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UBC Theses and Dissertations

A critical reassessment of the evidence of long swings in residential construction in Great Britain,… Olesen, Richard Mogens 1971

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A C R I T I C A L REASSESSMENT OF THE EVIDENCE OF LONG SWINGS  I N R E S I D E N T I A L CONSTRUCTION I N  GREAT B R I T A I N , 1 8 6 0 - 1 9 1 4 . WITH S P E C I A L EMPHASIS ON THE LOCAL EXPERIENCE I N LANCASHIRE AND SOUTH WALES by RICHARD MOGENS OLESEN A.B.,  University of California,  1969  A T H E S I S SUBMITTED I N P A R T I A L FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS  i n t h e Department of Economics  We a c c e p t t h i s required  t h e s i s as conforming  to the  standard  THE U N I V E R S I T Y OF B R I T I S H COLUMBIA June,  19 71  In p r e s e n t i n g t h i s  thesis  an advanced degree at the L i b r a r y s h a l l I  f u r t h e r agree  in p a r t i a l  fulfilment of  the U n i v e r s i t y of B r i t i s h  make i t  freely available  that permission  for  the requirements f o r  Columbia,  I agree  r e f e r e n c e and  f o r e x t e n s i v e copying o f  this  that  study. thesis  f o r s c h o l a r l y purposes may be g r a n t e d by the Head o f my Department o r by h i s of  this  written  representatives.  It  i s understood that  thesis- f o r f i n a n c i a l  gain s h a l l  permission.  Department of The U n i v e r s i t y o f B r i t i s h Vancouver 8, Canada  Date  ^)\J^j H %  Columbia  1  copying o r p u b l i c a t i o n  not be allowed without my  ABSTRACT  T h i s t h e s i s examines t h e evidence  o f long swings i n  B r i t i s h h o u s e - b u i l d i n g f r o m 1860 t o 1914. The c e n t r a l  issue of the present  existence of c y c l i c a l  i n q u i r y concerns  the  fluctuations i n residential construct-  i o n and t h e n a t u r e o f t h e c a u s a l mechanisms by w h i c h  these  phenomena m i g h t b e e x p l a i n e d . A general a n a l y s i s of the s t r u c t u r e of the housing m a r k e t and t h e i n s t i t u t i o n a l p e c u l i a r i t i e s w h i c h g i v e to the lagged  rise  a d j u s t m e n t p r o c e s s b y w h i c h c h a n g e s i n demand  are translated  i n t o changes i n t h e s u p p l y o f h o u s i n g  accommod  a t i o n suggests  that the appropriate l e v e l a t which t o analyze  the behavior o f house-building i s the r e g i o n a l or l o c a l The i m p o r t a n c e  of specifying  level  r e l a t i o n s h i p s whose u n d e r l y i n g  behavioral implications are consistent with the level of aggregation, With building explored.  i s stressed.  this  i n mind, a g e n e r a l r e g i o n a l model o f house-  activity  i s developed  and i t s t h e o r e t i c a l s o l u t i o n s  This provides a conceptual  used subsequently  t o study  b u i l d i n g experience  analytical  t h e r e g i o n a l (and l o c a l )  o f South Wales and S o u t h - e a s t  These d i s a g g r e g a t e d  framework house-  Lancashire.  r e g i o n a l s t u d i e s show l o c a l  patterns  of  residential construction  variation. at this  t o e x h i b i t a wide range o f  O p e r a t i v e c a u s a l mechanisms  found t o e x i s t  level of analysis disclose significant regional  d i f f e r e n c e s which s e r i o u s l y question  the v a l i d i t y  of the  m a c r o - c a u s a l r e l a t i o n s h i p s which have been o f f e r e d t o explain  fluctuations i n British  house-building.  The l i m i t s o f t h e p r e s e n t a n a l y s i s nature of our conclusions mind, there  and t h e t e n t a t i v e  a r e emphasized.  With t h i s i n  a r e s u g g e s t e d a number o f a r e a s w h i c h  f a r more i n t e n s i v e s t u d y t h a n t h e y h a v e r e c e i v e d past.  require i n the  O n l y when we l e a r n more a b o u t t h e i n t e r - r e l a t i o n s h i p s  i n the pattern more f u l l y  o f r e g i o n a l d e v e l o p m e n t w i l l we b e a b l e t o  u n d e r s t a n d t h e mechanisms  of the long  swings.  TABLE OF  CONTENTS  Page  L I S T OF TABLES  v i i  L I S T OF FIGURES  x  ACKNOWLEDGEMENT  x i i  Chapter I. II.  III.  INTRODUCTION  1  FLUCTUATIONS I N BUILDING A C T I V I T Y : EVIDENCE OF LONG SWINGS I N R E S I D E N T I A L CONSTRUCTION . . . . . . .  6  A. A M e a s u r e o f B u i l d i n g A c t i v i t y  6  B. The T i m e - P a t h o f R e s i d e n t i a l Construction i n Great B r i t a i n , 1860-1914  19  C. The C o u r s e o f R u r a l H o u s e - B u i l d i n g i n G r e a t B r i t a i n , 1860-1914  25  THE CAUSES OF LONG SWINGS I N HOUSEBUILDING  31  A. The S t r u c t u r e o f t h e H o u s i n g M a r k e t  IV.  . . .  32  B. M a j o r S o u r c e s o f I n s t a b i l i t y i n t h e H o u s i n g S e c t o r o f t h e Economy  46  C. Why t h e L o n g S w i n g s i n B r i t i s h B u i l d i n g f r o m 1860 t o 1914  57  House-  THE PROBLEM OF AGGREGATION: REGIONAL AND LOCAL BUILDING CYCLES  iv  93  V  Page  A. R e g i o n a l a n d L o c a l D i f f e r e n c e s i n the Course of House-Building Activity B. A R e g i o n a l M o d e l o f H o u s e - B u i l d i n g  V.  VI.  93 . . .  97  C. I m p l i c a t i o n s o f t h e R e g i o n a l M o d e l f o r t h e Course o f House-Building at t h e N a t i o n a l L e v e l  107  RESIDENTIAL CONSTRUCTION I N THE WALES COALFIELD  114  SOUTH  A. A R e g i o n a l I n d e x o f H o u s e - B u i l d i n g i n South Wales  114  B. D i f f e r e n c e s B e t w e e n t h e C o u r s e o f House-Building i n Great B r i t a i n and t h e S o u t h Wales C o a l f i e l d  118  C. H o u s e - B u i l d i n g a n d t h e E c o n o m i c Development o f South Wales  120  D. D e m o g r a p h i c F a c t o r s a n d t h e C o u r s e of House-Building i n South Wales: F u r t h e r Evidence o f t h e Absence o f R e g i o n a l Long Swings i n R e s i d e n t i a l Construction  148  E. V a r i a t i o n s i n t h e C o u r s e o f H o u s e B u i l d i n g a t t h e l o c a l L e v e l : South Wales  161  RESIDENTIAL LANCASHIRE  19 6  CONSTRUCTION I N SOUTH-EAST  A. A R e g i o n a l I n d e x o f H o u s e - B u i l d i n g i n South-East Lancashire  19 6  vi  Page  B. D i f f e r e n c e s B e t w e e n t h e C o u r s e o f H o u s e - B u i l d i n g i n G r e a t B r i t a i n and South-East Lancashire C. H o u s e - B u i l d i n g a n d t h e E c o n o m i c Development o f South-East L a n c a s h i r e  VII.  200 . .  202  D. D e m o g r a p h i c F a c t o r s a n d t h e C o u r s e of House-Building i n South-East Lancashire  237  E. V a r i a t i o n s i n t h e C o u r s e o f H o u s e B u i l d i n g a t t h e L o c a l L e v e l : SouthEast Lancashire  248  SOME CONCLUSIONS AND THEIR IMPLICATIONS FOR FURTHER STUDY OF HOUSE-BUILDING IN VICTORIAN BRITAIN  266  BIBLIOGRAPHY  274  APPENDICES  281  I.  281  II.  289  III.  298  L I S T OF TABLES  Table I.  II.  III.  IV.  V.  VI.  VII.  VIII.  IX.  Page LONG CYCLES I N B U I L D I N G A C T I V I T Y I N GREAT B R I T A I N  22  CHANGES I N URBAN AND RURAL HOUSING STOCK I N ENGLAND AND WALES 1 8 5 1 - 1 9 1 1 . . . .  28  GROWTH OF PRODUCTION AND EXPORT OF COAL, UNITED KINGDOM 1 8 6 0 - 1 9 1 4  125  PROPORTION OF TOTAL COAL EXPORTS FROM P R I N C I P L E D I S T R I C T S OF THE UNITED KINGDOM 1860-1900  127  S A I L I N G AND STEAM TONNAGE ENTERED WITH CARGO AND I N BALLAST AT PORTS I N THE UNITED KINGDOM  129  L I M I T E D COMPANIES (COAL MINING) REGISTERED I N SOUTH WALES AND THE AVERAGE S E L L I N G P R I C E PER TON OF STEAM COAL F.O.B. CARDIFF ( 1 8 6 0 - 1 8 7 5 )  133  NET GAIN OR LOSS THROUGH MIGRATION: ENGLAND, SCOTLAND AND WALES, DECENNIALLY, 1861-1911  150  INTERNAL MIGRATION BALANCE: WALES DECENNIALLY, 1 8 6 1 - 1 9 1 1  153  MIGRATION BALANCES I N ENGLISH AND WELSH C O L L I E R Y REGIONS, DECENNIALLY 1861-1911  157  vii  viii  Table  X.  XI.  XII.  XIII.  Page  POPULATIONS OF THE MERTHYR AND ABERDARE VALLEYS, DECENNIALLY 1861-1891  186  LOCATION OF THE COTTON INDUSTRY IN ENGLAND AND WALES, 1835-1921  204  CHANGES IN THE NUMBER OF FACTORIES, POWER-LOOMS, SPINDLES AND PERSONS EMPLOYED IN THE COTTON INDUSTRY OF ENGLAND AND WALES, 1858-6 8  210  R E L I E F EXPENDITURES BY THE GUARDIANS AND R E L I E F COMMITTEES 1860-1965 . . . . . . .  215  XIV.  NUMBER AND NOMINAL C A P I T A L OF LIMITED L I A B I L I T Y COTTON MILLS PROJECTED IN 1873-1884  XV.  NATIONAL INDICES OF BUILDING A C T I V I T Y IN GREAT BRITAIN, 1860-1914  XVI.  XVII.  NET INCREASES IN THE HOUSING STOCK AND THE NUMBER OF HOUSES BEING CONSTRUCTED ON CENSUS DAY IN ENGLAND AND WALES, 1861-1911  287  HOUSE-BUILDING DATA FOR SELECTED TOWNS IN SOUTH WALES  292  ix  Table  XVIII.  XIX.  XX.  Page  I N D I C E S OF HOUSE-BUILDING FOR SELECTED TOWNS I N SOUTH-EAST LANCASHIRE 1 8 6 0 - 1 9 1 3  299  NATURAL INCREASE AND MIGRATION POPULATION AGED 2 0 - 4 4 , LANCASHIRE AND CESHIRE 1 8 7 0 - 1 9 1 0  305  TOTAL NUMBER OF HOUSES ASSESSED AND NOT ASSESSED TO DUTY  306  L I S T OF FIGURES  Figure  1.  2.  Page  NATIONAL INDICES OF BUILDING A C T I V I T Y , GREAT BRITAIN 18601914  NET INCREASE IN URBAN, RURAL AND TOTAL HOUSING STOCK IN CENSUS DECADES ENGLAND AND WALES 1861-1911  10  . . .  29  3.  THE HOUSING AND MORTGAGE MARKET  4.  HOUSE-BUILDING INDICES FOR GREAT BRITAIN AND SOUTH WALES  116  INDICES OF LONG SWINGS IN WALES AND THE "ATLANTIC ECONOMY", 1860-1914 . . . .  121  INDICES OF HOUSE-BUILDING AND THE GROWTH OF INDUSTRY AND TRADE IN SOUTH WALES  140  DECENNIAL NET GAIN OR LOSS THROUGH MIGRATION: ENGLAND, WALES AND SCOTLAND 1861-1911  151  5.  6.  7.  8.  9.  DECENNIAL TRENDS IN HOUSE-BUILDING AND MIGRATION: SOUTH WALES, ENGLAND AND SCOTLAND, 1861-1911 INDICES OF HOUSE-BUILDING FOR SIXTEEN TOWNS IN SOUTH WALES 1860-1914  x  41  1  5  8  165  xi  Figure  10.  11.  12.  13.  14.  15.  Page  HOUSE-BUILDING INDICES FOR GREAT BRITAIN AND SOUTH-EAST LANCASHIRE  199  INDICES OF ECONOMIC DEVELOPMENT SOUTH-EAST LANCASHIRE  219  IN  MIGRATION, NATURAL INCREASE AND HOUSE-BUILDING IN LANCASHIRE 1871-1913  240  MARRIAGE AND BIRTH RATES (PER 1000 POPULATION) ENGLAND AND WALES 1860-1910  246  INDICES OF HOUSE-BUILDING FOR SELECTED TOWNS IN SOUTH-EAST LANCASHIRE 1860-1914  250  HOUSE-BUILDING IN GREAT BRITAIN ANNUALLY AND IN ENGLAND AND WALES ON CENSUS DAY, 1860-1911 . . . .  288  ACKNOWLEDGEMENT  I h a v e i n c u r r e d many d e b t s preparing this  study.  I am e s p e c i a l l y  t h e s i s a d v i s o r C h a r l e s K. H a r l e y . fited greatly  i n the course o f i n d e b t e d t o my  T h i s paper has bene-  from h i s i n v a l u a b l e c r i t i c i s m and i n s i s t e n c e  t h a t I s t a t e more p r e c i s e l y my own i d e a s .  Many  helpful  comments h a v e a l s o b e e n g i v e n b y D r s . James R a e , James Shepherd and Ronald  Shearer.  I n a d d i t i o n , much o f w h a t I u n d e r s t a n d partial differential of simultaneous  e q u a t i o n s and t h e s o l u t i o n o f systems  equations  I owe t o f r e q u e n t d i s c u s s i o n s  w i t h my f e l l o w s t u d e n t s M a s a k o D a r r o u g h , L o u i s and  Robbie Jones.  t h e s i s has proven  i n v a l u a b l e i n t h e f o r m u l a t i o n o f my i d e a s .  in his  t o be  Here, t h e deeply  debt. t o take t h i s opportunity t o  acknowledge a v e r y s p e c i a l debt a friend  my i n t e r e s t thesis  I have  H a n v e l t o n my b e h a l f l e a v e s me  I would a l s o l i k e  As  Christofides  The k n o w l e d g e o f e c o n o m e t r i c s  acquired while preparing this  time spent by Robin  about  and i n s p i r i n g  t o t h e l a t e E. B r u c e  teacher Bruce  helped  i n European economic h i s t o r y .  i s a t r i b u t e worthy o f him.  xii  Hurt.  kindle  I hope  this  xiii  My  often i l l e g i b l e  formed i n t o the Lillian Marie was  first  Turchenek.  Resanovic,  my  wife Kerry  f i n a l d r a f t was  and  typed  i n s p i t e o f numerous  able to maintain her  entire  by  difficulties  g o o d humor t h r o u g h o u t  the  ordeal. Finally,  whose p a t i e n c e than  d r a f t by  The  who  s c r a t c h i n g s were t r a n s -  one  and  I would l i k e  t o t h a n k my  wife,  Kerry,  e n c o u r a g e m e n t w e r e p e r h a p s more  could reasonably  expect.  CHAPTER I  INTRODUCTION  Any  a n a l y s i s o f h o u s e - b u i l d i n g must o f n e c e s s i t y  be  a c o m p l e x u n d e r t a k i n g b y v i r t u e o f t h e phenomena i t s e e k s to explain.  This holds a f o r t i o r i  h a p p e n s t o be h i s t o r i c a l .  i f the analysis  Originally,  also  t h i s p a p e r was  pro-  j e c t e d as an e c o n o m e t r i c s t u d y o f h o u s e - b u i l d i n g i n G r e a t Britain about  f r o m 1860  t o 1914.  e c o n o m e t r i c s and t h e p e c u l i a r s t r u c t u r e o f t h e h o u s i n g  market,  i t became i n c r e a s i n g l y  i n a p p r o p r i a t e way The is  H o w e v e r , as I l e a r n e d more  the s u b j e c t of t h i s  f o r the purpose  o f a n a l y z i n g an  to the a v a i l a b l e  building  paper.  fact.  implications  This consideration  l i t e r a t u r e on t h e c o u r s e o f B r i t i s h  i n the nineteenth century.  A s u r v e y o f what  t o be a n o t t o o e x t e n s i v e b o d y o f k n o w l e d g e ,  v i n c e d me  took house-  proved  but which i n -  c l u d e d t h e few d i s a g g r e g a t e d s t u d i e s o f r e s i d e n t i a l i n Great B r i t a i n  which  historical  requires that i t s underlying behavioral  be c o n s i s t e n t w i t h h i s t o r i c a l me  an  p r o p e r s p e c i f i c a t i o n o f an e c o n o m e t r i c m o d e l  t o be u s e d  problem,  t o approach  a p p a r e n t t h a t t h i s was  t h a t have o n l y r e c e n t l y appeared,  construction has  con-  t h a t f a r more i n t e n s i v e s t u d y i s r e q u i r e d a t t h e  r e g i o n a l and  local  level  t h a n has h i t h e r t o been  1  undertaken.  2  The  housing  market by i t s v e r y n a t u r e , i s a  local  m a r k e t , and t h e mechanism o f t h e b u i l d i n g c y c l e can be properly explained only i n the context of a l o c a l or r e g i o n a l economy.  This i s the central  issue of the present  paper.  T h e r e a r e t i m e s when n a t i o n a l o r i n t e r n a t i o n a l  factors  such  as food p r i c e s ,  i n t e r e s t r a t e s , war, e t c . ,  have a f a v o r a b l e o r u n f a v o r a b l e throughout  the country.  i n f l u e n c e on h o u s e - b u i l d i n g  Yet, i n the f i n a l  c a n b e no n a t i o n a l b u i l d i n g boom w i t h o u t  a n a l y s i s "there  there being a t least  one  l o c a l boom, a n d t h e j u s t i f i c a t i o n f o r a l o c a l boom m u s t  lie  i n l o c a l need.""'' Herein  lies  the apparently insurmountable  facing the econometrician. level  Attempts t o r e l a t e t h e aggregate  o f b u i l d i n g a c t i v i t y t o n a t i o n a l i n d i c e s o f income,  r e n t , p o p u l a t i o n and b u i l d i n g if  difficulty  c o s t s may g i v e a g o o d f i t , b u t  the real behavioral relationships are inconsistent with  the l e v e l  of aggregation,  mechanisms g i v i n g  rise  then our p e r c e p t i o n o f the o p e r a t i v e  t o long swings i n r e s i d e n t i a l c o n s t r u c t i o n  may b e s e r i o u s l y m i s g u i d e d .  A s i m p l e example w i l l  illustrate  J . P a r r y L e w i s , " B u i l d i n g C y c l e s : A R e g i o n a l Model and i t s N a t i o n a l S e t t i n g " , Economic Journal, V o l . LXX ( S e p t e m b e r , 1 9 6 0 ) , p. 5 3 3 .  3  the problem.  2  Consider  a country  c o n s i s t i n g o f two  d e f i n e d r e g i o n s , where i n t e r n a l m i g r a t i o n region i s experiencing national population  a net  clearly  i s such t h a t  i n f l o w of population;  remaining  unchanged.  one  total  Assume f u r t h e r  t h a t t h e e x p a n d i n g r e g i o n u n d e r g o e s an u p s w i n g i n h o u s e building housing  activity  i n r e s p o n s e t o t h e g r o w i n g demand f o r  accommodation, w h i l e  t h e b u r d e n o f empty h o u s e s i n  the d e c l i n i n g r e g i o n causes a l o c a l depression ing industry there. the n a t i o n a l course  An  aggregative  I t might very w e l l e x p l a i n the v a r i a b l e s , but  m o d e l m u s t now  of house-building  stationary t o t a l population data  i t s failure  and  activity  build-  explain  i n terms  of  perhaps other v a r i a b l e s .  i n f l u e n c e of these  t o account f o r the  t r i b u t i o n of population w i l l  i n the  inevitably  other  internal  falsify  our  redis-  inter-  p r e t a t i o n of what i s happening. Another problem concerns the the  local  level.  vacancies,  I f we  could estimate  here i s t h a t almost a l l of our  This  r e g i o n a l models. regional behavioral  s u b j e c t them t o r i g o r o u s t e s t i n g .  gate n a t i o n a l s e r i e s .  at  i n f o r m a t i o n on p o p u l a t i o n s t r u c t u r e ,  to account f o r d i f f e r e n t  t i o n s , and  of data  i n t e r e s t r a t e s , b u i l d i n g c o s t s , r e n t s and  f o r e a c h r e g i o n , we a l l o w us  had  availability  data  The  i s i n the  There i s very  example i s drawn from L e w i s ,  little  pp.  incomes This  would  assump-  difficulty  form of  aggre-  information l e t  532-3.  4  alone  complete s t a t i s t i c a l  vacancies,  incomes o r p o p u l a t i o n .  f u r t h e r grim prospects or l o c a l The detail and  econometric  We  building  Lancashire  i n Great  are thus  and  faced  with  Britain  activity.  experience  survey  f r o m 1860  i n greater  o f South Wales  their relationship  I n C h a p t e r I I we  the evidence  levels,  paper i s to study  to the  the course  t o 1914.  devoted t o the time-shape of b u i l d i n g  ticular  rent  models of h o u s e - b u i l d i n g  the r e g i o n a l house-building  South-east  local  f o r the c o n s t r u c t i o n of r e g i o n a l  purpose of the present  tional pattern.  is  s e r i e s on  of  nahouse-  Special attention  activity  of long swings i n r e s i d e n t i a l  and  i n par-  construc-  tion . C h a p t e r I I I d i s c u s s e s a t some l e n g t h t h e c a u s e s o f  long  swings i n r e s i d e n t i a l c o n s t r u c t i o n . C h a p t e r IV i s c o n c e r n e d w i t h t h e p r o b l e m o f and  the n e c e s s i t y of a n a l y z i n g b u i l d i n g  natural  the n a t i o n a l p a t t e r n The the  cycles within their  i . e . l o c a l or r e g i o n a l , s e t t i n g .  model o f h o u s e - b u i l d i n g  i s o u t l i n e d and  aggregation  A general regional i t s implications for  discussed.  r e g i o n a l course  s u b j e c t o f C h a p t e r V.  of h o u s e - b u i l d i n g Our  i n South Wales i s  e m p h a s i s i s on d e f i n i n g t h e  r e l a t i o n s h i p s between h o u s e - b u i l d i n g  and  t h e e c o n o m i c and  m o g r a p h i c d e v e l o p m e n t o f t h e r e g i o n a l economy.  We  de-  also discuss  5  the l o n g swing and l o c a l v a r i a t i o n s i n b u i l d i n g p a t t e r n s w i t h i n the r e g i o n . Chapter VI i s a s i m i l a r study o f h o u s e - b u i l d i n g i n South-east L a n c a s h i r e . g i o n a l development  A g a i n we  s t r e s s the course of r e -  and i t s impact on r e s i d e n t i a l  construction.  A c o n c l u d i n g statement w i l l be found i n Chapter V I I .  CHAPTER I I  FLUCTUATIONS I N BUILDING A C T I V I T Y : EVIDENCE OF LONG SWINGS I N RESIDENTIAL CONSTRUCTION  A MEASURE OF BUILDING  ACTIVITY  An i n d e x o f f l u c t u a t i o n s  i n private building  was r e q u i r e d a s a b a s i s f o r t h e p r e s e n t s t u d y .  activity  A wealth  o f i n f o r m a t i o n o n r e s i d e n t i a l b u i l d i n g was o r i g i n a l l y  col-  l e c t e d by m u n i c i p a l a u t h o r i t i e s , p r i m a r i l y t o s a t i s f y t h e requirements  o f l o c a l b u i l d i n g by-laws.  of the h i s t o r i c a l  r e c o r d has f a i l e d  t i m e and b u r e a u c r a t i c p r o c e d u r e , remain  And a l t h o u g h  much  to survive the test of  a g o o d many l o c a l  registers  i n t a c t a n d i t was t o t h e s e t h a t B e r n a r d Weber^" a n d J . 2  P a r r y Lewis  turned t o construct t h e i r  construction  i n Great B r i t a i n .  indices of residential  These r e c o r d s p r o v i d e t h e most 3  s a t i s f a c t o r y d a t a upon w h i c h  t o base such  an i n d e x .  B e r n a r d Weber, "A New I n d e x o f R e s i d e n t i a l C o n s t r u c t i o n and L o n g C y c l e s i n H o u s e - B u i l d i n g i n G r e a t B r i t a i n , 1 8 3 8 1950", Scottish Journal of P o l i t i c a l Economy Vol. I I , (June, 1 9 5 5 ) , pp. 104-132. 2 J . P a r r y L e w i s , " I n d i c e s o f H o u s e - B u i l d i n g i n t h e Manc h e s t e r C o n u r b a t i o n , South Wales and G r e a t B r i t a i n , 18511 9 1 3 " , Scottish Journal of P o l i t i c a l Economy, V o l . V I I I , ( F e b r u a r y , 1961), pp. 148-156. 3 J o h n R. R i g g l e m a n , " B u i l d i n g C y c l e s i n t h e U n i t e d S t a t e s , 1 8 7 5 - 1 9 3 2 " , Journal of the American Statistical Association, V o l . X X V I I I . , ( J u n e , 1 9 3 3 ) , p p . 1 3 1 - 1 5 3 . We m i g h t c o n c l u d e w i t h Mr. R i g g l e m a n t h a t " i n s p i t e o f t h e ... l i m i t a t i o n s , howe v e r , i t i s q u i t e p r o b a b l e t h a t few i n d u s t r i e s have a b e t t e r index of a c t i v i t y over a long p e r i o d of time than the b u i l d i n g i n d u s t r y h a s i n b u i l d i n g p e r m i t s . " B u i l d i n g p e r m i t s i n t h e U.S. a r e , o f c o u r s e , t h e c o u n t e r p a r t o f a p p r o v e d b u i l d i n g p l a n s and e r e c t i o n s i n Great B r i t a i n . 6 3  7  Generally,  before a building  i t was n e c e s s a r y  f o r the builder  could  be c o n s t r u c t e d ,  t o submit b u i l d i n g  to the C i t y Surveyor o r Engineer f o r approval. official  plans  The  local  approved t h e p l a n s i f they conformed t o t h e r e -  quirements o f t h e b u i l d i n g by-laws. Records were kept n o t o n l y on a p p r o v e d p l a n s , ly  b u t i n some c a s e s o n h o u s e s  actual-  erected. T h e s e r e c o r d s a r e , h o w e v e r , s u b j e c t t o many l i m i t a t i o n s .  For  example, as u r b a n b o u n d a r i e s changed b u i l d i n g  applied this  progressively  raises  the issue  Weber c l a i m s t h a t  to larger  series  and l a r g e r a r e a s .  Although  of d i s c o n t i n u i t i e s i n the s e r i e s ,  "inspection  i n w h i c h some o f t h e l a r g e r  of the building  series  extensions occurred  i n years  indicates,  4  m o r e o v e r , no o b v i o u s d i s c o n t i n u i t i e s . " c o n c e r n s t h e d e f i n i t i o n o f a "house". differed  from r e g i o n  to region,  over the h a l f century with  Another  problem  This probably not only  b u t a l s o was s u b j e c t t o c h a n g e  w h i c h we a r e c o n c e r n e d .  The g e n e r a l  t e n d e n c y , h o w e v e r , t h a t we f i n d b e f o r e 1914 was t o f o l l o w t h e Weber, "A New I n d e x o f R e s i d e n t i a l C o n s t r u c t i o n " , p. 108. Weber a l s o n o t e s t h a t i n a s t u d y o f o v e r f i f t y b o u n d a r y c h a n g e s i n more t h a n a d o z e n U.S. c i t i e s , C D . L o n g f a i l e d t o f i n d e v i d e n c e t h a t such changes s e r i o u s l y a f f e c t e d t h e u n i f o r m i t y o f b u i l d i n g p e r m i t d a t a . C D . L o n g , Building Cycles and the Theory of Investment, ( 1 9 4 0 ) , p. 9 7 .  8  d e f i n i t i o n used by the Census of P o p u l a t i o n . Other d a t a problems r e f e r s p e c i f i c a l l y t o the of the b u i l d i n g i n d u s t r y .  An approved  nature  p l a n p l a c e s the  b u i l d e r under no o b l i g a t i o n to complete the b u i l d i n g f o r which the p l a n was  approved.  under some approved  Work may  p l a n s , due  never take p l a c e  to d i f f i c u l t i e s  t h a t o f t e n occur i n a p e r i o d of d e p r e s s i o n . i n g by-laws are expected then b u i l d e r s may hoping  such as  those  Also, i f build-  t o change-to become more r i g i d  have a l a r g e number of p l a n s  -  approved  to use them l a t e r to c o n s t r u c t b u i l d i n g s under the  older l i b e r a l  regulations.  There i s a l s o a t i m e - l a g between  the a p p r o v a l of p l a n s and the time when c o n s t r u c t i o n begins on the a c t u a l house. why  Thus, t h e r e are a number of  reasons  b u i l d i n g p l a n s t a t i s t i c s o v e r s t a t e the amount of a c t u a l  building. In c o n s t r u c t i n g the b u i l d i n g index p r e s e n t e d  i n Figure 1,  Weber a d j u s t e d f o r many o f the problems mentioned above i n the f o l l o w i n g way: "  In o r d e r t o render comparable the data r e l a t i n g t o houses a c t u a l l y e r e c t e d and the d a t a of p l a n s i t has been assumed t h a t i t took s i x months t o b u i l d a house and t h a t p l a n s approved i n a g i v e n year were implemented i n the year ending s i x months l a t e r . I t was f u r t h e r assumed t h a t 10 per c e n t of the annual b u i l d i n g p l a n s f a i l e d to be executed, t h i s percentage b e i n g an e s t i m a t e formed from i n s p e c t i o n of the s t a t i s t i c s of p l a n s  9  and c o m p l e t e d h o u s e s f o r a few t o w n s f o r which both are a v a i l a b l e over a period of years. Finally, a l l series g i v e n i n f i n a n c i a l y e a r s were c o n v e r t e d to calendar years".* Weber c o m p i l e d s e r i e s o f s t a t i s t i c s  f o r 34 t o w n s .  Twenty-  s i x o f t h e s e r e f e r t o "houses e r e c t e d " w h i l e t h e r e m a i n i n g r e f e r t o t h e number o f h o u s e s on a p p r o v e d These were then used activity  ing in  curve  t o 1914,  The  from  interested  1856  t o 19 50.  This index, for  i s p r e s e n t e d g r a p h i c a l l y as t h e  (A) i n F i g u r e 1.  G r e a t B r i t a i n was  plans.  t o c o n s t r u c t an i n d e x o f h o u s e - b u i l d i n g  i n Great B r i t a i n  t h e y e a r s 1860  building  The  One  t h e n e s t i m a t e d on t h e b a s i s o f t h i s  reader w i l l  find  a brief  and  further limitation  a r e a s and  fails  summary o f t h e m e t h o d s  of these s t a t i s t i c s  of h i s paper^  argues  5  6  Ibid  t h a t by  ,p.  Ibid,pp.  I of  The  applying a slight  119 - 1 2 2 .  index i s based  Weber, h o w e v e r , d e v o t e s  to the course of r u r a l  109  s h o u l d be men-  t o t a k e i n t o a c c o u n t b u i l d i n g on  i n small rural villages.  tion  index.  paper.  tioned, although i t i s quite obvious. urban  build-  a c t u a l number o f h o u s e s e r e c t e d  e m p l o y e d b y Weber i n c o n s t r u c t i n g h i s i n d e x i n A p p e n d i x the present  18  on  farms a sec-  house-building.  c o r r e c t i o n f a c t o r t o the  He index  10 Figure  NATIONAL INDICES OF  1  BUILDING A C T I V I T Y  GREAT B R I T A I N 1860-1914  (A)  Weber i n d e x o f h o u s e - b u i l d i n g i n t o w n s , 1 8 6 0 - 1 9 1 4 . 1900-09=100. See T a b l e XV, A p p e n d i x I .  thirty-four  (B)  Lewis Weighted index of h o u s e - b u i l d i n g a c t i v i t y i n G r e a t B r i t a i n , 1 8 6 0 - 1 9 1 4 . 1901-11=100. See T a b l e XV, A p p e n d i x I .  (C)  C a i r n c r o s s i n d e x o f t h e volume o f r e s i d e n t i a l b u i l d i n g i n G r e a t B r i t a i n , 1870-1914. 19 0 7=100. See T a b l e XV, A p p e n d i x I .  (D)  I n h a b i t e d house-duty s t a t i s t i c s ; annual i n c r e a s e i n t h e number o f p r e m i s e s ( i n 0 0 0 ' s ) a s s e s s e d and n o t a s s e s s e d t o d u t y i n G r e a t B r i t a i n , 1875-1914. See T a b l e XV, A p p e n d i x I .  (E)  N e t i n c r e a s e i n h o u s i n g s t o c k as r e p o r t e d i n the d e c e n n i a l census of p o p u l a t i o n , England and W a l e s , 1 8 6 1 - 1 9 1 1 . 1901-11=100. See T a b l e X V I , A p p e n d i x I .  50 1860  1870  1880  1890  1900  1910  12  i n t h e p e r i o d 1 8 9 1 - 1 9 1 3 , i t c a n b e made b r o a d l y a t i v e o f the course vity.  represent-  of t o t a l national house-building  T h e e x i s t e n c e o f d a t a was t h e p r i m a r y  factor  ining the regional representation of the building  actideterm-  series.  H o w e v e r , "most o f t h e m a j o r g e o g r a p h i c a l a r e a s , s u c h c a s t e r , Y o r k s h i r e , S c o t l a n d , Wales, t h e Midlands, S o u t h a r e i n some way r e p r e s e n t e d ,  although  as Lan-  and t h e  some a r e u n d e r 7  represented w h i l e others a r e perhaps over-weighted." have i n c l u d e d i n Appendix I a l i s t building  I  o f t h e t o w n s whose h o u s e -  s t a t i s t i c s w e r e u s e d i n c o n s t r u c t i n g Weber's  index  of r e s i d e n t i a l c o n s t r u c t i o n . The i n Great presented  b e s t a l t e r n a t i v e measures o f b u i l d i n g  Britain  fluctuations  i n t h e l a t e V i c t o r i a n p e r i o d have a l s o been  i n F i g u r e 1. C u r v e  (B) i s a w e i g h t e d  four regional indices of building  activity  average o f  c o n s t r u c t e d by  g J.  Parry Lewis.  the s t a t i s t i c s not  The r e g i o n a l i n d i c e s a r e b a s e d n o t o n l y o n compiled  b y Weber, b u t a l s o o n d a t a f o r t o w n s  i n c l u d e s i n Weber's s t u d y  19 55.  These were then  t h a t have been c o l l e c t e d  combined u s i n g w e i g h t s  since  representing  the p r o p o r t i o n o f t h e n e t n a t i o n a l i n c r e a s e i n the housing 1  g  Ibid,  p. 1 1 0 .  L e w i s , " I n d i c e s o f H o u s e - B u i l d i n g " , pp. 148-149. From a l l t h e a v a i l a b l e d a t a , t h e f o l l o w i n g " r e g i o n a l " i n d i c e s were c o n s t r u c t e d ; t h e M a n c h e s t e r C o n u r b a t i o n i n d e x , t h e South Wales i n d e x , t h e L o n d o n i n d e x , a n d an a g g r e g a t e i n d e x o f " a l l o t h e r towns".  13  stock from The  1901-1911 c o n t r i b u t e d by each  weights  c a l c u l a t e d by Lewis were: London, 16.3; South  W a l e s , 5.5; M a n c h e s t e r 69.6.  individual region.  A comparison  Conurbation,  o f curves  8.6; a n d " O t h e r  Towns",  (A) a n d (B) i n F i g u r e 1 i n d i -  c a t e s t h a t t h e i n c o r p o r a t i o n o f new b u i l d i n g d a t a a n d t h e use o f r e a s o n a b l e a l t e r n a t i v e w e i g h t i n g t e c h n i q u e s does n o t appreciably alter originally Curve  the time-shape  of r e s i d e n t i a l construction  e s t a b l i s h e d b y Weber's i n d e x . (C) i s a n i n d e x o f t h e v o l u m e o f r e s i d e n t i a l  build-  i n g c o m p i l e d b y A.K. C a i r n c r o s s f o r h i s s t u d y o f home a n d g  f o r e i g n investment  i n Great B r i t a i n  from  1870 t o 1 9 1 3 . F o r  t h e y e a r s 1870 t o 1900 he r e l i e d h e a v i l y o n t h e I n h a b i t e d House Duty s t a t i s t i c s . number o f h o u s e s b u i l t 1891,  U s i n g b e n c h mark e s t i m a t e s o f t h e i n England  the net increase i n housing  and Wales i n 1871 and s t o c k between  revaluation  y e a r s a s i n d i c a t e d b y t h e I n h a b i t e d House Duty  statistics  f o r E n g l a n d , W a l e s , a n d S c o t l a n d was " s m o o t h e d  ... i n o r d e r  t o make t h e c h a n g e s f r o m y e a r t o y e a r c o n f o r m evidence.""^  For the years  1901 t o 1914, a b a s e s e r i e s o f  9 A.K. C a i r n c r o s s , Home and Foreign (Cambridge: U n i v e r s i t y P r e s s , 1953), ^Ibid  3  p. 155.  to the other  Investment pp. 152-158. 3  1870-1913,  14  h o u s e s e r e c t e d was and To  the  forty  o b t a i n an  constructed  largest municipal estimate  a f a c t o r of  21/2.  20,000 d w e l l i n g s total  s e r i e s by  final  s e r i e s o f new  t o 1914 Figure its  was 1.  long  Again,  a r e a s was  f o r r u r a l a r e a s and  one-eight  to the  the  Inhabited  repealed  F r o m 1875  t o 1914  " m e s s u a g e s and study  the  Inhabited  1870  the  t o t a l number o f h o u s e s c h a r g e d and  series,  taking f i r s t  ates  in this  a new  P.S.  J o s i a h S t a m p , B r i t i s h Incomes K i n g and S o n , L t d . , 1 9 2 7 ) , p.  dwelling ster-  House D u t y duty  u s e d as dwellings."''""''  I have c o n s t r u c t e d  By  with  Britain  charged w i t h  tenements not  the present  t o 1914.  i n Great  twenty pounds  For  f r o m 1875  from  confirmed.  H o u s e D u t y l e v i e d on  a l s o i n c l u d e d a t a on h o u s e s n o t  as w e l l as  The  (1907=100) g r a p h e d i n  h o u s e s w h o s e a n n u a l " r e n t a l " v a l u e was  records  the  the b a s i c shape o f the b u i l d i n g c u r v e  t h e w i n d o w t a x was  l i n g o r more.  constant  increased  swings i n r e s i d e n t i a l c o n s t r u c t i o n i s  r e p l a c e d by  multiplied  i n Great B r i t a i n  index  Wales.  areas  to account f o r Scotland.  houses b u i l t  converted  I n 1851 and  on m u n i c i p a l  i n urban  C a i r n c r o s s t h e n added a  a year  London  a r e a s i n E n g l a n d and  of a l l houses b u i l t  o u t s i d e London, the data by  f r o m d a t a on G r e a t e r  a series  not  representing  charged t o  d i f f e r e n c e s of the  s e r i e s measuring the annual  and Property, 141.  duty estimincreases  (London:  15  i n the housing Curve  (D) The  s t o c k was  i n Figure Inhabited  derived.  This  i s presented  1. House D u t y s t a t i s t i c s h a v e b e e n u s e d  i n numerous s t u d i e s o f b u i l d i n g f l u c t u a t i o n s y e t inappropriately.  I t i s important  o f l i m i t a t i o n s w h i c h may Both M i t c h e l l  12  f a c t t h a t the and  and  Weber  13  much new  be  o v e r c o m e i f we  had  IHD  records  constant  i s on  varied  significantly  to the  l e v e l of housing  s y s t e m a t i c way.  IHD  statistics  ments.  The  i s not  accounted  l e a d s one  o v e r t i m e and  the  could  annual  assume i t t o be  percentage of the housing  demolitions  any  are net q u a n t i t i e s  a d e q u a t e i n f o r m a t i o n on  however, i s p r e s e n t l y not p o s s i b l e . there  the  This p a r t i c u l a r problem  r a t e of d e m o l i t i o n or could reasonably relatively  usefulness.  have drawn a t t e n t i o n t o  house-building  f o r because of d e m o l i t i o n s .  often  t o k e e p i n m i n d a number  s e r i o u s l y reduce t h e i r  f i g u r e s i n the  consequently  as  stock.  What l i t t l e  This,  evidence  to conclude that were not  a  they  clearly related  stock or b u i l d i n g f l u c t u a t i o n s i n  Another problem t h a t a r i s e s from  concerns the  the  i n f l u e n c e of p e r i o d i c r e a s s e s s -  reassessment years  f o r L o n d o n w e r e 1876,  1881,  B.R. M i t c h e l l , Abstract of B r i t i s h H i s t o r i c a l S t a t i s t i c s ( C a m b r i d g e : C a m b r i d g e U n i v e r s i t y P r e s s , 1 9 6 2 ) , p. 233. 13  Weber, "A New  I n d e x o f R e s i d e n t i a l C o n s t r u c t i o n " , p.  3  106.  16  1887,  1892,  E n g l a n d and  1897,  1902,  1907  and  1912;  W a l e s t h e y w e r e 1876,  f o r the r e s t of  1879,  1882,  1885,  14 1888,  1893,  1898.  In Scotland the process  ment i n e f f e c t t o o k p l a c e e a c h y e a r .  of  reassess-  Increases  i n rent  were accounted f o r o n l y i n reassessment years w h i l e d u c t i o n s were a d j u s t e d treatment  for annually.  o f r e n t i n c r e a s e s and  ward b i a s i n f i g u r e s of annual ment y e a r s .  For  This  decreases  the s t a t i s t i c s  on  n u o u s s h i f t o f b u i l d i n g s f r o m one These l i m i t a t i o n s r e n d e r  may  c r e a t e d a down-  t h e number o f  to  t h e House D u t y changes i n  shape o f h o u s e - b u i l d i n g . "  as an To  statistics  house-builddoes  i n d i c a t i o n of the  test their r e l i a b i l i t y  this  respect  I have superimposed b u i l d i n g  1 on  a c u r v e w h i c h r e p r e s e n t s Weber's e s t i m a t e s British  conti-  another.  a g r e e w i t h Thomas t h a t " t h i s  n o t n e c e s s a r i l y r u l e them o u t 15  Mitchell,  houses  i t led to a  category  a r e l a t i v e l y poor measure of annual H o w e v e r , we  dissimilar  valuation for inter-assess-  t h i s o n l y c a u s e d a p r o b l e m i n so f a r a s  ing.  re-  Historical  curve  Statistics,p.  (D)  timein  i n Figure  of the  number  236.  15 B r i n l e y Thomas, " D e m o g r a p h i c D e t e r m i n a n t s o f B r i t i s h and A m e r i c a n B u i l d i n g C y c l e s " , p a p e r p r e s e n t e d t o MSSB C o n f e r e n c e on B r i t i s h E c o n o m i c H i s t o r y h e l d a t E l i o t H o u s e , H a r v a r d , S e p t . 1-3, 19 70. F o r t h c o m i n g i n Studies in a Mature Economy: B r i t a i n after 1840, (London, Methuan, 1971).  17  ( i n thousands) of houses e r e c t e d  i n Great B r i t a i n .  The  e f f e c t of the p e r i o d i c reassessments i s s t r i k i n g . the  long swings i n r e s i d e n t i a l  Weber's e s t i m a t e s trend of the The  clearly  reflected  source  i n Great B r i t a i n f i n d d a t a on  h o u s e s on  construction revealed  I n h a b i t e d House Duty  only remaining  activity H e r e we  are  Census day  beginning  c u l a t e the net  The  i n 1801.  C e n s u s was  i n the  (E)  i n the  Returns.  every  1.  index The  that the  enumeration of uninhabited  f r o m one  census to the next.  concerns the absence of data  Of  usefulness Census  Changes i n  discontinuities  I t i s also h o u s e s was  course  f o r the  (19 0 1 -  e x t r a c t e d from the  give r i s e to  t h a t are u n d i s c e r n i b l e .  has  inter-  f o r a number o f r e a s o n s .  t h e d e f i n i t i o n o f a h o u s e may  cal-  This  the net  i n t o the  i n Figure  o f i n f o r m a t i o n on b u i l d i n g a c t i v i t y i s limited  then  s t o c k of houses f o r each  A p p e n d i x I ) and  as C u r v e  taken  I t i s thus p o s s i b l e to  census i n c r e a s e s were then c o n v e r t e d  i n the data  uninhabited  as w e l l as t h e number o f h o u s e s  (see T a b l e XVI,  of Population  Population.  t h e number o f i n h a b i t e d and  increases  11=100) p r e s e n t e d  general  statistics.  i s the Census o f  d e c e n n i a l p e r i o d from the data b e e n done  i n the  by  o f i n f o r m a t i o n on b u i l d i n g  c u r r e n t l y under c o n s t r u c t i o n . ten years  Yet  probable not  the major  consistent problem  intercensus years  which  18  p r e c l u d e s t h e i d e n t i f i c a t i o n o f m a j o r p e a k s and residential  c o n s t r u c t i o n , l e t a l o n e m i n o r movements.  s p i t e of these p r o v i d e d by if  limitations,  t h e s t a t i s t i c s on  the Census of P o p u l a t i o n g i v e s a  over very long periods of time.  the course  sented  The  house-building reasonable,  are a l s o pre-  They p r o v i d e a  further  c h e c k on W e b e r ' s d a t a i n C e n s u s y e a r s and h a v e b e e n i n F i g u r e 15 The  acti-  number o f h o u s e s  o f c o n s t r u c t i o n on C e n s u s day  i n Table XVI, Appendix I .  in  In  however, rough i n d i c a t i o n of the course of b u i l d i n g  vity in  troughs  plotted  (Appendix I ) .  a v a i l a b l e data to which  we  p r e s e n t l y have  access  appear to c o n f i r m the time-shape of h o u s e - b u i l d i n g  manifested  i n Weber's i n d e x o f r e s i d e n t i a l c o n s t r u c t i o n .  study  by  Lewis  t h a t had  shows t h a t t h e i n c o r p o r a t i o n o f new p r e v i o u s l y n o t b e e n s t u d i e d and  The  d a t a on  the use o f  a t i v e w e i g h t i n g t e c h n i q u e s does not s i g n i f i c a n t l y shape o f the b u i l d i n g that  index.  We  of f a c i l i t a t i n g the n a t i o n a l t h e one  r e g i o n a l a n a l y s i s r a t h e r than of  s e r i e s - which  produced  by  is still  remarkably  C a i r n c r o s s ' s crude  altern-  alter  might conclude w i t h  " t h e o b j e c t o f c o l l e c t i n g more d a t a m u s t now  towns  be  Lewis that  improving close to  computations  and  16 viable  intuition."  Thus, i n the course of the  the  present  " ^ J . P a r r y L e w i s , Building Cycles and B r i t a i n s Growth, ( L o n d o n : M a c M i l l a n and Company, L t d . , 1 9 6 5 ) , p. 307.  en-  19  s t u d y when we will  refer to a national building  index,  we  s p e c i f i c a l l y h a v e i n m i n d t h e Weber i n d e x o f r e -  sidential construction.  THE  TIME-PATH OF  R E S I D E N T I A L CONSTRUCTION I N GREAT B R I T A I N ,  1860-1914. The  o u t s t a n d i n g c h a r a c t e r i s t i c o f Weber's i n d e x  building activity or  of major  fluctuations  w h a t h a v e v a r i o u s l y b e e n r e f e r r e d t o as  "long s w i n g s " two  i s the presence  or "long"waves" l a s t i n g  decades.  In f a c t ,  of  "major  cycles",  f o r a period of  each o f the i n d i c e s p r e s e n t e d  F i g u r e 1 e x h i b i t s t h e s e phenomena t o a g r e a t e r o r  about in  lesser  extent w i t h only s l i g h t v a r i a n c e , i f at a l l , i n t i m i n g . For the purpose of the present  s t u d y , we  will  be  primarily  c e r n e d w i t h t h e c o u r s e o f h o u s e - b u i l d i n g as m a n i f e s t e d Weber's i n d e x o f r e s i d e n t i a l b u i l d i n g a c t i v i t y was peak o f the f i r s t  construction.  generally rising  l o n g c y c l e i n 1876.  from  The  conin  trend i n  1860-61 t o  T h e r e a r e two  the  minor  f l u c t u a t i o n s i n t h i s p e r i o d , the f i r s t  and m o s t  of  house-building declines  for  which  rises  the next  t o a p e a k i n 1863.  two  years but  index r i s e s s t e a d i l y a t i o n i n 1872.  The  from  New  the trough  important  i n 186 5-66  t o t h e peak o f t h e second  minor  ensuing d e c l i n e l a s t s only a year  the fluctuand  20  is  f o l l o w e d by  culminating  a sharp r i s e  i n the m a j o r peak of  House-building 1879.  in residential  This  steep  falls  d e c l i n e i s f o l l o w e d by  the  trend  a f t e r 1886.  final  decade of the  up  sharply  in  189 8 and  1876.  o f f d r a m a t i c a l l y f r o m 1877  of depressed b u i l d i n g a c t i v i t y . fluctuations with  index  The  i n 189 5,  construction  sixteen years  There a r e , however, minor  exhibiting a slight  upward  industry begins to recover  nineteenth rising  190 3 o f t h e  century.  inexorably  in  t o the  second long c y c l e .  The  magnitude  at the  was  b u i l d i n g h i s t o r y , and Building  activity  unprecedented i n  so a l s o was  n i n g o f t h e F i r s t W o r l d War,  t i o n of the exigencies  by  1918 The  British  t h e downswing t h a t  and  time s i n c e the  of the m i l i t a r y downward t r e n d  house-building turning points  had  1913  b u i l d i n g had  but  followed.  t h e war  e f f o r t against  by  the  begin-  sunk t o a  e a r l y 1860's.  d o m e s t i c economy d u r i n g  i n f o r c e d the  place  d e c l i n e d p e r s i s t e n t l y f o r over a decade.  T h e r e w e r e m i n o r u p t u r n s i n 1906  l o w e r t h a n a t any  turns  d o u b l e peak  c o n s t r u c t i o n that takes  century  the  Weber's i n d e x  o f t h e boom i n r e s i d e n t i a l t u r n of the  to  The  level disrup-  y e a r s and  the  the Dreibund  i n residential construction been reduced to almost  reand  zero.  o f t h e m a j o r f l u c t u a t i o n s i n Weber's  21  index  of house-building  Table I. by  Turning  L e w i s and  from the f o r the  p o i n t s f o r the  Cairncross  Inhabited  activity  are given  indices  as w e l l as t h e  in  constructed  series derived  House Duty s t a t i s t i c s  purpose of  The  i n Great B r i t a i n  are a l s o  given  comparison.  b a s i c o u t l i n e of the i s quite similar  long swings i n b u i l d i n g  for a l l four indices.  There  a r e , h o w e v e r , some m i n o r d i f f e r e n c e s i n t i m i n g and plitude. first  Weber a n d  L e w i s b o t h l o c a t e t h e peak of  l o n g c y c l e i n 1876,  boom d e s c r i b e d by o u t l i n e d by  The  the b u i l d i n g depression  W h i l e Weber's vely and  constant a low  but  Lewis index  Weber.  t r a c e d o u t by  am-  these  the  i n t e n s i t y of the b u i l d i n g  i s much g r e a t e r t h a n  behavior of the  of the  industry  1 8 8 0 ' s and  that  during  e a r l y 1890's  indices i s also slightly  index  the  different.  depicts building activity  as  relati-  over t h i s p e r i o d w i t h only minor f l u c t u a t i o n s  p o i n t r e a c h e d i n 1886,  the  index  constructed  Lewis e x h i b i t s a g e n t l y d e c l i n i n g t r e n d to the major year  1890  trough  w i t h r a t h e r more e x a g g e r a t e d m i n o r f l u c t u a t i o n s  about t h i s t r e n d . of the  by  Both i n d i c e s l o c a t e the d o u b l e peak  s e c o n d l o n g c y c l e i n 189 8 and  189 8 t h e number o f new  houses e r e c t e d  1903.  F r o m 1890  to  rises consistently,  TABLE I  LONG CYCLES I N BUILDING A C T I V I T Y I N GREAT B R I T A I N  Phase o f Major Cycle  Turn  from d e c l i n e to rise  Rise  W  e  b  e  r  1860-61 1861-1876  Turn from r i s e to decline Decline  1876 1877-1886  Turn from d e c l i n e to r i s e  1886  L  e  w  i  s  Cairncross  IHD  1860 1861-1876  1876 1877-1890  1890  1877 1878-1885  1885  1876 1877-1893 1893  i  II.  Rise  1887-1898  1891-1898  Turn from r i s e to decline  1898-1903  1898-1903  Decline  1904-1914  1904-1914  Source:  See T a b l e XV, A p p e n d i x I .  1886-1899  1899 1900-1914  1894-1899  1899-1905 1906-  23  b u t b e c a u s e 1890 i s a m a j o r t r o u g h rise  i n building  activity  w h a t more p r o n o u n c e d t h a n The  from t h a t year  1906  i n both  indices,  index, the  t o 1895 i s some-  t h a t i n d i c a t e d by Weber's i n d e x .  r a p i d d e c l i n e i n new h o u s e - b u i l d i n g  captured  although  a f t e r 1903 i s  the minor upturns i n  a n d 1 9 1 3 , a p p a r e n t i n W e b e r ' s i n d e x do n o t show up  i n Lewis' two  i n Lewis'  weighted index.  These d i f f e r e n c e s between t h e  i n d i c e s t h a t we h a v e d e s c r i b e d a r e p r i m a r i l y  able t o the d i f f e r e n t weighting  techniques  attribut-  employed i n  t h e i r c o n s t r u c t i o n , a s w e l l a s t h e i n c o r p o r a t i o n o f new house-building activity The  data  i n t o the index of house-building  c a l c u l a t e d by index  ment w i t h t h o s e of the f i r s t  Lewis.  c o n s t r u c t e d by C a i r n c r o s s i s i n broad o f Weber a n d L e w i s .  long c y c l e a year  later  He p l a c e s t h e p e a k i n 1877 a n d t h a t o f  t h e s e c o n d i n 1899 w i t h a m i n o r p e a k i n 1 9 0 3 . d e c l i n e t h a t b e g a n i n 1878 i s r e v e r s e d f l u c t u a t i o n t h a t peaks i n 1889. followed the  i n 189 3 b y a s t e a d y  rise  l a t e r than  Weber a n d L e w i s ) . after  The  gradual  i n 1885 b y a m i n o r  A three year  slump i s  t o t h e p e a k i n 1899 o f  s e c o n d l o n g wave i n r e s i d e n t i a l  also i s a year  agree-  construction  (this  t h a t i n d i c a t e d by t h e i n d i c e s o f  The downward t r e n d i n h o u s e - b u i l d i n g  1903 d e s c r i b e d b y C a i r n c r o s s ' i n d e x  follows  closely  24  t h a t o u t l i n e d b y L e w i s f o r t h e same p e r i o d . a l s o be noted t h a t a l t h o u g h activity  during  the lowest  the depression  years  I t should  level of building  occurs  i n 1885, t h e  c h o i c e o f t h i s d a t e a s o p p o s e d t o 189 2 a s t h e m a j o r is  somewhat a r b i t r a r y .  The i n d e x  fails,  trough  however, t o  a c c o u n t f o r many o f t h e m i n o r f l u c t u a t i o n s i n b u i l d i n g activity;  the reason f o rt h i s  i s found i n t h e methods 17  employed i n c o n s t r u c t i n g t h e index. E a r l i e r we d i s c u s s e d uations  on t h e I n h a b i t e d  the effects of periodic revalHouse D u t y s t a t i s t i c s  consequent i m p o s s i b i l i t y o f using a s e r i e s from t h i s  data  estimates, The  (by t a k i n g f i r s t  and t h e  constructed  d i f f e r e n c e s of the annual  f o r example) as a measure o f a n n u a l  changes.  long swings i n r e s i d e n t i a l c o n s t r u c t i o n a r e c l e a r l y  revealed  i n t h e House Duty s t a t i s t i c s ,  l i m i t a t i o n s t o which these impossible  a r e s u b j e c t make i t  t o a c c u r a t e l y i d e n t i f y major t u r n i n g p o i n t s .  Thus, t h e e s t i m a t e s sidered very  found i n Table I should  rough approximations  points.  See  statistics  y e t t h e numerous  page  13  above.  o n l y be con-  to the actual turning  25  T h e r e can be  little  doubt t h a t the  r e s i d e n t i a l c o n s t r u c t i o n are i n the  f o l l o w i n g s e c t i o n we  tially  an u r b a n phenomenon.  THE  COURSE OF  r e a l and will  see  long swings i n  fundamental.  But  t h a t they were  essen-  RURAL HOUSE-BUILDING IN GREAT B R I T A I N ,  1860-1914. The  present  study  i s concerned p r i m a r i l y w i t h  d e n t i a l c o n s t r u c t i o n i n urban areas. important the  t o h a v e some u n d e r s t a n d i n g  countryside.  researches the  In t h i s  o f Weber and  long swings i n r e s i d e n t i a l  l i e r were e s s e n t i a l l y sense of being  Records s i m i l a r to those from which annual estimates do  not  exist  building discussed rived  a t t e m p t t o show t h a t  not  of house-building The  T h i s d a t a was  changes i n the  areas  c a n be  course  of r u r a l  t o t a l housing  house-  Earlier stock  i n t h e C e n s u s R e t u r n s f o r E n g l a n d and  c o l l e c t e d on  derived  only a v a i l a b l e evid-  i s found i n the Census o f P o p u l a t i o n .  from data  ear-  a n a t i o n a l ( i n the  a v a i l a b l e f o r urban  some i n d i c a t i o n o f t h e  estimated  the  r u r a l ) phenomenon.  f o r the countryside.  ence t h a t g i v e s  r e l y h e a v i l y on  in  construction described  an u r b a n and  b o t h u r b a n and  However, i t i s of the experience  s e c t i o n we  L e w i s i n an  resi-  we de-  Wales,  the b a s i s of R e g i s t r a t i o n D i s t r i c t s .  26  By  classifying  these D i s t r i c t s as being  o r r u r a l , we may o b t a i n e s t i m a t e s i n the r u r a l housing stock. a rural district with  do The  urban  of the decennial  changes  F o r t h i s p u r p o s e Weber  defined  a s one t h a t i n 1 8 9 1 d i d n o t i n c l u d e a t o w n  a population  o f 20,000 o r m o r e .  A few words o f m e t h o d o l o g i c a l der.  primarily  caution are here i n o r -  T h e t a x o n o m y e m p l o y e d b y Weber a n d l a t e r b y L e w i s  n o t g i v e an a c c u r a t e resulting  districts opposite  estimates  division  of rural  and urban  o f t o t a l housing stock  areas.  i n rural  i n c l u d e houses l o c a t e d i n s m a l l towns, w h i l e t h e i s t r u e f o r urban d i s t r i c t s .  associated with  Another problem i s  changes i n t h e b o u n d a r i e s o f R e g i s t r a t i o n  Districts.  Small  negligible  effect  c h a n g e s w e r e made f r e q u e n t l y b u t h a d a on t h e l o n g r u n t r e n d  i n rural  house-  18 building.  L a r g e c h a n g e s w e r e r e l a t i v e l y more  but  far less  frequent.  the  necessary information  F o r t u n a t e l y , t h e Census  important provides  s o t h a t a d j u s t m e n t s c o u l d b e made  where n e c e s s a r y t o ensure c o m p a r a b i l i t y . t h a t we h a v e e n c o u n t e r e d b e f o r e ,  One f i n a l  problem  concerns the i m p o s s i b i l i t y  Weber, "A New I n d e x o f R e s i d e n t i a l C o n s t r u c t i o n " ,  p. 1 2 1 .  27  of i d e n t i f y i n g major t u r n i n g p o i n t s . will  T h i s , however,  as  s o o n become e v i d e n t , i s o n l y o f m i n o r i m p o r t a n c e i n  a study  of r u r a l  The  house-building.  f o l l o w i n g table contains estimates  s t o c k i n r u r a l and  urban Regional  Districts  of the  housing  obtained  from 19  t h e C e n s u s o f P o p u l a t i o n as w e l l as d e c e n n i a l Columns 2. to  ( 4 ) , (5) and  House-building  (6) o f T a b l e  gentle d e c l i n e for approximately and  I I are graphed i n F i g u r e  i n Rural D i s t r i c t s  a h i g h p o i n t on o r n e a r 1871.  changes.  climbed  gradually  T h i s i s f o l l o w e d by two  decades.  1900's the t r e n d i n r u r a l h o u s e - b u i l d i n g  a  In the rises  1890's  signific-  a n t l y , y e t the most s a l i e n t c h a r a c t e r i s t i c o f the d a t a r u r a l v a r i a t i o n s over  the e n t i r e h a l f century  absence of l o n g swings s i m i l a r t o those urban d i s t r i c t s . u r b a n and  i s the  experienced  on  marked by  the  Thus t h e h i g h l y c o r r e l a t e d movement o f  n a t i o n a l changes i n housing  stock apparent i n  F i g u r e 2 are e x p l a i n e d by: a) t h e a b s e n c e o f any s i g n i f i c a n t t r e n d i n t h e r u r a l s e c t o r , p r i m a r i l y b e f o r e 1890, and  Data from the Census of P o p u l a t i o n i n S c o t l a n d have been e x c l u d e d b e c a u s e an o f f i c i a l c h a n g e i n t h e d e f i n i t i o n o f a h o u s e i n 1881 r e n d e r t h e s u b s e q u e n t e s t i m a t e s i n c o m p a r a b l e w i t h t h o s e o f e a r l i e r census'.  TABLE I I CHANGES I N URBAN AND RURAL HOUSING STOCK IN ENGLAND AND WALES 1 8 5 1 - 1 9 1 1 2 0  (000's)  (1)  (2)  (3)  (4)  (5)  Year  Total Housing Stock  Housing Stock I n Urban Reg. D i s t .  Housing Stock In Rural Reg. D i s t .  Increase in C o l . (1)  Increase in C o l . (2)  1851  3432  1784  1648  1861  3924  2175  1749  492  394  98  1871  4520  2658  1862  596  483  113  1881  5218  3264  1954  698  605  93  1891  5824  3788  2036  606  521  85  1901  6710  4517  2193  886  729  157  1911  7550  5116  2434  840  599  241  Source:  J . P a r r y L e w i s , Building Cycles and B r i t a i n s Growth, ( L o n d o n : M a c m i l l a n a n d Company, L t d . ) 1 9 6 5 , p . 3 3 2 .  "The f i g u r e s d i v e r g e s l i g h t l y f r o m t h e i n c r e a s e i n c o l s . (2) and (3) r e s p e c t i v e l y . C o l s . (2) a n d (3) r e l a t e t o e n t r i e s i n t h e a c t u a l C e n s u s y e a r s w h e r e a s c o l s . (5) a n d (6) w e r e o b t a i n e d b y t a k i n g i n c r e a s e s i n c o m p a r a b l e a r e a s b e t w e e n one C e n s u s a n d a n o t h e r . " L e w i s , " I n d i c e s o f H o u s e - B u i l d i n g " , p. 3 3 2 .  . (6) Increase in C o l . (3)  Figure  2  NET INCREASE IN URBAN, RURAL AND TOTAL HOUSING STOCK IN CENSUS DECADES ENGLAND AND WALES 1861-1911  (000  1  S)  (A)  800 700 600  (B)  500 400  300 (C)  200 100  1860  1870  1880  1890  1900  (A)  Net i n c r e a s e  (B)  Net i n c r e a s e i n housing s t o c k o f urban r e g i s t r a t i o n d i s t r i c t s  (C)  Net i n c r e a s e i n housing stock o f rural registration districts  29  i n t o t a l housing  1910 stock  30  b)  The the  the e x t e n t t o which urban housebuilding constituted a greater p r o p o r t i o n of the n a t i o n a l t o t a l .  d i v e r g e n c e o f t h e two c u r v e s a f t e r  adjustment mentioned  Index o f r e s i d e n t i a l nation  as a w h o l e .  earlier  1890  necessitates  r e q u i r e d t o r e n d e r Weber's  c o n s t r u c t i o n representative of the  CHAPTER I I I  THE CAUSES OF LONG SWINGS I N HOUSE - BUILDING  In h i s path Production presented  breaking  study  and Prices,"*" p u b l i s h e d extensive  statistical  i n 19 30,  Simon K u z n e t s  evidence of the existence o f secular  f l u c t u a t i o n s o f 16 t o 22 y e a r s  activity.  S e c u l a r Movements i n  measures r e l a t i n g  d u r a t i o n i n numerous t o t h e volume o f economic  These l o n g swings appear t o be a p r o m i n e n t  characteristic of building activity  i n general  and r e 2  sidentxal construction i n particular. was  the f i r s t  S i r W i l l i a m Beverage  a u t h o r i t y t o suggest t h e existence o f long  swings i n b u i l d i n g i n t h e United  Kingdom, b a s i n g h i s  argument on a d e t a i l e d a n a l y s i s o f unemployment  statistics. 3 There soon f o l l o w e d t h e s t u d i e s o f Riggleman (1933), 4 5 B u r n s (1934) a n d Newman (1935) , a l l o n t h e b u i l d i n g i n d u s t r y S i m o n K u z n e t s , Secular Movements in Production and Prices, (New Y o r k : H o u g h t o n M i f f l i n , 1 9 3 0 ) . 2 W.H. B e v e r a g e , Unemployment - A Problem of Industry, ( L o n d o n : 19 3 0 ) . 3 Riggleman, " B u i l d i n g Cycles i n t h e United S t a t e s , 1875-1932". 4 A r t h u r F. B u r n s , Production Trends in the United States Since 1870, (New Y o r k : N a t i o n a l B u r e a u o f E c o n o m i c R e s e a r c h , 1 9 3 4 ) . ^W.H. Newman, "The B u i l d i n g I n d u s t r y a n d B u s i n e s s C y c l e s " , Journal of Business of the University of Chicago, Volume 8 ( J u l y , 1935) . 31  32 in  the United In  this  S t a t e s , and a l l c o n f i r m i n g t h e l o n g c h a p t e r we w i l l  of the housing  look b r i e f l y  at the structure  s e c t o r , and t h e f o r c e s w h i c h combine t o  determine the course  of residential  b a s i c r e l a t i o n s h i p s are presented model o f t h e housing  construction.  and mortgage m a r k e t s .  s h i p s , and t h e g e n e r a l are the major sources  I n t h e second  institutional of i n s t a b i l i t y  relation-  arrangements which i n the adjustment  b y w h i c h c h a n g e s i n demand a r e t r a n s l a t e d i n t o  changes i n t h e supply we w i l l course  The  below i n a s t o c k - f l o w  s e c t i o n we c o n s i d e r t h e l a g s t r u c t u r e o f t h e s e  process  swing.  look b r i e f l y  of housing  accommodation.  Finally,  at the various explanations of the  of house-building  i n Great  B r i t a i n f r o m 1860 t o  1914.  THE STRUCTURE OF THE HOUSING MARKET The be  r a t e of c o n s t r u c t i o n of r e s i d e n t i a l housing  may  d e t e r m i n e d b y a l a r g e number o f f a c t o r s i n t e r a c t i n g i n  a c o n c i e v a b l y wide range o f complex p a t t e r n s . c o m p r e h e n s i v e p a p e r on t h e d e t e r m i n a n t s  In a  of residential  c o n s t r u c t i o n , L e o G r e b l e r a n d Sherman J . M a i s e l l i s t t h e following  f a c t o r s as those  commanding t h e g r e a t e s t a t t e n t i o n  ( w i t h v a r y i n g d e g r e e s o f emphasis) o f most s t u d e n t s  of the  33  building cycle. 1.  Changes i n p o p u l a t i o n a) I n c r e a s e s i n p o p u l a t i o n b) C h a n g e s i n t h e a g e - s e x c o m p o s i t i o n c) Change i n t h e number, t y p e and s i z e o f d) I n t e r n a l m i g r a t i o n and i m m i g r a t i o n .  2. C h a n g e s i n i n c o m e and  households  employment  a) T o t a l d i s p o s a b l e p e r s o n a l i n c o m e b) Income d i s t r i b u t i o n c) E m p l o y m e n t and u n e m p l o y m e n t 3. C o n s u m e r a s s e t h o l d i n g s and t h e i r d i s t r i b u t i o n , e s p e c i a l l y l i q u i d a s s e t h o l d i n g s and t h e i r e q u i t i e s i n e x i s t i n g houses. 4.  Changes i n the p r i c e s o f a) b)  5.  housing  The p r i c e e l a s t i c i t y o f h o u s i n g r e l a t i v e t o other prices. The s h a p e o f t h e c o n s t r u c t i o n s u p p l y and cost curves.  R e l a t i o n s h i p b e t w e e n o c c u p a n c y c o s t s and dwellings a) C r e d i t a v a i l a b i l i t y and t h e c o s t o f b) D e p r e c i a t i o n c) I m p u t e d c o s t s o f e q u i t y f u n d s  6.  C o n s u m e r t a s t e s and  p r i c e s of credit  preferences  L e o G r e b l e r and Sherman J . M a i s e l , " D e t e r m i n a n t s o f R e s i d e n t i a l C o n s t r u c t i o n : A Review of P r e s e n t Knowledge", Impacts of Monetary Policy, Research Studies prepared f o r t h e C o m m i s s i o n on Money and C r e d i t ( E n g l e w o o d C l i f f s , N . J : P r e n t i c e H a l l , 1 9 6 3 ) , pp. 4 7 6 - 4 7 7 .  34  7. N e t r e p l a c e m e n t demand f o r d w e l l i n g u n i t s d e m o l i s h e d o r o t h e r w i s e removed from t h e i n v e n t o r y l e s s n e t c o n v e r s i o n s and m e r g e r s of e x i s t i n g u n i t s . 8.  Conditions  i n the e x i s t i n g housing  a) U t i l i z a t i o n o f t h e h o u s i n g  supply  inventory  1. V a c a n c i e s 2. I n t e n s i t y o f o c c u p a n c y b) P r i c e s a n d r e n t s f o r e x i s t i n g d w e l l i n g c) Q u a l i t y , l o c a t i o n  units  9. R e a c t i o n s t o c h a n g e s i n demand a) B u i l d e r s ' o r g a n i z a t i o n a n d p r o f i t expectations b) I n v e s t o r s o r g a n i z a t i o n a n d p r o f i t expectations c) M a r k e t s t r u c t u r e and m a r k e t i n f o r m a t i o n This gives  list  and t h e f a c t t h a t i t i s n o t c o m p r e h e n s i v e  some i n d i c a t i o n a s t o t h e c o m p l e x i t y  o f any a n a l y s i s  which seeks t o adequately e x p l a i n behavior i n t h i s  sector  o f t h e economy. Many o f t h e s t u d i e s t h a t h a v e b e e n u n d e r t a k e n t o d a t e have proceeded by c o n c e n t r a t i n g potentially  on o n l y  a few o f t h e  l a r g e number o f f a c t o r s t h a t c a n e x e r t  s i v e i n f l u e n c e on t h e volume o f b u i l d i n g a c t i v i t y . e m p h a s i s h a s g e n e r a l l y b e e n on e s t i m a t i n g  a deciThe  the s t r u c t u r a l  r e l a t i o n s h i p s b e t w e e n t h e number o f h o u s i n g s t a r t s ( o r t h e v o l u m e o f e x p e n d i t u r e on r e s i d e n t i a l few s e l e c t e d e x p l a n a t o r y  factors.  construction)  and a  F o r example, s t u d i e s by  35  Alberts  and G u t t e n t a g  have attempted t o d e f i n e  the  r e l a t i o n s h i p between the r e s i d e n t i a l c o n s t r u c t i o n and  changes i n c r e d i t c o n d i t i o n s .  Models  cycle  relating  h o u s i n g s t a r t s t o t h e l e v e l o f house r e n t s , income and 9  demographic f a c t o r s have been c o n s t r u c t e d Chawner,^  and D e r k s e n .  by  Tmbergen,  A number o f s t u d i e s h a v e  t o r e l a t e t h e v o l u m e o f new h o u s i n g s t a r t s t o t h e 12 of  t h e h o u s i n g m a r k e t as a whole  tried  operation  and a t l e a s t one  study  has attempted t o d i s a g g r e g a t e the market i n t o i t s s i n g l e and  multiple dwelling  unit sectors  and e x p l a i n t h e i n f l u e n c e 13  o f m o n e t a r y f a c t o r s on t h e b e h a v i o r o f t h e s e s e c t o r s .  The  s p e c i f i c n a t u r e o f t h e s e and o t h e r s t u d i e s i s t o a l a r g e 7 W i l l i a m W. A l b e r t s , " B u s i n e s s C y c l e s , R e s i d e n t i a l C o n s t r u c t i o n C y c l e s , a n d t h e M o r t g a g e M a r k e t " , Journal of P o l i t i c a l Economy, V o l u m e 7 0 , ( J u n e , 1962) p p . 2 6 3 - 2 8 1 . p J . G u t t e n t a g , "The S h o r t C y c l e i n R e s i d e n t i a l C o n s t r u c t i o n " , American Economics Review, Volume 51, (June, 1 9 6 1 ) , pp. 275-298. 9  J . T i n b e r g e n , S t a t i s t i c a l Testing of Business r i e s , (League o f N a t i o n s , Geneva, 1939). " ^ L . J . C h a w n e r , Residential C o m m i t t e e ( W a s h i n g t o n , D.C.  Cycle  Theo-  Building, U.S. N a t i o n a l R e s o u r c e s Government P r i n t i n g O f f i c e , 1 9 3 9 ) .  ''""'"J.B.D. D e r k s e n , " L o n g C y c l e s i n R e s i d e n t i a l B u i l d i n g " , Econometrica, V o l . 8 ( A p r i l , 1 9 4 0 ) , pp. 97-116. 12 See Sherman M a i s e l , "A T h e o r y o f F l u c t u a t i o n s i n R e s i d e n t i a l C o n s t r u c t i o n S t a r t s " , The American Economic Review, Vol. L I U , (June, 1 9 6 3 ) , pp. 359-383. 13 L a w r e n c e B. S m i t h , "A M o d e l o f t h e C a n a d i a n H o u s i n g and M o r t g a g e M a r k e t s " , Journal of P o l i t i c a l Economy, V o l . 77, (September, 1 9 6 9 ) , pp. 795-816.  36  e x t e n t governed by t h e a v a i l a b l e d a t a and t h e e x i g e n c i e s of  statistical A critical  c o n v e n i e n c e a n d economy. survey of t h i s  literature  i s outside the  14 scope o f t h e p r e s e n t paper. to  I t may b e u s e f u l ,  however,  q u o t e a t some l e n g t h t h e c o n c l u s i o n d r a w n b y G r e b l e r a n d  M a i s e l i n a r e v i e w o f p r e s e n t knowledge  of the housing  sector: "The s t a t i s t i c a l - e c o n o m e t r i c a p p r o a c h l e n d s i t s e l f t o more c o m p l e t e , i n c l u s i v e , a n d q u a n t i t a t i v e s t a t e m e n t s w i t h more d e f i n i t e t i m e d i m e n s i o n s and e s t i m a t e s o f l e a d s and lags. But both i n t e r n a l a n a l y s i s of the e c o n o m e t r i c m o d e l s and c o m p r e h e n s i v e t e s t s of t h e i r r e s u l t s - t h e f i r s t t e s t s undertaken i n t h i s f i e l d - revealed the p o t e n t i a l a d v a n t a g e s t o b e l a r g e l y i l l u s i o n a r y ... None o f t h e e x i s t i n g s t u d i e s was i n a f i n i s h e d enough s t a t e t o u s e i t f o r a f u l l a n a l y s i s o f the market o r f o r p r e d i c t i n g t h e impact o f any p a r t i c u l a r v a r i a b l e . They l a c k e d c o m p l e t e n e s s , a c c u r a t e measurement o f p a r a m e t e r s , and f r e q u e n t l y e v e n t h e n e c e s s a r y a s s u m e d form o f t h e r e l a t i o n s h i p between a v a r i a b l e and c o n s t r u c t i o n s t a r t s o r e x p e n d i t u r e s . I f the a b i l i t y t o p r e d i c t i s used as a c r i t e r i o n of " s u c c e s s " o f e c o n o m e t r i c models, t h e r e s u l t s are f a r from f l a t t e r i n g t o t h i s method. Most of t h e econometric models d i d worse i n t h i s r e s p e c t t h a n t h e " n a i v e " f o r e c a s t o r judgement p r o j e c t i o n s w h i c h o u r t e s t s employed f o r comparison"15  F o r a c r i t i c a l s u r v e y o f a n a l y s e s s e e C.E.V. L e s e r , " B u i l d i n g A c t i v i t y a n d H o u s i n g Demand", Yorkshire Bulletin of Economics and Social Review, V o l . 3 ( F e b r u a r y , 1 9 5 1 ) , pp. 131-149 a n d G r e b l e r a n d M a i s e l , " D e t e r m i n a n t s o f R e s i d e n t i a l C o n s t r u c t i o n " , passim. " ^ G r e b l e r and M a i s e l , C o n s t r u c t i o n " , p. 6 0 3 .  "Determinants o f R e s i d e n t i a l  37  In l i g h t of these c r i t i c i s m s data problems  and  ( w h i c h assume g a r g a n t u a n  i n view of  proportions)  associated w i t h the a v a i l a b l e s t a t i s t i c s u n d e r c o n s i d e r a t i o n , we  will,  the  f o r the p e r i o d  i n what f o l l o w s ,  briefly  o u t l i n e the s t r u c t u r e of the housing market i n g e n e r a l qualitative  terms.  This w i l l  p r e l u d e t o the subsequent the housing The  p r o v i d e an a p p r o p r i a t e  discussion of i n s t a b i l i t y  in  sector.  h o u s i n g market i s not a w e l l d e f i n e d "market"  i n the t r a d i t i o n a l  sense.  "A h o u s i n g m a r k e t a r e a i s t h e p h y s i c a l a r e a w i t h i n which a l l d w e l l i n g u n i t s are l i n k e d t o g e t h e r i n a c h a i n o r s u b s t i t u t i o n ... I n a broad sense, every d w e l l i n g u n i t w i t h i n a l o c a l h o u s i n g m a r k e t may be c o n s i d e r e d a s u b s t i t u t e f o r every other u n i t . Hence, a l l d w e l l i n g u n i t s may be s a i d t o f o r m a s i n g l e m a r k e t , c h a r a c t e r i z e d by i n t e r a c t i o n s o f o c c u p a n c y , p r i c e s and r e n t s . However, t h i s v i e w c a n be m a i n t a i n e d o n l y f o r t h e m o s t g e n e r a l a n a l y s i s and e v e n t h e n w i t h g r e a t d i f f i c u l t y " . 16 The time  chain of housing  substitutes  ( p r i m a r i l y t o and  i s c i r c u m s c r i b e d by  from work).  are of n e c e s s i t y , l o c a l markets.  Thus, h o u s i n g T h i s i s an  travel  markets  important  C h e s t e r R a p k i n , L o u i s W i n n i c k and D a v i d M. B l a n c k , Housing Market Analysis ( H o u s i n g and Home F i n a n c e A g e n c y , 1 9 5 3 ) , pp. 9-10. 3  38  observation, fully  the i m p l i c a t i o n s of which are not always  appreciated. In r e a l i t y  lapping of  the housing market  i s a series of over-  submarkets, each c o m p r i s i n g a c o h e s i v e c o l l e c t i o n  s u b s t i t u t e s and d i s t i n g u i s h e d b y a s p e c i f i e d c h a r a c -  t e r i s t i c mix i n terms o f t e n u r e , neighborhood, type o f s t r u c t u r e , number o f r o o m s , l o c a t i o n , q u a l i t y , d e s i g n and s o o n . arbitrary  The  choice  interior  o f d e f i n i t i o n i s somewhat  and d i f f e r e n t t y p e s o f s u b m a r k e t s c o u l d  be  s e p a r a t e d by c h a n g i n g t h e s p e c i f i c a t i o n o f t h e c h a r a c t e r i s t i c mix. The v a r i o u s institutional cipants making  submarkets are " i n f l u e n c e d  considerations  and t h e b e h a v i o r o f  i n these submarkets o f t e n i t desirable  by d i f f e r e n t  differs  parti-  considerably,  t o disaggregate the housing market  as  17  much a s p o s s i b l e . "  Thus, a t w o - f o l d  classification  t e n u r e and t y p e o f s t r u c t u r e m i g h t d e f i n e submarkets: the s i n g l e family dwelling the  the  following  fee market, the m u l t i p l e  fee market, the s i n g l e f a m i l y r e n t a l market  multiple dwelling  i s d e s i r a b l e because  by  r e n t a l market.  Such a  and  distinction  i t i s argued t h a t houses b u i l t  for sale  L a w r e n c e B. S m i t h , "A Biseatoral Model of the Canadian Housing and Mortgage Markets," A preliminary unpublished r e s e a r c h p a p e r f o r t h e Bank o f C a n a d a .  39  to  owner o c c u p i e r s  s h o u l d be a n a l y z e d  i n much t h e same  way a s c o n s u m e r d u r a b l e s , w h i l e d w e l l i n g u n i t s for  built  r e n t a l p u r p o s e s a r e more c l o s e l y r e l a t e d t o t h e mar-  k e t f o r income p r o p e r t i e s . ^ The outlined  general  s t r u c t u r e of the housing  market i s  i n the s t o c k - f l o w model o f t h e housing  and  19 mortgage markets p r e s e n t e d is  of necessity, simplified,  trate basic relationships. stock of housing  then  3.  The m o d e l  a n d i s u s e d h e r e t o demonsA t a given p o i n t i n time the  i s made up o f a number o f u n i t s o f e a c h  of a wide range o f types ful  i n Figure  to think of this  of dwellings.  Itwill  be h e l p -  s t o c k i n terms o f a j o i n t  dis-  t r i b u t i o n o f numbers o f houses by s i z e o f u n i t , age, tenure, and  l o c a t i o n , number o f u n i t s p e r b u i l d i n g , c o n d i t i o n  other various q u a l i t y The  stock w i l l  dimensions.  demand f o r e a c h t y p e  of dwelling i n this  heterogeous  depend on a s i m i l a r d i s t r i b u t i o n o f h o u s e h o l d  characteristics  i n terms o f income, f a m i l y  composition,  a s s e t h o l d i n g s , e t c . , as w e l l as t h e p r i c e s o f t h i s and  D a v i d M. B l a n k a n d L o u i s W i n n i c k , "The S t r u c t u r e o f t h e H o u s i n g M a r k e t " , Quarterly Journal of Economics, V o l . LXVII, May, 1 9 5 3 , p. 1 8 5 . 19 T h i s m o d e l i s b a s e d on s i m i l a r m o d e l s c o n s t r u c t e d b y S m i t h , "A M o d e l o f t h e C a n a d i a n H o u s i n g a n d M o r t g a g e M a r k e t s . " , p. 4; a n d M a i s e l , " F l u c t u a t i o n s i n R e s i d e n t i a l C o n s t r u c t i o n S t a r t s " , p. 362.  40  Figure The  3  H o u s i n g and M o r t g a g e  Market  Symbols  HS  Housing  RC  E x p e n d i t u r e s on Residential Construction  CC  Construction Costs  MT  Lending  NRC  Nonresidential Construction  MR  Mortgage  N  Average Earnings of Labour i n C o n s t r u c t i o n Industry  BSC  Mortgage C r e d i t Generated by B u i l d i n g S o c i e t i e s  M  Building Material Costs  MC  Flow o f Mortgage (non-BSC)  F  C o s t o f Temporary Financing  SMC  Stock of I n s t i t u t i o n a l Mortgage H o l d i n g s  L  Cost o f Land  RA  Y i e l d and Terms on a t i v e Investment  Vg  Vacancy Rates: Existing Dwellings  P  V ,„  Vacancy Rates: New D w e l l i n g s  S i z e and D i s p o s i t i o n o f I n s t i t u t i o n a l Investment Portfolios  P r i c e o f Houses  EB  Builders Expectations Speculative Factors  Rents  HHF  Household Formation  T  HS  H R  Starts  'D G,S  P e r m a n e n t D i s p o s a b l e Income P r i c e s of A l t e r n a t i v e and S e r v i c e s  Goods  Terms Rates  Credit  Altern-  THE  HOUSING  AND  MORTGAGE  MARKET  DEMOGRAPHIC & EXOGENOUS  FACTORS  MT  HHF  G,S  P  MR  EXISTING HOUSEHOLDS  REPLACEMENTS NET ADDITIONS  r  1  STOCK OF DWELLINGS  I i  BSC  v  PH R  V  s  H  S  SMC  RA  H S  MC  cc  EB  FOREIGN SECTOR & EXOGENOUS FACTORS  L_  RC  M  N  T  NRC  J  42  each a l t e r n a t i v e prices  form  of housing  o f o t h e r g o o d s and  accommodation,  s e r v i c e s and  finally  the the  cost  the  left  20 and  availability  of  credit.  These v a r i o u s elements hand  3.  s i d e of F i g u r e  demand m a t r i c e s vacancy  ratios  individual markets.  Together,  (distributions) and  a matrix  I t i s important  of housing  because in  are  f a m i l i e s with  the d i f f e r e n t  between  residence,  the housing determine  of p r i c e s  and  supply  a matrix rents  of  the sub-  t h a t the  different  m a r k e t c h a r a c t e r i z e d by  different  somewhat i n s u l a t e d different  from  one  another  c h a r a c t e r i s t i c mixes  " In the  absence of a  t h a t i s , a group of  c o n s i d e r more t h a n  one  families  s u b m a r k e t as  in different  are channel  who  a place  upward o r downward p r i c e movements c a n  independently  and  i n the v a r i o u s  to p o i n t out  submarkets.  t sab] m a r k e t s ,  seriously  r e p r e s e n t e d on  elements of which p r e v a i l  segments o f t h e h o u s i n g kinds  are  p a r t s of the market  of  persist  for  consi-  21 derable periods." and  To  c h a n g e s i n v a l u e and  c u m s t a n c e s , one  (New  fully  a p p r e c i a t e the market  process  occupancy r a t e s under v a r i o u s  must h a v e some u n d e r s t a n d i n g  James S. D u e s e n b e r r y , Business Y o r k : M c G r a w - H i l l , 1 9 5 8 ) , p.  Cycles 136.  not  and  cir-  only of  Economic  the Growth,  21 W i l l i a m G. G r i g s b y , Housing Markets and Public Policy, ( P h i l a d e l p h i a : U n i v e r s i t y o f P e n n s y l v a n i a P r e s s , 1 9 6 3 ) , p. 47.  43  types o f submarkets, c l a s s i f i e d  according  to dwelling  c h a r a c t e r i s t i c s , but also of the types of f a m i l i e s that move i n t o a n d o u t o f t h e s e s u b m a r k e t s . portant  to identify  t h e c a u s e s o f h o u s e h o l d movement,  because i f f o r example "non-price" is  large relative  differences and  I t i s a l s o im-  m o t i v a t e d movement  t o demographic s h i f t s  i n p r i c e and q u a l i t y  i n response t o  among v a r i o u s  s u b m a r k e t s , t h e n t h e r e may b e n o l o n g  markets  run tendency  2 2  toward market e q u i l i b r i u m . On t h e r i g h t h a n d s i d e o f F i g u r e housing construction (L)  and t h e c o s t s  3, t h e r a t e o f  (HS) d e p e n d s o n t h e p r i c e o f l a n d  of construction  (CC).  Construction  c o s t s , i n t u r n , depend upon t h e a v e r a g e e a r n i n g s o f labour (M),  i n the construction  the cost of bridge  industry  (N), m a t e r i a l  or interim financing  costs  during  F.G. P e n n a n c e , Housing Market Analysis and ( I n s t i t u t e o f E c o n o m i c A f f a i r s , 1 9 6 9 ) , p. 1 9 .  Policy,  Our d i s c u s s i o n i n t h i s s e c t i o n a v o i d s many d y n a m i c c o n s i d e r a t i o n s which w i l l be d i s c u s s e d i n f u r t h e r d e t a i l in the following section. However, i t i s i m p o r t a n t t o recognize that the rate of r e s i d e n t i a l construction i s determined by t h e i n t e r a c t i o n s o f t h r e e dynamic p r o c e s s e s : a)  The a d j u s t m e n t o f p r i c e s a n d r e n t s demand a n d s u p p l y o f h o u s e s .  to the  b)  The a d j u s t m e n t o f t h e r a t e o f c o n s t r u c t i o n t o r e n t s , d w e l l i n g p r i c e s and c o n s t r u c t i o n costs.  c)  Changes i n s u p p l y r e s u l t i n g t r u c t i o n and d e m o l i t i o n .  f r o m new c o n s -  44  actual construction dential  (F) a n d t h e c u r r e n t  (RC) a n d n o n r e s i d e n t i a l  activity  relative  pacities. current  (NRC)  level of r e s i -  construction  to t h e i r respective production ca-  Builders expectations  (EB) w i t h  respect to  a n d f u t u r e m a r k e t c o n d i t i o n s may e x e r t  entirely  i n d e p e n d e n t i n f l u e n c e on t h e r a t e o f  an construc-  tion. At credit  the bottom of Figure  3 t h e f l o w o f mortgage  (MC) g e n e r a t e d b y f i n a n c i a l  institutions  other  t h a n b u i l d i n g s o c i e t i e s , has a d i r e c t i n f l u e n c e on lending  t e r m s (MT) a n d m o r t g a g e r a t e s  (MR).  The demand  f o r m o r t g a g e c r e d i t d e p e n d s o n much t h e same f a c t o r s affecting supply stock  t h e demand f o r h o u s i n g a c c o m m o d a t i o n .  o f mortgage c r e d i t  (MC) h o w e v e r , d e p e n d s o n t h e  o f i n s t i t u t i o n a l mortgages h o l d i n g s  s i z e and d i s p o s i t i o n o f i n s t i t u t i o n a l folios  (P) a n d t h e y i e l d  vestments  The  (SMC), t h e  investment  port-  a n d t e r m s on a l t e r n a t i v e i n -  ( R A ) . The s u p p l y  o f m o r t g a g e c r e d i t made  a v a i l a b l e through the formation  of building societies  (BSC) a c t s  a s an i n d e p e n d e n t c o n s t r a i n t ( i n f l u e n c e ) ,  along  t h e mortgage c r e d i t s u p p l i e d by f i n a n c i a l  with  t u t i o n s , on t h e v o l u m e o f h o u s i n g This  stock  insti-  starts.  f l o w model o f t h e h o u s i n g and mortgage  markets o u t l i n e s only b a s i c  r e l a t i o n s h i p s and i s t h u s an  45  o v e r s i m p l i f i c a t i o n o f the r e a l complexities which racterize this  s e c t o r o f t h e economy.  cha-  I t i s useful,  h o w e v e r , i n i l l u m i n a t i n g a number o f p r o b l e m s w i t h any  which  a n a l y s i s o f t h e h o u s i n g m a r k e t m u s t come t o g r i p s ,  but which a r e a l l the often  ignored.  By now i t s h o u l d  be a p p a r e n t t h a t t h e c o m p l i c a t e d i n t e r - r e l a t i o n s h i p s which c o n s t i t u t e the market a r e "not e a s i l y  reduced t o  q u a n t i t a t i v e t e r m s , much l e s s c o m b i n e d i n t o a s i n g l e of c o e f f i c i e n t . a constant  The m a t r i x  [or submarkets] i t s e l f  link  i s in  p r o c e s s o f change, as t h e exogenous v a r i a b l e s  whose i m p a c t o n t h e m a r k e t we s e e k t o t r a c e h a v e t h e added e f f e c t o f p e r m a n e n t l y a l t e r i n g t h e market s t r u c t u r e 23 itself." The s t r u c t u r e o f t h e h o u s i n g m a r k e t a l s o h a s implications  f o r the l e v e l of aggregation  housing market a n a l y s i s . and  appropriate to  The p a t t e r n o f r e l a t i v e  prices  r e n t s w i t h i n a n d b e t w e e n v a r i o u s m a r k e t s may h a v e a n  important tion. rent  important  i n f l u e n c e on t h e p a t t e r n o f r e s i d e n t i a l  T h i s may b e l o s t index.  Grigsby,  construc-  i n t h e c o n s t r u c t i o n o f an a g g r e g a t e  C o n s e q u e n t l y any n a t u r a l tendency t o e x p l a i n  Housing  Markets  and Public  Policy,  p . 43  46  the  course o f house b u i l d i n g i n terms o f t h e r e n t  a g g r e g a t e may l e a d t o " u t t e r l y  erroneous  This problem w i l l  at greater  be d i s c u s s e d  conclusions."  24  length i n  Chapter IV. Finally, behavior  any a n a l y s i s w h i c h seeks t o e x p l a i n t h e  of residential  c o n s t r u c t i o n must c o n s i d e r t h e  l a r g e number o f e x o g e n o u s e c o n o m i c a n d d e m o g r a p h i c w h i c h have an i m p a c t on t h i s is,  forces  s e c t o r o f t h e economy.  i n p a r t , r e q u i r e d by t h e a b s o l u t e  This  magnitude and  i m p o r t a n c e o f t h e h o u s i n g s e c t o r and b y i t s i n t e r d e p e n d e n c e with  other  a r e a s o f t h e economy.  MAJOR SOURCES OF I N S T A B I L I T Y I N THE HOUSING SECTOR OF THE ECONOMY The s t r u c t u r e o f t h e h o u s i n g - s e c t o r and in  the nature this  of the durable  g o o d s u p p l i e d a n d demanded  s e c t o r a r e such t h a t long  vity  tend  will  discuss  swings i n b u i l d i n g  to arise quite naturally.  In this  some o f t h e more i m p o r t a n t  b i l i t y which are instrumental  o f t h e economy  acti-  s e c t i o n we  sources of i n s t a -  i n generating  these  cyclical  J . P a r r y L e w i s , " B u i l d i n g C y c l e s : A R e g i o n a l Model and i t s N a t i o n a l S e t t i n g " , Economic Journal, V o l . LXX ( S e p t e m b e r , 1 9 6 0 ) , p. 5 3 3 .  47  phenomena. There  a r e a g r e a t many f a c t o r s t h a t c o n t r i b u t e t o  instability major  i n t h e h o u s i n g s e c t o r and thus g i v e r i s e t o  fluctuations  i n construction activity.  Though i n  most c a s e s i t i s n o t p o s s i b l e f o r us t o measure t h e differences  i n the influences these forces exert, i t i s  possible to identify  some o f t h e more i m p o r t a n t  Changes i n f a m i l y income a r e o f c e n t r a l the s p e c i f i c  importance, but  i m p a c t p a t t e r n i n terms o f d i r e c t and i n d i -  r e c t i n f l u e n c e s may b e h i g h l y c o m p l e x . ation  ones.  Household  i n g e n e r a l and f a m i l y f o r m a t i o n t h r o u g h  form-  marriages  i n p a r t i c u l a r a r e a f f e c t e d by income l e v e l s and e x p e c t e d f u t u r e incomes, to e s t a b l i s h  since r i s i n g  incomes  t h e i r own h o u s e h o l d s .  pacity of families  improves  e n a b l e young  people  As t h e f i n a n c i a l c a -  t h e r e i s a tendency  f o r those  who h a v e b e e n s h a r i n g h o u s i n g a c c o m m o d a t i o n b e c a u s e o f unemployment o r l o w e a r n i n g s , t o undouble  and e s t a b l i s h  26 separate  households.  25 Cf. A r t h u r F. B u r n s , " L o n g C y c l e s i n R e s i d e n t i a l C o n s t r u c t i o n " , Economic Essays in Honor of Wesley C. Mitc h e l l , (New Y o r k : C o l u m b i a U n i v e r s i t y P r e s s , 1 9 3 5 ) ; A.H. H a n s e n , F i s c a l P o l i c y and Business Cycles, (New Y o r k : W.W. N o r t o n and Co., 1 9 4 1 ) , pp. 21-23; J a n T i n b e r g e n and J . J . P o l a k , The dynamics of Business Cycles, (Chicago: U n i v e r s i t y o f C h i c a g o P r e s s , 1 9 4 2 ) , p p . 2 4 1 - 2 4 6 ; C.E.V. L e s e r , " B u i l d i n g A c t i v i t y a n d H o u s i n g Demand", pp. 1 3 1 - 1 4 9 . 26 L e s e r , " B u i l d i n g A c t i v i t y a n d H o u s i n g Demand", p. 143  48  Perhaps t h e most i m p o r t a n t e f f e c t o f a rise  i n incomes i s t h e d e s i r e o f a l l income groups t o  improve t h e i r housing c o n d i t i o n . types,  Expenditures ofa l l  including housing, increase with  t h i s helps is  secular  to accelerate  the f i l t e r i n g  t h e downward movement o f d w e l l i n g s  income  levels.  w h e r e new  process, between  The demand f o r b e t t e r  a d d s t o t h e demand f o r new construction  dwellings  i s normally  income  and that family  accommodations i n those  submarkets  introduced.  Another major f a c t o r c o n t r i b u t i n g t o c y c l i c a l tuations  i n house-building  of population. in  T h u s , an u p s w i n g i n e c o n o m i c  a p a r t i c u l a r region  only  favorable  and r i s i n g  i n and o f i t s e l f  hold  formation  f a m i l i e s who Thus  which accelerate  in particular  regions  in  i n s t i m u l a t i n g cons-  i n the l o c a l p r o s p e r i t y .  s h i f t s w i t h i n a country  activity  f a m i l y incomes i s  t r u c t i o n , b u t a l s o b y a t t r a c t i n g new to take part  shifting  a c c o m p a n i e d b y an i n c r e a s e  employment o p p o r t u n i t i e s not  i s the geographical  fluc-  wish  population  the r a t e of house-  will  stimulate  housing  demand and e n c o u r a g e a n u p s w i n g i n b u i l d i n g a c t i v i t y though the t o t a l p o p u l a t i o n  of the country  remains  even  unchanged.  The c e n t r a l i m p o r t a n c e o f d e m o g r a p h i c f a c t o r s i n t h e demand f o r h o u s i n g a c c o m m o d a t i o n s minor reservations  by A . J .  has been emphasized  Cairncross:  with  49  "Now i t i s no d o u b t t r u e t h a t t h e most p o w e r f u l i n f l u e n c e on t h e s i d e o f d e mand h a s g e n e r a l l y b e e n p o p u l a t i o n g r o w t h ; and t h a t , i n t h e l o n g r u n , i f t h e s i z e o f t h e p o p u l a t i o n shows a s t e a d y t r e n d upwards o r downwards t h e l e v e l o f b u i l d i n g a c t i v i t y w i l l be a f f e c t e d i n the corresponding direction."  Population is  subject  side  g r o w t h , and t h e f l u c t u a t i o n s t o w h i c h i t  are not the only  o f demand.  to other  Changes  important Changes  out  of rents  rents  and t h e l e v e l  as w e l l  i n the standard  relative as t h e  o f income have  i n f l u e n c e on t h e demand f o r h o u s e  by C a i r n c r o s s  housing  i n the l e v e l  i n f l u e n c e on t h e  elements i n the c o s t df l i v i n g  r e l a t i o n s h i p between an  important  space.  of housing are also singled  as a m a j o r s o u r c e  of i n s t a b i l i t y  i n th  sector. "New h o u s e s may o f f e r a m e n i t i e s n o t a v a i l a b l e i n e x i s t i n g h o u s e s o r be l o c a t e d i n p l a c e s more c o n v e n i e n t t o e x i s t i n g h o u s e h o l d e r s . S i n c e o n l y a s m a l l number o f new houses a r e e r e c t e d a n n u a l l y i n r e l a t i o n t o t h e e x i s t i n g s t o c k , t h e r e s u l t o f any r a p i d change i n a m e n i t i e s ( f o r example, t h e i n t r o d u c t i o n o f b a t h r o o m s a f t e r 1880) o r i n f a c i l i t i e s ( f o r example, t h e development o f s u b u r b a n t r a n s p o r t t h r o u g h tramways and e l e c t r i c r a i l w a y s ) may b e a marked a c c e l e r a t i o n i n new r e s i d e n t i a l c o n s t r u c t i o n . " 28  C a i r n c r o s s , Home and Foreign  Ibid.,  p . 14.  Investment,  1870-1913  }  50  The in  p o t e n t i a l d e s t a b i l i z i n g i n f l u e n c e o f changes  the rate of demolition  are also noted with  to the c l e a r i n g f o r p r o v i s i o n of railway t h e m a j o r towns d u r i n g century. should  the l a t t e r part of the Nineteenth  concludes that  i n the long  c h a n g e s i n t h e demand f o r h o u s e - r o o m  r u n "we  (subject t o  s i m u l t a n e o u s changes a f f e c t i n g e x i s t i n g d w e l l i n g -  h o u s e s e i t h e r b y way o f d e m o l i t i o n , version the  to other  purposes).  improvement, o r con-  We m i g h t a l s o f i n d  that i n  c i r c u m s t a n c e s e x a m i n e d , t h e d o m i n a n t i n f l u e n c e on  demand was p o p u l a t i o n The  growth...."  U n l i k e many o t h e r industry  rents w i l l  i n supply,  2  9  sector.  supply,  The v e c t o r  but i s f o r demo-  o f house p r i c e s and  b e d e t e r m i n e d b y t h e b a l a n c e o f a g g r e g a t e demand  which represents  TV, -A  total  a f t e r accounting  r e l a t i o n to the e x i s t i n g stock,  supply  import-  the output of the construction  c a n n o t be i d e n t i f i e d w i t h  and c o n v e r s i o n s .  i s of central  of adjustment i n the housing  products,  equal t o the increase litions  29  durable nature of dwellings  ance t o t h e t i m e p a t t e r n  in  facilities in  expect f l u c t u a t i o n s i n r e s i d e n t i a l b u i l d i n g t o  reflect any  Cairncross  reference  only  rather  than the current  a small portion of the t o t a l sto  51  T r a d i t i o n and among o t h e r  long term c o n t r a c t u a l arrangements,  factors,  rents a certain  combine t o g i v e house p r i c e s  inertia.  C h a n g e s i n demand and  c o n d i t i o n s i n the housing p r i c e s and  via  inelastic up  adjustment of supply  changes i n the  and  stock of houses.  t o demand t a k e s  part letting  E x c e s s demand l e a d s t o  of e x i s t i n g  supply  may  r e q u i r e d t o e l i m i n a t e an  at  In  i n t e n s i t y of u t i l i z a t i o n of the  excess be  supply  market b r i n g about changes i n  rents only after a considerable lag.  s h o r t run the  and  results  place current doubling  accommodations, w h i l e  i n unoccupied  e x i s t i n g p r i c e s b y way  the  houses.  excess  Several  supply  years  o r demand  of adjustments i n current  pro-  duction. The  building  instability.  industry, itself,  I t has  been o b j e c t e d  as a l o o s e l y i n t e g r a t e d p r o c e s s "industry".^ indeed  The  all  that  of  house-building  hardly j u s t i f i e s the  term  residential construction industry i s  p e c u l i a r i n a number o f i m p o r t a n t  example, the p r o d u c t i o n at  i s a major source  or f a b r i c a t i o n process  the s i t e where the b u i l d i n g  i s t o be  the v a r i o u s m a t e r i a l s , operations  brought t o the product,  respects.  r a t h e r than  used.  and  takes  For place  Consequently  f a c t o r s must  the product  R i c h a r d U. R a t c l i f f , Urban Land Economics M c G r a w - H i l l Book Company I n c . , 1 9 4 9 ) , p. 200. }  be  passing  (New  York:  52  through  a series of production  Dwellings The  stages w i t h i n a f a c t o r y .  a r e n o t w e l l s u i t e d t o mass widespread geographical  duction process  production.  dispersion of the pro-  i s a major o b s t a c l e t o r a t i o n a l i z i n g the  a d j u s t m e n t o f t h e s u p p l y o f new h o u s i n g demand. is  t o changes i n  "The p r e d o m i n a n t t y p e o f b u i l d i n g o r g a n i z a t i o n  s m a l l , o f t e n a o n e man o u t f i t , w i t h l i t t l e  limited  technical s k i l l ,  a n d no i n c l i n a t i o n ,  capital, time o r 31  money t o c o n d u c t r e s e a r c h The take  prevalence  o f a l a r g e number o f s m a l l f i r m s u n a b l e t o  advantage o f t h e economies o f l a r g e s c a l e  tends t o lower the  i n methods and m a t e r i a l s . "  t h e volume o f p r o d u c t i o n , thus  lags i n the i n d i v i d u a l response The  during a building  f e r a t e d u r i n g booms. i s important  Ibid.,  i n e x p l a i n i n g the lagged  f o r s e v e r a l years  p. 1 7 6 .  slump and t o p r o l i -  T h i s p r o p e n s i t y t o w a r d d i s s o l u t i o n and  ment m e c h a n i s o n t h e s i d e o f s u p p l y . may p e r s i s t  structure i si n  why t h e r e i s a m a r k e d t e n d e n c y f o r many  firms t o disappear  revival  lengthening  sequence.  lack of a well defined industrial  p a r t the reason  production  before  market a d j u s t -  A resurgence t h e r e i s any  o f demand significant  \  53 i n c r e a s e i n c o n s t r u c t i o n a c t i v i t y among b u i l d e r s . a r e among t h e m o s t d u r a b l e o f g o o d s . c a n be made t o s e r v e w i t h a l i t t l e ching here of  and  "Existing structures  crowding,  a little  pat-  renovation there, for a considerable period  t i m e b e f o r e t h e n e e d f o r new  acute  Houses  h o u s e s becomes  t o p u s h r e n t a l v a l u e s h i g h e r and  sufficiently  definitely  stimulate 32  t h e s l o w - m o v i n g cumbersome, s c a t t e r e d o p e r a t o r s , " of The  whom l e f t response  the i n d u s t r y d u r i n g the previous of supply i s delayed  ation period in residential  f u r t h e r by  construction.  depression. the long gest-  In the  c e n t u r y i t g e n e r a l l y t o o k b e t w e e n s i x m o n t h s and complete The it  an a v e r a g e s i z e h o u s e i n G r e a t  and  supply.  has  developed  tends  York:  a year  to  i n d u s t r y renders  estimates of excess  demand  I t i s not s u r p r i s i n g , t h e r e f o r e , t h a t there a tradition  t o exaggerate  typical  Nineteenth  Britain.  a t o m i s t i c c h a r a c t e r of the b u i l d i n g  e s p e c i a l l y prone t o erroneous  many  and  of s p e c u l a t i v e o v e r b u i l d i n g which  prolongue  the c y c l i c a l f l u c t u a t i o n s 33 of house-building a c t i v i t y . The e x i s t e n c e o f  Norman J . S i l b e r l i n g , The Dynamics of Business, M c G r a w - H i l l Book Company, I n c . , 1 9 4 3 ) , p. 191.  (New  33 F o r a v e r y g o o d d i s c u s s i o n o f s p e c u l a t i v e and c y c l i c a l a s p e c t s o f u r b a n l a n d d e v e l o p m e n t s e e : E r n e s t M. F i s h e r , " S p e c u l a t i o n i n S u b u r b a n L a n d " , American Economic Review, V o l . X X I I I ( M a r c h , 1 9 3 3 ) , pp. 1 5 4 - 1 6 3 ; Homer H o y t , One Hundred Years of Land Values in Chicago, (Chicago: U n i v e r s i t y of C h i c a g o P r e s s , 1 9 3 3 ) , pp. 3 8 3 - 3 8 9 ; an i n t e r e s t i n g l i t t l e b o o k on t h e r o l e o f b u s i n e s s c o n f i d e n c e i n a n i m a t i n g c y c l i c a l b e h a v i o r i s F. L a v i n g t o n , The Trade Cycle, ( L o n d o n : P.S K i n g and S o n , L t d . , 19 2 2 ) .  54  s p e c u l a t i v e promotion sector reflects  and r e a c t i o n  a fundamental  s t r u c t u r a l problem  caused by t h e absence o f adequate i s perhaps  financial  potential  This  i n t h e market,  factor contributing to general  instability.  f o r o v e r - e x p a n s i o n i s aggravated by t h e  requirements of the b u i l d i n g industry.  to r e l a t i v e l y  i n part  market i n f o r m a t i o n .  n o t t e c h n i c a l l y an " i m p e r f e c t i o n "  but i t i s a major The  i n the house-building  small fixed  confront the banking  In contrast  c a p i t a l requirements b u i l d i n g  system  and b u i l d i n g  r a t h e r l a r g e demands f o r b r i d g e f i n a n c i n g  firms  societies with (i.e.,  working  c a p i t a l requirements during the period of construction). " I t t h e r e f o r e becomes a p o t e n t i n s t r u m e n t f o r e x p l o i t i n g t h e i n f l a t i o n a r y / d e f l a t i o n a r y p o t e n t i a l of a free banking which  system  can vary e i t h e r t h e cash r e s e r v e r a t i o o r i t s Advances/  Investments  ratio  i n response  t o c h a n g e s i n t h e demand f o r  35 bank  advances."  The m e a n i n g o f m a r k e t i m p e r f e c t i o n s i s d i s c u s s e d b y George S t i g l e r , " I m p e r f e c t i o n s o f t h e C a p i t a l Market", Journal of P o l i t i c a l Economy, V o l . 75 ( J u n e , 1 9 6 7 ) , p p . 2 8 7 - 2 9 2 . 35 D.J. C o p p o c k , "The C a u s e s o f B u s i n e s s F l u c t u a t i o n s " , Manchester S t a t i s t i c a l Society, (December, 1 9 5 9 ) , p. 1 4 ; F o r a good d i s c u s s i o n o f t h e b a n k i n g system and t h e i n f l a t i o n a r y t e n d e n c y o f " s h o e s t r i n g " f i n a n c i n g , s e e H e r b e r t D. S i m p s o n , " R e a l E s t a t e S p e c u l a t i o n a n d t h e D e p r e s s i o n " , American Economic Review, V o l . X X I I I ( M a r c h , 1 9 3 3 ) , p p . 1 6 4 - 1 7 6 ; H o y t , op. c i t . , pp. 3 8 5 - 3 8 7 ; S i l b e r l i n g , Dynamics of Business, pp. 180-182.  55  In a g e n e r a l study o f b u i l d i n g c y c l e s Duesenberry  and i n v e s t m e n t ,  h a s f o c u s e d on p r i c e c h a n g e s a n d h i n t e d  r o l e p l a y e d by v a c a n c i e s i n an i n t u i t i v e l y  at the  a p p e a l i n g des-  c r i p t i o n o f t h e dynamic response mechanism i n r e s i d e n t i a l construction. "Whenever e x c e s s demand a p p e a r s , p r i c e s w i l l e v e n t u a l l y r i s e h i g h enough t o i n d u c e a r a t e of b u i l d i n g s u f f i c i e n t l y high t o e l i m i n a t e t h e e x c e s s demand. That r e q u i r e s a r a t e o f b u i l d i n g i n excess o f t h e r a t e o f growth o f demand. A t t h e moment when e x c e s s demand i s e l i m i n a t e d and p r i c e s s t o p r i s i n g , t h e r a t e of b u i l d i n g i s h i g h e r than t h e r a t e o f growth o f demand, a n d b u i l d i n g w i l l n o t s l o w down u n t i l enough e x c e s s s u p p l y has d e v e l o p e d t o lower p r i c e s o r reduce t h e r a t e of s a l e of houses. That i m p l i e s t h a t t h e r a t e o f const r u c t i o n must a g a i n f a l l t o a l e v e l below t h e r a t e o f g r o w t h o f demand u n t i l e x c e s s demand h a s a g a i n d e v e l o p e d , s o t h a t t h e c y c l e r e p e a t s . " 36 I t may now b e h e l p f u l t o s u m m a r i z e o u r d i s c u s s i o n o f s o u r c e s o f i n s t a b i l i t y by t r a c i n g o u t t h e response  pattern  of what might be r e f e r r e d t o as a p u r e b u i l d i n g c y c l e . an i n i t i a l modation results  increase  or a rise  i n t h e number o f f a m i l i e s d e s i r i n g a c c o m i n incomes  i n a reduction  Duesenberry,  Assume  or both.  The g r o w t h  o f e x i s t i n g v a c a n c i e s a s new  Business  Cycles  and Economic  o f demand families  Growth,  p. 158.  56  buy  houses o r ,  i n response to increased  purchasing  power,  f a m i l i e s undouble or  seek t o improve t h e i r h o u s i n g  Eventually  and  p r i c e s r i s e but  the  lagged response of the b u i l d i n g  rents  because of  (stickiness)  and  an  o f e x c e s s demand i s c r e a t e d .  inventory  response of supply c r e d i t and  the  may  be  e n c o u r a g e d by  expectation  in real estate.  As  of higher  The  profit  a p p e a r a n c e o f an not  and  increase  on  p r i c e s and  credit contracts.  The  process.  A coincident business depression  and  doubling  the  extent  ding  up.  i n vacancies  of excess  rents.  induces a d e c l i n e through the  to outmigration,  D e p e n d i n g on  but  may  cons-  multiplier  accelerate  deferred  the  on  B a n k s become  the  marriages,  take years f o r the  eventually  and  supply  the degree of pessimism  o f o v e r e x p a n s i o n i t may  industry to recover,  speculative  response of the  industry  leading  housing  have a r e t a r d i n g i n f l u e n c e  truction  downward t r e n d ,  increased  Eventually,  lead to  u n t i l the build-up  a downward p r e s s u r e  conservative  investment  i n i n c o m e and  unfounded e x p e c t a t i o n s  r a t e of c o n s t r u c t i o n  exerts  from  t h e b u i l d i n g boom g e t s u n d e r w a y  r e d u c e d h o u s e s a l e s may the  industry  eventual  f a m i l i a r m u l t i p l i e r process.  o v e r - c o n f i d e n c e and overbuilding.  inertia  i n c r e a s i n g l y easy  expenditures generate f u r t h e r increases demand t h r o u g h t h e  The  standard.  excess  and buil-  supply  57  becomes an e x c e s s  demand a n d t h e p r o c e s s  repeats.  T h u s , a c a s e h a s b e e n made f o r t h e e x i s t e n c e o f a t e n d e n c y t o w a r d s y s t e m a t i c c y c l i c a l movement i n h o u s e b u i l d i n g activity.  However, owing t o t h e v e r y  to which t h i s pect  l a r g e number o f f o r c e s  s e c t o r o f t h e economy i s s u b j e c t we m i g h t e x -  the actual pattern of residential construction to d i f f e r  significantly  from t h a t i m p l i e d by t h e simple model  developed  here.  WHY THE LONG SWINGS I N B R I T I S H HOUSE-BUILDING FROM 1860 TO 1 9 1 4 ?  The outlined  long swings i n b u i l d i n g a c t i v i t y i n the previous  in the past  chapter  i n Great  Britain  h a v e a t t r a c t e d much a t t e n t i o n  few decades f o r a v a r i e t y o f r e a s o n s .  B u i l d i n g , as a l a r g e and w i d e l y d i f f u s e d i n d u s t r y , has a marked i m p a c t on t h e g e n e r a l  l e v e l o f employment and t r a d e  t h r o u g h o u t t h e economy o f a n y c o u n t r y . of f l u c t u a t i o n s questions  The v i o l e n t  i n residential construction raises  concerning  the maintenance o f s t a b i l i t y  nature important  i n the general  For f u r t h e r e l a b o r a t i o n o f t h e dynamic f o r c e s which i n t e r a c t t o c r e a t e b u i l d i n g c y c l e s see L i o n e l Needleman, The Economics of Housing, ( L o n d o n : S t a p l e s P r e s s , 1 9 6 5 ) , p p . 147-15'  58  l e v e l o f economic a c t i v i t y . t h e most i m p o r t a n t dramatic  A n d w h i l e b u i l d i n g i s one o f  factors i n the trade  difference of period  and a m p l i t u d e between t h e  c y c l e s i n b u i l d i n g and t h o s e i n t r a d e Vigorous debate has centered by w h i c h t h e s e l o n g m i g h t be e x p l a i n e d .  c y c l e , one f i n d s a  i n Great  Britain.  on t h e c a u s a l  swings i n B r i t i s h  mechanisms  construction  activity  T h e r e a r e t h o s e who c o n t e n d t h a t  external  c o n s i d e r a t i o n s were o f p r i m a r y importance i n d e t e r m i n i n g the p a t t e r n  of domestic investment i n housing.  I t i s argued  t h a t t h e " r e g i o n a l " economies o f Great B r i t a i n  and A m e r i c a  i n t e r a c t e d through a pattern of inverse cycles i n investment, migration  and t r a d e  f o r a b o u t 20 y e a r s .  Conversely,  have c o n c l u d e d t h a t t h e c o u r s e o f r e s i d e n t i a l  others  construction  was l a r g e l y d e t e r m i n e d b y f a c t o r s s p e c i f i c t o t h e d o m e s t i c housing market. have p l a y e d  T h e y a g r e e t h a t e x t e r n a l i n f l u e n c e s may  some p a r t a t t h e m a r g i n , b u t f i n d t h a t  investment  i n t h e d o m e s t i c h o u s i n g s t o c k was n o t a r e s i d u a l a c t i v i t y w h i c h a c c e l e r a t e d o n l y when i n v e s t m e n t o p p o r t u n i t i e s  abroad  seemed u n a t t r a c t i v e . I n an a r t i c l e on t h e G l a s g o w b u i l d i n g i n d u s t r y , in  19 35,  P r o f e s s o r A.K. C a i r n c r o s s  s h i p between h o u s e - b u i l d i n g  suggested a l i k e l y  i n Great B r i t a i n  published relation-  and t h e waves  59  of emigration  and i n v e s t m e n t  overseas:  " T h i s e m i g r a t i o n was c h i e f l y t o t h e c o u n t r i e s t o w h i c h B r i t i s h c a p i t a l was f l o w i n g : i t was a c t i v e when f o r e i g n i n v e s t m e n t was a c t i v e , d e p r e s s e d when f o r e i g n i n v e s t m e n t was d e p r e s s e d ... D u r i n g t h e s e p a u s e s t h e r e was s i m u l t a n e o u s l y p r e s s u r e on h o u s e - a c c o m m o d a t i o n and a s u r f e i t o f c h e a p money; when t h e game b e g a n a g a i n , t h e need f o r houses and t h e funds f o r t h e i r const r u c t i o n vanished together. Moreover the very c e s s a t i o n o f f o r e i g n investment, by b r i n g i n g t o t h i s c o u n t r y d i s t r e s s s a l e s o f raw m a t e r i a l s a n d f o o d s t u f f s , d r o v e more a n d more o f t h e a g r i c u l t u r a l w o r k e r s t o t h e t o w n s and i n c r e a s e d t h e p u r c h a s i n g power o f t h e i n d u s t r i a l p o p u l a t i o n ; the b u i l d i n g i n d u s t r y prospered a t t h e expense o f c o l o n i a l development."^° Cairncross  d i d n o t t h e n s u g g e s t any c a u s a l mechanism;  ation of this  elabor-  i d e a was t o f o l l o w 18 y e a r s l a t e r w i t h t h e  p u b l i c a t i o n o f h i s Home and Foreign A study o f b u i l d i n g i n B r i t a i n  Investment. and t h e U n i t e d  States l e d  39 E.W.  Cooney  underlying dential  to outline a l i m i t e d explanation  of the forces  the r e c i p r o c a l r e l a t i o n s h i p i n the course of r e s i -  c o n s t r u c t i o n between t h e two c o u n t r i e s .  that building i s b a s i c a l l y a localized  Recognizing  industry with  a  A.K. C a i r n c r o s s , "The G l a s g o w B u i l d i n g I n d u s t r y " , of Economic Studies, V o l . I I (1934-35) p. 14.  local Review  39 E.W. Economica,  Cooney, " B u i l d i n g i n B r i t a i n (November, 19 4 9 ) .  a n d t h e U.S.A.  1856-1914",  60  e q u i l i b r i u m , no d i r e c t c o n n e c t i o n country's  economy.  of B r i t i s h suggests  capital  But a comparison of Douglas's  another estimates  e x p o r t s w i t h t h e two b u i l d i n g i n d i c e s  t h a t " i t was  linked building  c a n b e made w i t h  capital  exports  f r o m t h e U.K.  which  i n L o n d o n a n d t h e U.S.A. i n t h e way  already  40 described."  Cooney s u p p o r t s  t h i s h y p o t h e s i s by 41 42  on t h e o b s e r v a t i o n s o f C a i r n c r o s s  and Rostow  p e r i o d s when r e t u r n s o n f o r e i g n i n v e s t m e n t s l o w , t h e r e was  drawing that during  were  relatively  a n a t u r a l tendency f o r the B r i t i s h i n v e s t o r  t o t u r n t o p r o p e r t y as a s a f e o u t l e t f o r h i s i n v e s t m e n t Thus, a r e d u c t i o n i n c a p i t a l e x p o r t s to r a i s e both  t h e demand f o r new  t h e demand.  r a t h e r t h e p o o r a n d somewhat d u l l  the n i n e t e e n t h century  f a m i l y of investment  w a s , h o w e v e r , l i k e many d u l l t h i n g s , f e l t when t h e b r i l l i a n t  Ibid,  p.  expect-  "London  relation i n  opportunities. I t  t o be s a f e , and  promise of f o r e i g n investment  f a l s i f i e d by e v e n t s , t h e B r i t i s h  tended  c o n s t r u c t i o n and t h e  a t i o n o f h i g h e r p r o f i t s by s a t i s f y i n g b u i l d i n g was  and e m i g r a t i o n  funds.  was  periodically 43 investor turned to property".  350.  41 C a i r n c r o s s , "The G l a s g o w B u i l d i n g I n d u s t r y " , p. 1 3 , F o o t n o t e 7. 42 W.W. R o s t o w , "The B r i t i s h Economy o f t h e N i n e t e e n t h Century", (Oxford: Oxford U n i v e r s i t y P r e s s , 1948). C o o n e y , " B u i l d i n g i n B r i t a i n and t h e U.S.A.", p. 352-53 4 3  61  The  first  residential  comprehensive study of investment i n B r i t i s h  construction  f r o m 1870 t o 1913 was u n d e r t a k e n  44 by  Cairncross  w i t h i n t h e framework o f a broad a n a l y s i s o f  f l u c t u a t i o n s i n home a n d f o r e i g n i n v e s t m e n t g e n e r a l l y . H i s s t u d y f o c u s e s a t t e n t i o n on t h e f u n d a m e n t a l i m p o r t a n c e o f the  r o l e of investment, migration,  in the explanation Britain.  of industrial  and t h e terms o f t r a d e  fluctuations i n Victorian  The l e v e l o f i n c o m e a n d e m p l o y m e n t u l t i m a t e l y  d e p e n d e d u p o n t h e l e v e l a n d d i s p o s i t i o n o f home a n d f o r e i g n i n v e s t m e n t , b o t h o f w h i c h , i n t u r n , were l a r g e l y d e t e r m i n e d by  t h e terms o f  trade.^  Changes i n f o r e i g n ments o f p o p u l a t i o n  reacted  both the a v a i l a b i l i t y shifts  i n v e s t m e n t and t h e a s s o c i a t e d on t h e b u i l d i n g i n d u s t r y  movethrough  o f c a p i t a l f o r i n v e s t m e n t p u r p o s e s and  i n t h e demand f o r h o u s i n g  accommodation:  "The more f o r e i g n c o u n t r i e s b o r r o w e d , t h e more men we s e n t them t o c a r r y o u t t h e w o r k o f new c o n s t r u c t i o n f o r w h i c h B r i t i s h c a p i t a l was w a n t e d . T h e e m i g r a t i o n o f t h e s e men l e f t h o u s e s empty i n t h i s c o u n t r y . T h e r e was t h u s l e s s c e r t a i n t y o f f i n d i n g t e n a n t s f o r n e w l y b u i l t h o u s e s , a n d more d i f f i c u l t y i n l e t t i n g h o u s e s a t c u s t o m a r y r e n t s . The d e c l i n e i n demand n a t u r a l l y h i t t h e b u i l d i n g i n d u s t r y . S i m u l t a n e o u s l y , b u i l d e r s had o f t e n  A.K. C a i r n c r o s s ,  Home and Foreign  Investment.  45 C a i r n c r o s s does have a b i t o f t r o u b l e e x p l a i n i n g t h e r e a s o n why, d u r i n g t h e 1 8 8 0 ' s when c a p i t a l e x p o r t s w e r e v e r y h i g h , t h e r e was a d e t e r i o r a t i o n i n t h e t e r m s o f t r a d e .  62  t o p u t up w i t h w o r s e t e r m s o f c r e d i t ; o r i n v e s t o r s ceased t o buy house p r o p e r t y a l t o g e t h e r and p u r c h a s e d f o r e i g n bonds instead." 6 4  As  t h e wave o f f o r e i g n i n v e s t m e n t  once a g a i n  channeled  As  abroad  The d e c l i n e i n accommodation.  ( i n t h e form o f i n -  s u p p l i e s o f c h e a p raw m a t e r i a l s a n d f o o d  e x e r t e d downward p r e s s u r e rose  societies.  i m p r o v e d t h e demand f o r h o u s i n g  t h e r e a l r e t u r n t o investment  creased  i n t h e towns.  o n p r i c e s i n E u r o p e , r e a l wages  living  c o n d i t i o n s by moving t o  more d e s i r a b l e a c c o m m o d a t i o n , b u t a l s o i n c r e a s e d demand b y a t t r a c t i n g  l a b o u r t o t h e towns from  Great  (which  Britain  housing  depressed  regions.  Cairncross argues, Glasgow  products)  T h i s n o t o n l y made i t p o s s i b l e f o r c i t y  d w e l l e r s t o improve t h e i r  agricultural  c a p i t a l was  i n t o t h e d o m e s t i c mortgage market and  h e n c e made a v a i l a b l e t o b u i l d i n g emigration  subsided,  with respect t o house-building i n  followed a pattern very as a whole),  similar to that i n  t h a t " t h e b u i l d i n g c y c l e was  little  47 more t h a n emigration the  first  a migration cycle i n disguise."  t h a t g o t underway i n t h e m i d - s e v e n t i e s long swing i n house b u i l d i n g  reversal of this 46 47  The u p s w i n g i n brought  t o a c l o s e . "The  f l o w i n t h e n i n e t i e s gave t h e second most o f  Ibid,  p p . 219-20  Ibid,  p . 25  63  its  impetus.  When t h e o u t f l o w s t a r t e d a g a i n , on  s c a l e as t o a r r e s t t h e p o p u l a t i o n a l m o s t  such  a  completely,  the  48 s e c o n d boom, t o o , p e t e r e d M i g r a t i o n , both factor determining Britain.  out."  i n t e r n a l and  the course  e x t e r n a l , was  an  of house-building i n  important Great  C a i r n c r o s s shows t h a t t h e t r e m e n d o u s g r o w t h i n  p o p u l a t i o n i n the increase  1 8 9 0 ' s was  a c c o m p a n i e d by  a  significant  i n t h e movement o f p o p u l a t i o n f r o m one  another  w i t h i n the country.  Britain  seem t o h a v e d e p e n d e d n o t o n l y on an  aggregate  "The  location  b u i l d i n g booms o f  to  Victorian  i n c r e a s e i n the  demand f o r h o u s e r o o m , b u t a l s o u p o n c h a n g e s i n 49  the  i n c i d e n c e o f t h i s demand."  T h i s , among o t h e r t h i n g s ,  h e l p s t o e x p l a i n t h e p r o l o n g a t i o n o f t h e b u i l d i n g boom i n t h e 1 8 9 0 ' s and  1900's. 50  B u i l d i n g on analyzed  the  t h e w o r k o f C a i r n c r o s s , B r m l e y Thomas  l o n g w a v e s o f m i g r a t i o n and  c o n t e x t o f an  " A t l a n t i c economy".  w i t h i n the  There i s , however, a marked  d i f f e r e n c e i n e m p h a s i s b e t w e e n t h e two s e e s t h e t e r m s o f t r a d e as b e i n g  investment  has  studies. Cairncross  the major d e t e r m i n i n g  factor  Ibtd. 4  9  Ibid.,  p.  219  50 B r i n l e y Thomas, Migration Cambridge U n i v e r s i t y P r e s s ,  and,  1954).  Economic  Growth,  (Cambridge:  64  i n the  d i s t r i b u t i o n o f i n v e s t m e n t b e t w e e n home and  a l t e r n a t i v e s ; Thomas v i e w s movements i n t h e as  consequences of u n d e r l y i n g  causal  sectors  States  of the  and  r e l a t i o n s h i p s which l i n k e d the  differences relatively  c y c l i c a l b e h a v i o r of the  export sectors.  i n resource  natural  t o the  i s found i n the  and  of  long  i n the  p.  177  relatively  residential  United  capital  imports,  States;  meanwhile  f o r e i g n investment i n Great  i s accompanied a f t e r a s h o r t  volume of b u i l d i n g " .  being  swings i n  a c c o m p a n i e d by  i n d u c e s a boom i n c o n s t r u c t i o n  51  States  r o l e of i n t e r n a t i o n a l migration.  "A m a j o r i n f l u x o f p o p u l a t i o n  Ibid,  United  being  resources.  explanation  upturn of emigration  home  There were a l s o major  endowments: G r e a t B r i t a i n  c a p i t a l abundant, the  construction  the  existed  and  key  while  Important i n t e r - r e g i o n a l d i f f e r e n c e s s i z e and  resources  United  economy  w e l l endowed w i t h The  ( i . e . the  sector  of the  relative  construction  various  " A t l a n t i c economy". A home c o n s t r u c t i o n  t h e m s e l v e s compete f o r t h e  between the  51  a  e v i d e n c e , Thomas  G r e a t B r i t a i n ) compete f o r r e s o u r c e s  t h e y make up.  Britain  statistical  e x p o r t s e c t o r w i t h i n each r e g i o n  regions  the  trade  c h a n g e s r a t h e r t h a n as  a wide range of  o u t l i n e s the b e h a v i o r a l  an  terms of  force.  D r a w i n g on  and  foreign  l a g by  a fall  in  the  65  Thomas t h e n a r g u e s t h a t t h e U n i t e d propensity  States has a strong  t o spend i t s b o r r o w e d f u n d s on B r i t i s h  goods, thus r e s u l t i n g  i n a boom i n t h e B r i t i s h  s e c t o r a t t h e e x p e n s e o f home c o n s t r u c t i o n . of out-migration  gives r i s e  f o r t h e number o f v a c a n c i e s  r e n t s t o d e c l i n e , a l l have a d e p r e s s i n g of domestic b u i l d i n g a c t i v i t y . long swing the depression  During  decline i n real  emigration, to rise  and f o r  e f f e c t on t h e l e v e l t h i s phase o f t h e  i n home c o n s t r u c t i o n more t h a n  o f f s e t s t h e boom i n e x p o r t p r o d u c t i o n , general  factors  The r e d u c t i o n o f  i n t e r n a l m o b i l i t y t h a t accompanies i n c r e a s e d the tendencies  export  B u t t h e wave  t o changes i n o t h e r  which a r e adverse t o house-building.  capital  thus leading t o a  income p e r c a p i t a  (relative to  trend). In t h e United  States the i n f l a t i o n a r y expansion of  home c o n s t r u c t i o n d r a w s l a b o u r sector. This  results  and r e s o u r c e s  i n r e l a t i v e p r i c e changes:  goods p r i c e s r i s e most, f o l l o w e d b y e x p o r t prices rise  least.  from t h e a b i l i t y  from t h e export  prices;  The m i n o r c h a n g e i n i m p o r t  of the B r i t i s h  export  domestic  prices  i n costs.  results  s e c t o r t o draw f a c t o r s  f r o m t h e d e p r e s s e d home c o n s t r u c t i o n i n d u s t r i e s w i t h o r no i n c r e a s e  import  "Booming e x p o r t s  little  accompanied by  d e p r e s s e d c o n s t r u c t i o n a l a c t i v i t y y i e l d a more m o d e r a t e e x p a n s i o n than booming c o n s t r u c t i o n a l a c t i v i t y  accompanied  66  by  depressed exports."  Consequently, the net b a r t e r  terms o f t r a d e t u r n a g a i n s t Great A downturn i n t h e U n i t e d a fall the  i n capital  imports  States  i s accompanied by  and i m m i g r a t i o n .  In Great  Britain  r e d u c t i o n o f f o r e i g n i n v e s t m e n t and c a p i t a l e x p o r t s  labour  and l o a n a b l e  frees  f u n d s f o r employment i n t h e e x p a n d i n g  domestic c o n s t r u c t i o n sector. and  Britain.  The d e c l i n e i n e m i g r a t i o n  the increase i n internal m o b i l i t y lead t o a swelling of  the urban p o p u l a t i o n , a r e d u c t i o n i n vacancies house p r i c e s and r e n t s — activity.  a l l favorable to increased building  "The e x p a n s i v e  i s more p o t e n t multiplier;  force of this  than the depressing  hence a r i s e  and r i s i n g  i n real  induced  investment  effect of the foreign  trade  income a head r e l a t i v e t o  . , „53 trend. The  expansion of productive  the United resulted  States during  c a p a c i t y that took place i n  t h e upswing i n house c o n s t r u c t i o n  i n a s u b s t a n t i a l increase i n the supply  m a t e r i a l s and f o o d p r o d u c t s  exported  o f raw  overseas a t " f a l l i n g or  slowly r i s i n g prices".  Thus, t h e n e t b a r t e r terms o f t r a d e  shift  Britain.  i n favor of Great  52 B r i n l e y Thomas, Economies of International Migration, ( L o n d o n : M a c M i l l a n a n d Co. L t d . , 1958) p . 178. 53 Thomas, Migration and Economic Growth, p. 178.  67  This, then, "dividing  i s the pattern of the Atlantic  economy,  a common f u n d o f i n c r e m e n t a l e n e r g i e s b e t w e e n i t s  regions  i n v a r y i n g p r o p o r t i o n s from time  a villa  should  t o time  go up i n H u d d e r s f i e l d d e c i d e d ,  ... w h e t h e r  o r depended o n ,  54 w h e t h e r a f r a m e h o u s e w e n t up i n I o w a . " 55 P.J.  O ' L e a r y a n d W. A r t h u r L e w i s  the e x i s t e n c e o f any s y s t e m a t i c the development o f t h e U n i t e d ebb by  and f l o w o f c a p i t a l a c r o s s  seriously  inter-relationships  S t a t e s and Great the Atlantic,  a s u r f e i t o f B r i t i s h home i n v e s t m e n t ,  possible  t h a t t h e U.S.A. was i m p o r t i n g c a p i t a l ,  between gross  n a t i o n a l product  capital  freed  formation  U.K. l e n d i n g  imports  averaging  a h a l f o f one p e r c e n t o f  - that i t i s impossible to hold  i n t h e U.S. was a t t h i s t i m e  ..."^  as a  i t i s true  i t s capital -  The  periodically  i s dismissed  t o i t s own s a v i n g s  1874 a n d 189 5 l e s s t h a n  between  Britain.  l i n k w i t h t h e argument t h a t , " f o r w h i l e  were so s m a l l i n r e l a t i o n  question  that  dependent on  This also leads t o the conclusion  " t h e U.S. g o v e r n e d i t s own f o r t u n e s i n t h e n i n e t e e n t h  that century,  E.H. P h e l p s - B r o w n , i n a r e v i e w o f Migration and Economic Growth, Economic Journal, V o l . L X I V (December, 1954) p . 820. ' 55 P . J . O ' L e a r y a n d W. A r t h u r L e w i s , " S e c u l a r S w i n g s i n P r o d u c t i o n a n d T r a d e , 1 8 7 0 - 1 9 1 3 " , Manchester School, Vol. XXIII (May, 1955) r e p r i n t e d i n R.A. G o r d o n a n d L.R. K l e i n , Readings in Business Cycles (Homewood, 1 1 1 : R i c h a r d D. I r w i n , I n c . , 1965) pp. 5 4 6 - 5 7 4 . Ibid,  p. 556.  68  and  i f a n y a d j u s t m e n t h a d t o b e made i t was made on t h e 57  other  side of the Atlantic." The  theory  ditioning Britain for  t h a t m i g r a t i o n was a n i m p o r t a n t  link  the inverse pattern of house-building  and t h e U n i t e d  "emigration  States  i s treated with  con-  i n Great suspicion,  r a t e s made l e s s t h a n a q u a r t e r  o f one  percent 58  d i f f e r e n c e t o t h e annual r a t e o f growth o f p o p u l a t i o n . " I f t h e r e was a n y s y s t e m a t i c two  i n t e r a c t i o n between t h e  economies a f t e r 1870, L e w i s and O'Leary would be p r e -  disposed was  t o a mechanism i n which t h e B r i t i s h b u i l d i n g c y c l e  timed t o f i t i n with  take  t h e form o f B r i t i s h  t h a t i n t h e U.S. M e d i a t i o n investors shifting  f o r e i g n and domestic p o r t f o l i o s relative that,  returns.  would  then  funds between  i n response t o changes i n  They a r e s k e p t i c a l , however,  "we c a n n o t e v e n r u l e o u t t h e p o s s i b i l i t y  concluding that the  a l t e r n a t i o n o f t h e U.S. a n d U.K. b u i l d i n g c y c l e s was a s h e e r accident,  s p r i n g i n g perhaps from t h e d i f f e r e n t e f f e c t s which  t h e N a p o l e o n i c Wars may h a v e h a d u p o n t h e p r o g r e s s d e n t i a l b u i l d i n g i n t h e two c o u n t r i e s . it  may h a v e b e e n an a c c i d e n t  lies  of r e s i -  The c a s e f o r t h i n k i n g  i n t h e f a c t t h a t i f t h e two  c y c l e s h a d c o i n c i d e d , t h e r e w o u l d h a v e b e e n no m e c h a n i s m t o  Ibvd. ^  Ibid.  69  make t h e m a l t e r n a t e . "  59  T h i s l a s t p o s i t i o n h a s b e e n d i s c o u n t e d b y a number o f a u t h o r i t i e s , n o t a b l y B r i n l e y Thomas a n d A.R. H a l l .  Thomas  counters: " O b v i o u s l y i f you e x p r e s s m i g r a t i o n and c a p i t a l f l o w s as a p r o p o r t i o n o f p o p u l a t i o n growth and g r o s s n a t i o n a l p r o d u c t r e s p e c t i v e l y , you w i l l n e a r l y always get r i d i c u l o u s l y small percentages; but these percentages are irrelevant. I t i s s u r e l y the margin t h a t c o u n t s . " 60 He a l s o s t r e s s e s t h a t t h e r o l e o f c a p i t a l t r a n s f e r s s h o u l d not be c o n s i d e r e d population. in enabling  British  of the redistribution of  f o r e i g n l e n d i n g was an i m p o r t a n t  factor  i m m i g r a n t s t o be a b s o r b e d i n t h e d e v e l o p i n g  of the world. profound  independently  areas  T h e i r combined impact a t t h e margin had a  i n f l u e n c e on t h e p a t t e r n o f home i n v e s t m e n t .  Thus:  "A s l u m p i n e m i g r a t i o n m e a n t (a) an i n c r e a s e i n p o p u l a t i o n concentrated i n the houses e e k i n g age g r o u p , a n d (b) a s u b s t a n t i a l increase i n i n t e r n a l migration to the indust r i a l a r e a s s t i m u l a t e d b y t h e r i s e i n home i n v e s t m e n t ; b o t h t h e s e f a c t o r s had a d i r e c t b e a r i n g on t h e demand f o r h o u s i n g . M o r e o v e r , a d e c l i n e i n e m i g r a t i o n was a c c o m p a n i e d b y a r i s e i n t h e volume o f l o a n a b l e funds a v a i l able a t home." 6 1  ^Ibid,  p. 5 5 7 .  60 Thomas, Economics ^Ibid,  p. 1 1 .  of International  Migration,  p. 10.  70  L e w i s and contracyclical  O'Leary c l a i m , w i t h o u t  substantiation, that  long swings i n h o u s e - b u i l d i n g  activity  in  the 62  U n i t e d S t a t e s and  Great  Thomas d a t e s evidence  c a n be  t r a c e d f r o m t h e 18 2 0 ' s .  t h e i n v e r s e p a t t e r n f r o m 1847,  Shannon's i n d e x  m i l e s a d d e d f r o m 1843  Britain  of b r i c k production  t o 1868,  and  citing  t o 1849,  Cairncross's  as  railway  building  63 index  f r o m 1870  t o 1914.  causes of i n d u s t r i a l both  of these  before  f l u c t u a t i o n s , D.J.  p o s i t i o n s , arguing  of there having dom  I n a s t i m u l a t i n g a r t i c l e on 64 Coppock  criticizes  t h a t t h e r e i s no  been l o n g b u i l d i n g  evidence  c y c l e s i n the United  volume of B r i t i s h  exports  t r a n s p o r t - b u i l d i n g c y c l e f r o m 1840  followed closely  t o 1870.  of the Hoffman index of i n d u s t r i a l p r o d u c t i o n . t i o n s were moderated by  I n t h e U.S.  i n t h e two  home i n v e s t m e n t O ' L e a r y and T r a d e " , p. 126  they  These  Lewis,  fluctua-  swung t o g e t h e r .  can  in  construction i n  say  the  "Since  i n d u s t r i e s must have d o m i n a t e d  a r o u n d t h i s t i m e we  U.S.  trend  the tendency f o r h o u s e - b u i l d i n g  B r i t a i n to alternate with railroad  decades 1830-60.  the  This i s reflected  i n the minor s e c u l a r swings i n the d e v i a t i o n s from the  investment  King-  1870.  The  Great  the  British  t h a t i f aggregate  " S e c u l a r Swings i n P r o d u c t i o n  and  6 3 Thomas, Migration and Economic Growth, pp. 1 7 5 - 6 , 325. 64 D.J. C o p p o c k , "The C a u s e s o f B u s i n e s s F l u c t u a t i o n s " Transactions of the Manchester S t a t i s t i c a l Society , (December,1959) pp. 1-42  71  home i n v e s t m e n t  d i d n o t swing  i n phase w i t h  U.S.  investment  65 it  certainly  emigration  d i d n o t swing  from t h e U n i t e d  inversely."  The v o l u m e o f  Kingdom f l u c t u a t e d i n p h a s e  t h e U.S. t r a n s p o r t - b u i l d i n g c y c l e d u r i n g was n o t l a r g e enough t o c a u s e  these  with  years, but  an i n v e r s e d o m e s t i c b u i l d i n g  cycle. The  origin  construction, trial  according  Britain late  Civil  experienced  1860's.  exports  in  peaked  i n t h e U.S. f e l l  i n t h e same y e a r s  and G r e a t i n the  This,  peak i n 1876.  railway construction  o f f rapidly.  and then  British  declined  (relative  i t i s a r g u e d , gave a f i l l i p thus  pushing  t o the domestic  t h e b u i l d i n g boom t o a  The i n v e r s e p h a s i n g  r e s u l t e d from  " t h e extreme-  r a p i d r e v e r s a l o f t h e U.S. b u i l d i n g c y c l e t o g e t h e r  5  Ibid,  led  The o u t w a r d movement o f p o p u l a t i o n was a r r e s t e d  demand f o r h o u s i n g ,  ly  following  Feverish overexpansion  i n 1871-72, a f t e r w h i c h  house-building  1873.  States  i n building activity  and e x t e r n a l m i g r a t i o n .  to trend).  i n t h e 15 y e a r s  Both t h e U n i t e d  an u p s w i n g  i n the indus-  T h i s was a c c o m p a n i e d b y a boom i n B r i t i s h  t o a downturn  exports  War.  swings i n r e s i d e n t i a l  t o Coppock, i s found  developments which took p l a c e  the American  and  o f the inverse long  p . 29.  with  72  a rise  in British  unattained  to l e v e l s previously  e i t h e r a b s o l u t e l y or per c a p i t a . "  B e t w e e n 1871 out-flow  net emigration  was  and  66  1881, t h e n e t d e c e n n i a l  seven per thousand p o p u l a t i o n .  rate  This  of increased  t o 2 3 p e r t h o u s a n d i n t h e n e x t d e c a d e and t h e n f e l l two p e r t h o u s a n d i n t h e 1 8 9 0 ' s . domestic rate of population  The  to  added impetus t o t h e  (urban) growth c o n t r i b u t e d  t h e b u i l d i n g boom o f t h e 1 8 9 0 ' s w h i c h c o i n c i d e d w i t h s w i n g i n t h e U.S.  to  a down-  transport-building cycles.  "Thus i t seems t h a t L e w i s and O ' L e a r y may have been c o r r e c t i n s u g g e s t i n g t h a t t h e a l t e r n a t i o n o f t h e U.K. and U.S. B u i l d i n g C y c l e s "was a s h e e r a c c i d e n t " t h o u g h t h e c a u s e s o f t h i s a c c i d e n t d i d n o t l i e , as t h e y s u g g e s t , i n t h e e f f e c t s o f t h e Napol e o n i c Wars, b u t r a t h e r i n the d i f f e r e n t d e m o g r a p h i c , t e c h n i c a l and s p e c u l a t i v e d e terminants of the b u i l d i n g cycles i n the two c o u n t r i e s a r o u n d t h e 1 8 7 0 ' s . " 6 7 Once o u t o f p h a s e ,  t h e two o p p o s i n g b u i l d i n g  were l i n k e d by t h e waves o f m i g r a t i o n  across  the  C o p p o c k o u t l i n e s a c a u s a l m e c h a n i s m b a s e d on t h e t h a t t h e b u i l d i n g c y c l e i n G r e a t B r i t a i n was transport-building  Ibid, Ib%d.  p.  30  c y c l e i n the United  cycles  Atlantic. assumption  dependent  States.  This  upon t h  assumption  73  justified  f o rthe f o l l o w i n g reasons:  i n U.S. b u i l d i n g 1830's.  activity  First,  long  swings  a r e e v i d e n t as e a r l y as t h e  Second, t h e waves o f i m m i g r a t i o n  which coincided  w i t h a n d c o n t r i b u t e d t o t h e b u i l d i n g c y c l e s i n t h e U.S. h a d their origin see  i n many E u r o p e a n c o u n t r i e s .  "It i s easier to  t h e e m i g r a t i o n w a v e s f r o m t h e U.K. a s p a r t o f a g e n e r a l  response t o the p u l l which generated  o f t h e U.S. boom t h a n  as t h e f a c t o r  t h e U.S. boom a n d s o made p o s s i b l e t h e 68  e m i g r a t i o n waves from o t h e r E u r o p e a n c o u n t r i e s . " this,  then, house-building  marily  to shifts  i n Great  B r i t a i n responded  and  overseas.  Coppock does n o t d i s c u s s t h e r o l e o f c a p i t a l  f o r e i g n investment  i n the determination  b u i l d i n g , he d o e s r a i s e a n i m p o r t a n t  of British  issue, without  it,  w i t h r e s p e c t t o consumption and t h e c a p i t a l  and  t h e i r combined p o t e n t i a l  The  d e c l i n e i n home i n v e s t m e n t  overseas "But  releases potential  transfer,  i m p a c t on t h e h o u s i n g d u r i n g an u p s w i n g  savings  f o rforeign  p . 24.  house-  realizing  sector. i n building  investment.  c a p i t a l e x p o r t must be e f f e c t e d v i a t h e b a l a n c e  Ibid,  pri-  i n p o p u l a t i o n , s t i m u l a t e d by waves o f  r a i l w a y c o n s t r u c t i o n and h o u s e - b u i l d i n g Although  With  o f payments  74  and p o t e n t i a l  savings w i l l  v a n i s h i f t h e U.K.  economy  be-  69 comes s e r i o u s l y d e p r e s s e d . " accompanying to the  the l o n g swings  e f f e c t the t r a n s f e r . s e c u l a r swings  phase  The  British  e x p o r t booms  i n overseas investment helped  I t i s important to recognize that  in British  i m p o r t s and c o n s u m p t i o n  w i t h home i n v e s t m e n t a l s o e a s e d t h e c a p i t a l  for  70  transfer  A t t h e same t i m e , h o w e v e r , a d e c l i n e i n c o n s u m p t i o n d i t u r e s must have had  in  expen-  a d e p r e s s i n g e f f e c t o n t h e demand  house space, thus i n t e n s i f y i n g the d e p r e s s i o n i n b u i l d i n g  c o i n c i d e n t w i t h a wave i n o v e r s e a s i n v e s t m e n t . A second British  c o n t r i b u t i o n t o the study of l o n g swings i n  h o u s e - b u i l d i n g was  p r e s e n t i n g new  made by C o o n e y i n an  d a t a on l a t h w o o d  imports which  p r i o r t o t h e 1 8 6 0 ' s " t h e r e w e r e no m a j o r  article  suggested  fluctuations  greater length than the business c y c l e i n B r i t i s h  that  of  building  71 activity." in British is the  The  1 8 7 0 ' s a r e v i e w e d as a m a j o r  economic  the growing  development.  turning  The m o s t s i g n i f i c a n t  point change  importance of f o r e i g n investment i n governing  course of domestic house-building. Ibid,  p.  23  70 L e w i s and O ' L e a r y , " S e c u l a r S w i n g s i n P r o d u c t i o n and T r a d e " p. 1 2 4 - 5 . 71 E.W. C o o n e y , " L o n g Waves i n B u i l d i n g i n t h e B r i t i s h E c o nomy o f t h e N i n e t e e n t h C e n t u r y , Economic History Review, V o l . X I I I (December, 1 9 6 0 ) , pp. 257-269.  75  Major f l u c t u a t i o n s i n r e s i d e n t i a l construction from v a r i a t i o n s swings i n the suffered  i n the  supply of  volume of  foreign  greater  the  materials.  supply of  l a b o u r t o the  i n v e s t m e n t and  o u t l i n e d by of  long  waves i n the  boom c e n t e r e d on  are  during  a  Several  of  the  he  difficult  more l i k e l y  and  reduced  stressed  and  emigration the  r e s p e c t to the  importance  great  independent f a c t o r s  development of  in exception building are  re-  municipal  i n r e a l i n c o m e s b e t w e e n 1880 to argue t h a t  than the  for  t h i s major f l u c t u a t i o n , i n c l u d i n g  electricity,  rise  industry  industry.  economic development of America  i s taken with  foreign  construction  r e l a t i o n s h i p b e t w e e n home  Further,  1900.  introduction  " I t w o u l d be  factor  expanding export sector  building  having amplified  t r a m w a y s , and  the  of  expectations  time-shape of B r i t i s h b u i l d i n g . Minor  to t h i s influence  c o g n i z e d as  an  of  internal migration  Cairncross.  governing the  the  the  Increased emigration further  Cooney e m p h a s i z e s the foreign  d o m i n a t e d by  inability  t o s u c c e s s f u l l y compete w i t h  the  During periods  to depressed b u i l d i n g a c t i v i t y  i n v e s t m e n t boom was  finance  negotiable  p r o f i t s from investment abroad. Another  contributing  l a b o u r and  secular  investment. B u i l d i n g  r a i l r o a d bonds.  e x p a n s i o n t h i s p r e f e r e n c e was of  c a p i t a l c a u s e d by  from i n v e s t o r p r e f e r e n c e f o r r e a d i l y  f o r e i g n g o v e r n m e n t and  result  and  t h e s e , even t a k e n  overseas influence  1900. together,  to account f o r  the  76  particular  timing  of  the  b u i l d i n g boom o f  189 5 t o  1905  but  72 they  surely The  added a good d e a l  first  disaggregated  to  i t s amplitude."  study of house-building  in  73 Great B r i t a i n question implied  the by  f r o m 1890  1914  foreign  operation  of  an  statistics  approved  i n a l a r g e number o f  actual pattern  question  of  how  the  vestment fic  i . e . , the  local  Accounts the  level  of  to market c o n d i t i o n s . 1901  and  on  empty h o u s e s  Ibid  12  3  1911,  p.  and  shown  to raises  heart  Saul's  of  the  the  migra-  building  answer i s t h a t factors  in-  speci-  market.  i n contemporary  of  t o the  plans  differences  This  l a r g e l y d e t e r m i n e d by  housing  vacancies  country.  the  his  house  i n t e r n a t i o n a l investment  l o c a l market.  i n h o u s i n g was  to the  the  in  Basing  towns s i g n i f i c a n t  of  link  and  are  seriously  industry  cycle  of b u i l d i n g a c t i v i t y  t i o n mechanism i s t r a n s m i t t e d industry,  building  of houses e r e c t e d  e x i s t between d i f f e r e n t p a r t s serious  the  to  " A t l a n t i c economy."  on  the  the  of  Saul  investment-building  analysis  in  l e d S.B.  sensitive reactions  the  systematic  to  trade  i s often  u s e d by  Information what l i t t l e  i n various  literature  from  state  builders the  British  fragmentary  towns, a p p e a r s t o  as  that a  guide  censuses  evidence indicate  exists that  267  73 S.B. Saul, Review, V o l . XV  "House B u i l d i n g i n E n g l a n d " , Economic ( A u g u s t , 1962) , pp. 119-137.  H%story  77  t h e r e was  wide l o c a l v a r i a t i o n  i n the  lagged  response  of  74 the b u i l d i n g i n d u s t r y to t h i s r a i s e d here w i l l  o n l y be  indicator.  Unfortunately,  question  r e s o l v e d b y more i n t e n s i v e  of l o c a l market c o n d i t i o n s , p a r t i c u l a r l y , property.  The  little  the  study  r o l e of  empty  i n f o r m a t i o n on v a c a n c y  rates  is available. Perhaps t h e most i m p o r t a n t to  the determination  B r i t a i n was  the  house-building  local  of house-building  essentially industry.  factor contributing patterns  i n Great  s p e c u l a t i v e character of  F r o m r e g u l a r r e p o r t s on b u i l d i n g  activity  i n Birmingham, p u b l i s h e d  Gazette,  S a u l has  dustrial  propensity:  i n the  Building  Societies'  assembled v a l u a b l e evidence of t h i s i n -  "The f i r s t i n t e r e s t i n g f e a t u r e i s t h e c o n s i d e r a b l e amount o f s p e c u l a t i v e b u i l d i n g r e p o r t e d d u r i n g the e a r l y n i n e t i e s desp i t e t h e f a c t t h a t r e n t s w e r e v e r y l o w and s t i c k y , and c o s t s h i g h ... I t was n o t s o much a q u e s t i o n o f "want" f o r h o u s e s as an o p p o r t u n i t y made a v a i l a b l e b y l a n d o w n e r and s p e c u l a t o r . By 189 5 s p e c u l a t i v e b u i l d i n g was " n e v e r s o r a m p a n t " a n d t h e c o r r e s p o n d e n t a r g u e d t h a t "no d o u b t t h e p l e t h o r a o f money i s encouraging the b u i l d i n g f e v e r , f o r p r i vate mortgages are o b t a i n e d before the secur i t i e s are f i n i s h e d , the competition f o r investments being heavier than ever."75  74 75  Ibid,  pp.  Ibid,  p.  126-129 130.  the  78  I n many c a s e s r e n t s may h a v e p l a y e d in the decision to b u i l d .  only a minor  role  I n Birmingham, f o r example,  t h e y b e g a n t o i n c r e a s e r a p i d l y o n l y a f t e r 189 7, b u t t h e housing  boom g o t u n d e r w a y w e l l b e f o r e  then.  knowledge o f l o c a l r e n t l e v e l s and t h e i r course  of house-building  Saul recognizes and  i s very  Again, our  i n f l u e n c e on t h e  limited.  t h e p o t e n t i a l i n f l u e n c e o f t h e age  m a r i t a l s t r u c t u r e o f e m i g r a n t s on t h e demand f o r h o u s i n g ;  also the importance of i n t e r n a l migration the pressure low.  on u r b a n h o u s i n g  B u t he c o n c l u d e s  migration of i t s e l f  i nr e i n f o r c i n g  s u p p l i e s when e m i g r a t i o n  t h a t , " i t i s hard  to believe  was  that  c o u l d a c c o u n t f o r more t h a n a s m a l l  part  76 of t h e wide f l u c t u a t i o n s i n house c o n s t r u c t i o n . " of t h i s  statement s t a t i s t i c s  fluctuations affecting  are cited  a l l types  showing  support  similar  o f houses, w h i l e the great  m a j o r i t y o f e m i g r a n t s were from t h e w o r k i n g c l a s s . m o r e , he a r g u e s t h a t i n t e r n a l m i g r a t i o n domestic conditions i n the c o a l , woollen d u s t r i e s a n d i n no way was t h i s  In  Further-  responded t o s p e c i f i c and e n g i n e e r i n g i n -  "an i n d i c a t i o n  that  housing  r e s p o n d e d t o changes i n p o p u l a t i o n b r o u g h t about by any 77 i n t e r n a t i o n a l pattern of behavior." ^^Ibid,  p. 1 3 1 .  Ibid,  p. 132  11  79  With respect to c a p i t a l ,  i t i s p o s s i b l e t h a t the  gage m a r k e t s u f f e r e d from the r a p i d growth o f investment was  end  alternative  o p p o r t u n i t i e s i n a domestic f i n a n c i a l market which  quickly diversifying.  to support  mort-  H o w e v e r , no  evidence  c a n be  t h e v i e w t h a t booms i n h o u s e - b u i l d i n g  b e c a u s e c a p i t a l was  d i v e r t e d t o other uses  found  came t o  an  (eg. f o r e i g n  investment): " A l l t h i s , and t h e p e r i e n c e between make i t d i f f i c u l t t h a t b u i l d i n g was d e t e r m i n e d ... by the nature of the itself."  wide d i f f e r e n c e s i n exone a r e a and a n o t h e r , t o escape from the view i n t e r n a l l y and p o s i t i v e l y t h e s l a t e o f demand and b y o p e r a t i o n of the trade  7 8  In the cycle after city  and  aforementioned 1870  Coppock s t u d y ,  i s considered  amplitude  i v e a r t i c l e on  a r e e x p l a i n e d by  Nineteenth  b e e n c h a l l e n g e d by fluctuations  trade  a h y b r i d c y c l e whose p e r i o d i the  long swings i n domestic h o u s e - b u i l d i n g T h i s v i e w has  the B r i t i s h  H.J.  inverse phasing and  export  production.  H a b a k k u k i n an  exhaust-  i n B r i t i s h house-building  79  i n the  century:  " I t was t h e l o n g s w i n g s w h i c h w e r e t h e e p i phenomena and t h e t r a d e c y c l e s t h e r e a l i t y , i n t h e s e n s e t h a t when t h e c h a r a c t e r o f t h e i n d i v i d u a l c y c l e s has been e x p l a i n e d t h e r e i s no r e s i d u e w h i c h n e e d s t o be a t t r i b u t e d to the behavior of a long cycle."80  Ibid,  of  pp.  1  134-35-36.  Coppock, "Causes of B u s i n e s s  F l u c t u a t i o n s " , p.  12  80  and  H.J. H a b a k k u k , " F l u c t u a t i o n s i n H o u s e - B u i l d i n g i n B r i t a i n t h e U n i t e d S t a t e s i n t h e N i n e t e e n t h C e n t u r y " , Journal of  80  Residential building  i n Great  B r i t a i n before the  1860's f l u c t u a t e d w i t h t h e t r a d e c y c l e , and t h u s e x h i b i t t h e 20 y e a r  swings t y p i c a l  cycle i n the United  States.  fluctuations  d i dnot  of the t r a n s p o r t - b u i l d i n g  The a p p e a r a n c e o f m a j o r  i n B r i t i s h house b u i l d i n g ,  secular  inverse t o those  i n t h e U.S., i s e x p l a i n e d n o t o n l y b y s t r u c t u r a l c h a n g e s i n the character of B r i t i s h b u i l d i n g t h a t the "trade c y c l e s i n Great  c y c l e s b u t a l s o by t h e f a c t  B r i t a i n no l o n g e r came t o 81  a v i o l e n t end b u t t h e A m e r i c a n ones o f t e n d i d . " Habakkuk s t r e s s e s t h e i m p o r t a n c e o f d o m e s t i c f a c t o r s i n e x p l a i n i n g why  t h e r e l a t i o n between t h e t r a d e c y c l e and  fluctuations i n building second h a l f  s h o u l d have changed.  of the Nineteenth  During the  c e n t u r y many o f t h e i n f l u e n c e s  which had f o r m e r l y s t i m u l a t e d house c o n s t r u c t i o n i n t h e initial  stages  o f t h e t r a d e c y c l e were weakened.  m i g r a t i o n became l e s s r e s p o n s i v e phases o f t h e t r a d e c y c l e . creased  t o the expansion  One r e a s o n  Internal and c o n t r a c t i o n  f o r t h i s was t h e i n -  number o f m i d d l e - c l a s s m i g r a n t s .  Structural  changes  i n t h e c a p i t a l m a r k e t i m p o s e d f u r t h e r r e s t r a i n t s on t h e e x pansion  of house-building  Economic ^Ibid  }  History  3  during a trade c y c l e upswing.  V o l . XXIII  pp. 205, 213.  (June,  1 9 6 2 ) , p. 2 1 2 .  The  81  p r o l i f e r a t i o n of f i n a n c i a l on  instruments  h a d an a d v e r s e  t h e . d e s i r e o f i n v e s t o r s t o hold mortages.  the development of j o i n t - s t o c k banks, w h i l e it  impact  "Moreover, i t may h a v e made  e a s i e r f o r b u i l d e r s t o o b t a i n a d v a n c e s , a l s o made t h e 82  bank d e p o s i t course, had  an a l t e r n a t i v e a s s e t t o t h e m o r t g a g e . "  increased  incomes g e n e r a t e d d u r i n g  Of  the trade  boom  a f a v o r a b l e i n f l u e n c e on t h e demand f o r h o u s i n g .  The  v a r i o u s changes m e n t i o n e d above had t h e e f f e c t o f i n c r e a s i n g the  lagged  response o f t h e b u i l d i n g i n d u s t r y t o changes i n  demand, t h u s a l l o w i n g a b a c k l o g up  o f e x c e s s demand t o b u i l d  a n d r e s i d e n t i a l c o n s t r u c t i o n t o p e r s i s t a f t e r t h e down-  turn i n the trade  cycle.  downturn a l s o helped  Other f a c t o r s a s s o c i a t e d w i t h the  t o s u s t a i n t h e boom i n h o u s e - b u i l d i n g .  "The g r o w i n g s t a b i l i t y o f t h e b a n k i n g s y s t e m a f t e r m i d - c e n t u r y and t h e i n c r e a s e i n t h e range o f assets a v a i l a b l e , w h i l e they reduced t h e power o f b u i l d i n g t o compete f o r f u n d s d u r i n g a boom, g r e a t l y i m p r o v e d i t s p o s i t i o n during a depression. The d o w n t u r n c e a s e d t o be a c c o m p a n i e d b y a g e n e r a l c o m m e r c i a l and f i n a n c i a l c o n v u l s i o n ... "83 "Absence o f a c o m m e r c i a l p a n i c a f f e c t e d n o t only the a v a i l a b i l i t y of finance f o r b u i l d i n g , b u t a l s o e f f e c t i v e demand f o r h o u s e s . The p o i n t  2  Ibid,  2  Ibid,  pp. 207-08. p. 208.  82  i s not merely that s t r i n g e n c i e s of the boom m e a n t t h e r e was an u n s a t i s f i e d d e mand f o r h o u s e s a t t h e l e v e l o f i n c o m e p r e v a i l i n g d u r i n g t h e c y c l i c a l boom, b u t t h a t t h e l e v e l o f i n c o m e was b e t t e r s u s tained during the depression." 8 4  That these the gradual  changes produced l o n g swings i s e x p l a i n e d by  "shift  i n the balance  o f f a v o r a b l e and u n f a v o r a b l e  85 forces."  T h u s , t h e r e was a g r o w i n g number o f r e g i o n a l l o n g  c y c l e s o u t o f phase w i t h one a n o t h e r .  The i n c r e a s e d  import-  ance o f suburban b u i l d i n g w h i c h p e r s i s t e d f o r l o n g e r  periods  a l s o c o n t r i b u t e d t o t h e l o n g waves i n B r i t i s h b u i l d i n g  acti-  vity. Habakkuk d e v o t e s c o n s i d e r a b l e space t o a d i s c u s s i o n o f various possible influences that v a r i a t i o n s i n the pattern o f m i g r a t i o n and c a p i t a l  f l o w s m i g h t have had on t h e c o u r s e  of domestic house-building.  He s u g g e s t s  that inverse building  c y c l e s may, i n p a r t , h a v e b e e n t h e r e s u l t o f s e c u l a r s w i n g s i n e m i g r a t i o n o n l y i n s o f a r as t h i s worked through  a change i n  i n t e r n a l m i g r a t i o n l e a d i n g t o increases i n the r a t e o f urbanization.  The o u t f l o w o f p o p u l a t i o n was g o v e r n e d b y f l u c t u a t i o n s  i n the prosperity of developing g i o n s , by b o r r o w i n g investment  4  ^  than  Ibid, p. Ibid.  209  regions overseas.  l a r g e r sums r e l a t i v e t o B r i t i s h  ever before  These r e domestic  and by i s s u i n g s e c u r i t i e s  comparable  83  to  and c o m p e t i t i v e  with  housing  f i n a n c e , tended t o f u r t h e r  reduce the supply  o f funds f o r b u i l d i n g i n t h e upswing o f  the  These  trade  cycle.  underplayed  i n the course  The f i r s t explained of  long  swing  o f Habakkuk's a r g u m e n t . in British  p r i m a r i l y by t h e f a c t  the late  financial  i n f l u e n c e s , however, a r e r e p e a t e d l y  that the trade  crisis,  and t h a t level  industrial  high  construction  and h o u s e - b u i l d i n g  after  1873.  an " A t l a n t i c  building  Habakkuk  boom f a i l e d  in  areas  Thus, tively  where  is  found  in  the United  levels  a s i t d i d n o t one b u t two  suggests  t h a t one r e a s o n  i n d u s t r i e s (exports revival  t h e r e was e x c e s s i n output  internal  i n those  why a  and s h i p b u i l d i n g ) years  were  located  unemployment.  c o u l d be a c h i e v e d  with  migration.  States, Australia,  1880's  c a p a c i t y and h i g h  rela-  The m a i n e x p l a n a t i o n ,  i n t h e u n p r e c e d e n t e d waves  of emigration  1876 was e x -  spanning  the trade  large increases little  set i n after  t o g a i n momentum i n t h e l a t e  was t h a t t h e p r o m i n e n t which dominated  The boom i n r a i l w a y  economy".  prolonged,  cycles.  continued at  i m p l i e d by t h e working  The b u i l d i n g d e p r e s s i o n w h i c h  trade  activity  a b r o a d may h a v e h a d some i n -  f l u e n c e b u t n o t i n t h e d i r e c t way  ceptionally  c y c l e boom  1860's a n d e a r l y 1870's was n o t f o l l o w e d b y a  a relatively  of  building activity i s  o f development  overseas  A s i a and S o u t h A m e r i c a .  and f o r e i g n investment  however,  High  were s u s t a i n e d f o r  84  a l o n g e r p e r i o d than ever b e f o r e . "This i s t h e o n l y o c c a s i o n on which f o r e i g n i n f l u e n c e s c l e a r l y d e f l e c t e d B r i t i s h  build-  i n g f l u c t u a t i o n s from t h e course they would o t h e r w i s e have 86  taken."  The primary l i n k was through e m i g r a t i o n . But even  here, t h e r a t e o f o u t f l o w o f p o p u l a t i o n was p a r t l y by domestic  factors.  determined  The a g r i c u l t u r a l d e p r e s s i o n o f t h e  l a t e 1 8 8 0 ' s p r o v i d e d a s t r o n g push element i n the r u r a l flow.  C a p i t a l flows p l a y e d a p a r t b u t were "pushed  r a t h e r than p u l l e d . "  out-  abroad  Low i n t e r e s t r a t e s and t h e d i f f i c u l t i e s  b u i l d i n g s o c i e t i e s e x p e r i e n c e d i n l o a n i n g funds a r e c i t e d as evidence o f a d e a r t h o f investment o p p o r t u n i t i e s a t home. The  f i n a l decade o f the N i n e t e e n t h c e n t u r y opened w i t h  f i n a n c i a l c r i s e s i n A r g e n t i n a , and South America, B a r i n g C r i s i s a t Home.  T h i s made investment  and the  overseas  less  a t t r a c t i v e and h e l p e d d i v e r t funds t o t h e home market.  Thus,  it  "allowed  i s c l a i m e d t h a t an abundant supply o f l o a n a b l e funds  the b u i l d i n g boom o f t h e n i n e t i e s t o develop on a l a r g e r  scale  87  than might o t h e r w i s e have been t h e case." important  But the most  f a c t o r s d e t e r m i n i n g the b u i l d i n g boom i n the l a t e  1 8 9 0 ' s were domestic  i n origin.  The i n d u s t r i a l booms t h a t  took p l a c e i n t h a t decade were c o n c e n t r a t e d i n new i n d u s t r i e s l o c a t e d i n areas where t h e r e was no s i g n i f i c a n t excess S6  Ibid,  p. 2 2 4 .  ^Ibid,  p. 2 2 6 .  supply  85  of  labour.  erable  internal  An  added  provided the  Consequently,  a revival  migration  impetus  ation  systems  was a h i g h  i n building activity  i n suburban b u i l d i n g r e s u l t i n g  application of e l e c t r i c i t y The U n i t e d  l e d to consid-  and u r b a n i z a t i o n .  t o t h e upswing  by t h e i n c r e a s e  Britain.  i n trade  t o t r a n s p o r t a t i o n i n Great electrical  transport-  i n t h e 1880's, t h i s b e i n g  one r e a s o n  why  of building activity  "Thus t h e a l t e r n a t i o n o f A m e r i c a n a n d B r i t i s h  activity  i n t h e e i g h t i e s and n i n e t i e s p a r t l y  in  r a t e a t which  t h e two c o u n t r i e s .  electricity This  there  i n America during  period.  different  from  began u s i n g  level  States  was  that housing  r e f l e c t s the  was a p p l i e d t o t r a c t i o n  i s , i n the present  context,  almost  88 certainly fortuitous." The fall  aggregate  o f f after  differences boom j u s t migration. by the  indices of house-building  190 3.  T h i s , however, c o n c e a l s  that existed i n the l o c a l  e n d e d was m a i n l y  Ibid,  of British  p . 227.  patterns.  The b u i l d i n g  h a n d , was n o t s o much  t h e s u b s i d i n g wave o f e m i g r a t i o n ,  Britain  the considerable  i n f l u e n c e d by t h e i n t e r n a l  T h i s , on t h e o t h e r  distribution  i n Great  rate of caused  b u t r a t h e r by changes i n  industrial  activity.  86  " T h e r e i s no n e e d t o i n v o k e f o r e i g n i n f l u e n c e s , a n d i f t h e y a r e i n v o k e d i t c a n be a r g u e d t h a t t h e demand o f t h e p r i m a r y p r o d u c i n g r e g i o n s f o r E n g l i s h g o o d s i n t h e s e y e a r s d i d more t o s t i m u l a t e b u i l d i n g i n E n g l a n d t h a n t h e i r demand f o r m i g r a n t s and f u n d s d i d t o s u p p r e s s i t . " 8 9 The  s c e p t i c i s m o f L e w i s and  w i t h r e s p e c t t o the i m p l i e d by i s not  concerned is  systematic set of  the hypothesis  s h a r e d b y A.R.  O ' L e a r y , S a u l and  w i t h investment  inter-relationships  of a working  Hall.  international  Though H a l l  i s not  after  18 70.  g o v e r n e d by  well  i s i n f l u e n c e d by  as f a c t o r s o f s p e c i f i c  stimulus w i t h i n the world region.  the areas  investment  the development of a w o r l d  r e j e c t i o n of the hypothesis  one  specifically  T h u s , t h e p a t t e r n o f home i n v e s t m e n t  sequently house-building)  " I t c o u l d and  economy,  in residential construction, this  s e e n as a m a j o r c o m p o n e n t o f t o t a l d o m e s t i c  w h o s e f a t e was  Habakkuk  local origin.  events  did shift  con-  abroad  locus of  as a  economic  continuously located in f r o m r e g i o n t o r e g i o n among  o f r e c e n t s e t t l e m e n t and b e t w e e n t h o s e  g a r d e d as a s i n g l e e n t i t y , and  (and  This leads to  t h a t the c e n t r a l  economy was  economy  regions, re-  E u r o p e and w i t h i n E u r o p e t o  90 Britain  in particular."  89 A . R . H a l l , The Export of Capital from ( L o n d o n : Methuen, & Co. L t d . , 1 9 6 8 ) , p. 9. 9 0  Britain,  1870-1914,  87  The  case  f o r a s i n g l e - c a u s e e x p l a n a t i o n of the  reaction process of  e c o n o m i c and  a weak one. cannot  giving  t o s e c u l a r swings i n the  demographic a c t i v i t y  Inverse phasing  s i m p l y be  o f r e t u r n on  new  attributed  t o changes i n the  shifts  the w i l l i n g n e s s of B r i t i s h  volume  i s , according to  of r e g i o n a l investment  investment,  a t i o n a l migration, or in  rise  dynamic  Hall,  cycles  expected  rate  or the n a t u r a l rhythm o f  intern-  i n the terms of t r a d e , or investors to lend  changes  abroad.  "... i t d e p e n d e d on t h e c o m p l i c a t e d i n t e r p l a y o f a l l t h e s e v a r i a b l e s , and numerous others. Changes i n any one o f them r e a c t e d on t h e o t h e r s b u t n o t i n any s i m p l e way. The n a t u r e o f t h e r e a c t i o n t o any one i n g r e d i e n t was n o t a l w a y s i d e n t i c a l b e c a u s e t h e c o n j u c t u r e o f o t h e r f a c t o r s when s u c h c h a n g e s o c c u r r e d was n o t a l w a y s t h e same."  Thus, g r e a t emphasis inter-relationships f l o w o f g o o d s and as  capital,  This  tended  that linked  E u r o p e t o t h e New  technology  i n product  to lengthen  and  altered  the process  International financial  functioning  gold standard,  process.  Ibid,  p.  10.  trade)  demand and  of expansion these  stability,  helped  of  World.  The  as w e l l supply  f a c t o r markets around the  t h e p e r i o d t h a t would have e x i s t e d had red.  the m u l t i p l i c i t y  s e r v i c e s (items o f i n v i s i b l e  l a b o u r and  relationships  i s p l a c e d on  world.  w e l l beyond  changes not  resulting  to f a c i l i t a t e  the  from  occura  smoothly  adjustment  88  An tions  e x t e n s i v e and  i n Great  Britain's  i n f o r m a t i v e study  Britain  Growth.  the unpublished  i s J . P a r r y Lewis'  D r a w i n g h e a v i l y on  of the b u i l d i n g  building  late  r a t h e r as  a  fluctuaCycles  fact  Bernard  are presented,  c y c l e , but  c y c l e s i n the p l u r a l ,  Building  historical  r e s e a r c h m a t e r i a l of the  a number o f c a u s a l r e l a t i o n s h i p s theory  of b u i l d i n g  not  as  "theory  i n which a l t e r n a t i v e  and  and Weber, a of  possibi-  92 lities  are allowed  a r e d e r i v e d from Thomas, and in  the  and to  the  t o the  study  statistical ships  as  central  mentioned  analysis  do  not  importance,  L e w i s has  taken  ly  foundations  they  are J. T  pains  major  contribution  found.  by  Parry Lewis,  in a typical  of the  Building  credit  adding  Contemporary them t o  "represent everything 93  t o emphasize  assumed t o h a v e no  9 3, . ,  f o r shocks  Gaussian  influence. Cycles  and  and  than  Britains  about are  strike  relationships Rather  relation-  f a s h i o n . What  i s t h a t shocks  structural  behavior  i t i s i n regard  know enough t o h a v e a m e a s u r e " ,  assumed t o be w e l l b e h a v e d  a t the  and  t h a t Lewis'  These e r r o r s  of c y c l i c a l  Population,  c y c l e s i s t o be  allows  theory  Hawtrey, C a i r n c r o s s ,  various aspects  factor  of b u i l d i n g  "errors".  w h i c h we  a l l on  elements of the  o f economic development.  are of  last  The  the works o f J e v o n s ,  Frisch,  course  shocks  to operate."  on  directwhich  additive Growth^.  213.  8 9  with  z e r o mean, t h e y may  be more a p p r o p r i a t e l y t r e a t e d a s  m u l t i p l i c a t i v e with cumulative  effects.  s h o u l d be s t u d i e d w i t h i n t h e i r c o n t e x t important  food  through harvests  supply,  shocks w i l l  a f f e c t the population to emigrate.  shocks  as p e r h a p s t h e m o s t  dynamic f a c t o r i n t h e process  Operating the  I n any c a s e ,  of s t r u c t u r a l  or other  alter real  factors that incomes and  change.  9  4  affect  directly  t h r o u g h n a t u r a l i n c r e a s e and t h e d e c i s i o n  House-building  i s shown t o be i n f l u e n c e d b y a  f a r g r e a t e r number o f c o m p l e x f o r c e s t h a n h a s h i t h e r t o b e e n recognized.  The  i m p a c t may  work t h r o u g h changes i n age-  s p e c i f i c m a r r i a g e and b i r t h of the population.  rates altering  the  age-structure  Economic f a c t o r s a f f e c t i n g  t h e volume o f  m i g r a t i o n , though n u m e r i c a l l y  s m a l l compared  may  have a p r o f o u n d i n f l u e n c e i n t h e i r  sex  structure or i t s industrial  not  only important  considerable  lagged  for their  population,  e f f e c t on i t s age  composition.  i m m e d i a t e e f f e c t s b u t may  accommodation,  and  These changes a r e  i m p a c t (for as l o n g as a g e n e r a t i o n  on t h e demand f o r h o u s i n g (through  to total  the supply  of  have a o r more) labour  echo e f f e c t s ) and t h e d i s t r i b u t i o n o f income.  Shocks a l s o work  through the monetary s e c t o r i n t h e i r i n -  f l u e n c e on h o u s e - b u i l d i n g .  F o r i n s t a n c e , how  and t o what  extent  L e w i s p r o p o s e s t o do t h i s , w i t h t h e a i d o f a c o m p u t e r , i n t h e d e v e l o p m e n t and t e s t i n g o f a s i m u l a t i o n model o f h o u s e b u i l d i n g a c t i v i t y . P e r h a p s t h e n e g l e c t o f t h i s p r o b l e m i s one r e a s o n why t h e e c o n o m e t r i c m o d e l s o f t h e h o u s i n g s e c t o r t h a t have been t e s t e d have p r o v e d so u n s a t i s f a c t o r y .  90  is  the  availability  the  impact  the  importance  stressed: likely  of c r e d i t  o f h a r v e s t s on  for construction affected  the balance  of c o n s i d e r i n g shocks  "When c r e d i t  to p r e c i p i t a t e  i s strained, a crisis,  of payments? in their  a  'bad'  while  a  by  Again,  context i s  shock  i s very  'good' one  may,  i f  95 it  i s of the  i n Lewis' people  enter the  P o p u l a t i o n and this  labour force  a potential  realizing  real  kind."  theory through  constitute of  right  this  type and  credit  are  of c o n s i d e r a t i o n . begin  to earn  demand f o r h o u s i n g .  demand i s e n h a n c e d  i n c o m e s t a k e s p l a c e when c r e d i t  linked As  incomes,  The  young they  possibility  i f a shock t h a t  raises  i s abundant.  96 Brmley  Thomas  ments o f Habakkuk and and  addressed  South used  W a l e s and in this  Inhabited building  West o f E n g l a n d ,  M o n m o u t h s h i r e , and  s t u d y were c o l l e c t e d  House D u t y s t a t i s t i c s estimates.  constituted  h i m s e l f t o the  Saul i n a regional  h o u s e - b u i l d i n g i n the Midlands,  London, t h e N o r t h  the  recently  I t was  study  argu-  of population  the c o u n t r i e s surrounding Yorkshire, Northern London.  from  The  census  England,  population data  r e c o r d s , and  the  provided a basis for regional  assumed t h a t  t h e age  group  "vast m a j o r i t y of the house-seeking s e c t i o n of 97 community." The p u r p o s e o f t h e a n a l y s i s was t o d e t e r m i n e  ^^Ibid,,  the  20-44  p.  221.  96 Brinley  Thomas, Demographic  l o t a , p. 6 .  Determinants,  passim.  91  the  relationship  44,  separating  gration, led  and  Thomas t o  between  the  net  changes  effects  changes  i n the  of both  aged  20-  n a t u r a l i n c r e a s e and  mi-  i n the housing  population  stock.  The  results  conclude:  "... n a t i o n a l l y and r e g i o n a l l y t h e s w i n g i n h o u s e - b u i l d i n g f o l l o w s w i t h a l a g the swing i n t h e p o p u l a t i o n a g e d 20-44 as d e t e r m i n e d b y m i g r a t i o n ... The i n v e r s e r e l a t i o n b e t w e e n i n t e r n a l and e x t e r n a l m i g r a t i o n i s c l e a r l y shown. When i n t e r n a l m i g r a t i o n was high, e m i g r a t i o n was low; and i t was i n t h o s e y e a r s t h a t b u i l d i n g , w i t h a l a g , e x p a n d e d ; t h e opp o s i t e o c c u r r e d when i n t e r n a l m i g r a t i o n was low and e m i g r a t i o n was h i g h . The s w i n g s i n h o u s e - b u i l d i n g conform t o the swings i n the migration-dominated curve of population change." 9 8  D r a w i n g on on  the  recent  b u i l d i n g f l u c t u a t i o n s and  States,  Thomas r e a f f i r m s t h e  Economic  Growth.  The  the major determinant the  researches  economies o f Great The  existence of  o f Burnham  demographic  changes i n the  conclusions  o f Migration  mechanism o f t h e m i g r a t i o n i n the  Campbell  process  Britain  and  of  and  cycle is  interaction  the United  United  between  States.  a r e a l b u i l d i n g c y c l e d e t e r m i n e d by  gration  c o n t r a d i c t s Habakkuk's c l a i m t h a t t h e  only  was  trade  of r e g i o n a l  the  Ibid,  p.  cycle.  The  relative  similarity  real  mi-  cycle  17.  99 Burnham 0. C a m p b e l l , Population Change and Building ( B u r e a u o f E c o n o m i c and B u s i n e s s R e s e a r c h , 1 9 7 0 ) .  Cycles,  92  building patterns, not  ( e x c l u d i n g London and South W a l e s ) , does  s u p p o r t Habakkuk's c o n j e c t u r e  about l a c k o f s y n c h r o n i z a t i o n  between r e g i o n a l f l u c t u a t i o n s . The building  d e b a t e t h a t h a s g r o w n up a r o u n d t h e p r o b l e m o f h o u s e i n Great B r i t a i n does, t o a l a r g e extent,  substantive  issues.  limitations  imposed by t h e c h o i c e  ure.  involve  Y e t one c a n n o t h e l p b u t be aware o f t h e o f a unique p o i n t o f  depart-  Thomas i s s u r e l y c o r r e c t i n e m p h a s i z i n g t h e r o l e o f p o p u l -  a t i o n and l o n g waves i n i n t e r n a t i o n a l and i n t e r n a l but  a migration  not  l e m m i n g s , t h e y move f r o m o n e a r e a  migration,  c y c l e c a n n o t be t a k e n as a datum. P e o p l e a r e t o another f o r a wide  v a r i e t y o f r e a s o n s ; many a r e e c o n o m i c , b u t some a r e n o t . Implicit  i n the debate i s the question  e x t e r n a l and i n t e r n a l , t o o k p l a c e ;  o f why m i g r a t i o n ,  i ti s at this  juncture  both that  more l i g h t n e e d s t o b e s h e d . From t h i s b r i e f d i s c u s s i o n i t i s c l e a r t h a t t h e m a i n s t r e a m of debate over p r o f f e r e d explanations B r i t i s h house-building  Very l i t t l e  t o some o f t h e more i m p o r t a n t  dearth is  section.  of information.  at the l o c a l  i n s t i t u t i o n a l problems r a i s e d i n  To some e x t e n t  t h i s may b e o w i n g t o a  Y e t one s u s p e c t s  level.  around  a t t e n t i o n has been d i r e c t e d  that the r e a l  t h a t t h e s e i n s t i t u t i o n a l p r o b l e m s r e q u i r e more  study  swings i n  f r o m 1860 t o 1914 h a s c e n t e r e d  a few p r o m i n e n t f a c t o r s .  the previous  of the long  reason  concentrated  CHAPTER  THE  REGIONAL AND  IV  PROBLEM OF AGGREGATION: REGIONAL LOCAL BUILDING CYCLES  LOCAL DIFFERENCES IN THE  AND  COURSE OF  HOUSE-  BUILDING A C T I V I T Y Various Britain bate Of  aspects  of  the b u i l d i n g i n d u s t r y i n  Great  h a v e become t h e  s u b j e c t o f much r e s e a r c h  and  among e c o n o m i c h i s t o r i a n s i n t h e  special  industry  interest,  played  economy, b u t  not  as we only  a l s o i n the  have seen,  i n the  growing  fifteen  i s the  role  the  interest  years. this  development of the  f u n c t i o n i n g o f what we,  o t h e r s , h a v e r e f e r r e d t o as response to the  past  "Atlantic  domestic  following  economy".  s t u d i e s have produced n a t i o n a l i n d i c e s of  ing  and  ever, the  has  course  h o u s e rents.''"  centered  around the  of B r i t i s h  The  In  i n aggregate a n a l y s i s a  number o f costs  de-  build-  g r e a t e s t a t t e n t i o n , how-  appearance of  house-building  after  long 1860.  swings i n Much  of  See, f o r e x a m p l e , K. Maywald, "An I n d e x o f B u i l d i n g C o s t s i n t h e U n i t e d Kingdom, 1845-1938", Economic History Review, V o l . V I I ( 1 9 5 4 ) , pp. 187-203: H.W. S i n g e r , "An I n d e x o f U r b a n L a n d R e n t s and House R e n t s i n E n g l a n d and W a l e s , 1845-1913", Econometrica, V o l . IX ( J u l y - O c t o b e r , 1 9 4 1 ) ; A.K. Cairncross, Home and Foreign Investment, pp. 212-216; B. Weber, "A New I n d e x o f House R e n t s f o r G r e a t B r i t a i n , 1874-1913", Scottish Journal of P o l i t i c a l Economy, V o l . V I I ( F e b r u a r y , 1 9 6 0 ) , pp. 232-237. 93  94  the d i s c u s s i o n  i n Chapter  I I was  concerned  phenomenon and  t h e most i m p o r t a n t  with  attempts  this  t h a t have been  made t o c o n s t r u c t a n a t i o n a l m e a s u r e o f f l u c t u a t i o n s building veyed to  activity.  last  the v a r i o u s hypotheses  explain  have are,  In the  this  been  behavior.  formulated  c h a p t e r we  t h a t have been put  In g e n e r a l t h e s e  in highly  when t h i s  important  and  o f w h i c h one  a g g r e g a t i v e approach  sur-  forward  explanations  a g g r e g a t i v e terms.  h o w e v e r , a number o f m e t h o d o l o g i c a l  become v e r y  briefly  problems  must be  i s used  in  There that  fully  aware  for analytical  pur-  poses. The has  a local In  the  housing  i s a l o c a l market  and t h e r e f o r e  equilibrium.  Chapter  course  market  I we  stressed  the  importance  of house-building at a l e v e l  (of  of a n a l y z i n g aggregation)  w h e r e t h e u n d e r l y i n g b e h a v i o r a l i m p l i c a t i o n s were  consistent  with h i s t o r i c a l  To  an  fact.  This i s a c r i t i c a l  e x p l a n a t i o n o f t h e b e h a v i o r o f an  residential  c o n s t r u c t i o n by  measures such  as,  comparing  aggregate  annual  increase in total  dex  of the  cost of c r e d i t  the y i e l d  of  aggregate  rent index,  p o p u l a t i o n , or perhaps  e.g.  attempt  index  i t to other  f o r example, a n a t i o n a l  net  point.  on  21/2%  the  some i n -  Consols,etc.,  95  is  a hazardous  exercise  and may b e s e r i o u s l y  A p l a u s i b l e r e l a t i o n s h i p suggested a n a l y s i s may d i f f e r  significantly  at this from  many o f t h e i n d i v i d u a l towns o r r e g i o n s aggregate house-building true  i ftheir  exist  index.  considerable  that  misleading.  level of existing in  included  This w i l l  i n the  be e s p e c i a l l y  d i f f e r e n c e s i n l o c a l and 2  regional house-building This  patterns.  p r o b l e m h a s n o t gone w i t h o u t  recognition.  It  3 has  been d i s c u s s e d  ( a l l too b r i e f l y )  by C a i r n c r o s s  and  4 Derksen among o t h e r s ; y e t a s L e w i s p o i n t s o u t "some o f t h o s e who h a v e made i t h a v e p r o c e e d e d t o i g n o r e i t , o r  5 minimize  i t s importance."  Saul, "House-Building i n E n g l a n d , 1890-1914", p . 122; L e w i s , " B u i l d i n g C y c l e s : A R e g i o n a l M o d e l and i t s N a t i o n a l S e t t i n g " , p . 520. A g o o d example was p r e s e n t e d i n C h a p t e r I , w h e r e i n a one c o u n t r y , two r e g i o n m o d e l i n t e r n a l m i g r a t i o n was assumed t o b e c a u s i n g a d r a m a t i c d i v e r g e n c e o f regional house-building patterns. I n t h i s c a s e an a n a l y s i s i n a g g r e g a t e t e r m s w o u l d b e i n c a p a b l e o f p r o v i d i n g an a c c u r a t e e x p l a n a t i o n o f t h e o p e r a t i v e c a u s a l mechanism i n t h e c o u r s e o f r e s i d e n t i a l construction a t e i t h e r the n a t i o n a l or r e g i o n a l level. 3  C a i r n c r o s s , Home and Foreign  Investment,  p . 11.  4 D e r k s e n , "Long C y c l e s E x p l a n a t i o n " , p . 100. 5  Lewis,  i n Residential Construction:  "Building Cycles:  A Regional  M o d e l " , p . 520.  An  96  In r e c e n t y e a r s  a number o f n o t e w o r t h y  6 Richards duced  and  Kenwood,  a c o n s i d e r a b l e volume o f  substantial ing  Lewis,  7  differences  patterns.  A  steady  in  Stockport after  in  Crewe, i n t e r u p t e d by  to  the F i r s t  9  Saul  and  local  evidence  indicating  regional  house-build-  in local  and  Lewis  have  r e c o v e r y of the b u i l d i n g a sharp  1902.  p e r i o d 1875  From  experienced  t o 1900  witnessed  an  almost  r e l a t i o n s h i p between the  c o t t o n town o f  and  Bristol  i r o n port of  London had proceeded to  1886  1896.  coal  and  a m i n o r downswing f r o m to r i s e  was  activity  Channel  ending  finally  G l a s g o w , on  1867  t o 1872  t o a m a j o r p e a k i n 1880;  f o l l o w e d by  a prolongued  1900 in  a major upswing  inverse the  industry  house-building also declined  while Coventry  pro-  downswing  only minor r e v e r s a l s .  Sheffield, The  8  189 5 c o i n c i d e d w i t h  W o r l d War  s t u d i e s by  trough  i n the upswing  that  after  perfect  Rochdale  Cardiff. and  a steady  then decline  in building g o t underway i n  the o t h e r hand, e x p e r i e n c e d  a boom i n  J . Hamish R i c h a r d s and J . P a r r y L e w i s , " H o u s e - B u i l d i n g i n t h e S o u t h W a l e s C o a l f i e l d , 1851-1913", Manchester School, V o l . XXIV ( S e p t e m b e r , 1 9 5 6 ) , pp. 289-301. 7  A.G. Kenwood, " R e s i d e n t i a l B u i l d i n g E a s t e r n E n g l a n d , 1853-1913", Manchester (May, 1963) pp. 115-128. 8  Saul,  "House-Building  i n England,  A c t i v i t y i n North School, V o l . XXXI  1890-1914", pp.  120-121.  Q Lewis,  Building  Cycles  and  Britains  Growth,  passim.  97  house-building the  next  five  recovery of  traced  1865 t o 1876; a p r e c i p i t o u s  y e a r s was f o l l o w e d  towns t h a t  followed  and B i r m i n g h a m r e v e a l  quite  ween many towns, h o w e v e r , sample) p o i n t s  fall  long  over  gradual  There  were,  s i m i l a r courses.  t h e same c y c l i c a l  b y G l a s g o w a f t e r 1874.  tensive  by a v e r y  t o t h e d o u b l e p e a k o f 189 8-190 2.  course,  Salford  from  The d i s t i n c t  (the above l i s t  Both  pattern  contrast  i s only  a  betsmall  t o t h e n e e d f o r and i m p o r t a n c e o f more i n -  study o f the r e g i o n a l or l o c a l  house-building  ex-  perience.  A  REGIONAL MODEL OF HOUSE-BUILDING The  model p r e s e n t e d below i s used here o n l y  basic  r e l a t i o n s h i p s t h a t may b e e x p e c t e d  local  or regional  has  n o t been  forms w i l l pressed J.  Parry  Lewis'^  of housing  cycles  some i n d i c a t i o n o f e x p e c t e d  i n the discussion.  can be found  t o e x i s t a t the  The s t r u c t u r e o f t h e r e l a t i o n s h i p s  s p e c i f i e d , although  follow  here  level.,  i n a very  Many o f t h e i d e a s  ex-  i n t e r e s t i n g a r t i c l e by  i n which a s i m p l i f i e d , l i n e a r  regional  model  i s developed.  We b e g i n b y d e f i n i n g a h o u s i n g m a r k e t  Lewis,  to i l l u s t r a t e  "Building Cycles:  area  A Regional Model",  the boundaries  passim.  98  of which a r e determined by t h e d i s t a n c e to t r a v e l (e.g.  t o work.  valley)  This  region  a r e e m p l o y e d i n two l o c a l i n d u s t r i e s .  The  primary industry  and  labour  textiles.  may b e a s i n g l e t o w n o r a  i n w h i c h a number o f c o m m u n i t i e s a r e l o c a t e d .  C a p i t a l and l a b o u r  component.  people are w i l l i n g  employing the m a j o r i t y  p r o d u c e s a commodity w i t h  of l o c a l  a large external  Examples m i g h t be c o a l f o r e x p o r t o r The s e c o n d i n d u s t r y  i m p o r t s f o o d and o t h e r goods and s e r v i c e s .  are  fixed with  of rents  demand  cotton  i s house-building.  ity  the exception  capital  The communA l l prices  (thep r i c e of housing  accommodations) and t h e p r i c e o f t h e commodity p r o d u c e d by the  primary industry.  will  be r e f e r r e d t o as c o t t o n The  a by  For convenience, the l a t t e r  demand f o r c o t t o n  function  of i t s price  the variable  (X). D  C  textiles.  textiles  (D ) i s a s s u m e d t o b e  (p) a n d e x t e r n a l  factors  summarized  Thus,  = f j j (p,X)  where d f ^ / d p < 0 and d f ^ / d The  commodity  (1)  X > 0.  rate a t which cotton  textiles  are supplied  c d e p e n d s on t h e amount o f l a b o u r (n ) a n d c a p i t a l ployed i n the cotton t e x t i l e industry:  (S )  c (k ) em-  99  S  The  cotton  the  level  textile  of labour  i n which the t o t a l  > 0, d g £ / d w  C  of cotton  wage  b  textiles  r a t e s may  would be e s p e c i a l l y  labour  true  level  (w .)  force  (P) i s  ,...  (3)  < 0 a n d d g ^ / d P > 0.  messy,  i t should  be  supply  reco-  i n the  i n r e s p o n s e t o a change i n  involve a considerable  P, t h r o u g h m i g r a t i o n , The  available to  *c (n ) d e p e n d s on c b  that the adjustment o f the labour  relative  lag.  i f t h e mechanism r e q u i r e d  This a change  f o r example.  o f wages i n t h e p r i m a r y  i n d u s t r y i s assumed  be some f u n c t i o n o f t h e p r i c e o f o u t p u t ( p ) :  w  C  support  This  as an a c c u r a t e  wages i n c o t t o n  (4)  = h ^ (p)  w h e r e d h ^ / d p > 0. to  the supply  i t i s mathematically  production  to  (2)  C  T h i s may b e r e p r e s e n t e d a s *c n , c b n = g (w , w , P)  where d g £ / d w  in  C  i n d u s t r y i s changing  a s t h e way  Although  (n ,k )  o f wages i n t h e two i n d u s t r i e s , (w ) a n d  changing.  gnized  =  r a t e a t which  the  as w e l l  C  textiles.  a s s u m p t i o n may be r a t h e r  difficult  d e s c r i p t i o n of the determination On t h e o t h e r  hand,  i t does  of  conform  100  closely shall  to the process i n the coal mining industry, see i n t h e next c h a p t e r .  I n a n y c a s e , i t may  b e a l l t h a t much a t r a v e s t y o f t h e  d e p e n d on r e l a t i v e  rates  employed i n the p r i m a r y i n d u s t r y industry supply  This  may k  where d g / d r c k  C  be = g  c  and  textile  the l e v e l  d h^/d w  C  k  (r , r C  k  industry o f wages.  r  and  of return  ( r ) and t h e  textile  to  capital  construction  c  = h£  capital  written  > 0, d g / d r c  The r a t e o f r e t u r n cotton  f o r cotton  ( r ) , as w e l l as t h e b e h a v i o r o f t h e t o t a l  (K).  not  facts.  Changes i n t h e s u p p l y o f c a p i t a l production  a s we  b  ,  (5)  K)  < 0 and d g / d K > 0 c  b  k  (or rate of p r o f i t a b i l i t y )  i n the  depends on t h e p r i c e o f t h e o u t p u t Thus  (w°, p)  (6)  < 0, d h^/d p > 0.  The p r i c e o f c o t t o n  textiles  depends on t h e s t a t e o f  the market; p r i c e changes a r e r e l a t e d t o t h e l e v e l demand o r s u p p l y .  We  of excess  write  p = hP  (D , c  S ) C  (7)  101  where d h / d c  f  p  We for  now  (D ) i s r e l a t e d  i n income  wage r a t e s .  where d f£/d The  = f£  b  be  d f£/d  sector.  The  with  changes  For in  demand  convenience,  industrial  (8)  w) b  0 and d f ^ / d  d f^/d w > C  o f houses i s r e p r e s e n t e d  t h e amount o f l a b o u r  total  (P), i . e . , our  (R) and i n c o m e s .  R < 0,  current r a t e of supply  of  0.  written  C  stock  <  to population  (P, R, w ,  P > 0,  total  s  c  are i d e n t i f i e d  T h i s may  D  f  the housing  force variable, rents  changes  the  p  consider  houses  labour  > 0 and d h / d c  d  c  (S ) i s assumed  ID (n ) and c a p i t a l  by  t o be  (S ) ,  w> b  thus  a function  b (k ) e n g a g e d i n  house-building: S with  d f£/d The  = f£  b  n  b  (9)  (n , k ) b  b  > 0 and d f£/d  k  b  r a t e a t which the supply  >  0.  of house-builders  changes  •b (n  ) depends,  of  wages i n t h e two  taking  as i n t h e c a s e  of cotton t e x t i l e s ,  on t h e  i n d u s t r i e s as w e l l as e x o g e n o u s  place i n the t o t a l labour "b n , b c *. n = g (w , w , P)  force.  Thus  b  and d gJVd w  b  > 0, d gP/d w  C  <' 0, and d gJJ/d P > 0.  level  changes /~i f\\  (10)  0.  102  H e r e a l s o , we ployment direct  to  can  assume a l a g g e d  industry  some e x t e n t  strained  by  assuming  full  The  of  the  new  by  (R)  b  the  a v a i l a b l e to  relative of  of  be  the  return  rates total  capital  determined.  primary  i s conindustry,  the  as  return  capital  of  industry  i n the  stock  two  (K)  through the rate  and formof  follows:  + B  C  (11)  to c a p i t a l  costs  of  building  Changes i n t h i s  ( r ) i s assumed t o be  and  the  generated  (B).  expressed  = K - k  rate of  houses  rates  i n the  a  that b u i l d -  of b u i l d i n g a c t i v i t y  production  behavior  may  k  of  of  capital  supply  supply  The  (exogenously)  level  of b u i l d i n g s o c i e t i e s  capital  i s , in part,  em-  employment.  independent  ation  This  a d d i t i o n a l assumption  the  level  d e p e n d on  industries, an  the  supply  will  b  an  institutionally  Thus, to  (k )  requirements.  consequence of  i n g wages a r e  response of b u i l d i n g  employed  i n the  a function  construction,  here  of  supply rental  represented  (w ); b  r  where d h£/d  b  = h£  R > 0 and  (R,  w)  (12)  b  d hj/d w  b  <  0.  103  The supply ges is  level  of rents  and demand  i s related  to the conditions  i n t h e h o u s i n g m a r k e t as a w h o l e .  i n this level will  d e p e n d on t h e e x t e n t  and  f o r how  rents the  long  t h i s has p e r s i s t e d .  are sticky w i l l  there  accommodation  The d e g r e e t o w h i c h  i n l a r g e measure d e t e r m i n e t h e l e n g t h  l a g i n the b u i l d i n g  demand.  Chan-  to which  an e x c e s s demand f o r o r s u p p l y o f h o u s i n g  of  i n d u s t r i e s response t o changes i n  Thus  R = h£  ( D , b  S )  (13)  b  w h e r e d h ^ / d f £ > 0 and d h ^ / d f£ < 0. T h e s e t h i r t e e n e q u a t i o n s make up o u r r e g i o n a l Of  t h e 18 v a r i a b l e s ,  K, B, w  .  Assuming  5 a r e e x o g e n o u s l y d e t e r m i n e d : X, P, the s t r u c t u r a l s p e c i f i c a t i o n s of the  m o d e l r e s u l t s i n 13 i n d e p e n d e n t a n d c o n s i s t e n t it  i s possible  through  endogenous v a r i a b l e s  successive  to derive  house-building  as a f u n c t i o n  four  variables:  exogenous  V  where V,  n  ... V  ~rT dt  model.  +  +  V  are algebraic  elimination  of the  a single equation  of population  I  equations,  =  F  functions  expressing  and t h e o t h e r  (X,P,B,K,w ) b  (14)  of the s t r u c t u r a l  104  p a r a m e t e r s and n i s d e t e r m i n e d by t h e s p e c i f i c a t i o n o f the model. This  expression  captures  the various  forces, both  i n t e r n a l a n d e x t e r n a l , t h a t come t o b e a r o n t h e h o u s i n g th sector,  i n a single n  order  differential  There a r e s i x p a r t s t o i t s s o l u t i o n .  One c o m p o n e n t i s  d e r i v e d from the c h a r a c t e r i s t i c equation setting  the l e f t  d s h  v  n ~yr dt  hand s i d e e q u a l +  • • •  We c a n e x p e c t t h i s  +  v  i at -  equation  =  0  or  give r i s e to cycles.  ( 1 5 )  t o have a t l e a s t one r e a l  n r o o t s w i l l be r e a l , however; t h u s ,  probably  by  b  r o o t w h i c h may b e e x p l o s i v e o r damped. all  obtained  to zero.  ds  b  equation.  I t i s unlikely  that  a solution w i l l  T h e s e , a l s o , may be damped  explosive. I n a d d i t i o n t o t h e component  racteristic each d e r i v e d  equation,  there  a r i s i n g out o f the cha-  a r e f i v e a d d i t i o n a l components,  f r o m one o f t h e exogenous v a r i a b l e s on t h e  r i g h t side of the equation  . I f any one o f t h e s e  subject to c y c l i c a l behavior,  t h e n t h i s w i l l be  factors i s reflected  ''""'"The f u n c t i o n F w i l l c o n t a i n o n e o r more d e r i v a t i v e s o f each o f t h e exogenous v a r i a b l e s .  105  on h o u s e - b u i l d i n g  activity.  For  example, the  existence  of t r a n s p o r t - b u i l d i n g c y c l e s overseas i n developing t r i e s with a high marginal textiles in  propensity  ( o r c o a l , e t c . ) may  to import  domestic r e s i d e n t i a l c o n s t r u c t i o n through changes i n D e p e n d i n g on  lag  s t r u c t u r e of our model, these  the  strength of these  c l o s e l y or i n v e r s e l y the p a t t e r n Our bility.  p o p u l a t i o n v a r i a b l e may I f there  l i n k a g e s and  f l u c t u a t i o n s may  o f any  specific  a l s o be  a source  i s a natural migration  regional factors),  these  realistic  t o argue t h a t r a t e s of e m i g r a t i o n  r e g i o n a l model  a n a t i o n a l model) w i t h i n t h e c o n t e x t up  I t m i g h t be  a n a t i o n , i s s u b j e c t t o two  e n c e s : one  i s the  more  differentials.  (P) c o u l d t h e n h a v e such  (as o p p o s e d t o  of other  important  be  are r e l a t e d to  exogenous component p l u s a component r e l a t e d t o The  insta-  (independent  i n t e r - n a t i o n a l wage  r a t e of increase of t o t a l population  of  movements w i l l  i n local building construction.  wage d i f f e r e n t i a l s .  follow  c y c l e , o r i f de-  reflected  i n t e r r e g i o n a l as w e l l as  the  abroad.  v e l o p m e n t s a b r o a d cause waves o f e m i g r a t i o n  an  cotton  generate s i m i l a r f l u c t u a t i o n s  X.  The  coun-  regions  demographic  simply making  influ-  f l o w of p o p u l a t i o n between r e g i o n s , the  other  12 is. the  f l o w between  nations.  12 I n a d d i t i o n , t h e p o p u l a t i o n c u r v e may h a v e a n a t u r a l g r o w t h c o m p o n e n t as w e l l as a s u p e r i m p o s e d o s c i l l a t o r y g r o w t h c o m p o n e n t . T h e s e c h a r a c t e r i s t i c s w o u l d t h e n a l s o be p r e s e n t i n t h e b u i l d i n g curve.  106  Although the  other  source of c y c l i c a l e x t e r n a l demand  exogenous v a r i a b l e s are  i n f l u e n c e , we  (X)  and  can  population  a potential  expect conditions behavior  (P)  t o be  most i m p o r t a n t v a r i a b l e s w o r k i n g t h r o u g h the  function  The  subject  capital  factor  fluctuations ments, but  (K)  f o r e x a m p l e , m i g h t be  t h i s c o u l d be  t o d e f i n e more c l e a r l y w h a t t h e v a r i a b l e  sents.  C a p i t a l made a v a i l a b l e t o t h e activities  construction  regional  b u i l d i n g s o c i e t i e s or  t o e x i s t i n g ones i n o r d e r  The  w h i c h may  be  increased  to transform  sales of the  payne-  repre-  industry reasonably  formation subscriptions  increased  housing  construction.  regional pattern  s o l u t i o n of  to  population.  T h u s , a wave o f i n - m i g r a t i o n w o u l d r e s u l t i n t h e  need i n t o a c t u a l  (K)  of b u i l d i n g s o c i e t i e s might  e x p e c t e d t o f o l l o w changes i n the  o f new  F.  d e t e r m i n e d i t w o u l d be  cessary  be  the  r e s u l t i n g f r o m movements i n t h e b a l a n c e o f  before  through the  of  equation  (14)  s u m m a r i z e d as  of b u i l d i n g a c t i v i t y will  given  by  the  have s i x a d d i t i v e components  follows:  a)  A component r e s u l t i n g from t h e i n t e r n a l s t r u c t u r e o f t h e r e g i o n a l economy, w h i c h may be damped o r e x p l o s i v e , and w h i c h may be c y c l i c a l .  b)  A component a r i s i n g o u t o f p o p u l a t i o n m o v e m e n t s , w h i c h may r e f l e c t b o t h g r o w t h and c y c l e s .  107  c)  A component due demand.  to  d)  Potential cyclical t h e b e h a v i o r o f K.  Endogenous c y c l e s  fluctuations in  external  components r e s u l t i n g B. and w .  i n house-building  s i m p l e m o d e l d e v e l o p e d by  from  g e n e r a t e d by  L e w i s were f o u n d  t o be  the  heavily  damped.  "... h e a v y damping seems t o be more p l a u s i b l e c o u r s e o f e v e n t s i n an economy o f t h e k i n d we a r e consideri n g when l o o k i n g a t t h i s c h a r a c t e r i s t i c equation. With a c o n s t a n t p o p u l a t i o n and e x t e r n a l demand i t d o e s n o t seem l i k e l y t h a t w o r k e r s w i l l move t o and f r o m c o a l t o b u i l d i n g w i t h o u t s e t t l i n g down t o some approximate e q u i l i b r i u m long before e i g h t e e n y e a r s have p a s s e d .  If  there  i s t o be  building,  i t will  destabilizing  an  undamped r e g i o n a l  p r o b a b l y be  fluctuations  IMPLICATIONS OF  THE  BUILDING AT  NATIONAL  In  THE  analyzing  the  Lewis,  i n the  exogenous  THE  i n house-  recurrent  components.  COURSE OF  HOUSE-  LEVEL.  have emphasized  building cycle  "Building  cycle  a consequence of  REGIONAL MODEL FOR  t h i s c h a p t e r we  long  Cycles:  the  r e g i o n a l l y or  A  importance  of  locally.  Two  R e g i o n a l M o d e l " , p.  531.  108  important  reasons have been g i v e n  thodological rical  position.  evidence  significantly  i s extensive  the course o f house-building  i s by i t s v e r y n a t u r e  mechanism o f t h e b u i l d i n g  termined only  there  among many d i f f e r e n t towns.  h o u s i n g market "the  that  First,  i n support of t h i s  by t h i n k i n g  empidiffered  Second, t h e  a local  cycle  m a r k e t , and  can be p r o p e r l y  of regional  me-  or l o c a l  de-  cycles i n  14 their that of  natural  aggregate a n a l y s i s  little  prosperity and  local  thus of  find  o r no v a l u e .  conditions  o f c o u r s e , does n o t imply  b a s e d on n a t i o n a l b u i l d i n g d a t a i s A period  of over-riding  favorable  throughout  e f f e c t on  the country.  the course o f house-building  a r e a s t o be f o l l o w i n g the national  p r o b a b i l i t y be h i g h e r  circumstances, broad of  This,  may h a v e a v e r y  such p e r i o d s all  setting."  relatively total  national regional  We  might  i n a wide  range  similar patterns.  of house-building  than a t other  generalizations  times.  During  will in Under  such  based on t h e a n a l y s i s  a g g r e g a t e m e a s u r e s may b e b o t h m e a n i n g f u l and i l l u m i n a t i n g .  A p r o b l e m a r i s e s , h o w e v e r , when t h e p a t t e r n dissimilar  (as w e l l  nificantly  diverse  Ibid,  p.  533.  as s i m i l a r ) on a r e g i o n a l  of response t o  economic c o n d i t i o n s or local  basis.  i s sig-  An a r g u m e n t  109  in  aggregative  terms w i l l  now i n e v i t a b l y  r e s u l t i n con-  clusions that are misleading. L e t us c o n s i d e r o r more r e g i o n s beginning these  a country  defined along  of the l a s t  section.  i n which there the l i n e s  above, although  structural  similar  specifications.  t o those  Thus, i n each r e g i o n b u i l d i n g  = f ( t ) + F(X,P,B.  b  each o f  w i t h d i f f e r e n t p a r a m e t e r s and  a c t i v i t y may b e d e s c r i b e d b y an e q u a t i o n  S  two  indicated at the  We c a n r e p r e s e n t  regions with a s e t of equations  listed  exist  of the form  ... )  where f ( t ) i s t h e endogenous p a r t o f t h e s o l u t i o n determi n e d by t h e i n t e r n a l and  derived  represents  s t r u c t u r e o f t h e r e g i o n a l economy  from t h e c h a r a c t e r i s t i c  that part of the s o l u t i o n a r i s i n g  exogenous components.  To t h e e x t e n t  regional trade, migration or capital behavior  equation.  The F f u n c t i o n from t h e  that there i s i n t e r flows, etc., the  o f t h e e x o g e n o u s v a r i a b l e s i n one r e g i o n w i l l  the behavior  o f t h e same v a r i a b l e s i n o t h e r  regions.  A more e l a b o r a t e m o d e l c o u l d b e s p e c i f i e d i n t o account these variable  inter-regional flows.  affect  t o take  The l a b o u r  force  ( P ) , f o r example, w o u l d t h e n have an endogenous  110  component r e l a t e d as  well  as an e x o g e n o u s component.  wage r a t e s to  t o , s a y , i n t e r - r e g i o n a l wage  This  f o r e i g n wage r a t e force  variable.  models t h a t here,  could  There are c l e a r l y be s p e c i f i e d .  At  come  times there  various  cycles,  several  may  be c o n s i d e r a b l e  amplitude  regional  considering  and demand  regional  differences  equations w i l l  and p e r i o d  an a g g r e g a t e b a l a n c e  show up as a p l a t e a u  local  In terms o f o u r model,  patterns  terms o f t h e n a t i o n a l  that  exhibit  of which,  will  t o imagine a case i n  a r e out o f phase a r e  i n terms o f volume  i n a national patterns  i n t e r m s o f t h e e x p o r t demand  others  i n terms o f changes s p e c i f i c  changes.  building  may h a v e an  demand f o r l i g h t  others  industry.  number o f  as p r i m a r i l y g o -  of supply  I t i s not d i f f i c u l t  One o r more o f t h e s e  labour  about.  will  the phasing,  maintaining This  are simply  conditions  regional building-supply  be d i f f e r e n t .  which  in  We  the course o f house-building.  all  an i n f i n i t e  fluctuations i n residential building  h o w e v e r t h e y may  the  f o r by i n c o r p o r a t i n g t h e  i n t o t h e e x o g e n o u s component o f t h e  could  that  factor i n the decision  be a l l o w e d  v e r n e d by changes i n l o c a l  in  I t m i g h t be a r g u e d  overseas are a relevant  emigrate.  differentials,  index. explanation  manufactured  for coal,  and  to the cotton  goods,  still textile  The s t a b l e b e h a v i o r o f t h e a g g r e g a t e i n d e x  fails  Ill  to  i n d i c a t e these  of  t h e n a t i o n a l p a t t e r n by comparing  ing  index  to other  sures w i l l , in not is  differences.  house-building other  circumstances,  applicability).  d e s i r a b l e t o look  At  a t the l o c a l times,  of a specific  house-building, perhaps, leads all  build-  invariably erroneous  For this  i n greater detail  result ( i . e . do  reason  alone i t  a t the course o f  s e v e r a l r e g i o n a l upswings  local  i n residenti  T h i s may b e due t o f o r t u i t o u s character  that are favorable to  o r a wave o f n a t i o n a l p r o s p e r i t y  from a f a v o r a b l e s h i f t  (resulting  i n t h e terms o f t r a d e )  t o s i m i l a r movements o f c o m p a r a b l e v a r i a b l e s  regions.  result.  In e i t h e r  case  that  across  a n a t i o n a l b u i l d i n g boom  B u t as Lewis p o i n t s o u t , t h i s  high b u i l d i n g a c t i v i t y  mea-  level.  c o n s t r u c t i o n may c o i n c i d e . events  the aggregate  t h a t a r e t o some e x t e n t  have g e n e r a l  an e x p l a n a t i o n  a g g r e g a t e e c o n o m i c and d e m o g r a p h i c  under these  conclusions  To h a z a r d  will  period of generally  may come t o an end i n two d i f f e r e n t  ways. " I t may b e t h a t i n s e v e r a l o f t h e r e g i o n s t h e v a r i o u s l o c a l demands become q u i c k l y s a t i s f i e d so t h a t t h e r e a r e f e w e r and f e w e r r e g i o n s o f high a c t i v i t y . T o t a l demand f a l l s b e c a u s e l o c a l demands h a v e become e x h a u s t e d f o r q u i t e n a t u r a l and p o s s i b l y d i f f e r e n t r e a s o n s . On t h e o t h e r h a n d t h e r e may b e s o many l o c a l booms o f i n t e n s i t y t h a t e v e n t u a l l y t h e s t r a i n  112  on n a t i o n a l r e s o u r c e s becomes t o o g r e a t . T h e r e a r e n o t e n o u g h men, m a t e r i a l s , o r c r e d i t t o a l l o w t h e boom t o c o n t i n u e . " 1  Now,  5  i f i t i s p l a u s i b l e t o speak o f a l i m i t o r c e i l i n g  on  the national level of b u i l d i n g a c t i v i t y  by  the a v a i l a b i l i t y  of scarce  imposed p r i m a r i l y  n a t i o n a l resources  ment i n t h e c o n s t r u c t i o n o f d w e l l i n g s ,  f o r employ-  then i t m i g h t be  p o s s i b l e t o d i s t i n g u i s h between major f l u c t u a t i o n s i n housebuilding the  t h a t have l o c a l o r r e g i o n a l o r i g i n s  ( i . e . l i e below  c e i l i n g ) and those t h a t have t h e i r e x p l a n a t i o n  limitations  imposed by the supply  i n the  of n a t i o n a l resources  (i.e.  reach the c e i l i n g ) . If  such a d i s t i n c t i o n  each major downturn should be  a mistake t o apply  i s p o s s i b l e i t would imply be s t u d i e d  the explanations  separately.  I t would  of those with  or r e g i o n a l o r i g i n s t o a l l major downturns.  that  local  This, then, i s  a n o t h e r r e a s o n f o r e x a m i n i n g more c l o s e l y t h e r e g i o n a l a n d l o c a l components o f a g g r e g a t e h o u s e - b u i l d i n g  indices.  I n t h e f o l l o w i n g c h a p t e r s we p r o p o s e t o do t h i s coal mining region gion  o f South Wales and t h e c o t t o n  of South-east Lancashire.  The i d e a s  textile re-  underlying  n e r a l r e g i o n a l model o u t l i n e d i n t h i s c h a p t e r p r o v i d e  Ibid.  f o r the  t h e gea  I  useful  conceptual  of  house-building  we  will  arising  focus out  framework f o r t h e s e r e g i o n a l activity  on  of  economy as w e l l  i n Great B r i t a i n .  t h o s e d e m o g r a p h i c and  studies Specifically,  economic  internal  structure  as  external  f o r c e s which transcend  to determine the  activity.  of  the  factors  the  gional boundaries house-building  113  regional  regional pattern  reof  CHAPTER V R E S I D E N T I A L CONSTRUCTION I N SOUTH WALES COALFIELD  A REGIONAL INDEX OF Bernard  THE  HOUSE-BUILDING I N SOUTH WALES  Weber p u b l i s h e d h i s a g g r e g a t e  c o n s t r u c t i o n i n Great  Britain  i n 1955.  The  index of  residential  following year,  a  comprehensive study of h o u s e - b u i l d i n g i n a p a r t i c u l a r r e g i o n South  W a l e s , was  Lewis.''"  The  undertaken  by  H a m i s h R i c h a r d s and  d e t a i l s o f p l a n s a p p r o v e d and  J. Parry  houses e r e c t e d  c o n t a i n e d i n t h e r e g i s t e r s o f numerous l o c a l a u t h o r i t i e s  were  2 the b a s i s of t h i s In of  this  study.  c h a p t e r we  h o u s e - b u i l d i n g i n South  i n d e x o f R i c h a r d s and w i t h the n a t i o n a l we  will  will  l o o k i n some d e t a i l  Wales as m a n i f e s t e d  Lewis.  (urban)  at the  i n the  A f t e r comparing these  pattern reflected  regional  results  i n Weber's  present a t e n t a t i v e e x p l a n a t i o n of the r e g i o n a l  c e , p l a c i n g s p e c i a l e m p h a s i s on  industrial  and  course  index experien-  demographic  factors  Hamis R i c h a r d s and J . P a r r y L e w i s , " H o u s e - b u i l d i n g i n t h e S o u t h W a l e s C o a l f i e l d , 1 8 5 1 - 1 9 1 3 " , Manchester School, Vol. X X I V ( S e p t e m b e r , 1 9 5 6 ) , pp. 2 8 9 - 3 0 1 . 2 E a r l i e r we n o t e d t h a t t h e e n f o r c e m e n t o f B u i l d i n g By-Laws i m p o s e d c e r t a i n r e s p o n s i b i l i t i e s on l o c a l a u t h o r i t i e s . L o c a l b y - l a w s g e n e r a l l y f o l l o w e d t h e g u i d e l i n e s i s s u e d by t h e Cent r a l B o a r d o f H e a l t h u n d e r t h e H e a l t h A c t o f 1848. Before c o n s t r u c t i o n c o u l d b e g i n b u i l d i n g p l a n s had t o be a p p r o v e d b y a Town S u r v e y o r a n d / o r a l o c a l b o a r d t h a t was s e t up a f t e r a c e r t a i n d e g r e e o f u r b a n i z a t i o n had been r e a c h e d . 114  115  unique t o South Wales. a more e x t e n s i v e the  lysis  f i n a l task  examination of the  r e g i o n a l index The  Our  t h a n has  local  components  statistics,  Weber i n h i s  gestation  i n c o n s t r u c t i o n , the  approval  individual  ana-  l a g between p l a n  period and  the v a r i a t i o n i n t e r m i n a l dates  actual  for  s e r i e s were a l s o r e l e v a n t c o n s i d e r a t i o n s  the  c o n s t r u c t i o n of a r e g i o n a l index.  for  these various  factors differed  e m p l o y e d b y Weber.  of  p r i m a r i l y those  a s s o c i a t e d w i t h boundary changes, the  c o n s t r u c t i o n and  on  p r e v i o u s l y been u n d e r t a k e n .  many p r o b l e m s t h a t c o n f r o n t e d  of house-building  i s t o embark  The  in  adjustments  i n method f r o m  those  I h a v e t h u s d e v o t e d some s p a c e t o  a  d i s c u s s i o n of t h i s problem i n Appendix I I . The is  r e g i o n a l index  presented  j u s t b e l o w Weber's i n d e x  i n Great B r i t a i n building trough  of h o u s e - b u i l d i n g  activity  i n 186 3.  i n Figure  4.  fifty  house-building  From a p e a k i n 1858,  i n this region In the  of  i n South Wales  fell  s t e a d i l y to a major  years that followed  fell  early  t h e m i n o r u p s w i n g t h a t f o l l o w e d , and  the  1870  of  centered  on  r e f l e c t the  N e w p o r t , A b e r d a r e and  low.  similar  Merthyr-Tydfil.  The  trough  the  never again 60's,  to a point t h i s  house-  experiences The  in  index the trough  Swansea,  major peak i n  the  116  Figure 4 HOUSE-BUILDING INDICES FOR GREAT BRITAIN AND SOUTH WALES  0 1860  1870  1880  1890  SOURCE: G r e a t B r i t a i n , Appendix I South Wales, Appendix I I  1860-1914  1900  1910  - See T a b l e XV,  1860-1913 - See T a b l e  XVII,  117  mid-seventies,  however, i s e x p l a i n e d p r i m a r i l y by t h e  very high a c t i v i t y dare, Merthyr  i n Swansea, C a r d i f f , Newport, A b e r -  Tydfil,  i n the r e g i o n a l index sharp  a n d L l a n e l l y M.B.  The d o w n s w i n g  f r o m 1876 t o 1879 r e s u l t s  from  d e c l i n e s i n a l l o f t h e towns m e n t i o n e d above  except  Cardiff. The  1 8 8 0 ' s saw a s u b s t a n t i a l  increase i n residential  construction.  I t has been argued t h a t t h e development o f  new c o l l i e r i e s  i n t h i s p e r i o d gave t h e i n d u s t r y  momentum after  to safely 3  1885.  the trade c y c l e that turned  A minor trough  inexorable rise p e a k o f 189 7.  absorb  sufficient down  i n 1888 i s f o l l o w e d b y an  i n the r e g i o n a l index t o the unprecedented T h i s i s e x p l a i n e d n o t o n l y by t h e c o n t i n u e d  g r o w t h o f new c o l l i e r y  towns, b u t a l s o by major  building  booms i n S w a n s e a , C a r d i f f , N e w p o r t , M o u n t a i n A s h , a n d Rhondda.  House-building  fell  precipitously after  a major trough  i n 1900.  index r e f l e c t s  a general trend w i t h major depressions  t h e towns r e p r e s e n t e d Aberdare,  This behavior  1897 t o  i n the regional  i n F i g u r e 9 except  a n d an u n u s u a l  building  spree  in a l l  Llwchwr, Ebbw-vale, i n Merthyr  Tydfil  c e n t e r e d on 1900-01.  R i c h a r d s and L e w i s , C o a l f i e l d " , p. 296.  "House-Building  i n t h e South Wales  118  The  first  decade of the Twentieth  a wide v a r i e t y of l o c a l p a t t e r n s . followed a d i s t i n c t in  the f i r s t  total  loss  and  Century  But  the r e g i o n a l index  impressive course.  A sharp  t h a t j u s t missed  recovering  three years  i n t h e p r e v i o u s t h r e e y e a r s was  minor r e v e r s a l  the  years.  a The  i n t o a m a j o r boom p u s h e d t h e r e g i o n a l  i n d e x t o an u n p r e c e d e n t e d h i g h i n 1910. index d e c l i n e s t h e r e a f t e r , r e f l e c t i n g in building activity  rise  f o l l o w e d by  i n 190 4, w h i c h l a s t e d o n l y two  recovery which turned  witnessed  The  South Wales  a general  depression  i n most towns b e f o r e t h e F i r s t  World  War.  DIFFERENCES BETWEEN THE B R I T A I N AND  THE  COURSE OF  SOUTH WALES C O A L F I E L D  A comparison of the course Wales w i t h t h a t r e f l e c t e d c o n s t r u c t i o n i n Great conclusions. had  fallen  steady  of h o u s e - b u i l d i n g i n South  i n Weber's i n d e x o f  Britain  l e a d s t o some  residential  interesting  I n 186 3, when h o u s e - b u i l d i n g i n S o u t h W a l e s  t o an e x c e p t i o n a l l y l o w  shows a m i n o r p e a k . c e n t e r e d on  HOUSE-BUILDING I N GREAT  1870  The  level,  Weber's  m i n o r p e a k i n 1867  a r e r o u g h l y matched by  upswing, r e s p e c t i v e l y i n  and  the  trough  a minor trough  Weber's s e r i e s .  b u i l d i n g boom o f t h e m i d - s e v e n t i e s  index  The  and major  i s a p r o m i n a n t phenomenon  119  reflected  i n both i n d i c e s .  The d o w n s w i n g t h a t  follows  reached bottom sooner i n the r e g i o n a l index than i n Weber's n a t i o n a l i n d e x o f r e s i d e n t i a l  construction.  Weber's s t u d y c o n v e y s t h e i m p r e s s i o n a generation  that  a f t e r 1879 , t h e B r i t i s h b u i l d i n g  was i n a p r o t r a c t e d  state of depression.  The 1 8 8 0 ' s  were marked by a f l u c t u a t i n g b u t d e f i n i t e r i s e activity.  industry  B u t t h i s was  c l e a r l y n o t t h e e x p e r i e n c e o f South Wales.  building  f o r almost  T h i s , h o w e v e r , was o n l y  i n house-  a prelude t o  t h e m a j o r b u i l d i n g boom o f t h e 1 8 9 0 ' s t h a t l e d t h e n a t i o n a l boom b y h a l f a d e c a d e . index,  centered  The m a j o r t r o u g h i n t h e r e g i o n a l  b e t w e e n t h e p e a k y e a r s o f 1897 a n d 1 9 0 3 ,  c o r r e s p o n d e d t o a minor d i p i n what o t h e r w i s e were y e a r s of  e x t r a o r d i n a r i l y high  national building activity.  The  s t e a d y d e c l i n e i n W e b e r ' s i n d e x f r o m 1903 i s n o t p a r a l l e l e d i n South Wales u n t i l after  a f t e r 1910.  1903 i s f o l l o w e d  gional  by an u n i n t e r r u p t e d  index f o r the next f i v e  The  the  of Great B r i t a i n .  extant  industrial  information  We w i l l  two-year  decline  r i s e i n the r e -  years.  a v a i l a b l e evidence points  i n the course of house-building parts  A slight  to significant  differences  i n South Wales and o t h e r now l o o k  i n some d e t a i l a t  on g r o w t h and f l u c t u a t i o n s , b o t h  and d e m o g r a p h i c , i n - S o u t h Wales i n an a t t e m p t  to r e l a t e the long  swings i n r e s i d e n t i a l c o n s t r u c t i o n n o t  120  only t o the r e g i o n a l path  o f i n d u s t r i a l growth, b u t a l s o  to t h e p a t t e r n o f development i n t h e whole o f Great Britain  and t h e " A t l a n t i c  economy" a s d e s c r i b e d  i n Chap-  ter I I I .  HOUSEBUILDING AND THE ECONOMIC DEVELOPMENT OF SOUTH WALES T h e r e a r e no a v a i l a b l e s t a t i s t i c s  on i n c o m e a n d  i n v e s t m e n t i n Wales f o r t h e p e r i o d under review.  But  t h e o u t p u t o f c r u d e s t e e l f r o m 1879 a n d t h e v o l u m e o f c o a l exports  f r o m S o u t h W a l e s p o r t s f r o m 1860 p r o v i d e  l y good i n d i c e s o f i n d u s t r i a l g r o w t h . a continuous valued  There a l s o  The in Figure  a  reasonable  t o f l u c t u a t i o n s i n income.  i n d u s t r i a l progress  o f S o u t h W a l e s may b e t r a c e d  5 w h e r e we h a v e a l s o r e p r o d u c e d t h e p r i m a r y  d i c a t o r s o f long  s w i n g s i n t h e " A t l a n t i c economy".  p a t t e r n o f d e v e l o p m e n t i s b y now a f a m i l i a r o n e . tions United  exists  s e r i e s o f t h e average p r i c e o f steam c o a l  f . o . b . C a r d i f f t h a t may b e c o n s i d e r e d  approximation  relative-  i n house-building  in-  The Fluctua-  and r a i l w a y c o n s t r u c t i o n i n t h e  S t a t e s were h i g h l y c o r r e l a t e d w i t h B r i t i s h  i n v e s t m e n t and merchandise e x p o r t s .  During  the expansion  p h a s e o f t h e l o n g c y c l e , w h e r e t h e r e was e x t e n s i v e ment i n c a p i t a l e q u i p m e n t i n N o r t h  foreign  invest-  America, the export  121 Figure 5  INDICES OF LONG SWINGS IN WALES AND THE "ATLANTIC ECONOMY", 1860-1914  (A)  M i l e s o f R a i l w a y t r a c k added i n t h e U n i t e d S t a t e s , 1860-1913. S o u r c e : Simon S. K u z n e t s , Secular Movements in Production and Prices, (New Y o r k : A u g u s t u s M. K e l l y , 1 9 6 7 ) , pp. 526-27.  (B)  Index o f t o t a l new b u i l d i n g i n t h e U n i t e d S t a t e s , 1860-1914. S o u r c e : C D . L o n g , Building Cycles and the Theory of Investment, (Princeton: Princeton University P r e s s , 1 9 4 0 ) , pp. 228-29.  (C)  I n d e x o f U.K. c a p i t a l e x p o r t s (1865=100) 1866-1912. S o u r c e : P a u l H. D o u g l a s , "An E s t i m a t e o f t h e G r o w t h o f C a p i t a l i n t h e U.K. 1865-1909", Journal of Economic and Business History, ( A u g u s t , 1 9 3 0 ) , p . 680.  (D)  Volume o f t o t a l e x p o r t s f r o m t h e U n i t e d Kingdom 18601913. ( O r i g i n a l d a t a as p e r c e n t a g e o f t r e n d ) . S o u r c e : B r i n l e y Thomas, Migration and Economic Growth (Cambridge: Cambridge U n i v e r s i t y P r e s s , 1954), p. 292.  (E)  S o u t h W a l e s C o a l E x p o r t s , 1860-1913. S o u r c e : F i n l a y G i b s o n , The Coalmining of the United Kingdom, ( C a r d i f f , 1921),  Industries p . 84.  (F)  S o u t h W a l e s C r u d e S t e e l o u t p u t 1879-1913. S o u r c e : B r i n l e y Thomas, The Welsh Economy, Studies in Expansion, ( C a r d i f f : U n i v e r s i t y o f Wales P r e s s , 1 9 6 2 ) , p . 22.  (G)  Occupied immigrants t o t h e U n i t e d S t a t e s from 1875-1914. S o u r c e : B r i n l e y Thomas, Migration and Economic p. 272.  Wales, Growth,  10000 A  5000  122  123  sector i n Great B r i t a i n activity.  The  experienced  p a t t e r n of i n d u s t r i a l  South Wales i s i n g e n e r a l the  British  the  early seventies  inversely.  export  The  sector.  f o r e x a m p l e , when t h e  primary reason f o r the  trial  relations that coincided with The  owners t o c r u s h  the  coalfield  the  ironmasters,  the  c o a l market, to t h e i r  ex-  indus-  t h e m a j o r boom i n  first  regional  eco-  and  who  trade  the  union  also t h e i r attempts to l e v e l of those p a i d  were becoming p o w e r f u l colliers.  stoppages of twelve  weeks i n 1871,  and  1875.  f i v e months i n  e f f o r t s of  general  lower by  competitors  These v a r i o u s  cumstances u l t i m a t e l y exploded i n the  J.H. Industry,  in coal  s t r a i n on  Among t h e s e w e r e t h e  t h e wage r a t e s t h e y p a i d t o t h e  period  periods,  s e v e r e s t r e s s e s t h a t u l t i m a t e l y became p r i m e  movement i n t h e  The  fall  i s found i n the  of  s e r i e s moved  r a p i d development of the  sources of dispute. colliery  the behavior  There were, however,  r e l a t i v e to trend  nomy c r e a t e d  fluctuations in  agreement w i t h  ports  this period.  a boom i n e c o n o m i c  large scale  cirindustrial  t h r e e months i n  1873,  4  i n d u s t r i a l development of South Wales d u r i n g  f r o m a r o u n d 1860  in  to the  outbreak of the F i r s t  the World  M o r r i s and L . J . W i l l i a m s , The South Wales Coal ( C a r d i f f : U n i v e r s i t y o f W a l e s P r e s s , 1958) p.  254.  124  War  i s d o m i n a t e d b y one  the coal i n d u s t r y .  imposing  factor,  the expansion  of  F o r t h e B r i t i s h t r a d e s e c t o r as a w h o l e ,  c o a l became t h e s i n g l e m o s t i m p o r t a n t c o m m o d i t y e x p o r t i n the  l a s t h a l f of the Nineteenth Century.  c o a l p r o d u c t i o n i n the middle i n response iron  to the growing  industry.  important  But  The  increase in  o f t h e c e n t u r y was  n e e d s o f an e x p a n d i n g  as V i c t o r i a n E n g l a n d  i n f l u e n c e s c o n d i t i o n i n g the development of  a t i o n o f steam power i n i n d u s t r y , i n r a i l a t i o n a r o u n d t h e w o r l d c r e a t e d an  of  domestic  m a t u r e d , t h e most  c o a l i n d u s t r y assumed i n t e r n a t i o n a l d i m e n s i o n s .  coal.  primarily  and  c o a l t r a d e , D.A.  applic-  ocean t r a n s p o r t -  i n s a t i a b l e demand f o r  I n a c o m p r e h e n s i v e s t u d y o f t h e g r o w t h and  the B r i t i s h  The  the  Thomas  direction  states:  " B e t w e e n 1850 and 1900, w h i l e t h e q u a n t i t y of c o a l p r o d u c e d i n t h e U n i t e d Kingdom and r e t a i n e d f o r home c o n s u m p t i o n h a s r a t h e r more t h a n t r e b l e d , o r , p e r c a p i t a , a l i t t l e more t h a n d o u b l e d , t h e e x p o r t , i n c l u d i n g c o a l s h i p p e d f o r t h e use of steamers engaged i n t h e f o r e i g n t r a d e , has g r o w n f i f t e e n f o l d , and i n c r e a s e d f r o m a p r o p o r t i o n o f 6.8 p e r c e n t t o one o f 26 per-cent of the t o t a l output. In v a l u e i t progressed from about 2 per-cent of the t o t a l o f e x p o r t s i n 1850 t o o v e r 16 p e r c e n t i n 1900... " 5  D.A. Thomas, "The G r o w t h and D i r e c t i o n o f o u r F o r e i g n T r a d e i n C o a l d u r i n g t h e L a s t H a l f C e n t u r y " , Journal of the Royal S t a t i s t i c a l Society, V o l . LXVI- ( S e p t e m b e r , 1 9 0 3 ) , p. 440.  TABLE I I I GROWTH OF PRODUCTION AND EXPORT OF COAL UNITED KINGDOM 1860-19 00  U.K. c o a l production  Export o f c o a l , coke and b u n k e r  %age o f exports t o prod.  Value of all Exports  Value o f coal Exports  Year (Millions of tons)  (Millions of tons)  1860  80.0  8.4  1870  110.4  1880  %age o f coal value to t o t a l export value  (Millions (Millions o f pounds) o f pounds) 10.5  135.8  3.7  2.7  14.1  12. 8  199 .6  6.7  3.4  147.0  23.9  16. 3  223.0  10. 8  4.8  1890  181.6  38.7  21.3  263.6  23.9  9.0  1900  225. 2  58.4  25.9  291.2  48.3  Source:  D.A. Thomas, "The G r o w t h a n d D i r e c t i o n o f O u r F o r e i g n T r a d e i n C o a l D u r i n g t h e L a s t H a l f - C e n t u r y , " Journal of the Royal S t a t i s t i c a l Society, V o l . LXVI (September, 1 9 0 3 ) , p. 440.  16.6  126  Table to  I I I shows c l e a r l y  the growing  t h e t o t a l v o l u m e o f U.K. It  c o n t r i b u t i o n c o a l made  exports.  i s evident t h a t over  the e n t i r e p e r i o d , not  only  the volume o f c o a l e x p o r t s  rose s t e a d i l y , but  proportion of c o a l exports  to t o t a l coal production.  r a p i d development of t h i s  the  the The  e x p o r t b a s e d i n d u s t r y i s an  important, yet often overlooked total  also  factor explaining  why  e x p o r t s o f t h e U n i t e d Kingdom i n c r e a s e d a t a l l i n  l a s t quarter of the  century.  South Wales p l a y e d a major r o l e i n the e x p a n s i o n the coal mining 10 m i l l i o n total  I n 1860,  t o n s o f c o a l , w h i c h was  output  56 m i l l i o n  industry.  o f t h e c o u n t r y ; by  this 12.8  1913  region produced per cent of  t h i s had  tons which then c o n s t i t u t e d almost  of t o t a l n a t i o n a l output.^  This increase both  i n share  fails  i s significant  importance  but  1880,  the  increased to 20  percent  i n volume  t o d i s c l o s e the  and  growing  o f South Wales c o a l p r o d u c t i o n i n s u p p l y i n g  an e x p a n d i n g w o r l d m a r k e t . by  of  this  r e g i o n was  The  the c h i e f  i n t h e U n i t e d K i n g d o m . I n 1860  H. S t a n l e y J e v o n s , The P a u l T r e n c h T r u b n e r & Co.,  f o l l o w i n g t a b l e shows t h a t coal-exporting d i s t r i c t  the North-east  coast  exported  B r i t i s h Coal Trade, ( L o n d o n : K e g a n L t d . , 1 9 1 5 ) , p. 116.  TABLE I V PROPORTION OF TOTAL COAL EXPORTS FROM P R I N C I P L E DISTRICTS OF THE UNITED KINGDOM 1860-19 00  Year  South Wales B r i s t o l Channel  North West  North East  Humber  Other Ports on East Coast  East Scotland  West Scotland  1860  24.4  8.6  53. 5  3.4  .9  5.8  3.4  1870  31.2  4.9  46.9  4.5  .4  7.5  4.6  1880  39 .0  3.4  39.5  6.7  .6  7.8  3.0  1890  43.6  2.1  31.1  7.7  .5  11.4  3.6  1900  41.9  1.6  29.7  9.5  .6  13.1  3.6  Source:  D.A. Thomas, "The G r o w t h a n d D i r e c t i o n o f O u r F o r e i g n T r a d e ... ",p. 49 8.  128  53.5  per  cent  t h e U.K.,  and  of the the  t o t a l amount o f c o a l s h i p p e d  South Wales p o r t s  the B r i s t o l  channel  had  gained  north-east,  increasing their  cent.  and  development f o r the amount o f s a i l  twice the  s e v e n t i e s was c o a l mining  the  coal-exporting port  in  a particularly  tonnage c o n s t r u c t e d  amount o f s t e a m t o n n a g e .  steam tonnage added t o L l o y d ' s 7  the  sail  tonnage.  The  i n 1860  Ten  years  following table gives  C e r t a i n W e l s h c o a l s by' b e i n g  by  C u n a r d , P e n i n s u l a r , and 1872  the o f f i c i a l  South Wales over "North Within were i d e a l l y  easy reach  of the  some  times  indication  smokeless  early  recognized  companies,  Navy was  the Welsh  to  favor  coalfields  s i t u a t e d to develop a b r i s k export  J . F . R e e s , Studies in Welsh History, o f W a l e s P r e s s , 1 9 4 7 ) , p. 140. g M o r r i s and W i l l i a m s , The South Wales  1870,  i n overseas  Oriental shipping  sea,  in  three  virtually  T h i s was  p o s i t i o n o f H.M. g country" coal.  almost  later,  R e g i s t e r was  were h i g h l y s u i t e d f o r steamships. the  the  favorable  was  o f the g r o w i n g i m p o r t a n c e of steam t e c h n o l o g y shipping.  in  i n d u s t r y of South Wales.  the  and  1881,  lead progressively thereafter.  r e v o l u t i o n i n s h i p p i n g that took place  eighteen-sixties  by  By  world. The  The  per  a greater percentage than  C a r d i f f became t h e m o s t i m p o r t a n t the  24.4  from  trade.  The  (Cardiff: University Coal  Industry,^.  40.  TABLE V S A I L I N G AND STEAM TONNAGE ENTERED WITH CARGO AND I N BALLAST AT PORTS I N THE UNITED KINGDOM (OOO'S TONS)  Year  Sailing  Steam  Total  S a i l as Total  Steam as % Total  g, t>  1860  9 ,624  2 ,549  12,173  79  21  1870  10 ,678  7,435  18,113  59  41  1880  10 ,765  18,310  29,075  37  63  1890  6,231  30,605  36,836  17  83  1900  4 ,054  45,168  49,222  8  92  Source:  D.A. Thomas, "The G r o w t h a n d D i r e c t i o n o f O u r F o r e i g n Trade p. 478.  130  heavy investment p r o v i s i o n and  i n r a i l r o a d s p r i o r t o 1860  expansion  of port f a c i l i t i e s  Newport, Swansea, L l a n e l l y ,  the  the e n t i r e c o a l f i e l d  at C a r d i f f ,  the growing  The  expanding  t r a n s p o r t a t i o n was  later  came t o p a r t i c i p a t e .  were sent i n growing  e x p o r t t r a d e and  by  Penarth,  volume of  t h e l a t t e r p a r t o f t h e c e n t u r y , h o w e v e r , " i t was c o a l s o f t h e Rhondda w h i c h 9 a l l over the world."  subsequent  and m o s t i m p r e s s i v e l y B a r r y  i n t h e c e n t u r y , were a l l j u s t i f i e d by trade i n which  and  the  In  steam  quantities  the accession of  f a r t h e most i m p o r t a n t b u t  steam  not the  s o u r c e o f e f f e c t i v e demand f o r t h e c o a l o u t p u t o f S o u t h " I n 1875,  over  w o r k s , and r e g i o n , and  t w o - t h i r d s of t h e U n i t e d Kingdom's  h a l f of t h e i r  copper  only Wales.  tin-plate  s m e l t i n g p l a n t s , were i n t h i s  c o n s u m e d t h e c o a l t h a t was  mined l o c a l l y  ...  These i n d u s t r i e s , however, were l a r g e l y e x p o r t o r i e n t e d . a v a i l a b l e evidence  l e a d s us. t o c o n c l u d e  t h a t the South  industrial  s e c t o r was  any  a s s o c i a t e d p r i m a r i l y w i t h the domestic  source  t h a t i n the course  R e e s , Studies Lewis,  Building  in  Wales  more d e p e n d e n t on f o r e i g n demand  Welsh Cycles  History, and  p.  Britains  than  market,  of the l a s t h a l f of the Nineteenth  p.  and  century  XX Growth,  The  113.  131  t h e r e was  an e x t e n s i o n and  ages between t h i s The investment and  early and  strengthening of the trade  r e g i o n and  1870's w i t n e s s e d  e x p o r t s t h a t was  r a i l w a y booms o v e r s e a s .  widespread dramatic  the A t l a n t i c  transition  We  and  cant i n adding  by  c l o s e l y r e l a t e d t o the c o n s t r u c t i o n have a l r e a d y observed  t o a steam t e c h n o l o g y  t h e F r a n c o - P r u s s i a n war  t o t h i s demand b y  i n d u s t r y a l o n e u s e d one 1869."'""'' Two  and  of p i g - i r o n .  third  one-half  And  economies.  a boom i n B r i t i s h f o r e i g n  that  gave r i s e  i n c r e a s e i n t h e demand f o r i r o n and  ages o c c a s i o n e d  World  link-  coal.  were not  C o n t i n e n t a l powers.  the  to a  The  short-  insignifiThe  of the n a t i o n s c o a l output  iron in  t o n s w e r e r e q u i r e d t o p r o d u c e one  though t h i s  requirement  was  ton  progressively re12  duced through the i r o n  the development of improved p r o d u c t i o n  industry experienced  The  c o a l i n d u s t r y was  p e r i o d of investment.  be  expanded by w o r k i n g  1959,  shortages.  c h a r a c t e r i z e d by  a long gestation  I n t h e s h o r t r u n t h e r e were numerous  obstacles preventing the f u l l m e e t c h a n g e s i n demand.  frequent  techniques,  adjustment of c o a l s u p p l i e s to  There were l i m i t s overtime  and  opening  to which supply o u t new  could  working  P h y l l i s Deane and W.A. C o l e , B r i t i s h Economic Growth 1688( C a m b r i d g e : C a m b r i d g e U n i v e r s i t y P r e s s , 1 9 6 7 ) , p. 219  12 A l a n B i r c h , The Economic History of the B r i t i s h Iron and Steel Industry 1784-1879, ( L o n d o n : F r a n k C a s s and Co., L t d . , 1967) , p. 186.  132  places. in  When t h e s e l i m i t s w e r e r e a c h e d , f u r t h e r  supply could  d e p e n d i n g on  o n l y be  how  a t t a i n e d by  d e e p i t was  s i n k i n g new  n e c e s s a r y t o go,  increases mines,  and  this could  take  13 several years.  This  the  i s p e r h a p s the most i m p o r t a n t f a c t o r i n  coal  industry  explaining  the  basic  c h a r a c t e r i s t i c of  investment i n  c o a l p r i c e a d j u s t m e n t mechanism.  "Fluctuations  i n demand w e r e r e f l e c t e d i n p r i c e c h a n g e s i n t h e and  i n s u p p l y changes i n a long  figures  (of c o a l output) are  run  so  long  short  t h a t the  almost f r e e of  any  run,  annual  semblance  of  14 a cycle." profits  As  i n the  rising face  ment i n c o a l m i n i n g course of  demand d r o v e up  of  inelastic  increased.  supply, the  The  the  c o a l m i n i n g companies i n South Wales. f o r the  purpose of  Contemporary r e p o r t s profits  associated  with  Mackworth, a mines i n s p e c t o r , D.H. R o b e r t s o n , A Study ( L o n d o n : 1 9 1 5 ) , pp. 1 5 - 1 7 . 14  L e w i s , Building  Cycles  and  of  the  limited  comparison.  "the  t o the  large  t h e i r tendency  I n 1853,  noted of  invest-  A coal price series i s  p r i c e s and  encourage widespread investment.  volume of  formation  refer frequently  high  initially,  f o l l o w i n g t a b l e shows  i n v e s t m e n t as m e a s u r e d b y  also included  p r i c e s and,  to  f o r example, extraordinary  Industrial B r i t a i n s Growth,  H. and  Fluctuations, p.  110.  TABLE V I L I M I T E D COMPANIES (COAL MINING) REGISTERED IN SOUTH WALES AND THE AVERAGE S E L L I N G P R I C E PER TON OF STEAM COAL F.O.B. CARDIFF (1860-1875)  Year  1860 1861 1862 1863 1864 1865 1866 1867 1868 1869 1870 1871 1872 1873 1874 1875  Source:  T o t a l Nominal Capital  62,500 213,000 147,100 330,000 948,000 770,500 310,000 131,000 136,000 70,000 105,000 275,000 1,057,300 3,185,000 2 ,210,000 551,000  Number o f Companies  3 6 6 6 9 14 8 3 4 2 3 7 13 29 27 9  Steam c o a l Price s. d 8 8 8 8 8 8 8 8 8 8 9 10 19 23 16 14  J.H. M o r r i s a n d L . J . W i l l i a m s , The South Wales Coal Industry 1841-187 5, ( C a r d i f f : U n i v e r s i t y o f W a l e s P r e s s , 1 9 5 8 ) , pp. 8 1 , 151.  3 6 7 9 9 9 6 6 0 9 3 6 3 3 11 3  134  s u d d e n a c t i v i t y i n f u s e d by h i g h p r i c e s , a n d e x c e s s i v e demand, i n t o t h e c o a l t r a d e " , o f S o u t h W a l e s and a t t e n t i o n t o " t h e l a r g e number o f new  a year l a t e r  s h a f t s and new  drew collie-  15 r i e s b e i n g o p e n e d w i t h i n my  district."  S i m i l a r r e p o r t s w e r e s u b m i t t e d by m i n e s i n s p e c t o r s i n the mid-1860's  and  an u n p r e c e d e n t e d  a g a i n i n t h e boom y e a r s o f 1872-74 when  upsurge  i n a c t i v i t y l e d to a dramatic increase 16  in productive capacity  ( a s i n d i c a t e d by T a b l e V I ) .  The  i n v e s t m e n t d e c i s i o n s o f many c o l l i e r y o w n e r s , h o w e v e r , w e r e governed  more by  s h o r t term to  t h e l o n g - t e r m u p w a r d t r e n d i n demand  fluctuations  the growth  of t h i s  and  t h u s l e n t some d e g r e e  capacity.  Indeed,  than  of s t a b i l i t y  these d e c i s i o n s were  n o t s i m p l y made w i t h t h e a i m o f m a x i m i z i n g p r o f i t s  i n the s h o r t  or medium-run, b u t a l s o t o m a i n t a i n o r i n c r e a s e ones s h a r e w h a t was  of  c l e a r l y an e x p a n d i n g m a r k e t i n t h e l o n g r u n . " N e v e r t h e l e s s , t h i s growth i n p r o d u c t i v e power, a t t i m e s s t e a d y and a t t i m e s suddenl y a c c e l e r a t e d , p r o d u c e d p e r i o d s of low p r i c e s and p o o r p r o f i t s w h i c h l a s t e d u n t i l t h e e x c e s s c a p a c i t y was more t h a n a b s o r b e d by t h e p e r s i s t e n t u p w a r d t r e n d i n demand."-'-'  15 H. M a c k w o r t h , M%nes Inspector Report, p. 119. C i t e d i n M o r r i s and W i l l i a m s , The Industry, p. 79.  1853, p. 163; 1 8 5 4 , South Wales Coal  "^The g r o w t h o f i n v e s t m e n t i n r e s p o n s e t o an u n p r e c e d e n t e d i n c r e a s e i n t h e demand f o r s t e a m . c o a l was g i v e n f u l l a t t e n t i o n i n t h e M i n e s I n s p e c t o r s R e p o r t s f o r 1874 a n d 1875. 17  M o r r i s and W i l l i a m s , The  South  Wales  Industry,  p.  80.  135  T h i s we w i l l  see s u b s e q u e n t l y  i s o f key importance i n under-  standing  the p a t t e r n of f l u c t u a t i o n s i n the course  building  i n t h e South Wales  coalfield.  Expansion of the coal mining i n t h e d e r i v e d demand f o r l a b o u r ability  i n d u s t r y meant an  as w e l l as c a p i t a l .  of the e x i s t i n g population  b y n a t u r a l i n c r e a s e s was  of house-  increase The i n -  t o meet t h e g r o w i n g demand  r e f l e c t e d not only i n g e n e r a l l y  high  wage r a t e s , b u t a l s o i n s i g n i f i c a n t w a v e s o f i n - m i g r a t i o n . This  latter  aspect  has been v e r y  of the i n d u s t r i a l development of South  ably analyzed  P r o f e s s o r Thomas  b y T.M.  Hodges  18  19 a n d B r i n l e y Thomas.  concludes:  "Three c o n s i d e r a b l e waves o f m i g r a t i o n a r e c l e a r l y d i s t i n g u i s h a b l e , and t h e y s y n chronized with the p e r i o d i c a l cycles of p r o s p e r i t y i n t h e m i n i n g i n d u s t r y ... [These f l u c t u a t i o n s ] , enhanced i n S o u t h Wales by t h e u n s u r p a s s e d q u a l i t y o f t h e commodity, were so e x t e n s i v e t h a t t h e miners earnings' could e a s i l y reach a p o i n t a t w h i c h t h e y were d i s t i n c t l y s u p e r i o r t o those o f o t h e r Trades: hence the i n c u r s i o n o f such a l a r g e body o f l o n g distance migrants."20  18 T. M a n s e l H o d g e s , "The P e o p l i n g o f t h e H i n t e r l a n d and P o r t o f C a r d i f f , 1 8 0 1 - 1 9 1 4 " , Economic History Review, V o l . X V I I , (1947), pp. 62-72. 19 B r i n l e y Thomas, "The M i g r a t i o n o f L a b o u r i n t o t h e G l a m o r g a n s h i r e C o a l f i e d , 1 8 6 1 - 1 9 1 1 , Economica, V o l . X, (November, 1 9 3 0 ) , p p . 2 7 5 - 2 9 4 . Ibid,  20  pp.  289-290.  Wales  136  The  s y s t e m o f wage d e t e r m i n a t i o n i n t h e c o a l m i n i n g  i n d u s t r y o f S o u t h W a l e s may h a v e h a d a c o n s i d e r a b l e  influence  on t h e e x t e n t t o w h i c h l a b o u r was a t t r a c t e d t o t h e c o a l not only  from Welsh  i n England.  rural  a r e a s , b u t a l s o from d i s t a n t  The l e v e l o f wages i n S o u t h W a l e s ,  fields counties  i n spite of  d i f f e r e n c e s f r o m v a l l e y t o v a l l e y , was h i g h e r o n t h e a v e r a g e t h a n i n any o t h e r B r i t i s h this it  coalfield.  An i m p o r t a n t r e a s o n f o r  i s t h e g e o g r a p h i c a l p o s i t i o n o f South Wales w h i c h  more i s o l a t e d  English  makes  f r o m c e n t e r s o f p o p u l a t i o n t h a n any o f t h e  coalfields. As new c o l l i e r i e s w e r e d e v e l o p e d a n d s p a r s e l y p o p u l a t e d  v a l l e y s b r o u g h t i n t o p r o d u c t i o n i t became i n c r e a s i n g l y  necess-  a r y t o o f f e r h i g h e r wages i n o r d e r t o a t t r a c t t h e n e c e s s a r y labour. Other reasons f o r the g e n e r a l l y h i g h l e v e l of earnings were u n d o u b t e d l y t h e s t r e n g t h o f t h e South Wales M i n e r s F e d e r a t i o n and " t h e r e l a t i v e l y h i g h p r i c e o f t h e c o a l w h i c h i t s superior qualities  command i n t h e w o r l d s m a r k e t s .  These h i g h  p r i c e s h a v e made t h e t r a d e r e m u n e r a t i v e a n d h a v e e n a b l e d r y p r o p r i e t o r s t o o p e n new m i n e s ,  even though  21 done o n l y by p a y i n g h i g h wages."  J e v o n s , The B r i t i s h  Coal  Trade,  p. 1 2 1 .  this  collie-  c o u l d be  137  These f a c t o r s , combined w i t h major l a b o u r  disputes  i n t h e e a r l y 1 8 7 0 ' s l e d t o t h e a d o p t i o n i n May o f 1875 o f 22 the  first  "sliding  s c a l e " wage a g r e e m e n t .  agreement a p p l i e d o n l y those c o l l i e r s ciation,  to the determination  non-member c o a l o w n e r s .  paid  o f wages o f  i n f l u e n c e o n t h e wage p o l i c y o f The a g r e e m e n t i n t r o d u c e d  "was t o b e 5 p e r c e n t h i g h e r  at the respective  increased  this  e m p l o y e d b y members o f t h e C o a l o w n e r ' s A s s o -  i t had a strong  wage r a t e t h a t  Although  collieries  cost of l i v i n g  a minimum  than the r a t e  i n 1869 t o c o m p e n s a t e t h e  s i n c e t h a t d a t e , " and t i e d  the per-  c e n t a g e c h a n g e i n w a g e s a b o v e t h e minimum t o t h e p r i c e o f coal  (7.5 p e r c e n t f o r e a c h c o m p l e t e s h i l l i n g  change i n  23 price). The f u n c t i o n i n g o f t h e " s l i d i n g s c a l e " r e v e a l e d advantages t o both l a b o u r and employer; i t enabled South Wales t o a v o i d  the adverse e f f e c t s of the coal dispute  of  24 189 3  t h a t had such a f a r - r e a c h i n g  mining regions  of the United  i m p a c t on t h e o t h e r  Kingdom.  coal  The i m p o r t a n c e o f t h i s  J.H. M o r r i s a n d L . J . W i l l i a m s , "The S o u t h W a l e s S l i d i n g S c a l e , 1 8 7 6 - 7 9 ; An E x p e r i m e n t i n I n d u s t r i a l R e l a t i o n s " , Manchester School, V o l . X X V I I . , (May, 1 9 6 0 ) , p . 1 6 4 . 23 Ibid, p. 1 6 6 ; T h e r e was a c e i l i n g i m p o s e d c i a t e d w i t h p r i c e s o f 2 1 s . f o r s t e a m a n d 20 s. c o a l . I f p r i c e s r o s e a b o v e t h e s e l e v e l s , wages unchanged. T h i s p r o v i s i o n was a c o n c e s s i o n t o t o c o m p e n s a t e f o r t h e minimum w a g e - r a t e .  on w a g e s , a s s o for bituminous would remain the c o a l owners  24  and pp.  C M . P e r c y , "The C o a l D i s p u t e o f 1 8 9 3 : I t s H i s t o r y , P o l i c y W a r n i n g s " , Economic Journal, V o l . I l l , (December, 1 8 9 3 ) , 644-649.  138  institutional  s o l u t i o n t o t h e p r o b l e m o f wage  determination  f o r o u r p u r p o s e s i s f o u n d i n i t s i n f l u e n c e o n t h e movement of  labour  increase  i n t o t h e South Wales c o a l f i e l d i n required housing  The  and t h e c o n s e q u e n t  accommodations.  r e l a t i o n s h i p b e t w e e n c h a n g e s i n wage r a t e s a n d  c h a n g e s i n t h e numbers e m p l o y e d i n t h e c o a l m i n i n g  industry  25 has in  b e e n s t u d i e d b y R.H. H o o k e r  who c o n c l u d e d t h a t  t h e l e v e l o f employment r e s p o n d e d p r i m a r i l y t o upward  movements i n w a g e s , w h i l e stantial migration came c o n d i t i o n e d  f a l l i n g wages r a r e l y l e d t o s u b -  o f miners out of the region.  t o be f o l l o w e d  t h i n g s " by a p e r i o d o f p r o s p e r i t y . Hooker p l a c e d sliding  great  scale.  forces of supply were p r e c l u d e d  The men b e -  by t h e r e c u r r i n g c y c l e o f p r i c e s t o r e g a r d  a p e r i o d o f low earnings  the  changes  " i n the nature  In drawing h i s conclusions,  emphasis on t h e p e r v a s i v e Because t h i s  of  innovation  influence of  superseded the  a n d demand i n t h e l a b o u r m a r k e t ,  employers  f r o m l o w e r i n g wage r a t e s when t h e r e was a l a r g e  number o f p e o p l e s e e k i n g  employment, u n l e s s  of course, the  price of coal f e l l . "The a v e r a g e m i g r a n t , i f n o t i m p e l l e d b y f o r c e o f c i r c u m s t a n c e s , w o u l d be p e r s u aded t o t r y h i s l u c k by t h e i n f o r m a t i o n  R.H. H o o k e r , "On t h e R e l a t i o n s b e t w e e n Wages a n d t h e Numbers E m p l o y e d i n t h e C o a l M i n i n g I n d u s t r y " , Journal of the Royal S t a t i s t i c a l Society, V o l . L V I I (December, 1894) p p . 6 2 7 642.  139  r e a c h i n g h i m r e g a r d i n g money wages i n t h e c o a l f i e l d ... I t i s , t h e r e f o r e , c o n c e i v a b l e t h a t t h e r a t e o f wages i n the p i t s i n a given year would prove h i g h enough t o a t t r a c t d i s t a n t o u t s i d e r s , even though a t t h a t p a r t i c u l a r time t h e r e was a l r e a d y a g e n e r a l o v e r - s u p p l y o f workers. And e v e n t h i s e n h a n c e d s u r p l u s w o u l d n o t n e c e s s a r i l y l o w e r t h e wage p e r c e n t a g e ... " 2 6  T h e r e c a n be from the  little  question  t h a t t h e h i g h wages  i n d u s t r i a l p r o s p e r i t y of South Wales were a power-  f u l magnet d r a w i n g l a b o u r U n i t e d Kingdom.  The  i n c e s s a n t l y from throughout  This general for housing  t r e n d was  reflected  of housing  of the region. very  wages i n t h e  6.  i n an e v e r  g r o w i n g demand  t o 1914,  there existed a  accommodations i n a l l of the m i n i n g  O v e r c r o w d i n g and common.  reason  S o u t h W a l e s c o a l f i e l d was  England, the  the  f o r the housing  colliery  valleys  p a r t - l e t t i n g of a v a i l a b l e house  I n d e e d , one  companies r a r e l y p r o v i d e d Northern  traced i n Figure  accommodations.  T h r o u g h o u t t h e p e r i o d 1860  s p a c e was  the  i n e x o r a b l e g r o w t h o f t h e numbers employed  i n t h e c o a l f i e d s o f S o u t h W a l e s c a n be  shortage  resulting  given  f o r the  fact that  colliery  of t h e i r workers.  owners b u i l t houses w i t h  Thomas, " M i g r a t i o n o f L a b o u r i n t o t h e C o a l f i e l d , 1 8 6 1 - 1 9 1 1 " , p. 291.  high  In  their  Glamorganshire  140 Figure INDICES OF  HOUSE-BUILDING AND AND  (A)  6 THE  GROWTH OF  INDUSTRY  TRADE IN SOUTH WALES  A v e r a g e a n n u a l p r i c e o f c o a l (F.O.B. C a r d i f f ) , Mean o f 1886-91 = 100. S o u r c e : F i n l a y G i b s o n , The Coal Mining Industries United Kingdom, ( C a r d i f f , 1 9 2 1 ) , p. 84.  1860-1914. of  the  (B)  I n d e x o f h o u s e - b u i l d i n g i n S o u t h W a l e s , 1860-1914. Source: J . Parry Lewis, "Indices of House-Building i n t h e M a n c h e s t e r C o n u r b a t i o n , S o u t h W a l e s , and G r e a t B r i t a i n , 1851-1913", Scottish Journal of P o l i t i c a l Economy, V o l . V I I I ( J u n e , 1961) , pp. 51-52.  (C)  Numbers e m p l o y e d i n t h e c o a l m i n e s o f S o u t h W a l e s , 1864-1914, ( i n t h o u s a n d s ) . S o u r c e : B.R. M i t c h e l l , A b s t r a c t of B r i t i s h Historical S t a t i s t i c s , (Cambridge: Cambridge U n i v e r s i t y P r e s s , 1962) , pp. 118-119.  (D)  O u t p u t o f C o a l i n t h e c o a l f i e l d s o f S o u t h W a l e s , 18621913, ( I n 000,000's o f t o n s ) . S o u r c e : B.R. M i t c h e l l , Abstract of B r i t i s h Historical S t a t i s t i c s , pp. 115-116.  (E)  C o a l e x p o r t s f r o m t h e B r i s t o l C h a n n e l , 1860-1902, ( i n 000 , 0 0 0 s o f t o n s ) . S o u r c e : D.A. Thomas, "The Growth and D i r e c t i o n o f Our F o r e i g n Trade i n Coal d u r i n g the Last H a l f Century", Journal of the Royal S t a t i s t i c a l Society, V o l . LXVI (September, 1 9 0 3 ) , p. 509. 1  (F)  Mean a n n u a l wage o f C o l l i e r s , p e r c e n t a g e o f 1879 s t a n d a r d , 1880-1911. S o u r c e : B r i n l e y Thomas. "The M i g r a t i o n o f L a b o u r i n t o t h e G l a m o r g a n s h i r e C o a l f i e l d (1861-1911), Economica, V o l . X, (November, 19 3 0 ) , p. 2 81.  140(a)  141  own  f u n d s and  then rented  them t o t h e m i n e r s .  S o u t h o f W a l e s , o n l y a few  In  the  employers i n the v a l l e y s of  Monmouthshire found i t t o t h e i r advantage to p r o v i d e miners with cottages out  and  and  societies.  house-building  The turned  and  shops, but  was  left  Channel p o r t s are  carpenters  imports  e n t e r i n g the  evidence of the  returned;  t o 15,458. "Loads o f t i m b e r rose 1881,  f r o m 2 7 , 7 6 1 i n 1861 and  and  gional housebuilding pace w i t h the  deals  2 8  1891  index)  imported  I n 1861 grown  t o 85,599 i n increased  South Wales r e -  failed  to  requirements of a growing p o p u l a t i o n .  was  J e v o n s , The  t h e number o f  1 0 3 , 9 8 0 , o r 5.6  British  Hodges, " P e o p l i n g  Coal  of the  Trade,  persons per  p.  there  into Cardiff  d e s p i t e the  house-building  productive  t h i s had  c o n s t r u c t i o n , (see the  urban areas of South Wales a l o n e , h o u s e s i n 1901  But  main  growing  t o 65,000 i n 1 8 7 1 ,  t o 129,796 i n 1 8 9 1 . "  volume of r e s i d e n t i a l  by  re-  increased  c a p a c i t y of the domestic c o n s t r u c t i o n i n d u s t r y . w e r e 629 0 s u c h c r a f t s m e n  died  largely to p r i v a t e b u i l d e r s  c e n s u s e s as w e l l as t h e  volume of c o n s t r u c t i o n timber Bristol  t h i s p r a c t i c e soon  i n c r e a s e i n n u m b e r s o f masons and  i n the d e c e n n i a l  the  In  the  inhabited house.  122.  H i n t e r l a n d " , p.  keep  69.  By  142  1911  t h i s had  g r o w n t o 135,416 i n h a b i t e d h o u s e s , o r  6  29 persons per house.  Further p o s s i b l e evidence of  g r o w i n g gap  between s u p p l y  little  there  1901,  data  and  demand i s f o u n d i n w h a t  i s a v a i l a b l e on p a r t - l e t h o u s e s .  t h e r e w e r e 11,722 s u c h h o u s e s i n t h e u r b a n  w h i c h c o n s t i t u t e d 11.2 h a b i t e d houses.  the  percent  I n 1911  In  districts,  o f t h e t o t a l number o f i n -  t h e number was  16,724, o r  12.3  30 per  cent.  The  i n e x o r a b l e g r o w t h i n demand  from the  i n f l u x of labour  ganshire  and  1914  i s the  i n t o the  l o n g term upward t r e n d i n the building our  c o a l f i e l d s of  Monmouthshire between the years s i n g l e most i m p o r t a n t  index.  This  resulting Glamor-  1860  and  factor explaining  the  South Wales r e g i o n a l house-  conclusion w i l l  be  r e i n f o r c e d by  a n a l y s i s o f p o p u l a t i o n movements i n t h e n e x t s e c t i o n . We  m u s t now,  of the housing  however, b r i e f l y  s e c t o r and  the nature  ment i n S o u t h W a l e s t o e x p l a i n t h e about the  look at the of  structure  industrial  invest-  s h o r t term f l u c t u a t i o n s  long term trend i n r e s i d e n t i a l  construction.  have seen t h a t the  i n d u s t r i a l development of South Wales  was  shortages  c o n s t r a i n e d by  This perpetual Ibid, 30* ., Ibvd. T  p.  s c a r c i t y of 72  of both labour  f a c t o r s had  and  a drastic  We  capital. impact  on  143  the domestic c o n s t r u c t i o n i n d u s t r y , f o r both house-building  and c o a l - m i n i n g ,  industries,  w e r e l o c a t e d i n t h e same  a r e a s a n d c o m p e t e d w i t h one a n o t h e r ,  not only  f o r l a b o u r and  capital, but also f o rmaterials.  A carpenter  easily  s h o r e and r o o f  c o n s t r u c t mine f a c i l i t i e s ,  as b u i l d h o u s e s .  C o n s t r u c t i o n a l timber  houses o r t o r e i n f o r c e mine t u n n e l s .  c o u l d j u s t as shafts  c o u l d be used f o r  The d i f f e r e n c e was  t h a t t h e s t r e n g t h o f a g r o w i n g i n t e r n a t i o n a l demand f o r c o a l enabled and  the c o l l i e r y  c a p i t a l c o s t s on a s i n c r e a s e d p r i c e s .  prices  and p r o f i t s  s c a l e ) were r i s i n g guished  cover The  as w e l l as wages  A t a t i m e when  (because o f t h e s l i d i n g  i n the coal industry, construction  because o f i t s i n a b i l i t y  house-builder to  owners t o p a s s t h e h i g h e r wages, m a t e r i a l  lan-  t o compete f o r f a c t o r s .  The  i n g e n e r a l , c o u l d n o t r a i s e p r i c e s and r e n t s  increased  factor costs.  demand f o r new h o u s e s was h i g h l y e l a s t i c ,  partly  because o f t h e range o f a l t e r n a t i v e s open t o t h e p o t e n t i a l house-buyer.  He c o u l d  a l w a y s c h o o s e t o d o u b l e up w i t h  f a m i l y , or instead of buying he  c o u l d g e t up a c o u p l e  a new h o u s e n e a r e r  of hours e a r l i e r  I t was n o t uncommon f o r c o l l i e r s and  n i g h t , t o and from t h e p i t s .  demand t h u s p l a c e d  relatively  which the p r i c e of housing  the c o l l i e r y ,  and w a l k t o t h e m i n e s .  t o w a l k many m i l e s , The s e n s i t i v i t y  close limits  another  of  morning housing  on t h e e x t e n t t o  accommodations c o u l d be r a i s e d  144  w i t h o u t s e r i o u s l y a f f e c t i n g the E a r l i e r we  noted the  ment boom i n t h e  early  quantity  r e l a t i o n s h i p between the  18 70's  and  generalization  argument f o r the  discussion.  This requires  an  now  invest-  l a g g e d boom i n  We  that  will  the  dential construction. of  demanded.  propose a  index of  resi-  tentative  entire period  under  investment i n  the 31  coal mining industry, There i s e x t a n t ,  which unfortunately  however, a s e r i e s of c o a l e x p o r t  (F.O.B. C a r d i f f ) w h i c h may index of p r o f i t a b i l i t y r e s t s on  an  tions  i n the  lated  into a rise  of  the  that  short  sliding  because the  be  f o r the  i n the  run,  industry.  face of  increases  in prices  and  s c a l e does not  functioning  of  coal price  mining industry)  series  This  in this  inelastic  prices  The  section  s c a l e was  (our  at  which,  supply  conditrans-  introduction  seriously affect this  the  good  assumption  i n demand w o u l d be  profits.  j u s t m e n t s l a g g e d p r i c e c h a n g e s by The  exist.  considered a reasonably  argument p r e s e n t e d e a r l i e r  i n essence, held  does not  assumption  s u c h t h a t wage  ad-  l e a s t s i x months.  index of p r o f i t s  i s presented i n Figure  i n the  6 along with  coal-  the  The s e r i e s o f l i m i t e d c o a l m i n i n g c o m p a n i e s r e g i s t e r e d i n S o u t h W a l e s p r e s e n t e d a b o v e on p a g e 133 d o e s n o t e x t e n d b e y o n d 1875. Even i f i t d i d , however, t h e r e a r e numerous l e g i t i m a t e o b j e c t i o n s which would render i t i n a p p r o p r i a t e as an i n d e x o f new i n v e s t m e n t a f t e r 1880, f o r o u r p u r p o s e s h e r e .  145  South Wales r e g i o n a l h o u s e - b u i l d i n g i n d e x . the f a c t t h a t t h e former i s o n l y a rough  Keeping  i n mind  indication of the  l e v e l o f i n v e s t m e n t i n c o a l m i n i n g , and t h e e x t e n t t o w h i c h t h a t i n d u s t r y was d r a w i n g o n a v a i l a b l e r e s o u r c e s , t h e r e d o e s appear t o be a s i g n i f i c a n t two  curves.  Coal prices  i n v e r s e r e l a t i o n s h i p between t h e  (and p r o f i t s )  the r e g i o n a l index i n the i n i t i a l  t e n d e d t o move w i t h  s t a g e s o f an upswing i n  b u i l d i n g , w i t n e s s 1869-73, 1888-91, and 1900-01, b u t o n l y a f t e r p r i c e s and p r o f i t s  i n c o a l m i n i n g began t o f a l l , d i d  t h e s e b u i l d i n g booms r e a l l y  g e t u n d e r way.  There were, o f c o u r s e , f a c t o r s e x e r t i n g  independent i n -  f l u e n c e s on t h e volume o f i n v e s t m e n t i n c o a l m i n i n g and house-building.  F o r example,  the decline i n house-building  a f t e r 1885 d u r i n g a p e r i o d when p r o f i t s c o a l m i n i n g were d e p r e s s e d i s l a r g e l y  and i n v e s t m e n t i n  attributable t o the  f r e q u e n t c o n s t r u c t i o n s t o p p a g e s a s s o c i a t e d w i t h t h e wave o f new u n i o n i s m t h a t s w e p t t h r o u g h S o u t h W a l e s ,  especially  after  32 1888.  D e s p i t e such minor v a r i a t i o n s , t h e major  i n these i n d i c e s convey two  92",  the overwhelming  fluctuations  impression that the  i n d u s t r i e s d i d r e a c t on o n e a n o t h e r i n some s y s t e m a t i c way. L . J . W i l l i a m s , "The New U n i o n i s m i n S o u t h W a l e s , 1 8 8 9 Welsh History Review, V o l . I ( 1 9 6 3 ) , p p . 4 1 3 - 4 2 9 .  146  In the opinion  of the present w r i t e r , the a v a i l a b l e  evidence appears t o support t h e hypothesis dential construction  s e c t o r o f t h e economy o f S o u t h W a l e s  was a r e s i d u a l b e n e f a c t o r the  o f t h e g r o w t h and p r o s p e r i t y o f  domestic coal mining industry.  profits  fell  cial  capital  savings  N o t o n l y was t h e r e  construction  a diversion of finan-  now b e u s e d t o p r o v i d e  incomes d u r i n g the c o l l i e r s  the i n d u s t r i a l family  t h e i r d e s i r e d h o u s i n g a c c o m m o d a t i o n s u n d e r more conditions.  The e a s i n g  of credit conditions  gage m a r k e t , though s i g n i f i c a n t , as  i tat f i r s t  appears.  o f house r e n t s  with  favorable  i n t h e mort-  i s perhaps n o t as i m p o r t a n t  The r a t e o f r e t u r n o n i n v e s t m e n t  i n c o a l m i n i n g was p e r p e t u a l l y h i g h e r out  became  i n t o t h e mortgage market, b u t t h e accummulated  r e s u l t i n g from increased  boom c o u l d  When c o a l p r i c e s a n d  investment i n r e s i d e n t i a l  more a t t r a c t i v e .  that the r e s i -  received  than the r a t e  a t customary l e v e l s .  paid  Thus, even  when t h e r e w e r e c h a n g e s i n t h e r e l a t i v e r a t e s o f r e t u r n favored  house-building,  the increased  availability  that  o f mort-  g a g e c a p i t a l was i n s u f f i c i e n t t o m e e t t h e p r e v a i l i n g demand. By  and l a r g e t h e c o l l i e r s  o f South Wales, i n c o n t r a s t  t o those o f N o r t h e r n E n g l a n d , had t o p r o v i d e i n g s by f o r m i n g b u i l d i n g s o c i e t i e s and c l u b s . t h e i r houses by m o n t h l y i n s t a l l m e n t s .  t h e i r own  dwell-  They p a i d f o r  I t was n o t u n u s u a l ,  147  therefore,  for a collier  month i n c a p i t a l  t o be p a y i n g  a b o u t one p o u n d a  i n s t a l l m e n t s or s u b s c r i p t i o n fees i n 33  a d d i t i o n t o r e n t o f 2 2 s . t o 2 8 s . p e r month.  This  t o b e an e f f e c t i v e means o f m o b i l i z i n g t h e s a v i n g s community t o p r o v i d e h o u s i n g  f a v o r a b l e i m p a c t on h o u s e - b u i l d i n g  both the  probably  through  h a d a more  the consequent  c o n d i t i o n s i n the i n p u t markets from which  i n d u s t r i e s drew. coal-mining  of the  f o r i t s members.  Changes i n r e l a t i v e r e t u r n s , then  easing o f supply  proved  Any t e n d e n c y t o o v e r p r o d u c t i o n i n  i n d u s t r y t h a t gave r i s e  t o an i n v e n t o r y  downturn c o u l d r e l e a s e l a b o u r and m a t e r i a l s f o r u s e i n r e sidential construction. I n summary, t h e n , we h a v e s e e n and  (referring  6) t h a t t h e movements o f S o u t h W a l e s c o a l e x p o r t s a n d  s t e e l output  r e l a t i v e t o t r e n d , as w e l l as t h e f l u c t u a t i o n s  i n h o u s e - b u i l d i n g were i n v e r s e t o those and tial the  to Figures 5  house-building  i n Great  Britain.  o f home  The c o u r s e  investment of residen-  c o n s t r u c t i o n i n S o u t h W a l e s was l a r g e l y d e t e r m i n e d b y long run expansion  fluctuations  of the c o a l mining  i n the export  i n d u s t r y , and by  s e c t o r , which through  the price-  p r o f i t mechanism d e t e r m i n e d t h e i n d u s t r i a l d i s p o s i t i o n and  Jevons,  The B r i t i s h  Coal  Trade,  p. 122.  148  utilization  of productive  DEMOGRAPHIC FACTORS AND  resources.  THE  WALES: FURTHER EVIDENCE OF IN  last  s e c t i o n was  s h i p between the  ly its  THE  HOUSE-BUILDING IN  ABSENCE OF  SOUTH  REGIONAL LONG SWINGS  RESIDENTIAL CONSTRUCTION The  the  COURSE OF  course  p r i m a r i l y concerned with  industrial  development of  of house-building  discussed  the m i g r a t i o n  importance  labour  i n c o n t r i b u t i n g t o an  demand f o r h o u s i n g  accommodations.  into  now  and  T h e r e we  the  already We  relation-  South Wales  i n that region.  of  the  brief-  coalfields growing  and  local  t u r n t o a more  detailed  a n a l y s i s of m i g r a t i o n , both  e x t e r n a l and  b a s e d on  the  Welton,  internal,  34 researches  o f Thomas A.  35 and i n the  attention carried  Cairn-  36  cross, tained  A.K.  B r i n l e y Thomas,  as w e l l as  Census of P o p u l a t i o n .  t o t h e waves o f  a part of  the  the  details  In Chapter  transatlantic  con-  I I I we  migration  drew  which  n a t u r a l i n c r e a s e o f most E u r o p e a n  countries  Thomas A. W e l t o n , "Note on U r b a n and R u r a l V a r i a t i o n s A c c o r d i n g t o t h e E n g l i s h C e n s u s o f 1911", Journal of the Royal S t a t i s t i c a l Society, V o l . L X X V I , ( F e b r u a r y , 1913) , pp. 304-317; s e e a l s o by t h e same a u t h o r , England's Recent Progress: An Investigation of the Statistics of Migration, Mortality, etc., in the Twenty Years from 1881 to 19Ol, as indicating Tendencies towards 'the Growth or Decay of Particular Communities and of the Rural Portions of England and Wales, ( L o n d o n : Chapman & H a l l , L t d . , 1 9 1 1 ) . 35  . . . . A. K. C a i r n c r o s s , " I n t e r n a l M i g r a t i o n i n V i c t o r i a n E n g l a n d " , Manchester School, V o l . X V I I , ( J a n u a r y , 1 9 4 9 ) , pp. 67-87. 36 B r i n l e y Thomas, The Welsh Economy: Studies in Expansion, ( C a r d i f f : U n i v e r s i t y o f Wales P r e s s , 1962).  149  overseas p r i m a r i l y to the Americas, but Africa, of the  and  Australia.  The  t i m e - s h a p e and  l o s s e s f o r South Wales p r o v i d e  e v i d e n c e on  t h e g r o w t h and  also to A s i a , amplitude  us w i t h  further  f l u c t u a t i o n s of the  regional  economy. The  net m i g r a t i o n r a t e s f o r England, Scotland,  Wales w i l l  be  ates of net the  found i n Table V I I .  decennial  g a i n o r l o s s a r e d e t e r m i n e d by  excess of b i r t h s over deaths from the  enumerated p o p u l a t i o n between the excess of b i r t h s crease  I f , on  l e s s than the  estim-  subtracting increase  censuses.  When  in the  over deaths exceeds the recorded  i n p o p u l a t i o n , t h e r e was  migration. was  The  a net  in-  l o s s through  the other hand, the n a t u r a l recorded  population  and  out-  increase  change, t h e r e  was  a net g a i n through i n - m i g r a t i o n . I t i s c l e a r from F i g u r e a t i o n f o r Wales d i f f e r e d E n g l a n d and three  c o u n t r i e s i n the  divergent The  Scotland.  paths i n the  7 t h a t the p a t t e r n of  significantly  The  from those  migrof  both  rate of loss declined i n a l l  1 8 6 0 ' s and  e a r l y 1870's, but  1880's p r o v i d e  boom i n o v e r s e a s i n v e s t m e n t was  a striking  their  contrast.  a c c o m p a n i e d by  a  wave i n t r a n s - A t l a n t i c m i g r a t i o n  t o w h i c h E n g l a n d and  land contributed substantially-.  The  outflow  long Scot-  from Wales,  on  TABLE V I I NET GAIN (+) OR LOSS (-) THROUGH MIGRATION: ENGLAND, SCOTLAND AND WALES, DECENNIALLY 1861-1911  England  Year  Wales  Scotland  1861-71  -7  -47  -44  1871-81  -5  -35  -28  1881-91  -23  -11  -58  1891-1901  -2  -5  -13  1901-11  -19  + 45  -57  Source:  B r i n l e y Thomas, The Expansion, p. 7.  Welsh  Economy:  Studies  in  Note:  The n e t m i g r a t i o n f i g u r e s a r e e x p r e s s e d a s a r a t e p e r 10,000 o f t h e mean d e c e n n i a l p o p u l a t i o n t o a l l o w comparison of the course of m i g r a t i o n f o r each country.  Figure  151  7  DECENNIAL NET GAIN OR LOSS THROUGH MIGRATION: ENGLAND, WALES AND SCOTLAND 1861-1911  Wales  England  Scotland  1860  1870 Source:  1880  1890  See T a b l e V I I  1900  1910  152  the o t h e r hand, which continued c a d e , was  negligible.  experiences i n the  of these  first  The  to f a l l  d i f f e r e n c e s i n the  the e n t i r e  were l o n g waves i n o v e r s e a s  demographic  century.  expansion  and  Again,  European  there  emigration,  Scottish hinterland contributing i t s  s u r p l u s p o p u l a t i o n t o the p e o p l i n g of the d e v e l o p i n g tries.  But  de-  c o u n t r i e s become e v e n more p r o n o u n c e d  decade of the Twentieth  w i t h t h e E n g l i s h and  over  the experience  o f W a l e s was  coun-  unique i n t h a t  she  j o i n e d the ranks  o f the immigrant c o u n t r i e s , r e c e i v i n g peo-  p l e a t an  r a t e o f 45 p e r  We  annual  now  10,000 p o p u l a t i o n .  t u r n t o a more d e t a i l e d  gration balance  look at the  internal  f o r W a l e s , c o n c e n t r a t i n g p r i m a r i l y on  g r a p h i c changes i n the South Wales c o a l f i e l d .  The  t a b l e shows t h e p a t t e r n o f n e t r e g i o n a l c h a n g e by i n Wales f o r d e c e n n i a l p e r i o d s Using  the net  of i n d u s t r i a l the i n d u s t r i a l  f r o m 1861  to  i t i s evident  s e c t o r o f Wales  (i.e.,)  migration  1911.  from Table  Glamorgan-Monmouth-  experienced  those  ( 1 8 8 1 - 9 1 , 1901-11) when t h e i n d u s t r i a l  o f E n g l a n d and and  h i g h r a t e s of economic a c t i v i t y  S c o t l a n d were r e l a t i v e l y  1870's w i t n e s s e d  index  VIII that  shire region) decades  demo-  following  r a t e o f r e g i o n a l m i g r a t i o n a s an  expansion,  mi-  a steady  depressed.  in  sectors The  o u t f l o w of p o p u l a t i o n from  1860's the  TABLE V I I I INTERNAL MIGRATION BALANCE: WALES DECENNIALLY, 1861-1911  1861-71  1871-81  1881-91  1891-1901  1901-1911  -58,967  -64,646  -106,087  -57,413  - 37,909  +11,033  +12,213  + 87,225  +40,326  +129,295  area  - 1,984  - 1,907  -  1,122  618  -  2,875  Llandudno and Rhyl areas  - 2,268  + 2,339  +  2,190  + 8,289  +  5,715  Wales  -63,005  -52,139  - 17,794  - 9,350  - 98,492  Areas  Welsh areas  rural  GlamorganMonmouth sh i r e C o l l i e r y area Wrexham Colliery  Source: T.A. Welton, "A Note on Urban and R u r a l V a r i a t i o n s " , and A.K. C a i r n c r o s s , " I n t e r n a l M i g r a t i o n i n V i c t o r i a n England"; compiled i n B r i n l e y Thomas, The Welsh Economy: Studies in Expansion, p. 15.  154  countryside to  i n Wales.  A number o f new f o r c e s w e r e  beginning  h a v e a n i n f l u e n c e on t h e r e g i o n a l economy a n d one c o n s e -  q u e n c e o f t h i s was a m a r k e d i n c r e a s e i n t h e m o b i l i t y o f r u r a l inhabitants.  The E l e m e n t a r y E d u c a t i o n  r u p t i v e i m p a c t on t h e a g r i c u l t u r a l  A c t o f 1870 h a d a d i s -  labourer's  standard of  37 living.  The r e d u c t i o n i n f a m i l y e a r n i n g s  r e s t r i c t i o n of child  labour  for  labourer t o migrate.  the a g r i c u l t u r a l  strengthen  the agricultural  t e n d e d t o make i t more  mining of  and m a n u f a c t u r i n g  f a c t o r s such as t h e s e  productive  position,  of providing  centers.  financial  helps  enterprise.  The d i s t u r b i n g i n f l u e n c e  e x p l a i n the growing  a g r i c u l t u r e was s t i l l We r a i s e t h i s  p o i n t o u t t h a t t h e r e were f o r c e s o p e r a t i n g to  likely  r u r a l w o r k e r s who w i s h e d t o move t o t h e  exodus t h a t took p l a c e w h i l e and  by t h e  I n an a t t e m p t t o  labourers bargaining  the Labourer's Union adopted a p o l i c y a s s i s t a n c e t o those  occasioned  rural a prosperous  issue primarily to i n the rural  economy  e x p e l l a g r o w i n g s u r p l u s p o p u l a t i o n , and t h a t t h e l u r e o f  h i g h e r wages i n t h e c o a l f i e l d s a s w e l l a s o v e r s e a s w e r e n o t the only o p e r a t i v e  f a c t o r s l e a d i n g t o a r e g i o n a l and s e c t o r a l  r e d i s t r i b u t i o n of the world's population. ratively  slow growth o f t h e i n d u s t r i a l  I n d e e d , t h e compa-  s e c t o r o f South Wales  F. M u s g r o v e , " P o p u l a t i o n C h a n g e s a n d t h e S t a t u s o f t h e Y o u n g i n England since the Eighteenth.Century", The Sociological Review, V o l . I I , (1963), pp. 80-81.  0  155  i n t h e s e two d e c a d e s  allowed only  23,246 o r a p p r o x i m a t e l y  18 p e r c e n t o f t h e r u r a l o u t f l o w o f 1 2 3 , 6 1 3 p e r s o n s t o be a b s o r b e d i n t h e c o l l i e r y  districts  o f G l a m o r g a n s h i r e and  Monmouthshire. T h e r e was a s h a r p r i s e rural  districts  i n t h e n e t o u t f l o w from t h e  i n t h e 1 8 8 0 ' s w h i c h was i n p a r t a r e s p o n s e  to the a g r i c u l t u r a l depression that s e t i n a f t e r  1 8 7 9 . The  r a p i d growth o f t h e South Wales c o a l i n d u s t r y e n a b l e d  this  38 r e g i o n t o a b s o r b 82 p e r c e n t o f t h e r u r a l r e s i d u e s .  (We  a r e , o f c o u r s e , and have been s p e a k i n g f i g u r a t i v e l y :  of the  87,225 g a i n e d t h r o u g h m i g r a t i o n , many came f r o m  distant  c o u n t i e s i n E n g l a n d , S c o t l a n d a n d I r e l a n d ; w h a t we a r e h e r e trying to establish  i s t h e tremendous a b s o r p t i v e power o f  t h e S o u t h W a l e s r e g i o n a l economy.) " i n t h i s d e c a d e [1880-1889] when e m i g r a t i o n f r o m E n g l a n d was v e r y h e a v y , e m i g r a t i o n f r o m W a l e s was n e g l i g i b l e . During the n i n e t i e s , when E n g l a n d was h a v i n g a homei n v e s t m e n t boom, t h e n e t a b s o r p t i v e c a p a c i t y o f i n d u s t r y i n S o u t h W a l e s was l e s s t h a n h a l f o f what i t had been i n t h e p r e v i o u s decade. However, t h e s p e c t a c u l a r g r o w t h o f new t o w n s s u c h a s L l a n d u d n o a n d R h y l , and t h e s t r i k i n g f a l l i n s i z e o f t h e r u r a l s u r p l u s , e n a b l e d Wales t o r e t a i n almost t h e whole o f i t s n a t u r a l i n c r e a s e .  S.B. L. D r u c e , "The A l t e r a t i o n i n t h e D i s t r i b u t i o n o f t h e A g r i c u l t u r a l P o p u l a t i o n o f E n g l a n d and Wales, between t h e R e t u r n s o f t h e C e n s u s o f 1 8 7 1 a n d 1 8 8 1 " , Journal of the Royal Agricultural ciety V o l . 2 1 , ( 1 8 8 5 ) , p. 1 1 1 . 3  156  A t no t i m e was t h e c o n t r a s t more e v i d e n t t h a n i n t h e d e c a d e 1 9 0 1 - 1 1 when a n e t W e l s h r u r a l e x o d u s o f 38,000 was m a t c h e d b y a n e t a b s o r p t i o n o f 129,000 i n t h e ^g Glamorgan-Monmouthshire c o a l f i e l d ..." This stage  of her  paralleled far  f i n a l wave o f m i g r a t i o n i n t o  i n d u s t r i a l development r e f l e c t s  growth of the  t h e most i m p o r t a n t  ation,  South Wales d u r i n g not only the  c o a l i n d u s t r y , t h o u g h t h i s was  factor,  t r a n s p o r t a t i o n and  but  a l s o the progress  this  un-  by  i n educ-  c o m m u n i c a t i o n w h i c h e x p o s e d more  and  40 more p e o p l e  t o t h e a d v a n t a g e s o f town l i f e .  of a g r i c u l t u r a l  depression  was  a l s o important  employment o p p o r t u n i t i e s i n r u r a l s t r o n g push element i n the r u r a l The departed 1870. Table  industrial  and  The  areas,  thus  Figure  balances  f o r the  regions  f r o m 1861  Thomas,  The  8.  Table  Welsh  of South Wales  Scotland  after  summarized i n  IX c o n t a i n s t h e n e t  S o u t h W a l e s c o a l f i e l d and to  the  providing a  demographic experience  d i v e r g e n t p a t t e r n s are perhaps best  I X and  in limiting  exodus.  d r a m a t i c a l l y f r o m t h a t o f E n g l a n d and  The  persistence  English  migration colliery  1911.  Economy,  p.  16.  40 B u t , p e r h a p s n o t so c l e a r l y t h e d i s a d v a n t a g e s . As H o o k e r ("On t h e R e l a t i o n B e t w e e n Wages and Numbers E m p l o y e d . . . " o p . c i t . , p. 633) p o i n t s o u t , " I t i s n o t as a r u l e u n t i l t h e man has h a d e x p e r i e n c e o f t h e c o n d i t i o n s o f l i f e i n a new d i s t r i c t t h a t he a p p r e c i a t e s t h e d i f f e r e n c e b e t w e e n r e a l and money w a g e s . "  TABLE I X MIGRATION BALANCES I N ENGLISH AND WELSH COLLIERY REGIONS, DECENNIALLY 1861-1911 NET GAIN (+) NET LOSS (-)  Decade  South W a l e s Coalfield (000's)  a  E n g l i s h coal* Regions (000's)  1861-71  +  11  +  82  1871-81  +  12  +  74  1881-91  +  87  +  4  1891-1901  +  40  +  45  + 129  -  12  1901-11  Source:  a) T a b l e V I I b) A.K. C a i r n c r o s s , p. 86.  Home and Foreign  Investment,  3  158  Figure 8  DECENNIAL TRENDS IN HOUSEBUILDING AND MIGRATION: SOUTH WALES, ENGLAND AND SCOTLAND 1861-1911 South Wales Coalfield (A)  80  60  20  English Colliery Regions (B) Net D e c e n n i a l i n c r e a s e i n Housing Stock Great B r i t a i n (000's) (C)  90 80 70 -I 0 _ -10  England (D)  -30 -  -50 -  Scotland (E)  1860 Source:  1870  1890  1880  (A) and (B) T a b l e (C) (D)  1900  VIII  T a b l e XVI, Appendix I and (E) T a b l e V I  1910  159  It i s readily  apparent from F i g u r e  8 t h a t t h e demo-  g r a p h i c movements o f S o u t h W a l e s w e r e i n v e r s e t o t h o s e o f the E n g l i s h c o l l i e r y i n the aggregate.  regions  as w e l l as England and S c o t l a n d  When t h e r e was a n u p s w i n g i n t h e S o u t h  W a l e s r e g i o n a l economy, t h e B r i t i s h aneously  expanding, while  housebuilding, The  export  s e c t o r was s i m u l t -  capital construction,  a t home was d e p r e s s e d  coal output of English c o l l i e r y  (i.e.,  notably  1880's and 1 9 0 0 ' s ) .  regions, i n contrast to  S o u t h W a l e s p r o d u c t i o n , was c o n s u m e d p r i m a r i l y o n t h e home market and thus f l u c t u a t e d i n agreement w i t h t h e l o n g i n the rate of domestic c a p i t a l o f t h e South Wales c o a l f i e l d s  formation.  allowed  swings  The r a p i d g r o w t h  t h e r e g i o n a l , economy  to absorb a l a r g e percentage o f t h e c o u n t r i e s n a t u r a l o r even t o a t t r a c t a n e t i n f l o w o f l a b o u r  increase  from o t h e r  countries,  w h i l e t h e l a n g u i s h i n g home c o n s t r u c t i o n s e c t o r i n E n g l a n d and  Scotland  l e d t o a s u b s t a n t i a l increase i n the percentage  of the surplus r u r a l population  overseas.  Altern-  a t i v e l y , when e x p a n s i o n i n t h e S o u t h W a l e s c o a l f i e l d  and t h e  British  British  home  s e c t o r were d e c l i n i n g r e l a t i v e  investment,  rapidly. up  export  emigrating  During  trend,  p a r t i c u l a r l y h o u s e b u i l d i n g , was m o v i n g these  o r was p a r t i a l l y  p e r i o d s , t h e Welsh r u r a l  exodus  ahead  slowed  d i v e r t e d t o E n g l a n d w h e r e a b o o m i n g home  c o n s t r u c t i o n s e c t o r was c r e a t i n g a g r o w i n g demand f o r  labour.  160  I n C h a p t e r I I I we  drew a t t e n t i o n t o t h e  d e m o g r a p h i c movements i n E n g l a n d and purposes here, the net  rate of  Scotland  ges  construction.  i n W a l e s t h a t we  does not level.  support the The  in Figure  r a t e of  The  long  swings i n  long  at the  swing hypothesis  sharply  of the  regional  f o r Wales  from t h a t of her  experience  balance with coalfields  We  may  f o r S o u t h W a l e s and c o n c l u d e t h a t any  traced  neighbors.  Our  particular  i n the  p o i n t s t o a pronounced i n v e r s e r e l a t i o n s h i p between  Scotland.  chan-  s e c t i o n , however,  e m p h a s i s on  and  mi-  have s u r v e y e d i n t h i s  internal migration  pattern of migration  the  our  e v i d e n c e on d e m o g r a p h i c  a n a l y s i s of the the  the  l o s s through migration  8 diverges  (for  l o s s , or gain, through  g r a t i o n ) were i n complete agreement w i t h residential  fact that  south, the  that f o r England index  of  residential  c o n s t r u c t i o n f o r W a l e s as a w h o l e w o u l d f o l l o w c l o s e l y t h e regional pattern f a c t t h a t the  f o r South Wales.  is justified  r e g i o n a l economy s o d o m i n a t e d t h e  development of Wales. evidence confirms South Wales.  This  I n any  event, the  the divergent  by  the  economic  a v a i l a b l e demographic  course i n housebuilding  in  161  VARIATIONS I N THE COURSE OF HOUSE-BUILDING AT THE LOCAL L E V E L : SOUTH WALES We now t u r n t o a c l o s e r e x a m i n a t i o n  of the various  components o f t h e South Wales r e g i o n a l i n d e x . ination w i l l concentrate for  in  on t h e h o u s e - b u i l d i n g  s i x t e e n towns p r e s e n t e d  convenience,  i n Table  statistics  I o f Appendix I I .  t h e r a w d a t a on h o u s e p l a n s  each o f t h e s e  T h i s exam-  approved  For  annually  t o w n s h a s b e e n g r a p h e d i n F i g u r e 9.  We  m u s t now p r o c e e d c a u t i o u s l y u n d e r t h e f o l l o w i n g c a v e a t .  The  c o n c l u s i o n s drawn from t h e f o l l o w i n g a n a l y s i s must be c o n s i dered  tentative.  information  I have been unable t o a c q u i r e t h e r e l e v a n t  ( i . e . , Town p o p u l a t i o n c h a n g e s r e s u l t i n g  boundary a l t e r a t i o n s , monthly s u b t o t a l s o f t h e annual of plans is  t h e s e r i e s o f house p l a n s  o f a c t u a l houses b u i l t .  The raw d a t a  duced i n F i g u r e 9 a r e o n l y presented to  number  approved, e t c . , a l l d i s c u s s e d i n t h e Appendix)  required t o convert  estimates  from  the a c t u a l course Admittedly,  as rough  of house-building  approved t o series repro-  approximations  at the local  level.  the s t a t i s t i c a l problems a s s o c i a t e d w i t h  t h e method o f a n a l y s i s used i n t h e p r e s e n t shadows o v e r  that  the conclusions  subsequently  some e x t e n t c a n n o t b e a v o i d e d .  Confidence  p a p e r do c a s t drawn.  dark  This to  i n our r e s u l t s ,  162  h o w e v e r , i s r e i n f o r c e d by studies be  conclusions  of b u i l d i n g c y c l e s i n the  drawn from  United  States.  r e c a l l e d that Riggleman, i n a study c i t e d  C h a p t e r Two, few  found t h a t  "...  It  index of  will  earlier  i t i s quite probable  i n d u s t r i e s have a b e t t e r  period  earlier  activity  o f t i m e t h a n t h e b u i l d i n g i n d u s t r y has  in  that  over a  long  in building  41 permits." municipal CD.  The  problems of c o m p a r a b i l i t y  b o u n d a r y c h a n g e s may  L o n g , i n an  more a p p a r e n t t h a n  i n t e n s i v e study of b u i l d i n g c y c l e s  investment found t h a t than f i f t y  be  associated  "...  and  annexations i n over a dozen c i t i e s produced  problems a s s o c i a t e d  construction  and  construction  i s not  to argue t h a t  the  "while  dealing with  with  the  l a g between p l a n so  easily  approval  surmounted.  the  l a g i s not  i n the  ^C.D. L o n g , Building Cycles and the (Princeton: Princeton University Press,  and  of  actual  R i g g l e m a n was  able  k e p t i n m i n d when as  i m p o r t a n t when  a n n u a l d a t a as w i t h m o n t h l y d a t a ,  Riggleman, " B u i l d i n g Cycles  no  uniformity  gestation period  t h i s p o i n t must be  i n t e r p r e t i n g permit data,  4  real.  e x a m i n a t i o n o f e f f e c t s o f more  e v i d e n c e t h a t boundary changes s e r i o u s l y i m p a i r 42 of b u i l d i n g permits data." The  with  United  s i n c e most  S t a t e s " , p.  of  54.  Theory of Investment, 1940) p. 97.  163  the p e r m i t s i s s u e d  i n a given  year cover construction  com-  43 pleted w i t h i n that year."  The  evidence that i s a v a i l a b l e ,  however, appears t o i n d i c a t e t h a t the comparable d w e l l i n g than i n the United information of plan lag  there  u n i t s was States.  This  us  structure appropriate  shorter  somewhat l o n g e r f a c t along  i s a v a i l a b l e on  approvals gives  construction period  United 44  issue are  ination  l i m i t a t i o n s and  their  raw  due  form,.  a n a l y s i s , the  There are  t e c h n i q u e s have been a p p l i e d . constitutes in i t s e l f that occur during  L e w i s , Building  f o r the  by  of  the  data.  the  use  no  be  kept  smoothing  of annual smaller  data  fluctuations  random movements  i n the  Cycles  con-  f o l l o w i n g exam-  Second, a p p l i c a t i o n of the  Riggleman, " B u i l d i n g Cycles Parry  The  s e v e r a l r e a s o n s why First,  the  problems r a i s e d  a smoothing-out of the  the year.  somewhat  l o c a l data w i l l  o f moving averages would have a l l o w e d  J.  invalid  consideration  q u a l i f i c a t i o n s of the  Throughout t h i s in  The  so e a s i l y d i s m i s s e d .  i s only undertaken with  was  time  Consequently,  following analysis. not  distribution  States  a d o p t i o n o f R i g g l e m a n ' s a r g u m e n t w o u l d be  this  little  reason to b e l i e v e t h a t the to the  Britain  w i t h what  the monthly  than t h a t i n Great B r i t a i n .  venience of the  i n Great  for  and  United  method to  S t a t e s " , p.  B r i t a i n s Growth,  54. p.  302.  164  i n f l u e n c e t h e p e a k s and  troughs.  Thus, t u r n i n g p o i n t s  would o f t e n d i v e r g e from the years  i n which they  took p l a c e .  data, i t i s i n part  By  keeping  t o t h e raw  actually  p o s s i b l e t o d i s r e g a r d as t u r n i n g p o i n t s , y e t f u l l y t h e i m p a c t o f random m o v e m e n t s , s o c i a l , A third  and  natural  upheavals.  problems i s t h a t minor f l u c t u a t i o n s at the  l e v e l a r e h i g h l y i r r e g u l a r i n t i m i n g and  local  amplitude.  makes t h e c h o i c e o f a p e r i o d f o r a m o v i n g a v e r a g e and  appreciate  This arbitrary  dangerous. The  treatment study.  following w i l l  The  dearth  Wales r e n d e r s  of information i n North  economic h i s t o r y  our  a t the  t a s k p r i m a r i l y one  superficial  of house-building  activity.  c u s s i o n i n C h a p t e r I V , we  A m e r i c a on  local  level  i n the  will  be  a b l e t o say  and  local  Hopefully, i n light  at the  local  S o u t h W a l e s r e g i o n a l and  level  and  iso-  patterns  of our  dis-  something  about the r e l a t i o n s h i p between the course  house-building  the  i n South  of i d e n t i f y i n g  the most s a l i e n t c h a r a c t e r i s t i c s  meaningful  a very  o f a p r o b l e m t h a t r e q u i r e s f a r more i n t e n s i v e  d e m o g r a p h i c and  lating  o f n e c e s s i t y be  the behavior  of  Weber's n a t i o n a l i n d i c e s o f  of the resi-  dential construction. A c l o s e r look at the house-building  curves  i n F i g u r e 9 leads t o the f o l l o w i n g o b s e r v a t i o n s :  reproduced  165 Figure 9  I N D I C E S OF HOUSE-BUILDING FOR SIXTEEN TOWNS I N SOUTH WALES 1860-1914  Source: Table XVII, Appendix I I  167  500 •  300  Newport  1860  1870  1880  1890  1900  1910  170  1860  1870  1880  1890  1900  1910  171  A.  T h e r e was a w i d e r a n g e o f v a r i a t i o n i n the course of h o u s e - b u i l d i n g a t the local level.  B.  The g e n e r a l p a t t e r n o f r e s i d e n t i a l c o n s t r u c t i o n as m a n i f e s t e d i n t h e r e g i o n a l i n d e x i s r e f l e c t e d i n o n l y two o f the s i x t e e n towns s t u d i e d .  C.  V i o l e n t s h o r t run f l u c t u a t i o n s i n the l o c a l s e r i e s are l o s t i n the method of aggregation which r e s u l t s i n a s i g n i f i c a n t l y smoothed r e g i o n a l b u i l d i n g c u r v e (index).  D.  A long swing i n r e s i d e n t i a l c o n s t r u c t i o n c a n be d i s t i n g u i s h e d i n o n l y f i v e o f t h e local series.  In the at  y e a r s 1860-69 h o u s e - b u i l d i n g  a v e r y low  level.  T h i s was  in part  i n South Wales  a consequence of  o v e r - s u p p l y of h o u s i n g accommodations r e s u l t i n g from speculative  b u i l d i n g boom i n t h e  l a t e 1850's.  The  as  the  e s p e c i a l l y a f t e r 1866, a reduction  depressed state  of  the  were i m p o r t a n t f a c t o r s  towns of  Swansea  later  de-  contributing  i n e f f e c t i v e demand f o r d w e l l i n g s .  i n the  the  l o c a l economy,  (1863-67) and  to  There were,  however, s i g n i f i c a n t , i f o n l y minor, upswings i n activity  the  moderate  amount o f m i g r a t i o n i n t h i s d e c a d e , c o m p a r e d w i t h c a d e s , as w e l l  was  building  Aberdare  which were r e f l e c t e d i n a minor f l u c t u a t i o n i n the  (1863-66) ,  South Wales  172  r e g i o n a l i n d e x , c e n t e r e d on 1867.  From 1868  t o 1872  de-  p r e s s i o n i n t h e c o n s t r u c t i o n i n d u s t r y p r e v a i l e d i n most of  t h e t o w n s f o r w h i c h we  Cardiff  and L l a n e l l y  The  have d a t a , e x c e p t p e r h a p s ,  M.B.  decade of the  ' s e v e n t i e s w i t n e s s e d an  dented increase i n r e s i d e n t i a l South Wales.  construction  unprece-  throughout  For each of the s e r i e s presented i n F i g u r e  which extends back  through t h i s  i n h o u s e - b u i l d i n g can be  decade,  identified.  a significant  The m o s t  9,  boom  spectacular  i n c r e a s e s o c c u r r e d i n S w a n s e a w h e r e t h e number o f h o u s e p l a n s approved Cardiff 1875. by  j u m p e d f r o m 213  i n 1872  w h e r e t h e i n c r e a s e was  t o 820  f r o m 251  I n t h e p r e v i o u s s e c t i o n we  i n 1875; i n 1872  and i n t o 648  discussed the r o l e  in  played  S o u t h W a l e s i n t h e g r e a t c o n s t r u c t i o n and r a i l w a y booms  t h a t got underway t h r o u g h o u t t h e w o r l d around  1870.  In  a t t e m p t i n g t o meet t h e r e q u i r e m e n t s o f an e x p a n d i n g w o r l d market  for coal,  and C a r d i f f , their  iron,  c o p p e r and t i n p l a t e ,  Swansea  as t h e m a j o r p o r t s on t h e B r i s t o l C h a n n e l ,  d o c k s , s t o r a g e and  Each o f t h e s e towns, and t h e m a r k e t s i n heavy  both  loading f a c i l i t i e s  as a m a j o r n e x u s b e t w e e n t h e  o v e r s e a s became a f o c a l  i n d u s t r y and  taxed to  found  capacity.  hinterland  point f o r investment  s o c i a l overhead c a p i t a l .  s y s t e m s w e r e e x t e n d e d and t h e p o r t s b u r g e o n e d  Transportation with  activity.  173  Decennial  i n c r e a s e s i n town p o p u l a t i o n p r o v i d e  good i n d i c a t i o n o f the r e l a t i v e activity s e a was  at the  local  4 1 , 0 0 0 , by  level.  1871  a  i n t e n s i t i e s of  I n 1861  t h i s had  reasonably  economic  the p o p u l a t i o n of  g r o w n t o 5 2 , 0 0 0 , an  Swan-  increase  45 o f 25 p e r  cent.  f o l l o w e d by  The  moderate growth of the  a wave o f i n - m i g r a t i o n o v e r  1860's  the next  was  ten  years.  A t t r a c t i n g newcomers n o t o n l y f r o m W e l s h r u r a l a r e a s  but  a l s o f r o m d i s t a n t c o u n t i e s s u c h as C o r n w a l l , D e v o n , G o u c e s t e r and  Somerset i n E n g l a n d , t h e town p o p u l a t i o n s w e l l e d  76,000 b y  1881,  the net decennial i n c r e a s e being  that i n the previous  decade.  to  over  C a r d i f f experienced  a  twice  similar  demographic i n c r e a s e , her p o p u l a t i o n r i s i n g g r a d u a l l y 33,000 i n 1861 83,000 b y  t o 40,000 i n 1 8 7 1 ,  1881.  Approximately  and  then  exploding  17,000 o f t h e  43,000  i n c r e a s e i s a t t r i b u t a b l e t o changes i n m u n i c i p a l I t s h o u l d be  kept  i n mind, however, t h a t of the  from to  decennial  boundaries. 17,000  per-  sons added by b o u n d a r y c h a n g e s , a s u b s t a n t i a l p e r c e n t a g e were a l s o newly r e l o c a t e d migrants  f r o m t h e h i n t e r l a n d and  distant  46 counties. 45 B.R. ^Ibid,  Mitchell, British p.  24.  Historical  Statistics,  p.  115  174  The  upswing i n b u i l d i n g  manifested  i n the l o c a l  towns i n South  activity  during the  house-building series  i n d e x and  i n Great B r i t a i n .  This s i m i l a r i t y  the South  lends credence  in residential  r e s u l t o f m a j o r e c o n o m i c and  to the  determined,  which  favorable to increased building a c t i v i t y . accept or d i s m i s s such  t e n s i v e study of l o c a l  historical  It is difficult  records.  industrial which  a growing  of h o u s e - b u i l d i n g at the l o c a l  e x p e r i e n c e s o f two  On  the  other  prominent  almost  entirely  coal.  The  following  diversity  i n the  level.  useful to concentrate b r i e f l y t o w n s : S w a n s e a and  b a s e o f S w a n s e a was  developed  un-  a p r o p o s i t i o n w i t h o u t a more i n -  1 8 7 0 ' s t h e r e was  I t m i g h t be  the  override  hand, i t i s e v i d e n t from F i g u r e 9 t h a t i n the y e a r s  course  hy-  either  o r r e g i o n a l c o n d i t i o n s t h a t m i g h t o t h e r w i s e be  t h e boom o f t h e  Wales  c o n s t r u c t i o n are  demographic f o r c e s ,  n a t i o n a l l y or i n t e r n a t i o n a l l y  to  the  Weber's i n d e x o f r e s i d e n t i a l c o n s t r u c t i o n  p o t h e s i s t h a t long swings  local  for various  Wales i s i n g e n e r a l agreement w i t h  course of house-building represented i n both regional  1870's  f a r more b a l a n c e d  on t h e  different  Cardiff. than  The  that  i n the East country; the l a t t e r c o n c e n t r a t i n g i n t h e p r o d u c t i o n o f i r o n and m i n i n g  advantages of a c o a s t a l  site  and  of  free access  steam to  coal  175  made S w a n s e a  ideally situated  metallurgical centrated yfera in  f o r the development of v a r i o u s  i n d u s t r i e s , which eventually  i n t h i s Western region.  i r o n w o r k s , where t h e f i r s t  came t o b e  con-  The Y n y s c e d w y n a n d Y s t a l successful  use o f  anthracite  t h e s m e l t i n g o f i r o n had been a c h i e v e d by George Crane i n  1837, were l o c a t e d  i n t h e Swansea V a l l e y .  "By 1 8 7 5 ,  fifty-  seven o f t h e seventy-seven t i n p l a t e works i n the U n i t e d dom w e r e s i t u a t e d  i n S o u t h W a l e s , m a i n l y on t h e c o a s t n e a r  P o r t T a l b o t , Swansea, and L l a n e l l y . was  Of l e s s e r  the g r a v i t a t i o n of a substantial portion  lead,  King-  z i n c , and s i l v e r  smelting industries  importance  of B r i t a i n s '  t o w a r d s t h e same  47 area." in  C o p p e r s m e l t i n g was  and a r o u n d Swansea.  smelting capacity this  area.  dustries in the  was  a major industry  o f t h e U n i t e d K i n g d o m was  so g r e a t t h a t  concentrated i n  consumed b y t h e s e l o c a l i n -  t h e number o f c o l l i e r s  as h i g h as t h e number o f men  of the e a r l y  employed  occupied i n  A l lof these i n d u s t r i e s p a r t i c i p a t e d  v e s t m e n t boom and p r o s p e r i t y  i n the i n -  1870's o n l y t o f i n d  t h e m s e l v e s f a r more v u l n e r a b l e t o t h e f l u c t u a t i o n s  pp.  M o r r i s and 47-48.  situated  I n 1 8 7 6 , 54 p e r c e n t o f t h e c o p p e r  The amount o f c o a l  t h e m i n e s was works.  also  W i l l i a m s , The  South  Wales  Coal  i n market  Industry  3  176  conditions  t h a t were t o f o l l o w .  By  1876,  both the  and  i r o n i n d u s t r i e s were w e l l beyond t h e i r peaks.  the  c o p p e r i n d u s t r y i t was  smelt the  copper ore  production  i n 1871  d i t i o n s of the  1872  created  Franco-Prussian  War  The by  was  perceived  abnormal  s u p e r i m p o s e d on i n the  t o have been d e c l i n i n g from the  the  i n S w a n s e a was  availability  expectations  o f c r e d i t as w e l l as  of greater  dustrial prosperity. comes h a d The  significantly  profits  E a r l i e r we  of  influenced  by  abnormal i n -  l e v e l s i n the  s u p p l e m e n t e d by  in-  early  i n c o m e a v a i l a b l e f o r e x p e n d i t u r e on  a c c o m o d a t i o n was  builders  n o t e d t h a t wages and  r i s e n to extremely high  increased  1860's.  course  speculative  f o s t e r e d by  the  that  late  There i s every reason to b e l i e v e that the  con-  Western  a c y c l i c a l d e p a r t u r e from a trend  house-building  to  boom i n i r o n  the  requirements of heavy investment p r o j e c t s h e m i s p h e r e was  In  b e c o m i n g more e c o n o m i c a l  near the mines.  and  copper  1870's.  housing  a growing volume of  mort-  gage c r e d i t , p r i m a r i l y f i n a n c e d  by  little  i s i n d i c a t e s t h a t much o f  the  a v a i l a b l e evidence there  c r e d i t e x t e n d e d was  restrictions Building i n g was  i m p o s e d on  S o c i e t i e s Act often  ignored.  Building societies.  i n v i o l a t i o n of c e r t a i n d u t i e s societies incorporated of  1874.  I n Cole  The v.  intended  Swansea  under  What  and  the  l i m i t on Cooperative  borrow-  177  Building in  Society  i t was  stated that  "The S o c i e t y  started  1875 a n d i m m e d i a t e l y e x c e e d e d t h e i r b o r r o w i n g p o w e r s , 48  a p o s i t i o n i n w h i c h they have ever s i n c e c o n t i n u e d  (1885)."  The S t . H e l e n s B u i l d i n g S o c i e t i e s o f Swansea w e r e a l s o t o have v i o l a t e d t h e i r  authorized 49  b o r r o w i n g l i m i t s by a  rather  l a r g e sum o f £35,000.  tainly  e n c o u r a g e d t h e boom i n h o u s e - b u i l d i n g .  E a s y money c o n d i t i o n s The  i n house-building  part  a lagged response t o the s e c t o r a l readjustments  the i n d u s t r i a l  i n Swansea a f t e r 1875 was i n  c o l l a p s e o f 1873.  i r o n i n d u s t r y t h e r e was  increased  unemployment as w e l l as  more u n e m p l o y m e n t i n t h e c o a l f i e l d s  not  i n the metalurgical  the only  Expectations belief  occasioned  With the d e c l i n e of the  r e d u c e d demand f o r c o a l i n t h e West c o u n t r y ,  stagnation  cer-  precipitous  fall  by  activity  found  thus  creating  a r o u n d Swansea.  i n d u s t r i e s a f t e r 1873  But was  r e a s o n f o r t h e r e l a t i v e d e c l i n e i n t h e West. of greater  p r o g r e s s were b a s e d l a r g e l y on t h e  t h a t t h e steam r a i s i n g q u a l i t i e s o f a n t h r a c i t e would  e n a b l e t h i s West l a n d  staple to gain  access t o wide markets.  The f a i l u r e o f a t t e m p t s t o f i n d new, more p r o d u c t i v e  uses  f o r a n t h r a c i t e c o a l soon p r o v e d t h i s b e l i e f t o be i n e r r o r . Elek  E . J . C l e a r y , The Building Society B o o k s L t d . , 1965) p. 120. Ibid,  p.  122  Movement  3  (London:  178  T h o u g h t h e more p r o s p e r o u s y e a r s came t o an the m e t a l u r g i c a l  i n d u s t r i e s a r o u n d Swansea w i t h  o f d e p r e s s i o n i n 1873, dustry  was  hardly  d e t e r m i n e d by  the  affected  the  i n industry  and  unevenly over the  The  f o u n d t h e i r way C a r d i f f and  applications  of  now  around the  The  to  world.  i n the  r e g i o n s where m i n i n g v a l l e y s of  g r o w t h o f C a r d i f f as  coal export trade was  Rhondda  (the  the  due  t o the  transport  the  Taff  of  rail  extent of e x p l o i t a t i o n of  important factor contributing was 1875.  the  to the  the  In t h a t y e a r , however, the  v a l l e y w e r e j u s t b e g i n n i n g t o be  In the  Another  Cardiff  acres  r e s e r v e s of the  tapped.  part  intensity  b r i s k trade at  coal  of  especially  valleys.  e x p a n s i o n o f d o c k a c c o m m o d a t i o n s t o 9 71/2  im-  to  small  facilities,  V a l e Railway, which helped determine the the  most  opposed  S o u t h W a l e s i s i n no  and  of  t o t a l volume  3,780,000 t o n s as  acti-  valleys  ports  768,000 t o n s f o r Swansea) o f provision  The  distributed  f o r e i g n markets through the The  This  techno-  smokeless steam c o a l s mined i n t h e s e  s h i p m e n t s i n 1874  as w e l l as  primarily  steam  i n c o a l p r o d u c t i o n was  coalfield.  Newport.  portant port coal  the  d e v e l o p e d most r a p i d l y were the  Aberdare.  onset  "sale-coal" i n -  f o r i t s p r o g r e s s was  transportation  corresponding increase  vity  the  for  s t a t e o f w o r l d demand f o r s t e a m c o a l .  demand g r e w s t e a d i l y w i t h logy  growth of the  end  by Rhondda  following  decade  179  t h e o p e n i n g up o f new c o l l i e r i e s ones r a i s e d t h e annual  and t h e e x t e n s i o n o f e x i s t i n g  p r o d u c t i o n o f t h e v a l l e y b y 31/2 m i l l i o n  tons. The  phenomenal growth o f C a r d i f f  house-building  s e r i e s presented  i s reflected  i n F i g u r e 9.  i nthe  I t s development  after  1878 s t a n d s  i n marked c o n t r a s t t o t h a t o f Swansea.  sharp  u p s w i n g i n h o u s e - b u i l d i n g b e t w e e n 1873 a n d 1875 was  The  f o l l o w e d by a f o u r - y e a r pause i n which t h e s e r i e s f l u c t u a t e s about a h i g h building and  600 l e v e l .  fell  These were y e a r s  i n which  house-  o f f d r a m a t i c a l l y i n Swansea, L l a n e l l y  Blaenavon.  The t r o u g h  coincides with extremely  i n the r e g i o n a l index  low l e v e l s o f b u i l d i n g  i n 1879 activity in  S w a n s e a , M o u n t a i n A s h , Ebbw V a l e , B l a e n a v o n , M e r t h y r A b e r d a r e and Newport.  was s e v e r e l y d e p r e s s e d ,  relatively  went a p r o l o n g e d the years  (Weber's  opened w i t h a d r a m a t i c  i n Swansea u n t i l  1888-92 b y s h o r t a g e s  index)  increase i n  The i n d u s t r y r e m a i n e d 1886 w h i l e C a r d i f f  boom i n h o u s e - b u i l d i n g ,  Further evidence and  Britain  i n C a r d i f f and P e n a r t h .  depressed  Tydfil,  The d e c a d e o f t h e 1 8 8 0 ' s , i n w h i c h  the c o n s t r u c t i o n i n d u s t r y i n Great  house-building  M.B.,  of capital  under-  interrupted only i n and work  stoppages.  on t h e d i s s i m i l a r d e v e l o p m e n t o f Swansea  C a r d i f f i s found i n t h e d a t a on m u n i c i p a l p o p u l a t i o n  changes.  I n 1 8 7 1 , t h e p o p u l a t i o n o f S w a n s e a was 5 2 , 0 0 0 , b y 1881 t h i s h a d  180  grown t o 76,000, by increased  1891  t o 9 5,000.  w e l l w i t h the  i t was  The  course  net  91,000 and  decennial  For  fell  s h a r p l y a f t e r 1895  1898-1900; i n t h i s 4,000.  The  p o p u l a t i o n o f C a r d i f f on  and  164,000 i n 1901.  and  90"s  correspond  But  the  to the  an  house-  level  in  i n c r e a s e d by  only rose  129,000 i n  b u i l d i n g booms o f t h e  closely  o f 4 3 , 0 0 0 , 46,000 and  1890.  the o t h e r hand  t o 83,000 i n 1 8 8 1 , The  very  example,  to i t s lowest  decade the p o p u l a t i o n  f r o m 40,000 i n 1 8 7 1 ,  i t had  1880's c o i n c i d e d w i t h  upswing i n r e s i d e n t i a l c o n s t r u c t i o n u n t i l building  1901  changes agree  of house-building.  i n c r e a s e o f 24,000 p e o p l e i n t h e  by  1891  1870's,  large decennial  80's  increases  35,000 r e s p e c t i v e l y i n t h e u r b a n  po-  pulation. • The o f war  period extending  i n 1914  witnesses  from the  the  a p p e a r a n c e and  s m a l l towns t h r o u g h o u t t h e r e g i o n s extent  this  i s evidenced  by  1880's u n t i l  of the  the  outbreak  g r o w t h o f many  coalfield.  t h e g r o w i n g number o f  To  local  some record  51 on h o u s e - b u i l d i n g  Mitchell,  t h a t become a v a i l a b l e i n t h i s p e r i o d .  British  H i s t o r i c a l S t a t i s t i c s > pp.  An  24-27.  51 The H e a l t h A c t o f 1848 r e q u i r e d l o c a l h e a l t h b o a r d s t o be s e t up o n c e a c e r t a i n d e g r e e o f u r b a n i z a t i o n h a d b e e n r e a c h These b o a r d s were r e s p o n s i b l e f o r the enforcement of B u i l d i n g By-Laws and t h e m a i n t e n a n c e o f r e c o r d s on a p p r o v e d h o u s e p l a n s  181  outstanding  c h a r a c t e r i s t i c of the  industrialization  of  S o u t h W a l e s i s t h e m a r k e d l a c k o f u n i f o r m i t y by w h i c h l o c a l development of broad s e c t o r s ceeded.  This  u n e v e n g r o w t h was  of the  coalfield  a r e s u l t of the  i n t e r a c t i o n o f numerous g e o l o g i c a l , t e c h n i c a l , and  economic f a c t o r s .  A complete explanation  p r o c e s s l i e s beyond the ever,  the  a t the  productive be  level  ment i n and  concentrating  able  forces  on  industry  I f the  South Wales  local pattern  r e g i o n a l development, but o n l y be  One  extent  u n d e r s t o o d by  f a c t o r s we  then dismiss  the  f r o m any  develop-  regional  t o the  must operative  of development.  and  the  The  impetus  progress of  fully  for  that  appreciating  s o o f t e n r e f e r t o as  local  conditions,  analysis.  important c h a r a c t e r i s t i c of the  ment o f S o u t h W a l e s was  could  w h a t s o e v e r , we  g r o w i n g i n t e r n a t i o n a l demand f o r c o a l p r o v i d e d  and  house-building  individual valleys  a n a l y t i c a l value  c o n d i t i o n i n g the  the v a r i e t y of  this  progress of  t o r e l a t e i t i n some m e a n i n g f u l way  d e v e l o p m e n t can  personal,  of  course of  the  to the  entire region.  i n d e x i s t o h a v e any be  the  a n a l y s i s of t h i s  factors specific  throughout the  complex  i n S o u t h W a l e s s u g g e s t s t h a t a more  approach t o the  u n d e r t a k e n by  pro-  s c o p e o f t h e p r e s e n t p a p e r ; how-  a v a i l a b l e e v i d e n c e on  local  the  the  industrial  develop-  growth of c e r t a i n w e l l - d e f i n e d  182  urban areas i n v a r i o u s p a r t s of the h i n t e r l a n d . graphy of the c o a l f i e l d played process  of urbanization.  valleys  separated  by  The  an  important  For  i n t e r j a c e n t mountain ranges  the purposes of l o c a l  new  urban  civil  p a r i s h e s , each o f w h i c h had  of the v a l l e y s .  I n w h a t f o l l o w s , we  individual entities.  By  topothis  narrow largely  districts.  a d m i n i s t r a t i o n , the  u r b a n a r e a s w e r e f a r more s u i t a b l e , and old  role in  e x i s t e n c e of long,  determined the boundaries of these  The  new  soon r e p l a c e d  extended over  the  several  t r e a t t h e v a l l e y s as  s o d o i n g , we  are able to t r a c e  the  c l o s e r e l a t i o n s h i p between development i n the c o a l i n d u s t r y , the  course  of house-building  at the  a t i o n changes a t the a p p r o p r i a t e population  data  following  reason:  local  level,  and  popul-  l e v e l of aggregation.  a r e d r a w n p r i m a r i l y f r o m Hodges f o r  the  "Without a l o c a l knowledge, i t i s almost i m p o s s i b l e t o c o m p u t e an a c c u r a t e e s t i m a t e of the p o p u l a t i o n of these v a l l e y s from the Census f i g u r e s , s i n c e the v a r i o u s parish populations given overlap into several valleys. T h u s i t i s o n l y b y means o f many c r o s s - c a l c u l a t i o n s c o u p l e d w i t h l o c a l knowledge of the places mentioned t h a t approximate v a l l e y t o t a l s c a n be c o m p u t e d . " 5 2  Hodges, " P e o p l i n g  of the  H i n t e r l a n d " , p.  67.  Our  183  Early to  1860  was  l a n d west valleys  development  o f South Wales from around  c o n c e n t r a t e d i n Swansea, t h e i m m e d i a t e  o f the V a l e o f Neath  i n the East.  were f i r s t  iron  and  and  The m a j o r second  a c h i e v e d m a t u r i t y by  iron production these v a l l e y s  after  industries  iron  Aberdare  in this The  period  valleys  producing regions  of  that  t h e 1860's; and w i t h t h e d e c l i n e  the e a r l y  remained  hinter-  t h e M e r t h y r and  coal production.  M e r t h y r and A b e r d a r e were m a j o r had  1825  1870's, t h e p o p u l a t i o n s  relatively  unchanged  from  1860  of  of  to  1890. The and  slight  early  decline  1880's was  development  i n population  i n part  a consequence  o f t h e Rhondda and  smaller  rather  development  rapid  wage  differ-  a t t r a c t e d workers  Aberdare, Mountain  l o n g pause  Ash,  and  i n the i n d u s t r i a l  i n the l o c a l  house-building  urban areas of these regions.  t h e a n n u a l number o f h o u s e a v e r y low also  of the  away  the other  and  o f t h e M e r t h y r and A b e r d a r e V a l l e y s  reflected  the major  was  1870's  communities.  This  clearly  the  the p r e v a i l i n g  e n t i a l s between the v a l l e y s which from M e r t h y r T y d f i l ,  during  level  until  p l a n s approved  after  f o l l o w e d by M o u n t a i n  1890. Ash  This  demographic  i s very  patterns for  In M e r t h y r fluctuated general  and A b e r d a r e  Tydfil, around  time path  except f o r  184  r e l a t i v e l y high l e v e l s of b u i l d i n g a c t i v i t y t o w n f r o m 1873  t o 1876.  The  i n the  latter  e x p e r i e n c e of t h e s e towns i s  i n g e n e r a l disagreement w i t h the course of h o u s e - b u i l d i n g found i n t h e South Wales r e g i o n a l i n d e x . a r g u e d t h a t Weber's n a t i o n a l reflects We  Y e t i t may  index of r e s i d e n t i a l  t h e l o c a l t r e n d s i n the decade of the h a v e s e e n t h a t when t h e b u i l d i n g  B r i t a i n was  be  construction  'Eighties.  industry i n Great  d e p r e s s e d i n t h e 1 8 8 0 ' s and e a r l y  1890's,  Swan-  s e a and C a r d i f f were u n d e r g o i n g t h e most v i g o r o u s b u i l d i n g booms t h e y w e r e t o e x p e r i e n c e i n t h e e n t i r e h a l f which t h i s  i n q u i r y i s concerned.  a l s o departed markedly  century with  O t h e r towns i n South  from the n a t i o n a l t r e n d .  The  recorded  number o f h o u s e p l a n s a p p r o v e d  i n P e n a r t h and L l w c h w r  r e l a t i v e l y h i g h i n the 1880's,  fell  respectively,  and r e m a i n e d  o f f a f t e r 1887,  low f o r a decade  quent work s t o p p a g e s .  and 1891 b y  The  was  and  1889  thereafter.  I n N e w p o r t , a b u i l d i n g boom i n t h e m i d - e i g h t i e s i n t e r r u p t e d b e t w e e n 1889  Wales  l a b o u r u n r e s t and  was fre-  amiable labour r e l a t i o n s that  follow-  e d and t h e g r o w i n g i m p o r t a n c e o f N e w p o r t i n t h e c o a l e x p o r t t r a d e c o n t r i b u t e d t o an u n p r e c e d e n t e d b u i l d i n g boom i n t h i s town d u r i n g t h e 1890's.  Growing  economic  activity  and  a  d r a m a t i c i n c r e a s e i n r e q u i r e d h o u s i n g accommodations are r e flected  i n the upsurge  i n Newport's  enumerated  population  from  185  38,000  i n 1881 t o 67,000  i n 1901.  5 3  The Rhondda V a l l e y was r i c h l y quality for this  endowed  steam c o a l i n t h e U n i t e d Kingdom.  with the finest A s t h e w o r l d demand  c o m m o d i t y i n c r e a s e d , g r e a t e r e n e r g y was d i r e c t e d  to the exploitation  o f t h e s u p e r i o r c o a l seams i n t h e v a l l e y .  A t r a n s p o r t a t i o n network connecting t h e upper reaches  of the  Rhondda w i t h C a r d i f f h a d b e e n c o m p l e t e d w e l l b e f o r e t h e m i d eighteen s i x t i e s . new c o l l i e r i e s  " I n the t e n years ending  i n 1875, s i x t e e n  w e r e o p e n e d t o t h e s e m e a s u r e s i n t h e Rhondda  F a w r a n d f o u r i n t h e Rhondda  Fach.  Yet despite the substantial  c o n t r i b u t i o n t h e y h a d a l r e a d y made t o t h e o u t p u t o f t h e v a l l e y they were m o s t l y  still  i n t h e p r o c e s s o f b e i n g opened o u t . I n  t h e n e x t d e c a d e t h e a n n u a l p r o d u c t i o n o f t h e v a l l e y was t o 54  r i s e by a f u r t h e r  31/2 m i l l i o n  tons  was o n l y t h e b e g i n n i n g o f t h e f u l l r e s e r v e s i n t h e Rhondda.  ..."  T h i s , however,  exploitation  of the coal  The C e n s u s o f P o p u l a t i o n p r o v i d e s  us w i t h f u r t h e r e v i d e n c e on t h e p r o g r e s s o f i n d u s t r i a l ment i n t h e v a l l e y .  develop-  I n 1881, t h e t o t a l p o p u l a t i o n o f t h e Rhondda  V a l l e y was 81,895, b y 1891 t h i s h a d g r o w n t o 127,980 a n d i n Mitchell,  British  Historical  Statistics,  p. 27.  54  M o r r i s a n d W i l l i a m s , The South p.  115.  Wales  Coal  Industry,  TABLE X  POPULATIONS OF THE MERTHYR AND ABERDARE V A L L E Y S ,  DECENNIALLY  1861-1891  Region  1861  1871  1881  1891  Merthyr V a l l e y  69,618  54,741  51,712  61,135  Aberdare V a l l e y  37,487  38,637  38,137  43,314  Source:  T. M a n s e l H o d g e s , "The P e o p l i n g o f t h e H i n t e r l a n d and P o r t o f C a r d i f f , 1 8 0 1 - 1 9 1 4 , " Economic History Review, V o l . X V I I , ( 1 9 4 7 ) , p. 5.  187  1914  i t stood  a t 162,592.  T h r o u g h o u t t h e p e r i o d 1880-1914, the  Rhondda V a l l e y f a i l e d  population.  This  t o keep pace w i t h  l e d to a generally high  activity  i n t h e towns o f t h e v a l l e y  building  series  of a  residential strong  ly  approved  of building  as e v i d e n c e d  by t h e  The t i m e - s h a p e  towns, however,  to the national pattern.  i n the early  o f f i n the course  of the century,  increases i n  level  and P o n t y p r i d d .  c o n s t r u c t i o n i n these  high, but f e l l  turn got  f o r Rhondda  inverse relation  o f house p l a n s  house-building i n  another  1890's was  bears T h e number  extraordinari-  o f the decade.  After the  t r e m e n d o u s boom i n h o u s e - b u i l d i n g  underway. This  latter  upswing i n the f i r s t  decade o f t h e Twentieth  c e n t u r y was n o t u n i q u e t o t h e towns o f t h e Rhondda. a common e x p e r i e n c e  o f many o f t h e c o m m u n i t i e s  I t was  throughout  South Wales, b e i n g  most p r o n o u n c e d i n t h e towns o f t h e A b e r d a r e  and  From h i g h  Ebbw v a l l e y s .  activity these  or increasing levels  i n t h e 1890's, r e s i d e n t i a l  towns r o s e  Ebbw V a l e ,  c o n s t r u c t i o n i n each o f  t o i t s h i g h e s t peak i n t h e f o l l o w i n g y e a r s :  1909 and A b e r t i l l e r y ,  Hodges,  of building  "Peopling  1909 b o t h  o f t h e Ebbw V a l l e y ;  o f t h e H i n t e r l a n d " , p p . 69,71.  i  188  A b e r d a r e , 1906;  Mountain Ash,  1905.  experienced dramatic increases  O t h e r towns  that  i n t h i s p e r i o d were Tredegar  ( a f t e r 19 02) , Rhymney, L l w c h w r , L l a n e l l y , N e w p o r t ,  Swansea,  and  M e r t h y r T d y f i l , where a phenomenal r i s e  turn  the  century  pervasive sectors t o the  was  f o l l o w e d by  trend  of the  in residential  t r a c e d by  long the  construction  the  national  wide-spread coincidence  building during explained  a n o t h e r boom a f t e r 1906.  by  the  the  t u r n of the  of  various  l o c a l booms i n h o u s e -  f i f t e e n years before  response of the  century.  By  1914  The  accompanied by  coal production  and  to the  part  r e g i o n a l economy t o underway  the around  i n t e r n a t i o n a l economy  d e c l i n e o f i r o n and  i n d u s t r i e s was  is in  t h i s time the marriage of  South Wales c o a l i n d u s t r y t o the  vulnerability  The  index.  swing i n overseas investment t h a t got  complete.  f o r the  of  r e g i o n a l economy i s i n m a r k e d c o n t r a d i s t i n c t i o n  pattern The  at the  the  other  increased  consequently greater  the was  metalurgical  specialization in d e p e n d e n c e on  and  s t a t e o f i n t e r n a t i o n a l demand f o r c o a l . ^  F o r an a c c o u n t o f t h e d e c l i n e o f t h e m e t a l u r g i c a l i n d u s t r i e s o f S o u t h W a l e s s e e R.O. R o b e r t s , "The D e v e l o p m e n t and Decline of the Non-ferrous M e t a l Smelting I n d u s t r i e s i n South Wales", Transactions of the Honourable Society of Cymmrodarion, (1956), r e p r i n t e d i n W.E. M i n c h i n t o n , I n d u s t r i a l South Wales 17 50-1914, ( L o n d o n : F r a n k C a s s and Co., L t d . , 1 9 6 9 ) , pp. 1 2 1 - 1 6 0 .  189  In  the years  f o l l o w i n g t h e F i r s t W o r l d War  this  latter  c h a r a c t e r i s t i c o f t h e r e g i o n a l economy became a c h r o n i c problem.  The  of l o c a l persons 19 31.  s h r i n k i n g o f w o r l d m a r k e t s and  the c o n t r a c t i o n  i n d u s t r y i n South Wales l e d t o a l o s s of  242,000  b y m i g r a t i o n b e t w e e n t h e C e n s u s o f 19 21 a n d The  19 31 was  volume o f m i g r a t i o n i n the f i v e y e a r s  s o h i g h t h a t t h e r e was  an a b s o l u t e f a l l  t h a t of  that followed i n the  re-  57 g i o n a l p o p u l a t i o n of over  100,000.  We  cite  only to i l l u s t r a t e the extent to which the  these  local  facts  economy  had  become d e p e n d e n t u p o n e x t e r n a l e c o n o m i c f o r c e s . The  most t e l l i n g e v i d e n c e  c i p a t i o n of the broad  of the f a r reaching  s e c t o r s of t h e South Wales r e g i o n a l  economy i n t h e i n v e s t m e n t  boom a b r o a d i s t h e f a c t t h a t  t r e m e n d o u s m a g n e t i c a t t r a c t i o n o f 129,29 5 p e o p l e colliery 1901  regions of Glamorganshire  t o 1911  This dramatic in  local  parti-  transformed  and  to  the  Monmouthshire  W a l e s i n t o an i m m i g r a n t  builders expectations. speculative nature  R e e s , Studies  a very  in  Welsh  History,  the  i n d u s t r y i n Great  p.  prosperity  f a v o r a b l e impact  Much g e n e r a l c o m m e n t a r y on  of the b u i l d i n g  from  country.  demographic s h i f t coupled w i t h growing  i n d u s t r y must have had  147  the  on growing  Britain  190  can be found i n volumes o f the Building  Societies  Gazette  from the l a t e 1890's and e a r l y 19 00"s.  One s p e c u l a t i v e  b u i l d i n g got underway i t was able t o a t t r a c t some o f the c a p i t a l f l o w i n g i n t o the i n d u s t r i a l s e c t o r .  T h i s may have  been an important f a c t o r c o n t r i b u t i n g t o the f e v e r i s h b u i l d i n g booms throughout the South Wales c o a l f i e l d  i n these two  decades. In t h i s chapter  we have s t u d i e d i n some d e t a i l the  course o f h o u s e - b u i l d i n g  i n South Wales and i t s r e l a t i o n s h i p  t o the n a t i o n a l t r e n d f o r Great B r i t a i n . a t i o n o f the b e h a v i o r has  been presented  o f the r e g i o n a l h o u s e - b u i l d i n g  explanindex  i n terms o f economic and demographic f a c -  t o r s unique t o South Wales.  T h i s , however, was undertaken  at the r e g i o n a l l e v e l o f a g g r e g a t i o n . we focused  A tentative  In the f i n a l  section  g r e a t e r a t t e n t i o n on the course o f h o u s e - b u i l d i n g  at t h e l o c a l l e v e l .  There a r e two important reasons f o r t h i s .  F i r s t , examination o f aggregate i n d i c e s alone, whether n a t i o n a l or r e g i o n a l , may suggest p a t t e r n s  of behavior  quite  different  from t h a t e x i s t i n g i n any one o f the towns i n c l u d e d i n the indices.  Second, we have found t h a t the course o f house-  b u i l d i n g d i f f e r e d , n o t so much from town t o town, w i t h i n the same v a l l e y , b u t s i g n i f i c a n t l y ' b e t w e e n towns o f d i f f e r e n t valleys.  T h i s was i n l a r g e p a r t due t o the topography o f the  191  coalfield nical,  as w e l l as t h e i n t e r a c t i o n o f g e o l o g i c a l , t e c h -  e c o n o m i c , and  demographic i n f l u e n c e s t h a t were  t r i b u t e d unevenly i n time more u n i f o r m l y o v e r The  the e n t i r e c o a l f i e l d ,  valley.  an  a t t h e town l e v e l r e n d e r s  T h i s , however, i s not  p r o b l e m a t t h e r e g i o n a l l e v e l as national level.  ment t h i s w i l l ing if  on  Valley.  On  as c r i t i c a l  a  i t i s between the r e g i o n a l  s t i m u l a t e a boom i n h o u s e - b u i l d i n g , and a n a l y s i s i t may  t h i s boom i s c o n c e n t r a t e d  o r may  not  i n t h e Rhondda o r t h e  t h e o t h e r h a n d i f we  matter Merthyr  would want t o  s i d e r more c l o s e l y i n t r a - r e g i o n a l r e a c t i o n s , s u c h a s ,  number o f i m p o r t a n t building in  passing.  having We for  t h a t we  access  and  their  causes.  of  have not d i s c u s s e d , o r have mentioned been the u n f o r t u n a t e  to l o c a l  records  and  causal confor  There are  f a c t o r s i n f l u e n c i n g the course  T h i s has  developdepend-  are i n t e r e s t e d i n the  m e c h a n i s m o f t h e r e g i o n a l c y c l e , t h e n we  example, demographic s h i f t s  ex-  examining i t s  I f there i s a r e g i o n a l upswing i n  the purpose of our  course  the task of  aggregate index hazardous without  l o c a l components.  and  but  e x i s t e n c e of c o n s i d e r a b l e d i f f e r e n c e s i n the  of house-building plaining  each  over  dis-  a  houseonly  consequence of  not  other relevant information.  have, f o r example, i n d i c a t e d the b r o a d changes i n p o p u l a t i o n important  more u s e f u l ,  v a l l e y s and f o r our  towns, but  i t would have been f a r  p u r p o s e s , t o have been a b l e t o  determine  19 2  the r a t e of house-hold formation breakdown of i n t e r n a l m i g r a t i o n and  other  factors.  i n the data,  d i s t r i b u t i o n of the p o p u l a t i o n  i s the appropriate  population  an  and  the  explanatory  i n v e r s e r e l a t i o n s h i p between changes i n the  course  of house-building.  such c o n s i d e r a t i o n s are very  "The  went i n t o the  u n m a r r i e d men,  net  accommodation,  Wales c o a l f i e l d p e o p l e who  sex  Thus, because  i n a demand f u n c t i o n f o r h o u s i n g find  by  such t h a t the  r a t e of house-hold f o r m a t i o n  may  po-  - o r changes i n the  declines.  one  in  accompanied  rate of house-hold formation  variable  a  the marriage r a t e ,  c a n be  c h a n g e s i n t h e m a r r i a g e r a t e and age  from  I t i s possible that increases  p u l a t i o n o v e r a number o f y e a r s  and  coalfield  and  For  the  important.  c o a l f i e l d were m a i n l y  as a r e s u l t we  find  South  t h a t i n the  young coalfield  p a r i s h e s , t h e number o f m a l e s g r e a t l y e x c e e d s t h e number o f females;  note t h i s  e s p e c i a l l y i n the d i s t r i c t s  m o s t r e c e n t l y d e v e l o p e d as d i d t h e the  w h i c h have  Rhondda V a l l e y , w h e r e  f e m a l e s o n l y number a b o u t 84 p e r  cent  of the males.  In 5  the p a r i s h e s  outside  Such changes i n t h e  the  coalfield,  the  c h a r a c t e r i s t i c mix  reverse of the  i s the  local  case."  population  A.E. T r u e m a n , " P o p u l a t i o n C h a n g e s i n t h e E a s t e r n P a r t t h e S o u t h W a l e s C o a l f i e l d " , Geographical Journal, V o l . 53, ( J u n e , 1 9 1 9 ) , pp. 4 1 0 - 4 1 9 .  of  193  may h e l p  e x p l a i n why i n some t o w n s l i k e ,  1901 a n d 1 9 1 1 , t h e h o u s e - b u i l d i n g the towns p o p u l a t i o n  increased  C a r d i f f between  i n d u s t r y stagnated  f r o m 164,000  while  t o 182,000 p e r -  59 sons. every  Certainly the observation dwelling contained  shortage  that i n the v a l l e y s "nearly  i t s ' l o d g e r s ' , a n d s u c h was t h e  o f s l e e p i n g accommodation t h a t beds worked d o u b l e  t i m e - d a y and n i g h t " ^  was p r o m p t e d b y t h e s p e c i f i c  influence  of such demographic f a c t o r s . The d e a r t h  o f i n f o r m a t i o n on r e n t s and v a c a n c i e s h a s ,  o f n e c e s s i t y , c a u s e d us t o c o n c e n t r a t e  on o t h e r  matters.  The a g g r e g a t e r e n t i n d i c e s o f B o w l e y , C a i r n c r o s s a n d Weber are c l e a r l y  inappropriate.  I f we a r e g o i n g  to discuss the  i n f l u e n c e o f changes i n r e n t a l r a t e s on t h e l e v e l o f b u i l d i n g activity,  t h e n t h e a n a l y s i s must c o n s i d e r  in a particular  r e n t s and b u i l d i n g  locality.  In t h e t h i r d  section of this  chapter  we d e v o t e d  some  attention to b u i l d i n g costs, rates of return i n the b u i l d i n g i n d u s t r y and t h e i r r e l a t i o n s h i p t o t h e course T h i s , h o w e v e r , was i n t h e c o n t e x t  Mitchell, Hodges,  British  "Peopling  of house-building.  o f o u r a n a l y t i c a l model and  Historical Statistics,  p. 25.  o f t h e H i n t e r l a n d " , p. 70.  19 4  r e q u i r e s much more e m p i r i c a l w o r k a t t h e l o c a l  level.  We h a v e d i s c u s s e d o n l y b r i e f l y , w i t h r e s p e c t t o h o u s e building  i n Swansea and C a r d i f f , t h e r o l e o f c r e d i t and i n  p a r t i c u l a r the a c t i v i t i e s  of building  i n f o r m a t i o n i s a v a i l a b l e on t h e s e  societies.  financial  Very  little  institutions,  w h i c h f u n d e d p e r h a p s a s much a s 25 p e r c e n t o f t h e h o u s e building  i n Great  concerning  the supply  complicated fully  B r i t a i n during this period. of c r e d i t , both  This  l o n g and s h o r t , i s a  o n e , a n d m u s t b e s t u d i e d f u r t h e r i f we  understand  issue  are to  t h e mechanism o f t h e b u i l d i n g c y c l e i n South  Wales. In l i g h t o f these this  chapter  d i f f i c u l t i e s , we h a v e a t t e m p t e d i n  t o o u t l i n e t h e b r o a d r e g i o n a l and l o c a l  ences i n t h e course  of house-building  differ-  i n South Wales.  The  r e g i o n a l time-shape of r e s i d e n t i a l c o n s t r u c t i o n i s conspicuous its  g e n e r a l upward t r e n d and t h e a b s e n c e o f t h e f a m i l i a r  swings.  Our a n a l y s i s o f c a u s a l m e c h a n i s m s s u g g e s t s  course  o f r e s i d e n t i a l c o n s t r u c t i o n i n S o u t h W a l e s was  determined by the long r u n expansion  long  that the largely  of the c o a l mining i n -  d u s t r y w h i c h n o t o n l y drew l a b o u r u n c e s s a n t l y distant  in  from border  and  counties but also l e d to p e r i o d i c s h i f t s of population  w i t h i n the region.  Short  r u n movements i n h o u s e - b u i l d i n g  were  19 5  primarily periods we  a result  of b r i s k expansion  d e s c r i b e d how  through  of resource  mechanism  disposition  and u t i l i z a t i o n  Finally,  have  concept  patterns.  We  level,  trade  of scarce productive  where  swing  is a  during  Earlier worked industrial resources.  mythical  house-building  i s especially  movements and e x h i b i t s a w i d e v a r i e t y  h a v e p e r h a p s r a i s e d more q u e s t i o n s  have answered, b u t t h i s study  sector.  to determine the  seen t h a t the long  at the l o c a l  p r o n e t o random  o f the primary  f l u c t u a t i o n s i n the export  a price-profit  we  stringencies arising  only  serves  i s r e q u i r e d a t the r e g i o n a l  than  of we  t o p o i n t o u t t h a t more  level.  CHAPTER V I  R E S I D E N T I A L CONSTRUCTION  I N SOUTH-EAST  LANCASHIRE  A REGIONAL INDEX OF HOUSE-BUILDING I N SOUTH-EAST Extensive examination  of Surveyor's  the records o f l o c a l Health O f f i c e r s South-east tical  Lancashire  s e r i e s of plans  LANCASHIRE  R e g i s t e r s and  forfifty  towns i n  p r o d u c e d a s i m i l a r number o f s t a t i s approved and houses e r e c t e d w h i c h were  used by J . P a r r y Lewis t o c o n s t r u c t a r e g i o n a l index o f building  activity  i n the Manchester conurbation.^  gion i s of special  i n t e r e s t b e c a u s e i t was  the center o f the cotton i n d u s t r y i n Great The  approach taken  t h a t o f C h a p t e r V.  i n t h i s chapter  the regional house-building  regional experience of r e s i d e n t i a l by  area.  Britain.  i s identical to  index.  Lancashire  with the national pattern  c o n s t r u c t i o n i n Great  ofr e -  as r e f l e c t e d  A comparison o f the (Weber's  Britain) w i l l  a t e n t a t i v e e x p l a n a t i o n of the course  this  (and s t i l l i s )  We b e g i n b y o u t l i n i n g t h e c o u r s e  s i d e n t i a l c o n s t r u c t i o n i n South-east in  This r e -  index  be f o l l o w e d  of house-building i n  Here, once a g a i n , t h e emphasis w i l l  b e on demo-  ^"J. P a r r y L e w i s , " I n d i c e s o f H o u s e - B u i l d i n g i n t h e M a n c h e s t e r C o n u r b a t i o n , S o u t h Wales and G r e a t B r i t a i n , 1851-1913". 19 6  197  g r a p h i c and Lancashire.  industrial  F i n a l l y , we  behavior of the l o c a l The  factors peculiar will  to  South-east  e x a m i n e more c l o s e l y  components o f t h e r e g i o n a l  data used f o r the c o n s t r u c t i o n of the  the  index. South-east  L a n c a s h i r e r e g i o n a l i n d e x w e r e s u b j e c t t o t h e many p r o b l e m s encountered building  by  R i c h a r d s and  statistics  t o t r a n s f o r m t h e raw  Lewis  f o r South  i n t h e i r study of  Wales.  The  house-  adjustments  data into a reasonable  required  approximation  t h e a c t u a l number o f h o u s e s b u i l t w e r e v e r y much t h e as t h o s e e m p l o y e d i n t h e f o r m e r The  study.  i n F i g u r e 10  of house-building i n Great B r i t a i n . house-building a c t i v i t y  in this  a m i n o r p l a t e a u i n 1862-63.  s e v e r e d e p r e s s i o n i n B o l t o n and reflected 186 3 and late  186 8.  The  i n 1860,  in  index 1857  steadily  mid-1860's were y e a r s Ashton-under-Lyne.  to of  This i s between  m a j o r upswing t h a t g o t underway i n t h e  interrupted briefly  continued to r i s e  level  From a t r o u g h  i n a shallow trough i n the r e g i o n a l index  1 8 6 0 ' s was  o f 37.9  South-east  a l o n g w i t h Weber's  region climbed  The  same  (See A p p e n d i x I I ) .  r e g i o n a l index of house-building i n  Lancashire i s presented  of  i n 1 8 7 1 - 7 2 , and  t o a m a j o r peak i n 1876-77.  then  From a v a l u e  the r e g i o n a l index climbed to i t s highest  f o r t h e c e n t u r y , 169.7.  T h i s boom i n r e s i d e n t i a l  198  construction reflects  the  s i m i l a r experiences  of  Altrincham,  A s h t o n - u n d e r - L y n e , S a l f o r d , O l d h a m , B u r y , B o l t o n and  Roch-  dale . House-building the  r e g i o n a l i n d e x had  the b u i l d i n g with c r i s i s the  fell  late  p l u n g e d t o a low  a f t e r 1877. o f 51.7.  By  1882  Crisis  in  i n d u s t r y a p p e a r s t o h a v e p r e v a i l e d s i d e by  side  i n the c o t t o n i n d u s t r y throughout L a n c a s h i r e  in  1870's.  h o w e v e r , was 1883-85 was  precipitously  The  depression  to persist f o l l o w e d by  in residential construction,  f o r ten years. s i x years  A minor upswing i n  i n w h i c h t h e r e was  s i g n i f i c a n t change i n the r e g i o n a l i n d e x . house-building  Although  p a t t e r n s were f a r from u n i f o r m ,  i n d u s t r y i n S a l f o r d , A l t i r i n c h a m , R o c h d a l e and  no local  the c o n s t r u c t i o n  B u r y was  es-  p e c i a l l y hard h i t . The  s e c o n d r e g i o n a l l o n g s w i n g i n t h e p e r i o d 1860-1914  got underway i n S o u t h - e a s t building  climbed  Lancashire  t o a m a j o r p e a k i n 189 8.  c o t t o n consumption during these years perity  and  in industrial A sharp  arrested  The  upswing i n  and  a marked i n -  including house-building.  d e c l i n e i n the r e g i o n a l index a f t e r  i n 1902  pros-  R o c h d a l e , Oldham,  Altrincham, a l l experienced activity,  House-  b r o u g h t a wave o f  t o t h e c o t t o n towns o f L a n c a s h i r e ,  Salford, Burnley crease  i n the mid-1890's.  residential  construction i n  189 8  was  South-east  Figure  HOUSE-BUILDING BRITAIN AND  1860  1870  199  10  INDICES FOR  SOUTH-EAST  1880  Source: Great B r i t a i n Appendix I  GREAT  LANCASHIRE  1890  1900  1860-1914 - See T a b l e  1910  XV  S o u t h - E a s t L a n c a s h i r e , 1860-1914 - See Table XVIII, Appendix I I I .  200  Lancashire  remains a t a r e l a t i v e l y  The r e g i o n a l i n d e x  falls  high  l e v e l u n t i l 1909.  off, thereafter, reflecting  a  general trend i n a l l of the l o c a l  s e r i e s during the f i v e  years  o f war i n Europe.  t h a t preceeded the outbreak  DIFFERENCES BETWEEN THE COURSE OF HOUSE-BUILDING B R I T A I N AND  SOUTH-EAST LANCASHIRE  A comparison of the r e g i o n a l index i n South-east  similarities.  of house-building  L a n c a s h i r e w i t h Weber's i n d e x o f  c o n s t r u c t i o n i n Great  the  I N GREAT  Britain  residential  p o i n t s up a number o f s t r i k i n g  I n g e n e r a l , t h e minor f l u c t u a t i o n s as w e l l as  long term trends  i n the r e g i o n a l index are r e f l e c t e d i n  t h e n a t i o n a l h o u s e - b u i l d i n g p a t t e r n f r o m 1860 t o 189 8. 1 8 6 2 - 6 3 , when h o u s e - b u i l d i n g reached  a m i n o r p l a t e a u , Weber's i n d e x  The t r o u g h  that followed gained  in  in  The u p s w i n g  momentum f a s t e r i n S o u t h - e a s t  t h e n a t i o n as a whole.  Lancashire  A pause i n the r e g i o n a l  index  t h e m i n o r r e v e r s a l i n Weber's  that i n t e r r u p t e d the f i r s t  house-building index  had  shows a m i n o r p e a k .  at the n a t i o n a l l e v e l .  1871 came two y e a r s b e f o r e  index  Lancashire  i n t h e m i d - s i x t i e s was somewhat more p r o l o n g e d  the cotton r e g i o n than  than  i n South-east  In  long swing.  a c t i v i t y that followed, pushing  The b u r s t o f the r e g i o n a l  t o i t s h i g h e s t p o i n t i n 1876 was f a r more i n t e n s e  than  201  its  counterpart i n the national In  at  the late  'seventies house-building f e l l  t h e n a t i o n a l and r e g i o n a l l e v e l .  of Lancashire The  aggregate.  shared  rapidly  both  The b u i l d i n g i n d u s t r y  i n the national depression  o f t h e 1880's.  upswing t h a t f o l l o w e d , however, preceeded t h e n a t i o n a l  u p s w i n g b y n e a r l y two y e a r s .  Both  p e a k i n 189 8, b u t i n t h e o p e n i n g century, t h e i r courses  departed  i n d i c e s climbed  t o a major  decade o f t h e Twentieth dramatically.  A national  b u i l d i n g boom i n 1903 h a s no c o u n t e r p a r t i n t h e r e g i o n a l i n d e x . House-building  fell  189 8 a n d 1 9 0 2 .  sharply i n South-east  Lancashire  between  Y e t these were y e a r s o f e x c e p t i o n a l l y h i g h  building activity  f o rGreat  Britain  as a whole.  The r e g i o n a l  i n d e x r e m a i n e d r e l a t i v e l y u n c h a n g e d f r o m 1902 t o 1 9 0 9 , w h i l e Weber's i n d e x  fell  steadily after  p r i o r t o the outbreak in  1903.  of hostilities  Only i n t h e f o u r  years  i n 1914 d i d h o u s e - b u i l d i n g  S o u t h - e a s t L a n c a s h i r e assume a c o u r s e  similar  to that  t r a c e d by the n a t i o n a l index. We w i l l on  now e x a m i n e i n some d e t a i l  the i n d u s t r i a l  cashire.  and demographic h i s t o r y o f S o u t h - e a s t  Our p u r p o s e h e r e  (as i n Chapter  r e l a t e the long swings i n r e s i d e n t i a l mic  the available  development o f South-east  evidence Lan-  V) i s t o t r y t o  c o n s t r u c t i o n t o t h e econo-  Lancashire w i t h i n the context of  a d e v e l o p i n g n a t i o n a l economy w i t h c h a n g i n g  commitments  abroad.  202  HOUSE-BUILDING AND THE ECONOMIC DEVELOPMENT OF SOUTH-EAST LANCASHIRE Lancashire  o f f e r e d a number o f n a t u r a l a d v a n t a g e s  f a v o r a b l e t o the development o f the c o t t o n i n d u s t r y . raw  m a t e r i a l s r e q u i r e d f o r m a n u f a c t u r e had t o be  and  much o f t h e f i n a l  kets. age  was d e s t i n e d  and c o m m e r c i a l f a c i l i t i e s .  hub  for  finishing  W a t e r was p l e n t i f u l process.  suited  s i t u a t e d f o r t h e home  to the production  and t h e g e n e r a l  flexible  f o r use i n b o i l e r s  o f c o t t o n goods.  of coal and t h e  i s particularA i r currents  contain a high percentage of moist-  dampness makes t h e c o t t o n f i b r e s  a n d c a u s e s them t o c l i n g  breakages.  sources  The c l i m a t e i n L a n c a s h i r e  blown i n o f f the A t l a n t i c ure,  stor-  o f demand a n d M a n c h e s t e r a s t h e c e n t r a l  I n a d d i t i o n t h e r e were cheap l o c a l  power.  unlimited  The d o m e s t i c m a r k e t was  o f t h e i n d u s t r y was c o n v e n i e n t l y  trade.  imported  f o r f o r e i g n mar-  For t h i s purpose, L i v e r p o o l provided  a l s o a major source  ly  product  The  together,  Chapman a r g u e s t h a t t h e p r i m a r y  cotton industry s e t t l i n g  i n Lancashire  thus  more  reducing  reasons f o r the  were " t h a t t h e w o o l l e n  i n d u s t r y was a l r e a d y t h e r e , t h a t f o r e i g n e r s w e r e k i n d l y  recei-  2 ved,  a n d t h a t M a n c h e s t e r was n o t a C o r p o r a t i o n . "  S y d n e y J . Chapman, The Lancashire Cotton c h e s t e r U n i v e r s i t y P r e s s , 1 9 0 4 ) , p. 154.  These  Indus try  }  (Man-  203  f a c t o r s e n c o u r a g e d m a n u f a c t u r e and by  the  on  i n d u s t r y and  commercial  comparative freedom p r o v i d e d  t a b l i s h e d , the  trade.  from l o c a l  However, once the  n a t u r a l or geographical  enterprise restrictions  i n d u s t r y was  es-  a d v a n t a g e s became  important i n drawing the manufacture p r o g r e s s i v e l y to  Lan-  cashire . The was  concentration  of the  cotton  a strategic factor in realizing  industry i n  the  advantages  Lancashire of  s p e c i a l i z a t i o n which tended to encourage s t i l l  further  l o c a l i z a t i o n of production.  striking  evidence of t h i s operatives  the  trated  I n 1835,  e m p l o y e d i n E n g l a n d and  Lancashire. 1911  trend.  This  had  g r o w n t o 87  percentage of the  i n Lancashire  and  r e a c h e d i t s p e a k i . e . , 90 In the cotton and  with  59  per  cent of the  per  c e n t i n 1881  domestic cotton  cent i n terms of  labour  employment. the  Lancashire  There are  f o r example,  w e a v i n g became s e p a r a t e b r a n c h e s o f rather d i f f e r e n t types of  had  internalspecialization  unknown e l s e w h e r e .  c o m m e r c i a l r e a s o n s why,  by  concen-  the border area of C h e s h i r e per  in  and  industry  course of the Nineteenth century  d i v i s i o n of  cotton  Wales were l o c a t e d  i n d u s t r y a c h i e v e d a degree of  t e c h n i c a l and and  Table XI provides  the  f i r m s and  the  numerous spinning  industry  associated  t h e s e have been  TABLE X I  LOCATION OF THE COTTON INDUSTRY I N ENGLAND AND WALES, 1835-19 21 (000's)  18  3 5  18  8 1  MALE FEMALE TOTAL MALE FEMALE TOTAL  (A)  19  1 1  MALE FEMALE TOTAL  19  2 1  MALE FEMALE TOTAL  Number e n g a g e d in cotton industry i n Lancashire and C h e s h i r e  200  328  528  (B) Number e n g a g e d i n cotton indust r y i n E n g l a n d and Wales  229  367  596  (A) a s % (B)  S o u r c e : W i l l i a m P a g e , Commerce and Industry, (London: C o n s t a b l e and Company, L t d . , 1 9 1 9 ) , p. 2 3 0 . R. R o b s o n , The Cotton Industry in B r i t a i n , ( L o n d o n : M a c M i l l a n & Co. L t d . , 1 9 5 7 ) , p . 3 5 .  89  £  205  discussed elsewhere. t o be  separated  shire. south  The  operations also  largely  i n the northern border  even w i t h i n t h i s  tended  g e o g r a p h i c a l l y w i t h i n South-east  T h u s s p i n n i n g was and  two  a r e a t h e r e was  concentrated  i n the  r e g i o n of Cheshire.  f i n e r y a r n s were spun i n t h e n e i g h b o r h o o d o f  and  M a n c h e s t e r , w h e r e t h e r e was  Bolton  a g r e a t demand f o r s e w i n g  C o a r s e y a r n s w e r e p r o d u c e d i n Oldham and  surrounding  towns.  were c h i e f l y  The  conducted  i n the North,  and  here again  a geographical d i f f e r e n t i a t i o n of productions.  and  light  f a b r i c s a r e p r o d u c e d i n P r e s t o n and and  processes  Chorley,  D a r w i n and  B o l t o n i s the center f o r f i n e q u i l t i n g s  and  t h a t o f w e a v i n g , e.g.,  b l e a c h i n g , d y i n g , m e r c e r i z i n g and  while  India  Altrincham.  fancy  cotton  S p e c i a l i z a t i o n a l s o extended i n t o the  following  there Fine  o t h e r goods p r i m a r i l y d e s t i n e d f o r the  trade are manufactured i n Blackburn,  d r e s s goods.  the  weaving operations of the i n d u s t r y  was  shirtings  But  further specialization.  The  thread.  Lanca-  calico 4 finishing.  various  printing,  I n t r a - i n d u s t r y d i f f e r e n c e s i n the s t r u c t u r e of  production  See J o h n J e w k e s , "The L o c a l i z a t i o n o f t h e C o t t o n I n d u s t r y " , Economic History, V o l . I I , ( J a n u a r y , 1 9 3 0 ) , pp. 9 1 - 1 0 6 ; Chapman, Lancashire Cotton Industry, pp. 1 6 1 - 9 . 4 W i l f r e d S m i t h , An economic Geography of Great Britain, L o n d o n : M e t h u e n and Co. L t d . , 1 9 4 9 ) , pp. 4 7 4 - 8 .  206  and t r a d e , i . e . , o p t i m a l  s i z e o f f i r m s and c o m m e r c i a l  o r g a n i z a t i o n , were o f t e n i m p o r t a n t  factors contributing  t o l o c a l v a r i a t i o n s i n p r o s p e r i t y and d e v e l o p m e n t .  Weaving,  f o r e x a m p l e , c o u l d b e c o n d u c t e d p r o f i t a b l y on a s m a l l s c a l e , but  s p i n n i n g g e n e r a l l y r e q u i r e d a g r e a t e r commitment o f  fixed  and w o r k i n g c a p i t a l .  barriers to entry a l m o s t anywhere)  B e c a u s e t h e r e w e r e so  few  ( l o o m s w e r e c h e a p and c o u l d be p u t up w e a v i n g was  f a r more c o m p e t i t i v e  than  s p i n n i n g , and p r o f i t s w e r e , t h u s , more r a p i d l y e l i m i n a t e d . As a c o n s e q u e n c e , t h i s b r a n c h o f t h e i n d u s t r y t e n d e d t o respond q u i c k l y t o changes i n market c o n d i t i o n s , w h i l e lagged the  somewhat b e h i n d .  To some e x t e n t  this derived  spinning  from  s t r u c t u r e o f t h e m a r k e t s f a c i n g t h e two m a j o r b r a n c h e s  o f t h e c o t t o n i n d u s t r y : s p i n n e r s h a d many m a r k e t s i n w h i c h t o sell  t h e i r g o o d s , w h i l e t h e l a r g e number o f w e a v e r s h a d  tively  rela-  few.  The  applications of t e c h n i c a l innovations  t o the various  branches of the cotton i n d u s t r y at d i f f e r e n t times often m e a n t t h a t a wave o f p r o s p e r i t y i n t h e i n n o v a t i n g coincided with periods The  experience  provide  a good  of depressed a c t i v i t y  sector  i n other  o f Oldham a n d A s h t o n - u n d e r - L y n e i n t h e example.  sectors. 1880's  207  T h e s e t o w n s "Were b o o m i n g b e c a u s e t h e y h a d developed t h e i r mule t w i s t b u s i n e s s . Mule was c h e a p e r t h a n w a r p s made f r o m t h r o s t l e yarns. Keen c o m p e t i t i o n h a d r e d u c e d c o s t s b u t h a d a l s o r e d u c e d p r i c e s , a n d t h e manuf a c t u r e r who made m o s t c h e a p l y s u r v i v e d a t the expense o f t h e o l d f a s h i o n e d t h r o s t l e spinners. These were l o c a t e d l a r g e l y i n B u r n l e y , R o s e n d a l e a n d R o c h d a l e , a n d s o we see t h o s e a r e a s e x p e r i e n c i n g l e s s happy t i m e s t h a n Oldham saw."5 Thus, d e s p i t e t h e h i g h l y l o c a l i z e d nature and  of the industry  t h e more o r l e s s s t r o n g l i n k a g e s b e t w e e n t h e v a r i o u s  sectors there a r e reasons  t o expect  of development w i t h i n South-east significantly.  We w i l l  section of this  chapter.  By  that the l o c a l  patterns  L a n c a s h i r e may h a v e  return to this  differed  issue i n the f i n a l  1860 t h e c o t t o n i n d u s t r y o f L a n c a s h i r e a n d t h e b o r -  der regions t o t h e south dimensions.  A t t h a t time  cotton m i l l s  employing  and e a s t had grown t o i m p r e s s i v e t h e r e e x i s t e d n e a r l y two t h o u s a n d  half  a million operatives.  The i m p o r t -  a t i o n o f 139 0 m i l l i o n p o u n d s o f r a w c o t t o n k e p t no l e s s  than  300,000 p o w e r l o o m s a n d 211/2 m i l l i o n s p i n d l e s o p e r a t i n g n e a r g capacity. A very l a r g e percentage o f t h i s growth took p l a c e  J. Parry Lewis, p. 1 1 7 .  Building  Cycles  and B r i t a i n ' s  ^W.O. H e n d e r s o n , The Lancashire Cotton Famine, (New Y o r k , A u g u s t u s M. K e l l e y , 1 9 6 9 ) , p. 1.  Growth, 1861-18 65,  208  in  the decade b e f o r e 1860.  Between 1850 and  1861 the  number o f looms i n the weaving s e c t o r of the c o t t o n i n dustry  (U.K.) i n c r e a s e d by 150,635 or 60 per cent.  While  the number of s p i n d l e s added i n the s p i n n i n g s e c t o r t o 7 tailed  9,410,450,  an i n c r e a s e of 39.1 per cent.  tremendous expansion in  This  i n productive capacity, e s p e c i a l l y  the y e a r s 1 8 5 9 - 1 8 6 1 , made p o s s i b l e the p r o d u c t i o n of  far  more c o t t o n c l o t h than a v a i l a b l e markets were  to  absorb. The L a n c a s h i r e c o t t o n i n d u s t r y was  upon the Southern  ready  h i g h l y dependent  U n i t e d S t a t e s f o r her s u p p l i e s of  raw  g cotton.  The  outbreak  o f the American C i v i l  i m p o s i t i o n of the Blockade of  War  1,261,400,000  In 1861  British  c o t t o n imports  totalled  l a t e r they had  dropped by n e a r l y 60 per cent to  l e v e l was  the  l e d t o an abrupt c u r t a i l m e n t  c o t t o n shipments to Great B r i t a i n .  pounds and  and  pounds.  A year 533,100,00  i t was  not b e f o r e 186 5 t h a t the former h i g h 9 regained. There can be l i t t l e q u e s t i o n t h a t  Thomas E l l i s o n , The Cotton Trade of Great Frank Cass and Co. L t d . , 1 8 8 6 ) , p. 77  B r i t a i n , (London:  p  B. E l l i n g e r , "The Cotton Famine of 1 8 6 1 - 4 " , Economic History, V o l . I l l , (January, 1 9 3 4 ) , pp. 1 5 2 - 1 6 7 . q  Henderson, Lancashire  Cotton  Famine,  p. 35.  209  the Cotton cotton  Famine c o n t r i b u t e d t o t h e d e p r e s s i o n  industry during  i n the  t h e p e r i o d 1861-186 4, h o w e v e r ,  t h e c r i s i s was n o t due e n t i r e l y  t o the shortage  o f raw  material. We  n o t e d above t h e marked i n c r e a s e i n t h e  c a p a c i t y o f t h e U.K. Data r e f e r r i n g located  be r e c a l l e d entirely  c o t t o n i n d u s t r y f r o m 1850 t o 1 8 6 0 .  specifically  i n Lancashire  i s not a v a i l a b l e .  However,  i t may  of the i n d u s t r y are almost  t o t h i s r e g i o n and t h u s t h e d a t a f o r  E n g l a n d and W a l e s p r e s e n t e d reasonable  t o t h e segment o f t h e i n d u s t r y  that the operations  confined  productive  approximations  i n T a b l e X I I may  be  considered  t o a c t u a l changes i n t h e l o c a l  industry. In the years supplied the world needed.  1859 a n d 1860 t h e S o u t h e r n U n i t e d market w i t h  f a r more c o t t o n t h a n  A t t h e same t i m e t h e r e was  States was  a sharp increase i n the  demand f o r c o t t o n g o o d s i n t h e F a r E a s t .  With  abundant  s u p p l i e s o f raw c o t t o n b e i n g made a v a i l a b l e a t f a l l i n g and  unusually  f a v o r a b l e market c o n d i t i o n s , Lancashire  m a n u f a c t u r e r s r e s p o n d e d by o p e r a t i n g and, and  their mills  prices cotton  at capacity  as shown b y T a b l e X I I , b y i n v e s t i n g h e a v i l y i n new machinery t o increase t h e i r capacity.  B e t w e e n 1858  mills and  TABLE X I I  CHANGES I N THE NUMBER OF FACTORIES, POWER-LOOMS, SPINDLES AND  PERSONS EMPLOYED I N THE  COTTON INDUSTRY OF ENGLAND AND WALES, 1858-6 8  FACTORIES  1858  PERCENTAGE CHANGE  2,046  POWER-LOOMS  275,590 32  1861  2,715  2,405  SPINDLES  PERCENTAGE CHANGE  25,818,576 33  368,125 -11  1868  PERCENTAGE CHANGE  10  -6  S o u r c e : K a r l M a r x , Capital, V o l . I , (Chicago: K e r r & Company, 1 9 0 8 ) , pp. 4 7 4 - 5 .  20 407,598  7 30,478,228  Charles  PERCENTAGE CHANGE  341,170  28,352,152  344,719  PERSONS  -12 357,052  H.  to i— o  1  211  1861, of  669 new c o t t o n m i l l s w e r e c o n s t r u c t e d ,  32 p e r c e n t .  an  increase  The number o f p o w e r l o o m s i n o p e r a t i o n  r o s e b y o n e t h i r d , w h i l e t h e r e was a t e n p e r c e n t in  t h e number o f s p i n d l e s .  66,428 new  The l a b o u r  cotton workers.  from a g r i c u l t u r a l of the labour  regions  increase  force swelled  Many o f t h e s e w e r e  migrants  and b o r d e r c o u n t i e s .  The  f o r c e a d d e d t o t h e demand f o r h o u s i n g  a t i o n s and t h e p r o s p e r i t y o f t h e s e  years  with  made t h i s  growth accommoddemand  effective.  The h o u s e - b u i l d i n g  the  r e g i o n a l c o n s t r u c t i o n boom t h a t g o t u n d e r w a y  general  after  industry participated i n  1857. The t r e m e n d o u s g r o w t h o f p r o d u c t i v e  considerable the  over-production  accumulation  goods.  i n t h e c o t t o n i n d u s t r y and  o f m i l l i o n s o f pounds o f u n s o l d  To some e x t e n t  from t h i s  the Cotton  c o n d i t i o n by f o r c i n g a r e d u c t i o n  brokers,  pression  i n the cotton  industry.  relief  i n output.  But  by a few m a n u f a c t u r e r s  t h e y were f a r o u t w e i g h e d by f o u r y e a r s  d o m i n a t e d t h e r e g i o n a l economy e v e n more  cotton  Famine p r o v i d e d  whatever s h o r t - r u n b e n e f i t s were g a i n e d and  capacity led to  And b e c a u s e t h i s  of Lancashire,  o f deindustry  the c r i s i s  was  acute.  The i m p a c t o f t h e c r i s i s  i s c l e a r from Table X I I .  B e t w e e n 1861 a n d 1 8 6 8 , o v e r t h r e e h u n d r e d m i l l s c l o s e d  their  212  doors.  The number o f p o w e r l o o m s i n o p e r a t i o n s  6 p e r c e n t , a n d t h o u g h t h e r e was a s l i g h t t h e number  fell  by  increase i n  o f s p i n d l e s , employment i n t h e i n d u s t r y as  a w h o l e d e c l i n e d b y 12 p e r c e n t .  But t h i s h a r d l y  tells  the e n t i r e s t o r y . " A t t h e c r i s i s o f t h e f a m i n e ( i n November, 1862) t h e r e w e r e 247,230 o p e r a t i v e s o u t o f w o r k , a n d 16 5,60 0 w o r k i n g s h o r t t i m e . I n t h e same month no l e s s t h a n 485,454 p e r s o n s , o r n e a r l y o n e - f o u r t h o f t h e ent i r e population of the d i s t r i c t s a f f e c t e d , w e r e i n r e c e i p t o f r e l i e f ... D u r i n g t h e course of the famine the l o s s e s of the t r a d e a m o u n t e d t o b e t w e e n £65,000,000 and £70,000,000, i n c l u d i n g f r o m £28,000,000 t o £30,000,000 l o s s o f wages t o o p e r a t i v e s . Of t h e l a t t e r a b o u t o n e - f o u r t h was r e c o v e r e d i n t h e f o r m o f r e l i e f , o r i n wages f o r e m p l o y m e n t o n ' P u b l i c W o r k s , e t c . Many m i l l owners a l s o r e g a i n e d a p o r t i o n o f t h e i r l o s s e s i n t h e shape o f p r o f i t s on s t o c k s h e l d a t t h e commencement o f t h e f a m i n e ; b u t a l a r g e number l o s t n e a r l y e v e r y t h i n g t h e y w e r e w o r t h , w h i l e many were reduced t o bankruptcy."10 A crisis  o f s u c h s e v e r i t y c o u l d n o t h e l p b u t h a v e an  a d v e r s e i n f l u e n c e on h o u s e - b u i l d i n g . unemployment r e s u l t i n g  The h i g h  level of  from t h e d i s l o c a t i o n o f the c o t t o n  t r a d e p r o m p t e d many o p e r a t i v e s t o l e a v e L a n c a s h i r e p a r t s of England or t o emigrate 10  Ellison,  The  Cotton  overseas.  Trade,pp.  95-96  The  f o r other  Victoria  213  Emigrants'  Assistance  S o c i e t y were o n l y  S o c i e t y and t h e Manchester  two o f many l o c a l e m i g r a t i o n  formed t o a s s i s t unemployed o p e r a t i v e s  woollen  from L a n c a s h i r e  societies  and t h e i r f a m i l i e s  i n r e l o c a t i n g w h e r e w o r k was a v a i l a b l e . emigrating  Emigration  Many o f  those  f o u n d e m p l o y m e n t i n t h e w o r s t e d and  industries of Yorkshire.  In addition to out-migration,  t h e r e was an i n c r e a s e i n t h e s h a r i n g o f a c c o m m o d a t i o n s . Numerous r e p o r t s o f M e d i c a l cite  O f f i c e r s and R e l i e f S o c i e t i e s  t h e g r o w i n g t e n d e n c y t o w a r d o v e r c r o w d i n g o f h o u s e s among  the o p e r a t i v e  c l a s s i n t h e c o t t o n districts."'""''  consequences o f t h e depression ficantly  These  i n the cotton industry  r e d u c e d t h e demand f o r h o u s e room.  But there  various signiwere  a l s o f a c t o r s on t h e s i d e o f s u p p l y  t h a t d i d n o t f a v o r an  increase i n house-building  time.  at this  A s e r i e s o f bad harvests imports  o f food.  the United  States  large  A t t h e same t i m e g o l d was w i t h d r a w n b y t o p a y f o r t h e C i v i l War, a n d b y F r a n c e  f o r p u b l i c i n v e s t m e n t a t home. had  i n 1860-62 n e c e s s i t a t e d  Prior  t o 1861 G r e a t  p u r c h a s e d t h e g r e a t m a j o r i t y o f h e r raw c o t t o n  f r o m t h e U.S. w i t h e x p o r t s  Britain supplies  o f manufactured goods, b u t d u r i n g  See Rev. J o h n B a i l l i e r , What I Saw in Lancashire, (1862); F i f t h Report of the Medical O f f i c e r of the Privy Council, (1862) , A p p e n d i x V, b o t h c i t e d i n H e n d e r s o n , Lancashire Cotton Famine, p. 94.  214  the  C o t t o n Famine she t u r n e d  for her sources of supply,  t o I n d i a , E g y p t and B r a z i l  paying p r i m a r i l y with  gold  e f f e c t of a l l these  factors  12 and  silver.  The u l t i m a t e  was a d r a i n o n o f f i c i a l of  reserves  and a g e n e r a l  credit. The  financial  associated  with  c r i s e s o f 1864-66 a n d t h e u n c e r t a i n t y  the future of the cotton  a generally  depressing  conditions.  The f a l l  only  served  on the  a l s o had and c r e d i t  o f O v e r e n d a n d G u r n e y i n May, 1866  t o compound a c r e d i t c r i s i s  i n J u l y , "the p r i n c i p a l discount  trade  i n f l u e n c e on e x p e c t a t i o n s  apparent since e a r l y i n the year.  the  stringency  centres  t h a t had been  The Economist  observed  o f c r e d i t - t h e banks and  f i r m s - h a d done s o much a p p a r e n t b a d b u s i n e s s  t r u s t i n many o f them was w e a k e n e d a n d a f a t a l 13 a f e w o f them c r e a t e d . "  that  pressure  Thus, t h e v i c i s s i t u d e s o f  f i n a n c i a l market were u n f a v o r a b l e  t o investment i n  housing s i n c e they tended t o r a i s e the costs  of financing  b o t h t h e p u r c h a s e and c o n s t r u c t i o n o f houses. The Civil  y e a r s i m m e d i a t e l y f o l l o w i n g t h e end o f t h e A m e r i c a n  War w i t n e s s e d a m a r k e d i m p r o v e m e n t i n t h e w o r l d  cotton  12 A r t h u r S i l v e r , Manchester Men and Indian Cotton, (Manc h e s t e r : M a n c h e s t e r U n i v e r s i t y P r e s s , 1 9 6 6 ) , pp. 158-165. 13 Economist, J u l y 14, 1866, c i t e d i n Henderson, Lancashire Cotton Famine, p. 24.  TABLE X I I I  R E L I E F EXPENDITURES BY THE GUARDIANS AND ( i n pounds  Guardians  sterling)  1860-61  1861-62  1862-63  1863-64  1864-65  191,101  231,322  660,531  577,368  392,076  809,167  563,287  188,012  1,469,698  1,140,655  580,088  Relief Committees Total  R E L I E F COMMITTEES 1860-19 65  191,101  231,322  S o u r c e : Thomas E l l i s o n , "The C o t t o n T r a d e o f G r e a t B r i t a i n " ( L o n d o n : F r a n k C a s s and Co. L t d . , 1 8 8 6 ) , p. 9 6 . T a b l e X I I I does n o t i n c l u d e e x p e n d i t u r e s and d o n a t i o n s by m i l l o w n e r s and o t h e r p r i v a t e c i t i z e n s w h i c h p r o b a b l y amounted t o t h r e e o r f o u r m i l l i o n p o u n d s .  216  trade.  B r i t i s h m a n u f a c t u r e r s responded by  expanding production similar  and thus  t o t h a t o f 1860-61.  precipitating In fact,  However, t h e s e were y e a r s  employment and r i s i n g i n c o m e s , b o t h  a  crisis  t h e r e was a s t r o n g  tendency toward i n d u s t r i a l overproduction f r o m 1865-1869.  feverishly  i n c o t t o n goods of increasing  of which c o n t r i b u t e d 14  to  a minor upswing i n h o u s e b u i l d i n g . The r e c o v e r y  culminated,  after  prosperous years is  of the cotton trade i n the late  a p a u s e i n 1869, w i t h t h e e x c e p t i o n a l l y o f 1870-72.  a watershed i n the h i s t o r y  industry.  1860's  According  I n many ways t h i s  period  of the Lancashire  cotton  to Ellison  " I n t h a t s e a s o n (1870-71) G r e a t B r i t a i n c o n s u m e d 2 3.7 p e r c e n t , t h e C o n t i n e n t 20.1 p e r c e n t , a n d t h e U n i t e d S t a t e s 16.2 p e r c e n t , more t h a n t h e a v e r a g e o f t h e f i v e y e a r s , 1865-70. I t was i n f a c t a period of i n f l a t i o n , not i n cotton only, b u t i n every o t h e r a r t i c l e o f merchandise. T h e r e was a t e m p o r a r y i n t e r r u p t i o n i n b u s i n e s s on t h e C o n t i n e n t d u r i n g the F r a n c o - P r u s s i a n war; b u t t h i s o n l y c a u s e d t h e i n f l a t i o n t o t a k e a more  The t o t a l number o f o p e r a t i v e s e m p l o y e d i n t h e c o t t o n f a c t o r i e s o f t h e U n i t e d K i n g d o m f e l l f r o m 451,600 i n 1862 t o 401,100 i n 1867; b y 1870 e m p l o y m e n t h a d c l i m b e d b a c k t o 450,100. See G.R. P o r t e r , The Progress of the Nation, (London: Methuen and  Co. L t d . , 1 9 1 2 ) , p.  317  217  a g g r a v a t e d f o r m a f t e r t h e w a r was o v e r . I n t h e meantime, t h e war, by w i t h d r a w i n g a m u l t i t u d e o f F r e n c h and German o p e r a t i v e s and a r t i s a n s f r o m i n d u s t r i a l e m p l o y m e n t , l e d t o an a b n o r m a l demand f o r E n g l i s h T e x tiles. " 1 5  Under such f a v o r a b l e c i r c u m s t a n c e s p r o f i t s w e r e n o t uncommon. d i r e c t o r s of the dividends profits  ranging  and  production but  a l s o by  T h i s was  Sun  B e t w e e n 1867  spinning m i l l  and  1871  cent.  n o t o n l y by p r o v i d i n g t h e n e c e s s a r y  of c r u c i a l  savings  the  Exceptional  s t i m u l a t e d the expansion  attracting  high  i n Oldham d e c l a r e d  f r o m 10 t o 40 p e r  dividends  unusually  f o r investment  of incentive, purposes.  importance not o n l y because i t enabled  a m a j o r boom i n t h e c o n s t r u c t i o n o f c o t t o n m i l l s t o  take  place, but  a l s o b e c a u s e i t e a s e d t h e c r e d i t c o n s t r a i n t on  the supply  of mortgage f i n a n c e , thus  s i m i l a r boom i n h o u s e - b u i l d i n g . in  the  1 8 5 0 ' s was  concentrated  cotton i n d u s t r y , but place primarily  i n the  i n the  The  contributing to a wave o f  expansion  i n the weaving branch of  l a t e 1860's i n v e s t m e n t  spinning sector.  great  took "floating  mania" which culminated  i n 1875  i n t h e numbers o f j o i n t  s t o c k companies r e g i s t e r e d i n  Ellison,  The  Cotton  Trade,  witnessed  The  pp  a dramatic  106-107.  the  increase the  218  English cotton industry. " I n t h e two  T h i s i s shown i n F i g u r e  y e a r s , 1 8 7 4 - 7 5 , a b o u t 3,000,000 s p i n d l e s  were " f l o a t e d "  i n Oldham a l o n e , w h i l e , i n c l u d i n g p r i v a t e  firms converted  into  l i m i t e d c o m p a n i e s , 5,000,000  6,000,000 more w e r e " f l o a t e d " of Lancashire.""^ investment  11.  i n o t h e r t o w n s and  to districts  Weaving, though not the c e n t e r  activity,  of  d i d p a r t i c i p a t e i n the general  of productive capacity.  The  number o f p o w e r l o o m s o p e r a t i n g  i n Great  Britain  1870  and  1874.  The  s t o r y of the Lancashire c o t t o n r e g i o n during  years  i s partly  i n c r e a s e d by  growth  23,442 o r 5 p e r c e n t  1 7  t o l d by  F i g u r e 11.  o f c o t t o n m a n u f a c t u r e s and  through  The  working  The  upswing i n exports  accompanied by  c l a s s e s who  a rise  shared  From a m i n o r t r o u g h  i n the  i n 1869  e m p l o y m e n t r o s e as w e l l .  c o t t o n i n d u s t r y e m p l o y e d 401,064 p e r s o n s ,  16  Ibid,  p.  in  by  pros-  to weekly  wage o f c o t t o n o p e r a t i v e s r o s e t o a p e a k i n 1877. d i d wages r i s e , b u t  to  s u f f e r e d so s e v e r e l y  the d e p r e s s i o n of the s i x t i e s  p e r i t y of recovery.  these  home c o n s u m p t i o n i n r e s p o n s e  f a v o r a b l e m a r k e t c o n d i t i o n s was incomes.  between  Not  I n 1867 1874  this  only the had  134.  17 and  W i l l i a m P a g e , Commerce and Industry, Company, l t d . , 1 9 1 9 ) , p. 2 30.  (London:  Constable  219  Figure  INDICES OF  11  ECONOMIC DEVELOPMENT IN  SOUTH-EAST LANCASHIRE  (A)  South-East Lancashire House-Building Source: T a b l e XVIII, Appendix I I I .  Index.  (B)  Number o f J o i n t S t o c k C o m p a n i e s R e g i s t e r e d i n t h e E n g l i s h C o t t o n I n d u s t r y , 1861-1890. S o u r c e : D.A. F a r n i e , The English Cotton Industry, 1850-1986, M.A. T h e s i s : Manchester U n i v e r s i t y , C i t e d by J . P a r r y L e w i s , Building Cycles and Britains Growth, p. 120.  (C)  Index o f P r o f i t s i n the C o t t o n S p i n n i n g I n d u s t r y , 1886-1913, (1896-1905 = 1 0 0 ) . S o u r c e : H. Campion, "Prewar F l u c t u a t i o n s o f P r o f i t s i n the Cotton-Spinning Industry", Journal of the Royal S t a t i s t i c a l Society, V o l . X C V I I ( 1 9 3 4 ) , p. 629.  (D)  A v e r a g e W e e k l y Wage o f C o t t o n O p e r a t i v e s E m p l o y e d i n F a c t o r i e s and as Hand-Loom W e a v e r s , 1860-1906. S o u r c e : G.H. Wood, "The S t a t i s t i c s o f Wages i n t h e N i n e t e e n t h C e n t u r y . P a r t XIX. - The C o t t o n I n d u s t r y " , Journal of the Royal S t a t i s t i c a l Society, V o l . LXXIII ( J u n e , 1 9 1 0 ) , p. 599.  (E)  Home C o t t o n C o n s u m p t i o n ( i n m i l l i o n s o f p o u n d s ) , 1860-1914. S o u r c e : R. R o b s o n , The Cotton Industry in Britain, ( L o n d o n : M a c M i l l a n and Co. L t d . , 1 9 5 7 ) , pp. 332333.  (F)  Exports of Cotton Manufactures ( i n m i l l i o n s o f pounds s t e r l i n g ) , 1860-1914. S o u r c e : R. Robson, The Cotton Industry in Great Britain, p. 334.  221  grown t o 479,515. the border  R i s i n g wages a t t r a c t e d  c o u n t i e s and  labour  as t h e p o p u l a t i o n s o f t h e  cotton  t o w n s s w e l l e d , so a l s o d i d t h e demand f o r h o u s i n g ation.  The  t h a t had  persistent rise  i n incomes a l l o w e d  c r o w d e d t o g e t h e r y e a r s b e f o r e , t o now  Relatively  low  manufactures,  f o o d p r i c e s and including  released earnings housing.  the f a l l i n g  from  accommod-  families undouble.  p r i c e s of  c o t t o n goods, e s p e c i a l l y a f t e r  f o r improvements i n the s t a n d a r d  These f a c t o r s c o n t r i b u t e d t o a d e c l i n e i n  c i e s and  the widespread  By  a l l o f t h e t o w n s f o r w h i c h we  1876,  appearance of housing  1873,  of vacan-  shortages.  have d a t a  were  e x p e r i e n c i n g a m a j o r boom i n h o u s e - b u i l d i n g . As tiplied  the growing through  p r o s p e r i t y of the s t a p l e i n d u s t r y mul-  t h e r e g i o n a l economy m e m b e r s h i p i n  subscriptions to building  societies  and  burgeoned.  " T h e r e a r e a l s o e x c e p t i o n a l t o w n s and v i l l a g e s i n L a n c a s h i r e w h e r e l a r g e sums o f money h a v e been s a v e d by t h e o p e r a t i v e s f o r b u y i n g o r b u i l d i n g comfortable cottage dwellings. Last year Padiham saved about f i f t e e n thousand pounds f o r t h i s p u r p o s e , a l t h o u g h i t s p o p u l a t i o n i s o n l y about e i g h t thousand. Burnley h a s a l s o b e e n v e r y s u c c e s s f u l . The B u i l d i n g S o c i e t y t h e r e has s i x t h o u s a n d , s i x h u n d r e d i n v e s t o r s , who s a v e d l a s t y e a r one h u n d r e d  Ibid.  222  and s i x t y t h o u s a n d p o u n d s , o r an a v e r a g e o f t w e n t y f o u r pounds f o r each i n v e s t o r . The members c o n s i s t p r i n c i p a l l y o f m i l l o p e r a t i v e s , miners, mechanics, engineers, carpenters, s t o n e - m a s o n s and l a b o u r e r s . They a l s o i n c l u d e women, b o t h m a r r i e d a n d u n m a r r i e d . Our i n f o r m a n t s t a t e s t h a t " g r e a t numbers o f t h e w o r k i n g c l a s s e s have purchased houses i n which t o l i v e . T h e y h a v e l i k e w i s e b o u g h t h o u s e s as a means o f investment!"19 There  c a n be  p l a y e d a key r o l e  little  question that building  i n the South-east Lancashire r e g i o n a l  long swing i n h o u s e - b u i l d i n g a c t i v i t y . had  o v e r one  societies  hundred  building  Manchester  societies,  and  alone  t h e 66  located 20  i n Oldham h e l d s u b s c r i p t i o n s t o t a l l i n g The  accumulated  savings of thousands  800,000 p o u n d s .  of t e x t i l e  s p i n n e r s , e n t r e p r e n e u r s , e t c . , were m o b i l i z e d t h e s e and o t h e r f i n a n c i a l  institutions  investment i n cotton m i l l s By t h e e n d o f 1872  and d w e l l i n g  workers,  through  f o r the purpose  of  houses.  the c o t t o n t e x t i l e  industries  of  F r a n c e and Germany w e r e b e g i n n i n g t o r e c o v e r f r o m t h e  war.  The  r e v i v a l of C o n t i n e n t a l p r o d u c t i o n a t p r i c e s below  the  pp.  Samuel S m i l e s , T h r i f t , 123-24.  (New  Y o r k : A.L.  Burt,  1874),  20 Seymour J . P r i c e , Building S o c i e t i e s : t h e i r Origin and Function, ( L o n d o n , 1 9 5 8 ) , p. 189. Cited i n J . Parry Lewis, Building Cycles and B r i t a i n ' s Growth, p. 123.  223  inflated  B r i t i s h products  consequently (See  Figure  a fall 11).  l e d t o a d e c l i n e i n demand a n d  i n the export  In the United  of cotton  manufactures.  States the f a i l u r e of Jay  C o o k e a n d Company i n 1873 r e s u l t e d i n A m e r i c a n c o t t o n sumption remaining prices  s t a t i o n a r y f o r two y e a r s .  con-  Falling  l e d t o an i n c r e a s e i n home c o n s u m p t i o n o f c o t t o n  goods i n 1873-74. output a t this long before  (See F i g u r e  time,  11) B r i t a i n  chose t o i n c r e a s e  a s d i d F r a n c e a n d Germany.  I t wasn't  " t h e w h o l e o f E u r o p e ' s c o t t o n i n d u s t r y was  burdened w i t h heavy s t o c k s  and u n p r o f i t a b l e p r i c e s .  ment s l o w e d down, o r e v e n c e a s e d .  Invest-  I n 1875 t h e E a s t e r n  t r a d e was d i s o r g a n i z e d b y f i n a n c i a l  failures,  a n d when  hopes and o u t p u t r e v i v e d i n 1876, gloom descended q u i c k l y 21 as b a d h a r v e s t s The  and o t h e r  f a c t o r s reduced  b u i l d i n g boom i n m i l l  in  t h e e a r l y 1870's c r e a t e d  be  a source  followed. by  a sharp f a l l  gistered 1884 As  i n the years  i n t h e number o f j o i n t  p r i c e s continued  stock  industry.  accompanied  companies r e -  B e t w e e n 1878 a n d  c o t t o n m i l l s w e r e c l o s e d down.  to f a l l , profits  "Indices  that  t h a t s e t i n a f t e r 1875 was  many o f t h e L a n c a s h i r e  place  an e x c e s s c a p a c i t y t h a t was t o  i n the English cotton  Lewis,  c o n s t r u c t i o n t h a t took  of recurrent d i f f i c u l t i e s The d e p r e s s i o n  demand."  disappeared  of House-Building",  p. 1 2 1 .  and  dividends  224  became a t h i n g o f t h e p a s t .  M i l l owners responded  l o w e r i n g wages, w h i c h ushered i n a p e r i o d o f l a b o u r rest,  thus f u r t h e r augmenting the I n 1877  wage c u t s by quickly  operatives local  i n Bolton  spinning m i l l  exhausted the  industrial  owners.  t r e a s u r y of the  was  largely unsuccessful.  witnessed  the  "Great S t r i k e "  operatives  un-  crisis.  struck i n response  a t i o n and  Lancashire  by  The  Spinners' The  to  strike Amalgam-  f o l l o w i n g year  o f more t h a n 100,000  against reductions  i n wages,  North lasting  23 n e a r l y two  months.  I n 1880  a s t r i k e by w e a v e r s f o r a  r e t u r n t o p r e - 1 8 7 8 wage l e v e l s p u t a t i v e s out o f work. Oldham d i d w i n six  A year  In g e n e r a l , the  only a f t e r  strikes,  i n c r e a s e d unemployment, s h o r t - t i m e  rates,  oper-  l a t e r doubling workers i n  a m i n o r wage i n c r e a s e , b u t 24  month s t r i k e .  with  30,000 B l a c k b u r n  and  a  combined  falling  wage  l e d t o a d e c l i n e i n i n c o m e s as w e l l as a d e c l i n e i n  the  r a t e of i n c r e a s e of the  had  a very  depressing  Ellison,  The  labour  i n f l u e n c e on  Cotton  Trade,  p.  force.  These f a c t o r s  t h e demand f o r  housing  136.  23 H.A. T u r n e r , Trade Union Growth, Structure and Policy, ( L o n d o n : G e o r g e A l l e n and U n w i n , L t d . , 1 9 6 2 ) , pp. 124, 137, 150. 24 S i d n e y and B e a t r i c e Webb, The History of Trade Unionism, 1866-1920, (London: Longmans, 1920).  225  accommodations. and  their  R e p o r t s w e r e n o t uncommon o f o p e r a t i v e s  families migrating to other regions  s t r e e t s o f empty t e n e m e n t s a n d h o u s e s , dilapidating.  "leaving  many o f w h i c h  So g r e a t was t h e c o m b i n e d e f f e c t o f s h a r i n g  and m i g r a t i o n t h a t i n 1 8 8 1 t h e number o f u n o c c u p i e d i n Manchester  were  and S a l f o r d  exceeded  houses  t h e number o f i n h a b i t e d  25 houses i n a d j a c e n t S t o c k p o r t . " d e a l t a c r i p p l i n g blow.  The b u i l d i n g  House-building f e l l  a f t e r 1876 i n t o a d e e p p r o l o n g u e d  trough.  e a r n i n g s and w i d e s p r e a d  precipitously  (See F i g u r e 1 1 ) .  These were t r o u b l e d y e a r s f o r b u i l d i n g depressed  i n d u s t r y was  pessimism  s o c i e t i e s as l e dto with-  d r a w a l s o f f u n d s a n d f a i l u r e t o make p a y m e n t s . suffered  i n numerous c i r c u m s t a n c e s  e n t i r e l y beyond t h e i r c o n t r o l . o f G l a s g o w Bank f a i l e d . of b u i l d i n g  societies  t h e Queen's S o c i e t y  many o f w h i c h  I n October  Rumours c i r c u l a t e d  i n and around  (thefourth  Societies were  o f 1878, t h e C i t y t h a t a number  Manchester,  l a r g e s t i n Great  including Britain)  had b a l a n c e s a t t h e C i t y o f Glasgow Bank, and though  these  r u m o u r s h a d no j u s t i f i c a t i o n  a run  on many s o c i e t i e s .  i n fact,  I n o n l y f o u r days,  they d i d cause 50,000 p o u n d s  sterling  A. W o o d r o o f e F l e t c h e r , "The E c o n o m i c R e s u l t s o f t h e S h i p C a n a l on M a n c h e s t e r a n d t h e S u r r o u n d i n g D i s t r i c t " ; A paper presented t o t h e Manchester S t a t i s t i c a l S o c i e t y , F e b r u a r y 1 0 , 189 7, r e f e r e n c e i n L e w i s , " I n d i c e s o f H o u s e B u i l d i n g " , p. 123.  226  was w i t h d r a w n f r o m Building  t h e Queens S o c i e t y .  s o c i e t i e s a l s o became t h e i n n o c e n t v i c t i m s  of labour d i s p u t e s .  The B u r n l e y S o c i e t y h a d i n t h e p a s t  made l o a n s t o l o c a l m i l l - o w n e r s , some o f them of the s o c i e t y . tions  directors  When w e a v e r s s t r u c k a g a i n s t wage  i n 1878 t h e y w i t h d r e w t h e i r  funds  from  t h i n k i n g t h a t owners w o u l d t h e n be u n a b l e  reduc-  local  societies,  t o b o r r o w money  t o meet m o r t g a g e payments and o t h e r e x p e n s e s d u r i n g t h e dispute.  "No d o u b t s t r i k e r s w i t h d r a w i n g  their  meet c u r r e n t e x p e n s e s , a n d t h e news o f e v e n t s helped  t o speed w i t h d r a w a l s .  S o c i e t y ' s cash balance Notices of withdrawal  savings t o i n Manchester,  The r e s u l t was t h a t t h e B u r n l e y  o f £15,000 q u i c k l y  disappeared.  i n t h e l a s t two weeks o f O c t o b e r  rose  t o n e a r l y £50,000 a n d b y December t h e y h a d c l i m b e d t o n e a r l y 27 £75,000 c o m p a r e d t o a n o r m a l f i g u r e o f £10,000." I n t e s t i m o n y b e f o r e t h e R o y a l C o m m i s s i o n o f 1885 one witness stated that the building d i s r u p t e d by t h e events  s o c i e t y movement h a d b e e n s o  of the l a t e  1870's and e a r l y  1880's  28 t h a t i t w o u l d t a k e 20 y e a r s t o r e c o v e r .  C l e a r y , The Building  Society  Movement,  T h i s i s no d o u b t  p. 1 2 7 .  Ibid. 28 Lewis,  " I n d i c e s o f H o u s e - B u i l d i n g " , p. 124.  227  an  exaggeration,  societies was  but i t i s certainly  f a c e d many d i f f i c u l t i e s ,  a crisis  of confidence,  the b u i l d i n g depression The  true that the b u i l d i n g  not the l e a s t o f which  and t h a t t h e s e  contributed to  o f t h e 1880's.  excess s u p p l i e s o f yarn  and c o t t o n goods t h a t had  accumulated i n t h e w o r l d ' s markets by t h e mid-1870's were e v e n t u a l l y absorbed during  the depressed years  o f 1877-79.  B e t w e e n 1880 a n d 1883 t h e r e was a m a j o r u p s w i n g i n t h e p r o duction of cotton manufactures, e s p e c i a l l y i n Great and  the United  States.  9.6 m i l l i o n b a l e s of  7.2 m i l l i o n  World c o t t o n consumption rose t o  per year,  i n 1878-79.  compared t o t h e a n n u a l British  g o o d s a n d home c o n s u m p t i o n i n c r e a s e d 11).  Britain  Enormous A m e r i c a n c r o p s ,  exports  average  of cotton  sharply.  (See F i g u r e  e s p e c i a l l y i n 1883, caused  a s h a r p d e c l i n e i n raw c o t t o n p r i c e s , f u r t h e r s t i m u l a t i n g the manufacturing  (weaving) b r a n c h o f t h e i n d u s t r y .  r e s u l t was r e m i n i s c e n t gives  o f t h e e a r l y 1870's.  The  Table XIV  an a c c o u n t o f t h e number a n d n o m i n a l c a p i t a l o f " l i m i t e d "  cotton m i l l s  f l o a t e d i n each o f t h e years  Many o f t h e j o i n t  stock  c o m p a n i e s r e g i s t e r e d i n 1873-75 h a d  been p r i v a t e f i r m s which were c o n v e r t e d ownerships.  1873 t o 1 8 8 4 .  to limited  liability  The c o m p a n i e s f o r m e d i n 1 8 8 1 - 8 4 , on t h e o t h e r  h a n d , w e r e a l m o s t a l l new e n t e r p r i s e s .  And b e c a u s e  they  TABLE XIV  NUMBER AND NOMINAL CAPITAL OF LIMITED LIABILITY COTTON MILLS PROJECTED IN 1873-1884  Year  Number  Nominal Capital  Year  Number  1873  40  1,784.600  1877  1874  101  5,790.400  1878  1875  84  3,992.700  1876  17  953,000  242  12,520.700  Total Average Capital per m i l l  51,740  Nominal Capital  Year  Number  Nominal Capital  19  1,180.000  1881  25  1,742.000  10  328,500  1882  24  1,908.500  1879  6  257,000  1883  24  1,580.000  1880  23  867,000  1884  45  2,597.500  58  2,632.500  118  7,828.000  45,390  Source: Thomas E l l i s o n , The Cotton Trade of Great Britain, (London: Frank Cass and Co. L t d . , 1886), p. 303.  66,340  229  employed the represented 225  l a t e s t m a c h i n e r y and  1862,  be  has  "the  118  mills  a g r e a t e r i n c r e a s e d power o f p r o d u c t i o n than  m i l l s p r o j e c t e d i n 1873-75.  w h a t may  techniques  T h e r e c a n be no  doubt t h a t  termed the abuse of the L i m i t e d L i a b i l i t y  l a r g e l y c o n t r i b u t e d t o b r i n g about the  the  Act  long  of  continued  29 u n s a t i s f a c t o r y c o n d i t i o n of the cotton i n d u s t r y . " As  overproduction  o n c e a g a i n w e i g h e d h e a v i l y on  L a n c a s h i r e c o t t o n i n d u s t r y u n e m p l o y m e n t r o s e and wages I t wasn't l o n g b e f o r e "either voluntarily,  l o o m s b e g a n t o be or through  taken out of  bankruptcy,  the fell.  production  or i n consequence  30 of s t r i k e s  a g a i n s t reduced  i n d u s t r y was  shared  not o n l y by  the general populace, porter, policeman, T h u s when p r o f i t s pressed,  Ibid,  p.  The  f a t e of the  the o p e r a t i v e s , but  o r s h o p k e e p e r who and  The  cotton  a l s o by  "there i s scarcely a publican, railway 31 i s not a  d i v i d e n d s w e r e n i l and  so a l s o w e r e s a v i n g s .  Ellison, 30  wages."  Cotton  Trade,  And  i t was  shareholder." share p r i c e s  out of the  de-  savings  p.124.  300.  31 R o b e r t M o n t g o m e r y , "A C o m p a r i s o n o f Some o f t h e E c o n o m i c and S o c i a l C o n d i t i o n s o f M a n c h e s t e r and t h e S u r r o u n d i n g D i s t r i c t i n 1834 and 1 8 8 4 " , Manchester S t a t i s t i c a l Society Transactions, ( N o v e m b e r , 1 8 8 4 ) , p. 24.  230  o f o p e r a t i v e s a n d common f o l k t h a t much o f t h e f i n a n c i n g 32 of cotton m i l l s The  a n d c o t t a g e s was d r a w n .  1880's and e a r l y  adjustment i n Lancashire. hegemony h a d a d i r e c t  1890's were d i f f i c u l t y e a r s o f  The w a n i n g o f B r i t i s h  impact  on t h e d o m e s t i c  B e t w e e n 1860 a n d 1870 t h e t o t a l between t h e U n i t e d S t a t e s , Great was  very evenly d i s t r i b u t e d .  lions  economic  cotton industry.  increase i n cotton Britain  consumption  and t h e C o n t i n e n t  B u t between 1871 and 1883 " t h e  s h a r e was t a k e n b y t h e U n i t e d S t a t e s a n d t h e C o n t i n e n t , 33  l e a v i n g only a small i n c r e a s e f o r Great did British  cotton exports  Britain."  s u f f e r a t t h e h a n d s o f U.S. a n d  C o n t i n e n t a l competitors, b u t i n c r e a s i n g l y through and  1890's t h e r e were c o m p l a i n t s  African  Not only  t h e 1880's  o f the d e c l i n e i n the East  and F a r E a s t e r n t r a d e as a r e s u l t o f c o m p e t i t i o n  a growing  Indian cotton t e x t i l e  i n d u s t r y l o c a t e d i n Bombay.  These changes i n w o r l d market c o n d i t i o n s a r e r e f l e c t e d curve as  of British  from 34  c o t t o n good e x p o r t s p r e s e n t e d  i n the  i n Figure 11,  a g r a d u a l d e c l i n e from 1881 t o a r o u n d 1897.  T.S. A s h t o n , Economic and Social Investigations in Manchester., 1833-1933, ( L o n d o n : P.S. K i n g a n d S o n , L t d . , 1 9 3 4 ) , p. 1 0 9 . 3 3  Ellison,  The Cotton  Trade,  pp. 102-3.  S e e The Economist, May 2 8 , 1 8 8 5 , p. 6 2 5 ; J u l y 3, 1 8 6 6 , p p . 8 3 1 - 8 3 2 ; December 1 8 , 1 8 8 6 , p. 1 5 7 3 ; O c t o b e r 5, 1 8 8 9 , p p . 1 2 6 7 3 4  231  The  a v e r a g e w e e k l y wages o f c o t t o n o p e r a t i v e s r e -  mained r e l a t i v e l y poor harvests earnings  and h i g h  effect.  as d i d t h e L a n c a s h i r e  A series of  f o o d p r i c e s combined w i t h  the tendency o f f a m i l i e s  a similar  upswing  t h e 1880's.  t o r e d u c e demand f o r h o u s i n g  we m e n t i o n e d had  low t h r o u g h o u t  House-building cotton  i n home c o n s u m p t i o n  industry  depressed  accommodation.  Earlier  t o double  up, w h i c h  remained  depressed,  (except  i n the late  f o ra brief  1880's) u n t i l t h e  mid-1890's. The on  final  decade o f t h e n i n e t e e n t h  a not t o o encouraging  trade. with  A d e c l i n e i n exports  a depression  profit  note  index  incurred  falls  between  main e x p o r t  i n profits.  century  f o r the Lancashire a n d home c o n s u m p t i o n (See F i g u r e  11).  opened  cotton coincided Campions  f r o m a p e a k i n 1890 a n d shows l o s s e s  189 2-4.  Despite  a fall  i n Lancashire's  demand f o r p i e c e g o o d s a n d c o m p l a i n t s  w e a v i n g m a c h i n e r y , home c o n s u m p t i o n  of idle  i n c r e a s e d and p r o f i t s  were  35 made i n 189 5. but  i n 189 8 a n n u a l  of A c t i v i t y and  Trade condxtions  induced  w e r e u n s e t t l e d i n 1896-7,  trade reports indicate  "increased  signs  b y e x c e p t i o n a l l y low raw m a t e r i a l p r i c e s  t h e c o n v i c t i o n t h a t e c o n o m i c f o r c e s g e n e r a l l y were b r i n g i n g  The  Economist,  April  13, 1895, p . 485.  232  about a r e a c t i o n a f t e r the Earnings  long p e r i o d of  rose to t h e i r previous  of South L a n c a s h i r e  high  depression."  levels.  "The  have d e c l a r e d l a r g e r p r o f i t s  limiteds than 37  a n t i c i p a t e d , and  paid dividends  The  s t a t e o f t r a d e and  remunerative  t h a t spread mill  and  i n the  through  t h a t were not  the general p r o s p e r i t y  t h e r e g i o n a l economy l e d t o a boom i n  h o u s e - b u i l d i n g , the  former concentrated  m a c h i n e r y was  time  disappeared  and  as e m p l o y m e n t r o s e  brought i n t o production.  The  as w e l l as t h e p r o g r e s s  i n the d e c l i n e of I n 1890  in  1899.  labour unrest  t h e r e w e r e 135  r o s e t o 156 The  of the  recorded  i n 1891  and  To  some  extent  industry, i s reflected  i n the  course  of the  decade.  d i s p u t e s i n the c o t t o n i n d u s t r y .  then  disputes recorded  idle  c o n d i t i o n of  the o p e r a t i v e c l a s s improved c o n s i d e r a b l y .  This  primarily  s p i n n i n g centers of the i n d u s t r y . Short  this  expected."  fell  after  t o 52 1894  i n 1898  and  44  were a l l minor, 38  i n v o l v i n g no more t h a n The  t u r n of the  a few  days i n t e r r u p t i o n of  production.  c e n t u r y b r o u g h t a d e c l i n e i n home  J a n e t B l a c k m a n and E.M. Sigsworth, 1 8 9 0 ' s " , Yorkshire B u l l e t i n of Economics V o l . 17, (May 1 9 6 5 ) , p. 89.  "The and  Home Boom o f t h e Social Research,  37 The  Economist,  J u l y 2,  1898,  p.  969.  38 H.A. C l e g g , A l l e n Fox and A.F. Thompson, A History of B r i t i s h Trade Unions since 1889, ( O x f o r d : C l a r e n d o n P r e s s , 1 9 6 4 ) , p. 119.  233  c o n s u m p t i o n , a n d i n 1903-04 r a w c o t t o n p r i c e s r o s e T h i s was index  accompanied by a slump i n p r o f i t s .  shows l o s s e s i n 19 0 2-0 3.  sharply.  Campion's  A r e n e w e d u p s u r g e i n home  c o n s u m p t i o n , however, and t h e tremendous r i s e i n c o t t o n good e x p o r t s  (see F i g u r e  1 1 ) , a f t e r 1903 g a v e a  b o o s t t o t h e l o c a l economy. and in  significant  Changes i n m a r k e t c o n d i t i o n s  i n d u s t r i a l o r g a n i z a t i o n gave r i s e t o a d r a m a t i c profits  and c o n t r i b u t e d t o a p e r i o d o f f e v e r i s h  increase mill-  39 building.  The Economist's  correspondent,  i n Lancashire  w r o t e i n 19 0 4 : "New c o t t o n s p i n n i n g m i l l s a r e b e i n g e r e c t e d on a n e x t e n s i v e s c a l e i n v a r i o u s p a r t s o f L a n c a s h i r e ... What t h e B o l t o n t r a d e w i l l be when t h e s e f a c t o r i e s g e t t o w o r k no one can t e l l , b u t i t l o o k s s i m p l y d i s a s t r o u s that t h i s large increase of spindles should t a k e p l a c e when t h e r e i s r e a l l y no demand for them." 4 0  But  t h e t r a d e was b r i s k  a n d i n 19 0 5 m i l l s w e n t up i n Heywood,  A s h t o n - u n d e r - L y n e and t h e s u r r o u n d i n g  d i s t r i c t s adding  41 5,000,000  new  spindles i n that year.  I n 1 9 0 8 , 48  mills  See S . J . Chapmen a n d T.S. A s h t o n , "The S i z e s o f B u s i n e s s , M a i n l y i n t h e T e x t i l e I n d u s t r i e s " , Journal of the Royal Statistical Society, V o l . L X X V I I ( A p r i l , 1 9 1 4 ) , pp. 469-549. A l s o W. A s h w o r t h , " C h a n g e s i n t h e I n d u s t r i a l S t r u c t u r e : 1 8 7 0 1914",  Vol. 40  Yorkshire  17,  Bulletin  of  Economic  and  Social  (May, 1965) p p . 6 1 - 7 4 .  T/ze Economist,  O c t o b e r 1 5 , 1 9 0 4 , p. 87.  41 The  Economist,  October  14,  1905,  p.  1623.  Research,  234  in  the course  in  the f o l l o w i n g year.  exports  of construction.  came  The d e c l i n e i n home c o n s u m p t i o n a n d  saw many o f t h e j o i n t  inadequate  The r e a c t i o n f i n a l l y  stock companies, f l o a t e d  c a p i t a l d u r i n g t h e boom, i n f i n a n c i a l  on  difficulties.  By t h e e n d o f 19 09 a number w e r e a l r e a d y i n t h e p r o c e s s  of  42  voluntary  liquidation.  The r e g i o n a l boom o f t h e l a t e gradual  overseas  sharper  slackened  increase occured  population.  Many o f t h e s e p e o p l e  the expectations of higher depression  f o r vacancies  over-building industry  The 817.  o f t h e new  emigration  house-seeking increase i n  were a t t r a c t e d t o the  capital  incomes.  resulting  flowed  as w e l l .  Economist,  The  As p r o f i t s  i n to take  1890's h a d  allowed  rose i n the cotton  advantage of the h i g h r e -  i n t h e r e g i o n a l economy.  T h i s eased  i n residential  These were a l l i m p o r t a n t  April  prolongued  from the previous p e r i o d of  c o n d i t i o n s and f a v o r e d i n v e s t m e n t  struction  p.  As  of the  o f t h e 1880's a n d e a r l y  t o be reduced.  t u r n s on i n v e s t m e n t credit  share  1903.  towns o f L a n c a s h i r e b e c a u s e o f employment o p p o r t u n i t i e s  building time  after  i n t h e 1890's, p e o p l e  age g r o u p c o n s t i t u t e d a l a r g e r  and  a  i n c r e a s e i n t h e a v e r a g e w e e k l y wages o f o p e r a t i v e s .  A somewhat  cotton  1890's w i t n e s s e d  local con-  factors contributing  11, 1908, p. 777; A p r i l  17,  1909,  235  to  t h e upswing i n b u i l d i n g  a c t i v i t y w h i c h was a p r o m i n e n t  f e a t u r e o f t h e home boom i n t h e 189 0's. The and  financial  the c r i s i s  s t r i n g e n c y a s s o c i a t e d w i t h t h e B o a r War  i n t h e cotton i n d u s t r y which followed i n  1902-03 b r o u g h t h o u s e - b u i l d i n g  down q u i c k l y .  However, t h e  u p s w i n g i n home c o n s u m p t i o n a n d t h e p h e n o m e n a l r i s e i n exports  after  investment  190 3 p r e c i p i t a t e d a wave o f h i g h l y s p e c u l a t i v e  i n the Lancashire  marked s p i l l o v e r r e l a t i v e l y high until  depression  effect  i n house-building.  Incomes  remained  compared w i t h o t h e r r e g i o n s o f t h e c o u n t r y d e s c e n d e d i n 1908-09.  t h e r e a f t e r as poor h a r v e s t s expenditures  cotton i n d u s t r y which had a  on h o u s i n g  Building f e l l o f f  caused food p r i c e s t o r i s e and  accommodation d e c l i n e d .  We h a v e a t t e m p t e d h e r e ,  t o b r i e f l y t r a c e t h e economic  development o f L a n c a s h i r e , drawing a t t e n t i o n t o t h e i n t e r r e l a t i o n s h i p s between r e g i o n a l i n d u s t r i a l course  of house-building.  residential the  We h a v e s e e n t h a t i n v e s t m e n t i n  c o n s t r u c t i o n tended t o f o l l o w t h e fortunes o f  cotton industry.  run t h e experience rose  development and t h e  This contrast, a t least  o f South Wales.  When p r i c e s a n d p r o f i t s  i n the c o a l i n d u s t r y , investment  expense o f h o u s e - b u i l d i n g .  i n the short  took p l a c e , b u t a t t h e  T h e r e a r e a number o f r e a s o n s f o r  236  these d i f f e r e n c e s .  F o r one t h i n g t h e g e s t a t i o n  i n v e s t m e n t i n c o a l m i n i n g i s much l o n g e r t e x t i l e production. but  period  than i n cotton  Looms c a n b e s e t t o w o r k i n a s h e d ,  i t t a k e s y e a r s t o o p e n o u t a new m i n e .  requirements of investment i n c o l l i e r i e s r e l a t i v e t o most b r a n c h e s o f t h e c o t t o n  The  capital  are very  liability,  dominated by p r i v a t e f a m i l y of Lancashire,  while  firms.  Yet the ad-  the coal industry The c o t t o n  was  operatives  as w e l l as t h e b u t c h e r , t h e b a k e r and t h e  c a n d l e s t i c k - m a k e r were " c a p i t a l i s t s " respect:  their  s a v i n g s were h e l d  in joint  stock  cotton  For  large  industry.  i t was t h e l a t t e r w h i c h e x p l o i t e d t o t h e f u l l e s t vantages of l i m i t e d  of  i n a very  as share c a p i t a l ,  m i l l s , banks o r b u i l d i n g  these reasons periods  of prosperity  a more w i d e s p r e a d a n d i n t e n s e  important either  societies.  i n L a n c a s h i r e had  i m p a c t on t h e r e g i o n a l  eco-  nomy t h a n t h e y d i d i n S o u t h W a l e s . We h a v e n o t a t t e m p t e d t o g i v e account o f the causal c y c l e s have a r i s e n .  a c o m p l e t e and  mechanism by w h i c h r e g i o n a l F o r one t h i n g  little  has been  rigorous building  237  s a i d about m i g r a t i o n be  discussed  and p o p u l a t i o n  i n the next section.  change; t h e s e Before  c a n b e s p e c i f i e d more i n t e n s i v e s t u d y  will  such a mechanism  i s -required.  DEMOGRAPHIC FACTORS AND THE COURSE OF HOUSE-BUILDING I N SOUTH-EAST LANCASHIRE We h a v e e x p l o r e d b r i e f l y  the i n t e r r e l a t i o n s h i p s i n  the development o f t h e L a n c a s h i r e course  of residential  east Lancashire  cotton  i n d u s t r y and t h e  construction reflected  r e g i o n a l index  i n the South-  of house-building  A t t e n t i o n was d r a w n t o t h e m i g r a t i o n o f l a b o u r out  of the region during periods  and  the extent  t o which these  activity.  i n t o and  o f p r o s p e r i t y and  depression,  d e m o g r a p h i c movements r e i n f o r c e d  upswings o r a c c e l e r a t e d downswings i n r e s i d e n t i a l c o n s t r u c t i o n . In t h i s  s e c t i o n we w i l l  perience  of Lancashire  population the  look c l o s e r a t t h e demographic exi n an a t t e m p t t o r e l a t e  to the pattern of b u i l d i n g a c t i v i t y .  changes i n t h e A study of  f l u c t u a t i o n s i n the r e g i o n a l population, through  natural  i n c r e a s e and m i g r a t i o n w i l l  provide  greater  both insight  i n t o t h e l o c a l mechanisms o f economic development. The  data  u s e d h e r e a r e drawn l a r g e l y  Revenue l e d g e r s , t h e Census o f P o p u l a t i o n  from t h e I n l a n d and t h e  researches  238  of C a i r n c r o s s  a n d Thomas.  of a v a i l a b l e data raised  at the appropriate  i t s u g l y head.  graphic  Once a g a i n , t h e p r o b l e m  statistics  level of  Unfortunately,  comprehensive  index  do n o t e x i s t .  o f P o p u l a t i o n however, does c o n t a i n d e c e n n i a l  Lancashire, So the  The C e n s u s estimates  i n each o f t h e l a r g e towns i n S o u t h - e a s t  as w e l l as f o r each c o u n t y i n G r e a t  Britain.  t h a t t h i s d a t a m i g h t be used t o e x p l a i n f l u c t u a t i o n s i n course  index  of house-building,  of r e s i d e n t i a l  Duty s t a t i s t i c s records  discussed these  Thomas c o n s t r u c t e d  f o u n d i n t h e I n l a n d Revenue l e d g e r s .  a number o f t h e d i f f i c u l t i e s  statistics,  i n particular,  These  o f t h e number o f h o u s e s  t o d u t y on a c o u n t y - w i d e b a s i s .  valuations.  a regional  c o n s t r u c t i o n f r o m t h e I n h a b i t e d House  contain annual estimates  assessed  I n C h a p t e r I I we  associated  with  the effect of periodic r e -  To o v e r c o m e t h i s p r o b l e m Thomas h a s " a v e r a g e d  i n t e r - r e v a l u a t i o n years them; t h i s p r e v e n t s can  demo-  f o r a l l o f t h e towns i n c l u d e d i n t h e  regional house-building  of the population  aggregation  plus the r e v a l u a t i o n s year  any m i s l e a d i n g  impression  following  that the series  be u s e d f o r a n n u a l c h a n g e s a n d a t t h e same t i m e  provides  A.K. C a i r n c r o s s , " I n t e r n a l M i g r a t i o n i n V i c t o r i a n E n g l a n d " , Manchester School, V o l . X V I I , ( J a n u a r y , 1 9 4 9 ) , pp. 67-87. 44 B r i n l e y Thomas, " D e m o g r a p h i c D e t e r m i n a n t s o f B r i t i s h a n d A m e r i c a n B u i l d i n g C y c l e s , 1870-1913".  239  an  adequate i n d i c a t i o n o f t h e time-shape."  regional  The I.H.D.  i n d e x , c o n s t r u c t e d i n t h i s way, p r o v i d e s  approximations  o f t h e number o f h o u s e s b u i l t  of Lancashire  and C h e s h i r e  do n o t h a v e a c c e s s  annual  i n the counties  f r o m 1875 t o 1 9 1 2 .  B e c a u s e we  t o the o r i g i n a l disaggregated  data, i t  i s n o t p o s s i b l e t o c o n s t r u c t an i n d e x more a p p r o p r i a t e f o r o u r own p u r p o s e s , of Cheshire on  than  The  inclusion  results.  I.H.D. i n d e x c o v e r s  a r e g i o n t h a t i s somewhat l a r g e r  t h a t r e p r e s e n t e d b y t h e i n d e x g r a p h e d i n F i g u r e 10.  I n an a t t e m p t  t o determine  t h e e x t e n t t o w h i c h t h e I.H.D.  index i s r e p r e s e n t a t i v e o f South-east presented  both  South-east  ponents" The Liverpool  L a n c a s h i r e we h a v e  i n d i c e s i n F i g u r e 12 a l o n g w i t h a n n u a l  of h o u s e - b u i l d i n g i n L i v e r p o o l . and  alone.  on t h e o t h e r hand h a s o n l y a m i n o r i n f l u e n c e  the f i n a l The  i . e . of Lancashire  The i n d i c e s f o r L i v e r p o o l  Lancashire are, of course,  o f t h e I.H.D.  the major  "com-  index.  p e a k o f 1878 i n t h e number o f h o u s e s e r e c t e d i n i s i n c l o s e a g r e e m e n t w i t h t h e p e a k i n t h e I.H.D.  index  f r o m 1877 t o 1 8 7 9 .  rises  t o i t s p e a k one y e a r e a r l i e r , h o w e v e r , a s h a r p  45 Ibid,  estimates  p. 5.  The S o u t h - e a s t  Lancashire  index decline  240  Figure  MIGRATION, NATURAL INCREASE  AND  12  HOUSE-BUILDING IN  LANCASHIRE  1871-1913  (A)  H o u s e s E r e c t e d i n L i v e r p o o l , 189 2-1914. S o u r c e : J . P a r r y L e w i s , Building Cycles and Bvitains Growth, pp. 334-7.  (B)  Index o f H o u s e - B u i l d i n g i n S o u t h - E a s t c a s h i r e (1901-11 = 1 0 0 ) , 1860-1914. Source: Table XVIII, Appendix I I I .  (C)  I n h a b i t e d House D u t y I n d e x - Number o f H o u s e s B u i l t i n L a n c a s h i r e a n d C h e s h i r e , 1875-1912. (Inter-Reassessment Years Averaged). S o u r c e : T a b l e XX, A p p e n d i x I I I .  (D)  Change i n P o p u l a t i o n A g e d 20-44, N a t u r a l I n c r e a s e and M i g r a t i o n , Q u i n q u i n n i a l l y , 1871-1910. S o u r c e : T a b l e XIX.  Em  Net  In-Migration  •  Net  Out-Migration  Lan-  241  242  to  the  trough  pattern  t r a c e d by  Liverpool indices  very nearly with  I.H.D. i n d e x .  remain at a very  the  low  The  continuous level  underway i n 189 2-4.  while  u n t i l the  The  with  the  downswing i n the  other  second  boom i n t h e  subsequent d e c l i n e i n South-east  reflected The  the  i s more g r a d u a l b u t  swing g e t s and  i n 1883-5 c o r r e s p o n d s  long  late  1890's  Lancashire i s  a l a g i n the measure f o r L a n c a s h i r e - C h e s h i r e .  relatively  high  I.H.D. i n d e x b e t w e e n  level  of b u i l d i n g  1899  and  1903  activity  reflects  ween t h e w e a k e n i n g boom i n S o u t h - e a s t  shown by  a balance  Lancashire  and  the  betthe  46 continued high Figure in  12  South-east  o u t l i n e d by  Lancashire  course ally  similarity  i n the  of the  and  larger  assume t h a t t h e  To  the  same as  Lancashire  ^^Ibidj  and  p.  those  time-path  experience  this  tremendous w e i g h t  r e g i o n a l index.  We  Lancashire  accorded might  demographic determinants  T h i s assumption  is  of L i v e r p o o l  o p e r a t i n g i n the broader  Cheshire.  11  the  a large extent,  of h o u s e - b u i l d i n g i n South-east  the  Liverpool.  that house-building  followed closely  Lancashire  components  reasonably  impression  I.H.D. i n d e x .  the  South-east  these  of house-building i n  conveys the  the  e x p l a i n e d by and  level  of  are  thus  the basic-  region  u n d e r l i e s the  of analysis  243  i n the  remainder of t h i s  F o l l o w i n g Thomas we  will  47  assume t h a t t h e  section. 48  and  Femstein  among  others,  age  g r o u p 20-44 c o n s t i t u t e s t h e  g r e a t m a j o r i t y o f t h e h o u s e - s e e k i n g segment o f t h e ation.  By  migration 44, we  can  s e p a r a t i n g the e f f e c t of n a t u r a l increase on  changes i n the  perhaps gain  importance of these  Thomas d e f i n e s as  "an  estimate  have o c c u r r e d following  regional population  some u n d e r s t a n d i n g  of the p o p u l a t i o n age  and 20-  relative  regional  activity.  " n a t u r a l i n c r e a s e " i n the  in this  aged  of the  f a c t o r s i n e x p l a i n i n g the  p a t t e r n of h o u s e - b u i l d i n g  44  popul-  group  20-  change w h i c h would  g r o u p i n t h e two  each c e n s u s , i f t h e r e had  age  quinquennia  b e e n no m i g r a t i o n  in  49 e i t h e r of these variations periods. in quinary Ibid,  periods."  i n the The age p.  Such changes r e s u l t  excess of b i r t h s  Census of P o p u l a t i o n  over deaths i n  from earlier  contains decennial  totals  groups f o r each county i n Great B r i t a i n .  These  6.  48 CH. F e i n s t e i n , Home and Foreign Investment 1870-1913, (Ph.D D i s s e r t a t i o n , U n i v e r s i t y o f C a m b r i d g e , 19 5 9 ) . 49 Thomas, " D e m o g r a p h i c D e t e r m i n a n t " , p. 7.  244  f i g u r e s are o b v i o u s l y the r e s u l t a n t of n a t u r a l i n c r e a s e and net m i g r a t i o n over a ten year p e r i o d . combined the census data with age r e c o r d e d deaths c o n t a i n e d  i n the  Thomas has  specific figures  on  Registrar-General's  annual r e p o r t s and d e c e n n i a l supplements t o d e r i v e ates o f q u i n q u e n n i a l  changes i n the p o p u l a t i o n aged 20-44,  had m i g r a t i o n not taken p l a c e . these e s t i m a t e s  and  the net m i g r a t i o n i n which p r o f i t  The  d i f f e r e n c e between  the a c t u a l census t o t a l s  f o r the decade.  income was  rising  contained  used as a guide  decennial migratory  flow between  quinquennial  estimates  represents  Information  Revenue r e c o r d s was  The  estim-  on the  i n the  Inland  to a l l o c a t e the  net  quinquennia. of n a t u r a l i n c r e a s e  and  m i g r a t i o n f o r the p o p u l a t i o n aged 20-44 i n L a n c a s h i r e Cheshire  can be  a l s o presented  found  years  i n T a b l e XIX,Appendix I I I .  g r a p h i c a l l y i n F i g u r e 12.  Table  and  They are XX,  I I I c o n t a i n s the  I.H.D. s e r i e s of houses assessed  assessed  t o duty  i n these tow  gure 12,  t h e r e i s a s t r o n g c o r r e l a t i o n between the long swing  in house-building  counties.  T u r n i n g now  and the curve of p o p u l a t i o n change.  shape of the l a t t e r i s l a r g e l y determined by 50 the b a l a n c e  Ibid,  of m i g r a t i o n . "  p.  13.  and  Appendix not to F i -  The  "the swing i n  245  The  e a r l y 1870's w i t n e s s e d  of population with  a sharp r i s e  brought  i n the  activity  increase  this  period.  volume o f i n - m i g r a t i o n  cipitously. before  the  prolongued late  saw  No  mid-1890's. depression  the  powerful  i s a sharp  rise  t o Thomas,  echo e f f e c t  demand f o r h o u s e  1876  and  in building 1880  , both pre-  i n e i t h e r i s apparent  c o r r e s p o n d s t o a downswing  in residential  According  13)  marriage rate f e l l  increase  This  along  (see F i g u r e  major upswing  the  inflow  This,  i n the  Between  and  significant  1880's, t h e r e  increase.  Lancashire.  c o n t r i b u t i n g t o the  during  l a r g e net  marriage rate  about a tremendous  room, t h e r e b y  the  i n t o South-east  a very  i n the  "the  of  the  construction. curve  of  quinquinnium sharp  increase  In  and the  natural 1890-5 in  the  51 birth-rate in  the  population  marriage  after  l a g the  flow  1895.  The  upswing  of population  Ibid.  years  before."  a g e d 20-44 f a c i l i t a t e d  i n - m i g r a t i o n which  accommodations. a  to t h i r t y  r a t e when e c o n o m i c c o n d i t i o n s  Lancashire net  twenty-five  To  t h i s was  a sharp r i s e  improved  the  boom i n h o u s e - b u i l d i n g  i n the  curve  in  followed  house-seeking  age  The  group  the  South-east  demand f o r  of p o p u l a t i o n .  bulge  in  added a r e s u r g e n c e  further swelled  i n the  This  of housing  with  net after  out1900  Figure  246  13  MARRIAGE AND BIRTH RATES (PER 10 00 POPULATION) ENGLAND AND WALES 186 0-1910  1860  1870  1880  1890  S o u r c e : M a r r i a g e Rate - England B.R. M i t c h e l l , Abstract S t a t i s t i c s , pp. 45-46.  1900  1910  and W a l e s , 1860-1910, of British Historical  B i r t h R a t e - E n g l a n d and W a l e s , 1860-1910, B.R. M i t c h e l l , Abstract of British Historical S t a t i s t i c s , p p . 29-30.  247  and  the  fall  i n the  l e v e l of n a t u r a l increase  eventually  b r o u g h t a c o n t r a c t i o n i n the volume of b u i l d i n g a c t i v i t y . T h i s was  r e i n f o r c e d by  a d e c l i n e i n the marriage r a t e  after  1899 . The  evidence appears to i n d i c a t e t h a t  f a c t o r s w e r e an  important  demographic  p a r t of the mechanism w h i c h gave  r i s e t o r e g i o n a l long swings i n h o u s e - b u i l d i n g east Lancashire. is  largely  industry. trade  The  behavior  e x p l a i n e d by  the  f a c t o r s , however,  changing fortunes  ( t h e c a u s e o f w h i c h was  l a s t s e c t i o n ) d r e w a t r e m e n d o u s number o f  adults to Lancashire.  R i s i n g i n c o m e s and  it  e s t a b l i s h a separate  e a s i e r t o m a r r y and  w e l l as  support  larger families.  in natural increase during  the  which f o l l o w e d are p a r t i a l l y t h e e a r l y 1 8 7 0 ' s and to get  of the  Thus, f o r example, the p r o s p e r i t y of the  i n t h e e a r l y 1870's  i n the  of these  i n South-  along.  the  In t h i s  cotton cotton  discussed young  e m p l o y m e n t made house-hold,  sense, the  as  upswing  1 8 9 0 ' s and  t h e b u i l d i n g boom  e x p l a i n e d by  the p r o s p e r i t y of  inability  o f F r a n c e and  Prussia  248  VARIATIONS IN  THE  COURSE OF  HOUSE-BUILDING AT  THE  LOCAL  L E V E L : SOUTH-EAST LANCASHIRE  We  have seen  cashire and  followed closely  1900.  Was  individual we  restrict  The  reason  information of  however, the  for this on  the  i s t h a t we local  III.  series  and  1860 of  section  question  only.  t o even  economic  less history  d i d f o r South Wales. be  behavioral  partially  used,  The  where r e l e v a n t ,  relationships.  d i s a g g r e g a t i n g the r e g i o n a l  f o r e l e v e n m a j o r towns i n c l u d e d be  found  i n Table XVIII  of  Appendix  Those f o r Ashton-under-Lyne, B o l t o n , A l t r i n c h a m ,  of  Oldham, S t o c k p o r t , B u r y and indices  of b u i l d i n g  number o f h o u s e p l a n s in  In t h i s  d e m o g r a p h i c and  r e g i o n a l index w i l l  Salford, form  by  experience  have a c c e s s  that i s available w i l l  Statistical  the  region?  L a n c a s h i r e t h a n we  proceed  index.  the  typical  ourselves to addressing this  indicate possible local We  in  this,  Lan-  the n a t i o n a l p a t t e r n between  towns t h r o u g h o u t  South-east  information to  t h a t house-building i n South-east  approved  e a c h town r e s p e c t i v e l y . Manchester  house p l a n s  are  in their  approved  activity  Rochdale are based  on  the  a n n u a l l y between  The  data  raw  form.  i n M a n c h e s t e r between  local 1869  the  average  1901  f o r Burnley, The  in  and  1910  Preston records  and  1890  of  249  have been l o s t in  that  or destroyed, which accounts  local  i n d i c e s w e r e c o n s t r u c t e d f r o m raw  t h e number o f h o u s e p l a n s Once a g a i n ,  the previous  chapter  imations  level.  Figure  discussed i n the  o n l y be  a c t u a l course  now  the disaggregated  need  difficulties,  considered  rough  approx-  of b u i l d i n g , a c t i v i t y  to Figure  14  one The  series provide  smooth r e g i o n a l c u r v e  east Lancashire. swings at the the present  f o r m i t y , the  Our  local  of the s e r i e s ,  On  s e c t i o n of  at  the  For ease of r e f e r e n c e , they have been graphed  of l o c a l b u i l d i n g p a t t e r n s .  in  limitations  14.  Turning  relatively  last  on  town.  i n A p p e n d i x I I , and  In l i g h t of these  s e r i e s can  t o the  t o emphasize the  as w e l l a s  d e t a i n us h e r e .  however, the  in  T h i s was  data  approved a n n u a l l y i n each  i t i s important  of the data.  local  gap  series.  The  not  f o r the  i s s t r u c k by s h o r t run a sharp  on  contrast to  of  the  i n South-  the e x i s t e n c e of  long  i n South Wales appear t o h o l d  c a s e as w e l l .  true  Though r e c o g n i z a b l e i n a number  t h e y h a r d l y d i s p l a y w i t h any  time  diversity  fluctuations  of h o u s e - b u i l d i n g  observations  level  the  degree of  uni-  shape of the r e g i o n a l o r n a t i o n a l p a t t e r n .  t h e o t h e r h a n d , one  does o b s e r v e a c o i n c i d e n c e o f  relatively  250  Figure  14  INDICES OF HOUSE-BUILDING FOR SELECTED TOWNS IN SOUTH-EAST LANCASHIRE 1860 - 1914  Source: Table XVIII, Appendix I I I  '  1860  1  1870  '  1880  1  1890  I  1900  •  1910  0..I I860  ; 1870  ; 1880  ; 1890  ; 1900  1910  253  1860  1870  1880  1890  1900  1910  254  high  levels  of  in  South-east  in  the  late  We  Lancashire  during  towns  t h e mid-1870's and  again  1890's.  i n the and  perienced  mid-1860's.  level.  r e g i o n a l upswing  experience  peak i n b o t h  housing  and  f o r c e and Between  of  while  and  late  1881,  true  dein ex-  Altrincham constant  1860's p r i m a r i l y  o f B o l t o n where a m a j o r  i n d u s t r i a l b u i l d i n g came i n  in-migration swelled  added t o the  1861  especially  years,  i n the  unusual  level  relatively  f l u c t u a t e d around a r e l a t i v e l y  the  high  was  Manchester, however,  a m i n o r boom i n t h e s e  The  reflects  T h i s was  Ashton-under-Lyne.  appears t o have  The  i n a l l of the  have seen t h a t h o u s e - b u i l d i n g  pressed Bolton  construction activity  the  demand f o r h o u s i n g the  population  urban  1869.  labour  accommodation.  of Bolton  rose  from  52 70,000 t o 105,000, and The  1870's w i t n e s s e d  activity  throughout  regional  index  Altrincham, the  increase of  a tremendous  South-east  have d a t a  Historical  increase  and  in this  a m a j o r boom i n r e s i d e n t i a l  British  cent.  The  in building pause i n  the  from minor r e v e r s a l s i n  Ashton-under-Lyne, Bolton  Mitchell,  per  Lancashire.  i n 1871-2 r e s u l t s  towns f o r w h i c h we  periencing  50  Oldham.  A l l of  p e r i o d were  ex-  c o n s t r u c t i o n by  Statistics,  pp.  1875-6.  24-25.  255  The  most d r a m a t i c  L y n e and 1872  to  Oldham b e t w e e n 1875,  between  1869  In  the  structure industry branch the  and  from  and  1875  i n Ashton-under-  1877, to  i n S a l f o r d from  1877,  and  in  Rochdale  1875.  previous  s e c t i o n we  the  two  and  the  tendency  briefly  the  f o r the weaving or p r o s p e r i t y of  T h i s may,  booms i n Oldham and spinning  discussed  main b r a n c h e s of L a n c a s h i r e  spinning branch.  other  occurred  1873  of  primarily  centers,  an  in part,  the cotton  manufacturing  upswing  before  e x p l a i n why  the  A s h t o n - u n d e r - L y n e , w h i c h were lagged  somewhat t h e  booms i n  towns. The  local  took the The  i n Bury  to experience  building  of  increases  experience  o f Oldham p r o v i d e s  participation cotton  and  early  1870's s t i m u l a t e d  stock  companies.  presenting  over  example  i n t h e wave o f e x p a n s i o n t h a t  i n d u s t r y i n the  growth of p r o f i t s  a remarkable  dividends  an  Between  decade of  the  i n the  upsurge i n the 1873  and  1875,  3,000,000 s p i n d l e s and  'seventies.  late  1860's  formation 60  over-  of  companies  a total  nominal  and joint recapital  53 of  3,517,000 p o u n d s were f l o a t e d  Ellison,  The  Cotton  Trade,  i n Oldham.  pp.  134-5.  The  working  256  classes  both  participated  i n and p r o m o t e d t h i s wave o f  investment. " B e f o r e 1873 t h e w o r k i n g c l a s s was e s t i m a t e d t o h a v e owned a t l e a s t t h r e e - q u a r t e r s o f t h e c a p i t a l then i n v e s t e d i n the l o c a l s p i n n i n g c o m p a n i e s ... T h e r e w e r e h u n d r e d s o f p e o p l e e a r n i n g w e l l u n d e r h2 a week e a c h w i t h hund r e d s o f pounds i n v e s t e d i n t h e i r l o c a l m i l l s . By M a r c h , 1874, t h e r e c o u l d n o t h a v e b e e n f e w e r t h a n 10,000 p e r s o n s h o l d i n g s h a r e s i n Oldham."54  The  remarkable  g r o w t h o f Oldham i s r e f l e c t e d  ing population r e s u l t i n g as we h a v e through at  seen,  from  i n h e r burgeon-  n o t o n l y from n a t u r a l  increase, but,  the heavy n e t i n f l o w o f p o p u l a t i o n  internal migration.  83,000; b y 1881, t h i s  I n 1871 h e r p o p u l a t i o n s t o o d  h a d grown t o 111,000, an i n c r e a s e  55 of  34 p e r c e n t .  a dramatic r i s e tributing The  There  crisis  question that  i n p o p u l a t i o n was an i m p o r t a n t  to the b u i l d i n g  especially  factor  1870's h i t t h e w o r k i n g  hard, n o t o n l y because  Many w o r k e r s  such con-  boom o f 1876-7.  of the late  wages, b u t a l s o b e c a u s e capital.  can be l i t t l e  o f heavy lost  their  o f unemployment calls  classes and r e d u c e d  i n unpaid-up  entire  invested  share  savings.  54  D.A.  F a r n i e , The English  (M.A. t h e s i s ,  Building 55  Cycles  Mitchell,  Manchester  and B r i t a i n s British  Cotton  University,  Growth,  Historical  Industry, 1953),  1850-1896, cited  i n Lewis,  p . 125.  Statistics,  pp. 26-27.  257  Working  class  from the  savings  cotton  were s u b s e q u e n t l y  i n d u s t r y to savings  societies.  During  than  cent of m i l l  10  per  industry. played  the  depression  p a t t e r n of  b a n k s and  of  the  building  1880's  workers h e l d shares  Lewis d e s c r i b e s the  i n the  d i v e r t e d away  r o l e working  fewer  in  local  class  r e g i o n a l d e v e l o p m e n t as  savings follows:  "We t h u s h a v e t h e phenomenon o f w o r k e r s s a v i n g , i n v e s t i n g i n t h e i r own i n d u s t r y , and d r a w i n g h i g h d i v i d e n s w h i c h were u s u a l l y r e i n v e s t e d . They s t i m u l a t e d not o n l y i n d u s t r i a l b u i l d i n g , b u t a l s o h o u s e - b u i l d i n g , more t h r o u g h m i g r a t i o n i n t o t h e a r e a t h a n t h r o u g h an income e l a s t i c i t y o f demand. When c a p a c i t y and b u i l d i n g had b e e n o v e r d o n e , and t h e y l o s t b o t h t h e i r j o b s and t h e i r s a v i n g s , t h e y m i g r a t e d , o r moved t o g e t h e r , and l e f t s u r p l u s h o u s e s . B u t when b e t t e r t i m e s came t h e y r e t a i n e d t h e i r t h r i f t y h a b i t s and now^g f a c i l i t a t e d h o u s e - b u i l d i n g by s u p p l y i n g f u n d s . " House-building Lancashire  during  the  1880's o p n e d w i t h f o r w h i c h we t h e r e was ces. the  fell  o f f s h a r p l y throughout  trade  crisis  a building  have d a t a .  As  depression the  a growing d i v e r s i t y  Some towns s u c h r e g i o n a l and  of  local  as A l t r i n c h a m  L e w i s , Building  an  upswing  Cycles  and  late  1870's.  i n a l l of the  decade u n f o l d e d ,  national activity  1 8 9 0 ' s , f o l l o w e d by  of the  South-east  towns  however,  house-building  and  Salford  i n the  i n 1894-5.  Britains  experien-  follow  1880's and T h i s , on  Growth,  The  p.  closely  early the  126.  other  258  h a n d , was in  i n sharp  c o n t r a s t to the  B o l t o n , Oldham and  s e c t i o n we early this  noted  18 80's.  of  Ashton-under-Lyne.  house-building  In the  preceding  t h e boom i n t h e mule t w i s t t r a d e d u r i n g  The  i n d u s t r y , and  spinning mills  course  a b o v e towns were t h e experienced  during  these  primary  a wave o f  centers  investment  y e a r s w h i c h was  the of  in  accompanied  by  57 an  upswing  i n house-building.  A s h t o n - u n d e r - L y n e and a brief in  Reversals  Oldham a f t e r  1886,  p a u s e i n 1886-7, c o n t i n u e d  1890.  Between 1891  fluctuated  around  and  a relatively  R e c o v e r y came e a r l y upswings  1911,  in residential  high  experienced  a longer period of depression  other  town i n t h e  1906.  Her  almost  s t a t i o n a r y over  in  1891,  102,687 i n 1901  stood entire  and  then  peak  level.  Stockport  B u r y on  with  the  after  other  hand,  i n house-building  region, extending  p o p u l a t i o n which the  1889.  after  i n Bolton  c o n s t r u c t i o n g e t t i n g underway  off after  both  to a minor  constant  t o R o c h d a l e and  in  Bolton,  house-building  leveling  any  while  to climb  1885-6, and  than  occurred  from  1878  a t 99,494 i n 1881,  remained  period, climbing to declining  i n the  to  102,103  nextdecade  T.S. A s h t o n , "The Growth o f T e x t i l e B u s i n e s s e s i n t h e Oldham D i s t r i c t , 1884-1924", Journal of the Royal Statistical Society, V o l . LXXXIX, (May, 1 9 2 6 ) , pp. 568-9.  259  to  96,591 i n 1 9 1 1 . Residential  throughout as  c o n s t r u c t i o n was  South-east Lancashire  t h e home boom g a i n e d  all  upswing  of Stockport,  rose  depressed  i n t h e e a r l y 1890's, b u t 189 4-5, i t drew i n  i n the r e g i o n a l index,  B u r y and B o l t o n .  with  the  The r e g i o n a l  i s d o m i n a t e d b y t h e b u i l d i n g boom i n M a n c h e s t e r ,  w h e r e t h e number from  relatively  momentum a f t e r  o f t h e towns i n c l u d e d  exception  ly  5 8  o f houses e r e c t e d  annually  687 i n 1893 t o 2939 i n 1899.  from  increased  The towns  890,622 i n 1891 t o 1,011,605  sharp-  population  i n 1901, a g r o w t h o f  59 13.6 p e r c e n t . whose p o p u l a t i o n (an  M a j o r booms a l s o t o o k p l a c e rose  from  in  Altincham,  38,603 i n 1891 t o 43,122  i n 1901  i n c r e a s e o f 11.7 p e r c e n t ) , A s h t o n - u n d e r - L y n e where t h e  i n c r e a s e was  from  whose p o p u l a t i o n cent) from  84,654 t o 90,492 climbed  from  (6.9 p e r c e n t ) ,  87,016 t o 97,043  a n d R o c h d a l e where t h e i n c r e a s e was 76,161 t o 83,114  P a g e , Commerce  (9.1 p e r c e n t ) .  and  Industry,  Burnley  (11.5 p e r  slightly  lower,  6 0  p. 9.  59 Thomas A. W e l t o n , " N o t e s on t h e C e n s u s R e p o r t (1901) f o r t h e C o u n t y o f L a n c a s t e r " , Manchester Statistical Society transactions, (November, 1 9 0 2 ) , p. 2. 60 . ,  Ibid. T J  260  The at  the  crisis  which h i t the  t u r n of the  c e n t u r y was  i n home c o n s u m p t i o n , rest,  falling  cided with  f o r w h i c h we local  remained  o f f somewhat i n t h e  1900  Burnley  are m i l d and  1908-9.  significant  Residential after  189 7  and  underway i n  same y e a r ,  1900's, and  a random s h o c k , t h e  1898,  i f the  peak  t r e n d i s downward  Manchester.  A trough  a c t i v i t y i n both  boom f r o m  outbreak  o f war  as B o l t o n ,  enjoys  throughout  the  189 8 and  in  Rochdale  compared t o t h e p r e c i p i t o u s d e c l i n e s  Altrincham,  fluctuating the  towns  i n the  downswings i n Oldham a f t e r  which b u i l d i n g in  i n most o f t h e  1905. The  after  of coin-  upswing got  early  un-  This  duration.  d e c l i n e i n S a l f o r d began  labour  appearance  T h e r e w e r e , however,  d o l d r u m s u n t i l an  a decline  and  group.  o f f sharply i n Burnley  19 0 8 i s c o n s i d e r e d  after  in  fell  age  i n house-building  have d a t a .  i n the  The  leveling in  incomes p l u s the  d i f f e r e n c e s i n t i m i n g and  construction  1905.  a c c o m p a n i e d by  i n the house-seeking  a slump  cotton industry  i n c r e a s e d unemployment  wages and  out-migration  Lancashire  on  1894  the to  i n 1914.  occurs  towns r i s e s  i n 190 5,  after  t o a m i n o r peak  o t h e r hand, e x p e r i e n c e s 1904,  falling  Stockport,  r e l a t i v e l y high  e n t i r e p e r i o d 1890  levels  a  long  thereafter until  i n much t h e  same  of b u i l d i n g  activity  t o 1912.  I f the  way  isolated  261  peak i n 1903  f o r Ashton-under-Lyne i s ignored,  local  of h o u s e - b u i l d i n g  course  t o the  the  boom i n h o u s e - b u i l d i n g  towns i n S o u t h - e a s t  differed  i t was  in  less  Oldham saw  t h e m a j o r boom o f t h e boom o f t h e 1870's, w h i l e  of  far less  was  the  same.  Our  data  toward h i g h e r  its  of  The  than  late  the  the  entire  This the  1890's  1870's.  peak y e a r ,  one-third of  the only  f o r the  not  second  period  levels  189 8,  t h e m i n o r boom o f the  amplitude  the  long  other  swing  of  hand,  in  the  r e l a t i v e m a g n i t u d e s were 1870's  period of e x c e p t i o n a l l y high a few  years  i n the  1890's, which  middle  includes  towns, d i s p l a y s f a r more v a r i a t i o n  tendency  intensity  with  spanning  over  1890's.  swing o f  intense.  their  the  I n g e n e r a l , h o w e v e r , t h e boom o f t h e  activity  new  during  1890's o v e r s h a d o w e d t h e  patterns  late  resemblance  underway i n most  I n AltrLncham, on  i n Rochdale,  decade.  number o f  only  1876-7.  f a r more d r a m a t i c ,  building  Lancashire  house-building  t h e m i d - 1 8 8 0 ' s , and  about the  that got  i n a number o f ways f r o m t h e  I n many c a s e s  was  a close  the  regional pattern.  The of  bears  then  in  1890-1910, d e s p i t e  a  local the  general  of b u i l d i n g c o n s t r u c t i o n i n  o n l y has  the  effect  r e g i o n a l long  of r e d u c i n g  swing, but  also  the  the lengthens  period. In t h i s  chapter  we  have seen t h a t the  course  of  house-  262  b u i l d i n g i n South-east  L a n c a s h i r e resembles  n a t i o n a l p a t t e r n b e f o r e 19 00.  May  we  closely  the  thus assume t h a t  the c a u s a l mechanisms g i v i n g r i s e t o long swings i n r e s i d e n t i a l c o n s t r u c t i o n were b a s i c a l l y the same a t the n a t i o n a l and r e g i o n a l l e v e l ?  Our  a n a l y s i s of the economic  and demographic development o f L a n c a s h i r e suggests such an assumption  might be m i s l e a d i n g .  The  chanism holds t h a t the c e s s a t i o n of f o r e i g n and  e m i g r a t i o n which was  a f t e r 1873, investment.  that  national  me-  investment  accompanied by a d e c l i n e i n exports  r e l e a s e d f i n a n c i a l c a p i t a l and l a b o u r f o r home The d e c l i n e i n e m i g r a t i o n , p r i m a r i l y from  the  c o u n t r y s i d e i n t o the c i t i e s , thus i n c r e a s i n g the demand f o r housing  accommodation.  The r e l e v a n t q u e s t i o n t o  r e s p e c t t o the e x p e r i e n c e of South-east  ask w i t h  L a n c a s h i r e i s whether  a r e g i o n a l boom would have taken p l a c e i n the absence of the i n t e r n a t i o n a l r e d i r e c t i o n of r e s o u r c e s i m p l i e d by the working of the A t l a n t i c economy.  The  evidence we have p r e s e n t e d i n  the course of t h i s r e g i o n a l a n a l y s i s i s s u f f i c i e n t t o venture a t e n t a t i v e answer t o t h i s q u e s t i o n . The  l a t e 1860's and e a r l y 1870 s were years of heavy  investment  foreign  1  and e m i g r a t i o n o v e r s e a s .  At the same time,  the  b a l a n c e of i n t e r n a l m i g r a t i o n i n f a v o r of L a n c a s h i r e was c e p t i o n a l l y high.  F o r e i g n development imposed l i t t l e  ex-  i f any  263  restraint and  on  its ability  capital early 1873  i n d u s t r i a l recovery to a t t r a c t  f o l l o w i n g the  and  raw  mid-1860's.  the  The  regional population  demand) w e r e p o s i t i v e l y  of  The ous  The  periods  an  of  suggests  that  t o the  to  changes of  housing  development of  were n o t  the  after  migration  (the major determinant  related  1870's was  f o r the  undoubtedly  Lancashire  of  the  a residual  one  the  influence  o f t h e most  cotton trade.  Franco-Prussian  exogenous shock i n t h i s  trend.  evidence  contributed to exceptional p r o f i t s  impact  crises  and  expansion.  early  inflation  credit  labour  of external migration  c o t t o n i n d u s t r y , and  overseas  s u p p l i e s of  m a t e r i a l and ebb  r e g i o n a l economy,  a decline in internal  Lancashire.  Lancashire  of the  necessary  The  i s a c c o m p a n i e d by  South-east in  the  The  working  class  increased  earnings  and  a wave o f  investment  comes and  growing  war,  context, shared  and  w h i c h must be  gave a f i l l i p  High p r o f i t s  in mill-building f o r c e had  and  the  a similar  wide  dividends. considered  to  i n the p r o s p e r i t y  employment.  labour  A world  prosper-  this  through  stimulated  increased i n i n f l u e n c e on  house-building. The yet  market  profits  mid-1876 and  and  f o r c o t t o n goods s o f t e n e d  somewhat a f t e r  dividends  declared u n t i l  continued  t o be  wages o f o p e r a t i v e s c o n t i n u e d  to r i s e u n t i l  1873,  1877.  264  The  fact  t h a t t h e b u i l d i n g boom c o n t i n u e d  perhaps b e s t which  e x p l a i n e d by t h e s t r u c t u r a l  took p l a c e  t o 1876 i s reorganization  i n t h e r e g i o n a l economy d u r i n g  period  (this  cussed  i n Chapter  this  i s n o t t o d i s m i s s many o f t h e f a c t o r s d i s I I I , which  also played  a part).  Regional  c o n s t r u c t i o n was n o t e c l i p s e d b y what i n t h e p a s t h a d b e come a t r a d i t i o n a l stock  companies  credit  crisis.  and b u i l d i n g s o c i e t i e s  supplement t o t h e e x i s t i n g of  realizing  the savings  banking  generated  regional  economy.  cottages  was b y and l a r g e f i n a n c e d  of  The p r o l i f e r a t i o n provided  a  of joint  crucial  system f o r the purpose by t h e expansion  of the  T h e c o n s t r u c t i o n o f c o t t o n m i l l s and locally  out of the savings  o p e r a t i v e s , c a r p e n t e r s , m i n e r s and m e c h a n i c s , among  There  is little  question  that the decline i n foreign invest-  ment and t h e d i v e r s i o n o f l o a n a b l e economy was an i m p o r t a n t  others.  factor  funds  easing  into  credit  the domestic conditions at  61 home.  We  are simply  suggesting  t h a t i t was n o t c r i t i c a l  I n 1876 t h e Economist observed, with respect t o the c o u n t r y a s a w h o l e t h a t " t h e g r e a t l y demand ( f o r wood) seems t o b e o w i n g c h i e f l y t o t h e low p r i c e o f money, and t o t h e i n c l i n a t i o n on t h e p a r t o f c a p i t a l i s t s t o p r e f e r investments i n s u b s t a n t i a l p r o p e r t y i n E n g l a n d t o f o r e i g n s t o c k s ... As l o n g a s money c o n t i n u e s c h e a p , t h i s r a t e o f c o n s u m p t i o n may b e m a i n t a i n e d , a l t h o u g h i t w i l l p r o b a b l y r e s u l t s i n b u i l d i n g beyond t h e requirements o f t h e p o p u l a t i o n " . The Economist Commercial History and Review, 1877, p . 19, q u o t e d i n L e w i s ,  Building  Cycles  and B r i t a i n ' s  Growth,  p . 199.  265  in  t h e mechanism o f t h e r e g i o n a l l o n g  east  Lancashire.  more s t u d y other  At t h i s  stage  swing  i t i s clear  of the functions of b u i l d i n g  regional financial  more a s s e r t i v e c a n b e  relationships  said.  i n Southt h a t we  societies before  need  and  anything  CHAPTER V I I  SOME CONCLUSIONS AND FOR FURTHER  THEIR IMPLICATIONS  STUDY OF  IN VICTORIAN  Long be  swings i n r e s i d e n t i a l  a prominent  various Great  characteristic  aggregate  Britain  fluctuations  HOUSE-BUILDING BRITAIN  c o n s t r u c t i o n a r e found t o  of the time-path  measures o f h o u s e - b u i l d i n g a c t i v i t y i n  from  1860 t o 1914.  of approximately  In g e n e r a l , these s e c u l a r  twenty y e a r s d u r a t i o n have  been e x p l a i n e d i n terms o f m a c r o - c a u s a l most i n t r i g u i n g  example o f w h i c h  of  economy".  an " A t l a n t i c The  ize in  peculiar  the housing  institutional  market g i v e r i s e  t h e p r o c e s s by w h i c h c h a n g e s  changes analysis  i n the supply o f housing of housing  appropriate dential  level  t r a c e d by  market  a t which  r e l a t i o n s h i p s , the  i s found  i n the hypothesis  arrangements which c h a r a c t e r to lagged  response  patterns  i n demand a r e t r a n s l a t e d accommodation.  structure to analyze  construction i s the regional  suggests  A general  that the  the behavior of or local  into  resi-  level."''  The e m p h a s i s h e r e i s on " r e g i o n a l " , a l t h o u g h a number o f s p e c i f i c l o c a l i t i e s , f o r example London o r B i r m i n g h a m whose p o p u l a t i o n s e x c e e d t h o s e o f many w e l l d e f i n e d r e g i o n s , r e q u i r e s p e c i a l study. 266  267  Two o f t h e r e a s o n s us  to identify  national  given  f o r t h i s were, f i r s t ,  and a s s e s s  or international  not only  c h a r a c t e r which  housing  market b u t a l s o those  factors  of specific  to  local  i n f l u e n c e the course  there  i s less  those  structural  i t allows  forces of a i m p i n g e on t h e and i n s t i t u t i o n a l  o r r e g i o n a l o r i g i n which  of house-building  combine  activity.  Second,  chance o f s p e c i f y i n g c a u s a l r e l a t i o n s h i p s  whose u n d e r l y i n g b e h a v i o r a l i m p l i c a t i o n s a r e i n c o n s i s t e n t with  the l e v e l  of  aggregation.  We h a v e r e p e a t e d l y c h a r a c t e r o f t h e market very  real  sense, t h e r e  house s t a n d i n g substitute precisely of  i s no n a t i o n a l h o u s i n g  ization  suggests  activity  of considerable  hazardous.  seriously misleading  regional level.  few  steps  i n this  i n s o many  i n Great  direction  t h e burden of g e n e r a l -  approach  lends  Britain.  regional differences i n  c o n c l u s i o n s by a r g u i n g  The p r e s e n t  a  Yet, i t i s  The e n h a n c e d p o s s i b i l i t y  t h a t a more p r o d u c t i v e  the  A  i n Oldham c a n h a r d l y b e c o n s i d e r e d  o f house b u i l d i n g renders  very  In a  market.  p o i n t which has been o v e r l o o k e d  existence  local  accommodation.  f o r a h o u s e demanded i n G l a s g o w . this  course  the fundamental  f o r housing  the studies of house-building The  the  vacant  emphasized  o f drawing  an a g g r e g a t e s  c o u l d be made a t  paper as one o f t h e f i r s t s u b s t a n t i a l support t o  268  this  opinion. We  h a v e shown t h a t h o u s e - b u i l d i n g  fluctuated  inversely to that  especially  a f t e r 1880.  construction pansion of natural of  was  the  The  a steam t e c h n o l o g y  the  price-profit  ined  regional  industry  response to overseas  by  drawing  The  labour  creating  In  fact  that  contrast  Lancashire  1860  to  1914.  to  long  sector which,  utilization  swings i n South  c l o s e l y the  forces  local  construction  origin  and  Important  f a c t o r s of  growth of  limited liability  the  a regional  of  productive  and  thereby  explain  the  in  South-  national pattern  was  the  the  from  regional  l a r g e l y determined  local  ownership,  s o c i e t i e s and^ i n g e n e r a l ,  determ-  Wales.  i n f l u e n c e of or  world)  uninterrupted,  fields  shortage, helps  a  through  i n C h a p t e r V,  coal  ex-  application  around the  have seen, however, t h a t  residential  building  the  run  being  South Wales, h o u s e - b u i l d i n g  followed We  residential  latter  and  a whole,  long  e x p a n s i o n was  to the  housing  course of of  this  continuously  regional  east  export  d i s p o s i t i o n and  a perpetual  absence of  expansion  mechanism d e s c r i b e d  industrial  resources.  (the  the  Wales  as  course of  in transportation  f l u c t u a t i o n s i n the  the  Great B r i t a i n  p r i m a r i l y d e t e r m i n e d by  coal mining  and  of  i n South  exogenous  n a t u r e were  the  shocks. the  proliferation  evolution  of  by  a  of  more  269  "perfect"  capital  facilities the  f o r the r e a l i z a t i o n  considered  The  Cotton  influence ing,  e n d o g e n o u s i n an i n t e r n a t i o n a l  of production  by t h e F r a n c o - P r u s s i a n cotton trade  of the City  i n the present  there-by, tactics  impact  exogenous f a c t o r s  On as  domestic  on t h e C o n t i n e n t boost  1870's.  origin.  i n L a n c a s h i r e were  context.  unions  Withdrawals o f funds  course  societies  house-building)  of labour  disruptive  house-build-  The  There fail-  o f G l a s g o w Bank, and t h e rumours w h i c h l e d  t o a r u n on b u i l d i n g events  mechanism.  War g a v e a s h a r p  i n the early  were a l s o shocks o f a p r i m a r i l y  hardly  had a d e p r e s s i n g  on t h e r e g i o n a l economy a n d l o c a l  to the Lancashire  ure  d u r i n g an  i n t h e form o f shocks which c o u l d  the i n t e r r u p t i o n  from  International influences  F a m i n e and i t s a f t e r m a t h  while  occasioned  flowing  generated  i n the cotton i n d u s t r y .  were p r i m a r i l y  the necessary  of savings  i n c r e a s e d wages and e a r n i n g s  upswing  be  market which p r o v i d e d  i n their  on t h e market  of house-building  B u i l d i n g s o c i e t i e s (and  a l s o s u f f e r e d from t h e r e t a l i a t o r y  and f a i l u r e  played  fortuitous  fight  t o r e g a i n wage c u t s .  t o make payments h a d a f o r mortgage c r e d i t .  an i m p o r t a n t  role  These  i n the r e g i o n a l  activity.  t h e o t h e r h a n d , t h e r e were what m i g h t b e r e f e r r e d t o  endogenous  international  f o r c e s w h i c h h a d a marked i n f l u e n c e  270  on  the  quite  pattern different  hypothesis. and  of  the  from t h a t  For  trade  i m p l i e d by  example,  expansion of  coincided with export  r e g i o n a l development, but  the  to p a r t i c i p a t e i n the  goods.  control  of t h e i r  shire's  hegemony i n t h e w o r l d  textile  tional  m a r k e t s and  other  at the  p a t t e r n may explanation  be  slowly  case would  with  no  failed  cotton  exist  any  real  a g g r e g a t e volume  a statistical  of  Indeed, the  na-  creation with  suppose, the  patterns.  Lanca-  trade.  does not  l e t us  greater  no  individual, to  "real"  The  national pattern  of  the  regional  independent of  the  individual  simply  explanation  1880's  Lancashire  relationships giving rise  house-building  this  the  undermining  national level.  only  than,  consistent behavioral regional  s e c t o r i n the  r e g i o n a l economy  b e h a v i o r a l mechanism t o e x p l a i n the activity  investment  i n d u s t r i e s a b r o a d were g a i n i n g  i s possible that there  building  economy  expansion overseas because r a p i d l y  cotton  It  in foreign  export  The  way  Atlantic  d e t e r i o r a t i o n of  growing  own  upswing  British  a gradual  i n cotton  the  the  in a  be  a sum  in  experiences regional  explanations. If ships  there  at the  e x i s t s an aggregate  operative level,  as  set of macro-causal claimed  by  relation-  Thomas, C o o n e y ,  271  Cairncross  and  relate  these  ience.  This  the  present We  to  the  they  that  found  t o be  The  i s explained  the  of  the  long  swing.  task  could  c y c l e not  outline  i t i s here  that  be  be, only  In the  i n South  rise Wales  This,  of the of  however,  British South-east exo-  disagreement with  the  economy. this  Indeed, our  i s required before undertaken.  Our  study  to  present  conclusions s u c h an  suggest  ambitious  a n a l y s i s of  South-East Lancashire,  v a r i e d between r e g i o n s  course  operative  of  the  of t h i s  causal  long study  but  was  build-  f a r more  swing have been we  house-  incomplete  i n d i c a t e s t h a t the mechanism of the  t h a n many s t u d e n t s  the  exper-  r e l a t i o n s h i p s and  purpose of  i n S o u t h W a l e s and  i t may  center  Atlantic  been  fruitfully  the  causal  not  t o admit.  to  the i n t e r - r e l a t i o n s h i p s  in direct  the  f a r more r e s e a r c h  complex  by  are  that  ing  and  economy h y p o t h e s i s .  has  building  or r e g i o n a l  r e g i o n a l experience  mechanisms o f  a theory  t o do  possible  c a u s a l mechanisms g i v i n g  true of  f a c t o r s which  It  local  be  of house-building  Atlantic  industry.  implied  though  the  consistent with  i n the  Lancashire genous  have f a i l e d  regional pattern  not  i t should  p a p e r makes a p r i n c i p l e c o n t r i b u t i o n .  have seen  embodied  cotton  then  mechanisms t o the  are b a s i c a l l y  was  others,  willing  have a t t e m p t e d  r e l a t i o n s h i p s behind  the  to  regional  272  patterns of house-building a c t i v i t y South-east  Lancashire.  i n South Wales and  They h a v e n o t b e e n p r o v e n t o b e  c o r r e c t i n any f o r m a l s e n s e ,  b u t r a t h e r , r e s t on o u r  interpretation of h i s t o r i c a l  fact.  In t h i s regard,  comment b y J . P a r r y L e w i s i s e s p e c i a l l y  a  appropriate:  "This i s not t o say t h a t h i s t o r i c a l p r o o f does n o t e x i s t . I t most c e r t a i n l y does. But i t needs a f a r g r e a t e r e x p e r t t o r e c o g n i z e i t than does a s t a t i s t i c a l p r o o f ; and on o c c a s i o n t h e e x p e r t must d e c l a r e t h a t he s e e s no p r o s p e c t o f p r o o f o r d i s p r o o f , u n l e s s some u n s u s p e c t e d d a t a a r e revealed." 2  We h a v e l e f t many s t o n e s unfortunate  unturned.  consequence o f not having  i n f o r m a t i o n as w e l l as b e i n g  T h i s has been t h e  access  to relevant  c o n s t r a i n e d by t i m e .  Itis  c l e a r , h o w e v e r , t h a t f a r more w o r k n e e d s t o b e d o n e a t t h e regional  level.  The p r e s e n t p a p e r h a r d l y p r o v i d e s a  balanced  approach t o the study of r e g i o n a l house-building p a t t e r n s i n all  of Great  Britain.  m i g h t be conducted Yorkshire  Lewis,  Other areas  are the worsted  i n which s i m i l a r and w o o l l e n  ( t h e West R i d i n g ) , t h e c o a l f i e l d s o f  Building  Cycles  and  Britains  Growth,  research  region of North-east  p. 211.  273  England,  t h e Birmingham  urbation  and London  conurbation,  t h e Glasgow  con-  ( i n c l u d i n g t h e towns i n t h e o u t e r  ring) . We  also  n e e d t o know more a b o u t t h e i m p a c t  ternal migration household the of  and n a t u r a l  formation  increase  at the r e g i o n a l  of i n -  on t h e r a t e o f  level.  What  was  e f f e c t o f c h a n g e s i n t h e age and s e x d i s t r i b u t i o n the regional  Another  population  extremely  relatively  fuzzy  s o c i e t y movement a progressively  on t h e demand f o r h o u s e - s p a c e ?  important  a r e a where o u r knowledge i s  concerns the e v o l u t i o n  of the b u i l d i n g  and t h e r o l e o f b u i l d i n g changing  c a p i t a l market.  societies in O n l y when  we  l e a r n more a b o u t t h e s e a n d o t h e r  f a c t o r s at the regional  level will  fully  we b e a b l e  mechanism o f t h e l o n g  t o perhaps swing.  understand the  B I B L I O G R A P H Y  A l b e r t s , W i l l i a m W., and  "Business Cycles, Residential Construction  t h e M o r t g a g e M a r k e t , " Journal  (June, 1962), pp.  of  Political  Economy,  263-281.  A l d c r o f t , D e r e k H., a n d H a r r y W. R i c h a r d s o n , The British 1939 (London: M a c M i l l a n a n d Co. L t d . , 1 9 6 9 ) . 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(London: Longmans and Weber, B e r n a r d .  Journal  "A New  of Political  Structure  The History Co.  and Policy.  of Trade Unionism,  (London:  George  1666 - 1920.  L t d . , 1920).  Index o f House R e n t s f o r G r e a t B r i t a i n , " Economy, V o l . I l l ( 1 9 5 6 ) , p p . 2 3 2 - 2 3 7 .  Scottish  . "A New I n d e x o f R e s i d e n t i a l C o n s t r u c t i o n a n d L o n g C y c l e s i n H o u s e - B u i l d i n g i n G r e a t B r i t a i n , 1838 - 1 9 5 0 , " Scottish Journal of Political Economy, V o l . I I ( J u n e , 1 9 5 5 ) , p p . 1 0 4 - 1 3 2 .  280  W e l t o n , Thomas A. " N o t e on U r b a n and R u r a l V a r i a t i o n s A c c o r d i n g t o t h e E n g l i s h C e n s u s o f 1 9 1 1 , " Journal of the Royal Statistical Society, V o l . L X X V I ( F e b r u a r y , 1 9 1 3 ) , pp. 304-317.  . Statistics of 1881 to 1901, of Particular Wales.  England's Recent Progress: An Investigation of the Migration Morality, etc. in the Twenty Years from as indicating Tendencies Towards the Growth or Decay Communities and of the Rural Portions of England and  (London:  Chapman & H a l l L t d . , 1 9 1 1 ) .  . "Notes on t h e Census R e p o r t (1901) f o r t h e County o f L a n c a s t e r , " Manchester Statistical Society Transactions... ( N o v e m b e r , 1 9 0 2 ) , p p . 1-48. W i l l i a m s , L. J .  History  "The New  U n i o n i s m i n S o u t h W a l e s , 1889 - 9 2 , " ( 1 9 6 0 - 6 3 ) , pp. 413-429.  Welsh  Review, V o l . I  Wood, G. H. "The S t a t i s t i c s o f Wages i n t h e N i n e t e e n t h C e n t u r y . X I X - The C o t t o n I n d u s t r y , " Journal of the Royal Statistical V o l . L X X I I I ( J u n e , 1 9 1 0 ) , pp. 585-626.  Part  Society,  APPENDIX  The are  towns f o r w h i c h b u i l d i n g  available before  1856. by  number o f  To  construct  combining  cessary  an  1900  gradually  a general  base p e r i o d  built  towns i n c l u d e d  and  the  (1900-09).  number o f h o u s e s e r e c t e d period.  As  1900-09 was  i n the  "Thus t h e 1856  relatives  of  houses  were added of  the  up  average  same towns i n t h e  base  correspondingly  average  amount  considerably  r a i s e d by  from t h a t  above, i t tended  a number o f  "A  i n t e r e s t i n g problems.  i n the  i n other  t o h a v e an  metropolis  regions  included  in building activity. on  the  a d d e d towns.""''  C o n s e q u e n t l y , when i t was  Weber,  number  for  course of house-building  index based  the  ne-  average  London p r e s e n t e d  trend  activity  f u r t h e r towns were a d d e d , t h e  of b u i l d i n g i n the  The  as  six in  s e r i e s i t was  i n , say,  sums were e x p r e s s e d  to  index of b u i l d i n g  appropriately  towns i n t h e  statistics  decreases  i n c r e a s i n g number o f  f o r Weber t o v a r y  i n the  I  To  of Great  i n the  exagerated avoid  Index  of  Residential  281  described  i n f l u e n c e on this  varied  Britain.  i n d e x as  the  problem, a  t h i r t y - t h r e e towns, e x c l u d i n g  New  often  London,  Construction",  general was  p.  109.  282  constructed  and  houses b u i l t official  used to estimate  i n Great B r i t a i n  the  not  a c t u a l number o f  i n c l u d i n g London.  s t a t i s t i c s of a l l houses b u i l t  f r o m 19 24  i n Great  t o 19 37 m i n u s t h e h o u s e s c o n s t r u c t e d  w e r e u s e d as a b a s e t o c o n s t r u c t t h e s e D a t a on h o u s e - b u i l d i n g  i n the  The  Britain  i n London  estimates.  f o l l o w i n g towns were  u s e d t o c o n s t r u c t Weber's I n d e x o f R e s i d e n t i a l c o n s t r u c t i o n 2 i n Great The and  Britain. index  W a l e s on  plotted with  Census day  i n Figure  that provided  A v a i l a b l e data was  of houses under c o n s t r u c t i o n i n England  excluded  15. by  (Column 4 i n T a b l e XVI) This  evidence i s i n rough  Weber's I n d e x o f  i n previous  2  Ibid.  }  years.  p.  129.  agreement  in  Scotland  because of a change i n  d e f i n i t i o n o f a h o u s e i n 1881  been  building activity.  from the Census of P o p u l a t i o n  f r o m T a b l e XVI  has  that precludes  the  comparability  Birkenhead,  1853-74 and 1895-1923  Hull,  1 8 5 3 - 9 2 and 1 8 9 5 - 1 9 2 3  Birmingham,  1859-1923  Leeds,  1876-1923  Bradford,  1853-1923  Leicester,  1892-1923  Brighton,  1894-1923  Liverpool,  1853-66 a n d 1 8 7 2 - 1 9 2 3  Bristol,  1899-1923  London,  1856-1916 and 1920-23  Burnley,  1887-1913 a n d 1921-1923  M a c c l e s f i e l d ,1894-1923  Burton-on-Trent,  1866-1923  Manchester,  1891-1923  Cardiff,  1882-1912  Newcastle,  1881-1923  Coventry,  1892-1923  Newport  Crewe,  1876-1923  Nottingham,  1882-89 and 1 8 9 6 - 1 9 2 3  Derby,  1886-1923  Rochdale,  1878-1923  Doncaster,  1891-1923  Sheffield,  1887-1923  Exeter,  1868-1923  Stockport,  1866-1923  Gateshead,  1900-1923  Swindon,  1871-1923  Glasgow,  1864-1923  Sunderland,  1895-1923  Gloucester,  1879-1923  Wakefield,  1878-1923  Gourock ,  1896-1923  Wolverhampton, 1861-69, 1877-84, and 1887-1923  (Mon . )1855-1923  TABLE XV NATIONAL INDICES OF BUILDING A C T I V I T Y IN GREAT BRITAIN, 1860-1914  Year  (1)  (2)  (3)  New Houses Built  Building Index  Weighted Index  (000's) 1860 1861 1862 1863 1864 1865 1866 1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879  45.2 45.2 58.1 64.4 60.9 53.6 55.2 65.3 70 .4 77.0 85.9 90.4 93.8 81.7 90 .9 120.3 130 . 8 124.1 106.5 86.0  1900-09=100 34.6 34.6 44.5 49.3 46.6 41.0 42. 3 50.0 53.9 59 .0 65.8 69 .2 71.9 62.6 69 .6 92.2 100.2 95.0 81.6 65.8  1901-10=100 37.9 39 .3 47.6 52.1 54.9 48.7 51.4 57.7 64.1 70.1 75.2 77.1 82.0 75.0 86.5 108.0 123.0 115.9 99.4 80.2  I n h a b i t e d House Duty S t a t i s t i c s  CAIRNCROSS  LEWIS  WEBER  (4) New H o u s e s Built (000 ' s)  78 83 90 92 98 103 110 112 108 102  (5) Volume o f Residential Building 1907=100  54.4 58.2 63.4 65.1 69 . 7 73.6 79 .0 80 . 8 78.3 74.0  (6) Net Increase i n HousingStock (000's)  116 128 87 125 112 to  00  TABLE XV - C o n t i n u e d (2) NATIONAL INDICES OF BUILDING A C T I V I T Y IN GREAT BRITAIN, 1860-14  WEBER  Year  CAIRNCROSS  (1)  (2)  (3)  (4)  New Houses Built  Building Index  Weighted Index  New H o u s e s Built  (000's) 1880 1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900  LEWIS  83.1 79 .1 81.9 81.9 82.4 76.7 75.1 78. 7 79 .9 79 .5 75. 8 79 .1 84.0 85.9 91.2 89 .8 107.1 130.4 157. 7 156.2 139.7  1900-09=100 63.6 60.6 62.7 62.7 63.1 58.8 57.5 60.3 61.2 60.9 58.1 60.6 64.3 65.8 69.8 68.8 82.0 99 . 8 120.8 119 .6 107.0  1901-10=100 75.9 76. 8 73.1 74.5 74.2 68.3 65.4 68.6 67.3 66.9 62.9 63.6 68.0 76. 5 77. 8 79 .9 94.6 107. 8 129 . 8 129.6 118.7  I n h a b i t e d House Duty S t a t i s t i c s  (000's) 97 95 91 87 82 75 78 81 86 91 85 80 76 78 83 97 119 148 169 172 152  (5) Volume o f Residential Building 1907=100 71.0 69 .9 67.3 64.6 61.2 56.2 58. 8 61.3 65.4 69 . 5 65.2 61.7 58. 8 60. 7 64.8 76.1 93.8 117.2 134. 4 137.4 121.9  (6) Net I n c r e a s e i n HousingStock (000's) 97 80 105 92 76 79 75 81 91 92 78 93 82 59 89 114 132 112 160 173 161  TABLE XV - C o n t i n u e d (3) NATIONAL INDICES OF BUILDING A C T I V I T Y IN GREAT BRITAIN, 1860-1914  WEBER (1) Year  New Houses Built (000's)  1901 19 0 2 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 Sources:  139 . 7 153. 8 156.9 136.6 127. 4 130.6 121. 3 100.9 98.8 86.0 67.5 53.4 54.2 48. 3  LEWIS (2)  (3)  Building Index  Weighted Index  1900-09=100 107.0 117.8 120.2 104.6 97.6 100.1 92.9 77. 3 75.7 65.9 51. 7 40.9 41.5 37.0  1901-10=100 115. 7 121.5 124.2 112.0 112. 5 99.3 92.2 81.0 80.0 71. 3 60.0 48.4 43.1  I n h a b i t e d House Duty S t a t i s t i c s  CAIRNCROSS (4) New H o u s e s Built (000 ' s) 145 146 148 138 138 130 121 105 102 94 80 70 69 65  (5) Volume o f Residential Building 1907=100 116. 8 118.1 120.2 112. 6 113.1 107.0 100.0 87.1 85.0 78.4 67.2 59 .1 58.5 55. 3  (6) Net I n c r e a s e i n HousingStock (000's) 146 128 162 149 170 137 116 112 114 50 115 73 74  ( 1 ) , (2) B. Weber, "A New Index o f R e s i d e n t i a l C o n s t r u c t i o n a n d Long C y c l e s i n H o u s e - B u i l d i n g i n G r e a t B r i t a i n , 1838-1950", Scottish Journal of P o l i t i c a l Economy, V o l . I I , ( J u n e , 1 9 5 5 ) . (3) J . P a r r y L e w i s , Building Cycles and Britains Growth, (London:Macmillan and Company, L t d , 19 6 5 ) . ( 4 ) , (5) A.K. C a i r n c r o s s , Home and Foreign Investment 1870-1913,(Cambridge: Cambridge U n i v e r s i t y P r e s s , 1953). (6) J . Stamp, B r i t i s h Incomes and Property,(London: P.S. K i n g a n d S o n , L t d , 1 9 2 7 ) to  00  TABLE X V I NET INCREASES I N THE HOUSING STOCK AND THE NUMBER OF HOUSES BEING CONSTRUCTED ON CENSUS DAY IN ENGLAND AND WALES, 1 8 6 1 - 1 9 1 1  1 Year  Net I n c r e a s e Housing Stock (000's)  2 C o l . (1) 1901-1911 = 100  3 Houses Under Construction o n C e n s u s Day  4 Col. ( 1901= = H  1851-61  492. 7  58.6  27,305  44. 1  1861-71  596. 3  70.9  37,803  61. 1  1871-81  697. 7  80.9  46,414  75. 0  1881-91  605.5  72.0  38,387  62. 0  1891-1901  886.1  105.4  61,909  100. 0  1901-11  840.6  100.0  38 ,178  61. 7  S o u r c e : B, Weber, "A New I n d e x o f R e s i d e n t i a l C o n s t r u c t i o n and L o n g C y c l e s i n H o u s e - B u i l d i n g i n G r e a t B r i t a i n , 1838-1950"., Scottish Journal of P o l i t i c a l Economy, V o l . I I , (June, 1955).  288 Figure  15  HOUSE-BUILDING IN GREAT BRITAIN ANNUALLY AND IN ENGLAND AND WALES ON CENSUS DAY 1860 - 1911  100(A)  50  000's o f Houses 100 (B) 50  1860  1870  1880  1890  1900  1910  (A) .  Weber i n d e x o f h o u s e - b u i l d i n g i n towns, 1860-1914, 1900-09=100.  thirty-four  (B)  Number ( i n t h o u s a n d s ) o f h o u s e s G r e a t B r i t a i n 1860-1914.  (+)  Index o f houses under c o n s t r u c t i o n i n E n g l a n d and Wales on C e n s u s Day, 1861-1911, 1901=100  erected  in  APPENDIX I I  The  r e g i o n a l index of r e s i d e n t i a l c o n s t r u c t i o n i n  S o u t h W a l e s c o n s t r u c t e d b y L e w i s i s b a s e d p r i m a r i l y on  raw  d a t a s e r i e s of house p l a n s approved.  to  make a number o f a d j u s t m e n t s transformed  into estimates  so t h a t t h e s e  necessary  series could  of a c t u a l houses e r e c t e d .  i m p o r t a n t problems were t o determine plans  I t was  the percentage  a p p r o v e d t h a t w e r e n e v e r r e a l i z e d and  be Two  of  house  the t i m e - l a g bet-  ween p l a n a p p r o v a l and  actual construction.  i n a t i o n of those  r e g i s t e r s where a l l the r e l e v a n t  local  t a i l s were r e c o r d e d the houses planned  l e d Lewis t o conclude were e v e n t u a l l y b u i l t  E x t e n s i v e exam-  t h a t 85 p e r c e n t and  there  g e n e r a l l y a p e r i o d o f s i x months from t h e t i m e approved u n t i l To  a plan  was  t o X^  assumed  as a r e s u l t  of  t h e number o f h o u s e s t h a t w o u l d h a v e b e e n  i n the enlarged  a r e a b e f o r e t h e c h a n g e was  have been a p p r o x i m a t e l y  t h e number f o r t h e  X^/X^. T h i s i s , o f c o u r s e ,  p r o n e t o o v e r e s t i m a t i o n i n some c a s e s others.  intervened  a d j u s t f o r m u n i c i p a l b o u n d a r y c h a n g e s i t was  the change, then  p l i e d by  of  a c t u a l c o n s t r u c t i o n began.  t h a t i f t h e p o p u l a t i o n i n c r e a s e d f r o m X^  built  de-  I n an a t t e m p t  maps w h e r e a v a i l a b l e  t o a v o i d such  and  smaller area  a very naive and  made w o u l d multi-  adjustment,  underestimation  r e s u l t s Lewis s t u d i e d o l d  e x i s t i n g p o p u l a t i o n data to get  i d e a o f the t i m e - p a t t e r n of development i n the annexed  289  in  some  region  290  before  i t was  factor  X^/Xy  most  cases  absorbed. was  Where a p p r o p r i a t e , t h e m u l t i p l i c a t i v e  m o d i f i e d by a time  i n c r e a s e d from  X^/X^  to unity.  ment d e p e n d e d upon a d e t a i l e d  study  a series  course  showing the " a c t u a l "  a r e a o f t h e most r e c e n t b o u n d a r y each  town i n S o u t h From t h e s e  was  produced  coefficient  o f each  t , which i n  The a c t u a l a d j u s t locality.  Thus,  of house-building i n the  c h a n g e was  constructed f o r  Wales. individual  i n the following  local  series  the r e g i o n a l  index  manner.  " F i r s t an i n d e x f o r two towns c o v e r i n g t h e p e r i o d 1852-1913 was d e r i v e d , b a s e d on 1901-10=100. Then an i n d e x f o r f o u r towns, c o n s i s t i n g o f t h e p r e v i o u s two p l u s two o t h e r s , was computed f o r 1856-1913, b a s e d on a c t i v i t y i n t h e s e towns d u r i n g 1901-10. I n 1856 t h e v a l u e o f t h e two-town i n d e x was 73.1 w h i l e t h e v a l u e o f t h e f o u r town i n d e x was 81.6. To o b t a i n a s i n g l e i n d e x f o r t h e p e r i o d f r o m 1852 b a s e d on t h e maximum amount o f d a t a t h e s e two i n d i c e s were s p l i c e d b y m u l t i p l y i n g t h e f i r s t t h r e e y e a r s o f t h e two-town i n d e x b y 81.6/73.1. T h i s p r o c e d u r e was c o n t i n u e d w h e n e v e r a new town a p p e a r e d i n t h e i n d e x . " 1  T h i s method discrete  o f a g g r e g a t i o n has t h e advantage o f a v o i d i n g the  jumps  i n the series  resulting  from  the a d d i t i o n of  J . Parry Lewis, "Indices of House-Building i n the Manchester C o n u r b a t i o n , S o u t h Wales and G r e a t B r i t a i n , 1851, 1913", S c o t t i s h Journal of P o l i t i c a l Economy, V o l . V I I I , ( J u n e , 1 9 6 1 ) , pp. 148-49.  291  new  towns  tend  to the index.  to result  series.  On t h e o t h e r h a n d , s u c h  i n a s m o o t h i n g o u t and l o w e r i n g  T h i s may  obscure  ences t h a t a r e apparent  significant  only  of  house p l a n s  coalfield. is  o f the former  interregional  at the l o c a l  The f o l l o w i n g t a b l e c o n t a i n s  additions  level.  t h e raw d a t a  a p p r o v e d for 16 towns i n t h e S o u t h  series Wales  The S o u t h W a l e s r e g i o n a l h o u s e - b u i l d i n g  also presented  i n c o l u m n one.  differ-  index  TABLE X V I I HOUSE-BUILDING DATA FOR SELECTED TOWNS IN SOUTH WALES (Numbers o f House P l a n s A p p r o v e d )  (A) Year 1860 1861 1862 1863 1864 1865 1866 1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881  South Wales Regional Index 29.7 21.0 11.7 7.9 10.3 16.6 22.5 25.9 24. 8 22.0 22. 7 23.6 26.6 36. 3 48.3 61.0 62.4 47.6 37.2 31.4 36.9 42.8  (B)  (C)  Swansea  Cardiff  272 159 92 87 155 193 243 268 215 184 199 214 213 337 380 820 365 330 189 113 129 179  83 40 40 16 60 107 59 152 152 130 N.A. 277 251 273 539 648 552 611 564 618 771 904  (D)  (E)  Newport  Aberdare  20 35 11 10 16 47 54 89 91 76 69 38 72 56 87 163 172 191 151 67 118 84  153 66 58 36 68 128 200 73 67 37 37 41 43 164 187 156 134 10 5 5 5 2  (F) Merthyr Tydfil 131 69 12 12 7 25 40 59 45 60 19 58 144 162 90 26 176 17 40 10 137 56  (G) Llanelly MB.  89 54 62 53 67 86 61 31 100 99 239 143 75 58 63 77 52  (H) Mountain Ash  30 44 4 6 2 0 64 31 29 80 21 1 16 68 25  TABLE X V I I  - C o n t i n u e d (2)  HOUSE-BUILDING DATA FOR SELECTED TOWNS IN SOUTH WALES (Numbers o f House P l a n s A p p r o v e d )  (A)  (B)  (C)  South Wales Regional Index  Swansea  Cardiff  Year  1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902  39.8 49 .2 62.5 62.2 60 . 5 59 .9 54.6 50.5 58. 3 70.6 76. 7 86.6 96.9 98.5 102.1 106.1 89.6 73.1 60.4 64.2 88. 8  192 123 190 218 273 390 382 414 422 288 420 479 459 473 319 134 62 63 47 89 244  686 980 1445 1345 1201 1226 1062 603 745 730 990 1456 1206 1507 1196 1247 1258 624 267 230 185  (D)  (E)  Newport  Aberdare  87 203 243 189 349 139 275 110 183 114 433 594 544 515 760 522 390 300 307 567 410  2 1 3 29 12 39 6 10 15 36 77 79 200 158 180 125 91 140 149 109 161  (F) Merthyr Tydfil  41 147 51 180 231 87 34 107 163 158 19 3 247 297 162 222 255 446 824 419 1023 720  (G) Llanelly MB.  61 61 66 69 76 76 135 184 140 114 84 234 162 86 121 120 82 74 22 33 52  (H) Mountain Ash  19 76 149 141 76 131 29 44 35 300 91 226 350 220 466 211 292 112 116 169 418  TABLE X V I I - C o n t i n u e d (3) HOUSE-BUILDING DATA FOR SELECTED TOWNS IN SOUTH WALES (Numbers o f House P l a n s A p p r o v e d )  (A) Year  1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914  South Wales Regional Index  101.8 96.9 93.4 94.2 99 . 4 111.3 124.8 125.0 109 .6 91. 3 79.6  (B)  (C)  (D)  (E)  Swansea  Cardiff  Newport  Aberdare  182 145 393 305 226 514 447 449 440 311 302  398 228 389 291 222 307 377 307 208 325 325  365 426 298 496 481 427 319 261 244 171 199  253 64 149 329 259 233 120 88 94 98 137  (F) Merthyr Tydfil  283 251 - 181 185 501 305 632 424 530 209 158  (G) Llanelly MB.  42 213 144 145 174 196 173 97 217 309 203  (H) Mountain Ash  289 430 495 389 41 94 53 39 53 31 17  TABLE X V I I  - Continued  (4)  HOUSE-BUILDING DATA FOR SELECTED TOWNS IN SOUTH WALES (Numbers o f House P l a n s A p p r o v e d )  (I) Year  Blaenauon  1860 1861 1862 1863 1864 1865 1866 1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883  40 72 33 17 5 2 0 0 5 8  (J) EbbwVale  25 4 2 6 0 0 1 4 59  (K) Penarth  28 112 75 195 19 7 175 136  (L)  (M)  Tredegar  Rhondda  13 12 2 69  399 275 295 482  (N) Abertillery  7 5 10  (0) Rhymney  6 7 8  (P) Llwchwr  (Q) Pontypridd  TABLE X V I I  - Continued  (5)  HOUSE-BUILDING DATA FOR SELECTED TOWNS IN SOUTH WALES (Numbers o f House P l a n s A p p r o v e d )  (I) Year  1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904  Blaenauon  9 32 13 24 4 22 46 11 17 25 17 20 30 35 32 37 23 1 6 3 17  (J)  (K)  (L)  (M)  EbbwVale  Penarth  Tredegar  Rhondda  28 23 4 5 16 7 15 25 55 64 26 21 33 139 42 122 123 136 140 213 101  50 82 106 174 124 59 52 43 85 33 82 67 70 44 77 113 44 45 53 18 27  3 31 18 0 1 2 8 91 4 16 21 36 30 8 31 30 5 16 2 146 56  599 180 271 202 280 371 888 1008 918 702 1239 629 441 496 151 103 291 433 687 347 393  (N) Abertillery  46 59 44 19 18 51 179 134 63 183 184 180 343 175 306 181 191 268 316 324 274  (0) Rhymney  2 0 0 0 2 1 4 0 1 0 1 2 0 0 13 3 27 104 128 187 31  (P) Llwchwr  248 164 186 294 140 85 84 140 111 120 93 63 62 55 115 104 156 252 165  (Q) Pontypi  259 81 154 389 260 219 274 212 147 246 89 37 43 44 100 114 361 214  to VO  TABLE X V I I - C o n t i n u e d  (6)  HOUSE-BUILDING DATA FOR SELECTED TOWNS I N SOUTH WALES (Numbers o f House P l a n s A p p r o v e d )  (I)  (J)  Year  Blaenauon  1905 1906 1907 1908 1909 1910 1911 1912 1913 1914  11 28 31 62 30 60 26 36 N. A.  Sources:  EbbwVale 224 177 98 247 323 248 111 179 256  (K)  (L)  (M)  (N)  (0)  Penarth  Tredegar  Rhondda  Abertillery  Rhymney  13 37 38 32 36 65 51 38 32  70 91 12 5 154 208 19 5 176 75 52  382 463 957 1239 1397 1079 692 401 325  311 105 159 313 615 172 182 100 172  44 33 23 57 7 26 40 6 63  (P) Llwchwr  (Q) Pontypridd  262 367 453 401 475 555 404 621 426  343 193 291 428 436 365 219 88 56  (A) J . P a r r y L e w i s , " I n d i c e s o f H o u s e - B u i l d i n g i n t h e M a n c h e s t e r C o n u r b a t i o n , S o u t h W a l e s a n d G r e a t B r i t a i n " , Scottish Journal of P o l i t i c a l Economy, V o l . V I I I (June, 1 9 6 1 ) , pp. 151-152. (B) , ( C ) , ( D ) , ( E ) , ( F ) , H a m i s h R i c h a r d s a n d J . P a r r y L e w i s , " H o u s e - B u i l d i n g i n t h e S o u t h W a l e s C o a l f i e l d , 1 8 5 1 - 1 9 1 3 " , Manchester School, V o l . XXIV, (September, 1 9 5 6 ) , pp. 297-298. ( G ) , ( H ) , ( I ) , ( K ) , ( L ) , ( M ) , ( N ) , ( 0 ) , ( P ) , ( Q ) , J . P a r r y L e w i s , Building Cycles and B r i t a i n s Growth, (London: M a c M i l l a n & Co., L t d . , 1 9 6 5 ) , pp. 308-311. to  APPENDIX  298  TABLE X V I I I  INDICES OF HOUSE-BUILDING FOR SELECTED TOWNS IN SOUTH-EAST LANCASHIRE 1860-1913 (1901-10=100)  Year  South-East Lancashire Regional Index  AshtonUnderLyne  1860 1861 1862 1863 1864 1865 1866 1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880  37.9 56.5 60. 7 61.4 55.6 55.6 53.2 58.6 65.5 83.8 88.7 87.3 89 .9 96.0 110. 5 141.6 169 . 7 168.2 136. 7 94.7 69 .9  36. 5 100.9 53.7 34. 3 17.2 22.7 24.5 50.5 67.2 44.0 50. 3 120.7 76.6 36.0 114. 4 166.1 193. 3 261.8 207.9 103.4 147.4  Bolton  115.6 127.9 94.9 59 .0 54.2 23.7 48.4 72. 3 204.0 220.5 168.9 153.2 153.8 132.2 91.6 131.0 201. 3 135.5 68.2 59 . 3 38. 8  AltrinCham  54.5 45.5 69 .6 30. 4 97.0 32.6 68.5 47.1 21.5 23.6 30.8 72. 7 105.5 106.5 100.6 98.8 50.9 41.6  Salford  Oldham  Stockport  18.4 88.5 29.1 40.6 75. 3 73.3 86. 3 53.7 156.9 205.0 171.5 224. 2 223.2 183. 7 86.0 58.2  88.1 88.1 80.6 245. 8 150.6 173. 8 234. 3 199 .1 262.9 383.1 533. 5 618.1 217. 7 180.0 213.9  12. 4 17. 4 15. 3 27.4 23.3 40. 2 69.2 49.0 55.0 88.9 86.0 70.0 10 7. 7 65.7 59.9  Bury  84.2 100. 7 85.5 132. 8 135.0 80. 8 137.5 77.4 231. 8 256.0 107.1 69 . 8 96.4  TABLE X V I I I - C o n t i n u e d  (2)  INDICES OF HOUSE-BUILDING FOR SELECTED TOWNS IN SOUTH-EAST LANCASHIRE 1860-1913 (1901-10=100)  Year  1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901  South-East Lancashire Regional Index  AshtonUnderLyne  Bolton  Altrincham  Salford  58.4 51. 7 53.0 53.3 61.1 65.1 63.7 61.7 64.0 67.2 62.8 65.3 69 . 8 77.9 88. 4 118.8 137.4 146.6 142.3 126.8 101.4  85.0 65.7 96.7 86.6 106.2 153.9 121.0 102.3 103.4 97.9 70.6 78.6 78. 4 90.4 104.2 130.9 133.9 164.1 171.7 100.9 77.9  17.0 50.1 36. 8 54.2 87.1 80.5 78.2 104.2 89 .0 134.1 81.6 91. 8 87.2 120. 8 113.2 151.1 130.6 130.3 111.9 114.3 80.1  42.8 23.3 13.7 19.8 19.3 34.6 25.1 32.2 28.9 50. 3 28.5 50.6 54.5 153.6 110.9 106.5 23.2 99.3 141.5 109.3 101. 8  62.0 62.5 54.1 37.5 36.1 45.9 45.6 80. 8 70.2 80.0 50.1 79 .7 92.3 78.8 138. 6 137.1 180.0 134.8 143. 5 126.1 117.2  Oldham  160.0 150.3 177.1 251.7 237. 5 247.6 154.2 107. 8 73.9 60.6 70.5 96.6 97.1 107.6 144.9 164.5 19 8.7 202.2 162. 8 119.1 107.0  Stockport  44.0 99 .4 53. 4 44.2 31.6 64.3 69.4 81.1 93.7 85.4 85.6 91.5 93.7 67.3 75.9 79.3 150.3 88.4 95.4 69.6 82.4  Bury  61.9 46.4 60.1 54. 5 78.5 50.0 48.6 19. 3 42.0 41.8 32.9 36.0 54. 3 49 .3 74. 4 71.0 83. 8 81.9 82.9 69.6 59.4  TABLE X V I I I - C o n t i n u e d  INDICES OF HOUSE-BUILDING FOR SOUTH-EAST LANCASHIRE  (3)  SELECTED TOWNS IN 1860-1913  (1901-10=100)  Year  1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913  South-East Lancashire Regional Index 92.9 98.5 102. 3 99 . 7 99 .0 100.8 102.9 106. 5 95.9 80. 8 60.6 51.0  AshtonUnderLyne  Bolton  Altrincham  82.9 210.1 119 .6 92.5 97.0 86. 7 79 . 8 65.2 88.2 73.4 39.5 46.8  91.5 76.5 130.3 90.0 85. 3 81. 3 140.3 113.0 111.6 75.4 70.2 66.1  108.4 121. 8 132.5 107. 3 102.7 107.3 88.9 63.8 65.5 60. 8 44.3 16. 6  Salford  Oldham  Stockport  Bury  72.1 128.2 88. 4 114. 2 106.0 70.1 160.1 78.0 65.7 67.8 50 . 7 32. 3  92.4 121.2 54.5 41. 2 76.3 81.9 146.8 143.8 135.0 107. 3 93.2 73. 3  77.2 85.0 95.4 119 .9 110.2 104.2 106.6 114. 7 104. 4 95.4 72.7 69.6  90.8 62.1 53.6 74.6 102.2 164.3 108. 7 149 .0 135. 3 105. 3 64.0 40.8  TABLE X V I I I - C o n t i n u e d  (4)  I N D I C E S OF HOUSE-BUILDING FOR SELECTED TOWNS I N SOUTH-EAST LANCASHIRE 1 8 6 0 - 1 9 1 3 (1901-10=100)  Burnley Year  1860 1861 1862 1863 1864 1865 1866 1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881  Rochdale  20.7 58. 8 101. 8 114.1 115. 7 133. 8 152.8 176. 6 163. 7 167. 0 156.7 136. 4 69 .0 32.2  (No. o f House P l a n s Approved)  Preston (No. o f House P l a n s Approved)  Manchester (No. o f H o u s e s Erected) 229 352 662 652 861 714 868 735 659  o to  TABLE X V I I I  - Continued  INDICES OF HOUSE-BUILDING FOR SOUTH-EAST LANCASHIRE  (5)  SELECTED TOWNS IN 1860-1913  (1901-10=100)  Year  1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902  Rochdale  33.7 27. 3 34. 3 40. 5 48.4 88.3 104.2 104.0 98.6 93.5 100.0 84.6 79 .0 85. 2 167.0 173.6 163. 8 161.9 160.6 117. 2 107.6  Burnley  Preston  Manchester  (No. o f House P l a n s Approved)  (No. o f House P l a n s Approved)  (No. o f H o u s e s Erected)  452 569 584 444 434 358 376 588 584 589 381 197 192 280 177  309 261 200 119 135 176 174 172 277 242 237 413 248 259  722 909 687 1129 1087 19 6 8 2210 2772 2939 2305 1680 1662  TABLE  XVIII -  Continued  (6)  INDICES OF HOUSE-BUILDING FOR SELECTED TOWNS IN SOUTH-EAST LANCASHIRE 1860-1913 (1901-10=100)  Year  1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913  Rochdale  93.3 79 . 7 73.9 81. 8 103.1 124.4 123. 8 95.2 89 .7 78.2 65.4  Burnley  Preston  Manchester  (No. o f House P l a n s Approved)  (No. o f House P l a n s Approved)  (No. o f H o u s e s Erected)  162 142 188 289 327 339 267 255 290 378 425  170 242 266 336 259 205 209 169 193 143 142  1598 1678 1928 1945 2020 1712 1706 1595 1056 606 646  S o u r c e : . J . P a r r y L e w i s , Building Cycles and Britains Growth, ( L o n d o n : M a c M i l l a n and Co., L t d . , 1 9 6 5 ) , pp. 311, 313-15  to o  305  TABLE X I X  NATURAL INCREASE AND MIGRATION POPULATION AGED 20-44 1870 - 1910 LANCASHIRE AND  CHESHIRE  18761880  18811885  18861890  18911895  18961900  19011905  19061910  70.3  88.7  96.1  113.2  150.5  156.6  152.4  123.0  M i g r a t i o n +96.6  + 14. 5  +  +  +  +20.0  -18.9  -20.8  Natural Increase 166.9 and Migration  103.2  105.6  176.6  133.5  102. 2  18711875  Natural Increase  9.5  2.1  115.3  8.0  158. 5  S o u r c e : B r i n l e y Thomas, " D e m o g r a p h i c D e t e r m i n a n t s o f British  and American  1 9 1 3 " , p. 38.  B u i l d i n g C y c l e s , 1870-  306  TABLE XX TOTAL NUMBER OF HOUSES ASSESSED AND NOT ASSESSED TO DUTY (Thousands)  Year  Assessed  Year  Not  Assessed  1875  766.4  1895  1066.0  1876  788.5  1896  1083.5  1877  798.9  1897  1104.9  1878  824. 7  1898  1124.1  1879  849 .5  1899  1137.8  1880  868.1  1900  1170.5  1881  888. 5  1901  1193.3  1882  905.1  1902  1211.3  1883  915.1  1903  1224.4  1884  931. 8  1904  1232.3  1885  945.8  1905  1251.5  1886  950.1  1906  1271.2  1887  966. 4  1907  1289 .0  1888  979 .1  1908  1291.4  1889  992.2  1909  1322.0  1890  1010.5  1910  1338.8  1891  1025.2  1911  1343.6  1892  1038.8  1912  1359 .2  1893  1059.1  S o u r c e : B r i n l e y Thomas, " D e m o g r a p h i c D e t e r m i n a n t s of  British  and American  1 8 7 0 - 1 9 1 3 " , p. 37  Building  Cycles,  

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