Chapter IV.
PROSPERITY.
The iron trade continued for some time after this to be so flourishing, that Mr. Wallace found himself at length quite unequal to the pressure of business which rested wholly on him. He wrote so repeatedly and urgently to Mr. Bernard on this subject, that that gentleman hastened the settlement of his affairs, that he might remove himself and his family into Mr. Wallace’s neighbourhood. He owned that after his young partner had found the management of an iron-work with one furnace as much as he could manage, it was unreasonable to leave all the business to him when there were four, and when the demand for iron was so brisk that the utmost diligence could not enable them to answer all the orders they received. Instead of three hundred, upwards of eleven hundred labourers were now employed about the works. More and more capital was daily employed in the concern: and it was abundantly supplied as capital always is, where such speedy and profitable returns are made as in the iron trade, at the time we speak of. Many a man who found himself getting on but slowly in a manufacture of another kind, endeavoured to obtain a share in the iron-work. Many a farmer threw up his farm, and went into South Wales to find a more profitable settlement. Many a capitalist withdrew his money from concerns in London, or elsewhere, where he had received moderate interest for it, and invested it where the highest legal interest was willingly given. Even ladies, who had small properties in the funds, transferred them to the hands of any iron-master they might happen to be acquainted with, and were much delighted with their increase of income. Some experienced people who observed this vast flow of capital towards one point, predicted unpleasant results. The immediate consequences were agreeable enough, they allowed. Iron-works were established, wherever a promising situation could be found. Smokes arose from a hundred places where the hills where all before had been a mountain solitude. The cottages of well-paid labourers multiplied every day; and prosperity seemed, at last, to have visited the working classes in an equal proportion with their masters. But the quantity of iron prepared was so great, that it seemed scarcely possible that the demand could long remain as brisk as at present. Any one who observed the trains of waggons on the rail-roads of the various works, or the traffic on the canals, or the shipments at Newport and Cardiff, would have wondered where a market could be found for such a quantity of metal; but as long as the masters found it impossible to keep any stock by them, or even to supply their orders, they were very sanguine about the continuance of their prosperity, and went on fearlessly enlarging their works in number and extent, regardless of the warnings offered them that a glut must be the consequence.
Mr. Wallace and his partners were more prudent than most of their neighbours. They were mindful enough of the probability of change to be careful how much they invested as fixed capital, which could not be easily withdrawn or transferred in case of a change of times.
Fixed Capital, that is, money laid out in land, buildings, machinery, and tools, is a necessary part of the property of every one who endeavours to increase his wealth. The farmer must have not only land to produce grain, but ploughs and harrows to prepare the soil, sickles to reap the corn, waggons to carry it away, barns to store it in, &c., if he means to make the utmost profit he can of his produce. He thus increases his wealth by fixing his capital, though his tools and buildings and horses do not directly afford him any profit like his circulating capital. That which is commonly called circulating capital is the wealth laid out with an immediate view to farther production; such as the farmer’s seed-corn, and the wages of his labourers. But as nothing is said in the word circulating about this farther production, we had rather find a better word. Reproducible seems to us the right term. Thus, the manufacturer’s raw silk and cotton, the farmer’s seed-corn, or the sheep and oxen he intends to sell again, the iron-master’s coal and iron-stone, and that which is paid by all in the shape of wages, are reproducible capital, because it comes back to its owner when it has fulfilled its purpose and procured a profit. It is clear that the business which requires the least fixed capital in proportion to the reproducible capital must be the least in danger from a change of times. The wine-merchant, whose fixed capital consists only of cellars, casks, hampers, and a cart and horses, has less of his wealth locked up in a useless form in bad times than the silk or cotton manufacturer, who has his factories, his steam-engine, and all the machinery connected with it. Both may have a large stock, the one of wine, the other of raw or wrought silk or cotton; both may complain of having their reproducible capital made unproductive by a failure of demand; but he is the worst off who has the largest proportion of fixed capital locked up at the same time. On a smaller scale, the basket-maker risks less in bad times than the baker. The one has merely his shed, and his block, and knife for his fixed, and osiers for his reproducible, capital; while the other has his bakehouse, ovens, bins, yeast-pails, and many other articles as his fixed capital; and flour and fuel for his reproducible capital. If a demand for baskets and for bread should ever cease, the baker would have a much larger capital laid by useless than the basket-maker.
A very large fixed capital is necessary in an iron-work, and of a kind too which cannot be turned to any other account in bad times. Land may generally be made to produce something which is in demand; sheds and waggons and horses may be used for a variety of purposes, but blast-furnaces and forges serve no object but that for which they were erected. There is, therefore, a degree of risk in thus investing capital which ought to make reflecting men very watchful in their calculations, and very cautious in extending their works even in the best times. Mr. Wallace and his partners were thus cautious, while some of their neighbours, flushed with the present prosperous state of their trade, erected their works in magnificent style, and to such an extent that one would have thought they had a contract for supplying the world with iron for ever. The firm thought themselves justified in erecting new furnaces to the number we have mentioned; but a judicious economy was consulted in the mode of building; an economy which was smiled at by many who appeared as lavish of money and fond of splendour in respect of their furnaces, as of their dwelling-houses.
Mr. Wallace’s impatience that his acting-partner should come and see and approve what was done, was at length gratified. A letter was received one day announcing that Mr. Bernard, his two sons, his three daughters, and their governess, would arrive to a late dinner on the next Wednesday. It was a winter day, and darkness had come on long before there were any tokens of the approach of the party. The housekeeper (who had come some time before) listened to the blustering wind, and then looked at the clock, now trembling for the safety of her young masters and mistresses, and then vexed that her good dinner should be spoiled by the delay. Mrs. Wallace sent more than once to know whether the travellers had arrived. A crowd of little children, who had gathered together, unmindful of the cold, to cheer the carriage as soon as it appeared, were called home to bed by their mothers. The overlooker pronounced that there would be no arrival that evening, and every body at last hoped there would not, as the roads among the hills were very wild and dreary, and morning was the best time to pass along them. The travellers were approaching, however, all this time. The last stage was a very irksome one to horses and driver, and not very pleasant to those inside. No care could keep out the cold wind which obliged the driver to tie on his hat, and which terrified the child of three years old who hid her face in her papa’s bosom every time the gust roared among the hills. Another little girl pressed close to her governess, and the lads themselves wished that it had not been so dark; for it was impossible to keep the lamps lighted. Their father and Mrs. Sydney—the lady who educated their sisters—tried to amuse them by talking cheerfully; but whenever they stopped for a moment, some little voice was sure to ask “How far have we to go now?” “Shall we get home to-night?” “How late will it be when we get home?”
“How dark, how very dark it is!” cried Francis. “I cannot make out whether there is a hill on each side of us, or whether it is the black sky.”
“It is the sky,” said his brother John. “I see a fiery flush on this side, which I suppose comes from some iron-work near. How it brightens every moment!”
“Ah ha! we shall have light enough presently,” said his father. “We are nearer home than I thought. That light comes from behind the hill, and when we reach the turn of the road, we shall see a good fire, though we shall not feel one this half hour.”
In a moment the carriage turned the corner, and the children started up, forgetting cold and hunger and fear, to gaze at the extraordinary scene before them. Strange sounds rose when the gust fell—a roaring like that of a mighty wind, which their father told them was caused by the blast of the furnaces; and a hissing and rumbling which came from the machinery of the forge and mill. These buildings stood on a level beneath a sort of terrace, faced with stone, on which were placed the kilns where the ironstone is calcined ready to be put in at the top of the furnace. On this terrace also was the coke-hearth, where the coal was burning in a long ridge open to the sky. The flame blazed and flickered, and shot up in red and white spires, and disappeared and kindled again, as the wind rose and fell; and there were black figures of men, brandishing long rakes, sometimes half-hidden by red smoke, and sometimes distinctly marked against a mass of flame. At some distance were rows of twinkling lights almost too faint to be seen after looking at the furnaces. These were in the cottages of the work-people, Farther off was a solitary light, so far raised as to give the idea that it came from a house on a hill The children eagerly asked if this light shone from their home. No; it must be Mr. Wallace’s house; but their own really was near now. Accordingly, when they had passed another reach of the road in utter darkness, and had heard a gate swing, and knew by the crashing sound that the carriage was on a gravel road, they saw an open hall-door, and knew the figure of the housekeeper as she stood ready to welcome them.