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Abstract
Leslie Hannah contends that Europe was a more integrated market than the US at the turn of the twentieth century. This article shows lesser integration is part of the explanation for why the US was slower than Europe to standardise technology on the internal combustion engine for the motor car. The remaining contribution is that of US abundant oil deposits and water that encouraged the American development of cheaper first cost steam engines. These used more (liquid) fuel and less capital. In Europe, oil fuel prices relative to skilled labour were less appropriate for steam and European car entrepreneurs therefore focused on internal combustion engines. Distinctive US conditions were much less helpful for innovation and improvement before the continental US market was well established.
Disclosure statement
No potential conflict of interest was reported by the author.
Notes on contributor
James Foreman-Peck is Professor of Economics at Cardiff University. He is a former President of the European Historical Economics Society and a former Economic Adviser at H M Treasury.
Acknowledgements
Thanks to J. M. Laux, anonymous referees and participants in the Reading March 2017 conference. Responsibility for errors of fact and understanding remain mine.
Notes
1 Hannah, “Logistics, Market Size and Giant Plants”.
2 Hannah, “Marshall’s Trees and the Global Forest”.
3 Not consistent with Rae’s claim (Rae American Automobile Industry, 19–20) that 600 psi was necessary, that it was never possible to build steam as cheaply as ‘gas cars’, and that cheap gas in the US favoured internal combustion; steamers used more ‘gas’ per mile than internal combustion. As Rae rightly states, though (p. 20), boiler water was a consideration; Locomobiles used a gallon a mile.
4 Davison, Steam Road Vehicles, 53–4.
5 Foreman-Peck, “American Challenge of the Twenties”
6 McLaughlin “Stanley Steamer”; Rae, American Automobile Manufacturers, 41; Arthur “Competing Technologies”.
7 Laux and Villalon “Steaming through New England”; Barker, “Introduction”; Liebowitz and Margolis “Network Externality”.
8 Siebertz, Gottlieb Daimler.
9 Barker, ‘Introduction’; Diesel et al, From Engines to Autos, 153.
10 US Vehicle Industry in Europe, 358, 360–1.
11 Beasley, Skulduggery at the Crossroads, 80–81,124.
12 US Vehicle Industry in Europe.
13 Merki, “Birth of Motoring”, Tables 1 and 2
14 Beasley, Skulduggery at the Crossroads, 80–81,124.
15 Autocar, 16-7-1898, pp. 459–462.
16 Barjot,”Road Construction Technology”, 293.
17 Flink, America Adopts the Automobile, 234.
18 Production was estimated at 6132 (US Census of Manufactures 1902 p. 254) compared with a total of perhaps 8000 in use in the UK.
19 Jenkins, Motor Cars, 310.
20 Laux, European Automobile Industry, 8.
21 Ibid., 12-14; US Census of Manufactures 1902 p255; Merki “Birth of Motoring”, Table 1)
22 Hasluck, Practical Treatise, 780 792.
23 Ibid., 780.
24 Foreman-Peck, “Path Dependence”, 218.
25 The ‘Locomotives on the Highway’ Act (Noble and Mackenzie Junner Vital to the Nation), the 1879 legislation on the storage of petroleum (Cummins Internal Fire, Ch. 13) and the Lawson patent (see concluding remarks).
26 After his gun-making apprenticeship, Daimler enrolled at the School for Advanced Training in the Industrial Arts at Stuttgart in what was to become Germany. He received a travel grant in 1853 to work in an engineering firm in what was then France near Strasbourg (F Rollé and Schwilqué), where there were also theoretical courses. He was awarded a scholarship to study engine design and related subjects, including English, at Stuttgart Polytechnic. Soon after returning to Strasbourg in 1859 he left for Paris, where the Lenoir gas engine had been patented the previous year. From there Daimler went to visit British engineering companies in Leeds (Smith, Peacock and Tannet), Manchester (Roberts) and Coventry (Whitworths). He met his future colleague, Wilhelm Maybach, in Baden-Württemburg when he was managing director of Bruderhaus Engineering Works (1863-69). Siebertz Gottlieb Daimler; Diesel et al From Engines to Autos.
27 Rae, The American Automobile Industry, 11.
28 Reminiscences of F.L. Smith of Olds, Rae American Automobile Manufacturers, 45. In the US product of 1900 hinged lever steering was still common after the Europeans had instead
adopted the steering wheel. H. Sturmey ‘The Autocar of Today in Europe and America’ Autocar 17.3.1900 p. 266.
29 Rae, American Automobile Manufacturers, 13.
30 McShane, Down the Asphalt Path, 108.
31 Ford, My Life and Work, 66; Flink, America Adopts the Automobile, 287–8.
32 Broadberry, Productivity Race.
33 Flink, America Adopts the Automobile, 235–6. The Locomobiles of the Stanley brothers reputedly originated with the inspiration of steam-rollers engaged in road making in New England and their hill climbing abilities (H. Dolnar ‘American Steam Motocycles’ 12.11.98, pp. 726–29).
34 Worby Beaumont, Motor Vehicles, 458.
35 The efficiency with which heat is converted into mechanical energy for an internal combustion engine today can be as high as 35 to 40%, whereas the steam engine has efficiency nearer to 10 to 15%. However, because the internal combustion engine operates at higher temperatures, it must be constructed from stronger materials.
36 Laux, “Diesel Trucks and Buses”. Additional evidence that fuel costs determined the national choice of different power source comes from the heavy commercial vehicle sector. British solid fuel steam lorries continued to flourish long after steam cars had disappeared, and the economical diesel engine for road haulage spread faster in Europe during the 1930s than in the US.
37 Williamson et al., American Petroleum Industry, 172. Jenkins, Motor Cars, 812 cites an 1898 Peugeot estimate of running costs which assumes petrol costs 17.3d per gallon. In 1900 ‘gas’ in Geneva cost 9 cents a litre, or roughly 40 cents or 1/8d a gallon (US, Vehicle Industry in Europe, 394). Laux, European Automobile Industry, 11, states that the general French price was equivalent to 42 cents for an American gallon.
38 Yergin, Epic Quest for Oil, 112.
39 Hasluck, Practical Treatise, 780.
40 Barker, “Introduction”, 16.
41 Autocar, 29.10.1898 pp. 691–3.
42 Autocar, 20.1.1900 pp. 51–2.
43 Autocar 10.9.1898, p.581; Autocar, 3.9 1898, pp. 564–6.
44 Six thousand miles per annum approximately corresponds with the mileages in the preceding car use examples and also with a comparison undertaken by Worby Beaumont, Motor Vehicles, ch.36.
45 Hasluck, Practical Treatise, 792. Raff and Trajtenberg, “Quality Adjusted Prices” have calculated similar indices for the US market from 1906. They note that consistent information is scarcer before that date.
46 The model collapses to a deterministic frontier model when σ2v= 0.
47 The seminal articles are Meeusen and van den Broeck “Efficiency Estimation” and Aigner, Lovell, and Schmidt “Formulation and Estimation”.
48 For example, compared with Raff and Trajtenberg’s “Quality Adjusted Prices” equations.
49 Marks awarded to each car by the Trial judges was not statistically significant in any of the specifications (not reported in Table 3).
50 Laux, European Automobile Industry, 13.
51 And this does not take into account the water consumption of the steamers.
52 The ranking of vehicles in national markets will depend upon national conditions because these determine the mix of vehicles that will be offered for sale (and for competitions). With a 45% tariff and cheaper fuel the US mix would be different from free trade UK and so the rankings may differ. The data identify the vehicles by maker rather than by model. Occasionally two of the same model appear to be entered, but usually when two or more vehicles from the same maker are entered the prices and other specifications differ. Their performances can diverge quite substantially even when the vehicles seem to be the same model, because of different laden weights for instance. One finishing observation (Wilson and Pilcher) was dropped because fuel consumption figure at 8.27 gals per laden cwt (perhaps six times the maximum likely number) seemed to be a typo.
53 Reliability Trials, Automobile Club of Great Britain, September 1903 (Hasluck, Practical Treatise, vol. II 500). Oldsmobile used their achievement in these Trials to advertise in the US the reliability of the ‘Curved Dash’. The Automobile Review and Automobile News December 15 1903, p.8.
54 Broadberry “Technological Leadership”.
55 Dosi, Technical Change; Lloyd-Jones and Lewis, “Technological Pathways”. Trajectory influences include legislation such as the British ‘Locomotives on the Highway Act’, repealed in 1896, which is reckoned by some to have retarded the British motor industry (Noble and Mackenzie Junner Vital to the Nation), but not by others (Saul “British Motor Industry”). Developments in related sectors include electric battery and motor technology that allowed electric starters for internal combustion motor vehicles from 1911.
56 Wright “American Industrial Success”; Nelson and Wright, “American Technological Leadership”. Americans expected to be as forward in the vehicle industry as in other manufacturing sectors when selling abroad. The US Department of State was asked by a large US firm to procure statistical information about the vehicle industry in Europe. The 1900 US Special Consular report on the vehicle industry in Europe was the result.
57 Rae, American Automobile Manufacturers, 31.
58 Nineteenth-century manufacturing technological change in a prominent interpretation involved the spread of interchangeable parts technology that proved superior to, and replaced, the skilled artisans working with chisel and file (Mokyr, Lever of Riches, 137). This form of technical progress requires the increasing ability to measure and machine to higher tolerances. In a static context, scarcity of skill in the US may have encouraged interchangeable parts techniques, but the contention here is that the advantage of steam is that it required fewer interchangeable parts than internal combustion and therefore less skill, not that it needed interchangeable parts replacing handmade components.
59 Davison, Steam Road Vehicles, 53.
60 US Census of Manufactures 1902, 256.
61 Ford, Life and Work, 25–6.
62 Caunter, Light Car, 8–9.
63 Ibid., 1, 8–9.
64 Autocar 24.12.1898, pp. 824–6; Laux, European Automobile Industry, 9.
65 Merki, “Birth of Motoring”.
66 While De Dion dominated internal combustion engines for cars in Europe, the company at the same time made the considered judgement to operate a large steamer department for commercial road vehicles. Heavy road haulage was cheaper and more reliable with steamers in Europe, as traction engines had foreshadowed. Steam was even more suitable for boats (Davison, Steam Road Vehicles, 28–30). For water transport, the power source did not need to vary output as much as for land transport, with hills and stops at junctions and jams, and therefore steam was more competitive on the water by 1895 (with flash boilers).
67 Davison, Steam Road Vehicles, 28, 50–51.
68 Laux, “Steam Cars”.
69 Rae, “Electrical Vehicle Company”.
70 Noble and Mackenzie Junner, Vital to the Nation, 8.
71 Hannah, “Trust , Reputation and Regulation”.
72 Baker, Marconi Company .
73 Abelhauser et al, German Industry and Global Enterprise.
74 Coleman, Courtaulds.
75 Bertram et al, Solvay.
76 Broadberry, Productivity Race.
77 Magee, “Technological Divergence”.