Capital and Labour - WATT'S PARTNERSHIP WITH BOULTON : History of the Partnership

Watt left Glasgow to come to England in May, 1774, 1 whither the engine had already preceded him. Boulton having erected the engine in November, 1774, the trials were full of promise, and Watt wrote to Roebuck that " the fire-engine I have invented is now going, and answers much better than any other that has yet been made."

Boulton, however, hesitated to launch out into the large expenses that an adequate establishment for the manufacture of engines would entail, unless he was assured of a monopoly for longer than the eight years yet remaining.2 Already, in 1769, pirates were in the field; Watt laments " that in life there is nothing more foolish than inventing, here I work five or more years contriving an engine, and Mr. Moore hears of it, is more eveille, gets three patents at once, publishes himself in the newspapers, hires 2,000 men, sets them to work for the whole world in St. George's Fields, gets a fortune at once, and prosecutes me for using my own inventions."3

Though this letter of Watt is ironical, he had already had difficulties with imitations, one of his workmen, at Carron, had stolen and sold the plans of the Kinneil engine; and as there was likely to be a great demand for an engine, so economical in coals, Boulton naturally desired security in their possession.

Thus, in January, 1775, after the engine had proved satisfactory, Watt went to London to arrange for an extension of the patent. The whole question was raised in Parliament. This Act of Extension, though backed by the powerful influence of Boulton, and with " the assistance of Dr. Roebuck and all the friends "4 they could muster, was only obtained with great difficulty. It was made the occasion for reopening the whole question of monopolies, that had been fought over and over again in the House of Commons during the preceding two hundred years.

Under Elizabeth, Burleigh had made deliberate efforts to foster home industries by granting patents for new enterprises. The results of this were highly important. The study of the patents of Elizabeth's reign have brought into prominence the fact that the inception of processes and industries was a capitalist undertaking, financed by moneyed men, who were ready to wait some time for a return on their capitals.5

As long as the patent was given to a man who introduced a new process or introduced a new branch of industry, the system was beyond reproach, but the patents became oppressive when the internal trade in certain articles was given over to a grantee. Under the Stuarts, who were faced with the difficulty of governing the country on an insufficient revenue, though patents which trenched on the liberty of internal dealing were viewed with suspicion, they promised too convenient a means of obtaining money for them to be abandoned, and grants of monopoly were used in an unscrupulous manner, to obtain funds for the royal exchequer.

Nevertheless, though some hardship and jealousy resulted, the increase in the number of England's industries in the seventeenth century, due to this system, was very rapid. The system, in the case of genuine inventions, first of all, had the support of public opinion, for in Elizabeth's reign respect for private interests was very strong. This state was succeeded by violent attacks on the system when it was improperly used, for it is noteworthy that at the time when monopolies were granted most freely invention was the rarest. 6

The Mercantilist philosophy, of course, supported patent rights and monopolies, and though, in 1775, Burke raised his voice for freedom, and against the patent, Watt's Bill was passed by both Houses, and his monopoly extended to 1800.7 This was at the beginning of the movement for freedom of trade and toleration, and ten years later, Boulton and Watt found themselves on the same side as Burke, advocating free trade with Ireland.8

It is supposed that Burke was influenced by the mining interest in the neighbourhood of Bristol, which city he then represented.9 This seems very doubtful in view of his well-known views on the subject of the control of the representative by the electorate, and the fact that for his views on trade and toleration the City of Bristol discarded him in 1780. But Burke's opposition was more probably due to his natural hatred of monopolies, and to the fact that Boulton and Watt had applied for their Act on the advice of Wedderburn, with whom Burke at this time was struggling over the American question in the Commons.10

It would, indeed, have been curious if the first stirrings of economic liberalism had made it impossible for Watt to improve and make useful the greatest agent for expansion that has ever been invented. There is no doubt that it would have been better for the community at large had Watt perfected his engine and given it to the world to use free of charge, but it would have been impossible for Watt to invent and experiment on it for years had he not been able to draw on capital, from which the owners were, by all the standards of the eighteenth century, entitled to a return.

All the inventors of the eighteenth century had difficulty over their patents. Both Arkwright 11 and Watt had to spend much time in courts of law to defend their positions; while the resentment felt by contemporaries for people who controlled something so intangible and so desirable as an exclusive right to make a necessary machine probably prevented Crompton from obtaining for his " mule " the patent, which was afterwards secured by Arkwright. In evidence, before a Commons Committee, dealing with Samuel Crompton's claims in 1812, it was said that the method of reward to an inventor, as generally accepted in the eighteenth century, was that the machine, etc., should be made public, and that a subscription should be raised by those interested, as a reward12 to the inventor. This was all right before invention required much capital, but by 1750, capital was absolutely essential for the production of any great technical improvement, and every successive expansion of industry increased the advantage of a capitalist-inventor over the penniless one.13

Watt, having obtained his patent, and his invention being recent, he was, for a time, safe from molestation. Boulton concluded the arrangements with Roebuck, and definitely entered into partnership with Watt.14 Fothergill, his other partner, refused to be included, 15 and Dr. Small died while Watt was obtaining the patent. Thus, the steamengine firm was founded under the title of Boulton & Watt.16

The history of the firm is interesting along two lines. In the first place, the capitalization of a large industrial firm, whose products were costly, was a difficult business, as the failure of Roebuck at the outset of the enterprise shows; and, secondly, the story of the capitalization of industry generally is illustrated by the firms and industries to which Boulton & Watt supplied their engines.

1 Watt to Small, Glasgow, May 6, 1774. Tew MSS.

2 Watt's original patent granted in 1769, was for fourteen years. It was possible that some of the remaining eight would be consumed in experiments.

3 Watt to Small, July 26, 1769. Tew MSS.

4 Memorandum of Matthew Boulton, by James Watt. Tew MSS.

5 Cunningham, Growth Industry and Commerce, Vol. II, p. 78. Scott surmises that the original attacks on monopolies were due to a commercial depression in 1586, and the resentment shown by the commercial community towards the growth of a noncommercial community. Scott, op. cit., Vol. 1, p. l 10.

6 Marshall, Industry and Trade, p. 228.

7 The Bill was from February 22nd till May 8th in passing

8 An Answer to the Treasury Paper on the Iron Trade of England and Ireland, by James Watt. Tangye MSS. 9 Smiles, Boulton and Watt, p. 157.

10 M'Cormick, Life of Burke, 1798, p. 159.

11 Daniels, Early English Cotton Industry, pp. 1OO-102, 118, 186-7

12 Ib., quoting J. N. C. LXV., II., 838-839.

13 Marshall, Industry and Trade, p. 244: " Experiments on the laboratory scale or with small mechanical models have as a rule but little commercial value until they have been fortified by practical I proof of their efficiency on a working scale."

14 Smiles, Boulton and Watt, p. 159. Boulton had paid off the £1,200 debt and the £1,000 out of the first profit to be rid of the importunity of Roebuck's creditors. Boulton to Watt, June, 1775. Tangye MSS.

15 Roebuck owed the money to both Fothergill and Boulton. Boulton to Watt, March 29, 1773. Tangye MSS.

16 Watt to Enslie (of Rotterdam), July 14, 1775. Tangye MSS.