133system, therefore. Hence when the Cape’s Agent-General took over from the Crown Agent in 1881, the list of approved firms for railway mater ials was extended but it continued to consist of British firms of known reliability. Indeed, according to one recent study, ‘the benefits provided by the Office of the Crown Agents for the Colonies in the vital areas of purchasing and loan management were too evident’ to succumb to ‘mere petty carping’.44 To summarise: the empire was not an active ingredient in economic policy-making, but neither did the British state eschew any role whatsoever in promoting imperial trade. At the level of basic infrastructure, it clearly encouraged private interests to develop transport and communication networks, and provided the naval and military power to make these networks safer and more secure. British and colonial governments were happy for Crown Agents to purchase primarily or even exclusively from British producers. What they were not prepared to do was consciously shape the empire into an economic system with pre-determined characteristics: this was the logic of a system of preferential tariffs, whether they aimed at a full-blown imperial Zollverein (customs union) or merely closer market integration. The dominant policy of free trade did not allow for commercial relations to be shaped purely in imperial terms. However, as we are about to see, free trade did not prevent British producers from exploiting certain ‘non-market’ advantages in the settler colonies.
Trans-national networks
Long-distance trade is challenging. Transport, information and monitoring costs are all high, and foreign markets tend to be less predictable than
43 See for example D. Sunderland, Managing the British Empire: The Crown Agents, 1833–
1914 (Woodbridge: Boydell Press, 2004), pp. 18, 21, 60.
44 Davis and Huttenback, Mammon and the Pursuit of Empire, p. 188.
134those at home. Scholars of international business even have a name for this – ‘psychic distance’.45 They suggest that the level of uncertainty in a foreign market is influenced by differences in the education, language, customs and legal systems of the ‘home’ and ‘host’ country. The less the differences, the smaller the ‘psychic distance’, and the more likely goods are to flow between markets. A variety of trading networks helped British merchants and businessmen to operate in geographically distant markets.46 These networks nurtured a sense of shared purpose among their members, secured good behaviour, and disseminated up-to-date and accurate information about business conditions and individual reputations. Networks of family and kin, for example, developed effective trust in trade, especially in the eighteenth century when other more formal types of network were not yet established.47 To be sure, there were drawbacks to the family as a form of trans-national enterprise: the ‘pool of talented members was usually small and the capacity to check or punish delinquency was often limited’.48 Nonetheless, kin-based enterprises could draw strength from the loyalty that existed within the family core, from intermarriage between family members, and from their hierarchical structure and the ‘patriarchal’ authority exercised by the head of the family.49
A good example of a colonial business emerging from an extended family network is that of the Glaxo Company.50 Glaxo’s origins lie in the merchant firm of Joseph Nathan, a Londoner who migrated to the goldfields of Victoria in the 1850s and who subsequently settled in Wellington, New
45 B. Kogut and H. Singh, ‘The Effect of National Culture on the Choice of Entry Mode’,
Journal of International Business Studies 19 (1988), 411–32; Nicholas, ‘Locational
Choice’, pp. 122–41.
46 For the distinction between formal trading networks and personal or semi-formal trad-
ing networks, see S. Sugiyama and L. Grove (eds.), Commercial Networks in Modern Asia
(Richmond, Surrey: Curzon, 2001), pp. 2–3: once created, the former (often infrastruc-
tural) continued to operate regardless of what happened to the individuals or groups
that created them. Whereas the latter shared their resources and services only with the
individuals or groups that created and/or belonged to them.
47 N. Zahedieh, ‘Economy’, in D. Armitage and M. J. Braddick (eds.), The British Atlantic
World, 1500–1800 (Basingstoke: Palgrave Macmillan, 2002), pp. 51–68 (p. 66).
48 Ibid.
49 G. H. Boyce, Information, Mediation and Institutional Development: The Rise of Large-Scale
Enterprise in British Shipping, 1870–1919 (Manchester: Manchester University Press,
1995); J. Forbes, Munro, Maritime Enterprise and Empire: Sir William Mackinnon and His
Business Network, 1823–93 (Woodbridge: Boydell Press, 2003).
50 The detail below is drawn from H. Jephcott, The First Fifty Years: An Account of the Early
Life of Joseph Edward Nathan and the First Fifty Years of His Merchandise Business that
Eventually Became the Glaxo Group (Ipswich: n.p., 1969); R. P. T. Davenport-Hines and
J. Slinn, Glaxo: A History to 1962 (Cambridge: Cambridge University Press, 1992), pp. 7,
13–14, 27–8, 30, 37–9, 43–5.
135Markets and consumer cultures Zealand. He set up a general merchandise business with his brother-inlaw, Jacob Joseph, exporting wool and importing goods such as groceries, stationery, patent medicines, drapery and ironmongery. By the end of the 1870s the firm’s agencies and stores reached into most parts of New Zealand, while Nathan’s economic interests had expanded to include property development, banking and transport. The organisation of the firm was based on the dispersal of Joseph’s several sons, some based permanently in Wellington, others in London. New Zealand remained the centre of trading, and the working capital continued to be provided by Joseph, who, from 1894, made London his home.
By the end of the century, Nathan’s company was importing a wide range of merchandise from England that it then sold to various farmers’ co-operative associations. It also acquired several agencies from British firms, and began exporting frozen butter and cheese to Britain as agents for New Zealand farmers on commission. In the early 1900s the firm made a major commercial breakthrough when it developed dried milk powder for infant food, using the name ‘Glaxo’, which was registered as a trademark in 1906. One of Joseph’s sons was sent to England to develop a market for the product, which was sold to infirmaries, infant welfare clinics and local municipal authorities across the country. Although the business had now developed the formal structure of a company, it was still very much a family affair. Indeed, Glaxo shows how an internationally dispersed family network could continue to provide a cost-efficient method of doing business across imperial spaces well into the twentieth century.51
Religious groups likewise provided the basis for successful trading networks. Faith communities such as the Jews or the Quakers developed channels of communication across the British World that provided members with strong support in times of need and sanctioned certain types of behaviour. As with the family, members of a religious group could take a person’s word as his bond. Take the Quakers, for example. They owned some of Britain’s most famous food and drink enterprises, the fortunes of which were dependent on colonial supplies of raw material or the tastes of colonial consumers: Cadbury’s and Fry’s (chocolate), Rowntree’s (cocoa), Huntley and Palmer (biscuits), and the Sturges (soft drinks) spent much of their time procuring high-quality colonial ingredients or developing lucrative markets among settlers.52 Interestingly,
51 M. Casson and H. Cox, ‘International Business Networks: Theory and History’, Business
and Economic History 22 (1993), 42–53 (pp. 47–8).
52 C. Delheim, ‘The Creation of a Company Culture: Cadburys, 1861–1913’, AHR 92
(1987), 13–44; R. Fitzgerland, Rowntree and the Marketing Revolution, 1862–99 (Camb
ridge: Cambridge University Press, 1995); T. C. Kennedy, British Quakerism, 1860–1920:
The Transformation of a Religious Community (Oxford: Oxford University Press, 2001);
136the enlightened polices these firms pursued towards their workforces in Britain could be extended to workers in the colonies only by taking direct responsibility for production. The Sturges did so successfully in Britishcontrolled Montserrat, although they never hired any of their management staff locally, nor did they consider making and bottling their drinks there. Meanwhile, Cadbury’s became embroiled in a controversy over the treatment of plantation workers on the Portuguese islands of San Thome and Principe – plantations that they did not own but from which they bought part of their supply of cocoa beans.
Trust was not, of course, confined to family or faith networks. During the second half of the nineteenth century other types of association – freemasonry is a case in point – spread British influences, practices and traditions overseas.53 The Masonic brotherhood functioned as ‘a kind of global patronage network that helped men to find employment, secure promotion, and cope with hardship’.54 From the mid century, ‘ideas, information, money, and people flowed with increased intensity across the whole Masonic network’.55 By the late 1880s, there were over 820 lodges to be found across the empire. Merchants, planters and professionals were all widely involved, with respectability a key aspect of membership.56
The export not only of masonry, but of a wide array of voluntary clubs and societies, was in fact a distinctive feature of the British World.57 Although the commercial impact of these associations remains largely undocumented, it is clear that they provided fellowship, mutual support and opportunities for personal advancement for the more upwardly mobile classes of British society. They also developed relations between business, professional and official groups in the colonies, and circulated ideas about commerce, technology and trade.58
The rest of this chapter, however, turns from the informal to the more formal commercial structures of the British World: professional
A. Tyrrell, ‘A Business of Philanthropy: The Montserrat Company, 1856–1961’, The
Journal of Caribbean History 38 (2004), 184–212; I. Williams, The Firm of Cadbury, 1831–
1911 (London: Constable, 1931).
53 P. J. Rich, Elixir of Empire: The English Public Schools, Ritualism, Freemasonry and
Imperialism (London: Regency, 1989), pp. 82–100.
54 J. L. Harland-Jacobs, Builders of Empire: Freemasonry and British Imperialism, 1717–1929
(Chapel Hill: University of North Carolina Press, 2007), p. 208.
55 Ibid., p. 244.
56 Ibid., p. 6. For a fascinating account of how Cornish freemasonry aided both the migra-
tion of Cornish miners and mine managers and the dissemination of mining information
around the (mainly British) world, see R. Burt, ‘Freemasonry and Business Networking
during the Victorian Period’, EcHR 56 (2003), pp. 657–88.
57 P. Clark, British Clubs and Societies, 1580–1800: The Origins of an Association World (Oxford:
Oxford University Press, 2000), pp. 388–429.
58 Ibid., pp. 452–3.