¹ Schonhardt-Bailey, Cheryl, “A Model of Trade Policy Liberalization: Looking Inside the British ‘Hegemon’ of the Nineteenth Century” (Ph.D. diss., University of California, Los Angeles, 1991)Google Scholar, chap. 3.

² Ibid., chap. 1.

³ This application appears in Caves, Richard E. and Jones, Ronald W., World Trade and Payments (Boston: Little, Brown, 1985).Google Scholar

⁴ Before 1832 a significant number of manufacturers would have had sufficient property qualifications to vote; they would have done so, however, in constituencies where they con stituted a small percentage of the electorate.

⁵ Aydelotte, W. O., “The Country Gentlemen and the Repeal of the Corn Laws,” English Historical Review 82, no. 322 (January 1967), 51.Google Scholar

⁶ Mayer, Wolfgang, “Endogenous Tariff Formation,” American Economic Review 74, no. 4 (1984), 970–85.Google Scholar

⁷ For an excellent discussion of nineteenth-century British investors’ responsiveness to fluctuations in investment opportunities, see Michie, R. C., Money, Mania and Markets: Investment, Company Formation and the Stock Exchange in Nineteenth-Century Scotland (Edinburgh: John Donald, 1981).Google Scholar

⁸ These were individuals who were under some compulsion—perhaps impending insolvency—to reinvest flows in a factor that yielded less than (an) other factor(s).

⁹ In an ideal world one would not engage a static model but rather would look to a dynamic one that incorporated future expected returns.

¹⁰ It should be mentioned that undiversified farmers were enticed by the government to acquiesce to repeal, as evidenced most clearly in the “drainage loan” portion of the repeal legislation; see Moore, D. C., “The Corn Laws and High Farming,” Economic History Review, 2d ser., 18, no. 3 (1965), 544–61.CrossRefGoogle Scholar Nevertheless, many “marginal” farmers (i.e., grain farmers unable to increase production through advanced farming methods or unable to switch to other forms of farming) left Britain in the wake of repeal hoping to gain better returns for their capital investments in the U.S.; see Van Vugt, William E., “Running from Ruin?: The Emigration of British Farmers to the U.S.A. in the Wake of the Repeal of the Corn Laws,” Economic History Review, 2d ser., 41, no. 3 (1988), 411–28.CrossRefGoogle Scholar

¹¹ Stone, , The Crisis of the Aristocracy 1556–1641 (Oxford: Oxford University Press, 1965), 377–83.Google Scholar

¹² Plumb, , The Growth of Political Stability in England, 1675–1725 (London: Macmillan, 1967), 5.CrossRefGoogle Scholar

¹³ The literature explaining the various linkages between railways and the development of heavy industry in Britain is considerable. For instance, Llewellyn Woodward wrote that “the railways were one of the results of progress in the iron industry and of the increased consumption of coal brought about by the use of steam power. They were in turn the cause of a vast expansion in the metal trades and of a much greater demand for coal. Directly or indirectly they influenced the development of most industries in the country. [In addition] the railway itself was an article of export; British contractors built lines in every continent and organized companies to buy them”; see Woodward, , The Age of Reform, 1815–1810 (Oxford: Oxford University Press, 1962), 41.Google Scholar E. J. Hobsbawm found that the “immense “coal” industry, though probably not expanding fast enough for really massive industrialization on the modern scale, was sufficiently large to stimulate the basic invention which was to transform the capital-goods industries: the railway. For the mines not only required steam-engines in large quantities and of great power, but also required efficient means of transporting the great quantities of coal from coal-face to shaft and especially from pit-head to the point of shipment. The ‘tramway’ or ‘railway’ along which trucks ran was an obvious answer. … Technologically the railway is the child of the mine, and especially the northern English coal mine”; see Hobsbawm, , The Age of Revolution, 1789–1848 (New York: New American Library, 1962), 63.Google Scholar He added that “in the first two decades of the railways (1830–1850) the output of iron in Britain rose from 680,000 to 2,250,000 [tons]. … The output of coal between 1830 and 1850 also trebled from 15 million tons to 49 million tons. That dramatic rise was due primarily to the railway, for on average each mile of the line required 300 tons of iron merely for track” (p. 64).

B. R. Mitchell clearly sketches the correlation between rising demand in the iron and coal industries and the railway booms and, moreover, the subsequent royalties accruing to landowners. For example, Mitchell explains that royalties usually consisted of a fixed rent plus a royalty paid according to the amount of coal extracted. From the early nineteenth century to the 1870s, royalties averaged between 8% and 11% of coal sales, or 6d to 9d per ton, or £50 to £180 per acre; see Mitchell, , Economic Development of the British Coal Industry, 1800–1914 (Cambridge: Cambridge University Press, 1984), 251–58.Google Scholar

It should be noted that while recent British historiography has discounted the Rostowian notion of a sudden industrial “takeoff period, such revisions have applied not to the heavy industry stage of industrialization beginning in the 1830s but rather to the period from roughly 1780 to 1830; see Crafts, N. F. R., British Economic Growth during the Industrial Revolution (Oxford: Oxford University Press, 1985).Google Scholar Other useful sources that address the linkages between railways and the development of heavy industry (not to mention the large literature simply on railway development) include Cottrell, P. L., Industrial Finance, 1830–1914 (London: Methuen, 1980)Google Scholar; Thompson, F. M. L., English Landed Society in the Nineteenth Century (London: Routledge and Kegan Paul, 1963)Google Scholar; and von Tunzelmann, G. N., Steam Power and British Industrialization to 1860 (Oxford: Oxford University Press, 1978).Google Scholar

⁴ See Thompson (fn. 13) for a discussion of the mineral incomes of several great landowners (e.g., Dukes of Northumberland and Portland, the Earl of Carlisle, Lords Hastings and Rokeby, Sir Matthew White Ridley, and the Earl of Durham) and gentry (e.g., the Claytons, Crofts, Bates, Edens, Riddells, Wrightsons). He noted that “landowners certainly drew large and increasing incomes from coal, but these were predominantly and increasingly in the shape of royalty and wayleave rents” (p. 264). Some gentry received mineral income equal to half their total income.

¹⁵ One might add that landowners would be far more likely to invest in industries (mostly heavy) that had land occupying a larger share of assets—i.e., coal, iron, railways—than such light industries as cotton textiles.

¹⁶ See, e.g., Cottrell (fn. 13); and Victor Morgan, E. and Thomas, W. A., The Stock (Exchange: Its History and Functions) (London: Elek Books, 1962).Google Scholar

¹⁷ Manufacturing and industrial enterprises were not as apt to benefit from the repeal of the Bubble Act since, unlike insurance companies whose ownership was corporate, these firms largely consisted of partnerships; see Michie (fn. 7), 62.

¹⁸ See Morgan, and Thomas, (fn. 16), 125–31.Google Scholar

¹⁹ Pollins, Harold, “The Marketing of Railway Shares in the First Half of the Nineteenth Century,” Economic History Review, 2d ser., 7, no. 2 (1954), 233.CrossRefGoogle Scholar

²⁰ Michie, R. C., “The London Stock Exchange and the British Securities Market, 1850–1914,” Economic History Review 2d ser., 38, no. 1 (1985), 68.Google Scholar

²¹ Schonhardt-Bailey (fn. 1), chap. 4. Moreover, J. R. Killick and W. A. Thomas provide a listing of companies quoted on the Leeds, Liverpool, Manchester, and Newcastle exchanges that clearly illustrates the growing dominance of railway shares from 1837to 1847; see Killick, and Thomas, , “The Provincial Stock Exchanges, 1830–1870”, Economic History Review, 2d ser., 23, no. 1 (1970), 96–111.Google Scholar

²² Killick and Thomas (fn. 21), no. See also Thomas, W. A., The Provincial Stock Exchanges (London: Frank Cass, 1973).Google Scholar

⁴ Michie (fn. 7) estimates the gross capital formation in Scottish iron manufacture to have increased from 1.8 million pounds in 1828 to 6.6 million pounds by 1840 (p. 51).

²⁴ The Bank of England lowered its rate from 6% in late 1839 to 3% in 1846, while in Scotland, the rate fell from 3.5% in 1842 to 2% in 1843; see Clapham, John, The Bank of England, vol. 2 (Cambridge: Cambridge University Press, 1944)Google Scholar; and Michie (fn. 7).

²⁵ Michie, (fn. 7), 92, 117.Google Scholar

²⁶ Ibid., 117.

²⁷ For example, “the Liverpool and Manchester Railway had only 10 Scottish shareholders in 1838, but 29 by 1845, while the Grand Junction Railway had 4 in 1835 and 122 in 1845. Scots had invested only £2000 in the Newcastle and Carlisle Railway in 1838, but £9,300 in 1844, while they held £94,000 of the stock of the Great North of England Railway in 1845 compared to a mere £4,700 in 1838”; see Michie, (fn. 7), 117–18.Google Scholar

²⁸ Morgan, and Thomas, (fn. 16), 106.Google Scholar

²⁹ Schonhardt-Bailey (fn. 1), chap. 4, presents selected data from Killick and Thomas (fn. 21).

³⁰ Broadbridge, S. A., Studies in Railway Expansion and the Capital Market in England, 1825–1873 (Guildford and London: Frank Cass, 1970), 144.Google Scholar

³¹ Hawke, G. R. and Higgins, J. P. P., “Transport and Social Overhead Capital,” in Floud, Roderick and McCloskey, Donald, eds., The Economic History of Britain since 1700 (Cambridge: Cambridge University Press, 1981).Google Scholar

³² Pollins, (fn. 19), 238.Google Scholar

³³ Irving, R. J., “The Capitalisation of Britain's Railways, 1830–1914,” Journal of Transport History, 3d ser., 5, no. 1 (1984), 14–15.CrossRefGoogle Scholar

³⁴ Briggs, Asa, The Age of Improvement, 178–1867 (London: Longman 1959), 340.Google Scholar

³⁵ For general references to this argument, see Moore, Barrington, Social Origins of Dictatorship and Democracy (Boston: Beacon Press, 1966)Google Scholar; and Hobsbawm, E. J., Industry and Empire (London: Weidenfeld and Nicolson, 1968).Google Scholar For the specific application of this argument to the M.P.'s of 1841–47, see Aydelotte, W. O., “The Business Interests of the Gentry in Parliament of 1841–1847,” in Kitson Clark, G., The Maying of Victorian England (London: Methvent, 1962), 290–307Google Scholar; and idem (fn. 5), 47–60. See also Thomas, J. A., “The House of Commons, 1832–1867: A Functional Analysis,” Economica, no. 13 (1925)CrossRefGoogle Scholar; and idem, “The Repeal of the Corn Laws, 1846,” Economica, no. 25 (1929).

³⁶ In an earlier phase of this project, I tested this hypothesis. In sum, I found that while unmistakable change in the economic interest composition of Parliament was occurring from 1832 onward, the change was quite gradual. The landowning interest was steadily declining while that of business was steadily rising, overtaking the former by the 1870s. I concluded that it seemed likely that it was not the M.P.'s own economic interest that motivated him, but that of his constituents. Transformations in the economic interests of constituents thus took several decades to be reflected in the composition of Parliament.

³⁷ Timothy J. McKeown, “The Politics of Corn Law Repeal Reconsidered” (Paper pre sented at the 1987 annual meeting of the American Political Science Association, revised December 1987).

³⁸ English, Barbara, “Probate Valuations and the Death Duty Registers,” Bulletin of the Institute of Historical Research 58, no. 135 (May 1984)Google Scholar, argues that death duty registers offer more complete records of business holdings than do probates. For example, the registers list stocks and shares, industrial machinery, business interests, and residual estate. They offer more details as to the form in which wealth was held at death. Only since 1982 have the registers been opened to study by researchers for the period from 1796 to 1903. I did find, however, that for later years many registers remain closed, some until the year 2007.

Jane Cox describes and explains the contents, format, notations, and abbreviations relevant both to probates and to death duty registers; see Cox, , The Records of the Prerogative Court of Canterbury and the Death Duty Registers: A Provisional Guide (Canterbury: Public Record Office, Prerogative Court of Canterbury, 1980).Google Scholar

³⁹ Since 1825 and 1846 constitute roughly the critical years “before” and “after” the emergence of capital markets and diversification, and since we may assume that an individual would most likely be at his financial peak not at his death but rather a few years prior, 1830 and 1850 appeared to be adequate choices for each time period sample.

⁴⁰ Schonhardt-Bailey (fn. 1), chap. 4. In brief, however, a mapping of both the 1830 and 1850 samples illustrates a fairly even geographic distribution, with of course the expected concentration around London. A comparison of the regional distribution with actual population figures for England in 1831 and 1851 suggests that the sample distributions appear to match the population figures relatively well. It should be noted, however, that in 1830 the Southeast (including London) and to a lesser extent the Midlands appear overrepresented, while the northern regions are underrepresented. For 1851 the regions fairly accurately correspond to the population figures.

⁴¹ As it was the final year of the wartime income tax, returns in 1815 dropped sharply due to public resistance to the tax and less stringent collection efforts by the Tax Office; see Hope-Jones, Arthur, Income Tax in the Napoleonic Wars (Cambridge: Cambridge University Press, 1939), 77, 109.Google Scholar Hence, 1815 was not considered an appropriate year to sample.

⁴³ Ibid., 121.

⁴³ Schonhardt-Bailey (fn. 1), Appendix 2.

⁴⁴ Further on I separate the votes of M.P.'s into those representing boroughs and those representing counties. For the death duty register sample, this means that, statistically speaking, both sets of M.P.'s are responding to the same county-average diversification score.

⁴⁵ The real estate estimate for this sample suffers from various coding difficulties. Real estate, usually listed as “charges thereupon” rather than as actual values, creates distortion due both to inflated values in some cases and to unreported values in others. It is possible that these two distortions may have nullified each other, but without better microlevel data the extent of the distortions is unknown. Moreover, real estate included not only agricultural holdings but also commercial property, and sometimes mining interests as well. Finally, while I include “residue” with real estate, not all the residue value could indeed be verified as real estate. The effect of these cross-cutting distortions in the estimate of real estate is, again, unknown.

⁴⁶ Squaring both terms of the equation was considered but dismissed, since the result was an increased sensitivity to changes in income levels. In other words, given equal ratios of realestate to non-real estate holdings, squaring the terms multiplied the effect of one's income level, i.e., a wealthier individual would be predicted to have an exponentially stronger interest in either free trade or protection for any given ratio of real estate to non-real estate holdings. The unsquared version, being less responsive to changes in income levels, has the advantage of isolating to a greater degree the effects of diversification.

⁴⁷ Broadly speaking, diversification need not demonstrate direction. Returns from factor inputs need not be channeled from land to capital; the flow could be reversed. The point is that factor returns—as capital flows—will shift from low-to high-yield sectors of the economy.

⁴⁸ Schonhardt-Bailey (fn. 1), chap. 3.

⁴⁹ Ibid.