Entrepreneurship: From Judgement and Information to Transformative Agency

While a comprehensive review of the entrepreneurship literature would occupy too much space, one can chart the fascinating ways in which emphases have switched from Schumpeter’s focus on the entrepreneur and “creative destruction” to the more recent concerns with information, judgement and agency.Footnote ¹¹ Mark Casson was the first to propose this reorientation, explaining that far from destabilising markets through radical innovation, entrepreneurs achieved success as a result of exercising effective judgment in asymmetrical conditions.Footnote ¹² By moving the emphasis to judgment-based coordination under uncertainty, this redefined the entrepreneur as an expert decision-maker whose social value lies in superior information processing, rather than radical novelty. Casson had consequently switched the emphasis from heroic biography to include imitative and incremental actors in systematic studies of firms, industries, and historical contexts.

Following Casson’s innovative work, Scott Shane and Sriram Venkataraman moved the focus to opportunity recognition.Footnote ¹³ One should stress that while this opportunity-based view would become highly influential in the entrepreneurship literature, it is less easily historicized because opportunities are often inferred retrospectively. Moreover, the framework offers limited tools for embedding entrepreneurial action in institutional, cultural, and temporal contexts. Similarly, it is important to add that while failure is typically attributed to processual issues such as missed recognition, insufficient resources, or exogenous constraints, process dynamics are mostly ignored in this framework. Aligning their work with that of Andrew Popp and Robin Holt, Dan Wadhwani and Christina Lubinski stress that it is vital to understand the processual and historical dimensions when analyzing entrepreneurship.Footnote ¹⁴ As Popp and Holt note: “What we argue is not simply that entrepreneurial processes exist in interplay with historical contexts but that we need to see them in relation to the unfolding of time as a making present.”Footnote ¹⁵ Wadhwani and Lubinski add that “understanding [entrepreneurial] agency hinges on examining the processes by which they envision and pursue possible futures beyond the constraints of their present context.”Footnote ¹⁶ Above all, these scholars stress that entrepreneurship unfolds as a historically contingent process, shaped by evolving social norms, organizational forms, and market structures, rather than isolated acts of discovery.

Building on this innovative scholarship, McMullen, Brownell, and Adams have developed what they claim to be a “unified theory of entrepreneurship” based on an ability-motivation-opportunity-institution-process (AMOIP) framework.Footnote ¹⁷ Crucially, they argue that by applying this framework to the work of entrepreneurs, one can detect the extent to which entrepreneurial agency has been achieved. As agency is regarded as the extent to which actors are able both to make and enact choices through their leadership of an industry, this highlights the need to consider both the environment in which the “Troika” operated and the distinctive characteristics of these entrepreneurs as they strived to transform Tyneside shipbuilding. Above all, McMullen, Brownell, and Adams stress how entrepreneurial agency focuses on “the power of transformative capacity, which we define as the capability to intervene in worldly events to produce definite outcomes by getting circumstances and others to comply with one’s wants.”Footnote ¹⁸

What is most notable about this work is how McMullen, Brownell, and Adams build on both Casson’s conception of entrepreneurship as judgment under uncertainty and Shane and Venkataman’s opportunity-based framework. In addition, not only is self-efficacy embedded in this framework (“motivation”), but they also accommodate the institutional and temporal context in their analysis, providing an effective toolkit to examine fledgling industries. Their central argument is that structural change occurs only when opportunities, judgment, institutional conditions, and process skills align to enable sustained action under uncertainty. In simple terms, it is not enough for an entrepreneur to seek and exploit an opportunity; rather, it is essential to “identify process along with the dynamic skills needed to manage it.”Footnote ¹⁹ This view has also been endorsed by Nicolai Foss, who notes that “there is clearly much more to entrepreneurship than the discovery of opportunities, namely the exploitation of those opportunities through assembling and deploying a bundle of relevant resources, such as complementary assets related to production, sales and marketing.”Footnote ²⁰

The McMullen, Brownell, and Adams framework provides historians with a highly effective means of not only analyzing entrepreneurial action but also understanding why some fail and others succeed. The next section will be concerned with opportunity, scoping out the environment in which the pioneers of iron shipbuilding were operating. This will demonstrate that in emerging fields, where institutional rules were fluid and legitimacy contested, it is clear that conversion was the operational heart of entrepreneurial agency; without conversion, agency remains latent.

Tyneside and the Emergence of Iron Shipbuilding

It is clear from the previous section that entrepreneurial behavior cannot be understood in isolation from the institutional and economic settings in which it occurs. In addition, one must examine the nature of iron shipbuilding and how this aligned with the specific requirements of key interests on the Tyne. This will highlight the catalytic role of coal, because as Milne has emphasized, by the late eighteenth century, “the [North East] coalfield was at the heart of an integrated industrial complex, involving railways, ports, ships, ironworks and much else.”Footnote ²¹ This also generated considerable wealth for the region’s entrepreneurs, money that was invested in new industries and financial institutions.Footnote ²² Moreover, as with most industrial-urban elites, this ecosystem was built on extensive endogamous marital alliances that bound the business community together, creating multi-generational family dynasties which controlled coal, banking, and manufacturing.Footnote ²³ Daniel Riddell has also demonstrated through a detailed analysis of foreign merchants operating on Newcastle’s Quayside that the business community was built on high levels of trust, benefitting substantially from the financial, human, and social capital that it generated.Footnote ²⁴

Coal mining continued to expand from the late eighteenth century, with total shipments from North East ports rising from 3.4 million tons in 1825 to 8.4 million tons in 1850.Footnote ²⁵ Crucially, the multiplier effects of this expansion included the extensive use of iron and steam engines as a result of sinking deeper pits. It has been estimated that by 1800 there were 304 steam engines operating across Northumberland and Durham, considerably more than in other industrial regions.Footnote ²⁶ Moreover, it was also in this region that steam-powered railways were pioneered, stimulating even further expansion of the engineering and iron industries in an ecosystem that was extensively interconnected.Footnote ²⁷ In addition, key institutions were formed to support industrial and commercial activity, confirming the views of those scholars who regard this as essential to the development of a vibrant industrial system.Footnote ²⁸

While the region’s financial and civic elites had been enriched by earlier waves of industrialization, iron shipbuilding would not emerge automatically; it required the intervention of individuals who could recognize and exploit a structural opening in the market.Footnote ²⁹ The key factor on Tyneside was the economics of moving a bulky commodity like coal. One can even argue that North East entrepreneurs could have been victims of their own success; having demonstrated the economic value of steam railways, other regions were investing heavily in this form of transport. In particular, although by the early nineteenth century the North East still dominated the lucrative London coal market, coal from the East Midlands was by the early 1840s being transported by rail to the London market in competition with the coal being moved by wooden colliers from the North East.Footnote ³⁰

Crucially, the wooden sailing colliers conveying coal from the North East to London (or other European markets) suffered from two principal disadvantages: they were dependent on wind for power, as well as the requirement to take on board ballast (usually in the form of sand or chalk) in order to balance the vessel on its return journey. As the loading and unloading of this ballast was both time-consuming and labor-intensive, it significantly affected the turnaround times for each ship. On the other hand, not only would steam power eliminate the dependence on weather conditions, but also iron ships could be equipped with tanks to take on water as ballast, thereby significantly speeding up the transport of coal by sea. While a return journey from Newcastle to the capital took just four days in an iron ship, for a wooden vessel it could take three, or even four, weeks.Footnote ³¹ Although the 1809 Coal Turn Act would initially limit the turnaround advantages by specifying that all ships could only join the queue to load coal when the ship was within two miles of Tynemouth Bar, this legislation would become moribund once the majority of colliers were made of iron, and it was repealed in 1856.Footnote ³²

Given this scenario, while it is clear that some Tyneside entrepreneurs were beginning to consider how best to cope with the competition from other regions in London, one should stress that the transition from wood to iron ship construction was a slow, overlapping process that required both builders and shipowners to adapt their perspectives. The narrative and analysis are provided in a range of authoritative studies that reveal how the pressures imposed by rapidly expanding global trade resulted in a demand for larger, faster ships capable of carrying bigger loads.Footnote ³³ It was also clear that by the mid-nineteenth century wood was incapable of meeting all of these requirements, resulting in extensive experimentation with iron.Footnote ³⁴ At the same time, one must also add that the majority of sea-going iron ships built up to the 1860s were powered by sail, rather than by steam engines, largely because of the expense associated with carrying coal, the lack of fueling stations, and concerns over the vulnerability of boilers. In 1870, steam power still only constituted just 1.1 million tons of the 5.7 million tons registered in the British merchant fleet. It was not until the 1880s, with the introduction of triple-expansion steam engines, that sail began to dwindle significantly as the motive power behind British shipping.Footnote ³⁵

Having noted this slow transition, one must remember that steam engines had been used to power river boats since this mode was pioneered on the Clyde in 1811.Footnote ³⁶ Contemporaries across the UK copied this model for tugs and passenger ferries, because it obviated the reliance on wind. By the 1860s, there were 250 steam-powered boats on the Tyne.Footnote ³⁷ On the other hand, one should stress that while in 1850 there were thirty shipbuilding yards on the Tyne producing a wide range of vessels for commercial and military use, almost all of them used wood.Footnote ³⁸ Indeed, it was a local engineering firm that responded earliest to this opportunity, when in 1839 T.D. Marshall launched the Star, which served as a passenger ferry between South Shields and Newcastle.Footnote ³⁹ In 1842, Marshall also built the iron barque Bedlington for the Bedlington Coal Co., incorporating the highly novel use of iron tanks to take on water ballast.Footnote ⁴⁰ It is important to note, however, that the Bedlington merely conveyed coal wagons from the collieries in Blyth to the Tyne staithes, a feature that limited its impact on later designs of iron colliers.Footnote ⁴¹ Moreover, due to regular breakdowns and high maintenance costs, the Bedlington only remained in service for three years. It is also clear that while Marshall continued to build iron ships, securing in the 1840s a further sixteen orders for tugs and small cargo ships,Footnote ⁴² he failed to attract the interest of coalmine owners to invest in this technology.

While it is impossible to be precise about whether Marshall was the first to use water ballast tanks, contemporaries were clearly aware of its possibilities.Footnote ⁴³ As we shall see in the next section, a year earlier in May 1841 John Coutts had explained this technique to a leading coalmine owner, prompting the possibility that Marshall copied the idea from the Aberdonian. Above all, though, as the Bedlington case demonstrated, the transition to iron (and steam-powered) shipbuilding was replete with challenges. In particular, metal hulls required completely different production skills when compared to the carpentry involved in wooden shipbuilding, placing a premium on the skilled labor required to mold iron and rivet the sheets together. Incorporating steam engines and boilers into the propulsion system was also challenging, especially when screw propulsion replaced the early dominance of paddle steamers. Nevertheless, between the 1840s and 1860s, Tyneside underwent a major reconfiguration as the growing demand for iron-hulled, steam-powered vessels introduced a new industrial logic - one that privileged engineering knowledge, organizational scale, and financial innovation over artisanal skill and inherited status.

Apart from coping with these design and production challenges, iron shipbuilding required greater capital investment than wood shipbuilders. Even though they shared the basic requirement of river-fronted land for a slipway, iron pioneers also needed an engine house and workshops for the shearing, drilling, and punching equipment, as well as appropriate riveting machinery. In addition to these fixed capital requirements, adequate working capital was required to purchase iron plates and associated tools and fittings, as well as pay the wages of highly skilled workers who initially proved to be a scarce commodity. This demonstrates how the fixed and working capital demands associated with iron shipbuilding would prove to be highly challenging, obliging firms to employ cost accounting techniques in order to convert the emerging demand into commercial success.

It was into this environment that Coutts, Mitchell, and Leslie were to embark on the risky journey to convert their engineering expertise into viable iron shipbuilding yards on the Tyne. Given the technological, organizational, and financial challenges just outlined, it is essential to consider the early careers of each of our Aberdonian Troika in order to understand how, or whether, they converted opportunity into commercial success.

John Coutts

John Henry Sangster Coutts (1810–1862) was the first of the Troika to establish a business on the River Tyne. Born in Aberdeen of a farming family, at the age of fifteen he moved to London, where he undertook a seven-year apprenticeship at the leading engineering firm of Maudsley, Son & Field.Footnote ⁴⁴ Returning to Aberdeen in 1836 as an architectural draughtsman, he joined Wm Simpson and Co., where he would also mentor Charles Mitchell.Footnote ⁴⁵ He later partnered with John Ronalds, playing a key role in designing the first iron sailing ship built in Aberdeen, the 555-ton John Garrow, which was launched in March 1840. It was later in that year when Coutts and his wife moved to Newcastle, a decision that was probably based on a recognition that the coal trade would provide a better market for iron shipbuilding. Within a few weeks he had formed what was known as the Tyne Iron Shipbuilding Works, after leasing four acres of river-fronted land in Low Walker, two miles to the east of Newcastle.Footnote ⁴⁶ As it was a former wooden shipbuilding yard owned by William Reay, the site was ideally located near deep water and the ironworks of Losh, Wilson and Bell.Footnote ⁴⁷

Delving further into the reasons why Coutts had made this move south, strong inferences can be drawn from the letter book of an important Newcastle figure, John Buddle. A prominent self-made mining engineer and entrepreneur, Buddle was known as ‘the king of the coal trade’, given his role as a coalmine owner, shipowner, and the catalyst behind the construction of both Seaham harbour and the Tyne dock at South Shields.Footnote ⁴⁸ According to his letter book and diaries that meticulously recorded his activities, on May 17, 1841, he was on a train from York to London. His companions were:

As Buddle well understood that a ship’s turnaround rate was directly linked to profitability, he was impressed with Coutts. This resulted in a close, albeit brief, relationship, because Buddle’s diary reveals that not only did he visit the Low Walker yard on several occasions but also regularly invited the shipbuilder and his wife to dinner.Footnote ⁵⁰

One of the reasons why Buddle visited Coutts’ yard was their collaboration on a plan to submit a tender to both British and French governments for a mail ship. This tender is preserved in Buddle’s “Scientific Notes” for November 1841, revealing that Coutts had designed an 840-ton steam-powered liner measuring 215 feet long.Footnote ⁵¹ Apart from emphasizing how much more robust iron was compared to wood, Coutts also estimated that it would cost £20,980 to build, saving £9000 on an equivalent wooden vessel. However, even though a military version “of any Dimensions required” was added, no orders materialized for this ship. This highlights the challenges that a pioneer like Coutts faced in convincing influential contemporaries that iron shipbuilding was the future. Indeed, over the following two years Coutts would only build two iron ships, neither of which were for his erstwhile collaborator, John Buddle.Footnote ⁵²

Undeterred by these events, Coutts persevered with his mission to establish iron shipbuilding on the Tyne. It is also known that he became a member of the Newcastle Masonic Lodge, inveigling his way into the thriving Newcastle business community. Nevertheless, it was 1844 before Coutts was able to persuade a shipowner to back his ideas. This sale was indicative of contemporary shipping transactions, in that typically ownership was broken into sixty-fourths in order to spread the risks associated with sea-going transport.Footnote ⁵³ Coutts was clearly taking a big risk in building a ship that would reflect his radical design ideas, because initially he took all sixty-four shares. Within a few months, however, Coutts was able to sell sixty shares to a shipping magnate, Henry Corles Bingham.Footnote ⁵⁴

The relationship between Coutts and Bingham had clearly been developing since the former’s arrival on the Tyne, because the shipbuilder’s first child (born in September 1841) was named Henry Corles Bingham Coutts. Although this ploy did not seem to work initially, by January 1844 the shipowner had agreed to take the majority share in what was the appropriately named QED (in Latin, “quod erat demonstrandum,” or “that which was to be demonstrated”). The three key features of this ship were the incorporation of double-bottomed water ballast tanks, the installation of a 20 hp Hawthorn steam engine to power a screw propulsion system, and a rear mast that doubled as a chimney. One should also stress, though, that like almost all of the twenty-two ships built by Coutts between 1842 and 1848, it was rigged as a sailing barque, with the engine used only to guide the ship into and out of port.Footnote ⁵⁵ This was standard practice at that time, as the engineering challenge of developing screw propulsion had yet to be perfected.Footnote ⁵⁶ Above all, though, QED established the viability of Coutts’ ideas on the construction and powering of ships, leading the Illustrated London News to predict that he had provided a template others should replicate.Footnote ⁵⁷ This prediction would also be borne out when the Palmer brothers established their shipbuilding yard in 1852, because they replicated Coutts’ design and sold twenty-four ships in two years.Footnote ⁵⁸

Having at last made a breakthrough with the QED, this provided Coutts with a regular series of orders. The QED was operated on behalf of Bingham by the shipping firm of T.C. Gibson & Co., mainly transporting up to 500 tons of coal per journey on the Newcastle-Rouen route. As the owner of the Hartlepool Coal and Coke Company, Gibson purchased eleven iron barques from the Low Walker yard in 1845 and 1846. Local newspaper reports on the launch of Coutts’ ships also generated widespread admiration for the innovatory nature of these vessels.Footnote ⁵⁹

At the same time, and in spite of securing orders for eighteen ships between 1844 and 1848, it is clear that the Low Walker yard struggled as a commercial venture. The lack of archival evidence limits our full understanding of Coutts’ business challenges, but as the iron founders Losh, Wilson and Bell were appointed as assignees of the eventual sale of the shipyard, it is clear that liquidity was a major issue.Footnote ⁶⁰ This was confirmed in the official announcement of his bankruptcy by the London Gazette: “The debts and liabilities are understood to be considerable and the prospects of the creditors are not good.”Footnote ⁶¹ While Coutts had clearly made every effort to engage with the Tyneside business community, generating considerable social capital through his links with Buddle, Bingham, and Gibson, the failure to pay debts fatally undermined the trust he had accumulated. Although the bankruptcy was in 1849 annulled when Bingham and his partners purchased the Rifleman from Coutts, the Low Walker yard was closed and all the equipment sold to pay off his debts.

In attempting to understand why Coutts was unable to develop a sustainable business, one can only speculate that in spite of securing a consistent stream of commissions, pioneering the new technology of iron shipbuilding proved to be too much of a challenge. Of course, one might argue that as a first-mover in iron shipbuilding, he was faced with significant challenges. In the first place, he needed sufficient skilled engineers, the solution to which was a recruitment drive in his native Aberdeen and the construction of what would come to be known as “Scotch Row” in Walker. This example of chain migration was typical of the nineteenth century, whereby immigrants from a particular area followed neighbors to a specific destination.Footnote ⁶²

While this solved one problem, it is clear from the London Gazette report on his bankruptcy that cashflow management would appear to have been more challenging. Moreover, because he was not connected by marriage to other Tyneside business interests, there was no relative available to bail him out. It is also clear that Coutts preferred to design and build ships that were on the frontiers of technological knowledge, ignoring the need to control cashflow. As he later admitted to one correspondent, “no expense was spared with best workmanship” when constructing his first ship, the Prince Albert.Footnote ⁶³ With regard to a schooner launched in 1843, Flash, Coutts also stated that: “No expense has been spared to make the vessel complete.”Footnote ⁶⁴ In addition, each launch was accompanied by lavish entertainment for a “numerous and respectable company,” adding further to the costs incurred for each order.Footnote ⁶⁵ While one should add that this was typical of all shipbuilders, and the publicity generated in local newspapers was crucial in extending Coutts’ reputation, his bankruptcy was a warning to others about pioneering a new technology.

We shall return in the final section to an analysis of Coutts’ business acumen, balancing out the challenges of being a first-mover in iron shipbuilding and the need to curb creative instincts. One must stress that the QED had been a technological success, providing Palmers with a design that laid the foundations for what would be a flourishing shipbuilding yard at Jarrow.Footnote ⁶⁶ It is also important to add that Palmers benefited considerably from their extensive prior links with coal mining and shipping, because this provided a ready market for their colliers. As Coutts was clearly dependent on securing orders from skeptical shipowners, this limited his market potential considerably.

Above all, though, he remained confident about the future of iron shipbuilding, because in 1849 Coutts was to start again. Having learned lessons from his first venture, this time he went into partnership with a local coal merchant, William Parkinson, who agreed to finance a new venture further down the Tyne on land owned by the Town Council at Willington Quay.Footnote ⁶⁷ Parkinson also had some experience of Coutts’ work, having in 1847 purchased a half-share in one of his ships, the GFD. This persuaded him to provide the £2,000 required by the Town Council as an investment in a slipway and associated equipment.Footnote ⁶⁸ The site was also expanded in 1852, when Coutts took a further two acres of land from the Town Council to accommodate a series of orders for some of the largest iron ships built at that time.Footnote ⁶⁹

Nevertheless, even though Coutts’ reputation as a leading iron ship designer and builder was sustained in the 1850s and Parkinson provided the start-up capital, the business clearly struggled to generate adequate profitability. In mitigation, one should note a series of external events: the 1851 strike by engineers; Parkinson’s premature death in 1852; and the repercussions experienced as a result of one order, the W.S. Lindsay. While most engineering firms suffered from the lengthy 1851 dispute with the Amalgamated Society of Engineers, the loss of Parkinson’s financial resources and costs arising from the W.S. Lindsay contract significantly affected his business.Footnote ⁷⁰

The W.S. Lindsay contract had been placed by a prominent London shipbroker (and from 1854 MP for Tynemouth), W. S. Lindsay, originally for a clipper to service the London-China trade. At a late stage in the construction, however, Lindsay insisted on the installation of a third spar deck, with the aim of using the ship to carry up to 300 emigrants to Australia. This caused serious problems, because on the ship’s first sailing from London it almost capsized and had to be towed back to port at a cost of £3000 in salvage and modifications. Lindsay wrote to The Times blaming Coutts for the problem.Footnote ⁷¹ The shipbuilder responded by explaining that it was the shipowner who had altered the design “[w]hen the vessel was far advanced.”Footnote ⁷² While this settled the issue, and in 1854 Lindsay placed another order with Coutts, the shipbuilder’s reputation had been tarnished and the embarrassing return to port adversely affected his cashflow.

Even though orders did continue to be placed with Coutts, cashflow proved to be his major issue. A key factor in this scenario was Coutts’ decision to seek orders for what at that time were very large iron ships exceeding 1,000 tons. While up to 1848 the average ship constructed by Coutts and Marshall had been well under 300 tons, in the 1850s Coutts built nine ships exceeding 500 tons, five of which were well over 1,000 tons.Footnote ⁷³ As we shall note later when assessing the strategies enacted by other shipbuilders at that time, Coutts’ approach was much more ambitious, challenging the conventions of the time. While each ship generated considerable publicity for the Willington yard,and customers seemed to be satisfied with their vessels, there is little doubt that by 1854 the business was struggling.Footnote ⁷⁴

Another factor to consider in this context was how Coutts would appear to have enjoyed a lavish lifestyle, accumulating substantial debts to local food and drink merchants.Footnote ⁷⁵ His family commitments had expanded considerably by that time, in that by 1853 he was supporting seven children and two of his wife’s sisters in Picton Place, an affluent part of Newcastle. In 1851, he also moved his family to Willington Lodge, a substantial house close to his second yard. Apart from the expensive ship launches noted earlier, Coutts also upheld the Scottish tradition of celebrating New Year at considerable expense, inviting large numbers of his peers and workers to annual parties.Footnote ⁷⁶ More importantly, Coutts ran up a substantial debt with a local firm of iron merchants, Mounsey and I’Anson, which by 1856 he was unable to service. This resulted in a brief spell in Newcastle County Gaol for failing to pay these debts and allegedly planning to flee the country.Footnote ⁷⁷ While Coutts was incarcerated, Mounsey and I’Anson seized the Willington yard and sold off all the equipment, terminating Coutts’ shipbuilding activities for the second and decisive time.

Although it is clear that he was correct in foreseeing a market opportunity in iron shipbuilding and his pioneering innovations would also directly influence major Tyneside figures such as Charles Mitchell, Andrew Leslie and the Palmer brothers, clearly his management skills were lacking. In mitigation, one might very well excuse his commercial failings in the 1840s when the industry was only just emerging. On the other hand, by the 1850s iron shipbuilding was being developed profitably by several entrepreneurs on Tyneside and elsewhere. Crucially, Coutts would commit the ultimate mistake of alienating his iron suppliers for a second time, resulting not only in a brief spell in jail, but also the termination of what had been a pioneering career. It was an ignominious end to what had been a significant career replete with technological successes, albeit one that reflected badly on Coutts’ business acumen. Although he continued to be active as an innovator, taking out two patents covering hull protection materials, by 1862 he had died of “Disease of the Liver” and haematemesis in what would appear to have been abject poverty.Footnote ⁷⁸

Charles Mitchell

Charles Mitchell (1820–1895) was a towering figure in nineteenth century shipbuilding, contributing extensively to shaping the industrial and maritime legacy of the River Tyne and beyond. Even though he came from a relatively humble family background, he would benefit from an extensive range of education, because after joining Wm Simpson & Co as an apprentice (where Coutts trained him as a draughtsman), he attended evening classes in chemistry and physics at Marischal College (which in 1860 became Aberdeen University).Footnote ⁷⁹ Although there is no documentary evidence to support the claim that Mitchell was persuaded by Coutts to move south to the Tyne, in 1842 he joined his mentor’s Low Walker yard. In 1844, though, Mitchell went to London to work with the same firm that his employer had joined in 1825, Maudsley, Sons and Field. As he boarded there with a French family, he would also become bilingual, an asset that proved highly beneficial in his career.

After eight years in London, Mitchell returned to Tyneside in 1852 and established his own yard at Low Walker, close to Coutts’ former site and the village’s iron works. He was also able to recruit more skilled workers from Aberdeen, using “Scotch Row” to house them. Crucially, a local coalmine owner and banker, Matthew R. Bigge, was persuaded to provide the start-up capital.Footnote ⁸⁰ This provided the foundations for what would become a flourishing business that over the course of the following thirty years launched 450 ships.Footnote ⁸¹ As we shall see in the final section, the yard was also managed in what would appear to have been a reasonably efficient manner, indicating how Mitchell was always careful with cashflow, keeping stocks at a modest level and costing every contract to a high degree of accuracy.

Apart from being a proven site for shipbuilding, Low Walker would also offer Mitchell an opportunity to mix with the local business community. One of his closest neighbors was the prominent merchant and shipowner, William Swan, with whom Mitchell struck up a close friendship. He would eventually marry Swan’s daughter, Anne, in 1854, facilitating access to what we noted earlier was a business community built on marital alliances. Although there is no evidence that Swan invested in Mitchell’s business, by 1858 William’s sons, Henry (1842-1908) and Charles (1831-1879), had been apprenticed to Mitchell, laying solid foundations for careers that would have a significant impact on the industry.

To demonstrate this point, when in 1862 Mitchell was looking for somebody to run a Russian shipyard, he chose Henry Swan. While this might seem nepotistic, even at the age of twenty Swan was demonstrating considerable skill in the construction of iron steamers. The Russian contract had arisen directly as a result of that country’s defeat in the Crimean War, when British naval supremacy revealed serious deficiencies.Footnote ⁸² Mitchell was already well placed in that market, having supplied ten paddle steamers for the Russian Steam Navigation & Trading Co. between 1857 and 1859, a government-owned enterprise that cultivated the interest in iron shipbuilding. Arising from this contact, he was invited by the Russian government to St Petersburg, with a view to converting naval shipbuilding at Gallenii Island to iron.

Although Mitchell had not yet built any warships, he oversaw the construction of five at Gallenii Island. He was paid £598,814 8s. 7d. for this work, providing a solid cashflow that Mitchell used to expand the Low Walker yard.Footnote ⁸³ Instead of running the yard himself, he deputed the role of general manager to Henry Swan, largely because the Low Walker yard was experiencing a slump in orders. While in the period 1855-59 Mitchell had launched an average of fifteen ships per year, in the following five-year period this figure was less than nine and in 1862 just five slipped into the Tyne.Footnote ⁸⁴ This prompted him to concentrate on rebuilding his British business, with Henry Swan seconded to Gallenii Island. More importantly, though, the experience in building warships would result in the development of an enormous opportunity on the Tyne, because by 1867 Mitchell and Co. had signed a major deal with W.G. Armstrong and Co.

As a leading armaments firm, Armstrong’s was well placed to divert lucrative warship contracts to Mitchell, given the limited capacity of his Elswick factory located two miles upstream from the old Tyne Bridge.Footnote ⁸⁵ Indeed, the relationship was working so well that in 1882 the two companies merged, to form Sir W.G. Armstrong, Mitchell and Co. with the substantial capital of £2 million.Footnote ⁸⁶ This merger epitomizes the status Mitchell had achieved by the 1880s, with one of the world’s major engineering firms moving to enhance its competitive advantage by absorbing the firm’s dynamic capabilities. It also proved to be a lucrative deal for Mitchell, because in his account book it is recorded that he was paid £205,980 for the Low Walker yard.Footnote ⁸⁷ In addition, Armstrong, Mitchell generated significant profitability over the following twenty-five years, with the return on ordinary capital frequently exceeding 10%.Footnote ⁸⁸ The Low Walker yard would also continue to provide innovatory designs that impacted widely on the industry. In 1873, this yard built the world’s first purpose-built cable-laying ship, while in 1886 they launched the world’s first purpose-built oil tanker, the Gluckhauf. These were followed by the world’s first train ferry (Baikal, 1898) and the world’s first oil-burning vessel (the Silverlip, 1902).Footnote ⁸⁹

Beyond Low Walker, Mitchell was also directly responsible for launching other key ventures such as Swan Hunter (1879), which would become a dominant force in shipbuilding well into the twentieth century. In addition, he had established the Wallsend Slipway Co in 1871, which by 1874 had added marine engineering to its ship repair business.Footnote ⁹⁰ Though he avoided politics, Mitchell was a notable philanthropist, spending some of his wealth on community activities such as the construction of St George’s church in Jesmond (at a cost of £30,000). He also donated £15,500 to Aberdeen University. While this would have generated some social capital, above all Mitchell’s achievements stemmed from his commitment to innovation and the adoption of a business model that ensured careful control over cashflow and stock levels. This highlights the importance of effectively converting opportunities and explains why Mitchell was able to succeed in developing a viable business, contrasting sharply with his mentor, John Coutts.

Andrew Leslie

Andrew Leslie (1819-1894) was born into a crofting family on the west coast of Shetland. His first few years of life would prove to be extremely traumatic. Firstly, the family was ejected from their croft when Andrew was just a few weeks old, as part of what are known as the Highland Clearances.Footnote ⁹¹ The family chose to move to Aberdeen, where they had some relatives, but the boat carrying them capsized and his mother was obliged to swim ashore grasping her baby. Although the father was able to find employment on coastal traders owned by a distant cousin, George Leslie,in 1824 he drowned in a shipwreck.Footnote ⁹² One can only surmise that George Leslie supported the family, providing the fee for Andrew when he started an apprenticeship at Bowman and Vernon, an Aberdeen engineering and shipbuilding firm. Leslie would be trained initially as a rivet catcher and eventually as a boiler maker. As we noted earlier, he was also being given technical drawing lessons in the evening by Charles Mitchell, establishing a strong relationship between the two engineers that would last for many years.

Such was Leslie’s ability that he was promoted to foreman, while by 1843 he had taken over Vernon’s business on the founder’s death. Like several other Aberdonian shipbuilders, however, it was clear that their ambitions would never be fulfilled if they stayed in their hometown, given the limited demand for fishing vessels or coastal traders.Footnote ⁹³ Leslie was clearly just as ambitious, because by the early 1850s, he was looking at various sites in Glasgow, Liverpool, and Newcastle to expand his iron shipbuilding interests.Footnote ⁹⁴

While there is no evidence to support the claim, one could infer from their earlier connection that Mitchell was a major influence on Leslie’s final decision, because in 1853, the younger man chose to establish a business on the south bank of the Tyne at Hebburn. Even though he only possessed the paltry capital sum of £198, he was able to lease four acres from a local landowner and purchased the equipment required to build iron ships. Much of the skilled labor was recruited from Aberdeen, providing further evidence of the chain migration that Coutts had initiated. It is noticeable, however, that up to 1856 Leslie had only secured orders for two ships, indicating that the venture was struggling. Moreover, his first ship launched in 1855 was hit by a gale on its maiden voyage and severely damaged.Footnote ⁹⁵ Leslie refused to take any money from the London merchants who had commissioned the ship until it had been repaired, establishing a reputation as a trustworthy businessman yet stretching his meager financial resources to breaking point.Footnote ⁹⁶

These difficult first few years would appear to have been overcome by the acquisition in 1857 of a contract to supply five iron tugs, five iron cargo ships, and five barges for the Russian Steam Navigation & Trading Co. As we noted earlier, this operation was the Russian government’s response to the relative weakness of its naval resources, providing in this case a major boost to Leslie’s yard. This proved decisive, because by honing his production skills to demonstrate greater reliability, over the following three years Leslie was able to secure further orders for a total of thirty-two ships. In 1863, Leslie also started supplying ships to the Liverpool mercantile firm of Holt and Lamport, establishing a commercial relationship that resulted in contracts for sixty cargo ships over the following twenty-two years.

Such was the surge in Leslie’s order book that by 1863 he was searching for a partner who would contribute both engineering and financial resources. The solution was Arthur Coote, who apart from having served an apprenticeship at the Clyde shipbuilding firm of Denny & Co., he was the son of a prosperous coal merchant, Thomas Coote. After some discussions, Coote Senior agreed to provide £20,000 in return for one-third of A. Leslie and Co.Footnote ⁹⁷ In 1867, Arthur would also marry Leslie’s adopted daughter, Jane MacIntosh, cementing a partnership that would prove to be a mainstay of the firm until Leslie retired in 1885. By that time, the Hebburn yard had launched 260 vessels and the labor force had grown to just over 2,000 mostly skilled workers.

In addition to his industrial endeavors, Leslie was also a major force in developing Hebburn as a community, accumulating considerable social capital as a result of his philanthropy. For example, when faced with a local labor shortage, Leslie embarked on a recruitment campaign in Aberdeen, persuading what would eventually amount to several hundred engineers to move their families to Hebburn. This resulted in the formation of a community that was known as “Little Aberdeen” which by the 1880s comprised 400 houses built by Leslie next to the yard. Leslie also donated £7,500 towards the construction of a Presbyterian church, St Andrew’s, with his workforce contributing a further £2,500 through a mortgage. Adjoining this impressive building was a workmen’s institute and school that was similarly funded by a partnership between Leslie and his workers.

Other examples of his philanthropy included a loan of £2,500 to Hebburn council for the construction of an infirmary, a debt he wrote off on his retirement. As he lived between 1859 and 1880 in Wallsend (in the house formerly occupied by John Buddle), Leslie also played an important role in that township’s affairs, joining the Wallsend school board and local board of health in 1867. In addition, he served as a Tyne Improvement Commissioner (1869-1878) and Justice of the Peace for Northumberland and Durham. The Shields Daily News announced his death in 1894 with the headline “Hebburn loses great benefactor,” highlighting the contribution Leslie had made to building a flourishing community.Footnote ⁹⁸

Leslie’s rise had clearly involved the accumulation of both engineering skills and considerable social capital, assets which he had used to secure sufficient finance from both customers and business partners at crucial times in the firm’s evolution. After retiring in 1885 his business partner and son-in-law, Arthur Coote, merged A. Leslie and Co. with the Hawthorn engineering business, forming what continued to be a major force in the industry for many decades, Hawthorn, Leslie and Co.Footnote ⁹⁹ This new enterprise had a capital of £650,000, compared to the £198 that Leslie had brought to Hebburn in 1853, graphically illustrating the founder’s success in converting opportunity into a flourishing venture.