A Pipe Dream Come True: The International Expansion of the Hume Pipe Company in the 1920s

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Acknowledgments

Research for this article was made possible with financial support from the Australian National University's Faculty of Economics and Commerce Summer Research Grant 2001/2002. I would like to thank Smorgon Consolidated Investments Pty Ltd for granting permission to publish from the Humes Limited archives held at the Noel Butlin Archives Centre (hereafter NBAC), ANU. I would also like to thank Pierre van der Eng of the ANU for providing comments on an earlier draft of this paper.

Notes

D.T. Merrett, ‘Australian Firms Abroad: Why so Few, Why Those, and Why There?’, Business History, Vol.44 No.2 (2002), pp.65–87.

H. Hughes, ‘Australians as Foreign Investors: Australian Investment in Singapore and Malaysian Manufacturing Industries’, Australian Economic Papers (June 1967), pp.57–76; idem, ‘Australian Investment’, in H. Hughes and You Poh Seng (eds), Foreign Investment and Industrialisation of Singapore (Canberra, 1969), pp.62–85; K. Short, ‘Australian Based Manufacturing in Indonesia: A Case Study’, in E. Utrecht (ed.), Transnational Corporations in South East Asia and the Pacific, Vol.1 (Sydney, 1978), pp.123–218; A.D. Sorensen and M.J. Cooper, ‘Australian Overseas Investment: Some Locational Considerations’, in G.J.R. Linge and J. Mckay (eds), Structural Change in Australia: Some Spatial and Organisational Responses (Canberra, 1981), pp.119–41; and M. Taylor, ‘The Changing Pattern of Australian Corporate Investment in the Pacific Islands’, in idem (ed.), The Geography of Australian Corporate Power (Sydney, 1984), pp.25–45.

Merrett, ‘Australian Firms Abroad’, pp.65–87.

G.D. Snooks, ‘Innovation and the Growth of the Firm: Hume Enterprises 1910–40’, Australian Economic History Review, Vol.13 No.1 (1973), pp.16–40; idem, ‘Constraints on the Growth of the Firm: Hume Enterprises, 1910–40’, Australian Economic History Review, Vol.14 No.1 (1974), pp.37–57; and idem, ‘Hume Enterprises in Australia, 1910–1940: A Study in Microeconomic Growth’ (unpublished Ph.D. thesis, Australian National University, 1971).

Variants of the centrifugally spun reinforced concrete pipe are still produced today by CSR Humes.

J.H. Dunning, ‘Trade, Location of Economic Activity and the MNE: A Search for an Eclectic Approach’, in B. Ohlin et al. (eds), The International Allocation of Economic Activity (London, 1977), pp.395–418; idem, ‘Explaining Changing Patterns of International Production: In Defence of the Eclectic Theory’, Oxford Bulletin of Economics and Statistics, Vol.41 (Nov. 1979), pp.269–95; and idem, ‘Forty Years On: American Investment in British Manufacturing Industry Revisited’, Transnational Corporations, Vol.8 No.2 (1999), pp.1–34.

Dunning, ‘Trade, Location of Economic Activity and the MNE’, pp.395–418.

S. Hymer, The International Operations of National Firms (Cambridge, MA, 1976), p.34.

Ibid.

J.H. Dunning, ‘Market Power of the Firm and International Transfer of Technology: An Historical Excursion’, International Journal of Industrial Organisation, Vol.1 (1983), pp.333–51; idem, Explaining International Production (London, 1988); idem, ‘The Eclectic Paradigm of International Production: A Personal Perspective’, in R. Sugden and C.N. Pitelis (eds), The Nature of the Transnational Firm (London, 1991).

F. Lage-Hidalgo and J.H. Love, ‘The Ownership Advantage in Latin American FDI: A Sectoral Study of US Direct Investment in Mexico’, The Journal of Development Studies, Vol.35 No.5 (1999), pp.76–95.

J.H. Dunning, ‘The Eclectic (OLI) Paradigm of International Production: Past, Present and Future’, International Journal of the Economics of Business, Vol.8 No.2 (2001), pp.173–90.

Dunning, ‘Forty Years On’, pp.1–34.

Internalisation theory was developed to explain why firms opt to expand their operations horizontally or vertically rather than rely on external markets to distribute resources for them, O.E. Williamson, Markets and Hierarchies: Analysis and Antitrust Applications: A Study in the Economics of Internal Organisation (New York, 1975). Buckley and Casson are widely credited as the first to apply the theory effectively to FDI – P.J. Buckley and M. Casson, The Future of the Multinational Enterprise (London, 1976).

N. Kumar, ‘Intangible Assets, Internalisation and Foreign Production: Direct Investments and Licensing in Indian Manufacture’, Weltwirtschaftliches Archiv, Vol.123 (1987), pp.325–45.

Dunning, ‘Explaining Changing Patterns of International Production’, pp.269–95.

P. Estrella Tolentino, ‘From a Theory to a Paradigm: Examining the Eclectic Paradigm as a Framework in International Economics’, International Journal of the Economics of Business, Vol.8 No.2 (2001), pp.191–209.

M. Casson, The Firm and the Market (Oxford, 1987).

Dunning, Explaining International Production, p.44.

Lage-Hidalgo and Love, ‘The Ownership Advantage in Latin American FDI’, pp.76–95.

Dunning, ‘Forty Years On’, p.12.

C.G. Culem, ‘The Locational Determinants of Direct Investment among Industrialized Countries’, European Economic Review, Vol.32 (1988), pp.885–904; and Veuglers, ‘Locational Determinants and Ranking of Host Countries’, Kyklos, Vol.4 (1991), p.363.

Veuglers, ‘Locational Determinants and Ranking of Host Countries’; Vernon, Sovereignty at Bay: The Multinational Spread of US Enterprises (New York, 1971); and Dunning, ‘Explaining Changing Patterns of International Production’, p.285.

Culem, ‘The Locational Determinants of Direct Investment’.

Dunning, ‘Explaining Changing Patterns of International Production’; Culem, ‘The Locational Determinants of Direct Investment’; and Veuglers, ‘Locational Determinants and Ranking of Host Countries’.

Dunning, ‘Changing Patterns of International Production’, p.287; idem, ‘Forty Years On’, p.16; and Veuglers, ‘Locational Determinants and Ranking of Host Countries’, p.363.

NBAC, 32/9/1, ‘Twenty-Fifth Anniversary of the Hume Pipe’, notes by W.R. Hume, 18 Sept. 1934, p.1.

NBAC, 116/1/18, ‘Commemorating 50 Years of Progressive Industry: Hume Industries 1892–1942’, pp.1–2.

L. Port, Australian Inventors (Melbourne, 1978), pp.87–8.

See Snooks, thesis, p.183; and S. Encel and M. O'Dea, ‘Walter Reginald Hume (1874–1947): Some Notes on a Pioneer of Pipe Technology’, Records of Australian Academy of Science, Vol.1 No.4 (1969), pp.17–26.

NBAC, Z167/347, ‘An English Opinion’, in Hume Pipe Co. (Australia) Prospectus, 1920. The process is described in a 1920 prospectus released for the Hume Pipe Company (Australia) Ltd, though the process had been improved upon slightly since 1910, the fundamentals of the process remained the same, as they still do to this day.

NBAC, Z167/347, ‘An English Opinion’, p.5.

Ibid.

NBAC, Z167/347, Hume Pipe Co. (Australia) Prospectus, 1920, p.5.

NBAC, 116/28, News Cuttings, ‘Hume Pipes: Record of Remarkable Achievement’ p.101. For a review of the problem of corrosion in iron pipes see M. Edwards and L.S. McNeill, ‘Iron Pipe Corrosion in Distribution Systems’, American Water Works Association Journal, Vol.93 No.7 (2001).

NBAC, 116/1/18, Prospectus – Humes Patent Cement Iron Syndicate Ltd, in ‘Commemorating 50 years of Progressive Industry’.

Snooks, thesis, p.20.

NBAC, 32/9/1, Speech by Mr Lord, 7 Nov. 1934, p.4.

NBAC, 155/2, Company History, Notes by W.R. Hume on the Early Days of Hume Pipe, p.6. It was later alleged by the Hume Pipe directors that Charles Bayer was receiving benefits from a competitor of Humes, Mephen Ferguson and Company – NBAC, 116/8 Hume Pipe Company (Australia) Ltd Minute Book, 1920–22, 13 March 1922, para.284. A complaint made to Bayer in 1910 by one of the Hume directors, A.J. McLachlan, regarding the quality of drainage at Mr McLachlan's residence may also have had some bearing on this discrimination by Bayer – State Library of South Australia, PRG 342/1/8, Letter McLachlan to Bayer, 26 Nov. 1910.

NBAC, 32/9/1, Speech by Mr Lord, 7 Nov. 1934, p.5.

NBAC, 116/2/3, Were's Statistical Service Pamphlet – Hume Pipe Company (Australia) Ltd, 5 Oct. 1936.

NBAC, 155/2, Notes by John Herbert Cooke – Hume Brother's Patent Attorney. The tender by the Hume Brothers for this contract was so much lower than its competitors that the Hobart Council sent an engineer, Mr J.C. Ross, to South Australia to investigate. Upon inspecting the Hume Pipe Mr Ross sent word to the S.A. Hydraulic Engineers Department that ‘they didn't know what South Australia possessed in pipe making’.

NBAC, N36/15, ‘Complete Hume Pipe Plants Operating in Australia and New Zealand, 1920’. In NSW, the Hume patent rights were sold in 1913 to the Monier State Pipe and Reinforced Concrete Works.

NBAC, 116/8, Hume Pipe (Aust.) Minute Book 1920–22, 15 Dec. 1921, para.270; NBAC, S69, ‘Hume News’; NBAC, N36/34, WA Branch Managers' monthly progress report 1921; NBAC, 32/18, Press Cuttings book Feb. 1923–Jan. 1931; and 116/28, Press Cuttings Book 1916–26.

NBAC, Z167/347, Hume Pipe Co. (Aust.) Prospectus, 1920, p.4.

NBAC, 116/2/3, Were's Statistical Service Pamphlet – Hume Pipe (Aust.), 5 Oct. 1936.

NBAC, 155/2, Notes, Mr W.R. Hume – South Africa, p.1.

NBAC, 155/2, Notes: Mr W.R.H. – Early Days of Hume Pipe Co: South Africa, p.1.

NBAC, 116/2/1, Letter – Hume/Fitzpatrick, 15 Sept. 1917.

NBAC, 155/3, Notes by Mr F.E. Paice – ‘The Early History of Indian Hume Pipe’, p.1.

NBAC, 116/2/1 Letter – Fitzpatrick/W.R. Hume, 15 Oct. 1919, p.2; and NBAC, N36/39, Early History of Hume Pipe and Concrete Construction Ltd (India), 1922.

NBAC, 32/9/1, Agreement with Sir J Percy Fitzpatrick and the Hume Pipe and Concrete Construction Company, in envelope marked ‘W.R. Hume Esq., Flinders Street, Adelaide, Australia’.

NBAC, N36/26, Notes by W.R. Hume whilst in London.

NBAC, 155/2, Notes: Mr W.R.H Early days of Hume Pipe: South Africa, p.1.

NBAC, 155/2, Notes by John Herbert Cooke – Hume Brothers Patent Attorney, 1958, p.6.

NBAC, 116/2/3, Were's Statistical Service Pamphlet – Hume Pipe (Aust.), 5 Oct. 1936.

NBAC, 116/8, Hume Pipe (Aust.) Minute Book, 1920–22, 13 Sept., para.84.

The importance of excess managerial resources for FDI is shown in R.E. Caves, ‘Causes of Direct Investment: Foreign Firms' shares in Canadian and United Kingdom Manufacturing Industries’, Review of Economics and Statistics, Vol.56 (1974), pp.279–93.

NBAC, N36/18, Letters from S.R. Pitman to W.R. Hume relating to the Cement Pipe Co. Ltd New Zealand, letter dated 31 July 1920.

Ibid.

NBAC, N36/26, Notes by Hume in London, 14 July 1921, p.14.

NBAC, 155/2, Notes Mr W.R. Hume – South Africa, p.1.

Ibid, p.3.

NBAC, 155/3, ‘The Early History of Indian Hume Pipe’, p.3. One such expert was Mr Ward-Florence, a South African actor who prior to going to India received all of three months' training in pipe manufacturing. Upon being fired for gross incompetence, Mr Ward-Florence said, ‘It's been the best holiday I ever had’.

Ibid., p.6.

Ibid., p.28.

Ibid., p.3.

NBAC, N36/33, Notes by W.R. Hume, Annual General Meeting, Hume Pipe & Concrete Construction Co. Ltd, 28 July 1921, p.1.

Ibid.

NBAC, N36/26, Notes by Hume in London, 14 July 1921, p.4.

NBAC, N36/20 Letter WRH to HPCCC Ltd, 13 April 1921.

NBAC, 32/27/1, Correspondence between New Zealand Branch and Head Office; NBAC, 32/33/1, Correspondence between Singapore and Melbourne; and NBAC, 32/41/1, Correspondence respecting contracts.

NBAC, N36/26, Notes by Hume in London, 11 Aug. 1921, p.2.

Ibid.

Ibid, 23 July 1921, p.14.

NBAC, 155/2, Notes: Mr W.R.H. Early Days of Hume Pipe: South Africa, p.1.

The Singapore Expansion refers to Humes' expansion to not only Singapore but also the whole of the Straits Settlements and the Federated Malay States.

NBAC, S69, ‘Humes in Export’ in ‘Hume News, Jubilee Edition’ (1970), Issue 8, p.4.

NBAC, 32/27/1, Letter between Auckland and Melbourne, ‘Wire’, 28 June 1926; and NBAC, 32/33/1 Letter – Singapore to Melbourne, ‘Wire’, 16 June 1923.

New Zealand Census and Statistics Office, Statistics of the Dominion of New Zealand for the Year 1920, Vol.II – Trade and Shipping (Wellington, 1920), pp.418, 420–21.

W.G. Huff, The Economic Growth of Singapore (Cambridge, 1984), pp.3–4; and R. Deane, Foreign Investment in New Zealand Manufacturing (Wellington, 1970), p.4.

Notes made on front cover of C.S. Nathan, Report on the Possibilities of Trade in British Malaya and Java (Perth, 1921) in NBAC, 32/33/1, Correspondence – Singapore/Melbourne.

Huff, The Economic Growth of Singapore, p.82; A.M. Pountney, ‘Revenue and Expenditure’, in R.O. Winstedt, Malaya: The Straits Settlements, The Federated and Unfederated Malay States (London, 1923), pp.175–6; and R.W. Dalton, Report on Commercial Conditions in the Dominion of New Zealand, July 1921 (London, 1921), p.9.

NBAC, S69, ‘Hume News’, Sept. 1964.

NBAC, N36/18, Letter from S.R. Pitman to W.R. Hume, 31 July 1920; and Nathan, Report on the Possibilities of Trade in British Malaya and Java.

NBAC, N36/29 Letter from W.R. Hume to the Hume Pipe Company (Australia), 19 Jan. 1921.

NBAC, 116/8, Hume Pipe (Aust.) Minute Book, 1920–22, 13 Sept. 1920, para.77.

As evidence of the company's desire to access the whole of the Asian market, W.R. Hume in 1921 proposed the flotation of a ‘powerful company to deal with Japan, China, Siam, Federated Malay States, Java, Borneo, Sumatra and French Indo-China and possibly the Philippines’. However, the London company had already met with parties interested in purchasing these rights and so was not interested in Hume's plan. NBAC, N36/29 Letter from W.R. Hume to the Hume Pipe Company (Australia), 19 Jan. 1921, p.1.

NBAC, 116/8, Hume Pipe (Aust.) Minute Book, 1920–22, 3 Feb. 1921, para.168.

Ibid.

Ibid, 18 Oct. 1921, para.254.

Ibid, 13 March 1922, para.274.

NBAC, 116/2/3, Were's Statistical Service Pamphlet – ‘Hume Pipe (Far East)’, 21 July 1936, p.1. There are 20 shillings to a pound so 40,000 x 15/- = 30,000 pounds + 10,000 pounds = 40,000 pounds originally issued.

NBAC, 32/33/1, Correspondence between Singapore and Head Office, 1923.

NBAC, P10/165, Singapore Hume Pipe Company, Directors' Report – Period ended 31 March 1923.

Ibid.

Ibid.

NBAC, P10/165, Singapore Hume, Directors' Report – Period ended 31 March 1924.

Ibid.

NBAC, 155/2, ‘Hume Pipe Company: A Great Future: The True Position – Views of Mr Clifford’, cutting from The News, 20 Sept. 1924.

NBAC, P10/165, Singapore Hume, Directors' Report – Period ended 31 March 1924; Period ended 31 March 1925; and Period ended 31 March 1926.

NBAC, Z167/372, Singapore Minute Book, 1922–38, 4 Aug. 1932, para.168.

Ibid.

NBAC, 116/8, Hume Pipe (Aust.) Minute Book, 1920–22, 10 Aug. 1920, para.30.

NBAC, 116/1/18, ‘Commemorating 50 Years of Progressive Industry’.

NBAC, 116/8, Hume Pipe (Aust.) Minute Book, 1920–22, 10 Aug. 1920, para.30.

Ibid., 17 March 1921, para.184.

Ibid., 13 April 1921, para.209.

Ibid., 6 Sept. 1921, para.252.

Ibid., 5 Sept. 1922, para.328

Ibid., 6 Sept. 1921, para.252.

Snooks, thesis, p.294.

NBAC, N36/46, Branch Progress Reports – New Zealand, 27 April 1925.

NBAC, 32/27/1, ‘List of Hydraulic Pipe Lines Laid and Being Laid by New Zealand branch’.

H. Fountain, ‘Technology Acquisition, Firm Compatibility and Sustainable Competitive Advantage: A Case Study of Australian Glass Manufacturers Ltd, 1915–39’, Business History, Vol.42 No.3 (2000), pp.89–108; and B. Morgan, Apothecary's Venture: The Scientific Quest of the International Nicholas Organisation (London, 1959).

Merrett, ‘Australian Firms Abroad’.