890s than it did the South Metropolitan, and it claimed to Parliament that lack of innovation was due to the capital structure. Select Committee on Metropolitan Gas Companies, Parliamentary Papers, 1899, vol. 10, p. 267.Google Scholar

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32 Although they commanded respect worldwide and pioneered many developments, no leading British gas engineer in this period had a formal education beyond the age of 16; many contemporaries contrasted this situation with that in America and Europe. See Matthews, “London Gas Industry,” pp. 81–84; Gas World, 4 May 1901, p. 692.Google Scholar

33 No comprehensive comparisons of wages in the gas industry exist, but in 1902 stokers in London earned 6s per eight-hour shift, in Berlin 5s 4d per twelve-hour shift, and in Milwaukee, Wisc., 10s 5d for twelve hours. JGL, 25 Feb. 1902, p. 479; Gas World, 3 Jan. 1903, p. 22; Gas Light and Coke Company, Directors' Minutes, 21 Oct. 1898 and 8 Sep. 1911. For a comparison between American and British stoking machinery, see American Gas Light Journal, 16 Nov. 1888, pp. 345–48. Hobsbawm believed that Britain was in advance of the rest of Europe in the use of inclined retorts, taking contemporary estimates that in 1900 Britain had 96,000 feet while the rest of Europe had only 84,200 feet, including 40,200 feet in Germany. This ignored the fact that, as Figure 2 shows, the German industry was not much more than a quarter the size of the British. Hobsbawm, Labouring Men, p. 176.Google Scholar

34 Water gas accounted for 24 percent of U.S. manufactured gas in 1886 and 60 percent by 1898, in which year it constituted only 5.3 percent of British output. Also in 1898 the progressive South Metropolitan company had 33 percent of its retorts machine stoked, 11 percent were inclined, while 45 percent were still hand stoked. American Gas Light Journal, 16 Dec. 1886, p. 360; Annual Report of the United States Geological Survey, (1899), vol. 6, p. 592; Select Committee on the Metropolitan Gas Companies, Parliamentary Papers, 1899, vol. 10, p. 125.Google Scholar

35 This was due to the varying levels of urbanization, income, relative cost of substitutes, and climate, but mostly it reflected the cheaper price of gas in Britain, itself a function of the cost of coal. See “Why English gas outputs are large, with lessons to be drawn in the United States,” in Gas World (30 Apr. 1904), pp. 758–59;Google ScholarSchurr, S. H. and Netschert, B. C., Energy in the American Economy (Baltmore, 1960), p. 97; JGL, 25 Feb. 1902, p. 473.Google Scholar

36 Gas World, 21 Jan. 1899, p. 92; JGL, 25 Feb. 1902, p. 479.Google Scholar

37 Gas World, 26 Aug. 1908, p. 558.Google Scholar

38 For similar conclusions, see Ames, Edward and Rosenberg, Nathan, “The Enfield Arsenal in Theory and History,” Economic Journal, 77 (12 1968), p. 312;Google ScholarSandberg, Lars, “American Rings and English Mules: The Role of Economic Rationality,” Quarterly Journal of Economics, 82 (11 1968).Google Scholar

39 JGL 19 May 1891, p. 952. Note that in concentrating on the growth of natural gas production Schurr and Netschert dismiss manufactured gas in America as insignificant. In fact, although in 1905, for example, the output of natural gas was three times that of town gas, its value at around $43 million compared weakly to $115 million for manufactured gas. Schurr and Netschert, Energy in the American Economy, pp. 97, 130; Gas World, 10 Dec. 1904, p. 1077 and 6 Apr. 1907, p. 443.Google Scholar

40 In 1901 annual per capita production of electricity was 0.023 kw hours in Germany and 0.010 in the United Kingdom. Mitchell, Brian R., European Historical Statistics, 1750–1970 (Cambridge, 1975), pp. 19–24, 478–79.CrossRefGoogle Scholar

41 Rosenberg, Perspectives on Technology, p. 30.Google Scholar