Historical aspects of the Welsh slate industry

D Dylan Pritchard MA FSS

  1. In our last article it was shown what handsome profits accrued to the owners of the Penrhyn and Dinorwic concerns and the shareholders of the Welsh Slate Company. These three concerns together produced some 60 per cent. of the total output of North Wales so that the greater proportion of the output of slate was produced at a very high rate of profit and the widely publicized profitability of the industry had a basis in fact. On the other hand it would seem that the self-constituted publicist-in-chief - the contemporary editor of the Mining Journal - must have worn rose coloured spectacles which prevented him from seeing that most of the very numerous smaller concerns failed to cover their costs even when trade was booming. It is reliably reported that in 1873, when trade was brisk, only three out of fifteen quarries in the Nantlle district were worked at a profit, and only four out of some fifteen concerns in the Festiniog district were said to be paying concerns.

  2. Shady company promotion nipped a few promising concerns in the bud, but the chief cause of financial stringency in the industry was wasteful capital expenditure partly as a result of a desire on the part of the investors to make their quarry a second Penrhyn quarry and partly as a result of mismanagement. Companies often found out to their cost that the terms of their lease were unduly onerous, or that there was insufficient room for the working of the quarry and the disposal of the waste off the slate rock, that the supply of water power was inadequate, that the inaccessibility of the quarry involved the concern in prohibitive transport costs, or that the quantity of slate rock was less and the quality inferior to what it was supposed to have been. A striking example of reckless capital expenditure is afforded by the company which was formed in the 'fifties to work the Gorseddau quarry in the Pennant Valley. An enormous sum was spent upon the erection of spacious sheds in which expensive machinery worked by a tremendous water-wheel was housed; some £20,000 were spent in constructing a tramline to take the slates from the quarry to the shipping place at Portmadoc. The Company had overlooked the elementary necessity of making an extensive preliminary trial to ascertain the extent and quality of the slate rock in the quarry with the result that the productive slate vein proved to be narrow and inferior so that after working energetically for a few years the quarry was abandoned. (The disastrous history of the Gorseddau concern is oddly reminiscent of the costly and futile effort to set up an Australian slate industry following the last war).

  3. A long tragic list could be given of quarry enterprises which fizzled out shortly after being started; to take a few instances all drawn from one small slate area. The Prince of Wales Slate Company, registered October, 1864, with authorized capital of £50,000, of which £30,612 had been paid up on March, 1868, when the concern was wound up; at that date liabilities amounted to £3,534. The Prince of Wales Slate Company, registered in October, 1864, authorized capital of £50,000 of which £44,600 had been paid up by November, 1867, when the Company was wound up; at that date liabilities were £10,957. The Pennant Slate Company, registered August, 1864, with nominal capital of £50,000, of which £9,313 had been paid up when it was wound up in August, 1867, the outstanding liabilities being £186. The above three concerns were all floated to work quarries in the Pennant Vale.

  4. The diversity in the types of business organisation in the slate industry was even more striking in the 'sixties than it had been in the 'thirties. Private proprietorship still held its ground. The Penrhyn and Dinorwic concerns, which together produced more than half the slate output of North Wales in 1860. were still owned and operated by the heirs of the Penrhyn and Vaynol estates respectively. Most of the small Nantlle quarries were worked by private individuals at some time or other between 1830 and 1870; the same fact applied to the Llechwedd, Cwmorthin and other important slate mines in the Festiniog district. The family business concern was still common. For example, the Dorothea Quarry was worked between 1829 and 1849 by the ubiquitous William Turner and his son-in-law John Morgans, and the near-by Penyrorsedd concern was owned and managed by Mr. Kane and his sister from 1820 until 1854. The enterprising Holland family worked the Upper Oakley mine from 1826 until the termination of their lease in 1877, and the Greaves family has worked the Llechwedd quarry since 1846.

  5. The predominating form of business organisation up to about 1865 was the small common-law partnership with unlimited liability for all partners, and the history of some of these co-partnership concerns is most fascinating to follow. One such concern was the Dorothea Slate Company floated in April, 1849. Turner and Morgans had taken over the quarry in 1829 and worked it to great advantage for some years but they gave it up in April, 1849 as it had not latterly proved remunerative. A number of Nantlle quarrymen who had been working the small PwIl-y-fanog quarry in the valley formed the idea of floating a company to buy and work the larger Dorothea quarry. Through the co-operation and the influence of the Rev. John Jones, Talysarn, the famous Welsh preacher, sufficient capital was raised to form a company. A hundred shares of £25 each were soon taken up and the lease, machinery and fixed plant of the quarry were bought for £3,000, half the purchase money to be advanced immediately and the other half within a year. The Rev. John Jones, as Chairman of the Company, presided over the meetings of shareholders which were held every two months at the quarry office. The minutes of these meetings were kept in Welsh and throw a light on the democratic government of the concern during its early years when the quarrymen shareholders had a voice in its management and in determining general policy. It has been said that to mix religion and business is to spoil two good things; the Rev. John Jones would not agree with that dictum because we find him making use of his position as Company Chairman to bring economic pressure to bear on some of the quarrymen in an effort to make them give up their drunken habits. The continual need for raising new capital meant that the quarrymen were very soon holding less than half the shares and they had to give up the idea of controlling the concern and. sold 20 shares to Mr. Williams of Plas y Blaenau, Denbighshire, one of the shareholders, for £2,000 or four times their original value. The quarry did not prosper for some length of time, and the Rev. John Jones, who had himself been a practical quarryman and was anxious lest his friends should lose their money, in 1851 himself became quarry agent at a weekly wage of 25/-. In the following year the selling of the quarry was discussed but at a meeting of the shareholders held on September 20th, 1852, those who opposed the selling of the quarry carried the day because they held a majority of four shares over the party which was in favour of selling. In a few years the concern became very profitable. Mr. Williams gradually bought up more and more shares so that soon he had a controlling interest, and this family has ever since held the majority of shares in the concern.

  6. Joint-stock undertakings had been popular from a very early date in all branches of mining and quarrying, and the need for limited liability forms of organisation was greater in extractive industries than in manufacturing industries because the risk involved in opening out a new mine or quarry was greater than in erecting a factory. The slate industry was by no means dilatory in taking advantage of the various Companies Acts. Under the Companies Act of 1844 all companies in existence prior to September of that year were required to return their names and places of business. There were eight such companies in the slate industry, of which six worked quarries in North Wales. The other two companies were the Imperial Slate Company, formed by Deed of Settlement to work slate quarries in Ireland, and the Old Delabole Slate Company. The latter was registered as a limited liability company in May, 1859, and later reconstituted under the Companies Act of 1862; at that time its authorised capital was £75,135 divided into £25 shares. By 1864 all the shares had been taken up, the shareholders numbering fifty-three, and all the capital had been called up. Table I. shows the number of new companies registered annually between 1845-1855 under the 1844 Companies Act, to work slate quarries in North Wales and elsewhere in Great Britain.

  7. As the above Table indicates, not many companies were registered under the 1844 Act, partly because of the weaknesses inherent in that Act, mainly because of the violent fluctuations in the slate trade during the Hungry 'Forties.

  8. The joint Stock Companies Acts of 1856 and 1857 were an improvement, and Table II, gives particulars of the companies registered each year under these Acts until they were in turn superseded by the important Companies Act of 1862 which inaugurated a new era in the history of capital investment in the industry.

  9. Table III. gives for each year the authorized capital of the companies set up in the slate industry between 1856 and 1862 and also the total amount of calls made on the nominal capital within the first few months of, their existence.

  10. The above Table shows that there was a marked increase in the volume of investment in the industry after 1855 and this upward movement was, as we shall show in the next article, continued throughout the 'sixties and the ‘seventies.


Investment in the Slate Industry 1830 - 1930 Part 2

Quarry Managers' Journal February 1943