Explaining the Collapse of the British Electrical Supply Industry in the 1880s: Gas versus Electric Lighting Prices

In the late 1870s there was a tremendous interest in the development of electric lighting, which at long last looked to become commercially viable. In the early 1880s electric lighting systems were being installed in many cities in the US, to light factories, stores, public buildings and streets. While Britain had perhaps fewer inventors than the US, it appeared to be on the verge of adopting the electric light. There was much excitement in the press in the late 1870s and early 1880s, and 1882 proved to be a watershed year, when the industry boomed, many entrepreneurs entered the business, much money was invested through the stock market in new companies formed to supply electric equipment and power, and government legislation was passed to set up rules for central power supply installations. Yet despite the early frantic activity, the boom soon turned to bust, the industry appeared to have stalled in the mid1880s, and by 1890 Britain had fallen far behind the Americans in installing and using electric power for lighting and other purposes. In 1890 there were 235,000 arc lights in use in the US, and streets in virtually every American city were lit up by these bright lights. Meanwhile in Britain in that year there were only 700 arc lights on the streets. While Edison, Thomson-Houston and Westinghouse had established central power stations across the United States, with almost 2000 central stations in existence in 1891, in Britain there were just a handful, 25 by one count in 1889 [2, p. 22; 3, p. 218; 5, pp. xxvi-xxvii; 17]. This failure of the British electrical supply industry in the 1880s has been much commented on, and it has been blamed for the later troubles of the electrical manufacturing industry, especially since British electrical equipment producers were slow to develop and found themselves unable to fend off the invasion of the British market by foreign producers in the late 1890s. The primary causes that have been asserted in the past, by numerous contemporary writers and later historians are: the rash of ill-conceived promotions of electrical supply companies and the stock market bubble and crash in shares of these firms, often called the Brush boom, in 1882; the much lower price of gas lighting, electric lighting's chief competitor, in Britain compared to the US; the poor state of the British economy in the 1880s; contemporary