The Butterfield Archives we look after hold a wide range of items from informal letters between family members (some more cordial than others!), invoices or business related correspondence. Our volunteer Ian continues to trawl through transcribing the contents and uncovering more stories. This latest blog from him looks at the Butterfield Brothers as business men – which isn’t a story we’ve told before
He writes:
It has long been a given that the financial records of the Butterfield Bros Company were lost, the British Govt had a major recycling drive post war and many long-established businesses took it as an opportunity to clear their archives. The financial papers of Henry Isaac Butterfield were themselves lost when the family changed solicitors and the survival of the cache of personal letters at Cliffe was purely fortuitous. Heather Millard recently found a reference to the dissolution of Butterfield and Swire in 1869 which was a partnership established between Richard Shackleton, the oldest of the Butterfield Bros and John Samuel Swire (1825-1898).
Further research showed that in the 1960’s Marriner and Hyde, two Liverpool University Economic Historians had worked on the Swires Archive, as the firm was still trading at the time, to produce a biography of J.S. Swire focusing on the activity of the Firm of John Swires and Son, the parent company.
This revealed that all three remaining Butterfield Bros, R.S.B., H.I. and Fred had had dealings with the firm, John Butterfield, described as “the ablest of the brothers” by H. I’s son Frederick William Louis in his autobiography “My West Riding Experiences” had died prematurely in 1865.
There is evidence that Richard Shackleton Butterfield had been shipping fabrics to America and the Far East, presumably through Liverpool, the family concern Butterfield Bros had after all established Fred as their American Representative and H.I. had also traded there prior to his move to France where he seems to have semi-retired due to his wife’s money.
Marriner and Hyde state” At some time in the sixties, probably to compensate for the loss of the U.S. cotton trade (during the Civil War) Swires began to ship cotton, woollen and worsted goods to China and Japan on behalf of various constituents including R.S.B” The brothers operated four mills at this point. Dis satisfaction with a shipping company Preston, Bruell and Co of Shanghai, which he seems to have been using as agents had led to the founding of the Butterfield and Swire Co in 1866. They opened in Shanghai on the 1st of January 1867 and two other firms were founded by the partners in England and America. Swire and the Butterfields may well have known each other previously. Swire’s father was baptised in Halifax in 1793 and John Swire Senior was descended from the Swires of Cononley so there was probably a local connection and the Butterfields will have shipped extensively through Liverpool.
R.S.B as millowner
Incidentally in “Wuthering Heights” Heathcliffe is described as an orphan boy who had been found in Liverpool so the connection of the Pennines with Liverpool was well established and the Brontes were aware of R.S.B in particular through his ownership of the mansion Woodlands in Haworth.
In her book “The Brontes” Juliet Barker recounts an example of R.S.B’s parsimony , describing him as a “hard-nosed Liberal free trader from Keighley” Barker relates how he had taken a mill in Haworth and was employing workers at the lowest possible rates of pay as well as operating the two loom system under which one weaver had to run two looms simultaneously whilst only receiving the same wages as for operating one.
Barker recounts how “on 18th May (1852) his workers had walked out and Richard Butterfield had taken the unusual and provocative step of applying to the magistrates clerk in Bradford for warrants to compel them to work his system. When they refused eight men were arrested and brought before the bench .Two of them were committed to two months hard labour at Wakefield Prison for breaking their contracts before the third ,Robert Redman , announced that he could prove that Butterfield regularly lowered their wages in the middle of a warp , without notice and that weavers had been discharged in the middle of a warp for refusing to attend a second loom. When Butterfield admitted that this was true , the bench reversed its position, discharged all the prisoners and ordered him to pay them 3 shillings and sixpence (17.5 p) each for their days wages , declaring that the contract could not be binding on the men if it was not binding also on the master.
” I am personally struck by the gross disparity of the penalties imposed on the two parties”. Charlotte Bronte recounted the story to her father adding “ I cannot help enjoying Mr Butterfields defeat and yet in in one sense this is a bad state of things – calculated to make working people both discontented and insubordinate “
C.B Letter of 2.6.1852. Source as above.
It is obvious from the surviving letters that R.S.B was following developments in local and U.S.A mills closely.
“The Keighley Spinners are the best (placed) just now of any in the trade because they live under their incomes (blank) which ought to be practiced by everyone.”
R.S.B 16.12.1857 Cliffe Castle Archive
Butterfield and Swire – exit Butterfield
The partnership between J. S. Swire and R. S. Butterfield proved to be a remarkably short lived one, lasting barely two years, it broke up leaving Swire and Sons in possession of Butterfield and Swire and R.S.B in possession of the other two firms.
Marriner and Hyde write
”The reasons for this sudden and unexpected breakdown of the partnership of Butterfield and Swire are obscure. Swires remained on very friendly terms with R. S. Butterfield’s brother H.J. (presumably a mis reading of H.I.) and they maintained close business relations with him, acting as manager of his ships and handling sales and purchases on his behalf” of which more later.
Marriner and Hyde add that “one suspects the main disruptive factor may have been incompatibility of temperament. Perhaps R.S. Butterfield like John Swire was such a forceful personality that one business was not large enough to contain two such overpowering characters” .
At a later date when involved in the continuing lawsuit over the settlement of the company’s affairs John Swire himself hinted that this may have been the explanation when he wrote that
“Mr Butterfield retired from the firm at my suggestion, he was grasping and he bothered me”
(J.S.S to John Cunliffe 26 Feb 1877).
At this point R.S.B had been dead for 8 years but the two firms he retained were still trading. Another pointer to the fact that there was probably incompatibility between the two men lies in the fact that John Swire is described as “utterly abhorring any business associate who failed to fulfil his obligations”.
On the dissolution of the partnership R. S. Butterfield agreed to lend Swire £40,000 for five years at 5% interest to allow them to redeem the sudden drop in the firms’ capital his, Butterfields withdrawal occasioned. He also wanted to get out of some large scale produce operations in which he had still a half interest, Swires agreed to take over these operations which in the event registered considerable losses.
Unfortunately R.S.B only actually lent them £15,000 and Swire was so incensed at this failure to honour the agreement he continued to sue R.S. Butterfields executors after the partnership ended and after R.S. B’s death in 1869. “Swire was angry at being deprived in this way of the £25,000 at a time when his business seriously needed capital…. he was still pursuing the £25,000 in 1879 for on the 7th Feb the assets of the two other companies in which R.S.B had retained full control were released”.
The affairs of the two companies, R. S. Butterfield and R.S.B and Co were settled by R.S.B’s executors and under the terms of the arrangement Swires should now have received the balance of the loan of £25,000 for as John Swire told one of the brothers (Fred) “we don’t desire any compromise : we want the capital for our business”( J.S.S to Fred Butterfield 2 May 1879). Fred was kept busy by his older brother’s estate as he also faced legal action from the Vicomte De Montauban, husband of R.S. B’s short lived daughter and heiress Jennie.
Shipping Profits
The loan was still not forthcoming and as late as 1886 Swires again sued R.S.B’s executors, in a telling statement connected with the suit John Swire spelled out why the £25,000 was of such importance to them.
When R.S. Butterfields assets were realised the John Swires and Sons Company were concentrating on developing their shipping interests and were wanting to invest more heavily in modern steamships. The process they normally followed was that John Swire and Sons took a quarter share in a ship and found co-owners to provide the other ¾ of the capital
“ such an arrangement is entered into on the footing of our being and they invariably are the managing owners or agents of the said steamers and receive as a working expense of the said steamers, the commission usually allowed to managing owners “
Had John Swire and Sons received the outstanding £25,000 in 1879 they would have invested it in four steam ships to a total value of £100,000 .John Swire claimed that in the period 1879-80 his shipping property yielded an average profit of 30% per annum so to this extent he was deprived of a profit of 30% on £25,000 ( by the failure to pay up).
In addition commissions on the four steamers would have averaged £4,000 per year and as the organisation already acted as agent for 50 steamers it could have handled a further four without any additional costs so that these receipts would have been virtually pure profit (and) furthermore the agency of these ships would have remained in Swires hands after the repayment of the loan.
J.S. Swires maintained that they would have experienced no difficulty in finding co-owners for such a venture but they could not undertake it without R.S. B’s promised loan because their own capital was already fully utilised and they could not have raised such a loan on the market or borrowed such a sum on equally favourable terms.
John Swire explained that
“They continued to employ every available means of avoiding locking up capital needed in their business”.
(Letter to H.I. Butterfield 26.8.1886).
Butterfield and Swires remained a very successful business despite the withdrawal of Butterfield’s capital although as a consequence Swire chose not to take on another wealthy partner, relying on the capital which he and his brother possessed. See below.
The explanation of their business practices wasn’t coincidental as H.I. was considering investing in another of the John Swires and Son’s lucrative ventures. Their activity ranged from manufacturing through to shipping as that way they could guarantee freight for the outward journey of their ships and they operated a Guinness bottling plant in Liverpool which produced goods for Australia. The explanation of the generous returns to be made from shipping casts doubts on R.S. B’s ability as a businessman but perhaps he was unused to dealing on equal terms with his business associates.
As the oldest Butterfield brother R.S.B would have taken a lead role in Butterfield Bros .According to an unpublished dissertation of M. Fisher Garside 1989 on H.I. Butterfields pictures “Significantly the only portrait of a member of Henry’s past family to be placed in the reception rooms at Cliffe Castle was that of R.S.B who was head of the firm for many years and brought about its expansion of trade to the U.S.A and Far East” .
R.S.B. as senior partner in Butterfield Bros
Due to the age difference between R.S.B and the two youngest brothers, H.I. and Fred he probably acted as a combination of father figure and mentor and due to his forceful personality his opinions on the business would have been respected and followed. It was probably difficult for him to defer to an equally opinionated partner.
Making a good living in Victorian Haworth, one of the poorest parts of West Yorkshire would have called for generous applications of Yorkshire grit. It isn’t difficult to conclude that Swire found that R.S. B’s truculence was a high price to pay for use of his capital.
Swire was no shrinking violet either. He responded to the loss of the Butterfield capital by resorting to stringent economy, as at that stage Swires were dependant upon the capital of John and his brother to run the business. In 1867 the working capital of John Swires and Sons was £44,710 provided by W.H. Swire (J.S. S’s partner and brother) and £39,192 from John Swire himself so the action of R.S.B in reneging on his promise was damaging.
As a consequence J.S.S advised that staff should be carefully vetted in order to
“weed out the ineffectual and dismiss the superfluous “…. (Business) Buildings mustn’t “be too glorious “……” we must work each port as cheaply as we can” …” economy is our only safeguard “
R.S.B. had certainly met his match in John Swire. Swire seems to have been a human dynamo forever thinking up new business opportunities, possibly the ageing R.S.B found Swire a wearying partner.
There may have also been a disparity in the business acumen of the partners, as once Butterfield and Swire were founded one of their main focuses was to handle the shipment of textiles from Britain, led by William Lang but assisted by a Butterfield Bros employee called Newby. who was an expert in Yorkshire Woolen Goods.
Newby was apparently not highly regarded by John Swire as when he opened a trading house in Yokohama, despite his reservations he explained his decision to proceed as being due to the fact that he had promised R.S. Butterfield that Newby, originally working in the Shanghai office would eventually be put in charge of a trading house of his own.
Accordingly Swire had opened the Yokohama one where “ Newby could do no harm” , hardly a ringing endorsement but proof of Swires integrity. After a year or so Newby moved on and the Yokohama house staggered on, never proving particularly profitable.
R.S.B. on the other hand must have trusted Swires integrity
“ for on ceasing to be a partner he requested that the partnership dissolution should neither be notified (to the stock exchange) or gazetted .For years he was legally liable for our eastern engagements without having any pecuniary interest in the business .He lived and died responsible to the world for what we did” .(J.S.S to John Cunliffe 26 Feb 1877).
This is very strange behaviour from someone previously viewed as at best an astute businessman, in assuming responsibility for the debts of an organisation over which he had no control. Presumably it was in R.S. B’s interest to keep the dissolution of the partnership quiet, possibly because it allowed him to inflate the scale of his business operations and gain loans at a more favourable rate of interest as a consequence.
R.S.B himself was no slouch, encouraging H.I. to travel from Paris to New York in the financial crash of 1857
“I calculate with good (luck) you may purchase something that will pay you good interest besides if I am right perhaps advance 50% within 18 months….You have no idea in what a state things are in here and America all brought about by grand stores, extravagant living and over trading on paper and thousands will have to retrench”
R.S.B 31.-.1857 Cliffe Castle Archive.
However R.S.B. was heading out to see what he could pick up in the resulting fire sale. The crisis was so bad that the American agent Fred Butterfield wrote
“I have written to B Bros to cease their shipments here entirely as we shall have no buyers to sell to for some time to come and I presume they will comply with my wishes unless they are actually crazy” He also remarks in the same letter “ The largest, best and strongest (business) houses are falling like rotten sheep on all sides”
F.B. 11.10.1857 As above.
R.S.B. himself recalled
” I never saw such a state of business as when I arrived in N.Y. and if the great P(anic) had gone(on)there would only have been two houses in the N.Y. trade in this country who could have sustained themselves , one of them A + S Henry , the other I need not state( ie Butterfield Bros) , that was publickly appreciated at the time”
R.S.B .29.3.1858
As above. Nor did R.S.B lose his financial astuteness as he grew older
“I mean to invest my spare funds in the U.S. 5/20 new series (bonds) which are 3% undersold but such are not sold here yet intrinsically as good in every shape and offer interest 6% whilst there. I also mean to invest currency of sisters and your funds left in trust to W.m (Blank) by poor John……..when I say I mean to invest currency in U.S. 6% such will depend upon my conviction of those and other securities of which I shall be guided by Frederick and other influential parties”
R.S.B. 5.10.1866
Unless otherwise specified all quotations are taken from “The Senior, John Samuel Swire, Management in Far Eastern Shipping Trades.” Sheila Marriner and Francis E Hyde. Liverpool University Press 1967.
“My West Riding Experiences” F.W.L. Butterfield Ernest Benn Limited 1927
“The Brontes” Juliet Barker Weidenfield and Nicolson 1994
“The Paintings of H.I.Butterfield” Unpublished dissertation M. Fisher Garside 1989
