The Bear’s Lair: Regulators — killing new industries since 1831!

The New Steam Carriage by George Morton

This column has not written enough about the economic damage done by excessive regulation, partly because most of that damage takes the form of new businesses snuffed out. Something that has been eliminated from existence is by definition difficult to write about. However, in my Industrial Revolution researches I have found an example of regulation from 1831 that without question eliminated an entire industry – or at least, postponed it by 70 years. It is an excellent example of the immense economic and social damage, hidden in most cases, that government regulation generally brings.

In the 1820s, applications of steam power to transportation were advancing rapidly. Paddle-steamers had begun to travel the Mississippi and provided easy, cheap and rapid transportation on the Hudson, the Thames and the Clyde rivers. The first railways were being built: the Stockton and Darlington, mostly for coal, opened in 1825 and the Liverpool and Manchester had its grand opening in September 1830. However, it is less well known today that road transportation by steam vehicles was also developing and was fully competitive with other steam-powered forms of transport.

The principal proponent of steam transportation by road was a Cornish gentry doctor, Goldsworthy Gurney (1793-1875) who moved to London in 1820 and among other inventions (Limelight, the oxy-hydrogen blowtorch) invented the blastpipe, which used steam pressure to increase the flow of air through a steam engine’s chimney, thereby greatly increasing its power to weight ratio compared to a conventional engine (engineers may correct me, but I think it had a similar effect to the supercharger on a 1920s “blower” Bentley).

In 1827, Gurney set up a workshop near Regent’s Park in London, and began producing steam-powered carriages, which ran on coke to reduce smuts and had the advantage over contemporary railway engines of being able to go up hills (Gurney invented a very elegant but probably ineffective pair of steam-powered “horse feet” to assist the hill-climbing process initially but left the horse feet off later models). Gurney steam-carriages were soon performing such feats as climbing Highgate Hill, something well beyond steam-powered railway engines, then or later.

In October 1829, the Liverpool and Manchester Railway held the famous “Rainhill Trials” along a one-mile stretch of railway in which five engines (one of them horse powered) competed to see which model would power the railroad. Stephenson’s “Rocket” was the only competitor to complete the trials (the horse, working a treadmill to provide motive power, broke through the base of its carriage) doing so at a top speed of 30 miles per hour, but an average speed of only 12 miles per hour.

Three months earlier in July 1829, a Gurney steam-powered carriage, built to carry 21 people, had traveled from London to Bath and back without any breakdowns, at an average speed including stops for fuel and water of 14 miles per hour. With Gurney’s patented blastpipe technology, steam transportation by road was thus at that point clearly ahead of railways.

The following year Sir Charles Dance (probably Colonel Sir Charles Webb Dance, 1785-1844) bought three Gurney steam carriages and instituted a road service between Cheltenham and Gloucester, a distance of 9 miles, which his carriages covered in 30 minutes compared to an hour for horse coaches. The service was very successful, carrying over 3,000 passengers in its first four months, but was stopped in 1831 by the local turnpike trusts, pushed by the horse-coach providers, deciding to charge a £2 toll for steam carriages, 20 times as much as the 2 shillings charged for horse-drawn coaches.

In the newly Whig House of Commons in 1831, no fewer than 60 private Bills were passed, proposed by turnpike trusts all over the country, each setting a different turnpike toll at £2 or £4 for steam carriages, thus making it economically impossible for them to operate. The same year, the House voted a £100,000 loan to the railways. Gurney was thus forced into bankruptcy the following year, with liabilities of £232,000, an enormous sum for those days. A Select Committee of the House three years later agreed he had been badly treated and voted him £5,000 compensation, reduced from the originally suggested £30,000 at the insistence of the Whig Chancellor of the Exchequer.

Gurney lived on as an impoverished consultant; the House may have felt a collective guilt as it appointed him advisor on the new Houses of Parliament’s ventilation in 1852, and Queen Victoria gave him a belated knighthood in 1863. Parliament continued in its opposition to powered road transportation; the Locomotive Acts of 1861 and 1865 rectified the toll injustice, setting powered vehicle tolls at only twice that of horse-drawn vehicles, but worsened the overall problem by decreeing that any “road locomotive” must proceed at no more than 4mph, and be preceded by a man with a red flag no less than 60 yards in front. That legislation was not repealed until 1896, ensuring that Britain was very late on the internal combustion engine revolution after missing out on the steam carriage revolution that never happened.

The economic and social cost of that 1831 burst of regulatory activity was very considerable, as we can see if we imagine what a steam-carriage industry might have looked like, 70 years before the automobile.

First, let us accept that it would not have been like the automobile industry of the 1920s and later. Gurney steam carriages were large and difficult to operate; it is unlikely that they would have become individual automobiles, except for those lucky enough to have chauffeurs. But at that level there would have been a demand. Dornford Yates’ lovely first volume of “Berry” stories “The Brother of Daphne,” relates how in 1907 the Pleydell family of “White Ladies” acquired their first car, a Rolls-Royce (of course) and used it to have lunch in a town 50 miles from home, which they had never seen because it was on a different railway line, too difficult to get to. That new opportunity would have appealed to an upper-class family in 1837 as to the Pleydells in 1907.

The steam carriage business would also have operated at no more than 25-30 mph. Yes, the Stanley Steamer of 1906 set a speed record over 100 mph, but by 1906 they had pneumatic tires and – above all – semi-reliable brakes. High speeds in the 1830s were better kept to segregated railways and were pretty dangerous there. On the other hand, the effect of steam carriages in frightening horses attached to other users should have been no worse than that of the early automobiles 70 years later – and equally reduced as the horses became accustomed to them.

Beyond the private automobile, there would have been two markets for steam road carriages: buses and goods transport. The initial Goldsworthy Gurney public transport model would have continued viable, provided the tolls problem had been solved. The roads were by this time adequate, thanks to Thomas Telford and John Mcadam whose good work was largely wasted in the railways-only world in which little long-distance road travel took place for half a century once the railway network had been built. With reliable steam coaches, many branch railway lines would not have been needed, the road carriages acting as feeders to the main railway lines.

There would also have been a business in steam carriages acting as trucks. This would have allowed Britain to make more use of its competitive advantage of cheap coal. In the United States, where much of the country was far from coal deposits, and distances beyond the East Coast were huge, steam carriage transportation would not have been particularly economic, but in Britain, availability of cheap coke would have allowed farms to use communally owned steam carriages to get produce from their farms to the railway network, thus remaining more competitive against transatlantic shipped grain and meat after 1870.

We can therefore imagine a Britain of 1870 with a smaller network of mostly long-distance railways, a modest number of privately owned luxury steam carriages among the rich, and substantial fleets of public steam carriages and steam trucks, making transport of people and goods more efficient and cheaper than at any time before the 1920s in our world. In a free market, Gurney-type steam carriages would have had a major position, and Gurney would have been a very rich man, like Lord Nuffield (William Morris) a century later.

The Whig Parliament of 1831 marked a sharp contrast to the Tory-dominated parliaments before 1830, which had been generally very supportive to industrial innovation. Alas, the Whigs won the intellectual argument, and thus we now live in a world of stifling regulation of every business under the sun. The Gurney example demonstrates how much we have missed and are still missing by this explosion of restrictive Whiggery.

(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)