Capital and Labour - WATT'S PARTNERSHIP WITH BOULTON : Boulton: The Hardware


BOULTON had had complete charge of the hardware business for some years before his father's death, which occurred in 1759. He inherited a considerable fortune, which had been accumulated in the business, and the next year he married Anne Robinson, a wealthy heiress, in spite of considerable opposition from the lady's friends on account of his occupation.

Boulton was now in an established financial position, and might easily have retired from the trade, but instead he entered into it more vigorously. He was determined to establish a business that should be the foremost of its kind. The firm's earliest premises, on Snow Hill, having become too small, Boulton decided to remove to Soho, about two miles north of Birmingham, on the Wolverhampton road, where he built himself more commodious premises. Before taking this step, he took into partnership a Mr. John Fothergill, who had a limited capital, but was a very active business man. The removal was important for many reasons.

In the first place Boulton had to use both his wife's fortune and his own for the venture, £20,000 being sunk in buildings and equipment. In consequence of this development, new connections and agencies were established at home and abroad, and Boulton took the greatest care in selecting artistic designs for his productions, and extending the range of his manufactures. The business rapidly developed; the gross receipts of the firm increased from £7,000 in 1763, to £30,000 in 1767,1 and the fame of the manufactory had spread all over Europe. Even in France, the home of fashion itself, Boulton & Fothergill had correspondents at Marseilles, Lyons, Aix, Montpellier, Paris, and Rouen,2 while so important was the Russian trade, that Fothergill spent a whole year travelling in Russia and Sweden.

The natural result of this large increase of business, immediately after so much capital had been sunk in permanent improvements, was embarrassing to the firm. In a letter to his friend, Baumgarten, Boulton says, " The number of our friends and customers are every day increasing, and so are our orders, consequently the money required must also be increased, for nothing will have a tendency to extend our dealings so much as giving a little indulgence in point of credit to such friends as are solid arid safe. And, therefore (as I very well knew our circulating capital would be too little for our undertakings), I intended, in the course of this summer, to add to our capital two or three thousand pounds." He asks Baumgarten for a loan, but if it becomes necessary, announces his intention of mortgaging one of his private estates, to prevent the business languishing.3 This was in 1767, and Boulton was now an enterprising and energetic manufacturer, understanding to the full the difficulties of expanding a small business into a large capitalist undertaking, and quite unafraid of the bogey of overtrading. Nevertheless, Boulton realized that he was a pioneer, that there was a difference of degree, as well as of kind, between his father's modest works on Snow Hill and the elegantly built manufactory at Soho,4 and that there was an increasingly wide gulf between employer and employed.

The apprentice who married his master's daughter was rapidly becoming a legend. Boulton, in reply to an application that he should take the brother of one of his friends as an apprentice, said, " I do not think it an eligible plan for your brother, as it is not a scheme of business that will admit of a mediocrity of fortune to be employed in it. It even requires more than is sufficient for a considerable merchant, so that a person bred in it must either be a working journeyman in it, or he must be possessed of a very large fortune."5 This is the position in many trades by 1750, the gap between the economic classes has widened. The masters who devote all their energies to production have become fewer in number, the amount of capital necessary to set up has increased, and the only prospect before the generality of apprentices was the wage-earning status of a journeyman. Moreover, business organization was becoming more scientific, and this is an important development. When all labour depends upon acquired personal skill, and business success upon the energy and capacity of the individual, it is possible for sharp vicissitudes to occur in the history of firms. But a firm like that of Boulton was uniformly successful from 1740 to 1850, and this was due, first to its machinery, which, by replacing individual skill, made all advances in technical skill permanent; and, second, to its business system and organization, which continued the business acumen and vigour of Boulton when his guiding hand was removed. In 1770, Boulton arranged for a meeting of the partners and managers of Soho to take place once a week to examine the state of the business during the past week, the state of the orders in hand, I price-lists, " any other regulations, alterations, resolutions, necessary to be made, or any new mode I of proceeding adopted," and " that no important points relative to our foreign trade be determined but at such meetings, as well as important letters to be written or to be answered."6

Watt, himself, paid his first visit to Soho in 1767, and " the goods then manufactured there were steel, gilt, and fancy buttons, steel watch chains and sword hilts, Plated wares, Ornamental works in Or Moulu, Tortoise shell, snuff boxes, bath metal buttons, inlaid with steel, and various other articles, which I have now forgot. A mill with a bearer wheel was employed in laminating metal for the buttons, plated goods, etc., and to turn laps for grinding and polishing steel works, and I was informed that Mr. Boulton was the first Inventor of the inlaid buttons, and the first who had applied a mill to turn the laps. Mr. B., at that time, also carried on a very considerable trade in the manufacture of buckle chapes, in the making of which he had made several very ingenious improvements. Besides the laps in the mill, I saw an ingenious lap, turned by a hand wheel, for cutting and polishing the steel studs for ornamenting buttons, chains, sword hilts, etc., and a shaking box put in motion by the mill, for scowering button blankes and other small pieces of metal, which was also a thought of Mr. Boulton. There was also a steel house for converting iron into steel, which was frequently employed to convert the cuttings and scraps of the chapes and other small iron wares into steel, which was afterwards melted and made into cast steel for various uses." 7

It is evident that Boulton was fully aware of the value of the division of labour, and that his works, even with the limited power at his disposal, were beginning to be largely machine operated. In the organization of his business, Boulton consciously practised a thorough division of labour, and realizing all the benefits of Adam Smith's celebrated pin-maker, taught all his workpeople some special department, and made every one a skilled hand. In 1770, he employed 800 persons, and though the financial panic of 1771-2 shook him severely, he continued his plans and expansion. 8

Boulton was a business organizer, and possessed " marketing ability of a constructive order."9

The removal to Soho, and the consequent increase in capital, had made necessary this development of business organization, while the mere increase in the size of his works had made more power necessary to drive them.10 Capital and power were necessary, and they became the two necessities of all modern industry; and the order in which industries have fallen into modern industrial methods, depends largely on the ease with which steam-power was applied to them. Among the characteristics which affect the introduction of steam-power to industry are the size and structure of the industry, the fixity and uniformity of the demand for its products and the durability or valuable properties of its products.11 All these characteristics were present in the hardware trade, just as they were in the iron and pottery industries and in the mines, though in some of these, machinery was opposed to the skilled labour element, which even yet persists in some of the pottery and glass trades.

In Boulton, the hardware trade and capitalist industry, as a whole, had a wealthy and intelligent leader, and it was his efforts that brought steam power into the market as a commercial proposition. Boulton was the right man at the right moment for England's foreign trade; long freedom from invasion had given her the power of capital even before she needed it, and there was scope in the middle of the eighteenth century for men with this marketing ability of a constructive order. The removal to Soho had called for a large increase in capital, anere he built himself more commodious premises. Before taking this step, he took into partnership a Mr. John Fothergill, who had a limited capital, but was a very active business man. The removal was important for many reasons.

In the first place Boulton had to use both his wife's fortune and his own for the venture, £20,000 being sunk in buildings and equipment. In consequence of this development, new connections and agencies were established at home and abroad, and Boulton took the greatest care in selecting artistic designs for his productions, and extending the range of his manufactures. The business rapidly developed; the gross receipts of the firm increased from £7,000 in 1763, to £30,000 in 1767,1 and the fame of the manufactory had spread all over Europe. Even in France, the home of fashion itself, Boulton & Fothergill had correspondents at Marseilles, Lyons, Aix, Montpellier, Paris, and Rouen,2 while so important was the Russian trade, that Fothergill spent a whole year travelling in Russia and Sweden.

The natural result of this large increase of business, immediately after so much capital had been sunk in permanent improvements, was embarrassing to the firm. In a letter to his friend, Baumgarten, Boulton says, " The number of our friends and customers are every day increasing, and so are our orders, consequently the money required must also be increased, for nothing will have a tendency to extend our dealings so much as giving a little indulgence in point ents were due, first, to Newcomen himself, later to the different people responsible for the engines, and also, in a very large degree, to chance. The leading engineers of the country, Brindley and Smeaton, were also deeply interested in the steam-engine, and it is probably to one of Smeaton's variations and the original machine that Boulton refers in his letter, and between which he is hesitating.14

As a matter of fact, he adopted neither.

It was at this time that Boulton was introduced to James Watt, and at the failure of Roebuck, Boulton bought his share in the steam-engine patent; and in 1774, Watt came to Birmingham, and the engine, which he had designed for the Kinneil coal-mines, was erected at Boulton's works, at Soho, to pump water to drive the works.15

Thus, began the partnership that was to be one of the most important economic events of the century.


1 Smiles, Boulton and Watt, p. 177.

2 Boulton to Wicke, August 22, 1767. Tew MSS.

3 Boulton to Bargum (Baumgarten), August 5, 1767. Tew MSS.

4 Arago, James Watt, 1854, p. 420: " Une manufacture de M. Boulton existait deja depuis quelques annees a Soho, lorsque naquit l' association qui a rendu son nom inseparable de celui de Watt. Cet etablissement, le premier sur une aussi grande echelle qui ait forme en Angleterre, est encore cite aujourdthui pour Elegance de son architecture."

5 Boulton to Peter Bottom, March 30, 1768. Tew MSS.

6 Memorandum in Boulton's writing dated November 27, 1770. Tew MSS.

7 Glasgow, September 17, 1809, Memorandum Concerning Mr. Boulton, Commencing with My First Acqnaintance with him, by James Watt. Tew MSS.

8 Timmins, Matthew Boulton in Trans. Birmingham Arch. Soc. Vol. 11, p. 26.

9 Marshall, Industry and Trade, p. 47.

10 " Water power—about 6 to 8 horse power and costing five to eight guineas a week—had hitherto been the mechanical motor at Soho." S. Timmins. Birmingham Arch. Society Transactions, Vol. 11, p. 27. M. Boulton.

11 Hobson, Evolution of Modern Capitalism p. 90-1.

12 Smiles, Boulton sand Watt, p. 168: " Hooper was here this morning to talk about an engine. Hockly Pool is green grass, and all the mills below panting. When the Devil was sick the Devil a saint would be." Boulton to Watt, Aug. 16, 1781. Tew MSS.

13 Boulton to B. Franklin, February 22, 1766. Tew MSS.

14 Smiles, Boulton and Watt, pp. 63-5.

15 Boulton to John Lockwood, August 14, 1775. Tangye MSS.: " 1 have returned the water to my mill all this summer by means of one of them " [Watt's steam-engines].


I Capital and Steam PowerI The Significance of the PartnershipI