Monday, 11 August 2008

The aristocratic elite: Landowners and financiers: a narrowing circle?

Landowners complemented their estate business with interests in industrial and commercial ventures. This diversification was eased by the already close business links between landowners and City financiers. City financiers were also important in their own right as promoters if business ventures, especially railway companies. The railways were giant enterprises whose capital requirements outweighed those of all other businesses together. London bankers, especially Glyn Mills, acted as active promoters for railway companies and brought together the masses of ‘anonymous’ investors, many from the professions and many ‘widows and orphans’, who provided much of the railway capital.

The railway boom in the 1840s led to a situation where the 15 largest companies controlled 75 per cent of railway revenue and by the boom of the 1860s the top four companies had 44 per cent of revenue. As a result, from the 1860s many landowners began to take portfolio investments in the big main-line companies, a move away from their previous commitment only to local lines. The railway booms brought together some of the interests of the financial community and the landowners. But the development of railways was also to have an indirect impact on industrial funding. Limited liability had rarely been thought necessary by industrial entrepreneurs but, as the capital requirements of some industries increased, the trust and the partnership gave way to the joint-stock company. This enabled manufacturers to draw on a wider pool of capital and to provide for the various members of their families by issuing shares to them. By the mid-1860s about a thousand new joint-stock companies were being registered annually, though the majority were still run as partnerships. The spread of railway shareholding encouraged the growth of the London and provincial stock exchanges and so made it easier for expanding industrial enterprises to raise capital and for landowners to invest.

Concentrating industrial power

The move towards joint stock capital was associated with an increase in the levels of economic concentration. In the 1880s the hundred largest industrial firms accounted for less than ten per cent of the total market. However, a spate of company amalgamation led to greater concentrations in the 1890s as the increased merger activity outpaced the growth of the market. Companies were floated on the stock exchange and might then grow by taking over their competitors; or rival firms might join together to float a common holding company. The families whose firms were floated or merged at this time often retained the ordinary, voting, shares for themselves and allowed debentures and non-voting shares to be sold to the wider public. This, family control could be maintained on the basis of a relatively small capital investment. The flotation of firms allowed capital to be raised from outside the family circle; and the joint-stock form allowed family wealth to be diversified and so made more secure.

Large amalgamation of family firms occurred in a rapid burst between 1898 and 1900, but the rate of flotation and merger remained at a high level until 1914. These were, however, often hamstrung by attempts to maintain the autonomy of the constituent family firm, leaving the large firms as merely holding companies with no real control over their subsidiaries. The desire to maintain family control was paramount and could lead to difficulties in managing the newly created company. For example, in the fusion of 59 firms that produced the Calico Printers’ Association in 1899, each of the 84 directors on the board was determined to safeguard the interest of his original company that, in the majority of cases, was still under his management. Because of this situation of family loyalties and priorities, those larger companies that succeeded in adopting a more centralised structure were generally either those in which one constituent firm was considerably larger than the others, or those in which a particular family managed to subordinate its fellows in the struggle for control. The families who lost out in the struggle for the fewer positions of control in the amalgamated firms were faced with the choice of either retiring into land or politics (the gentleman’s route) or moving into new business ventures (the so-called player’s route).

Families that wished to leave business often decided to sell out to a company promoter prior to the stick exchange flotation. These families sometimes retained a stake in the firm but were not involved in active control. These promoters were often keen to recruit peers to the board of companies of the companies that they floated, feeling that a ‘lord on the board’ would help the sale of shares. From the 1870s landowners joined the boards of joint-stock companies and by 1896 a quarter of all peers had directorship. Many of these men would have been invited on to a board for decorative purposes but many landowners found their directorships to be a significant supplement to their income. They may even have performed a useful function for the companies since the managerial problems of large firms and the need for delegated administration was similar to those faced on their estates. Companies may even have benefited from the ‘managerial’ expertise of the landowners.

A concentration of wealth?

The declining return of agriculture as a proportion of the returns of the economy as a whole was aggravated by the agricultural depression of 1873-1896. Smaller landowners were hit far more severely than the larger landowners who had been able to diversify into non-agricultural activities. The squeeze that this exerted on the smaller landowners exacerbated the growing awareness and criticism of the accumulation of wealth in land, commerce and industry. The result of this controversy and criticism was the establishment of an official investigation to scotch the claim that the bulk of British land was owned by 30,000 people. In fact this backfired: the investigation discovered that the land was owned by a much smaller number of people.

The results of the survey for 1873 were published in the Returns of Owners of Land (the ‘New Domesday Book’) and, although there is some confusion in the various summaries of the Return, certain conclusions about the ownership of land are clear. First, 80 per cent of land was owned by 7,000 people, of whom 4,200 in England and Wales and 800 in Scotland held 1,000 acres or more. Secondly, among these people a total of 363 held 10,000 acres or more, 44 having 100,000 acres or more. Most of the largest estates were in Scotland: there were a total of 35 estates larger than 100,000 acres, of which the 25 Scottish estates accounted for a quarter of the Scottish land. Thirdly, in total the large landowners held about 24 per cent of the land, the smaller rentiers held about 55 per cent and owner-occupiers held a further 10 per cent with the Church of England and the Crown holding a similar amount. Finally, this national picture was repeated at local level: in East Anglia, for example, 350 people owned 55 per cent of the agricultural land in Norfolk, Suffolk and Cambridgeshire.

It is also possible to reach some conclusions about income from land. Of the 2,500 people with an annual rental income of £3,000 or more in 1873, 866 received an income of £10,000 or more and 76 received £50,000 or more. Sixteen people received a rental income in excess of £100,000, the largest incomes going to the Dukes of Norfolk and Buccleuch and the Marquess of Bute. Any attempt to construct a list of Britain’s richest people is complicated by the fact that there was not a perfect correlation between income and acreage. Only 7 people had both 100,000 acres and £100,000 annual income: the Dukes of Buccleuch, Devonshire, Northumberland, Portland and Sutherland, the Marquess of Bute and the Earl Fitzwilliam. The survey did not extend to the rental income derived from urban rents and the wealth if men such as the Duke of Westminster were underestimated.

To identify Britain’s richest landowners more closely it is necessary to include the Dukes of Norfolk and Westminster, who had large incomes from relatively small estates and six men with massive estates though receiving less than £100,000 rental: the Duke of Richmond, the Earls of Breadalbane, Fife and Seafield, Alexander Matheson and Sir James Matheson. These fifteen people constituted the core of the British landed class. The continuing overlap between the rich and the peerage is obvious. Of the 363 people with both £10,000 income and 10,000 acres, together holding almost a quarter of Britain’s land, 246 were members of the peerage; and a further 350 peers had smaller estates.

Landed wealth-holders 1809-1899









Half-millionaires 150





83 --


This table shows the estimate by Rubinstein of the numbers of landed millionaires and half-millionaires -- that is those leaving land valued at £500,000 or more on their death. It is clear that the number of landed millionaires fell considerably between the first and second half of the century. It is, however, important to recognise that the holding of land through settlements and trusts tended to result in an underestimation of landed wealth in studies based on land held at death.

The position of landowners in relation to wealthy merchants and industrialists was deteriorating significantly. In his researches for Capital, Marx tried to assess the number of industrial millionaires by analysing the returns for Succession Duty so as to discover the number of personal estates of more than £1m. He found no deceased millionaires for 1815-1825, eight for 1825-1855 and in the three years 1856-189 he found four. More recently Harold Perkin has estimated that there were, in 1850, 2,000 businessmen with profits of £3,000 or more; 338 of these people received £10,000 or more and 26 £50,000 or more. In 1867 the wealthiest 0.5 per cent of the population received 26.3 per cent of the total income. By 1880 the number of businessmen with Schedule D profits of £3,000 or more had risen to 5,000 of whom 987 received £10,000 or more and 77 £50,000 or more. By 1880 the commercial and manufacturing classes had overtaken the landed classes in economic terms.

Top British wealth-holders outside land 1809-1914


  1809-1858 1858-1879 1880-1899 1900-1914
Millionaires 9 30 59 75


47 102 158 181
Total 56 132 217 256


The financial sector consistently accounted for between 20 and 40 per cent of all non-landed millionaires. Within the manufacturing sector, textiles accounted for about 10 per cent (rather more in the earlier period) and metals accounted for the same percentage in both of the earlier periods and then fell away. It can be concluded that both of the main industries of the industrial revolution were well-represented among millionaires. In the later periods the food, drink and tobacco industries together accounted for about 20 per cent of all non-landed millionaires, and from 1858 the distributive trades accounted for one-tenth.


The wealthy men of land, commerce and manufacturing were drawing closer together during the Victorian period, though landowners still tended to deprecate merchants and manufacturers as ‘middle-class’ and concerned with ‘trade’. This status exclusion was made easier by the existence of a vast number of clerks, shopkeepers and tradesmen who were oriented towards the commercial and manufacturing classes and appeared to form a continuous social category with them. In fact, the economic gulf between them was immense.

It was the development in the scale of business activity and the emergence of the joint-stock company that brought into existence a class of salaried managers and administrators who occupied an increasingly important position in the class system. These ‘professionals’ were distinct from manual workers by virtue of their higher earnings, the ‘career’ nature of their work and their participation in the control and surveillance of the labour process but they were distinct from the capitalists themselves. They constituted a loose middle stratum below the main areas of privilege, but enjoyed superior life chances to the majority of the population. They were, however, dependent on the business and private actions of manufacturers and merchants and were also direct beneficiaries of the new form of property that the joint-stock company represented. Yet with the landowners, manufacturers and merchants, the intellectual property of the professions represented an important shift in the definition of property in late Victorian Britain.

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