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The Investment Boom In British-Texan Cattle Companies 1880–1885

Published online by Cambridge University Press:  24 July 2012

Richard Graham
Richard Graham
Affiliation:
Ph.D. Candidate in History atUniversity of Texas
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Abstract

Like most speculative extravaganzas, the Western cattle boom was compounded out of a bona fide opportunity, exaggeration, gullibility, inadequate communications, dishonesty, and incompetence. There were some solid residual benefits, representing, in effect, an involuntary gift by British investors to their American cousins.

Type
Research Article
Information
Business History Review , Volume 34 , Issue 4 , Winter 1960 , pp. 421 - 445
Copyright
Copyright © The President and Fellows of Harvard College 1960

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References

1 This study of the Texas cattle boom has been based principally upon periodical literature, almost all of it published in England but of influence upon American readers as well. Most important are The Economist, Weekly Commercial Times, Bankers' Gazette, and Railway Monitor; a Political, Literary, and General Newspaper (hereafter, Economist); London Times (hereafter, Times); and Fortnightly Review (hereafter, Fortnightly). For their influence in America see Buckman, George Rex, “Ranches and Rancheros of the Far West,” Lippincott's Magazine of Popular Literature and Science, vol. XXIX (1882), p. 435Google Scholar.

The sources for the financial record of the companies have been, primarily, the London Economist and the Investor's Monthly Manual, new series (both published at the same office and frequently with identical items), together with the financial pages of the London Times. A major drawback of these sources lies in the fact that many of the companies under discussion were formed in Scotland, therefore attracting less interest from these London periodicals than would otherwise have been the case.

2 For the background of the cattle range business see Dale, Edward Everett, The Range Cattle Industry (Norman, Oklahoma, 1930)Google Scholar; Osgood, Ernest Staples, The Day of the Cattleman (Minneapolis, 1929, reprinted, 1954)Google Scholar; Joseph Nimmo, Jr., “Range and Ranch Cattle Traffic,” House Exec. Doc. 267, 48th Cong., 2d Sess. (1884–1885), vol. XXIX; H. M. Taylor, “On Importance of Range Cattle Industry,” Second Annual Report of the Bureau of Animal Industry for the Year 1885, House Misc. Doc. 36, 48th Cong., 2d Sess. (1884–1885), vol. II, pp. 293–325. For the larger context of this article in the social and economic history of Texas, see Spratt, John S., The Road to Spindletop; Economic Change in Texas, 1875–1901 (Dallas, 1955)Google Scholar; and Holden, William Curry, Alkali Trails; or Social and Economic Movements of the Texas Frontier, 1846–1900 (Dallas, 1930)Google Scholar.

3 Burton, Harley T., A History of the JA Ranch (Austin, 1928)Google Scholar; also see Times, Aug. 29, 1883, p. 3; Sept. 5, 1883, p. 4. Bright, Davilla, “Foreigners and Foreign Capital in the Cattle Business of the United States,” Cattleman, vol. XXII (1936), pp. 34–35Google Scholar; Sheffy, L. F., “British Capital and the Cattle Business,” Cattleman, vol. XVI (1930), p. 53Google Scholar; Debo, Angie, ed., “An English View of the Wild West,” Panhandle-Plains Historical Review (hereafter, PPHR), vol. VI (1933), pp. 24–44Google Scholar; Cabe, Ernest Jr., “A Sketch of the Life of James Hamilton Cator,” PPHR, vol. VI (1933), pp. 16–20Google Scholar. For contemporary mention of some individually run enterprises see Times, Jan. 7, 1886, p. 5; Aug. 18, 1883, p. 4; Davis, Richard Harding, The West from a Car-Window (New York, 1892), pp. 132–135Google Scholar.

4 Economist, vol. XXXVIII (1880), p. 1,510; see also Banker's Magazine, vol. XXXVIII (London, 1878), p. 191.

5 For background on British foreign investments see Hobson, C. K., The Export of Capital (New York, 1914), particularly pp. 77–120Google Scholar; Cairncross, A. K., Home and Foreign Investment, 1870–1913, Studies in Capital Accumulation (Cambridge, England, 1953)Google Scholar. For the record of American use of foreign capital see Lewis, Cleona, America's Stake in International Investments (Washington, D. C., 1938), pp. 1–113Google Scholar.

6 Times, Feb. 26, 1879, p. 11; also see MacDonald, James, Food from the Far West; or American Agriculture with Special Reference to the Beef Production and Importation of Dead Meat from America to Great Britain (London and Edinburgh, 1878)Google Scholar.

7 Times, April 6, 1880, p. 4.

8 Read, Clare and Pell, Albert, “Report of the Agricultural Interests Commission,” in Great Britain. House of Commons. British Sessional Papers, 1880 (Readex Microprint Edition, ed. Erickson, Edgar L.), vol. XVIII, pp. 8–12Google Scholar.

9 Times, April 6, 1880, p. 4.

10 Ibid.

11 Grohman, W. Bailie, “Cattle Ranches in the Far West,” Fortnightly, vol. XXXIV (1880), p. 444Google Scholar.

12 Times, April 6, 1880, p. 4.

13 Grohman, “Cattle Ranches,” p. 441.

14 Ibid., p. 440; and Times, April 6, 1880, p. 4.

15 Ibid.

16 Ibid.; and Grohman, “Cattle Ranches,” p. 446.

17 MacDonald, Food from the Far West, p. 53.

18 Grohman, “Cattle Ranches,” pp. 439, 449–450; in the case of profits the Times was the more conservative, estimating them at 20% on “a well-managed station”: Times, April 6, 1880, p. 4.

19 Grohman, “Cattle Ranches,” p. 450; and Times, April 6, 1880, p. 4.

20 Grohman, “Cattle Ranches,” p. 441.

21 Ibid., p. 449.

22 Times, April 6, 1880, p. 4.

23 Grohman, “Cattle Ranches,” p. 443.

24 Clay, John, My Life on the Range (Chicago, 1924), pp. 16, 129Google Scholar. Clay was to become head of the cattle commission house of Clay, Robinson, and Company, Chicago. See Papers Concerning the Prairie Cattle Company, Limited, p. 17. Archives of the University of Texas Library.

25 Clay, My Life on the Range, pp. 16, 129. Sheffy, L. F., “British Pounds and British Purebred,” PPHR, vol. XI (1938), p. 60Google Scholar, says that the Prairie Cattle Company originated in Colorado in 1877 and moved into the Panhandle in 1877; possibly there was an American company with nearly the same name which then was organized in Great Britain as was the case with various other similar ventures. On the impression given Americans by titled directors see Clements, Roger V., “British Investments and American Legislative Restrictions in the Trans-Mississippi West, 1880–1900,” Mississippi Valley Historical Review (hereafter, MVHR), vol. XLII (1955), pp. 208Google Scholar and 208n.; Nimmo, “Range and Ranch Cattle Traffic,” p. 46.

26 Clay, My Life on the Range, p. 129; Bright, “Foreigners and Foreign Capital,” p. 22; von Richtofen, Walter Baron, Cattle Raising on the Plains of North America (New York, 1885), pp. 49, 55Google Scholar; Rippy, J. Fred, “British Investments in Texas Lands and Livestock,” Southwestern Historical Quarterly (hereafter SHQ), vol. LVIII (1955), p. 333Google Scholar; Haley, J. Evetts, George W. Littlefield, Texan (Norman, Oklahoma, 1943), pp. 128–129Google Scholar; Sheffy, “British Pounds,” p. 60; and Brand Book Containing the Constitution, By-laws, and Brands of the Members of the Pan Handle Stock Association of Mobeetie, Texas (Kansas City, Missouri, n.d., photostatic copy in University of Texas Library, hereafter, Brand Book), p. 31Google Scholar.

27 Economist, vol. XLII (1884), p. 142; cf. lower figures given by Clay, My Life on the Range, pp. 130–131.

28 See Appendix; Times, March 23, 1883, p. 9; Economist, vol. XLII (1884), p. 142; Clay, My Life on the Range, p. 130.

29 Investor's Monthly Manual, vol. XIII (1883), p. 51.

30 Economist, vol. XLI (1883), pp. 373, 401, 431.

31 Clay, My Life on the Range, pp. 15, 132; Investor's Monthly Manual, vol. XIII (1883), p. 631.

32 Economist, vol. XLI (1883), p. 111.

33 Ibid., pp. 131, 172; Investor's Monthly Manual, vol. XIII (1883), pp. 48, 96. It was possibly in reference to this venture that a letter to the editor of the Times on March 28, 1883, p. 5, referred to two large ranches offered “a few weeks ago… but both now withdrawn” which were “loaded with about 40 per cent, of indefensible charges and extravagant commissions” by the promoters.

34 Clay, My Life on the Range, p. 132.

35 Economist, vol. XLII (1884), p. 142.

36 Ibid., p. 365.

37 Clay, My Life on the Range, p. 133.

38 Ibid., p. 134.

39 Ibid., p. 137; Haley, George W. Littlefield, p. 130.

40 Economist, vol. XLI (1883), p. 143; Investor's Monthly Manual, vol. XIII (1883), pp. 51, 95. This would indicate a capital of £90,000; conflicting reports on capital are given by Richtofen, Cattle Raising, p. 54, and Rippy, “British Investments in Texas,” p. 336.

41 Investor's Monthly Manual, vol. XIII (1883), p. 51.

42 Ibid., vol. XIV (1884), p. 99; Economist, vol. XLII (1884), p. 208.

43 See Appendix.

44 Clay, My Life on the Range, pp. 16–79, passim., and particularly, p. 26; Economist, vol. XL (1882), pp. 972, 1, 411; Investor's Monthly Manual, vol. XII (1882), p. 564.

45 Times, Nov. 29, 1881, p. 3; Oct. 20, 1882.

46 Clay, My Life on the Range, p. 21.

47 Ibid., pp. 20–21, 24, 169; for Drew's first name see Tinkler, Estelle D., “Nobility's Ranche: a History of the Rocking Chair Ranche,” PPHR, vol. XV (1942), p. 15Google Scholar.

48 Investor's Monthly Manual, vol. XII (1882), p. 144; Clay, My Life on the Range, pp. 21, 24; Times, Feb. 9, 1883, p. 8.

49 Economist, vol. XL (1882), p. 294; Investor's Monthly Manual, vol. XII (1882), p. 144; Clay, My Life on the Range, pp. 20, 23.

50 Economist, vol. XL (1882), p. 1,564; cf. with Investor's Monthly Manual, vol. XII (1882), p. 652.

51 Clay, My Life on the Range, p. 168. The official statement of profit was $88,304; Economist, vol. XLI (1883), p. 143; and Investor's Monthly Manual, vol. XIII (1883), p. 137.

52 Times, Feb. 9, 1883, p. 8; see also Times, March 23, 1883, p. 9.

53 Clay, My Life on the Range, p. 168.

54 Ibid., pp. 169–170.

55 Ibid., pp. 169–171; Economist, vol. XLIV (1886), p. 365.

56 Rippy, “British Investments in Texas,” p. 336; Brand Book, p. 31.

57 Appendix; Richtofen, Cattle Raising, p. 55.

58 Economist, vol. XLIV (1886), p. 183; Investor's Monthly Manual, vol. XVI (1886), p. 95.

59 Pearce, William M., “A History of the Matador Land and Cattle Company, Limited, from 1882 to 1915” (unpublished Ph.D. dissertation, University of Texas, 1952Google Scholar) [hereafter, “History of Matador”].

60 Photostat of Prospectus, pp. 1–2; Photostats of Annual Reports, 1884, pp. 3–4, 6; 1885, pp. 3–4, 6; 1886, pp. 3–4, 6; 1887, p. 9; 1891, p. 6. Reports and Associated Documents of the Matador Land and Cattle Company, Limited, Archives of the University of Texas Library; this writer was guided to this material by Pearce, “History of Matador,” pp. 11, 13–16, 30–31, 43–44, 46, 51; notice of most of these reports was given in the Economist and Investor's Monthly Manual; also see Clay, My Life on the Range, p. 316; Times, Aug. 29, 1883, p. 3; Sheffy, “British Pounds,” p. 62.

61 Investor's Monthly Manual, vol. XIII (1883), p. 371; Times, Oct. 20, 1882, p. 9.

62 Ibid.

63 Economist, vol. XLI (1883), pp. 143, 194; Investor's Monthly Manual, vol. XIII (1883), p. 96.

64 Times, March 23, 1883, p. 9.

65 Economist, vol. XLI (1883), p. 164.

66 Ibid., pp. 372–373.

67 Ibid., p. 191; also in Investor's Monthly Manual, vol. XIII (1883), p. 51.

68 Economist, vol. XL (1882), p. 1,597; Investor's Monthly Manual, vol. XII (1882), p. 654.

69 One work published in America but supposed to have had a great effect in Great Britain was Brisbin, James S., The Beef Bonanza; or, How to Get Rich on the Plains. Being a Description of Cattle-Crowing, Sheep-Farming, Horse Raising, and Dairying in the West (Philadelphia, 1881)Google Scholar. Its publication in the United States places it somewhat outside the scope of this article. A new edition with a foreword by Gilbert C. Fite was published by the University of Oklahoma Press in September, 1959.

70 Times, Jan. 26, 1883, p. 3.

71 Investor's Monthly Manual, vol. XIII (1883), p. 51; a similar statement was carried in the Economist, vol. XLI (1883), p. 131.

72 Times, Jan. 26, 1883, p. 3.

73 Times, Feb. 11, 1883, p. 11.

74 Times, Jan. 26, 1883, p. 3.

75 Times, March 20, 1883, p. 11. For further correspondence on the subject see Times, March 23, 1883, p. 9, and March 24, 1883, p. 11.

76 Economist, vol. XLI (1883), p. 131.

77 Ibid.

78 Ibid.

79 Investor's Monthly Manual, vol. XIII (1883), p. 51.

80 Economist, vol. XLI (1883), p. 164.

81 Ibid., pp. 190–191.

82 Times, March 20, 1883, p. 11.

83 Ibid., March 28, 1883, p. 5.

84 Ibid., March 20, 1883, p. 11.

85 Ibid., March 28, 1883, p. 5.

86 Investor's Monthly Manual, vol. XIII (1883), p. 51.

87 Economist, vol. XLI (1883), p. 373.

88 >Ibid.; Investor's Monthly Manual, vol. XIII (1883), p. 51.

89 According to an article entitled “Scottish Capital Abroad,” which appeared in Blackwood's Magazine, vol. CXXXVI (1884), pp. 477 and 479, Scotland had invested well over £4,000,000 in “wild cattle.” These companies represented approximately a tenth of all Scottish investments abroad with “land companies” accounting for another tenth, and investment-mortgage companies representing a half. The cattle companies were estimated as paying in 1883 an average of about 8 per cent in dividends and interest, more than any other type of Scottish investment.

90 Economist, vol. XLI (1883), p. 131.

91 Ibid., p. 164.

92 Ibid., p. 194.

93 Clay, My Life on the Range, p. 91.

94 On the New York and Texas Land Company, Limited, organized by English and American capitalists about 1879, see Sheffy, “British Pounds,” pp. 55 and 61; Tinkler, Estelle D., “Nobility's Ranche: a History of the Rocking Chair Ranche,” PPHR, vol. XV (1942), p. 3Google Scholar; Times, Jan. 26, 1883, p. 3.

95 Tinkler, “Nobility's Ranche,” pp. 12–16, passim., 19, 19n., 172; Sheffy, L. F., ed., “The Arrington Papers,” PPHR, vol. 1 (1928), pp. 47–54Google Scholar.

96 Economist, vol. XLII (1884), p. 197.

97 Aldridge, Reginald, Ranch Notes in Kansas, Colorado, the Indian Territory, and Northern Texas (London, 1884), pp. 1, 161, 169–177, 189, 206Google Scholar.

98 Ibid., p. 207.

99 Ibid., p. 208.

100 Ibid., pp. 212–213.

101 Economist, vol. XLII (1884), p. 364; Investor's Monthly Manual, vol. XIV (1884), p. 148.

102 Economist vol. XLII (1884), p. 391.

103 Sheers, Margaret, “The LX Ranch of Texas,” PPHR, vol. VI (1933), p. 53Google Scholar.

104 Times, Jan. 28, 1885, p. 11.

105 Clay, My Life on the Range, pp. 101, 104–105; Economist, vol. XLII (1884), pp. 1,234, 1,266.

106 McClure, Charles Boone, “A History of Randall County and the T-Anchor Ranch” (unpublished M.A. Thesis, University of Texas, 1930), pp. 87, 67–69Google Scholar; Economist, vol. XLII (1884), p. 1,522; Investor's Monthly Manual, vol. XV (1885), p. 187; Sheffy, “British Pounds,” p. 55; Rippy, “British Investments in Texas,” p. 337. The sale price of the T-Anchor Ranch is reported by McClure (p. 67) as $800,000, but, as this is higher than the total announced capitalization of the company, it is probably incorrect.

107 Holden, William Curry, The Spur Ranch (Boston, 1934), pp. 13–15Google Scholar; Economist, vol. XLII (1884), p. 1,522; Investor's Monthly Manual, vol. XIV (1884), p. 666; Times, Dec. 12, 1884, p. 11; Taylor County News (Abilene, Texas), April 17, 1885.

108 Ibid., June 19, 1885.

109 Times, April 7, 1883, p. 7; Haley, J. Evetts, The XIT Ranch of Texas, and the Early Days of the Llano Estacado (2d ed.; Norman, Oklahoma, 1953), p. 72nGoogle Scholar.

110 Ibid., pp. 71–72; Times, March 13, 1889, p. 12.

111 Ibid., Oct. 3, 1885, p. 11.

112 Ibid., Jan. 26, 1887, p. 11; March 13, 1889, p. 12.

113 Ibid., June 9, 1890, p. 12.

114 Ibid., June 5, 1891, p. 11.

115 Ibid., Oct. 3, 1885, p. 11; Jan. 26, 1887, p. 11; March 13, 1889, p. 12.

116 Ibid., Oct. 3, 1885, p. 11; March 13, 1889, p. 12; May 27, 1889, p. 11; June 9, 1890, p. 12; June 5, 1891, p. 11.

117 Haley, The XIT Ranch of Texas, p. 73; Times, Jan. 26, 1887, p. 11.

118 Ibid.; ibid., Feb. 2, 1888, p. 11; June 9, 1890, p. 12; June 5, 1891, p. 11; Aug. 1, 1892, p. 8.

119 Rippy, “British Investments in Texas,” p. 337, says the company was liquidated in 1918; Haley, The XIT Ranch of Texas, p. 73, says 1909.

120 New York, 1885.

121 National Livestock Association, Prose and Poetry of the Live-Stock Industry of the United States with Outline of the Origin and Ancient History of Our Live-Stock Animals (3 vols.; Denver and Kansas City, 1904), vol. I, p. 673Google Scholar.

122 Economist, vol. XLIV (1886), p. 365; see also Investor's Monthly Manual, vol. XVI (1886), p. 100.

123 Briggs, Harold E., “The Development and Decline of Open Range Ranching in the Northwest,” MVHR, vol. XX (1934), p. 530Google Scholar. The decline in prices is described by Cox, James, Historical and Biographical Record of the Cattle Industry and Cattlemen of Texas and Adjacent Territory (St. Louis, 1895), p. 150Google Scholar.

124 Firsthand accounts of these forces can be found in Cox, Historical and Biographical Record, pp. 129–140; Economist, vol. XLVI (1888), p. 595; W. M. F. Somerville to A. Mackay, Nov. 25, 1885. Typescript of the Correspondence of the General Manager, Book I, Part I, p. 22, Correspondence of the Matador Land and Cattle Company, Limited, Archives of the University of Texas Library; Clay, My Life on the Range, pp. 141, 178, 180, 181; Baumann, John, “On a Western Ranche,” Fortnightly, vol. XLVII (1887), pp. 518–519Google Scholar. Also see Clements, “British Investments,” p. 212; Rippy, “British Investments in Texas,” p. 334; and Pearce, “History of Matador,” pp. 50, 55, 76.

125 Cf. Times, Nov. 19, 1879, p. 5 with Feb. 28, 1885, p. 4.

126 Economist, vol. XLIV (1886), p. 863; vol. XLV (1887), p. 1,402; vol. XLVI (1888), p. 594; vol. LI (1893), p. 446; Great Britain. Foreign Office. Diplomatic and Consular Reports on Trade and Finance, Annual Series, 1891, No. 823, p. 4; 1892, No. 989, pp. 1–2, 6; 1893, No. 1164, p. 3. On degree of British press concern, consider these items in the Times: Aug. 11 (p. 9), Aug. 13 (p. 10), Aug. 15 (p. 3), Aug. 16 (p. 2), Aug. 17 (p. 6), 1883; Dec. 13 (p. 5), 1884; Jan. 15 (p. 5), Jan. 23 (p. 5), Feb. 26 (p. 5), Aug. 22 (p. 9), 1885; March 10 (p. 5), Aug. 3 (p. 3), 1886; April 26 (p. 11), April 27 (p. 13), July 25 (p. 5), 1887; April 30 (p. 11), 1888. On the American point of view see Taylor County News, April 24 and May 8, 1885. See also Clements, “British Investments,” pp. 211, 221; Rippy, “British Investments in Texas,” pp. 334–335; Pearce, “History of Matador,” p. 29.

127 Economist, vol. XLVI (1888), p. 594; Clay, My Life on the Range, pp. 171–172; Baumann, “On a Western Ranche,” pp. 518, 526. Baumann was a leading critic of absentee management, possibly because he failed to secure such a position himself after an apprenticeship as a cowboy in the Texas Panhandle; see [Baumann, John], “The Cowboy at Home,” The Cornhill Magazine, vol. VII (1886), p. 294Google Scholar.

128 E.g., Economist, vol. XLVI (1888), p. 594.

129 Times, Jan. 2, 1884, p. 2.

130 Baumann, “On a Western Ranche,” p. 518.

131 “Scottish Cattle Companies in the United States,” Dundee Advertiser, Feb. 29, 1888, quoted in Reports from the Consuls of the United States, vol. XXVI (1888), No. 93, House Misc. Doc. 608, 50th Cong., 1st Sess. (1887–1888), vol. XXIII, p. 206.

132 Rippy, “British Investments in Texas,” p. 336.

133 Ibid., p. 338; Dallas Morning News, July 25, 1951, p. 1.