Between 1800 and 1914 manufacturing industry grew steadily in importance to become the dominant element in the economy. These changes were reflected in the structure of class relations. The altered significance of agriculture in relation to industry tilted the balance of power in favour of the manufacturing class and the central position of Britain in the international flow of commodities and money ensured the continuing importance of the financiers and merchants of the City of London. The landed interest was forced to come to terms with its changed circumstances. However, by 1900 the landed, manufacturing and commercial classes had moved closer together in economic, cultural and political terms. Though they did not form a unified social class, these three classes could no longer be considered as totally distinct from each other and were, to some degree, on the verge of forming a single propertied class even though differences in their market situation continued to separate them.
The City, the lords and the boards
The nineteenth century saw the development of a closer relationship between property owners whether in agriculture or industry. The distinction between the two had never been complete, even in the eighteenth century where successful industrialists bought themselves landed estates and landowners exploited the mineral reserves beneath their land. It was, however, changes in the banking system in the second half of the century that stimulated a closer relationship between the two groups. In 1830 three different types of bank together formed the British banking system. At the heart of the London financial system were the private banks such as Hoares, Childs, Coutts and Martins, that had often developed out of older goldsmith businesses. The private banks of the West End tended to have many landed clients and were often heavily involved in the long-term mortgage business of the landed class. By contrast the private banks of the City itself were mainly concerned with the provision of short-term credit for merchant firms and, to a much lesser extent, manufacturing concerns. The Bank of England and, perhaps less importantly, the Scottish chartered banks were concerned with the management of government finances but also carried out some private banking transactions for the merchant houses that comprised its major shareholders. The Bank was by no means a central bank that regulated the rest of the banking system; its main role was to facilitate the formation of the financial syndicates that purchased government stock. The third type of bank to be found in Britain was the country bank, a private bank located outside London. These often arose as adjuncts of mercantile concerns and had strong banking links with both local landowners and industrialists. Though their businesses were highly localised, the country banks were tied into the national system of capital mobilisation through their use of London agents and correspondent offices, generally one or other of the London private bankers.
Major changes in the financial system began with the repeal of the ‘Bubble Act’ in 1825 and the two Companies Acts of 1856 and 1862. These changes in the law made limited liability and transferable shares more easily available to businesses and did much to stimulate the establishment of joint-stock banks in London and the provinces. The country banks were often involved in the formation of joint-stock banks, a number of these being in London. Agency arrangements between London and country banks were, in many cases, formalised in mergers to form large joint-stock banks. The tightening up of the banking system, especially in the 1844 Act, enabled it to become more closely involved in capital mobilisation: agricultural wealth filtered through the country banks to London from where the money went to finance the industries of the north and midlands and to finance landowners’ mortgages.
By the 1860s and 1870s the City of London had become the hub of an international monetary system, with a particularly important group of ‘merchant banks’ specialising in the financing of foreign trade and in funding foreign government loans. Such prominent merchant bankers as Rothschild and Baring, together with others such as Goshen and Hambros, were generally based around the businesses of émigré merchants and bankers and often continued with their merchant businesses alongside their banking activities. The merchants and merchant bankers of the City formed a tightly integrated group with numerous overlapping business activities: they joined together to syndicate loans, they dominated the board of the Bank of England and they coalesced to run the major dock, canal and insurance companies. This City faction was united through bonds of business, kinship and friendship and its cohesion was enhanced by the frequency and informality in the exchanges, coffee-houses and other meeting-places in the square mile itself.
The landed elite: a basis in land?
In the eighteenth century the distinction between a class of landlords and a class of capitalist farmer tenants had been sharpened by the continuing process of agricultural improvement. By 1850 the enclosure movement was all but completed and a third rural class of agricultural wage labourers had been created. The trilogy of landlord, tenant farmer and labourer characterised Victorian rural society and formed the basis of both contemporary and current images of the rural world.
The landlord was the undisputed chief figure in terms of wealth, power and prestige and the class of tenant farmers had fallen below the levels of privilege attained by both manufacturers and merchants. The rentier landowners at this time held about three-quarters of the land in England and a considerably higher proportion in Scotland. Running a great landed estate was very much a form of economic management. The estate was treated as a unit of capital and was administered through various rules, procedures and routines similar to those used in the larger mines and ironworks. The estate was managed by the landowner through agents and stewards, to whom general executive responsibilities had been delegated and who undertook the collection of rents, kept accounts and supervised the tenants. Large estates employed both a resident land agent with delegated authority but often also a chief agent with a subordinate staff to handle specialised tasks such as timber, minerals and so on. There existed in the landed estates a partial separation of ownership from control: the legal relation of ownership was entwined in a complex mediation of control whereby general supervision of the affairs of the estate -- strategic control -- remained with the landowner while the general day-to-day administration was the responsibility of a managerial staff. Where land was let out to tenants, strategic control was shared between the landowner and the tenant. The landowner and his agents exercised supervision over tenants and made decisions over the renewal of tenancies as well as contributing to the capital requirements of the farms. The tenant was not only the active day-to-day manager of his farm, but also participated in strategic control. The relationship between landowner and tenant was cemented in the financial arrangements whereby the tenant received the profits generated by his farming activity and used it to pay his rent to the landowner.
The landlords formed a system of intermarried extended families, each ranging over several generations and degrees of cousinhood, and each dependent on the fortunes of a particular estate. Family strategy was an important structuring mechanism in economic life and the highly regulated marriage market helped to ensure both the maintenance of the traditional family life-style and the perpetuation of the family estate.
The landed elite: diversification?
It was under the continuing influence of such family strategies that landowners began to diversify their interests. During the nineteenth century farming offered a relatively poor return when compared to the investment opportunities that had been opened by the development of industry. For this reason, many landowners diversified into investments in minerals, in urban property, in railways and docks and in overseas mining concerns to supplement their, at lest static, agricultural earnings.
Many landowners, for example, began to develop those parts of their estates that were well-sited for urban growth. Until 1850 the urban areas, apart from London, were relatively small and localised, but the pace of development soon increased. In London the major landowners included the Duke of Portland, the Duke of Westminster (in Pimlico, Belgravia and Mayfair) and the Duke of Bedford (Bloomsbury and Covent Garden). In smaller cities and towns prominent landowners included: the Duke of Norfolk and Earl Fitzwilliam in Sheffield; the Marquess of Salisbury and the Earls of Derby and Sefton in Liverpool; the Marquess of Bute in Cardiff and the Calthorpes in Birmingham. As fashion shifted from the spa towns to seaside resorts in the 1880s and 1890s, landowners such as the Duke of Devonshire profited from the growth of such leisure centres as Eastbourne, Brighton, Hastings and Scarborough
In 1886, 69 out of 261 provincial towns were largely owned by great landowners and a further 34 were owned by smaller landowners. Similarly, the Duke of Sutherland, the Marquess of Bute and the Earl of Dudley were prominent as mineral developers. Railways offered gains not only through investment but, more importantly, through the sale of land to railway companies and through compensation money. Where landowners did invest heavily in railways, this tended not to be in main-line companies but in the secondary lines that connected their mineral interests to the main arteries of the railway network. In this way, landowners saw railway investment as a way of improving the yield earned from the agricultural and mineral resources of their own estates.
 On this issue see S.D. Chapman Merchant Enterprise in Britain, Cambridge University Press, 1992.
 F.L.M. Thompson English Landed Society in the Nineteenth Century, Routledge, 1963 is the basic work. L. Stone and J.C. Fautier Stone An Open Elite? England 1540-1880, OUP, 1984, G.E. Mingay The Gentry, Longman, 1976 and J.C. Beckett The Aristocracy in England 1660-1914, Basil Blackwell, 1986, 2nd ed., 1989 cover broader periods. These should now be supplemented by D. Carradine The Decline and Fall of the British Aristocracy, Yale, 1990 and Aspects of Aristocracy: Grandeur and Decline in Modern Britain, Yale, 1994. General views, with sociological emphasis, can be found in J. Powis Aristocracy, Blackwell, 1984 and J. Scott The Upper Classes, Macmillan, 1980.
 On the development of banking in the nineteenth century see Michael Collins Banks and Industrial Finance in Britain 1800-1939, Macmillan, 1991.
 A good introduction to this subject is David Cannadine Lords and Landlords: the Aristocracy and the Towns 1774-1967, Leicester University Press, 1980 and David Cannadine (ed.), Patricians, power and politics in nineteenth-century towns, Leicester University Press, 1982.