CHAPTER 24.

On Over Manufacturing

284. One of the natural and almost inevitable consequences of
competition is the production of a supply much larger than the
demand requires. This result usually arises periodically; and it
is equally important, both to the masters and to the workmen, to
prevent its occurrence, or to foresee its arrival. In situations
where a great number of very small capitalists exist--where each
master works himself and is assisted by his own family, or by a
few journeymen--and where a variety of different articles is
produced, a curious system of compensation has arisen which in
some measure diminishes the extent to which fluctuations of wages
would otherwise reach. This is accomplished by a species of
middlemen or factors, persons possessing some capital, who,
whenever the price of any of the articles in which they deal is
greatly reduced, purchase it on their own account, in the hopes
of selling at a profit when the market is better. These persons,
in ordinary times, act as salesmen or agents, and make up
assortments of goods at the market price, for the use of the home
or foreign dealer. They possess large warehouses in which to make
up their orders, or keep in store articles purchased during
periods of depression; thus acting as a kind of flywheel in
equalizing the market price. 285. The effect of
over-manufacturing upon great establishments is different. When
an over supply has reduced prices, one of two events usually
occurs: the first is a diminished payment for labour; the other
is a diminution of the number of hours during which the labourers
work, together with a diminished rate of wages. In the former
case production continues to go on at its ordinary rate: in the
latter, the production itself being checked, the supply again
adjusts itself to the demand as soon as the stock on hand is
worked off, and prices then regain their former level. The latter
course appears, in the first instance, to be the best both for
masters and men; but there seems to be a difficulty in
accomplishing this, except where the trade is in few hands. In
fact, it is almost necessary, for its success, that there should
be a combination amongst the masters or amongst the men; or, what
is always far preferable to either, a mutual agreement for their
joint interests. Combination amongst the men is difficult, and is
always attended with the evils which arise from the ill-will
excited against any persons who, in the perfectly justifiable
exercise of their judgement, are disposed not to act with the
majority. The combination of the masters, on the other hand, is
unavailing, unless the whole body of them agree, for if any one
master can procure more labour for his money than the rest, he
will be able to undersell them.

286. If we look only at the interests of the consumer, the
case is different. When too large a supply has produced a great
reduction of price, it opens the consumption of the article to a
new class, and increases the consumption of those who previously
employed it: it is therefore against the interest of both these
parties that a return to the former price should occur. It is
also certain, that by the diminution of profit which the
manufacturer suffers from the diminished price, his ingenuity
will be additionally stimulated; that he will apply himself to
discover other and cheaper sources for the supply of his raw
material; that he will endeavour to contrive improved machinery
which shall manufacture it at a cheaper rate; or try to introduce
new arrangements into his factory, which shall render the economy
of it more perfect. In the event of his success, by any of these
courses or by their joint effects, a real and substantial good
will be produced. A larger portion of the public will receive
advantage from the use of the article, and they will procure it
at a lower price; and the manufacturer, though his profit on each
operation is reduced, will yet, by the more frequent returns on
the larger produce of his factory, find his real gain at the end
of the year, nearly the same as it was before; whilst the wages
of the workman will return to their level, and both the
manufacturer and the workman will find the demand less
fluctuating, from its being dependent on a larger number of
customers.

287. It would be highly interesting, if we could trace, even
approximately, through the history of any great manufacture, the
effects of gluts in producing improvements in machinery, or in
methods of working; and if we could shew what addition to the
annual quantity of goods previously manufactured, was produced by
each alteration. It would probably be found, that the increased
quantity manufactured by the same capital, when worked with the
new improvement, would produce nearly the same rate of profit as
other modes of investment.

Perhaps the manufacture of iron(1*) would furnish the best
illustration of this subject; because, by having the actual price
of pig and bar iron at the same place and at the same time, the
effect of a change in the value of currency, as well as several
other sources of irregularity, would be removed.

288. At the present moment, whilst the manufacturers of iron
are complaining of the ruinously low price of their produce, a
new mode of smelting iron is coming into use, which, if it
realizes the statement of the patentees, promises to reduce
greatly the cost of production.

The improvement consists in heating the air previously to
employing it for blowing the furnace. One of the results is, that
coal may be used instead of coke; and this, in its turn,
diminishes the quantity of limestone which is required for the
fusion of the iron stone.

The following statement by the proprietors of the patent is
extracted from Brewster's Journal, 1832, p. 349:

Comparative view of the quantity of materials required at the
Clyde iron works to smelt a ton of foundry pig-iron, and of the
quantity of foundry pig-iron smelted from each furnace weekly

Fuel in tons of 20 cwt each cwt 112 lbs; Iron-stone; Lime-stone
Cwt; Weekly produce in pig-iron Tons

1. With air not heated and coke; 7;3 1/4; 15; 45
2. With air heated and coke; 4 3/4; 3 1/4; 10; 60
3. With air heated and coals not coked; 2 1/4; 3 1/4; 7 1/2; 65

Notes. 1. To the coals stated in the second and third lines, must
be added 5 cwt of small coals, required to heat the air.

2. The expense of the apparatus for applying the heated air
will be from L200 to L300 per furnace.

3. No coals are now coked at the Clyde iron works; at all the
three furnaces the iron is smelted with coals.

4. The three furnaces are blown by a double-powered
steam-engine, with a steam cylinder 40 inches in diameter, and a
blowing cylinder 80 inches in diameter, which compresses the air
so as to carry 2 1/2 lbs per square inch. There are two tuyeres
to each furnace. The muzzles of the blowpipes are 3 inches in
diameter.

5. The air heated to upwards of 600 degrees of Fahrenheit.
It will melt lead at the distance of three inches from the
orifice through which it issues from the pipe.

289. The increased effect produced by thus heating the air is
by no means an obvious result; and an analysis of its action will
lead to some curious views respecting the future application of
machinery for blowing furnaces.

Every cubic foot of atmospheric air, driven into a furnace,
consists of two gases.(2*) about one-fifth being oxygen, and
four-fifths azote.

According to the present state of chemical knowledge, the
oxygen alone is effective in producing heat; and the operation of
blowing a furnace may be thus analysed.

1. The air is forced into the furnace in a condensed state,
and, immediately expanding, abstracts heat from the surrounding
bodies.

2. Being itself of moderate temperature, it would, even
without expansion, still require heat to raise it to the
temperature of the hot substances to which it is to be applied.

3. On coming into contact with the ignited substances in the
furnace, the oxygen unites with them, parting at the same moment
with a large portion of its latent heat, and forming compounds
which have less specific heat than their separate constituents.
Some of these pass up the chimney in a gaseous state, whilst
others remain in the form of melted slags, floating on the
surface of the iron, which is fused by the heat thus set at
liberty.

4. The effects of the azote are precisely similar to the
first and second of those above described; it seems to form no
combinations, and contributes nothing, in any stage, to augment
the heat.

The plan, therefore, of heating the air before driving it
into the furnace saves, obviously, the whole of that heat which
the fuel must have supplied in raising it from the temperature
of the external air up to that of 600 degrees Fahrenheit; thus
rendering the fire more intense, and the glassy slags more
fusible, and perhaps also more effectually decomposing the iron
ore. The same quantity of fuel, applied at once to the furnace,
would only prolong the duration of its heat, not augment its
intensity.

290. The circumstance of so large a portion of the air(3*)
driven into furnaces being not merely useless, but acting really
as a cooling, instead of a heating, cause, added to so great a
waste of mechanical power in condensing it, amounting, in fact,
to four-fifths of the whole, clearly shews the defects of the
present method, and the want of some better mode of exciting
combustion on a large scale. The following suggestions are thrown
out as likely to lead to valuable results, even though they
should prove ineffectual for their professed object.

291. The great difficulty appears to be to separate the
oxygen, which aids combustion, from the azote which impedes it.
If either of those gases becomes liquid at a lower pressure than
the other, and if those pressures are within the limits of our
present powers of compression, the object might be accomplished.

Let us assume, for example, that oxygen becomes liquid under
a pressure of 200 atmospheres, whilst azote requires a pressure
of 250. Then if atmospheric air be condensed to the two hundredth
part of its bulk, the oxygen will be found in a liquid state at
the bottom of the vessel in which the condensation is effected,
and the upper part of the vessel will contain only azote in the
state of gas. The oxygen, now liquefied, may be drawn off for the
supply of the furnace; but as it ought when used, to have a very
moderate degree of condensation, its expansive force may be
previously employed in working a small engine. The compressed
azote also in the upper part of the vessel, though useless for
combustion, may be employed as a source of power, and, by its
expansion, work another engine. By these means the mechanical
force exerted in the original compression would all be restored,
except that small part retained for forcing the pure oxygen into
the furnace, and the much larger part lost in the friction of the
apparatus.

292. The principal difficulty to be apprehended in these
operations is that of packing a working piston so as to bear the
pressure of 200 or 300 atmospheres: but this does not seem
insurmountable. It is possible also that the chemical combination
of the two gases which constitute common air may be effected by
such pressures: if this should be the case, it might offer a new
mode of manufacturing nitrous or nitric acids. The result of such
experiments might take another direction: if the condensation
were performed over liquids, it is possible that they might enter
into new chemical combinations. Thus, if air were highly
condensed in a vessel containing water, the latter might unite
with an additional dose of oxygen, (4*) which might afterwards
be easily disengaged for the use of the furnace.

293. A further cause of the uncertainty of the results of
such an experiment arises from the possibility that azote may
really contribute to the fusion of the mixed mass in the furnace,
though its mode of operating is at present unknown. An
examination of the nature of the gases issuing from the chimneys
of iron-foundries, might perhaps assist in clearing up this
point; and, in fact, if such enquiries were also instituted upon
the various products of all furnaces, we might expect the
elucidation of many points in the economy of the metallurgic art.

294. It is very possible also, that the action of oxygen in a
liquid state might be exceedingly corrosive, and that the
containing vessels must be lined with platinum or some other
substance of very difficult oxydation; and most probably new and
unexpected compounds would be formed at such pressures. In some
experiments made by Count Rumford in 1797, on the force of fired
gunpowder, he noticed a solid compound, which always appeared in
the gunbarrel when the ignited powder had no means of escaping;
and, in those cases, the gas which escaped on removing the
restraining pressure was usually inconsiderable.

295. If the liquefied gases are used, the form of the iron
furnace must probably be changed, and perhaps it may be necessary
to direct the flame from the ignited fuel upon the ore to be
fused, instead of mixing that ore with the fuel itself: by a
proper regulation of the blast, an oxygenating or a deoxygenating
flame might be procured; and from the intensity of the flame,
combined with its chemical agency, we might expect the most
refractory ore to be smelted, and that ultimately the metals at
present almost infusible, such as platinum, titanium, and others,
might be brought into common use, and thus effect a revolution in
the arts.

296. Supposing, on the occurrence of a glut, that new and
cheaper modes of producing are not discovered, and that the
production continues to exceed the demand, then it is apparent
that too much capital is employed in the trade; and after a time,
the diminished rate of profit will drive some of the
manufacturers to other occupations. What particular individuals
will leave it must depend on a variety of circumstances. Superior
industry and attention will enable some factories to make a
profit rather beyond the rest; superior capital in others will
enable them, without these advantages, to support competition
longer, even at a loss, with the hope of driving the smaller
capitalists out of the market, and then reimbursing themselves by
an advanced price. It is, however, better for all parties, that
this contest should not last long; and it is important, that no
artificial restraint should interfere to prevent it. An instance
of such restriction, and of its injurious effect, occurs at the
port of Newcastle, where a particular Act of Parliament requires
that every ship shall be loaded in its turn. The Committee of the
House of Commons, in their Report on the Coal Trade, state that,

'Under the regulations contained in this Act, if more ships
enter into the trade than can be profitablv employed in it, the
loss produced by detention in port, and waiting for a cargo.
which must consequently take place, instead of falling, as it
naturally would, upon particular ships, and forcing them from the
trade, is now divided evenly amongst them; and the loss thus
created is shared by the whole number.' Report, p. 6.

297. It is not pretended, in this short view, to trace out all
the effects or remedies of over-manufacturing; the subject is
difficult, and, unlike some of the questions already treated,
requires a combined view of the relative influence of many
concurring causes.

NOTES:

1. The average price per ton of pig iron, bar iron, and coal,
together with the price paid for labour at the works, for a long
series of years, would be very valuable, and I shall feel much
indebted to anyone who will favour me with it for any, even
short, period.

2. The accurate proportions are, by measure, oxygen 21, azote 79.

3. A similar reasoning may be applied to lamps. An Argand burner,
whether used for consuming oil or gas, admits almost an unlimited
quantity of air. It would deserve enquiry, whether a smaller
quantity might not produce greater light; and, possibly, a
different supply furnish more heat with the same expenditure of
fuel.

4. Deutoxide of hydrogen, the oxygenated water of Thenard.