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Pioneering Foreign Direct Investment in British Manufacturing.

This article analyzes all known cases of foreign direct investment in British manufacturing prior to 1890. From 1890 onwards the bulk of foreign entrants were industrial goods producers. Before 1890, the pioneering entrants were mostly consumer goods manufacturers. The article demonstrates that, with one monumental exception, these pioneers were narrowly focused, driven entirely by a concern about enhancing access to the British market. Typically they failed. The one exception was the Singer Manufacturing Company. This investment was of an entirely different nature. Singer's commitment was large and non-reversible from almost the very beginning, and was predicated on an awareness of the possibility of using Britain as an export platform. Its consequence was the emergence of Singer as the world's first modern multinational enterprise and as one of the world's largest firms by 1900.

Britain has been one of the world's most important host economies for foreign direct investment (FDI) for over a century. [1] Since the Second World War, for instance, American, European, Japanese, and other Asian multinationals have established many hundreds of manufacturing subsidiaries, currently employing over one-quarter of the British manufacturing labor force. [2] Much of the impetus behind the postwar increase in FDI appears to have come from the general increase in economic growth in the world economy as well as the specific attractions of the British market. Furthermore, tariff barriers, exchange controls and various other constraints on international trade have prompted foreign multinationals to pursue FDI strategies in the U.K. rather than exporting or licensing. [3] However, what is less well understood is why Britain should have been such an important host of inward investment in the age of laissez faire, the second half of the nineteenth century, when economic growth was slower, the British mar ket much poorer, and when there were no tariff barriers. [4]

Historians have recently mapped the population of foreign entrants into British manufacturing. [5] For the era before official statistics capture the financial flows of FDI, counting entries and exits is the best, albeit highly imperfect, proxy for estimating the stocks and flows of FDI. As a result of this mapping exercise, it is now clear that inward investors in Britain before 1914 were concerned primarily with supplying intermediate goods to the British manufacturing sector. They arrived overwhelmingly after 1890 and exploited their advantages in the new chemical, mechanical, and electrical engineering technologies in the relatively advanced British market for industrial goods. The typical motive for these entrants was the importance of being close to their market, either for customization requirements or as a defense against illegal copying.

The first entrants, the pioneers, were different from the post-1890 entrants, however. They mostly manufactured branded consumer goods rather than industrial equipment. This is intriguing because it is less obvious why there should have been a sufficiently strong incentive for foreign consumer goods manufacturers to have opened British production capacity rather than simply exporting to the British market. It suggests that there may have been important differences in the motives for entry among the pre-1890 arrivals compared with the later arrivals. The pioneers were historical novelties not only for the timing of their entries but also for their strategies. This article concentrates on these pioneers and considers the determinants and impact of their entries case by case. It reveals that among the pioneers there was a similar motive behind entry, better access to U.K. consumer demand, and a common and notable lack of success; most either failed, divested or needed refinancing.

Among the pioneers there was one exception to this commonality in motive and performance: the Singer Manufacturing Company. Singer entered British manufacturing with a markedly different purpose. It wanted its Scottish factories to be an export platform to supply the world market with sewing machines. The success of this strategy was quite astonishing, propelling Singer to becoming the seventh largest firm in the world by 1912. Because of Singer's unique place in international business the company is examined in detail. It deserves to be considered as the world's first modem multinational enterprise.

Foreign Direct Investment in British Manufacturing to 1914

The first three recorded cases of inward investment in British manufacturing occurred in the 1850s, followed by four in the 1860s, and five in the 1870s. Figure 1 shows how the number of entrants increased dramatically after the 1880s, with the annual entry rate growing from 0.6 in 1880-9, to 7.7 in 1900-9, and 7.2 in 1910-14.

Figure 1 highlights how the 1890s were the turning point in this period. Of the 158 documented foreign entries into British manufacturing before the First World War, only eighteen arrived before 1890. Such a dramatic discontinuity in the trend of inward investment needs emphasizing. The annual entry rate from 1850 to 1889 was just under 0.5, and from 1890 to 1914 it was 5.7. An increase of this order of magnitude cannot be explained by simple reference to increasingly favorable economic conditions. Nor was there any introduction of tariff barriers or exchange controls. Rather, it is more likely that the later group were simply different.

The differences between the pioneer and later entrants emerge from a more detailed analysis of their characteristics. For example, while there was little difference in the distribution of the national origins of the parent companies among the post-1890 entrants and the pioneers, there was a marked change in the nature of the markets targeted.

The pioneers mostly originated from the United States and Germany. Of the eighteen entries, 44 percent were from U.S. parents and 17 percent from German ones. Moreover, and as will be detailed below, one Swiss parent, the Anglo-Swiss Condensed Milk Company, was actually run by an American entrepreneur, using American finance and exploiting American technology. Even disregarding Anglo-Swiss' American ties, the similarity in the national origins of the pioneers and the post-1890 entrants is clear. Of the 140 post-1890 entries, 49 percent were from American parents and 23 percent from German.[6] The general trend throughout was for inward investment to be dominated by American and German concerns.

The real difference in the two groups of pre-1914 entrants was in their target markets. Before 1890, most foreign multinationals entered the United Kingdom market to produce consumer goods for the British market. From 1890 to 1914 most foreign entrants produced intermediate goods, overwhelmingly industrial equipment, rather than final products.

Any analysis of the products manufactured by the eighteen pioneer entries (listed in Table 1 below) shows the importance of consumer goods. Whether it was pistols, family sewing machines, rubber boots, proprietary medicines, watches, photographic paper, food or costume fans, eleven of these pioneers entered to improve access to the British market.

Consumer goods producers were also present among the post-1890 entries. There were ten food and tobacco processors, six clothing producers, four gramophone manufacturers, two proprietary medicine, two safety razor, two match manufacturers, as well as various others. All in all, however, only thirty-eight at most of the 140 entries (27 percent) were manufacturers of consumer goods. Around three-quarters of the post-1890 entrants were producers of industrial goods. These included several dyestuff, fertilizer, paint, and solvent producers in the chemicals industry. In the field of mechanical engineering, foreign textiles machinery and footwear machinery producers entered, along with various food processing machinery manufacturers, printing press manufacturers, and various other concerns. In the electrical engineering industry, there were several telecommunications equipment manufacturers, as well as power plant and other heavy electrical machinery producers. There were other investors outside these three main in dustrial categories, but once again, they were overwhelmingly industrial equipment manufacturers, from swaging machines and filters, to office machines and commercial vehicles.[7] In short, the post-1890 surge in inward investment can mostly be accounted for by a new kind of entrant, focusing on a new kind of market. From the 1890s onwards, the target market for entrants was comprised of an industrial and not a consumer demand.

The distinction between the target markets of the pioneers and the later entrants has not been made before.[8] It is important to emphasize because the motive for FDI may well have been different for industrial equipment manufacturers than for consumer goods producers. For instance, machinery manufacturers have often needed to open branch plants in important markets because of the demand for customization. This was partly the reasoning behind the investments by the printing press, commercial vehicle and telecommunications equipment manufacturers. Illegal copying through reverse engineering also prompted machinery manufacturers to engage in FDI. What would appear to be less easily explainable, however, is the pioneering pre-1890 FDI composed predominantly of consumer goods producers. Branded consumer goods producers have rarely needed to locate manufacturing capacity close to their consumers. Moreover, brand development has often overcome problems associated with illegal copying. [9]

These pioneering cases of FDI were novel on two counts. First, they were simply historically very early, and second, they were interested in a different market. Already by the 1880s the balance of inward investors was beginning to change in favor of industrial goods producers. From 1881 to 1889 only two of the five entrants were consumer goods producers. By contrast, from 1850 to 1880 nine of the thirteen entrants were consumer goods manufacturers, or 70 percent, almost the exact opposite of the relative shares among the later entrants. It is, therefore, to these pioneering entrants that the rest of this article is devoted, focusing on their chronological order of arrival and their relative success in the British market.

The Pioneers, 1850-1889

Table 1 lists all eighteen of the pre-1890 entrants by the date of entry, giving also their parent company's nationality, their principal product, their date of exit (when it occurred before 1914), and size of their labor forces in 1885 and 1914. Apart from Siemens Brothers and Singer, these subsidiaries all remained relatively small and most parents withdrew before 1914. It might, therefore, be concluded that these pioneering cases of FDI were fairly unsuccessful outside Siemens and Singer, typically neither growing very large nor lasting the course. However, while most investments were indeed failures, even the apparent success of Siemens Brothers by 1914 hides a longer history of relatively poor performance.

Samuel Colt. Samuel Colt's London Armory, arriving in 1853, was the first recorded instance of FDI in British manufacturing. Colt's pistols had been acclaimed at the Crystal Palace Exhibition and he was convinced that there was a substantial market for his revolvers in Britain. Rather than simply export American-manufactured guns though, Colt thought that he needed to establish his pistol factory in order to protect himself from spurious imitations in Britain and Europe. He was wrong. Consumer demand for pistols was far less in Britain than expected and he encountered serious worker resistance to his American system of manufacturing. The London branch factory lost money and Colt soon sold out and returned to America. [10]

North British Rubber Company. The North British Rubber Company was the second case of FDI in British manufacturing. Established in 1856 by a group of New Jersey-based rubber entrepreneurs to manufacture rubber overshoes in Scotland, this short-lived venture was profitable from the start, in contrast to Colt.

In the mid-nineteenth century the rubber industry was in its infancy, dependent upon highly imperfect processing techniques. The chemistry was complex and the plasticity of rubber changed according to temperature. On hot days rubber products melted, on cold days they became brittle. This was solved only when the American inventor Charles Goodyear patented his vulcanization process in the late 1830s.

American manufacturers were initially less than enthusiastic about Goodyear's idea and so he tried to sell it in Britain. Before he applied for an English patent, however, his formula was either replicated or discovered--allegedly illegally--by the leading British rubber producer, Macintosh & Co. of Liverpool, who filed an application for an English patent in November 1843. The timing was critical. Goodyear, with little funding, was able to apply for an English patent only afterwards, in the following January. He hotly disputed the legitimacy of the Macintosh claim, believing that they had stolen his formula. Nonetheless, for a further eleven years of legal wrangling, England, and indeed the whole British market, was closed to Goodyear and any of his license holders.

The establishment of the North British Rubber Company owed much to the existence of a semi-autonomous Scottish legal system under British law. While Goodyear was too slow in applying for a patent in England, the tables were turned in Scotland. There, Goodyear's application of March 1844 predated that from Macintosh by three months. [11] While there remained a possibility of overcoming the Macintosh claim through the English courts, the American rubber producers continued to pay Macintosh for every Goodyear-type overshoe imported into Britain. As soon as the final outcome was known, however (the decision went against Goodyear), five American rubber entrepreneurs formed what became the North British Rubber Company Ltd. in Edinburgh to manufacture rubber goods using the Goodyear technology in Scotland. This legal curiosity allowed two routes for patenting inventions to co-exist under British law, but there was no possibility under that same law of restricting trade between Scotland and England. [12]

The venture proved successful. In 1860 North British had approximately 10 percent of the market for rubber products in England. The company employed three hundred people by 1861, had one of the largest rubber factories in the U.K. and, by the mid-1880s, was described as "the greatest [rubber] manufacturers in Scotland." However, by this time control had long passed into British hands. [13]

The restructuring of the American rubber industry increasingly occupied the North British's American owners. They consolidated their interests with other American producers first into the New Brunswick Rubber Company and then into the giant United States Rubber Company. This call on their limited resources proved too important. They began to liquidate their foreign assets. Despite its profitability, the Scottish factory remained a peripheral venture. They had some difficulties in re-insuring the factory after extensive fire damage in 1863, and this may have prompted the initial withdrawal from Scotland in 1864 before getting out completely by 1869. [14]

Siemens and Halske. Siemens and Halske was the third of the foreign investors arriving in the 1850s and was the first to target a non-consumer market. Moreover, while Colt and North British were insufficiently profitable for the investments to be maintained, Siemens Brothers, Siemens' British subsidiary, remained extant until sequestration in 1915. It became an important part of the British electrical industry, employing four thousand people in 1914. Siemens Brothers would appear on the face of it to have been a successful pioneering inward investment. It was nothing of the kind, however. [15]

In 1847 the German inventor, Werner Siemens, established the firm in Berlin through collaboration with a master mechanic, Johann Georg Halske. Werner Siemens' telegraph cable technology was adopted by the Russian government, which prompted efforts to market it elsewhere. The biggest single market for telegraph cable was in Britain, with the largest concentration of government and military buyers and the most rapidly emerging commercial market in the world. [16]

Siemens and Halske concentrated on marine cable-laying, where the key technology was Werner's technique of testing the cable wires for breakages as they were being submerged. The repairing of faults once the lines had been laid was hugely expensive, [pounds]20,000 to [pounds]50,000 according to a contemporary expert. [17] The successful laying of an underwater cable from Sardinia in 1857 allowed them to open a small factory in Westminster in 1858, although the subsidiary remained very small for the first few years. [18]

The first contract of promise came from the French government in 1863 to lay a deep-sea cable between southern Spain and North Africa. This enabled the firm to move to its first proper manufacturing site, a small factory in Woolwich in 1863 where cable was finished before laying. [19] However, the contract was a complete disaster for the firm. The cable broke and was lost, the cable-laying ship was damaged, and the London subsidiary bore the responsibility. It cost the parent company half of its capital. As Sigfrid von Weiher noted, "purely commercial considerations would have obliged the British subsidiary to shut-up shop, but at this point Werner Siemens stepped in with his private capital. The worst consequences were avoided thanks to his personal commitment." [20]

This pioneer investment was a failure and Siemens would have left the British market after 1864 if "commercial considerations" alone had dictated the outcome. That it did not was a result of Werner's personal commitment to family capitalism and the creation of what he called "a comprehensive Siemens enterprise," a family federation linking all of the Siemens family across Europe and run through "true brotherly togetherness." It was too much for Halske, the only non-family partner. He insisted on a complete separation of the British subsidiary, which was restructured, refinanced and renamed Siemens Brothers, a family partnership between Werner and his brothers alone. [21]

The firm continued, however, to have problems in Britain until a third and much larger investment after 1899. For most years from 1864 until 1910, Siemens Brothers profitability was poor. Apart from the returns of a transatlantic cable in 1874-5 and its successor laid in 1881-2, Siemens Brothers entered a period of decline. [22] There was still talk of getting rid of the British business altogether in the 1890s. However, in 1899 the decision was made by the parent company to build a dynamo factory in Stafford, in the Midlands (completed in 1904), and a small incandescent lamp factory in Dalston, London, in 1908. [23] As a result, Siemens Brothers was by 1911 the largest British producer of power station generators, enjoyed a 20 percent share of the British market for electrical machinery, and had become a well-known industrial company. [24] But the Siemens Brothers of 1911 was a different company than the Siemens Brothers of 1899.

Siemens Brothers in 1899 was an insignificant part of Siemens & Halske's worldwide operations. Byatt's estimates of Siemens' world sales in 1899 suggest that it was one of the world's largest electrical firms, bigger than Westinghouse, smaller than AEG and GE. However, the contribution of Siemens Brothers to the parent company's total sales was very modest. Probably only just over 5 percent, with around [pounds]200,000 out of [pounds]3.3 million. Indeed, even within the British market, Siemens Brothers had only the same market share as its parent, with the Berlin factory exporting roughly the same value of goods to Britain as Siemens Brothers gross output. [25]

The third investment by Siemens into Britain after 1899 should not, therefore, be seen as the expansion of a successful foreign subsidiary but more as a completely separate venture, and, moreover, one in common with the other big foreign electrical producers. Between 1896 and 1903 Westinghouse Electric invested [pounds]3 million in a British branch plant; British Thomson-Houston put [pounds]700,000 into a new factory at Rugby, in the Midlands; Dick, Kerr & Company built a [pounds]800,000 factory at Preston; and GE built a [pounds]300,000 plant at Witton. Siemens' new [pounds]400,000 dynamo works at Stafford was, therefore, the response of the Berlin parent to global rivalry and had little to do with the core cable business of the Woolwich factory. [26]

Thus Siemens' claim to be a successful pioneer inward investor rests on tenuous ground. The original investment of 1858 was a failure and would have been withdrawn in 1864 had the firm been run purely for commercial purposes. The second inward investment by Siemens, the 1865 refinancing, was still historically early, but one prompted by Werner's personal commitment to maintaining his family's mutual ties. It had sporadic success, especially for the years 1879-1885, however, by the 1880s the cable market was mature and Siemens Brothers' attempts to diversify were not particularly successful. [27] The restructuring of the Siemens U.K. subsidiary after 1899, the third inward investment, was in reality a separate venture and one which reflected the different strengths of the much larger and more profitable Berlin-based parent. This was a successful case of inward investment, but occurring as late as 1899 it was neither particularly early nor even, within the global electrical industry, particularly pioneering.

The next inward investments were by A & J Ettlinger, Hoe, and Singer in the mid- 1860s, followed by Ohlendorff's, Anglo-Swiss (twice), Jacquemin, Pullman, and Marion in the 1870s. All except Hoe, Ohlendorff's, and Jacquemin were focused on British consumer demand. Ettlinger, for instance, was a Parisian manufacturer of costume fans wanting to target the London fashion demand. It established a small branch factory in London in 1865. The factory must have remained very small for virtually no records of its existence remain and, unsurprisingly given the volatility of fashion demand, it had disappeared by 1913. [28]

R. Hoe & Co. R. Hoe & Co., a New York manufacturer of a new revolving printing press was, after Siemens, the second industrial goods entrant. Lloyds of London insurers had imported one of Hoe's presses for its weekly newspaper and, after witnessing its performance, the publishers of The Times enthusiatically ordered two. They demanded, however, that the presses be manufactured locally, perhaps because of customization and maintenance requirements. Hoe established a small assembly factory in London in 1867. Whilst it survived until 1914 it never attained great size, with a capital value of only [pounds]5,000 on registration in 1911 and probably employing no more than fifty at any time until 1914. [29]

Singer Manufacturing Co. Singer was the next inward investor. Its British manufacturing subsidiary was, in contrast to all of the other pioneer inward investors, an unambiguous commercial success. The Singer factory at Clydebank in Scotland was the largest sewing machine factory in the world and for many years produced over half of the company's total output. Business historians have rightly emphasized that the Clydebank factory represented the dawn of a new scale of FDI. However, this episode has hitherto not been fully understood and the evolution of Singer's commitment to Scotland has not been fully explained.

Singer's Clydebank investment was large. At its peak in the summer of 1914, it was one of the largest factories in Britain with a payroll of 14,50O. [30] Even this considerably understates the presence of Singer in Britain, however. Singer constructed the largest, and most elaborate high street marketing network seen in Britain before the First World War. A feature of the company's British investment that has never been fully recognized, this network employed a further 6,000 workers in over 900 retail outlets in Britain and Ireland. [31] Indeed despite Singer's obvious importance as the pre-eminent foreign firm in the U.K. economy before 1914, surprisingly little is known of the activities in Britain of what has been called the world's first modem international business. [32] A fuller treatment of the development of Singer's Scottish investments follows in the next section.

Ohlendorff's. The 1870s brought Ohlendorff's, Anglo-Swiss, Jacquemin, Pullman, and Marion. Ohlendorff's was a German fertilizer producer which established a small processing plant in Silvertown, by the docks in East London, in 1872. This was an investment of German chemicals manufacturing technology but was dependent on the financial brilliance of the London-based banker, John Henry Schroder, and his good fortune in exploiting the Peruvian guano monopoly? [33]

In 1870 Dreyfus Brothers, the Paris merchant bank, was appointed by the Peruvian government as its sole agent for the entire guano monopoly. In return, Dreyfus promised to underwrite the Peruvian government's huge [pounds]12 million loan. [34] Dreyfus needed to syndicate the loan, which was raised on the security of future guano revenues. Schroder, a native of Hamburg and already involved in guano exports to Germany, became Dreyfus's London agent for the loan. It was a huge success, oversubscribed in London. Partly in reward, Schroder was allowed to increase his involvement in the guano monopoly. [35] However, the outbreak of the Franco-Prussian War in 1871 prompted Dreyfus to ask Schroder to take responsibility for all guano sales outside France. Schroder lost no time in capitalizing on his good fortune and wholesale agents were appointed throughout Europe. In Hamburg Schroder's agents were Baron Adolphus and Henry Ohlendorff, who had been importing raw guano since the early 1840s. From the early 1860s they had begun experimenting with dissolving raw guano in sulfuric acid to enhance its fertilizing properties. [36]

Because of declining quality, sales of raw guano were falling worldwide and so the value of the sole agency was diminishing. In January 1872, Schroder formed Ohlendorffs in London's dockland, with Dreyfus and Ohlendofff & Go., to produce and distribute "dissolved guano" fertilizer. [37] It was a substantial undertaking, with a capital of [pounds]500,000, subscribed 50 percent by Dreyfus, and 25 percent each by Ohlendorff & Go. and Schroder. The new company took over all of Ohlendorff & Co.'s assets, including factories at Hamburg and Emmerich in Germany, and Antwerp in Belgium. Despite Dreyfus's half share, control lay with the two minority partners. [38]

Production of Ohlendorff's "dissolved guano" fertilizer began in 1873 and was immediately successful. [39] However, the financial benefits of the guano monopoly were fairly short-lived. By the 1880s the quality of the raw guano was very poor and evermore sophisticated processing techniques were required to compete with superphosphate and other fertilizers. Moreover, as the agricultural depression worsened, British farmers switched to cheaper manure. [40]

In 1883 Schroders Bank sold out and Ohlendorff & Co. took full control. The subsidiary was renamed the Anglo Continental Guano Works (late Ohlendorff's) and the German parent was renamed Anglo-Continentale Guano Werke AG. [41] The London subsidiary experienced difficulties. It diversified away from guano and by the mid 1900s had developed facilities to produce fertilizer from basic slag but it was not one of Britain's (or even Anglo-Continentale's) major fertilizer plants. The German parent company had become a fairly important German superphosphate manufacturer, but its locus of interests in 1914 was not in Britain. The company owned five factories in Germany and the Low Countries, with large ones in Rhineland and in Central Germany. Together with Ohlendorff's in London, these six factories employed 1100 people. The London factory was, therefore, most unlikely to have employed as much as one sixth of the total workforce. [42]

Anglo-Swiss Condensed Milk Co. The Anglo-Swiss Condensed Milk Company has already been referred to as a Swiss curiosity, for its origins were almost wholly American. The company was started by two American entrepreneurs, the Swiss-resident Charles Page and his brother George. It was initially funded by family capital, with additional funds from friends of the Page brothers, all but one Swiss-resident American nationals. Anglo-Swiss exploited American technology, Gail Borden's technique for condensing and sweetening milk, which solved much of the problem of perishability of fresh milk.

The venture began after Charles Page became the American Consul in Zurich in 1860. He recognized the possibilities of being able to condense fresh milk in Switzerland and asked his brother to approach Borden about the possibility of making "Borden's Milk" under license. Nothing materialized, but George Page discovered enough about the condensing process and machinery required to purchase all of the appropriate equipment in the United States and bring it to Switzerland in 1866. Within a few months he was able to produce high quality condensed milk. [43]

Anglo-Swiss's rise to prominence was not based on George Page's technological virtuosity, however. The technology of condensing milk was not that complex. Rather, Anglo-Swiss became the leader in the European condensed milk market through a marketing strategy of rare simplicity. From the start the purpose of the firm was to sell its output not in Switzerland, or in neighboring Germany or France, but in Britain. The "Anglo" part of the name was supposed to flatter British nationalistic tastes. It was immediately successful, 75 percent of total firm output was sold in Britain by 1872. [44]

Increasing difficulties in the transporting of Swiss manufactured milk, however, required the company to invest in manufacturing capacity closer to their main market. In 1872 Anglo-Swiss opened its first foreign condensery in Chippenham, near Bath. In 1874 it acquired the English Condensed Milk Company, which gave Anglo-Swiss two new factories at Middlewich and Aylesbury, and the leading position in the U.K. market. With no loss in quality from using English milk, the lower costs of local production led to an increase in British capacity. By 1881 over one-third of the firm's output was manufactured in the U.K., by 1882 one-half. [45] Despite this success, Anglo-Swiss was still only a relatively small firm. In 1885 it employed only around 150 in the three U.K. condenseries, with Aylesbury the largest at around 100 employees. [46] From the 1880s to 1905 little changed among the British branch plants. In 1905 Anglo-Swiss merged with its Swiss rival, Nestle, but the U.K. operations of the larger parent still rem ained relatively small until after 1914. [47]

Jacquemin Freres. In between Anglo-Swiss' initial entry and the subsequent acquisition of English Condensed Milk, Jacquemin Freres, a small French specialist manufacturing opticians, opened a British factory in Birmingham in 1873. The subsidiary, Jacquemin (JB) Brothers, made eyeglasses for jewelers and it quickly relocated to the heart of the London jewelry district, Hatton Garden. The subsidiary stayed there in a small factory, employing no more than fifty, until being acquired by British interests sometime between 1907 and 1913. [48]

Pullman. George Pullman's great innovation was to provide train passengers with luxury comfort. In the United States consumers happily paid the supplement fare for the Pullman service and the firm was extremely successful. In 1873 he was invited to London and offered a fifteen-year contract with the Midland Railway Company to "supply and operate, without any cost to the railway, as many sleeping, parlor and dining cars as demand warranted." The cars were built at Detroit and shipped over in sections to be reassembled at the Midland's Derby works. By 1876 thirty-six cars had been shipped over for use on routes from London to the North. [49] However, the demand for Pullman cars was disappointing. Train journeys were much shorter in the U.K. than in the U.S. and far fewer consumers were willing to pay any supplement. A number of other train companies took a few cars but demand never took off. No more cars were shipped over from Detroit and manufacturing operations at Derby ceased in 1880. In 1888 the Midland co ntract expired and was not renewed. [50] The British subsidiary simply operated the Pullman service on the few lines that still took the cars. The American parent eventually sold out to British interests in 1907. Ironically, it was from then that the subsidiary's fortunes began to Improve. [51]

Marion & Co. Marion's first foreign venture was a London retail outlet opened in 1850 for their up-market French photographic paper. Retailing remained the most important activity of the firm's London branch, but in 1875 it was first listed as having manufacturing capacity, no doubt very small. In 1887 a dry-plate factory was established which grew to employ 150 workers by 1907. However, the British branch disappeared between then and 1913. [52]

Allcock Products. The first entrant of the 1880s was Allcock Products, the British subsidiary of the American pharmaceuticals firm, Allcock Manufacturing Company. A small branch plant opened in Birkenhead, Merseyside, in 1880, to manufacture "Dr. Brandreth's Pills," "Allcock's Porous Plasters," and other proprietary medicines. The branch continued in existence through to 1914, although the brands never really took off in Britain and the factory only employed around twenty workers. [53]

After 1880 the balance of inward investment changed decisively in favor of industrial goods producers for the first time. The next three entrants were Westinghouse Brake, Edison, and the German explosive manufacturer Vereinigte Rheinische-Westphalische Pulverfabrike. The motives for entry were different from the pioneers and conformed more to the bulk of the later entrants.

Westinghouse Brake, Edison, and Vereinigte Rheinische-Westphalische Pulverfabrike. Westinghouse Brake had a licensing agreement with Vickers in Britain to produce air-brakes. In 1881, however, the parent took over the Vickers operations and established a wholly owned subsidiary at Kings Cross, London. It remained, however, relatively small. [54] Edison and Swann United Electric Light was a short-lived joint venture between Edison and its British competitor Swann United to produce electric lighting equipment. Edison initially held control in 1883, despite having only a 40 percent stake, but the American parent's share quickly fell to a quarter and control passed to British interests. In 1893 the Edison patents expired and the American parent withdrew completely. [55] Finally, the German military explosives company, Vereinigte Rheinische-Westphalische Pulverfabrike, acquired Chilworth Gunpowder in 1885, but little is known about the German parent's involvement before control passed to British interests in 1901 . [56]

Baume Brothers and Monsted. The final two entrants to arrive before 1890 were consumer goods producers. Baume Brothers was the London branch of a Swiss watchmaking firm, Baume Freres, from 1888. The London branch remained small and disappeared before 1913. Otto Monsted was a Danish entrepreneur who built a margarine factory in Manchester in 1889. Monsted's margarine was immediately successful and a second factory followed in London. By 1907 the British subsidiary employed 750. Shortly after, however, control passed to George Watson of the British Maypole chain as part of the restructuring of the British grocery sector. [57]

This survey of all of the pioneer investors suggests that typically they were small, none except Siemens and Singer, ever employing more than a few hundred workers at any time before 1914. Most were also relatively short-lived. The only entrants that arrived before 1880 and survived under the same parent to 1914 were Hoe, Ohlendorff's, Siemens, and Singer. The only pioneer inward investments, therefore, which both survived and grew to employ reasonably large workforces (say over 1,000) were Siemens and Singer. Moreover, as has been outlined above, Siemens' post-1899 expansion was really unrelated to the original investment, which is best seen as something of a failure. Singer emerges as quite unique among these early multinational manufacturers in both its success and longevity in the British market.

The Singer Manufacturing Company

Business historians have emphasized two features that determined the worldwide competitive success of the Singer Manufacturing Company. These were the early substitution of a company controlled sales force for independent agents, and the early push into foreign markets, where similar centrally controlled sales forces were established. [58] This was of critical importance because of the problems associated with the distribution of a complex consumer good. Sewing machine consumers needed model-specific demonstration and after-sales service. Independent agents were not as committed to these features as was the manufacturer. This represented a strong incentive to the company to internalize the channels of distribution. [59]

In the 1850s demand for sewing machines was restricted to a few thousand American clothing manufacturers. It was not until the U.S. Civil War boosted demand for machine-made uniforms that Singer's annual sales exceeded 10,000 machines. [60] Moreover, it was only after the Civil War that the American family market for the machines grew. The impact on sales, however, was immense. The company's annual output of sewing machines increased fourfold from 1866 to 1870. [61] However, it was precisely during this domestic boom that demand for the machines took off in foreign markets.

Singer prevailed over its American rivals in foreign markets. By 1880 Singer sold three out of every four sewing machines in the world. By 1914 Singer had a 90 percent share of all markets outside the U.S. [62] As a result Singer's market capitalization grew rapidly. The total capital employed was $25 million in 1882. Stock market value was $30 million in 1887, reaching $90 million by 1900, and climbing to over $170 million by 1912; it was by then the seventh largest firm in the world. [63]

This remarkable performance was predicated on a global strategy decades ahead of its time. Singer's leading executives created and dominated new markets around the world, not by collusive agreements or anti-competitive practices but through the nurturing and development of the firm's own competitive advantage in marketing and retailing. However, this marketing strategy was dependent on the firm's manufacturing capacity and the ability to deliver machines at the right time, in sufficient numbers, and at competitive prices for foreign consumers with a typically lower disposable income than Americans had. It was Singer's concern with achieving competitive production costs that led to the investment in the Scottish factories.

Singer's immediate rationale for investing in a Scottish factory in the mid-1860s was to protect its sales in the new U.K. market. These were threatened, first by the high U.S. labor costs and, second, by the surge in U.S. domestic demand. During the Civil War the depreciated dollar enabled American producers to earn high profits from foreign sales. Almost $2 million worth of American sewing machines were exported in 1865. However, with "the gradual restoration of that currency to its normal specie value ... the cost of domestic [U.S.] manufacture became too high to enable competition in the world markets," according to Singer's later president Frederick G. Bourne. "Therefore some of the American manufacturers established factories in foreign countries." [64]

British sales, at less than 10,000 machines per annum in the mid-1860s, were just beginning to increase. However, the extraordinary growth in American sales threatened this emerging market. Singer faced serious capacity constraints in its New York factory and yet was eager to meet British demand. It reacted cautiously at first. Small "ad hoc" assembly plants were opened in 1865 in London and Glasgow, followed by a small workshop at Love Loan, John Street, in the heart of the commercial district of Glasgow in the fall of 1867 to assemble imported machine-parts. This "was a very small experimental affair, so as to make it safe to discontinue if it did not succeed" according to Singer's British agent. Nonetheless, it was still seen as "a distribution centre for Europe" being so closely located to one of the world's largest shipping centers, the port of Glasgow. The factory quickly grew, already by the end of 1868 its total assets were valued at over [pounds]50,000. [65]

By 1869 Singer was having difficulties supplying the Glasgow workshop with American components because of the continuing surge in U.S. domestic demand. It was then decided that a new plant should be built in Glasgow to manufacture entire machines. Construction began on what became the first dedicated sewing machine factory in Europe, at James Street, Bridgeton, in Glasgow's East End. This was the key investment by Singer because it committed the American firm to Scotland. Furthermore, with British and European sales accelerating, the new Bridgeton factory was extended in 1871. From the outset the Bridgeton factory supplied all of the British, European, and Empire markets. By 1880 over 2,000 people were employed there producing 5,500 machines a week. It was described by a contemporary as "the largest [factory] in the United Kingdom." [66] Singer's global capacity increased with the opening of a huge new factory in Elizabethport, New Jersey, in 1873, but it with the U.S. market maturing it was the increase in demand outside the United States that fuelled the company's growth.

From 1875 Singer's British agents began increasing sales outlets, moving out of the clothing manufacturing centers to towns and cities, targeting the British family market. Door-to-door canvassing was introduced and was so successful that the British agent was given authority to introduce the system in all foreign markets. Direct selling like this was not a feature of the American retailing operations until after its success had been clearly demonstrated in Britain. As a result British sales grew from 30,000 in 1875 to over 60,000 in 1880. European and Empire sales rose even faster, leading to serious capacity constraints at Bridgeton. [67]

A frequent visitor to Bridgeton commented in 1882 that the factory had "been arranged and rearranged until there is hardly standing room for the workmen--so thickly are they planted together." [68] All non-essential activity was relocated or subcontracted out. A cabinet factory, "a huge building of six floors," was started in nearby Govan Street in 1878 and extended in 1882. Castings and other engineering work were bought in. [69] It became clear that a new factory needed to be built to accommodate the ever-growing demand. The Bridgeton factory simply could not cope. Singer was being "squeezed out" of the premises. Singer planned to build a factory with a capacity to chum out 10,000 machines a week. This was the Kilbowie (later renamed Clydebank) factory. [70]

The Clydebank factory has generally been seen by business historians as taking FDI to a new level in Britain. Mira Wilkins, for example, contrasts the "tentative steps" of 1867 with the "full commitment" of the Clydebank investment implying that this was the key decision in the firm's growth to global dominance. [71] Certainly, it was big. It became the largest sewing machine factory in the world and one of the largest factories in Britain. However, this interpretation sits uncomfortably with the archival evidence. The company records show that senior management was bullish about the project, expressing great confidence in the Scottish factory even before it was built, happy to commit around one-fifth of the company's capital to the project, but there was actually relatively little discussion involved. [72] Discussion was limited to the particularities of site. The absence of any detailed evaluation appears all the more strange when compared to the company's later investment in Russia, which was a long, draw n-out affair involving detailed reports and much procrastination for what was a much smaller investment. [73]

In fact the key decision made by Singer was not the investment in the Clydebank factory, impressive though the outcome was, but the earlier factory at Bridgeton. It was the commitment to manufacture the entire machine there in 1869, reinforced by the doubling of capacity there in 1871, that determined the company's development into a modern multinational manufacturer. This is an important revision to the accepted view. It shows that Singer's key strategic decision came as early as the 1860s as opposed to the 1880s. Singer, alone of the leading American manufacturers, opted to develop a foreign manufacturing base rather than to continue marketing American-made machines after the post-Civil War dollar appreciation. As a result of its Scottish investments, Singer became the dominant global sewing machine producer, overcoming all of its American and foreign rivals. Table 2 and Figure 2 show how significant Singer's Scottish factories were to the firm. [74]

Table 2 suggests four things. First, the level of output gives some indication of the sheer scale of operations at Clydebank. Output grew from 230,000 shortly after opening in 1885, to a peak of 1.3 million machines in 1913. Employment followed--from 3,500 in 1885, to 7,000 around the turn of the century, to almost 15,000 in the summer of 1914. [75] It was one of the largest single-site factories in the United Kingdom.

Second, the importance of the Glasgow factories, and eventually the single Clydebank site, is suggested by comparing the units of output from Scotland with the firm's total output. Column 3, which makes the calculation, shows that even before the Clydebank factory was built the earlier Glasgow factories had already become substantial contributors to total firm output, with almost half of all machines made in the late 1870s coming from the Bridgeton factory. It was the Clydebank factory, however, which dominated Singer's total output after coming on stream in 1883 and 1884 (see Figure 2).

Designed initially as a replica of what was then thought of as the chief factory at Elizabethport, it went on to achieve greater prominence. Half of all the firm's machines were made there during the early 1890s, the other half at Elizabethport. Over half were made at Clydebank after 1898. The Scottish factory's share of total firm output peaked at 57 percent in 1907. Its share declined thereafter, as other sewing machine factories were developed in the United States, Canada, Germany and, in particular, Russia, but Clydebank still remained the largest of all Singer's factories. [76]

Third, the Scottish workers were increasingly producing for foreign (non-U.K.) markets as columns 4 and 5 indicate. From the very beginning the majority of the Bridgeton factory's output was exported, and throughout the factory's life only around one-third of its output was destined for the domestic British market. The rapid growth of the U.K. market in the 1880s ensured a higher proportion of output was sold at home. However, Singer's U.K. sales peaked in 1890. By the late 1890s foreign demand again completely dominated Scottish output. In 1901 three-quarters of Clydebank machines were exported; in 1907 the share was 85 percent, and in 1912, 90 percent. The insignificance of British sales in Singer's Scottish output is quite extraordinary. From the very beginning the company had decided to use Scotland as an export platform.

Fourth, the table reveals that it was the Bridgeton and not the Clydebank investment that was the critical success. The Bridgeton factory appears to have attained a level of production efficiency that the Clydebank factory took many years to match. An approximate estimate of labor productivity emerges from comparing output per worker at the two factories. Thus, the Bridgeton factory before its extension produced almost 17,000 machines with less than 600 workers, or an annual output of less than 30 machines per worker. By 1880, however, 2,000 workers produced over 200,000 machines, and in 1881 and 1882 over a quarter of a million, suggesting a productivity of at least 100 machines per worker.

Production began at Clydebank in 1883, with the full transfer of operations from Bridgeton in the summer of 1884. [77] In 1885, Clydebank's first full year as sole Scottish factory, output was below the 1882 level, yet employment had risen. [78] It was not until 1890 that Clydebank output exceeded Bridgeton's 1882 level, but employment by then was 6,000, suggesting a productivity level of only 60 machines per worker.

The low productivity at Clydebank reflected some serious problems with the factory's organization. Bourne was completely scathing of Clydebank's performance after visiting the factory in 1889, claiming that Clydebank produced poor quality machines at "enormous expense." [79] Elizabeth port employed a quarter less workers in 1888, yet produced at least as many machines. [80] However, Singer's management knew from past experience at Bridgeton that the Scottish factory could be made to work efficiently. Bourne appointed a new head of production in 1890 and things improved quickly. By 1900 the 7,000 workers produced over 600,000 machines, a rate of around 85 machines per worker. Given that Clydebank output was more complex, that the product-mix was more varied than at Bridgeton, this was an impressive rate of output per worker. [81] Clydebank thus went on to become the most important sewing machine factory in the world and so enabled the parent company to dominate the world market. But without the earlier the exp erience at Bridgeton it is unlikely that either the initial commitment or the subsequent attempts to overcome the early problems at Clydebank would have resulted in such a happy outcome.

It was, therefore, the Bridgeton factory that was the key investment and the truly entrepreneurial venture for Singer. The firm's subsequent foreign expansion was dependent on success at the Bridgeton plant. Over the entire period from 1867 to 1914, Singer's Scottish factories produced over 21 million machines, just under half of the firm's total global output from inception to the first world war. Of these, less than five million were sold in the U.K. Singer deliberately developed its Scottish factories to produce for world markets. By 1905 it employed over 60,000 in its worldwide sales force and a further 30,000 in its eight factories on two continents. [82] Despite all of the additional later entrants from the 1880s to the First World War, Singer remained the dominant foreign investor in U.K. manufacturing, with half of all employment at foreign manufacturing subsidiaries in 1914. [83] The impact of this, the largest inward investment in Britain before 1914, on the balance of trade was genuinely significa nt. Britain became the world's leading exporter of sewing machines. [84]

Determinants and Impact of Pioneer FDI in British Manufacturing

The pioneering inward investors in British manufacturing were, on the whole, not particularly successful. The entrants up to 1890 were over-whelmingly targeting the British consumer market, yet this was typically insufficient to guarantee either growth or survival. Colt, North British, Ettlinger, Pullman, and Marion all withdrew early. Anglo-Swiss survived and prospered until its 1905 merger, but within what was, at that time, only a very small niche market. While the survival rate was higher among the few pioneering industrial equipment entrants, growth was circumscribed. Only Siemens Brothers grew to employ over 1,000 British workers prior to 1914 and this, as has been emphasized, was not directly related to the initial investment. The principal conclusion from this survey is that the pioneers, whether targeting the consumer or industrial markets, typically failed. The British market was simply insufficiently well developed for successful FDI prior to the 1890s.

Singer's exceptionality reinforces this assessment. Singer's success was based on a completely different strategy. Singer used its Scottish factories as an export platform to overcome high American labor costs and so to target world markets. Singer was, therefore, the only pioneer whose motive for investment was not to obtain better access to the British market. Rather, Singer developed the Scottish factories because of the factor cost advantages associated with its location. It was the combination of relatively low-cost high-skill labor close to one of the world's leading ports that gave Singer the cost advantages over its American rivals in foreign markets.

This suggests that among the very earliest multinational enterprises the dominant motive was one of market access. It was, however, typically an insufficient motive for success. This is an important finding because business historians have mostly emphasized the technological advantages of early multinationals, yet the results of this survey suggest that this generalization may need to be restricted to the later entrants. [85] The earliest entrants into British manufacturing generally developed manufacturing capacity because of marketing requirements, a point emphasized by Nicholas elsewhere. [86] Concerns with marketing were not restricted to the consumer goods entrants. Siemens entered because London was the center of military and government demand for telegraph cable, and Hoe followed a leading London newspaper's orders.

Singer, however, with its awareness of differences in factor costs, was the only pioneer investor to exploit the location advantages of Glasgow compared to New York. Of course, Singer was also aware of the benefits of the British market and also possessed firm specific advantages in marketing. [87] However, Singer followed a different logic in its Scottish FDI and one that is best explained by the product-cycle theory of the internationalization of manufacturing. Singer developed sewing machine technology at its home base and, once production was sufficiently standardized, was able to relocate much of its manufacturing capacity to a more cost-effective location. [88] Indeed, Singer even planned to import machines from Scotland into the American market once the U.S. tariff was dropped in 1913. [89]

The final conclusion of this survey of the pioneering foreign direct investments in British manufacturing may, in consequence, be something of a surprise. The only pioneer to have had any kind of significant impact on the British economy was Singer, an episode best explained by recourse to product-cycle theory. The irony of this is that in recent years international business scholars have concluded that product-cycle theory is of very little use in explaining trends in the behavior of multinational enterprises in the twentieth century. [90]

Andrew C. Godley lectures at the School of Economics and Business, the University of Reading, UK. He is author and editor of several articles and books on entrepreneurship, culture, and organizational change, including the forthcoming volume Enterprise and Culture: Jewish Immigrant Entrepreneurship in New York and London, 1880-1914.

The author would like to thank the two anonymous referees, Mark Casson, Fred Carstensen, Geoffrey Jones, and Mira Wilkins for their comments. Frankie Bostock and Geoffrey Jones were particularly generous in facilitating access to their data.

(1.) Mira Wilkins, The Emergence of Multinational Enterprise (Cambridge, Mass., 1970); Mira Wilkins, The Maturing of Multinational Enterprise (Cambridge, Mass., 1974); Mira Wilkins, "Comparative Hosts," Business History 36 (1994):18-50; and Fritz Blaich, Amerikanische Firmen in Deutscheland, 1890-1918 (Wiesbaden, 1984).

(2.) John H. Dunning, The Globalization of Business (London, 1993).

(3.) John H. Dunning, American Investment in British Manufacturing (London, 1958), 1736; and Geoffrey Jones, The Evolution of International Business (London, 1996).

(4.) Wilkins, "Comparative Hosts," 20, table 1. The U.S. was also a host economy for significant amounts of market-led inward investment by foreign manufacturing companies, most notably the giant thread manufacturer Coats of Paisley. But this was defensive investment, precipitated by the high American tariff barriers, without which it is unlikely to have occurred. Coats, for example, never exported any of their U.S. manufactured product outside the American market. Moreover, market-led investment represented a very small proportion of total foreign direct investment in the U.S. before 1914, less than 10 percent, in contrast to the U.K. Mira Wilkins, The History of Foreign Investment in the United States to 1914 (Cambridge, Mass., 1989) 129-30, 361-9, and tables 5.9-16, 164-73.

(5.) Frances Bostock and Geoffrey Jones, "Foreign Multinationals in British Manufacturing, 1850-1962," Business History 36 (1994): 96. Also see Geoffrey Jones and Frances Bostock, "U.S. Multinationals in British Manufacturing before 1962," Business History Review 70 (1996): 207-256; and Geoffrey Jones, "Foreign Multinationals and British Industry before 1945," Economic History Review 41 (1988): 429-53.

(6.) Adapted from Bostock and Jones, "Foreign Multinationals," table 3, and including subsequent amendments. See the Figure 1 caption, above.

(7.) Calculated from the database.

(8.) Bostock and Jones, "Foreign Multinationals," and Jones, Evolution, emphasize technological advantages, for instance.

(9.) Wilkins, Emergence; Wilkins, Maturing; John H. Dunning, Multinational Enterprise and the Global Economy (Wokingham, 1993) chap. 4; Peter Buckley and Mark C. Casson, The Economic Theory of Multinational Enterprise (London, 1985) emphasize internalization advantages.

(10.) Wilkins, Emergence, 30, 259; David Hounshell, From the American System to Mass Production, 1800-1932 (Baltimore 1984), 17-25, 46-50, 331-2.

(11.) William Woodruff, The Rise of the British Rubber Industry during the Nineteenth Century (Liverpool, 1958), 1-14, 133-43, 153-4 on J. R. Ford's use of the Scottish Goodyear patent. Michael French, "The Growth and Relative Decline of the North British Rubber Company, 1856-1956," Business History 30 (1988): 396-415 covers post-1869 development.

(12.) William Woodruff, "The American Origins of a Scottish Industry," Scottish Journal of Political Economy 2 (1955): 17-31; Glenn D. Babcock, History of the United States Rubber Company (Bloomington, Ind., 1966), 13-15.

(13.) Woodruff, "American Origins"; Woodruff, Rise, 143,153-4. Sales figures are from Woodruff, Rise, 71, 92-3, 227. Market share calculated from 1860 imports of crude rubber (less re-exports) and assuming that the cost of crude rubber was 25 percent of the firm's selling price. Woodruff, Rise, app. 4, 202-3 for imports, and app. 7,222-4 and esp. 81 for estimated cost of crude rubber out of sales. North British were also exporting rubber goods, so some minor adjustment to their share of the U.K. market would need to be made. See Peter L. Payne, Rubber and Railways in the Nineteenth Century (Liverpool, 1966), 191 on exports of railway springs to India in mid 1870s. Employment in 1861, Woodruff, Rise, 71. Citation from French, "North British," 397,401 citing India Rubber Journal.

(14.) Woodruff, "American Origins," 29-31; Woodruff Rise, 209; Babcock, United States Rubber, 15 (on 1864 withdrawal) and 20-34 on U.S. industry restructuring. Audrey Dannithorne, British Rubber Manufacturing: An Economic Study of Innovations (London, 1958), 49; and French, "North British," on later developments.

(15.) The history of Siemens' British activities is covered by Wilfried Feldenikirchen, Werner von Siemens: Inventor and International Entrepreneur (Columbus, Ohio, 1994); J. D. Scott, Siemens Brothers, 1858-1958 (London, 1958); Georg Siemens, History of the House of Siemens, 2 vols. (Munich, 1957); Sigried von Weiher and Herbert Goetzeler, The Siemens Company--Its Historical Role in the Progress of Electrical Engineering, 1847-1980 (Munich, 1983); and Sigfried von Weiher, Die Englishen Siemens-Werke und das Siemens-Uberseegeschaft in der zweiten Halfte des 19. Jahrhunderts (Berlin, 1990).

(16.) Britain pioneered the development of a telegraph network, Feldenkirchen, Werner von Siemens, 68 and 181 n.3. By 1872 the British state-owned network comprised 100,000 miles of line, the largest public network in the world, see R. Sabine, "Telegraphy" in British Manufacturing Industries, ed. G. Phillips Bevan (London, 1877), 105.

(17.) On underwater cable telegraphy technology see Sabine, ibid., 74-95, repair cost, 94; and Feldenkirchen, ibid., 71-5.

(18.) Feldenkirchen, ibid., 72; Scott, Siemens Brothers, 32.

(19.) Feldenkirchen, ibid., 101; Scott, ibid., app. Also see the plate of the Woolwich factory in von Weiher and Goetzeler, Siemens Company, 31, dated 1866, showing how small it was.

(20.) von Weiher and Goetze1er, ibid., 14-15. Also von Weiher, Englischen Siemens-Werke, 58-61; Scott, ibid., 31-5 and 52 on the disaster; and Siemens, House of Siemens, 41. William Siemens's (Werner's younger brother and the London agent) over-confidence ("ubermut") led to the loss of [pounds]15,000, half of the total capital of Siemens & Halske, von Weiher, ibid., 61. (n.b. Feldenkirchen, ibid., 75 gives the amount lost as [pounds]150,000, but this is surely a typographical error. In 1863 Siemens & Halske employed only 515 in total and had less than half a million marks in sales, or less than [pounds]25,000, ibid., 161, table 1.)

(21.) Feldenkirchen, ibid., 74-9 and 101; von Weiher, ibid., 61, ("treue bruderlicher Verbundenheit" my translation); Scott, Siemens Brothers, 37-9.

(22.) Scott, ibid., 64-5 (on profits) and 68-70; Feldenkirchen, ibid., 123-5 and 137, and on profits 99-105 and 169 table 9. Siemens Brothers developments can be followed through Les Hannah, Electricity before Nationalisation (London, 1979), 7; John F. Wilson, Ferranti and the British Electrical Industry, 1884-1930 (Manchester, 1988), 7, 10-12; Ian C. R. Byatt, The British Electrical Industry 1875-1914 (Oxford, 1979), 2, 17-18 (sales), 21, 3, 47, 143, 194.

(23.) Scott ibid., 71 on the pessimism in the 1890s, and 68-78; Feldenkirchen, ibid., 137; von Weiher and Goetzeler, Siemens Company, 58. Byatt, ibid., 26, 69, 148, and 194.

(24.) Byatt, ibid., 150, 156, and 194.

(25.) Byatt, ibid., 166, table 37 on global sales in 1899; 150, table 32 on Siemens Brothers output. I have assumed 1899 to be the mean of 1896-7 and 1900-1. Siemens imports inferred from German imports of electrical goods (167-8) and the concentration of the German industry (163-6).

(26.) Byatt, ibid., 146-51. The value of Siemens factories in Britain after the third investment was still probably only about 5 percent of Siemens' total assets, which were valued at over [pounds]25 million in 1912, but total employment increased from 963 in 1885 to 4,000 in 1913 Cwhich included non-manufacturing employment in the service of cable-laying). See Christopher Schmitz, "The World's Largest Industrial Companies of 1912," Business History 37(1995), 89; and Feldenkirchen, Werner von Siemens, 162, table 2. Von Weiher gives the capital value of Siemens Brothers as [pounds]600,000 after 1899, Englischen Siemens-Werke, 207-8. Even with generous additions for the value of the new factories, these British assets must have amounted to only around [pounds]1 million by 1912. Les Hannah has recently estimated that the market value for Siemens would have been only about $65m, or just over [pounds]13m. Les Hannah, "La evolucion de las grandes empresas en el siglio XX: un analisis comparativo," Revista de Histo ria Industrial 10 (1996): 119.

(27.) Siemens Brothers managed a return on capital of 6 to 7 percent from 1896 to 1913, higher than the India Rubber and Gutta Percha, but Lower than Henley and Glover, the other principal manufacturers of telegraph cable. Returns in power cable were at least 10 percent. Byatt, ibid., 136-76.

(28.) Bostock and Jones, database, subsidiary reference no. s/00078. On the economics of fashion demand see, Andrew Godley, "Immigrant Entrepreneurs and the Emergence of London's East End as an Industrial District," London Journal 21 (1996): 38-45; and Godley, "Credit Rationing among small-firm networks in the London and New York garment industries," in Interfirm Networks, ed. Anna Grandori (London, 1999).

(29.) Dunning, American Investment, 18-19; Bostock and Jones, database, subsidiary reference no. s/00747. Employment estimate of 50 in 1885 and 1914 (Table 1) is at the upper end of the likely range.

(30.) The principal studies of Singer are: Wilkins, Emergence, 37-47; Fred V. Carstensen, American Enterprise in Foreign Markets: Studies of Singer and International Harvester in Imperial Russia (Chapel Hill, 1984); Robert B. Davies, Peacefully Working to Conquer the World: Singer Sewing Machines in Foreign Markets, 1884-1920 (New York, 1976); and Hounshell, American System, chaps. 2 and 3. That the Scottish factory was the largest sewing machine factory in the world can be seen from the relative output figures in Table 2 below. The only other comparable factory was Singer's American factory at Elizabethport, N.J. That Clydebank was also "one of the largest manufacturing concerns in Great Britain" was a claim made by the Company's President, Douglas Alexander, in 1906 and cited by Davies, ibid., 197.

(31.) The importance of the British-based activities is emphasized by all of the company's historians, but newly deposited records in the Singer Manufacturing Company archives held at the State Historical Society in Madison, Wisconsin, as well as hitherto unpublished material held at the Clydebank District Libraries, Central Library and at the archives of the Business Records Centre, University of Glasgow, considerably augment the evidence on Singer in Britain. References below to material from the Singer Archives at the SHSW, Madison, follow the recently adopted classification system: the box number is listed first, followed by the folder number for all manuscript documents. Also the microreels held at the SHSW, Madison, are listed by their serial number. The records held at Clydebank Central Library are relatively few and are individually referenced here. For example, the figure for employment in the U.K. retailing organization for 1914 comes from a company brochure, "Where Singer Sewing Machines are made in Great Britain," (nd., c.1914) held in a box file with other press cuttings and company publications (hereafter Clydebank box file).

(33.) Richard Roberts, Schroders: Merchants and Bankers (Basingstoke, 1992), 86-91.

(32.) Wilkins says it was "the first American international business" (Emergence, 37); Davies also calls it "the United States' first international company" (Peacefully Working, v); but Carstensen puts the company in global perspective with the claim that the Singer Company was, "perhaps the first modern multinational enterprise of any nationality" (American Enterprise, 2), a claim completely endorsed here.

(34.) W. M. Matthew, The House of Gibbs and the Peruvian Guano Monopoly (London, 1981); Matthew "Peru and the British Guano Market, 1840-1870," Economic History Review 3 (1970): 112-28; and Roberts, ibid., 87-8.

(35.) Roberts ibid., 51 and 86-8; and Matthew, Gibbs, 30.

(36.) Roberts, ibid., 87-90. The only history of Ohlendorff & Co.'s British subsidiary is a short, unpublished manuscript, "The Anglo Continental Guano Works Ltd," (no pagination, no date) held in the Fisons' archive at the Suffolk Record Office, Ipswich. It was probably written by a company employee at the time of the company's acquisition by Fisons in 1937.

(37.) "Anglo Continental"; Roberts, ibid., 90 and plate 35. For fertilizer developments see Matthew, "Peru"; Jimmy M. Skaggs, The Great Guano Rush: Entrepreneurs and American Overseas Expansion (Basingstoke, 1994), 139-57; L. F. Haber, The Chemical Industry during the Nineteenth Century (Oxford, 1958); and Robert G. Greenhill and Rosy Miller, "The Peruvian Government and the Nitrate Trade, 1873-1879" Journal of Latin American Studies 5 (1973): 107-31.

(38.) "Anglo Continental"; and Roberts, ibid., 90 and n. 35, 564.

(39.) Roberts ibid., 90-1; Matthew, "Peru," 122-3; and Greenhill and Miller, "Peruvian Government," table 2, 111 on guano exports to Britain and 112.

(40.) Greenhill and Miller, "Peruvian Government," 123-5.

(41.) Roberts, ibid., 91, 110, 128; Greenhill and Miller, "Peruvian Government"; "Anglo Continental"; and L. F. Haber, The Chemical Industry 1900-1930: International Growth and Technological Change (Oxford, 1971), 117.

(42.) Employment for 1885 and 1914 inferred from "Anglo Continental" and Haber, ibid. 117.

(43.) Nestle and Anglo-Swiss Holding Company Ltd., This is Your Company, (privately published by the company, New York, 1946); and J. Heer, World Events 1866-1966: The First Hundred Years of Nestle (privately published, Lausanne, Switzerland, 1966) are the two company histories. Your Company, 1-2; and World Events, 28-9, 38-9 and 56 on origins.

(44.) Your Company, 35-9 on technology; World Events, 28-9, 38-9 and 56.

(45.) Your Company, 2 on motives for investment and new plants; World Events, 56-8, 64 and 65-6 on U.K. output.

(46.) Employment for 1885 and 1914 estimated from World Events, (total employment of 400) 71, (Swiss employment over half) 72, (Aylesbury factory) 67, and there was also a factory in Bavaria, 65.

(47.) Your Company, 61-4. A fourth condensery, at Staverton, was opened in 1897. Nestle also had one British condensery so total U.K. labor for 1914 was a little higher than for 1885, around 200 (not reported in Table 1 because of the change in ownership). The period of rapid growth was after after 1918. By 1939 the U.K. subsidiary employed 4,365, Your Company, 64; and World Events, 72-104.

(48.) Red Book of Commerce (London, 1907); Bostock and Jones, database, subsidiary reference no. s/00111. 1885 employment estimate of 50 (Table 1) at the upper end of the likely range.

(49.) Julian Morel, Pullman: The Pullman Car Company--Its Services, Cars end Traditions (Newton Abbot, 1983), citation 23.

(50.) Morel, ibid., 23-5 and passim; G. Behrend, Pullman in Europe (London, 1962), 33-35.

(51.) Morel, ibid., 23-44.

(52.) Red Book of Commerce (London, 1907); Scott Fletcher and Andrew Godley, "Foreign Direct Investment in British Retailing, 1850-1962," Business History 42 (2000): forthcoming. Employment estimate of 20 (Table 1) for 1885 for manufacturing employment only and at upper end of likely range.

(53.) Dunning, American Investment; Bostock and Jones, database, subsidiary reference no. s/00409. Employment was 20 shortly after World War II and has assumed to have been stable beforehand, John H. Dunning, "U.S. Direct Investment in U.K." (unpublished ms. and database, University of Reading archives, 1955).

(54.) Wilkins, Emergence, 59; Red Book of Commerce (London, 1907 and 1933). Employment estimates (Table 1) at upper end of likely range.

(55.) Robert Jones and Oliver Marriott, Anatomy of a Merger: A History of GEC, AEI and English Electric (London, 1970). Employment estimate (Table 1) at upper end of the likely range.

(56.) Bostock and Jones, database, subsidiary reference no. s/00239.

(57.) Bostock and Jones, database, subsidiary reference no.s s/00080 and s/00159; Fletcher and Godley, "FDI in British retailing"; and Andrew Godley, "The Development of the Clothing Industry: Technology and Fashion," Textile History 28 (1997): 6,7.

(58.) Alfred D. Chandler, Jr., The Visible Hand (Cambridge, Mass., 1977): 302-5, 402-6, is the best summary of the thesis, although dependent upon Davies, Peacefully Working. See also Andrew B. Jack, "The Channels of Distribution for an Innovation: The Sewing Machine Industry in America, 1860-1865," Explorations in Entrepreneurial History 9 (1957).

(59.) Red 'S' Review (Singer's in-house corporate magazine published from Sept 1919, copies held in the Clydebank Central Library): various issues, on the importance of after-sales service and demonstration; this is also rightly emphasized by Carstensen, American Enterprise, in the Russian context. Oliver E. Williamson emphasizes the importance of demand externalities in "The Modern Corporation: Origins, Evolution, Attributes," Journal of Economic Literature 19 (1981): 1537-68.

(60.) Davies, Peacefully Working, on early competitors, 5-15 and 54-5; also Hounshell, American System, chap. 2; and Frederick C. Bourne, "American Sewing Machines," in One Hundred Years of American Commerce, ed Chauncey M. Depew (New York, 1968, orig. 1895), 530.

(61.) See Table 2 on Singer's annual output. Also Bourne, ibid., 530-6 on U.S. output and limited exports. On the characteristics of the early U.S.-market and post Civil War change see Davies, ibid., 19 (branches in manufacturing centers), and 21-2 (productivity gains to industry); also Carstensen, American Enterprise, 5; Hounshell, ibid., 87, fig. 2.11; (on early technology) Ross Thomson, The Path to Mechanized Shoe Production in the United States (Chapel Hill, N.C., 1989), 73-117; and Jack, "Channels," 124-8, 134; Andrew Godley, "Comparative Labour Productivity in the British and American Clothing Industries, 1850-1950" Textile History 28 (1.997): 67-80.

(62.) Figures for U.S. and World markets are given in Bourne, ibid., 530; Davies, ibid., 161-2; and, for 1914, Carstensen, ibid., 71.

(63.) In 1882 the firm's total capital employed was "more than five million pounds sterling," Report of the Proceedings on the Occasion of Breaking Ground for the Singer Manufacturing Company's New Factory, May 18th 1882 (pamphlet privately published by the firm, Glasgow, c. 1882, copy held in Clydebank Central Library), 23 (and 35). 1887 see Davies, "'Peacefully Working to Conquer the World:' The Singer Manufacturing Company in Foreign Markets, 1854-1889," Business History Review 43 (1969), 321 (which may have made it the largest industrial firm in the world in the late 1880s); and 1900 see Davies, Peacefully Working, 108-9. For 1912, see Schmitz, "World's Largest Industrial Companies."

(64.) Bourne, ibid., 535. Also, Wilkins, Emergence, 41-2. It is not known what other U.S. firms Bourne was referring to.

(65.) London and Glasgow "ad hoc" assembly operations in 1865 in Davies, Peacefully Working, 43. The 1867 Glasgow factory is best covered in Breaking Ground, 20-1 (cit. 21) and 32-4; and Red 'S' Review (1922): 717 ("distribution centre"). Also see Davies, ibid., 42-5; Carstensen, American Enterprise, 24-5; and Wilkins, ibid., 41-2. U.K. sales from Andrew Godley, "Singer in Britain: The Diffusion of Sewing Machine Technology and its Impact on the Clothing Industry in the United Kingdom, 1860-1905," Textile History 21 (1996): 59-76. Total assets in 1868 were $262,559.89, or [pounds]54,021; Wilkins, ibid., 42.

(66.) On the early Glasgow factories from 1867 to 1871 see Red 'S' Review (1922): 716-7, 740-1, 764-5; Hounshell, American System, 93-5, 356, n. 78; and Davies, ibid., 46-7 where the source of the citation is given. Also see Red 'S' Review (Sept. 1930): 3340, a reprint of a speech given in 1870 by Alexander Anderson, the then Glasgow factory manager, on the early factories. See Table 2 sources for breakdown of Bridgeton's output, and the correspondence between the German agent and Head Office, Box 84, folders 1-3. The cost of the original Bridgeton Street factory was $90,000. Also see Anderson's short speech in Breaking Ground, 33-4. lain Russell and Michael McDermott, "The Sewing Machine--The Singer Factory," in The History of Clydebank, compiled by John Hood (Glasgow, 1988), 15 for 1880 employment. They suggest that Bridgeton was not completed until 1873 but this must refer to the extension.

(67.) Carstensen, American Enterprise, 19-20; Godley, "Singer in Britain"; Andrew Godley, "The Development of the U.K. Clothing Industry, 1850-1950," Business History 37 (1995); and Godley, "Jewish Soft Loan Societies in New York and London and Immigrant Entrepreneurship, 1880-1914," Business History 38 (1996): 104-5.

(68.) Breaking Ground, 8. On Elizabethport, see Red 'S' Review (1946), 7013; and A Century of Sewing Service (pamphlet, privately published by the firm, n.d. c.1914, Clydebank box file).

(69.) Cabinet Factory at Govan Street, see Red 'S' Review (1922): 740. Bonnybridge castings see Davies, ibid., 45, and George Ure, Breaking Ground, 8. Coatbridge engineers see Engineering 35 (1883): 41; and capacity see The Glasgow News, 24 July 1883, 2, both in Clydebank box file.

(70.) On the Kilbowie decision see Davies, ibid., 78-81; Carstensen, American Enterprise, 32 ff.; Wilkins, Emergence, 44-5; and Russell and McDermott, "The Sewing Machine," 15-18. Citation from North British Daily Mail, 10 July 1885; and The Glasgow News, 24 July 1883, 2 on planned capacity, both in Clydebank box file.

(71.) Wilkins, ibid., 44.

(72.) Kilbowie was a small village in what, in 1886, became the burgh of Clydebank. The factory assumed the name of the burgh a few years later (c. 1900), Russell and McDermott, "Sewing Machine," 19. The only data on the value of investment at Kilbowie/Clydebank comes from fragments in the archives reported by Wilkins, Emergence, 44 and 261 n. 27 ($868,264 in Feb. 1883 for, seemingly, costs of building); and by Davies, Peacefully Working, 78-9, 351 n. 62 ($67,000 for the land and $2,013,600 in Dec. 1883 for the cost of contractors). Adding all three 1883 figures together probably gives a reasonable figure for the cost of land, bricks and mortar and building, coming to almost [pounds]600,000. (Iain Russell, Sir Robert McAlpine and Sons Ltd. The Early Years [Glasgow, 1989], says that McAlpine--the principal contractor--was paid [pounds]300,000 to [pounds]350,000 for erecting the factory, 41). But this does not include any of the machinery, which was mostly built in-house and is impossible to price, but which p robably exceeded the value of land and buildings. For the 1867 assembly shop relatively little was needed. For Bridgeton in 1869 machine tools were shipped over from New York, Breaking Ground, 33-4. For the later factories most machinery was made on-site. See North British Daily Mail, 10 July 1885; and Hounshell, American System, 94-6 and 120-1. There is no extant archival data on the total subsequently invested in the extensions and electrification of the Clydebank factory from 1904 to 1914, except that McAlpines received a total of [pounds]775,000 for all Clydebank building work to 1919, implying that at least [pounds]400,000 of building work took place from 1904 to 1918, when capacity was more than doubled, Sir Robert McAlpine & Sons, McAlpine Contracts (privately published, Glasgow?, n.d. 1919). It is likely that the (undepreciated) value of Singer's investments exceeded [pounds]1 million by 1884 and [pounds]2 million to [pounds]3 million by 1914.

(73.) For example, Vice-President McKenzie, "not much doubt about the new factory being a success" in Breaking Ground, 31. In the company records the debate was limited to particularities of site. McKenzie reported to President Clark "that we were open to receive tenders for eligible sites. As a natural consequence we have received quite a lot of proposals from every quarter in and around Glasgow." "The only question which seems to perplex me is that of labor," he added. It was important to retain as many of the original workers as possible because the fit-and-finish production methods required considerable skill and dexterity. McKenzie was afraid that he would "have difficulty in getting the people to go any considerable distance out of Glasgow," 10.5.1881, Box 94/1. Rail links were unsatisfactory between Clydebank and Glasgow at this time. The Company was evidently committed to the Glasgow area, but McKenzie appears to have decided on Clydebank/Kilbowie only after June 1881. The problem of bringing workers out of Glasgow continued to dog him until then and a large plot of land seen in Paisley, with appropriate rail and river links, he thought would be very suitable because "it has this advantage over Kilbowie that in Paisley we should experience no difficulty in drawing whatever labour we require," McKenzie to Clark, 11.6.1881, Box 94/1. However, Kilbowie was preferred and by the following spring the "location for the various buildings has been practically settled" and McKenzie was very enthusiastic, "[t]he business looks admirable here. I am very much gratified and encouraged," McKenzie to Clark, 31.3.1882, Box 94/4. For the Russian investment see Carstensen, American Enterprise, 28-39.

(74.) Hounshell, American System, 93, suggests that Clydebank was chosen on the basis of the low cost of docile labor (as well as good shipping facilities) on the apparent authority of Davies, Peacefully Working. But Davies is much more equivocal and the source of McKenzie's alleged comment on the cheapness and docility of Glasgow labor would seem dubious-- it was to an official inquiry in New Jersey in 1885 and it is impossible to know what was top of McKenzie's agenda in his responses. Glasgow labor was certainly not cheap within Britain and had no reputation for docility, see E. H. Hunt, Regional Wage Variations in Britain, 1850-1914 (Oxford, 1973), chap. 1. Although, of course, it was considerably cheaper than American labor. In 1888 the Clydebank workforce received $5 per week, 40 percent of the average weekly wage of Elizabethport workers, who received nearly $13 per week. See Andrew Carnegie letter to Singer Sewing Machine Company, 13 Feb. 1888, and attached newspaper clipping, Box 63/1. I am indebted to Kristine Bruland for this source.

(75.) Employment in 1885 was "between 3,000 and 4,000," North British Daily Mail (10.7.1885, Clydebank box file). For 1900, see S. Saul, "The Market and Development of the Mechanical Engineering Industries in Britain, 1860-1914," Economic History Review 20 (1967): 124. Singer's weekly payroll was 14,437 at the Scottish factory in the summer of 1914. This Probably does not include salaried employees, so that the true figure was close to 15,000.

(76.) Clydebank was initially a replica of Elizabethport, even using the same architect, and Elizabethport was still referred to as the "chief factory," Breaking Ground, 4. By the 1890s, the two factories were "equal in capacity," Bourne, "American Sewing Machines," 535. Most other factories did not produce sewing machines, only stands. The Canadian factory, at Montreal, was established in 1883 but remained small. Between 1904-06 it produced only 2 percent of the finn's total output, See Hounshell, American System, 117-8; and Comparative Factory Shipments, 1904-06, 10.1.1907, Box 107/3 (it made 33,107; 34,482; and 34,749 machines per annum respectively). The German factory was small and was not listed as producing any machine-heads between 1904-06. The Russian factory at Podolsk produced its first machines in 1905--5,430--and its first significant number in 1906--42,322 or 2.2 percent of total firm output. Comparative Factory Shipments, 1904-06, 10.1.1907, Box 107/3. There was also an Austrian factory, which just produced stands, and, after Singer acquired Wheeler and Wilson, a second sewing machine factory contributed to the firm's American output after 1906.

(77.) There is some confusion over the Clydebank start date: Russell and McDermott suggest that it opened in the summer of 1885, "six months ahead of schedule," "Sewing Machine," 18; Davies, Peacefully Working, 79, suggests late spring 1885. I assume these were errors. Work commenced in 1882, after the ceremony reported in Breaking Ground. Moreover, "Commercial Glasgow" in Glasgow and its Environs, author unknown, (Glasgow, 1891), 42, Clydebank box file, confirms that work commenced in 1882 and was completed by 1884; Red 'S' Review (1922): 740, "From James Street and Govan Street the factories were transferred to Kilbowie in 1884," although in two stages, with work beginning at Clydebank already in 1883 according to A Century of Sewing Service, 5.

(78.) For 1885-7 some sources refer to "planned" employment reaching 5000 at Clydebank, for example, 1885, A. Dorman, "A History of the Singer Company (U.K.) Ltd.," (unpublished bachelor's thesis, University of Glasgow, 1972), n.p. (I am indebted to Professor Fred Carstensen for sending me a copy of this valuable source); 1886, Russell and McDermott, ibid., 18; and 1887, Davies, ibid., 79-80. But actual employment must have fallen short. Employment was only "between 3000 to 4000" in the summer of 1885 (North British Daily Mail, 10.7.1885, Clydebank box file).

(79.) Davies, Peacefully Working, 121, citing Bourne. Hounshell, American System, 119-21, also refers to early problems at Clydebank.

(80.) Elizabethport employment calculated from Carnegie to Singer, 13 Feb. 1888, Box 63/1. The weekly payroll there was $35,000 and mean pay was under $13, giving 2,700 workers. Unfortunately, Elizabethport and Clydebank output for 1888 is a crude estimate, table 2.

(81.) Davies, Peacefully Working, 121. Another source confirms the drive to productive efficiency at Bridgeton. A cost account ledger from the Bridgeton factory, held at the Clydebank Central Library, lists the annualized costs of components for all of the different models manufactured at the Bridgeton factory. The most popular model by far was the New Family, only 5 percent of Bridgeton output between 1871 and 1881 was of non-Family models. In 1871 the New Family's component costs were [pounds]149.73 per hundred machines. The 1872 and subsequent accounts excluded some of the labor charges included with the 1871 calculation so that the first year may not be strictly comparable with later ones. The 1872 cost certainly fell dramatically to [pounds]101.62 per hundred machines, however, the component costs continued to fell, in 1873 to [pounds]97.20, in 1874 to [pounds]91.35, and in 1875 to [pounds]85.62. Costs increased in 1876 but fell to a new low of [pounds]83.64 in 1877, increased again in 1878 before falli ng very quickly to [pounds]74.76 in 1879, [pounds]69.37 in 1880 and [pounds]65.13 in 1881. Component costs had fallen by more than 35 percent in the nine years from 1872. As output increased so component costs fell. The coefficient of correlation between growing output and falling unit costs from 1872 to 1881 is .9325. The implication appears to be clear. The company's factory management at Bridgeton were learning about and exploiting very significant economies of scale.

(82.) A Century of Sewing Service, 9; and Davies, Peacefully Working viii, 140.

(83.) There were by 1914 perhaps as many as 150 foreign firms engaged in manufacturing in the U.K., see Bostock and Jones, "Foreign Multinationals," 95. Dunning estimated the total of U.K. employees of U.S. manufacturing affiliates in 1914 as 12,000-15,000, (incorporating an estimate of Singer's Scottish factory employment of 7,000) which is obviously woefully short, American Investment, 36. The estimate here of Singer's U.K. employment as half of all employment in foreign manufacturers' U.K. affiliates is based on Dunning's upper figure for non-Singer U.S. affiliates (say 8,000--Dunning thought that there were about 70 U.S. branches in 1914, which is confirmed by Jones and Bostock, "U.S. Multinationals," 213-5) and an estimate of some 7,000 employees from the 70 or so manufacturing subsidiaries of non-U.S. firms identified by Bostock and Jones, the three largest of which employed less than 4,000 in aggregate, "Foreign Multinationals," 97-9. Most subsidiaries were very small.

(84.) Materials sourced from outside the factory were from British companies like John Dewhurst's of Skipton and John Clark's of Paisley who supplied the enormous amount of thread required. On the competition between thread suppliers see McKenzie to Clark, 11.6.1881, Box 94/1; and Woodruff to McKenzie, 3.8.1881, Box 94/1. On Dewhurst see Red 'S' Review (1921): 438-9 on the Skipton factory. The only inputs imported from America were the wooden units for the unveneered cabinets, Bourne, "American Sewing Machine," 535, Singer's cabinet making facility was concentrated onto one site, South Bend, Indiana, and output exported in a pre-finished state to Clydebank and elsewhere. See Hounshell, American System, 136-44. American export figures unfortunately include Singer's wooden cabinets with sewing machines, so that any kind of substitution effect from the Scottish investments is not easily discernible from the official sources, Bourne, ibid., 536-7. By 1914 exports were worth [pounds]2.5 million, Dunning, American Investment, 18.

(85.) Bostock and Jones, "Foreign Multinationals"; and Jones, Evolution, for example.

(86.) Stephen Nicholas, "British Multinational Investment before 1939" Journal of European Economic History 11 (1982); and Nicholas, "Agency Contracts, Institutional Modes and the Transition to Foreign Direct Investment by British Manufacturing Multinationals before 1939" Journal of Economic History 43 (1983): 675-86.

(87.) John H. Dunning, Multinational Enterprise and the Global Economy (Wokingham, 1993) chap. 4; Buckley and Casson, Economic Theory.

(88.) Raymond Vernon, "International Investment and International Trade in the Product Cycle," Quarterly Journal of Economics 80 (1966).

(89.) Davies, ibid., 162-3; Carstensen, American Enterprise, 89.

(90.) J. Cantwell, "The Globalisation of Technology: What Remains of the Product Cycle Model," Cambridge Journal of Economics 19 (1995).
       FDI (Foreign Entries) in British Manufacturing, 1850 to 1914
                      (Annual Entry Rate per Decade)
1850s   0.3
1860s   0.4
1870s   0.5
1880s   0.6
1890s   3.0
1900s   7.7
1910-14 7.2


Source: Adapted from Bostock and Jones, "Foreign Multinationals," table 1. Jones and Bostock kindly made their original database available to the author. The details of this database can be found in G. Jones, "End of Award Report," award number R000232275, ESRC 1996. The author has made some minor amendments to the original data which have the effect of altering the reported entry figures here from Bostock and Jones, "Foreign Multinationals." For example, Babcock and Wilcox, originally thought to have entered in the 1880s, is now no longer included as it was not a case of FDI. (See K. Bruland, "The Babcock and Wilcox Company: strategic alliance, technology development and enterprise control, 1860-1900," in From Family Firms to Corporate Capitalism: Essays in business and industrial history in honour of Peter Mathias, eds. Kristina Bruland and Patrick O'Brien [Oxford, 1998]). Also, subsequent research has identified an earlier entry date (in the 1870s rather than the 1880s) in one case, and two new cases of FD I in the 1900s (a German vending machine manufacturer and an American piano manufacturer). Access to the original database has allowed the 1910-19 decade to be separated into pre- and post-war entrants (cf. Bostock and Jones, table 1), and the entry rate for the period 1910-14 was calculated by dividing the thirty-three entries by four years (1910-13) and the seven months of 1914 before the declaration of war.
            Pioneering FDI in British Manufacturing, 1850-1889
                                    Exit                       Labor Labor
        Firm          Home Entry (pre-1914)      Product       1885   1914
        Colt          U.S. 1853     1857        Revolvers        *     *
North British Rubber  U.S. 1856     1864     Rubber Footwear     *     *
     Siemens [1]       D   1858      N       Telegraph Cables   963   4000
      Ettlinger        F   1865    1913?       Costume Fans    c.50    *
         Hoe          U.S. 1867      N       Printing Presses  c.50   c.50
       Singer         U.S. 1867      N       Sewing Machines   3500  14,800
    Ohlendorff's      D/F  1872      N          Fertilizer     c.150 c.150
Anglo-Swiss Condensed
      Milk [2]         CH  1872     1905      Condensed Milk    150    *
Jacquemin (JB) Bros.   F   1873    1913?      Manufacturing
                                                Opticians      c.50    *
  English Condensed
      Milk [2]         CH  1874     1905      Condensed Milk     *     *
     Pullman Car      U.S. 1874     1880    Railway Carriages    *     *
       Marion          F   1875     1913    Photographic Paper c.20    *
   Alcock Products    U.S. 1880      N         Proprietary
                                                Medicines      c.20   c.20
 Westinghouse Brake   U.S. 1881      N          Air Brakes     c.50  c.200
   Edison & Swann                             Electric Light
United Electric Light U.S. 1883     1893       Installation    c.50    *
 Chilworth Gunpowder   D   1885    1901?        Explosives       *     *
   Baume Brothers      CH  1888    1913?         Watches         *     *
   Monsted (Otto)      DK  1889     1910        Margarine        *     *


Notes:

(1.)Includes all service sector employment (cable-laying) as well as manufacturing.

(2.)Anglo-Swiss and English Condensed Milk employment combined.

Key: D = Germany, F = France, CH = Switzerland, DK Denmark. ? = No longer present by this date, but exact exit date not known.

(*.)= not applicable.

Sources: See text below.
                       Singer in Britain, 1851-1914
                                       Scottish               U.K. Sales
Year  Total Frim Out-   Total Scottish Share of  Total Sales out of Scot-
     put, all factories     Output     Firm Out- in the U.K. tish Output
                                        put (%)                  (%)
1851          800
1852          800
1853          810
1854          879
1855          883
1856        2,564
1857        3,630
1858        3,594
1859       10,953
1860       13,000
1861       16,000
1862       18,396
1863       20,030
1864       23,632
1865       26,340
1866       30,960
1867       43,053              185        0.4           2560      -
1868       59,629            7,669        7.8           2720     35.5
1869       86,781           11,638       13.4           2680     23.0
1870      127,833           16,923       13.2    [840.sup.o]      -
1871      181,260           41,209       22.7         10,900     26.5
1872      219,758           56,799       25.9         18,200     32.0
1873      232,444           59,048       25.4         19,300     32.7
1874      241,679           83,330       34.5         24,800     29.8
1875      249,852          100,124       40.0         30,300     30.3
1876      262,316          111,189       42.4         35,800     32.2
1877      282,812          132,603       46.9         41,300     31.2
1878      356,432          163,777       46.0         46,800     28.6
1879      431,167          178,089       41.3         52,300     29.4
1880      538,609          218,337       40.5         62,252     28.5
1881      561,036          252,288       45.1         67,417     26.7
1882      603,292          257,344       42.7         79,815     31.0
1883      600,000          233,292       40.0         85,936     36.8
 1884    500,000    210,407         91,411 43.5
 1885    500,000    231,941         88,732 38.3
 1886    500,000    199,841         82,412 41.2
 1887    500,000    139,000         91,217
 1888    500,000    185,000         98,547
 1889    625,000    231,000        127,266
 1890    750,000    373,781   50   150,008 40.1
 1891    769,000    401,004   50   145,901 36.4
 1892    788,000    401,291   50   146,561 36.5
 1893    806,000    387,983   50   138,589 35.7
 1894    825,000    451,119   50   146,452 32.5
 1895    845,000    437,636   50   143,334 32.8
 1896    863,000    440,561        133,442 30.3
 1897    881,000    451,946        133,408 29.5
 1898    900,000    473,804   53   139,767 29.5
 1899    990,000    546,844        165,549 30.3
 1900  1,080,000    600,534        164,980 27.5
 1901  1,170,000    626,822        155,358 24.8
 1902  1,183,607    633,397 53.5   150,936 23.8
 1903  1,329,886    735,274 55.3   136,622 18.6
 1904  1,510,284    798,877 52.9   130,290 16.3
 1905  1,665,928    887,602 53.3   142,659 16.1
 1906  1,899,555  1,040,450 54.8   168,737 16.2
 1907  1,933,194  1,100,086 56.9   163,976 14.9
 1908  1,781,590    830,192 46.6   128,396 15.5
 1909  1,901,430    963,536 50.7   136,349 14.2
 1910  2,019,217    953,538 47.2   130,726 13.7
 1911  2,109,600    931,381 44.2   129,173 13.9
 1912  2,326,956  1,158,027 49.8   137,654 10.6
 1913  2,510,652  1,301,851 51.8   142,026 10.9
 1914  2,185,104  1,093,228 50.0   138,703 12.6
TOTAL 43,400,227 21,141,017      4,935,301


Sources for Table 2: Total Annual Output, all factories. 1851-2: Thomson, Mechanized Shoe Production, 93; 1853-76: Bourne, "American Sewing Machines," 530; 1877-1879: Hounshell, American System, 89, table 2.2; 1880: Company advertising, c. 1881, listing annual sales for 1870-80 inclusive (which confirms Bourne and Hounshell), Box 108/3; 1881 and 1882: The Glasgow News, 5 Feb. 1883, Clydebank Box File. 1883: calculated from Hounshell, American System, 116; 1890: "Commercial Glasgow" (Clydebank Box File), 43 (Davies, Peacefully Working, 100, gives 800,000, but the contemporary source preferred); 1898: Company advertising c. 1898, Box 108/3; 1902-1903 and 1907-1913: Sales data from Treasurers Office, World Reports, 1902-41, Microreel AP93-0444, unprocessed acquisition, Singer Archives, SHSW, Madison; 1904-6: "Comparative Factory Shipments," 10 Jan. 1907, Box 107/3; 1914: Carstensen, American Enterprise, 244, n. 1.

Other years are missing and the figures reported here are all straight-line interpolations, except for the 1884-9 series, which is non-linear because of Carstensen's description of a fall in sales after 1882/3 until the mid-late 1880s, American Enterprise, 32. This is partially confirmed by a fall in U.S. exports of sewing machines of one-third from 1884 to 1889, Bourne, "American Sewing Machine," 536-7. Bourne also implies that 1890s sales were more constant saying that the two factories had each "produced about 400,000 annually during the past four years" to 1895, 535.

Some sort of check on the validly of these estimates comes with the claims in the 1890s that a grand total of 13.25 million machines had been made by the company from 1853 to 1 Oct. 1895 (Bourne, "American Sewing Machine," 535), and that over 14 million machines had been made by the company by 1898 ("Company advertising," c. 1898, Box 108/3). The total in this table from 1853 up to and including the third quarter of 1895 was 13.0 million, and up to 1897 was 14.0 million, and including 1897 was 14.9 million. Thus the estimates are likely to be reasonably accurate in aggregate.

Total Annual Scottish Output. 1867-1914: A. Dorman, "A History of the Singer Company (U.K.) Ltd.," (unpublished bachelor's thesis, University of Glasgow, 1972), table of sewing machines shipped, 1867-1943, n.p. app. Dorman gives a slightly different version earlier in the thesis, which is cited by Russell and MacDermott, "The Sewing Machine," 20, but this does not give a figure for 1910 and gives slightly different totals for 1877 and 1893. Neither of Dorman's lists give estimates for the years 1887-89. For these three years the aggregate was estimated from Bourne, "American Sewing Machine," 535, which gives a total of foreign manufactured machines to 1 Oct. 1895 as 5,877,000. Total Scottish output from Dorman to third-quarter 1895 is 5,322,780, leaving a balance of 554,220. The individual figures listed here for 1887-89 are the closest fit to the aggregate, allowing for a general upward trend. Davies, Peacefully Working, 79-80, 121, gives estimates for 1887 and 1890, but these are substantially higher than t he Dorman series would lead one to expect, at 500,000 and 525,000 respectively (see notes to column 3 below). The 1904-06 series is confirmed by "Comparative Factory Shipments," 10 Jan. 1907, Box 107/3. The 1905-14 series is confirmed by P. Payne, "Singer Manufacturing Co. Ltd," (unpublished ms., 1961, University of Glasgow, Archives, Business Records Centre) which gives slightly different annual figures for "machines inspected" but which aggregate up to 100.7 percent of the Dorman figure.

Scottish Share of total firm output. Column 2 divided by column 1. Using Davies' estimates for 1887 and 1889 (see notes to column 2 above) Clydebank's share of the total becomes 74 percent and 69 percent, which is too high. Where the figures for the two series are exact, the share is given to one decimal place. Where the value from either series is an estimate, the share is given to the nearest integer. For 1891-5 a half share has been listed because of Bourne's 1895 statement that the two factories "are equal in capacity ... and have produced about 400,000 machines annually during the past four years," ibid., 535.

Total U.K Sales. 1867-79: Estimated from Results of Business (Branches), Annual, 1867-73, Micro 2002, reel 16, segment 5, and from Results of Business (Branches), Annual, 1879, Micro 2002, reel 17, segment 1; 1880-1905: Company sales data, given in Godley, "Development," 58, table 6; 1906-13: London, GB Agency, Sales, 1900-13, Microreel P92-8957, Singer Archives, SHSW, Madison; 1914: Calculated from London Agency sales, total merchandise, 1914, Microreel AF93-0446, Singer Archives, unprocessed acquisition, SHSW, Madison.

U.K Sales of Scottish Output. Column 4 divided by column 2.
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