There is little doubt that Britain lost its position as the world’s dominant producer of iron and steel in the final decades of the nineteenth century (Tables 4.1 to 4.3). It was a relative decline rather than an absolute one for total output continued to rise, apart from a temporary drop in pig iron output in the early 1890s. By the beginning of World War I iron production was double, and steel had risen to 16 times, the 1870 level. The deterioration in the relative position, however, was rapid as Britain’s share of world output was overtaken by the US in the 1880s, 1886 to be precise, and Germany in the 1890s (1893). As a proportion of world production, Britain’ share fell from almost half in the early 1870s to 15 per cent for iron; for steel the reduction was from over 40 per cent to 15 per cent in 1913. On the on the eve of war the German steel industry was two and a half times, and the American steel industry four times, the size of that in Britain.181
178 Royal Commission on Depression of Trade and Industry, Final Report, Minutes of Evidence and
Appendix, (Parliamentary Papers 1886-7, C. 4893,C.4715, C.4715-I); Report of Departmental Committee of the Board of Trade to consider the position of the Iron and Steel Trades After the War, Board of Trade (1918, Cd 9071).
179 Burn, Steelmaking.
180 M. Dintenfass, The Decline of Industrial Britain (London, 1992).
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Table 4.1: British Iron and Steel Output (million tons, annual average)
Pig Iron % World Steel % World
1860-64 4.15 - 0.11* - 1870-74 6.38 47.6 0.43 43.9 1880-84 8.16 40.8 1.79 32.7 1890-94 7.28 28.5 3.14 24.6 1900-04 8.64 20.2 4.97 15.1 1910-14 9.50 14.9 7.2 10.8
*Data for 1868. Source: S. Pollard, Britain’s Prime and Britain’s Decline: The British Economy 1870- 1914 (London, 1989), p. 77; Mitchell, Historical Statistics, pp. 281-3.
Table 4.2: Pig Iron Output in Britain, Germany and the USA, 1870-1913
Metric tons, million Per cent of world output
Britain Germany US Britain Germany US
1870 6.1 1.4 1.7 49 11 14 1880 7.9 2.7 3.9 43 15 21 1890 8 4.6 9.4 29 17 34 1900 9.1 8.5 14 22 21 34 1910 10.2 14.8 27.7 15 22 42 1913 10.4 19.3 31.5 13 24 39
Source: W.S. Woytinsky and E.S. Woytinsky, World Population and Production: Trends and Outlook (New York: The Twentieth Century Fund, 1953), p. 1117.
Table 4.3: Steel Output in Britain, Germany and the USA, 1870-1913
Tons, million Per cent of world output
Britain Germany US Britain Germany US
1870 0.22 0.13 0.04 43 25 8 1880 1.29 0.69 1.25 31 17 30 1890 3.58 2.10 4.28 29 17 28 1900 4.90 6.36 10.19 18 23 37 1910 6.37 12.89 26.09 11 22 44 1913 7.66 17.32 31.30 10 23 42
Source: P.E. Paskoff, ‘The growth of the American steel industry, 1865-1914: technological change, capital investment, and trade policy’, in E. Abe and Y. Suzuki (eds.), Changing Patterns of International Rivalry: Some Lessons from the Steel Industry (Tokyo: 1991), p. 78.
In terms of world trade, the situation was similar, if less dramatic (Table 4.4); and, as with production, the decline was relative rather than absolute. Exports were higher in terms of both value and volume in the 1910 to 1914 period than in the 1870s, but the fall in the share of world exports was striking, declining from over 80 per cent to 32 per cent. Imports rose steeply from a negligible amount in the 1870s to 40 per cent of exports in volume and 26 per cent in value by the end of the period. The extent of this reversal in fortunes can be illustrated by the ratio of exports to imports: this fell from 26:1 to 2.5:1 in volume, and in value from 12:1 to 4:1. As Table 4.5 shows, not only did this represent a major shift in imports and exports, but it also marks a rising degree of import penetration. As a total of pig iron output, imports increased
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from 2.5 per cent to 21.6 per cent between 1870 and 1913 as overseas producers captured more of the British market.182
The trade position can also be illustrated by considering the unit value of exports and imports. There was a downward trend in the value of imports per ton from £12.52 to £6.50, while at the same time the unit value of exports rose from £7.10 to £10.50 (Table 4.3 and Figure 4.1). This may be partly explained by changes in relative prices of imports and exports, as production costs fell faster abroad than in Britain or from lower import prices as a result of dumping of output by foreign producers.183 But it seems unlikely that prices and costs account for the entire shift in relative unit values; part was due to the change in the composition of trade, with a movement to higher quality-higher value exports compared to imports.184
Table 4.4: British Iron and Steel Exports and Imports (annual average)
Imports Exports Exports % of world exports Tons (m) £m Tons (m) £m 1870-74 0.19 2.38 2.95 30.5 80+ 1880-84 0.35 4.15 3.90 27.6 70+ 1890-94 0.36 4.14 3.01 23.5 60+ 1900-04 1.09 7.93 3.31 28.8 44 1910-14 1.79 11.99 4.42 46.5 32
Source: Pollard, Britain’s Prime, p. 27.
Table 4.5: Iron and Steel Output, Imports and Import Penetration (thousand tons)
Output Iron and steel
imports
Import % output Pig iron
Steel ingots
and castings Total
1870 5,963 240 6,203 150 2.4 1880 7,749 1,295 9,044 348 3.8 1890 7,904 3,579 11,483 386 3.7 1900 8,960 4,901 13,861 800 5.8 1910 10,012 3,674 16,386 1,367 8.3 1914 10,260 7,664 17,924 2,220 12.4
Source: Mitchell, Historical Statistics, Chapter 5, Tables 2, 4, 7, pp. 281-3, 289-90, 294-5.
182
Import penetration is defined here as simply the ratio of imports to output rather than the usual domestic demand.
183 See below, pp. 109-14. 184
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Figure 4.1: Unit Value of Exports and Imports (£ per ton), 1870-1913
Source: The data series for this graph are derived from various years of the Board of Trade, Annual statement of the trade of the United Kingdom with foreign countries and British possessions, as follows: 1869-73: Board of Trade, 1874, C.1029; 1874-78: Board of Trade, 1878-9, C.2371; 1878-82: Board of Trade, 1883, C.3637; 1883-87: Board of Trade, 1888, C.5451; 1888-91: Board of Trade, 1892, C.6676; 1892-95: Board of Trade, 1896, C.8097; 1896-1900: Board of Trade, 1901, Cd.549, Cd.664; 1901-04: 1905, Board of Trade, Cd.2497, Cd.2626; 1905-07: 1908, Board of Trade, Cd.4100, Cd.4150; 1907-11: 1912-3, Cd.6216, Cd. 6336, Cd.6491; 1911-13: 1914-16, Cd.7968, Cd.8069.
A similar pattern is evident at the level of individual products, or at least for groups of products (Table 4.6). In 1913 the unit value of exports of iron and steel sheets was 28% higher than for imports, and for steel bars and angles the figure for exports was over twice that for imports. Further, a comparison of the balance of trade in these products indicates that the deterioration in trade performance may not have been as serious as has often been suggested. There was indeed a significant increase in imports in tonnage terms and only a slow rise in exports between 1910 and 1913 (Table 4.7). Overall the net exports of these products halved (231,744 tons to 116,804), and there was even net imports of sheets and plates. In value terms, on the other hand, the trade balance held up well despite the rising import volumes; it declined by just £125,000 (1910-13), with much of this accounted for by a collapse in exports to, and a surge in
0 5 10 15 20 25 30 1870 1877 1884 1891 1898 1905 1912 Exports Imports
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imports from, Germany between 1912 and 1913.185 Once again, one probable explanation of the better performance in trade values than volumes is that exports were of an increasingly higher quality in comparison to the more basic imports.
Table 4.6: Unit Value of Exports and Imports of Plates and Bars, 1913 (£ per ton)
Exports Imports Ratio
Iron and steel ship, bridge,, boiler and other plates
(not under 1/8th inch thick)
9.2 7.2 1.28
Steel bars, angles and shapes 14.2 6.8 2.09
Source: Board of Trade Iron and Steel Industries Committee, North East Steelmakers Association: Statistics and Documents, (Board of Trade, 1916), pp. 4-7.
Table 4.7: Exports and Imports of Plates and Bars, 1910-1913
Volumes (tons) Values (£)
1910 Exports Imports
Trade
Balance Exports Imports
Trade Balance Plates and sheets 121,131 57,765 63,366 933,607 438,794 949,813 Bars and angles 227,202 58,794 168,408 2,952,970 401,750 2,551,220
Totals 231,744 3,046,033
1913 Exports Imports
Trade
Balance Exports Imports
Trade Balance Plates and sheets 113,949 134,612 -663 1,232,998 973,086 259,912 Bars and angles 251,059 133,592 117,467 3,571,478 910,540 2,660,938
Totals 116,804 2,920,850
Source: Board of Trade Iron and Steel Industries Committee, North East Steelmakers Association: Statistics and Documents, (Board of Trade, 1916), pp. 4-7.
The general picture indicated by this brief assessment of the statistics is one of slowing growth, as might be expected with the maturing of the industry and economy. It was overtaken is size by both the US and Germany by the end of the nineteenth century. There was also a loss of ground in international markets as export growth slowed and imports, especially from Germany, rose. In some products Britain even became a net importer in volume terms by 1913.
Nevertheless, the state of the industry was not as bleak, and the rate of relative decline not as rapid, as is often presented. The most startling signs of decline are the result of measuring the size of the sector and its trade performance in volume terms, i.e. as tons of iron and steel. This is partly because it is easier to obtain the data, but also partly because of an obsession with quantities and the sheer physical size of the industry. But because the products are not homogeneous, figures in tons of iron and steel are not necessarily good measures of the
economic value of output since they ignore the range and quality of products. When this is
185 Board of Trade Iron and Steel Industries Committee, North East Steelmakers Association: Statistics
97
taken into account, there is some indication that, at least in trade terms, the decline in the competitive condition of the sector was not as serious as some commentators have suggested.
This is most clearly demonstrated by the balance of trade (Figures 4.2 and4. 3). In volume terms, by 1913 the trade balance was barely above the level of 1869 as imports expanded at a rate that far outstripped the growth in exports. From 1887 the compound growth rate of imports was 8.6 per cent per year whilst export tonnage grew at 1.5 per cent. By contrast, although imports grew faster than exports in value, the discrepancy was not so marked, with annual (compound) growth rates for exports and imports over the same period of 3 per cent and 5 per cent respectively. This had the result that by 1913, the trade balance in Britain’s favour was £18.5 million wider than it had been in 1869. Taking five year averages, by 1909-13 Britain was importing 129,000 tons more than it had been in 1869-73, but the trade surplus had widened by £6.3 million.
Figure 4.2: Exports, Imports and the Balance of Trade by Volume, 1869-1913 (tons)
Source: Board of Trade, Annual statement of trade, 1874-1916 (see Figure 4.1 for full references). 0 1000000 2000000 3000000 4000000 5000000 6000000 18691873 1877 1881 1885 1889 1893 1897 19011905 1909 1913 Exports Imports Balance of Trade
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Figure 4.3: Exports, Imports and the Balance of Trade by Value, 1869-1913 (£)
Source: Board of Trade, Annual statement of trade, 1874-1916 (see Figure 4.1 for full references).