Daunton M. The Cambridge Urban History of Britain, Volume 3: 1840-1950
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The development of the ‘new’ industry growth sectors – chemicals, new syn-
thetic materials, motor vehicles and electrical engineering – was crucial to urban
regeneration and had begun to revive the economies of a number of cities, espe-
cially in the Midlands, before they became conspicuous in the national output
figures.
38
This was dramatically so in regard to Coventry, a city whose economic
and demographic fortunes, previously in decline for thirty years following the
collapse and attrition of silk weaving and watchmaking, were transformed in the
twentieth century. An influx of new entrepreneurial energy, technical skills and
capital pulled the city out of stagnation, creating a new kind of factory boom
town whose growth was carried forward by a flood of migrants, representing
per cent of its population increase in the interwar years. The location of bicycle
and motor car production in the city was the prime factor although Coventry
also benefited from the arrival of other major manufacturing activities in artificial
textiles, ordnance work and electrical equipment. How can this influx of new
industry be explained? There were no special inducements and Coventry had a
relatively low municipal profile, but it had the advantages of good communica-
tions, an abundant supply of appropriate labour, including female labour (for
Courtauld’s), and available and cheap workshop and factory space. Moreover,
once industrial restructuring began it developed a momentum of its own, pro-
pelled by linkages across and within different parts of the engineering sector, par-
ticularly in the demand for motor car components. The engineering industries
in Coventry benefited also from the rearmament drive in the late s and
during the war itself. In this context of rapid expansion local employers adopted
various strategies to overcome labour supply problems, including support
for institutionalised technical education through probationer-apprenticeship
schemes and day release classes.
39
Coventry offers an insight into a more abrupt process of industrial change.
The development of new industry in this city had a more conspicuous impact
than in such mature industrial centres as Birmingham which still retained a great
variety of trades. Even the comparable, if fortuitous, development of a motor
car industry in the suburb of Cowley in Oxford generated fewer linkages in a
city where the academic industry still remained such an important influence.
40
David Reeder and Richard Rodger
38
For an overview of the debate on new growth industries in the interwar economy, see D. H.
Aldcroft and H. W. Richardson, The British Economy – (London, ); for differing
interpretations of interwar growth, see D. H. Aldcroft and P. S. Fearon, Economic Growth in
Twentieth Century Britain (London, ).
39
See D. W. Thoms and T. Donnelly, ‘Coventry’s industrial economy, –’, and B. Lancaster
and T. Mason, ‘Society and politics in twentieth century Coventry’, in B. Lancaster and T. Mason,
eds., Life and Labour in a Twentieth Century City (Coventry, ), pp. – and –. Also
D. Thoms, ‘Technical education and the transformation of Coventry’s industrial economy,
–’, in P. Summerfield and E. J. Evans, eds., Technical Education and the State since
(Manchester, ), pp. –.
40
The most recent account is in R. C. Whiting, ed. Oxford Studies in the History of a University Town
since (Manchester, ).
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Coventry’s diversification had resulted in a concentrated economy, however, and
the extent of its dependence on the motor car industry was eventually to pose
the most serious threat to its future prosperity.
41
The growth industries of the interwar years not only regenerated the
economies of older industrial cities but helped to revive the fortunes of middle-
rank county towns, particularly in the Home Counties. These towns benefited
from their proximity to London as well as the success of specialist consumer-
based industries. In Reading (biscuit making), Luton and Oxford (new centres
of motor manufacturing) and Maidstone (food processing and engineering) new
sectors were superimposed on more established industries, also based on con-
sumption, such as brewing and printing.
42
Many towns in the orbit of London
owed their success to a more variegated industrial development, as with the
towns of Hertfordshire such as Watford and Slough. These Hertfordshire towns
exemplify the way that prosperous mixed light industries were attracted to the
South-East by efficient communications and distribution networks, as well as by
cheap sites and the availability of new factory buildings.
43
An industrial Arcadia emerged along the new arterial roads in Leeds,
Birmingham, Manchester and in Greater London, as industrial estates sprouted
widely spaced factories on green-field sites. It was a development which
engulfed older villages and also affected small market towns.
44
In Hertfordshire
a mixture of town planning idealism and entrepreneurial acumen brought into
being new communities. Like the industrial cities of the Midlands, these were
boom towns with very high rates of immigration. But whereas the older cities
contributed in larger measure to remaking their own economies from existing
infrastructural resources and services, the new towns and industrial districts drew
heavily on inward investment as well as labour and were dependent also on
private capital for the provision of services. There was a similarity in that respect
between the factory villages and new company towns of the nineteenth century
(Middlesbrough, in its early stages, and Crewe) and the industrial trading estates
and interwar planned towns.
The development of Slough illustrates the mechanisms of change.
45
A small
country town in the late nineteenth century, the beginnings of Slough’s indus-
trial development was already in evidence along the Bath Road prior to the First
World War. It was accelerated by the formation of a large industrial estate of
Industrialisation and the city economy
41
As Fogarty, prophetically warned, Prospects, p. .
42
P. Clark and L. Murfin, The History of Maidstone (Stroud, ), p. , state that Maidstone ‘with
its thriving industries, shops and services . . . moved into the top flight of expanding towns in the
south east’.
43
Fogarty, Prospects, pp. –.
44
The phenomenon of arterial industrial development was also reproduced in older industrial
centres. See M. Bateman, ‘Leeds: a study in regional supremacy’, in Gordon, ed., Regional Cities,
p. , who discusses the role of the Leeds ring road and arterial routes and notes that they were
‘modelled on the example of Liverpool’.
45
The principal sources are J. Hunter, The Story of Slough (Newbury, ), pp. –, and
M. Cassell, Long Lease! (London, ).
Cambridge Histories Online © Cambridge University Press, 2008
acres to capitalise on a demand for low rented factory accommodation. The site
– a government repair depot during the First World War – was bought out by
entrepreneurs involved in the motor repair business. They had the foresight to
convert the trading company into an estates company in , initially to provide
factories for firms – mostly those requiring extensive space – willing to move
there, but from adopted a policy of building ‘off the peg’ adaptable units
aimed at light industry. Companies were attracted by good communications and
as a result of the investment of the Slough Estates Company in roads and factory
units and in centralised services such as power, light, steam and water, as well as
gas distribution, and in the building of railway lines and loading facilities. This
initial outlay was supplemented by overseas inward investment encouraged by a
government scheme for Imperial Preference which enabled Slough to advertise
itself as a gateway to British Empire markets for foreign companies. One
hundred companies housed in seventy-two premises had located in Slough by
. Many were household names – Black and Decker, Horlicks, Aspro and
Weston’s biscuits – as well as companies specialising in light engineering and new
fabrics and materials like rayon and bakelite. The majority of these firms were
relatively small local concerns which rapidly developed national markets.
46
Such
a remarkably rapid development meant that Slough in effect became a new
twentieth-century style of company town, though no responsibility was assumed
by employers for housing the workforce. Nor was there much in the way of
social facilities until the building of a community centre with support from
leading tenants. Since the factory premises were ‘de-rated’ or exempt from local
taxes, the local authority considered that for its part it was exempted from
making contributions to amenities on the estate.
In the s and s Slough must have seemed like a frontier town.
Encouraged by payments under the Industrial Transference Scheme labour
migrated to such nodes of economic development and capital was also attracted
from other parts of the country and from abroad. Much the same could be said
of Letchworth and Welwyn during the interwar years. The first of the garden
cities, they were creations of private enterprise and as such speculative and
under-capitalised until industrial development paid off in substantial increases in
rental value and an expanded local tax base.
47
From the outset and with inade-
quate financial resources, Garden City Companies created new towns with
limited infrastructural provisions. Services had to be provided de novo and these
towns soon acquired the reputation of being ‘do-it-yourself ’ communities. In
contrast to the older centres, they had neither civic traditions nor local resources
of capital and labour.
David Reeder and Richard Rodger
46
For another industrial estate development with several developers but a similar mix of industries
see J. Armstrong, ‘The development of the Park Royal industrial estate in the inter-war period’,
LJ, (), –.
47
F. J. Osborn and A. Whittick, New Towns (London, ), pp. –, .
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The composition of local industry was crucial to the trajectory of growth,
both for firms and for towns, too. This ‘path-dependency’, to use the term
applied to explain Britain’s national economic performance, identifies Britain as
having a high proportion of its output in products which had low growth poten-
tial in the early twentieth century and in the interwar years.
48
The high wage-
cost-price structure and overvalued pound did few favours to British
manufacturers in the interwar years, but more serious was this overdependence
on stagnant or declining economic sectors. By contrast, towns and cities with
diversified production structures gained because they were less exposed to risk
and business failure. Industrial diversity was also a critical ingredient in the
responsiveness of towns to technological change, especially if the engineering
sector was of a broad-based and adaptable mechanical engineering and tool-
making variety rather than marine, railway, civil, agricultural or other specialist
subspecies of engineering.
49
Like a skittle, the broader based the industrial struc-
ture the less likely was it to be knocked over when recession approached. Under
these circumstances – less exposure to cyclical and secular decline and better
prospects for industrial regeneration – then levels of consumption locally
remained robust for goods and services. It was not just that diversified towns had
high propensities to consume – the inhabitants of Merthyr and Jarrow had that
too because they had no opportunity to save – but that the purchasing power
locally was sustainable despite the ravages of the depression elsewhere.
(v)
The rise of the new towns and industrial districts was one of the factors affecting
the relationships between urban and manufacturing interests in the twentieth
century. These relationships were also affected by structural changes within
manufacturing industry as well as by more wide-ranging changes in the condi-
tions influencing the development of city institutions and services. The remain-
ing sections summarise the general trends whilst stressing the variability of their
impact on the experience of different towns and cities in what is very much an
underresearched topic.
How important, then, was the changing scale and nature of production to
relationships between urban and manufacturing interests? According to one
school of thought a series of technological and organisational developments in
the leading industries of the late nineteenth and early to mid-twentieth centuries
– continuing mechanisation of processes, transformation of workshop-based to
Industrialisation and the city economy
48
S. N. Broadberry, The Productivity Race (Cambridge, ); R. C. O. Matthews, ‘Some aspects of
post-war growth in the British economy in relation to historical experience’, Transactions of the
Manchester Statistical Society () tables , .
49
S. B. Saul, ‘The market and the development of the mechanical engineering industries in Britain,
–’, Ec.HR, nd series, (), .
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factory-based methods increasingly geared to mass production, growth in the
scale of production, and new forms of business organisation – provided the
momentum for the economies of industrial cities.
50
The growth in the scale of
units was characteristic of the iron and steel industry, armaments, shipbuilding
and certain branches of textiles whilst mergers took place in the s in soap
and chemicals, brewing, tobacco and food processing as part of international
business trends on a scale sufficient in more recent times to have referred the
amalgamations to the Monopolies and Mergers Commission.
51
Prior to the First
World War, however, mergers were limited in extent and did not much affect
corporate structures in Britain overall. Even amongst merged concerns the
holding form of company organisation enabled local firms to retain a degree of
autonomy, a characteristic which diverged strongly from the cartels and corpo-
rate structures which had developed in Germany and the USA between
and . Many large firms remained family owned and managed, and the family
interest continued to be strong in those firms which adopted limited liability.
This was the case amongst the Oldham limiteds, quoted public companies such
as Crawford, Dowry, Haugh, New Hay, Moorfield and Werneth, in the years
c. –, though they were out-performed in terms of profitability and
growth by private companies – Fielden Bros., Horrockses, Osborne, Tootals.
52
Neither private nor public firms used bank borrowing to fund capacity exten-
sions in the Lancashire textile industry, preferring stock options and appeals to
existing investors to finance expansion in what represented ‘urban estates’ or per-
sonal capitalism rather than organisational units with fully fledged managerial
hierarchies.
Complementing this emphasis on the durable role of family firms and local
capital supplies as the main dynamic of urban growth is an explanation that
stresses the contribution of small firms and flexible modes of production con-
nected to the traditional organisation of craft-based workshops and associated
forms of outwork. Recent studies have led to new claims for the importance of
small producer capitalists in generating technical change and economic growth.
53
At the same time the growth of large firms itself created further opportunities
for small-scale operations by generating new demands for bespoke machines,
tools, components, materials. In Bradford the large combined worsted mills
David Reeder and Richard Rodger
50
See, for example, A. D. Chandler Jr., Scale and Scope (Cambridge, Mass., ).
51
P. L. Payne, ‘The emergence of the large scale company in Great Britain, –’, Ec.HR,
nd series, (), –; M. A. Utton, ‘Some features of the early merger movements in
British manufacturing industry’, Business History, (), –; L. Hannah, ‘Mergers in man-
ufacturing industry, –’, Oxford Economic Papers, (), –.
52
S. Toms, ‘Windows of opportunity in the textile industry: the business strategy of Lancashire
entrepreneurs, –’, Business History, (), .
53
See the examples in C. Sabel and J. Zeitlin, ‘Historical alternatives to mass production: politics,
markets and technology in nineteenth-century industrialisation’, P&P, (), –;
Rodger, ‘Concentration and fragmentation’; Johnson, ‘Economic development’.
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coexisted with small-scale engineering enterprises, in Newcastle small-scale sup-
pliers to the large Tyneside shipyards sprang up, whilst in Birmingham and
throughout the Black Country during the early twentieth century long-
established small-scale iron and metal firms turned to making components for
the motor car industry.
54
Thus in many of the older industrial cities – the metalworking centres espe-
cially – a dualistic economy, already in evidence by the s, was reinforced.
This is best exemplified by Sheffield, a city in which small-scale production as
represented initially by the ‘little maisters’ of the cutlery industry played an inno-
vative part in the city’s transition to steel production.
55
Yet the expansion of steel-
making was also associated with a degree of concentration in crucible steel
production and a spectacular growth of large firms in the making of heavy steel
goods, notably armaments. In Sheffield, large and even giant firms coexisted
with many small firms in what can be represented as two business systems,
differently organised and spatially differentiated. Many of the larger works grav-
itated to green-field sites in the east end districts of Attercliffe and Brightside to
form, in effect, new industrial fiefdoms. In contrast, the centre of Sheffield pre-
sented a very different picture of business organisation with its ‘outworkers,
teams, merchants and manufacturers drawn together by a complex of interde-
pendence of skills and products’.
56
The minute subdivisions in Sheffield’s economy encouraged product differen-
tiation, whilst an outwork and rentier system facilitated quick responses to
changes in design and fashion. This was complemented by a marketing strategy
based on an establishment of brand names and capitalising on the city’s reputa-
tion for quality – a reputation its leading manufacturers sought to maintain by
Industrialisation and the city economy
54
Fogarty, Prospects, pp. –; G. C. Allen, The Industrial Development of Birmingham and the Black
Country, – (London, ; repr., ), pp. et seq.
55
The statistical analysis of Sheffield firms has been undertaken by R. Lloyd-Jones and M. J. Lewis,
most recently in their chapter, ‘Business structure and political economy in Sheffield: the metal
trades –s’, in C. J. Binfield et al., eds., The History of the City of Sheffield, –, vol.
(Sheffield, ), pp. –. The authors point out that the persistence of the small private
firm had to do with its role as a vehicle for family control, but in Sheffield constraints on growth
were reinforced by an extensive outwork system.
56
S. Taylor, ‘The industrial structure of the Sheffield cutlery trades, –’, in Binfield et al.,
eds., History of the City of Sheffield,p., quoting R. J. Islip, ‘A future for the past in Sheffield?’,
Yorkshire Architect (May/June ). Taylor argues for the rationality of the complicated structure
of the cutlery industry in which factory, worshop and outwork, mechanised and hand production,
coexisted. For the crucible steel production industry, see G. Tweedale, ‘The business and technol-
ogy of Sheffield steelmaking’, in Binfield et al., eds., History of the City of Sheffield,p., drawing
on J. G. Timmins, ‘Concentration and integration in the Sheffield crucible steel industry’, Business
History, (), –. For a pioneering study of the process of industrial location in the steel
industry, see R. T. Simmons, ‘Steam, steel and Lizzie the Elephant – the steel industry, transport
technology and urban development in Sheffield, –’ (PhD thesis, University of Leicester,
). For similarities and contrasts between the Sheffield and Birmingham city economies and
their social implications, D. Smith, Conflict and Compromise (London, ).
Cambridge Histories Online © Cambridge University Press, 2008
endowing Firth College in order to train metallurgists. Sheffield continued,
therefore, to provide an environment in which small firms in the various
branches of the metal trades could survive and flourish.
57
Detailed analysis has
shown that until , and despite wartime mergers, the iron and steel trades in
Sheffield went against the national and international trend by continuing to reg-
ister an increase in the proportion of small firms.
58
Yet this highly specialised
manufacturing economy served the city less well in the difficult s, a decade
which exposed structural weaknesses. In circumstances where the cutlery indus-
try was faced with tariff barriers and the competitive pressure of low-quality
steel, a multiplicity of small firms, once a strength, became a weakness. The
market no longer functioned efficiently: too many firms produced too many
product lines. The competitive edge was surrendered to those producers capable
of greater standardisation, whether in Britain or abroad. In these changed con-
ditions, flexibility gave way to conservatism amongst the small family-based
units, reinforced by the power of craft-based trade unions. The cooperative
dynamic which Marshall had regarded as essential to the success of small pro-
ducer capitalism in the industrial districts was lacking, if, indeed, it had ever
existed. In consequence, Sheffield businessmen were unable to present a united
front on important political issues and the attachment to trademarks and indus-
trial secrets inhibited them from working together.
59
Elsewhere, large- and small-scale units of production sought from different
perspectives to contain costs of production in the difficult national and interna-
tional circumstances which Britain faced in the s. The concentration of pro-
duction, reinforced in the s by rationalisation schemes funded by the
government and the Bank of England to cocoon capacity in textiles and ship-
building, was intended to generate economies of scale in an effort to withstand
the assault on profits and to avoid bankruptcy in the context of an international
depression. But increased scale was also associated with logistical difficulties. For
example, in the s, non-traditional building methods employed by larger
firms using poured concrete and shuttered construction techniques encountered
supply difficulties, inconsistent quality control and organisational difficulties in
coordinating the different stages of building.
60
In parallel, this enabled smaller
David Reeder and Richard Rodger
57
Tweedale, ‘Sheffield steelmaking’, p. .
58
The detailed analysis referred to is by Lloyd-Jones and Lewis, ‘Business structure’, in Binfield et
al., eds., History of the City of Sheffield, pp. –. The general account is G. Tweedale, Steel City
(Oxford, ). See also G. Tweedale, ‘The business and technology of Sheffield steelmaking’, in
Binfield et al., eds., History of the City of Sheffield, pp. –.
59
The problems of the interwar period are discussed by all the business historians previously cited
in Binfield et al., eds., History of the City of Sheffield, and by S. Pollard in his chapter on ‘Labour’,
pp. –. See also A. White, ‘“We never know what price we are going to have till we get to
the warehouse”: nineteenth century Sheffield and the industrial district debate’, Soc. Hist.,
(), –.
60
S. Marriner, ‘Cash and concrete. Liquidity problems in the mass production of “homes for
heroes”’, Business History, (), –; F. Wellings, A History of Marley (Abington, ).
Cambridge Histories Online © Cambridge University Press, 2008
builders to fill orders using locally produced materials from known suppliers.
Grates, keys, plumbing and gas fitments, electric cables and switches were exam-
ples of products which sustained small-scale suppliers locally.
In addition, the wider adoption and distribution of electrical power through
the development of the national grid enabled production and the point of dis-
tribution to be increasingly detached. Light industrial and finishing processes
facilitated product differentiation to take place at a distance from the factory gate.
Though a considerable volume of freight was still carried on the railways, the
interwar years witnessed an increase in the number of vans and lorries operat-
ing within towns, and this improved business flexibility and nurtured small busi-
ness endeavours. On the back of changes in transport developments and
distributed energy sources, a vigorous counter-culture of successful small busi-
ness was sustained in interwar Britain, arresting what seemed, at least in the long-
term national picture, an inexorable trend towards larger scale of production, to
such an extent that between and the census of production in ‘the level
of industrial concentration advanced imperceptibly, and may actually have
diminished’.
61
Nevertheless, growth in the scale and complexity of industry had a visible
impact on the appearance of the British industrial city in that textile and steel
mills, shipbuilding yards and, later, automobile plants required sites, buildings
and workforces on a scale not encountered before. By the early twentieth
century industrial and commercial property had become a significant part of the
urban real estate market. Rising rentals forced more specialised land use within
cities as users sought to evaluate how important city-centre access was to their
business activities and in many cities, not only in Sheffield, the rents and con-
gestion of the central areas and the need for space led to peripheral industrial
development. In Birmingham, for example, many of the growth industries of
the late nineteenth century had moved to the middle ring whilst the newest and
largest factories of the twentieth century were to be found on the outskirts of
the city: the Austin Motor Works at Longbridge was particularly extensive cov-
ering acres (. ha) by and employing , workers on the eve of
the Second World War.
62
In other cities the development of trading estates to
attract migrant capital and the strategic requirements of wartime industrial sites
and ‘ghost factories’ accelerated this tendency to peripheral development.
Lubricated by increased private road transport and changed residential patterns,
Industrialisation and the city economy
61
G. A. Phillips and R. T. Maddock, The Growth of the British Economy – (London, ),
p. . A new phase of mergers, acquisitions and the establishment of subsidiaries set in after .
62
A. Sutcliffe and R. Smith, History of Birmingham, vol. : Birmingham – (Birmingham,
), pp. –. See also M. J. Wise and P. O’N. Thorpe, ‘The growth of Birmingham
–’, in R. H. Kinvig, J. G. Smith and M. J. Wise, eds., Birmingham and its Regional Setting:
A Scientific Survey (Birmingham, ), esp. pp. –. For the scale of Austin’s plant see R. A.
Church, Herbert Austin (London, ), pp. , , and more generally on the relationship of the
car industry to Birmingham, pp. – and –.
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the centrifugal forces of the twentieth-century city replaced its earlier centripetal
role. These forces substantially shaped the requirements of industrial location
whether in the Manchester or Birmingham city region or on Merseyside.
Extensive peripheral estates with road and rail links and industrial services
attracted the new growth industries as well as encouraging existing local indus-
try to relocate on more spacious sites close to suburban housing.
63
This did not necessarily mean the demise of the older inner-city economy.
Indeed, the almost infinite capacity of small-scale firms to rediscover a market
niche was testimony to the constantly mutating nature of the urban economy.
In compact industrial cities such as Leicester there was, even after , a heavy
concentration of industrial premises. Hosiery factories and light engineering
firms, for example, remained prominent in and around the central area despite
some peripheral development, mainly of large-scale firms, in new industries
such as electrical engineering.
64
In other industrial cities the older districts of
small-scale operators and workshop concerns were still in existence through the
interwar years and after the Second World War. Birmingham’s industrial pros-
perity in the twentieth century continued to depend very much on the adapt-
ability of small firms typical of the city’s central area to the pattern of growth
and decay. As M. P. Fogarty noted in , the successful continuance of this
process, and the fact that the supply of new firms did not fail, was largely due
to ‘the environment – to the proximity of large number of small firms with
their associated force of skilled labour and their ancillary services’.
65
Conditions
in Birmingham, he further pointed out, were similar in many respects to those
of east London. In P. Sargant Florence, the Birmingham economist, was
still able to argue that industrial districts in central areas reproduced in many
respects the major advantages of a large-scale plant in the form of the physical
juxtaposition of consecutive processes and auxiliary services, and in he
coined the phrase ‘industrial swarming’ to explain how Birmingham still func-
tioned as a local economic unit.
66
Clearly, the external economies so impor-
tant to the foundation of Birmingham’s international reputation were robust
contributors to the recreation of its business identity in the mid-twentieth
century.
One aspect of this urban context of importance to the small-scale suppliers of
the automobile assembly plants in Birmingham and Coventry was business net-
working. For example, for the majority of small-scale, owner-managed or family
firms supplying components to the automobile assembly plants in Birmingham
and Coventry throughout the interwar years, direct personal contacts were
David Reeder and Richard Rodger
63
See also above, pp. –.
64
C. Harrison and D. Reeder, ‘The local economy’, in D. Nash and D. Reeder, eds., Leicester in the
Twentieth Century (Stroud, ), pp. –.
65
Fogarty, Prospects, p. .
66
P. Sargant Florence, Investment, Location and Size of Plant (Cambridge, ; new edn, ), p.
; P. Sargant Florence, The Logic of British and American Industry (London, , nd edn, ),
pp. –.
Cambridge Histories Online © Cambridge University Press, 2008
essential to obtain business: directors and managers participated in such local
business networks as those formed in the recreational institutions scattered across
the Coventry region, notably the Coventry and County Club, the ‘unofficial
headquarters’ of the Coventry motor industry.
67
These continuities apart, due weight must be given to the ramifications of
changes in corporate organisation during and after the First World War with a
new wave of defensive mergers in the s. These changes had implications not
only for urban land use but also for the life of the city more generally and on its
government in particular. Until the First World War there was still a structural
basis for the government of cities: family firms were still dominant and multi-
plant concerns rare. Hence, efficiency depended on investment in local infra-
structures from which family firms derived external economies in a symbiotic
relationship between business interests and urban governance. Wage negotiations
and industrial disputes, too, continued to be conducted mostly at a regional or
district level and the formal conduct of industrial relations through conciliation
and arbitration discussions had a firm local focus, as in the Lancashire mill towns.
There is a strong argument, however, that the position changed remarkably
quickly after .
68
Labour relations became a matter for national settlements
and industries were involved in negotiating with the government during the war
for access to materials or the terms of the Excess Profits Duty. The centralisa-
tion of banking and monetary policy through the Bank of England was, to some
extent, at the expense of the autonomy of industrial regions as deflationary mea-
sures to buttress the exchange rate undermined local authority expenditure in a
de facto early version of rate-capping.
69
Many family firms foundered in the
difficult circumstances of post-war Britain; others converted into joint-stock
companies or were swallowed by larger businesses. Collectively, these develop-
ments forced a deepening fracture both between ownership and control and
between local business loyalties and board room priorities detached by non-local
balance sheets and stock market prices.
This is a crucial matter for understanding the way that cities functioned in the
interwar years and beyond, if, as has been claimed, the old representatives of
family capitalism who had previously been so important to funding and running
urban associations were being replaced by more impersonal boards of directors
and salaried managers with control located distantly in a London head office.
The larger firms tended to outgrow their local origins as they spread their oper-
ations to other parts of industry and overseas. The formation of multi-branch
Industrialisation and the city economy
67
B. Beaven, ‘Re-constructing the business community: the small firm in the Coventry motor
industry, –’, Business Archives, (), –. We are grateful to Lucy Newton for
drawing this paper to our attention.
68
M. J. Daunton, ‘Payment and participation: welfare and state formation in Britain –’,
P&P, (), –.
69
J. Foreman-Peck, ‘Industry and industrial organisation in the inter-war years’, in R. Floud and
D. McCloskey, eds., The Economic History of Britain since , nd edn (Cambridge, ), vol.
, pp. –, drawing on W. A. Thomas, The Provincial Stock Exchanges (London, ).
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