On the Economy of Machinery and Manufactures

On the Causes and Consequences of Large Factories

263.  On examining the analysis which has been given in chapter XIX of the operations in the art of pin-making, it will be observed, that ten individuals are employed in it, and also that the time occupied in executing the several processes is very different.  In order, however, to render more simple the reasoning which follows, it will be convenient to suppose that each of the seven processes there described requires an equal quantity of time.  This being supposed, it is at once apparent, that, to conduct an establishment for pin-making most profitably, the number of persons employed must be a multiple of ten.  For if a person with small means has only sufficient capital to enable him to employ half that number of persons, they cannot each of them constantly adhere to the execution of the same process; and if a manufacturer employs any number not a multiple of ten, a similar result must ensue with respect to some portion of them.  The same reflection constantly presents itself on examining any well-arranged factory.  In that of Mr Mordan, the patentee of the ever-pointed pencils, one room is devoted to some of the processes by which steel pens are manufactured.  Six fly-presses are here constantly at work; in the first a sheet of thin steel is brought by the workman under the die which at each blow cuts out a flat piece of the metal, having the form intended for the pen.  Two other workmen are employed in placing these flat pieces under two other presses, in which a steel chisel cuts the slit.  Three other workmen occupy other presses, in which the pieces so prepared receive their semi-cylindrical form.  The longer time required for adjusting the small pieces in the two latter operations renders them less rapid in execution than the first; so that two workmen are fully occupied in slitting, and three in bending the flat pieces, which one man can punch out of the sheet of steel.  If, therefore, it were necessary to enlarge this factory, it is clear that twelve or eighteen presses would be worked with more economy than any number not a multiple of six.

The same reasoning extends to every manufacture which is conducted upon the principle of the division of labour, and we arrive at this general conclusion:  When the number of processes into which it is most advantageous to divide it, and the number of individuals to be employed in it, are ascertained, then all factories which do not employ a direct multiple of this latter number, will produce the article at a greater cost.  This principle ought always to be kept in view in great establishments, although it is quite impossible, even with the best division of the labour, to attend to it rigidly in practice.  The proportionate number of the persons who possess the greatest skill, is of course to be first attended to.  That exact ratio which is more profitable for a factory employing a hundred workmen, may not be quite the best where there are five hundred; and the arrangements of both may probably admit of variations, without materially increasing the cost of their produce.  But it is quite certain that no individual, nor in the case of pin-making could any five individuals, ever hope to compete with an extensive establishment.  Hence arises one cause of the great size of manufacturing establishments, which have increased with the progress of civilization.  Other circumstances, however, contribute to the same end, and arise also from the same cause—­ the division of labour.

264.  The material out of which the manufactured article is produced, must, in the several stages of its progress, be conveyed from one operator to the next in succession:  this can be done at least expense when they are all working in the same establishment.  If the weight of the material is considerable, this reason acts with additional force; but even where it is light, the danger arising from frequent removal may render it desirable to have all the processes carried on in the same building.  In the cutting and polishing of glass this is the case; whilst in the art of needle-making several of the processes are carried on in the cottages of the workmen.  It is, however, clear that the latter plan, which is attended with some advantages to the family of the workmen, can be adopted only where there exists a sure and quick method of knowing that the work has been well done, and that the whole of the materials given out have been really employed.

265.  The inducement to contrive machines for any process of manufacture increases with the demand for the article; and the introduction of machinery, on the other hand, tends to increase the quantity produced and to lead to the establishment of large factories.  An illustration of these principles may be found in the history of the manufacture of patent net.

The first machines for weaving this article were very expensive, costing from a thousand to twelve or thirteen hundred pounds.  The possessor of one of these, though it greatly increased the quantity he could produce, was nevertheless unable, when working eight hours a day, to compete with the old methods.  This arose from the large capital invested in the machinery; but he quickly perceived that with the same expense of fixed capital, and a small addition to his circulating capital, he could work the machine during the whole twenty-four hours.  The profits thus realized soon induced other persons to direct their attention to the improvement of those machines; and the price was greatly reduced, at the same time that the rapidity of production of the patent net was increased.  But if machines be kept working through the twenty-four hours, it is necessary that some person shall attend to admit the workmen at the time they relieve each other; and whether the porter or other servant so employed admit one person or twenty, his rest will be equally disturbed.  It will also be necessary occasionally to adjust or repair the machine; and this can be done much better by a workman accustomed to machine-making, than by the person who uses it.  Now, since the good performance and the duration of machines depend to a very great extent upon correcting every shake or imperfection in their parts as soon as they appear, the prompt attention of a workman resident on the spot will considerably reduce the expenditure arising from the wear and tear of the machinery.  But in the case of single lace frame, or a single loom, this would be too expensive a plan.  Here then arises another circumstance which tends to enlarge the extent of a factory.  It ought to consist of such a number of machines as shall occupy the whole time of one workman in keeping them in order:  if extended beyond that number, the same principle of economy would point out the necessity of doubling or tripling the number of machines, in order to employ the whole time of two or three skilful workmen.

266.  Where one portion of the workman’s labour consists in the exertion of mere physical force, as in weaving and in many similar arts, it will soon occur to the manufacturer, that if that part were executed by a steam-engine, the same man might, in the case of weaving, attend to two or more looms at once; and, since we already suppose that one or more operative engineers have been employed, the number of his looms may be so arranged that their time shall be fully occupied in keeping the steam-engine and the looms in order.  One of the first results will be, that the looms can be driven by the engine nearly twice as fast as before:  and as each man, when relieved from bodily labour, can attend to two looms, one workman can now make almost as much cloth as four.  This increase of producing power is, however, greater than that which really took place at first; the velocity of some of the parts of the loom being limited by the strength of the thread, and the quickness with which it commences its motion:  but an improvement was soon made, by which the motion commenced slowly, and gradually acquired greater velocity than it was safe to give it at once; and the speed was thus increased from 100 to about 120 strokes per minute.

267.  Pursuing the same principles, the manufactory becomes gradually so enlarged, that the expense of lighting during the night amounts to a considerable sum; and as there are already attached to the establishment persons who are up all night, and can therefore constantly attend to it, and also engineers to make and keep in repair any machinery, the addition of an apparatus for making gas to light the factory leads to a new extension, at the same time that it contributes, by diminishing the expense of lighting, and the risk of accidents from fire, to reduce the cost of manufacturing.

268.  Long before a factory has reached this extent, it will have been found necessary to establish an accountant’s department, with clerks to pay the workmen, and to see that they arrive at their stated times; and this department must be in communication with the agents who purchase the raw produce, and with those who sell the manufactured article.

269.  We have seen that the application of the division of labour tends to produce cheaper articles; that it thus increases the demand; and gradually, by the effect of competition, or by the hope of increased gain, that it causes large capitals to be embarked in extensive factories.  Let us now examine the influence of this accumulation of capital directed to one object.  In the first place, it enables the most important principle on which the advantages of the division of labour depends to be carried almost to its extreme limits:  not merely is the precise amount of skill purchased which is necessary for the execution of each process, but throughout every stage—­from that in which the raw material is procured, to that by which the finished produce is conveyed into the hands of the consumer—­the same economy of skill prevails.  The quantity of work produced by a given number of people is greatly augmented by such an extended arrangement; and the result is necessarily a great reduction in the cost of the article which is brought to market.

270.  Amongst the causes which tend to the cheap production of any article, and which are connected with the employment of additional capital, may be mentioned, the care which is taken to prevent the absolute waste of any part of the raw material.  An attention to this circumstance sometimes causes the union of two trades in one factory, which otherwise might have been separated.

An enumeration of the arts to which the horns of cattle are applicable, will furnish a striking example of this kind of economy.  The tanner who has purchased the raw hides, separates the horns, and sells them to the makers of combs and lanterns.  The horn consists of two parts, an outward horny case, and an inward conical substance, somewhat intermediate between indurated hair and bone.  The first process consists in separating these two parts, by means of a blow against a block of wood.  The horny exterior is then cut into three portions with a frame-saw.

1.  The lowest of these, next the root of the horn, after undergoing several processes, by which it is flattened, is made into combs.

2.  The middle of the horn, after being flattened by heat, and having its transparency improved by oil, is split into thin layers, and forms a substitute for glass, in lanterns of the commonest kind.

3.  The tip of the horn is used by the makers of knife handles, and of the tops of whips, and for other similar purposes.

4.  The interior, or core of the horn, is boiled down in water.  A large quantity of fat rises to the surface; this is put aside, and sold to the makers of yellow soap.

5.  The liquid itself is used as a kind of glue, and is purchased by cloth dressers for stiffening.

6.  The insoluble substance, which remains behind, is then sent to the mill, and, being ground down, is sold to the farmers for manure.

7.  Besides these various purposes to which the different parts of the horn are applied, the clippings, which arise in comb making, are sold to the farmer for manure.  In the first year after they are spread over the soil they have comparatively little effect, but during the next four or five their efficiency is considerable.  The shavings which form the refuse of the lantern maker, are of a much thinner texture:  some of them are cut into various figures and painted, and used as toys; for being hygrometric, they curl up when placed on the palm of a warm hand.  But the greater part of these shavings also are sold for manure, and from their extremely thin and divided form, the full effect is produced upon the first crop.

271.  Another event which has arisen, in one trade at least, from the employment of large capital, is, that a class of middlemen, formerly interposed between the maker and the merchant, now no longer exist.  When calico was woven in the cottages of the workmen, there existed a class of persons who travelled about and purchased the pieces so made, in large numbers, for the purpose of selling them to the exporting merchant.  But the middlemen were obliged to examine every piece, in order to know that it was perfect, and of full measure.  The greater number of the workmen, it is true, might be depended upon, but the fraud of a few would render this examination indispensable:  for any single cottager, though detected by one purchaser, might still hope that the fact would not become known to all the rest.

The value of character, though great in all circumstances of life, can never be so fully experienced by persons possessed of small capital, as by those employing much larger sums:  whilst these larger sums of money for which the merchant deals, render his character for punctuality more studied and known by others.  Thus it happens that high character supplies the place of an additional portion of capital; and the merchant, in dealing with the great manufacturer, is saved from the expense of verification, by knowing that the loss, or even the impeachment, of the manufacturer’s character, would be attended with greater injury to himself than any profit upon a single transaction could compensate.

272.  The amount of well-grounded confidence, which exists in the character of its merchants and manufacturers, is one of the many advantages that an old manufacturing country always possesses over its rivals.  To such an extent is this confidence in character carried in England, that, at one of our largest towns, sales and purchases on a very extensive scale are made daily in the course of business without any of the parties ever exchanging a written document.

273.  A breach of confidence of this kind, which might have been attended with very serious embarrassment, occurred in the recent expedition to the mouth of the Niger.

‘We brought with us from England,’ Mr Lander states, ’nearly a hundred thousand needles of various sizes, and amongst them was a great quantity of Whitechapel sharps warranted superfine, and not to cut in the eye.  Thus highly recommended, we imagined that these needles must have been excellent indeed; but what was our surprise, some time ago, when a number of them which we had disposed of were returned to us, with a complaint that they were all eyeless, thus redeeming with a vengeance the pledge of the manufacturer, “that they would not cut in the eye”.  On examination afterwards, we found the same fault with the remainder of the “Whitechapel sharps”, so that to save our credit we have been obliged to throw them away.’(1*)

274.  The influence of established character in producing confidence operated in a very remarkable manner at the time of the exclusion of British manufactures from the continent during the last war.  One of our largest establishments had been in the habit of doing extensive business with a house in the centre of Germany; but, on the closing of the continental ports against our manufactures, heavy penalties were inflicted on all those who contravened the Berlin and Milan decrees.  The English manufacturer continued, nevertheless, to receive orders, with directions how to consign them, and appointments for the time and mode of payment, in letters, the handwriting of which was known to him, but which were never signed, except by the christian name of one of the firm, and even in some instances they were without any signature at all.  These orders were executed; and in no instance was there the least irregularity in the payments.

275.  Another circumstance may be noticed, which to a small extent is more advantageous to large than to small factories.  In the export of several articles of manufacture, a drawback is allowed by government, of a portion of the duty paid on the importation of the raw material.  In such circumstances, certain forms must be gone through in order to protect the revenue from fraud; and a clerk, or one of the partners, must attend at the custom-house.  The agent of the large establishment occupies nearly the same time in receiving a drawback of several thousands, as the smaller exporter does of a few shillings.  But if the quantity exported is inconsiderable, the small manufacturer frequently does not find the drawback will repay him for the loss of time.

276.  In many of the large establishments of our manufacturing districts, substances are employed which are the produce of remote countries, and which are, in several instances, almost peculiar to a few situations.  The discovery of any new locality, where such articles exist in abundance, is a matter of great importance to any establishment which consumes them in large quantities; and it has been found, in some instances, that the expense of sending persons to great distances, purposely to discover and to collect such produce, has been amply repaid.  Thus it has happened, that the snowy mountains of Sweden and Norway, as well as the warmer hills of Corsica, have been almost stripped of one of their vegetable productions, by agents sent expressly from one of our largest establishments for the dying of calicos.  Owing to the same command of capital, and to the scale upon which the operations of large factories are carried on, their returns admit of the expense of sending out agents to examine into the wants and tastes of distant countries, as well as of trying experiments, which, although profitable to them, would be ruinous to smaller establishments possessing more limited resources.

These opinions have been so well expressed in the Report of the Committee of the House of Commons on the Woollen Trade, in 1806, that we shall close this chapter with an extract, in which the advantages of great factories are summed up.

Your committee have the satisfaction of seeing, that the apprehensions entertained of factories are not only vicious in principle, but they are practically erroneous:  to such a degree. that even the very opposite principles might be reasonably entertained.  Nor would it be difficult to prove, that the factories, to a certain extent at least, and in the present day, seem absolutely necessary to the wellbeing of the domestic system:  supplying those very particulars wherein the domestic system must be acknowledged to be inherently defective:  for it is obvious, that the little master manufacturers cannot afford, like the man who possesses considerable capital, to try the experiments which are requisite, and incur the risks, and even losses, which almost always occur, in inventing and perfecting new articles of manufacture, or in carrying to a state of greater perfection articles already established.  He cannot learn, by personal inspection, the wants and habits, the arts, manufactures, and improvements of foreign countries; diligence, economy, and prudence, are the requisites of his character, not invention, taste, and enterprise:  nor would he be warranted in hazarding the loss of any part of his small capital.  He walks in a sure road as long as he treads in the beaten track; but he must not deviate into the paths of speculation.  The owner of a factory, on the contrary, being commonly possessed of a large capital, and having all his workmen employed under his own immediate superintendence, may make experiments, hazard speculation, invent shorter or better modes of performing old processes, may introduce new articles, and improve and perfect old ones, thus giving the range to his taste and fancy, and, thereby alone enabling our manufacturers to stand the competition with their commercial rivals in other countries.  Meanwhile, as is well worthy of remark (and experience abundantly warrants the assertion), many of these new fabrics and inventions, when their success is once established, become general amongst the whole body of manufacturers:  the domestic manufacturers themselves thus benefiting, in the end, from those very factories which had been at first the objects of their jealousy.  The history of almost all our other manufactures, in which great improvements have been made of late years in some cases at an immense expense, and after numbers of unsuccessful experiments, strikingly illustrates and enforces the above remarks.  It is besides an acknowledged fact, that the owners of factories are often amongst the most extensive purchasers at the halls, where they buy from the domestic clothier the established articles of manufacture, or are able at once to answer a great and sudden order; whilst, at home, and under their own superintendence, they make their fancy goods, and any articles of a newer, more costly, or more delicate quality, to which they are enabled by the domestic system to apply a much larger proportion of their capital.  Thus, the two systems, instead of rivalling, are mutual aids to each other:  each supplying the other’s defects, and promoting the other’s prosperity.

Notes: 

1.  Lander’s Journal of an Expedition to the Mouth of the Niger, vol. ii., p. 42.