Historical aspects of the Welsh slate industry

D Dylan Pritchard MA FSS

  1. In this article it is proposed to study the financial structure of the slate industry between 1780 and 1830, a period when the industry was reorganising itself on a new basis in order to enable the output of slate to be increased in response to the rapidly expanding demand created by the Industrial Revolution. In a second article the trend and volume of capital investment in the industry during the following hundred years will be analysed. 

  2. Lord Penrhyn provides the best example of the exploitation of the slate resources by an individual who owned the land, minerals, foreshore and provided his own capital. Richard Pennant, created Baron Penrhyn in 1783, was the great pioneer of the industry in North Wales. He was for some years Member of Parliament for Liverpool and had made exhaustive enquiries among his Lancashire friends whether the potential market for slate was of sufficient magnitude to justify him in taking over the Braich-y-Cafn Quarries which he had leased for a trifling sum to some local men. Between 1782, when he bought out the lessees, and the time of his death in 1808 the annual revenue he derived from the quarries increased from £80 to £7,000, the number of quarrymen from 80 to 600, and the annual output of slate from less than 1,000 tons to nearly 20,000 tons. In 1790, he built a new road and employed 120 wagons in transporting slate from the Penrhyn Quarry, as they were now called, to the private quay erected at considerable cost at the mouth of the Cegid; this quay he enlarged into Port Penrhyn in 1801 and spent £5,000 in laying down a tramway six miles long from the quarry to the quay. He built a large factory for polishing and framing school slates of which about 10,000 were sent annually to Liverpool, London and the Continent; another slate mill was erected to produce chimney pieces and tomb stones. His heir, G. H. Douglas Pennant, carried on the work of his enterprising father. In 1813 a new slate mill was erected which was equipped with sixteen sawing frames worked by water power. The quarry was worked to such effect that in 1819 the output of slates amounted to 24,418 tons valued at £58,000; in the same year 802 crates of writing slates were shipped, and about 800 men were employed in and about Penrhyn Quarry. 

  3. Lord Penrhyn is not typical of the early capitalist period in the development of the industry because the predominating form of industrial organisation was the small common-law partnership which leased the land from the private landowner or the Crown, and whose fixed and working capital was supplied collectively by the partners. The partners in these concerns were drawn from all ranks of society-mainly slate merchants and builders with a fair sprinkling of lawyers, shop-keepers, small landowners and local quarrymen. 

  4. In 1787, after having conducted a highly satisfactory trial for slate in quarries in the Manor of Dinorwic, Hugh Ellis, a prominent local attorney, Thomas Wright, solicitor to the Vaynol estate, and William Bridge, who became the active partner, formed a private partnership to take over the quarries, and obtained a lease for twenty-one years from Assheton Smith, the lord of the manor. The outbreak of war with France, the imposition of a heavy duty on all slates carried coastwise, together with the high cost of transporting slate to the shipping place, retarded the development of the quarries. On the expiry of the lease in 1809 Assheton Smith the proprietor, William Turner, a Lancashire adventurer, Hugh Jones, an enterprising banker from Dolgelly, and Thomas Wright, one of the old lessees, formed a new partnership to work the Dinorwic Quarries. A lease for twenty-one years was obtained for which they paid an annual royalty of one-eighth the output to Assheton Smith, the latter had a half-share in the concern, the other three partners having a one-sixth share each. In 1920 the partnership was dissolved and Assheton Smith decided to work the quarries himself; he retained the services of William Turner as general manager and gave him a one-eighth share of the profit for his services. Between October 1st, 1809, and May 12th, 1828, the Dinorwic Slate Quarries returned a total net profit of £157,326, or an average annual profit of £9,740; the concern was profitable throughout this period except in the last quarter of 1814 when a loss of £326 was made. It had been worked profitably on a small scale between 1809 and 1820, and at the latter date some 200 men were employed. It was not until 1824 when a horse tramway was constructed at a cost of £93,000 from the quarries to Port Dinorwic that the concern began to expand rapidly; in 1826, 800 quarrymen produced 20,000 tons of slate in the Dinorwic Quarries. In the Penrhyn quarries the landlord was never replaced by new industrial entrepreneurs; in the Dinorwic quarries the slate resources were only worked on a comparatively large scale when the landlord took over the quarry himself; in both quarries they have remained in possession ever since. 

  5. Perhaps the best example of a partnership concern was the Cilgwyn and Cefndu Slate Company. It was originally composed of four partners - John Evans of Caernarvon, one of the most important legal practitioners of his day in North Wales, Richard Roberts, slate merchant of Caernarvon, and Thomas Jones and John Price, landed gentry, from Caernarvonshire and Anglesey respectively; each held an equal share in the concern. In 1807 Owen Anthony Poole, a Caernarvon solicitor, formally entered into co-partnership with the others on payment of one-fifth the expenses up to that date; he was practically associated with the Company a few years earlier. In 1799 the partners applied for a lease of the Crown wastes of Cilgwvn, in the Nantlle district, and of Cefndu, overlooking the Llanberis Valley. Their primary concern was the Cilgwyn quarries but they were unwilling to invest money in those quarries unless they controlled operations upon the Cefndu common ; the latter was less than four miles from Caernarvon so that slate could be sent "to a place of shipping for about two shillings and six pence or three shillings a ton. cheaper than any other quarry in Wales; very promising veins of blue slate had recently been found there by quarrymen and so the partners feared lest another group of gentlemen should take over the Cefndu quarries and by taking advantage of the smaller cost of transport undersell Cilgwyn slates in the market. On April 8th, 1800, they obtained a lease for a period of 31 years subject to a nominal annual rent of a pound and a royalty of one-tenth the value of all slates produced. On May 16th, 1800, the four partners formed the Cilgwyn and Cefndu Slate Company and each partner advanced £100 to open a partnership account at the North Wales Bank, Caernarvon. It had been arranged among them that they were to advance money to work the quarries equally, but some paid considerably more than others, and had separate accounts with each other; those partners who were deficient in their advances paid interest for their deficience and those who had a balance in their favour received interest on that balance. Richard Roberts was the active partner in charge of the quarry until 1814; he received an annual salary of £140 with £30 towards his expenses. The Company hired an office at Caernarvon and appointed as their clerk and agent one Edmund Francis for a salary of £50 a year; his duty was to keep the books and manage the accounts of the concern, sell the slates, superintend the freighting of the sloop "Cilgwyn" which the partners bought for £1080, receive the payments for slates and the rents from tenants, and all the outgoings of the concern were paid by him. 

  6. The Cilgwyn Company was a most ambitious project and sought to obtain control of a large number of quarries in various districts. They failed in their attempt to buy Hafodlas quarry, Nantlle, for £1,500, but by 1805 the Company had obtained leases of the Galltyllan quarry, Llanberis, the Tynyffridd quarry in the Bethesda area, the Hafodywern and Garreg Fawr quarries in the Gwyrfai Valley, and jointly with a Merionethshire merchant, they held a lease of 1,000 acres of the Manod and Moelwyn commons in the Festiniog district. Also in 1802 they took over a lease of three quarries on Talysarn farm, Nantlle, for a period of five years at a clear yearly rent of £180; in this venture they were joined by the landowner and another local gentleman, and their partnership concern was called the Talysarn Slate Company. During the first ten years of its existence the Cilgwyn Company spent hundreds of pounds in developing these numerous concerns; the only one to prove remunerative was the Cilgwyn quarry which returned a total net profit of £2,861 during the six years ending January 31st, 1812; after that date most of the other quarries were sublet to various parties and were a source of not inconsiderable revenue during the next few years. 

  7. Encouraged by the profit derived from the Cilgwyn quarry the partners in 1813 successfully petitioned the Crown for an additional 250 acres of Cilgwyn common, including the Moeltryfan quarry. In the following year the tide of prosperity in the industry reached a very low ebb and instead of going to the expense of securing a lease they paid a nominal rent of two pounds and so were to all practical purposes in possession of the quarries on the common. In 1814 Richard Roberts sold his share in the concern to his partners for £1,900 and John Evans became the active partner. Up to that time the accounts had been kept satisfactorily but henceforward only Evans knew how matters stood. The other partners did not know whether the quarry was being worked at a profit or a loss; they distrusted Evans and accused him of having sold large quantities of slate, received payment and applied the money for his own use. In 1822 Thomas Jones sold his share to Evans for £480; the value of shares in the concern had depreciated greatly, and the other partners urgently called for a settlement of accounts from 1812, when the last settlement was made, to 1822; Evans was in possession of the books and declared that the other partners owed him money, whereas they maintained the contrary was true and that a "handsome profit' had been derived from their "ill-conducted concern." In 1823 Over 20,000 tons of rock fell into the quarry and this could not be cleared without additional capital; they offered to surrender the lease to the Crown provided it was renewed not only in the name of the remaining partners but also in the name of new partners who were to supply the capital necessary to work the quarry effectively. The attempt to secure an extended lease and to incorporate new partners failed and they decided to sell. In 1825 it was offered to Rothschild but nothing materialised. In December, 1827, the Cilgwyn, Cefndu and Moeltryfan leasehold quarries and properties were put up for sale by auction in Caernarvon; the speculative boom in the slate industry as in other industries had collapsed, and it does not surprise us to find that the total of the highest biddings for these three quarry properties was only £11,500 or less than half the price for which they were willing to sell. The output of the quarry fell from 2,500 tons in 1822 to 870 tons in 1829; for the seven years 1823 to 1829 the average annual gross sales of slate were £1,896, the average annual costs were £1,830, leaving an average annual profit of £66; the discount allowed on the gross sales greatly exceeded this profit, so that actually the result was a net loss. A great deal of money had been borrowed from the North Wales Bank and in 1830 the Bank determined to recover some of it and the award of the Great Sessions held at Caernarvon in March, 1830, went against the Company, and a sum of £1,680 had to be repaid to the bankers. On the termination of the lease the Company gave up working the quarries. 

  8. The Cilgwyn and Cefndu Slate Company provides the best example of the exploitation of the slate resources of North Wales by a group of local gentlemen who were willing to invest a considerable amount of capital in the industry. Much of their capital was squandered in making unprofitable trials for slate in various districts; the waste rock left by former primitive workings hindered the proper development of the Cilgwyn quarries and this, together with false economy of capital expenditure, resulted in the further accumulation of rubbish and the undermining of the sides of the main quarry, so that large and expensive falls of rock were frequent. The early capitalist period of the industry witnessed the flotation of very numerous small mushroom concerns which for a few years of good trade enjoyed "one crowded hour of glorious life" and then, when prices fell and demand slackened, they ingloriously crashed. Edward Hall, who toured the slate districts in 1811, wrote: "It is really lamentable to see the small capitals of industrious individuals thus thrown away in gambling speculation, which bribe the imagination, and do nothing more. The slow, but certain, returns from the cultivation of the Earth's surface are disregarded, because the quarries of a few great capitalists have proved, in report at least, prodigiously productive." One example of these "gambling speculations" will suffice. 

  9. In 1812 a Bangor slate merchant, a Bristol slate merchant, a Chester stationer and a local quarryman obtained from the Cilgwyn Company a lease of Cook's quarry on Cefndu common, for fifteen years subject to an annual rent of 5/- and a royalty of one-ninth the value of the slates produced. A deed of co-partnership was drawn up; the local quarryman was to superintend the working of the quarry for a weekly salary of £1 1s. 0d., the local slate merchant was to take charge of the accounts and to issue a quarterly statement to his partners who were to meet him on January 1st of each year to determine profit or loss; each partner was to contribute towards the costs and should any one of them fail to do so he was to forfeit his share in the concern; there were five shares, each of the partners having a single share except the Chester shopkeeper, who held two. Between 1812 and 1820 shares in this little concern were transferred eight times and they appreciated in value; in 1813 a one fifth share was sold for £74, but in 1820 a one-third share changed hands at £400. In 1820 the share holders were a Liverpool slate merchant, a Liverpool architect and the local slate merchant. In 1824 the whole quarry was owned by a Caernarvon gentleman; the local merchant had been constrained in 1821 to sell his share in order to redeem a bond due to the Dinorwic quarry-owner for a cargo of slates shipped by the former to America and which had proved a great loss; in 1823 the Liverpool architect had been arrested on account of a dishonoured bill and so he sold his share in the quarry in order to take this up. Cook's quarry was never worked on a large scale; in 1813 the output was about 500 tons; during the ensuing period it declined, but rose to over 1,000 tons in 1823 and again fell to some 500 tons in 1828. This little concern represents in many respects numerous such primitive financial enterprises. We have the local quarryman who has practical experience of quarrying and we also have the local slate merchant who floats the company and persuades his English trade acquaintances to invest a few hundreds in the industry. These English capitalists were almost invariably builders or slate merchants who wanted a constant supply of slates at competitive prices, and were eager to invest a few hundreds in Welsh quarries in the hope of quick returns and they were not averse to a little flutter in quarry shares; they were unwilling or, more often than not, unable to provide sufficient capital to finance the considerable amount of unremunerative work which the opening of a quarry upon scientific lines and on a large scale necessarily involved. 

  10. In the Festiniog district there were only two successful concerns during the early capitalist period - the Diphwys and Rhiw quarries. The Diphwys quarry up to 1800 only gave employment to 20 men; in that year the quarry and farm on which it was situated were put up for auction. William Turner, who had been working a small quarry near Llanrwst, sent for two of his Lancashire friends, Messrs. Thomas and William Casson, and by pooling their resources bought the property for £1,000. They had no capital to work the quarry and so they took into partnership Hugh Jones, the wealthy banker from Dolgelly, who was also interested in the Dinorwic Slate Company. The slate vein proved to be very valuable and was near the surface so that the cost of removing topsoil and unproductive rock was not excessive. The Company secured lucrative Government contracts to roof barracks at Portsmouth, Plymouth, Dublin, Cork and other places. William Turner was the active partner and kept all the accounts; all monetary transactions was carried out through the firm of Thornas and Hugh Jones, Bankers, Dolgelly. The Diphwys quarry proved very remunerative. Between 1809 and 1828 Turner acted as general manager of the Dinorwic quarry; in the 'twenties he was active partner in small companies working the Penybryn and Penyrorsedd quarries in the Nantlle district and the Cloddfa'r Coed quarry in the Bethesda district. It can be seen that William Turner played an important part in the development of almost every slate producing area in Caernarvonshire and Merioneth. 

  11. Other Lancashire gentlemen who successfully worked the slate resources of Festiniog during these years were the Samuel Hollands. father and son. In 1817 Samuel Holland, senior, leased a small quarry on Cefnddu common from the Cilgwyn Company but he only worked it on a minute scale. In 1819 he heard of good prospects of a quarry on Rhiwbryfdir farm in Festiniog; he took the farm over for three years, paying £120 the first year and £150 for the other two years, together with a royalty of one-tenth the value of slate produced. Trials for slate on this farm had previously been conducted by Hugh Williams, a lead mine owner from Machynlleth, and by Mr. Oakley, the owner of the estate, but it remained for the Hollands to work the rich slate vein to advantage. In 1920 Samuel Holland junior, with no knowledge of slate-quarrying and at the early age of eighteen, was put in charge of the quarry; it turned out to be profitable and the Hollands obtained a lease for 21 years. Early in 1825, during the great speculative boom, "a company of gentlemen" who were "desirous of getting a takenote of some promising ground, where from £20,000 to £50,000 might be laid out to profit," were inquiring for quarries in Bethesda, Nantlle and Festiniog. This was the Welsh Slate, Copper and Lead Mining Company, promoted by Nathan Mayer Rothschild, and which included the famous Lord Palmerston among its directors. The Hollands sold the Rhiw quarry to this Company for £28,000, but kept the upper part of the mountain where in two or three years they opened another quarry which they worked profitably on a large scale until 1877 when their lease terminated. The Welsh Slate, Copper and Lead Mining Company was a typical product of those days of wild speculative investment; it was probably the intention of Rothschild to buy a large number of mines and quarries, and sell out the shares at inflated prices. The Company Laws compelled him and his associates to become industrial entrepreneurs and they confined their activities to slate quarries; they soon abandoned a new quarry which they had opened on the Moelwyn common and during the next fifteen years, until the Rhiw quarry began again to show profits, they worked in a haphazard manner and probably treated their employees worse than any other concern in the industry. 

  12. An attempt has been made in this article to give representative examples of the types of business organisations which were engaged in the development of the industry at the time when the Industrial Revolution really began to affect it. We find private proprietors owning the land and working the quarries at Penrhyn and later Dinorwic; the family business as exemplified in the case of the Rhiw quarry until it was taken over by Rothschild's Chartered Company, the latter being at that time the only one of its kind in the industry; the common-law joint-stock partnership concern as exemplified by the Dinorwic Slate Company, the Cilgwyn and Cefnddu Slate Company, and the Festiniog Slate Company; and, lastly, the small company which worked Cook's quarry is typical of numerous such concerns. The Cilgwyn and Cefnddu Slate Company further shows the system of inter-locking directorates which was a common feature in the industry; it also shows the monopolistic tendencies of these capitalistic ventures, and this tendency was very marked in the Bethesda and the Llanberis districts where the landed proprietors sought to control all slate quarrying operations. The different types of entrepreneurs and the various sources of the capital invested in the industry has been outlined, and an indication given of the manner in which some of these representative units functioned and the success or failure which attended them. lessons.' 'So I think, Sir,' rejoined Smith; 'I quite agree with you, and here I have learnt some truly serviceable things. You see, Sir,' added Smith, directing the clergyman's attention to one particular tombstone, 'You see that stone?' 'I do, Mr. Smith,' 'Well, Sir, you will observe that it is a slab of the worst bed of the inferior oolite, and that even already it is peeling off at the edges; but look at the other stone, Sir, on the right. That is a slab of the hard blue lias, and it will last for centuries. Yes, Sir, this is the place to learn the true durability of stones.' 

  13. When the Houses of Parliament were about to be erected, the attention of the Government was drawn to Smith and he, in company with two other gentlemen, was deputed to visit and examine the principal quarries and building stones, and to report upon them. Numerous, researches were instituted. Smith knew every principal building stone in England. He had walked over most of the strata, pen in hand, and had noted many things which other men had never seen, though beneath their eyes. He selected a stone at once durable, ornamental, and facile to the tool. 

  14. It is true that the beds of even this excellent stone were found to differ, and hence the decay in some parts of the building, which has occasioned so much talk. Still, the defects so far exhibited are not more than were to be expected in a building requiring such vast quantities of material quantities beyond the capacity of any one quarry to supply. More durable stones would have been too hard, and would not have yielded to chisel and mallet. One of the best building stones in our land is the carboniferous or mountain limestone, especially that of Clifton, near Bristol, but it is impossible to dress and carve this stone, and the same is the case with hundreds of other stories most suitable for building purposes.


The Financial Structure of the Slate Industry of North Wales 1780 - 1830

Quarry Managers' Journal December 1942