The Bear’s Lair: Canals, not steam catalyzed the Industrial Revolution

Pendeford Rockin' Canal Boat

Source: Æthelred

The Industrial Revolution is traditionally held to have begun in the middle 1780s with James Watt’s invention of the rotary steam engine with condenser attached. (The condenser alone did not allow Watt’s engine to power machinery, since it still used the jerky Newcomen “beam” motion.) Yet there was another innovation, almost 20 years earlier, which had more short-term importance to industrialization and was the real spark to its take-off: James Brindley’s “Grand Cross” system of canals.

From this distance, we tend to telescope the Industrial Revolution. Many modern historians date it from the advent of railways (1825 or 1830) or the repeal of the Corn Laws (1846), which encouraged it to spread worldwide through Britain’s self-defeating post-1846 free trade policy. Certainly, the final transition by Britain to modern rates of GDP per capita and productivity growth of 2% or more can be dated no earlier than the long mid-century boom of 1842-66, though Lord Liverpool’s 1820s saw a 5-year preview of rapid industrial growth.

But as the early historians of the Industrial Revolution recognized, to date its advent so late is to miss the transition altogether. In Britain, the 1850s were the culmination of the Industrial Revolution, after which it began to slow. Long before that date, it was already changing society and living standards irrevocably, even with economic growth less rapid than at its peak. The more interesting question is not when it reached its apogee, but when it began to accelerate from the minimal growth that characterized pre-industrial societies, and what sparked that change.

The conventional answer is with James Watt’s invention of the steam engine condenser in 1769, followed by his design of a rotary engine that could power machinery, the first of which was produced in 1783. The usefulness of Watt’s technological advance was itself dependent on John “Iron-mad” Wilkinson’s invention of the cylinder borer in 1774 – before Wilkinson’s invention, the manufacturing tolerances for steam engines were so poor that with the piston being an inch or more from filling the cylinder, you could not actually see a steam engine at work because of the dense fog of escaping steam surrounding it.

Once Watt’s rotary engines appeared in 1783, they were quickly adopted by textile manufacturers, who had already invented most of the gadgetry that increased the efficiency of spinning and weaving far beyond traditional hand methods (Richard Arkwright’s first mechanized factory, powered by a water wheel at Cromford, had opened in 1771). However, not all textile manufacturers adopted them. Indeed, so modest were the advantages of large steam engines in a textile factory, that even as late as the 1830s, half a century after Watt, Britain’s largest textile mill, the Quarry Bank mill at Styal, Cheshire (featured in the 2014 BBC series “The Mill”), was powered only by a 32-foot water wheel, although a 10hp Boulton and Watt engine was kept as back-up after 1810 for dry summers. (Quarry Bank switched fully to steam turbines only in 1881.)

Railways too depended on the invention of Richard Trevithick’s high-pressure engine of 1801 to get the necessary power-to-weight ratio, and it was only George Stephenson and Goldsworthy Gurney in the late 1820s who first made steam-powered vehicles that could move faster than a horse. Thus, even Watt’s great invention was not truly revolutionary, nor did it make the Boulton and Watt partnership as rich as several other industrialists, despite a 25-year patent extension to 1800 that Boulton had engineered through Parliament in 1775.

For the revolutionary change, so much of a leap forward that it caused the rhythms of the entire economy to beat faster, we must look to canals. Canals had been built by the Romans, and the very large state-financed “Canal du Midi” was built by Louis XIV in the late 17th century – it does not appear to have caused an economic leap forward, even in the Midi. In Britain, the first true canal, the Sankey, completed in 1757 and only 8 miles long at a cost financed locally of only £18,000, allowed coal to be shipped to Liverpool more cheaply, halving the Liverpool coal price.

The economics are simple. Given the roads of that day (half a century before Thomas Telford and John McAdam improved them) the maximum load for a horse-drawn cart was about 1½ tons, and that required two men to lever the cart out of innumerable potholes or rescue it when it ran off the road. Progress would be slow, at best. However, a canal narrowboat (not used on the Sankey canal, where a local boat type, Mersey Flats, prevailed) could carry 50 tons of goods, and required the same horse and the same two men, one to guide the barge and the other to tend the horse. Thus, canals were potentially about 30 times as productive as road transport where heavy goods such as coal were involved. That indeed was a potentially revolutionary advantage, far more than in most pre-1810 steam engine applications other than pumping water.

The chief canal projector was James Brindley (1716-72) who in the late 1750s was an experienced water technologist, having worked on mills, pumps and water projects around Staffordshire, some of them for the largest local landowner Granville Leveson-Gower, 2nd Earl Gower (in 1786 to become 1st Marquess of Stafford) (1721-1803). Brindley, possibly influenced by the Sankey project, in the late 1750s envisioned a huge “Grand Cross” canal system to connect England’s four major rivers, the Mersey, the Trent, the Severn and the Thames.

Gower was interested enough to commission Brindley at a retainer of £100 a year to survey the route for the first of these, the Trent and Mersey Canal. However, since the Trent and Mersey would be 93 miles long, its financing would be well beyond Gower’s large but not unlimited means. His solution was to interest his younger brother-in-law, Francis Egerton, 3rd Duke of Bridgewater (1736-1803) (Gower had married Bridgewater’s sister in 1748). Bridgewater was interested in engineering, even richer than Gower and owned large coal mines at Worsley in Lancashire – it also helped that his agent and Gower’s were brothers, Thomas and John Gilbert. Therefore, a canal from Bridgewater’s mines at Worsley to the rapidly growing cotton town of Manchester was an ideal demonstration project.

Gower via the Gilberts introduced Brindley to Bridgewater, who got Parliamentary approval for his canal in 1759 and completed the first section in 1761. That halved the price of coal in Manchester and was a great success, so Bridgewater continued the canal to the River Mersey at Runcorn, linking the system to Liverpool. Possibly because it was a Duke’s canal, the Bridgewater was engineered on a lavish scale, with a 15-foot width, a much-admired aqueduct 40 feet above the Irwell River at Barton, a flight of ten locks down to the Mersey at Runcorn and a tunnel through the mountain directly to the coal face of Bridgewater’s mine at Worsley. The total cost was £360,000, over £10,000 per mile, but even at that cost it was an excellent investment for Bridgewater – and eventually for Gower’s family, since Bridgewater left his entire fortune to Gower’s son, his own nephew, on his death in 1803.

With his work on the Bridgewater Canal complete, Brindley could turn his attention to the Grand Cross. Here Gower was again helpful, introducing him to a rising young local pottery manufacturer Josiah Wedgwood (1730-95). Wedgwood had just enjoyed a big early success, selling a tea service to Queen Charlotte, but he despaired at transportation from his hometown of Burslem to the worldwide pottery markets. Whether shipping to London or to the American colonies via the port of Liverpool, his pots had first to run the gauntlet of road transport, which around Burslem was especially bad, because the local potters dug up the roads for their red clay, which was a valued pottery ingredient.

Hence Wedgwood quickly got involved in the Trent and Mersey Canal project and helped market it to other tradesmen along the potential route, taking care to be closely involved so he could buy land next to the canal for his proposed new “Etruria” pottery works. With Wedgwood and other tradesmen involved, as well as investment from Gower, £130,000 was raised by a local share issue, with almost no participation from London.

At the same time, Gower and Brindley, talking to friends at the Birmingham Lunar Society as well as local grandees, were able to raise £70,000 for another canal, the Staffordshire and Worcestershire, also surveyed by Brindley, which would run 46 miles from a junction with the Trent and Mersey Canal to the River Severn at Stourport. Gower steered a bill authorizing both canals through Parliament in May 1766, and work began.

Since Brindley controlled construction on both these canals, riding frantically between them on his horse to monitor and guide progress, they were built without the frills of the Bridgewater Canal. They were 7 feet wide instead of 15 feet and followed the contours of the land to avoid locks. The Staffordshire and Worcestershire was finished in 1771, with only a modest cost overrun to a cost of £2,200 per mile, and with a local 23-mile Birmingham Canal financed by wealthy Birmingham industrialists connecting to it in 1772 (when that reached the local coal mines, the price of coal in Birmingham was halved, greatly helping Watt’s decision to join Matthew Boulton there).

The eastern half of the Trent and Mersey was also finished in 1771, connecting the River Trent with the Staffordshire and Worcestershire Canal, but the western end required a 2,880-foot tunnel to be dug through Harecastle Hill. That provided easy access for Harecastle’s coal deposits, which Brindley had thoughtfully bought up with partners before work began, but caused overruns of time and cost, the latter financed by a £42,750 loan from Bridgewater’s cousin, the backbench Tory MP Samuel Egerton. This tunnel was only finished in 1777, but Wedgwood already had access to world markets through the canal’s eastern half, completed in 1771.

Brindley was also involved in two other Midlands canals, the Coventry and the Oxford (the latter connecting to the Thames and completing Brindley’s Grand Cross) but the workload and travelling proved too much for him (let alone his horse) and he died in 1772. As a result, with lesser men involved, both the Coventry and the Oxford had cost overruns and were completed only in 1790, after a lengthy pause for the American war, during which top-up funding for private sector projects was unavailable. However, all Brindley’s canals were financially hugely successful in the long run, valued at ten times their initial investment by the 1820s. Even the Oxford was said to yield its chairman, the splendidly Tory baronet Sir Roger Newdigate, an annual return of 100% on his large investment as early as 1790, the year the canal finally opened.

There were other canals later, but Brindley’s Grand Cross canals were by far the most profitable big ones. Even more important, the Grand Cross created for the first time a national transportation network, so that raw materials could reach the new factories while heavy goods sourced anywhere in the industrial Midlands could be transported cheaply both nationally and, through the ports, internationally. Together with a new network of country banks and the plethora of textile machine innovations, Brindley’s canals made the late 1760s, not the mid-1780s, the point of Britain’s economic take-off into the Industrial Revolution. After Brindley’s early death, Gower remained a powerful force to monitor and help its progress; he was the leading Tory in almost all Cabinets from 1767 to 1794.

With Gower’s help, James Brindley not James Watt was the Father of the Industrial Revolution.

(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.)