In the 21st century the word ‘Cornish’ is a strong brand in the food industry. Pasties, cheeses, cream, ice cream, biscuits, cakes, fish, tea, coffee, cauliflower, wine, beer, gin and cider are the many products benefiting from the prefix.
In the 19th century however, it was the hard rock mining industry that had fallen in love with the prefix; Cornish stamps, Cornish engine, Cornish stamps, Cornish Rolls, the list is long. Alongside this technology though was a term with a more vague meaning, the ‘Cornish System’.
This ‘Cornish System’ formed a major part of John Taylor’s success. It was the implementation of this system to mines outside of Devon and Cornwall that gave him a critical financial advantage over his competitors.
Taylor did not transplant all of the system to his mines, he only used the parts that suited him best. The two key elements he used were the cost book company structure, and the workforce payment system.
Cost book companies
When Taylor reached the financial position to be enable him to enter the realm of mine ownership, cost book companies became his preferred method of company structure.
Cost book companies were a historic and simple form of financial institution that had developed from the needs of the early medieval tin streamers. In theory, they could only legally be used within the Cornish and Devon Stannaries’ jurisdictions, but this legal detail did not prevent Taylor from setting them up in many other parts of Britain.
The key features of cost book companies were:
- The names of the investors (adventurers) and the mines financial transactions are entered in a cost book.
- At the end of each accounting period all profits are divided between the adventurers according to their shareholding.
- All money required to develop the mine and continue operating is to be obtained from the sales of ore.
- If sales do not meet these costs a ‘call is to be made on the adventurers, who will then be required to make a payment to the mine according to their shareholding.
- The mine cannot hold a cash reserve, or borrow from external sources.
Investors in cost book companies could not just sit back and allow the money to role in. Mines often spent many years demanding money from their adventurers before the reward of profits occurred, and the majority of the adventures would never reach profitability.
Despite of its apparent short-comings when applied to large industrial scale operations, the cost book system suited Taylor very well. By restricting the number of shares it enabled him to maintain a tight control of the companies and allowed for quick changes in strategy. The lack of capital reserve and external borrowing was not a restriction to Taylor, who was extremely skilled at managing the balance between ore being sold, broken ore underground awaiting hauling to the surface and the development of new potential ore reserves. He treated the broken ore laying in the stopes as his bank, solid capital to be called on when required.
The payment and management of the workforce
This was a system based on a method of self-employment, with two classes of miners, those paid on work completed (tut workers), and those paid as a share of the value of the ore raised (tribute).
The process revolved around the act of setting, when the work was auctioned to the miners. On the large rich mines this must have been an impressive spectacle, with the miners gathered around the grand frontage of a count house waiting to determine their future chances of fortune or poverty.
Taylor considered that the system was an effective in maximising profits and enabling efficient management. Once the work had been set, large parts of the mines operations became self-managing. Miners and the mine owners shared the common aims of producing saleable ore at low cost, and this alignment of aims resulted in a system that was stated by Charles Babbage as :
“no other mode of payment affords to the workmen a measure of success so directly proportioned to the industry, the integrity, and the talent, which they exert”.
It was not a system without its weaknesses. One important one was its influence of the infrastructure on the mine. The efficiency of ground working it stimulated often left a complex of shafts, winzes and tunnels not suited to modern methods being demanded in the latter half of the 19th century. Critics also accused the system of encouraging unsafe practices, with the miners willing to take more risks when driven by the desire for higher payments.
To sum up in a few easy words...
A genius from Norwich used traditional Cornish methods he first learnt in Devon to modernise mines in the rest of Britain. History is never simple.
I can still find no trace of recognition of his achievements in his town of birth. Various libraries, tourist information offices, record libraries and museums have helped in the hunt, but it appears he his the genius the town chooses to ignore.
The next post will send the blog back west to Cornwall, and will reverse the grammatical emphasis.
If you wish to explore the life of another character in the Cornish mining industry then read The Last Great Cornish Engineer.